DILIP SINGH HUF,FIROZABAD vs. ITO, WARD-2(2)(1), FIROZABAD

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH (SMC), AGRA BEFORE : SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No. 116/Agr/2026 Assessment Year: 2017-18

Dilip Singh HUF Vs. ITO, C.B. Guest House Market Bye Ward-2(2)(1), Road, Firozabad-283203. Firozabad. PAN : AACHD1489C (Appellant) (Respondent)

Assessee by Sh. Anurag Sinha, Adv. Department by Sh. Harsh Siddharth Gautam, Sr. DR (Physical hearing)

Date of hearing 22.04.2026 Date of pronouncement 24.04.2026

ORDER PER : S. RIFAUR RAHMAN, ACCOUNTANT MEMBER:

The assessee has filed this appeal against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 09.01.2026 for the Assessment Year 2017-

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served on the assessee. In response, Ld. AR of the assessee attended

and submitted rrelevent information as called for. During assessment

proceedings letter issued to the Punjab Nation Bank, Firozabad calling

for bank statement, details of cash deposits made by the assessee

during the year under consideration and details of cash deposits made

during demonetization period. In response, Branch Manager provided

bank statement, from the bank statement above, the Assessing Officer

observed that assessee has deposited amount of Rs. 35,00,000/- and

the same was made during demonetization period as SBN. Since, there

was no response from the assessee, a show cause notice was issued u/s

144 of the Act, and however, assessee has not complied. Based on the

information available on record, the Assessing Officer proceeded to

make addition of Rs. 35,00,000/- u/s 69A of the Act as undisclosed

income.

before NFAC, Delhi. After considering the submissions of the assessee a

remand report was called for from the Assessing Officer. The Assessing

Officer submitted a remand report based on the report from the Branch

Manager of PNB. In response to remand report, the assessee has

submitted the rebuttal that the Assessing Officer has made an addition of

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Rs.35,00,000/- to the Total Income of Assessee of Rs.3,22,620/-

disclosed in the Income Tax Return of FY 2016-17 filed on 31.03.2018.

The above addition has been made on the ground that the Assessee has

made a deposit of Rs. 35,00,000/- in his Bank Account (Punjab National

Bank-3637000100073697) on 01.12.2016. Assessee summarized

chronology of events relevant for the present case was submitted:-

Date Transaction Amount (Rs.) Expanded reason 06.01.2016 Deposit in Punjab 36,17,337 Compensation received for acquisition National bank (Ac No. of land (Fate No. 491, Mauza Jirauli 3637000100073697) Kalan Tehsil Tundla,UP). Principla 33,21,162; interest: 2,96,175 07.01.2016 Cash withdrawal for 18,00,000+ Cash withdrawn to invest in and investment in land, 18,00,000 agricultural land ½ of Khasara No. 91, 12.01.2016 however the Rakba 1.716 Hec.) belonging to Shri transaction of Latoori Singh, Tehsil Tundla, purchase could not Firozabad, however transaction could materialize not materialize. Reason for cancellation of deal: Seller (Shri Latoori Singh) unilaterally demanded a higher price than agreed, making the transaction unacceptable. To avoid disputes and financial loss, the assessee cancelled the deal.

The Id AO in remand report has accepted the "cash withdrawal made

from Bank and deposit of Rs. 3617337.00 in Bank Account. However he

has mentioned that deposit of Rs. 36,17,337.00 is lacking evidences. As

regards deposit of Rs.3617337.00 in Punjab National Bank account on

06.01.2016, it was submitted that this is an undisputed fact that the said

deposit represents compensation received against compulsory

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acquisition of agricultural land situated at Gata. No. 491, Mauza Jirauli Kalan, Tehsil Tundla, Uttar Pradesh.

Copy of Compensation letter dated 27.10.2016 is enclosed herewith. (Annexure-A)

• Bank statements evidencing deposit, withdrawals, and subsequent deposit. (Annexure-B) • Draft purchase deed of property belonging to Shri Latoori Singh. (Annexure-A)

The assessee places reliance on following judicial pronouncements:

in Jaya Aggarwal vs Income Tax Officer.

