DIGITAL VISION, KALA AMB,NAHAN vs. DCIT/ACIT, CIRCLE, PARWANOO

आयकर अपील�य अ�धकरण, च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 681/CHD/2025 �नधा�रण वष� / Assessment Year : 2017-18 Digital Vision The DCIT/ACIT Village Ogli बनाम Circle, Kala Amb, Nahan 173030 Parwanoo Vs. �थायी लेखा सं./PAN NO: AAGFD4922Q अपीलाथ�/Appellant ��यथ�/Respondent ( Physical Hearing ) �नधा�रती क� ओर से/Assessee by : Sh. Pranav Jain, Avneet Singh & Ms. Rashmi, Advocates राज�व क� ओर से/ Revenue by : Sh. Vivek Varadhan, Addl. CIT, Sr. DR सुनवाई क� तार�ख/Date of Hearing : 15.04.2026 उदघोषणा क� तार�ख/Date of Pronouncement : 05.05.2026 आदेश/Order Per Krinwant Sahay, AM: Appeal in this case has been filed by the assessee against the order dated 25.03.2025 passed by Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi.

681-Chd-2025 2 2. The assessee firm got its accounts audited u/s 44AB and filed its return of income declaring Net Income of Rs. 65,49,150/- after claiming deduction of Rs. 16,38,292/-u/s 80IC. 3. That as per the books of accounts the assessee firm had cash in hand of Rs. 1,66,97,557 on 08.11.2016. 4. The assesse firm deposited a sum of Rs. 1,38,32,000 during demonetization period i.e. from 11.11.2016 to 30.12.2016. 5. The Ld. Deputy Commissioner of Income Tax (AO) made addition u/s 68 of the Act of Rs. 1,19,63,356/- on account of deposit of Specified Bank Notes treating it as unexplained income of assesse and computed the tax liability after applying Section 1158BE. 6. The Ld. AO has also initiated penalty proceedings u/s 271AAC of the Act against the appellant for unexplained income in his books of accounts. 7. Aggrieved by the said addition, the Appellant had filed an appeal before CIT(A) on dated 20.01.2020 against Order u/s 143(3) passed by AO. 8. However, the CIT(A) dismissed the appeal vide order dated 25.03.2025 under section 250 of the Act, confirming the addition of income u/s 69A and covered u/s 115BBE of the Act. 9. Being aggrieved by the said order of the CIT(A), the Appellant is filing the present appeal before the Hon'ble Income Tax Appellate Tribunal. 3. Brief facts of the case, as per the submissions filed by the Assessee, are as under: -

681-Chd-2025 3 1. The Appellant is engaged in the business of manufacturing drugs and pharmaceuticals. 2. The books of accounts were duly maintained and audited u/s 44AB. Return declared income of ₹65,49,150 after claiming deduction u/s 80IC. As per books, the Appellant had cash-in-hand of ₹1,66,97,557 on 08.11.2016. 3. During demonetisation period (09.11.2016- 30.12.2016), the Appellant deposited 21,38,32,000 in bank. The AO treated ₹1,19,63,356 as unexplained cash credit u/s 69A read with 115BBE and initiated penalty u/s 271AAC. 4. On appeal, the Ld. CIT(A) NFAC has confirmed the addition in full. 4. During proceedings before us, ld. Counsel for the Assessee submitted that they had filed various documents and details before the Assessing Officer but the Assessing Officer did not accept their submissions in toto and after giving credit to the certain amounts, made an addition of Rs. 1,19,63,356/- on account of unexplained money u/s 69A of the Income Tax Act, 1961 (in short 'the Act') and taxed it u/s 115BEE.

681-Chd-2025 4 5. Aggrieved with the order of the Assessing Officer, the Assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) has given a very detailed findings after taking into consideration the submissions filed by the Assessee as well as the remand report given by the Assessing Officer. The findings of the Ld. CIT(A) are as under:

“5.4.3 In the appellate proceedings, burden of proof lies on the assessee to prove that facts and findings of the AO are incorrect, Assessee contested in appeal that the assessment order is totally arbitrary and not proper and justified. The appellant has to prove or rebut with cogent evidence against the facts and findings of the AO in the assessment order. The appellant pointed out that the Id AO arbitrarily decided the amount of Rs. 1,19,63,356/ on account of unexplained money u/s. 69A. The appellant has not produced the copy of the bank account as well as the cash book to reconcile the figures figures and to prove the source of the cash deposits during demonetization period. In the present appeal, the issue is with regard to the cash deposits and the sources of such cash deposits. During the course of appellant proceedings the appellant has not explained the sources for such cash deposits. It is simply explained that the cash was received from the debtors. However, the appellant was not authorized to accept SBN notes on and from 9.11.2016.

681-Chd-2025 5 5.4.4 Appellant has not made any submission as to how the AO is wrong in passing assessment order. Since, the appellant could not submit any material evidences/additional evidences during appeal proceedings substantiating his grounds which could not be produced before the assessing officer, except the documents produced before AO earlier, it clear that the appellant has no strong evidences on his to substantiate his grounds of appeal. Further, it is held by the AO in the Assessment order that the onus is on the assessee to establish the genuineness of the transactions, which in the instant case the assessee has not discharged. In view of the foregoing discussion and relied on the remand report submitted by the JAO, I am of the considered opinion that the addition of Rs. 1,19,63,356/- made by the AO is justified and I hereby confirm the addition. Ground No. 1 is dismissed. 6.0 Ground No. 2 is with regard to the computation of tax liability under sec. 115 BBE. As per section 69A of the Act, assessee has to explain to the satisfaction of the AO the cash deposited by him. If the assessee fails to explain or the explanation is not satisfactory, the section provides that the money is deemed to be income of the assessee for the year in which it was deposited. In this case the assessee failed to explain her claim that it relates to business. Therefore, the amount is liable to be added under deeming provision of 69A. In this case, the appellant neither offer

681-Chd-2025 6 proper explanation/nor supporting evidences in respect of his claim which compelled the AO to treat the cash deposits as unexplained money and make addition u/s 69A of the Act. Since, the addition in assessment order has been made under sec. 69A of the Act, the appellant is liable to pay the consequent taxes and cannot refrain himself from paying the tax liability u/s 115BBE of the IT Act. Ground No. 2 is dismissed” 6. Per contra, the ld. DR relied on the orders of the authorities below.

681-Chd-2025 7 this case back to the file of the Assessing Officer for verification and denovo order. Accordingly, we set aside the impugned orders and restore the matter to the file of the Assessing Officer for fresh adjudication de novo on merits, after duly considering the submissions and evidences that may be furnished by the Assessee, as well as the material available on record. Needless to add, the Assessing Officer shall afford adequate and reasonable opportunity of being heard to the Assessee. The Assessee is also directed to extend full cooperation in the remand proceedings. All grounds and contentions available under law are kept open. Ordered accordingly.

Sd/- Sd/- ( LALIET KUMAR ) ( KRINWANT SAHAY ) Judicial Member Accountant Member “आर.के.” आदेश क� ��त�ल�प अ�े�षत / Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent

681-Chd-2025 8 3. आयकर आयु�त/ CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar