RAJNI MAHAJAN,CHANDIGARH vs. ITO, WARD 2(1), CHANDIGARH, CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.829/CHANDI/2025 (िनधा�रण वष� / Assessment Year: 2017-18) Smt. Rajni Mahajan ITO Ward – 2(1) H. No.1010, Sector 18C बनाम/ Vs. Sector-17 Chandigarh-160018 Chandigarh-160017 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AFRPM-3659-K (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. Parikshit Aggarwal (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) - Ld. Sr. DR (Virtual) सुनवाईकीतारीख/Date of Hearing : 03-06-2026 घोषणाकीतारीख /Date of Pronouncement 04-06-2026 : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 10.07.2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Act on 19.12.2019. 2. The registry has noted delay of 262 days in the appeal, the condonation of which has been sought by the assessee on the

strength of condonation petition which is accompanied by an affidavit of the assessee. The delay has been attributed to the fact the assessee’s file remained unattained at counsel’s office. Keeping in mind the background of the assessee, the delay is condoned and we proceed for adjudication of the appeal on merits. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.17.87 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 3. The assessee carried out retail business in her proprietorship concern namely M/s Delhi Light House and offered income on presumptive basis u/s 44AD. During this year, the assessee had deposited cash of Rs.44.85 Lacs in her SBI account which include deposit of Rs.38 Lacs on 12-11-2016 which fall in demonetization period. It transpired that the assessee had declared Rs.5 Lacs in Pradhan Mantri Garib Kalyan Yojna whereas the remaining cash was stated to be deposited out of cash sales, cash-in-hand and debtors realization. The Ld. AO compared cash sale and cash deposit data for this year as well as preceding year and observed that there was sudden increase in sales during the month of October, 2016. The deposits made till October 2016 were Rs.6.85 Lacs only. There was low sale during April to September 2016. The opening cash-in-hand as on 01-04-2016 was Rs.1.13 Lacs but there was negative balance in the months of June, July and August. The month-wise cash sales and cash deposits were tabulated at Para-7 of the assessment order which revealed that the assessee made cash sales of Rs.21.51 Lacs

whereas it deposited cash of Rs.44.85 Lacs during the whole year. There was negative cash balance from 09-11-2016 to 30-11-2016 for Rs.22.87 Lacs which was held to be out of unexplained sources. After granting benefit of Rs.5 Lacs as declared by the assessee under the scheme, the remaining deposit of Rs.17.87 Lacs was added to the income of the assessee. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. 4. From the facts, it clearly emerges that the assessee is engaged in business activities and has offered business income on presumptive basis u/s 44AD. Under this scenario, the assessee is not required to maintain regular books of accounts. However, the facts remains that the cash sales are much less than cash deposits by the assessee which is also evident from the fact that the assessee has made declaration of Rs.5 Lacs under the Pradhan Mantri Garib Kalyan Yojna to fill the gap. The assessee is not shown to have any other source of income. On these facts and with a view to put an end to litigation, we would hold that lump sum addition of Rs.2 Lacs would meet the end of justice which would be added as business income of the assessee and subject to normal rate of tax. The Ld. AO is directed to re-compute the income of the assessee. We order so. No other ground has been urged in the appeal.

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 04-06-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

ASSISTANT REGISTRAR

ITAT CHANDIGARH