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assessee, Ld. CIT(Appeals) sustained the additions made by the

Assessing Officer with observation that assessee has kept the cash in

hand for 11 months and accordingly, rejected the submissions of the

assessee that assessee has entered into an agreement for purchase of

land , which did not materialized, therefore, cash withdrawn for the above

purpose was redeposited in bank. Since not convinced with the above

submissions the addition was sustained by him.

us, raising following grounds:-

“1. BECAUSE, upon overall consideration of the facts and in the circumstances of the case the authorities below were highly unjustified in making and sustaining addition of Rs 35,00,000/-under section 69A r.w.s 115BBE of the Act. 2. BECAUSE, the Ld. CTT(A) grossly erred on facts and in law in sustaining addition of Rs.35,00,000/- failing to appreciate that cash deposit during the demonetization period was fully explained and stood duly sourced from earlier cash withdrawals made from the same bank account, the source of which was an admitted and undisputed receipt of compensation on compulsory acquisition of agricultural land. 3. BECAUSE, the Ld. CIT(A) erred in rejecting appellant's explanation merely on the ground that the cash was held for a long duration, without bringing any material on record to show that the cash withdrawn had been spent, invested, or otherwise diverted. The finding is based on a purely presumptive and subjective approach, resting on personal notions rather than on any concrete evidence or objective material on record. 4. BECAUSE, the Ld. CIT(A) failed to apply the settled legal principle that once cash withdrawals are proved and the Revenue does not establish contrary 5 | P a g e

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utilization, subsequent redeposit of cash cannot be treated as unexplained merely on presumptions and surmises. 5. BECAUSE, the provisions of section 1158BE of the Act cannot be invoked in view of the judgement of Hon'ble Madras High Court in the case of SMILE Microfinance Ltd. Vs. ACIT, 2024 (11) TMI 1444 Madras High Court as followed by the Hon'ble ITAT, Agra Bench in the case of Sh. Pankaj Kumar Vs. ITO in ITA No.219/Agr/2023 dated 04.02.2025. 6. BECAUSE, in any case and in any view of the matter impugned addition and impugned assessment order is bad in law, illegal, unjustified, contrary to facts and law based upon incorrect assumption of facts and further without allowing adequate opportunity of hearing in violation of principals of natural justice and therefore, the additions made deserves to be quashed. 7. BECAUSE, assessee denies its liability against Interest charged under section 234A &234B is incorrectly charged. The 'appellant' reserves his right to add, delete, modify, alter or substitute any or all the grounds of appeal.” 6. At the time hearing, Ld. AR of the assessee brought to my notice

page 39 of the paper book which is statement of PNB and he brought to

my notice the assessee has received RTGS from the Government of

India on 06.01.2016 for remittance towards compulsory acquisition of

land held by the assessee. On 07.01.2016 and 12.01.2016, the assessee

has withdrawn the cash and kept the cash in hand for the purpose of

purchasing another land. Since, the above purchase of land was not

materialized, the assessee has redeposited the cash on 01.12.2016. He

submitted that assessee has already established the source of cash i.e.

compulsory acquisition of land by the government and it is fact on record

that assessee has withdrawn the above cash and the same was

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redeposited. Therefore, assessee has already established the source of

cash deposited during demonetization.

lower authorities.

I observed that assessee has received RTGS on 06.01.2016 towards

settlement of compulsory acquisition of land held by the assessee.

Immediately on receipt of RTGS, the assessee has withdrawn Rs.

18,00,000/- on 07.01.2016 and another Rs. 18,00,000/- on 12.01.2016. It

is fact on record that assessee has withdrawn huge cash of Rs.

36,00,000/- of receipt of RTGS and subsequently, on 01.12.2016

assessee has redeposited the same. The issue under consideration is

whether the assessee redeposited the cash kept in hand was the source

of cash deposit on 01.12.2016 and is reasonable. In my considered

view, as per record submitted before me. It is clear that assessee has

received RTGS towards settlement of compulsory acquisition of land and

is also facts on record that the assessee has withdrawn Rs. 36,00,000/-

immediately on receipt of RTGS and there is no record brought on record

by the Revenue that assessee has utilized the above cash on purchase

of land or for any over purpose. In absence of above, the assessee gave

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a reason that assessee could not utilize the above cash for any other

purpose, therefore, assessee has redeposited the same. Since, the

assessee has already established the fact that there is direct link with the

cash withdrawn and cash deposits, therefore we inclined to accept the

submission of the assessee and also there is proper merit in the

argument of the assessee.

Order pronounced in the open court on 24 .04.2026.

Sd/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated: 24.04.2026 *Santosh, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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