RAMESH CHAWALA,JAIPUR vs. ITO WD 4(2), JAIPUR

P a g e | 1 ITA No.930/JPR/2025 Ramesh Chawala IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.930/JPR/2025 (Assessment Year:2021-22)

Ramesh Chawla Vs. ITO 105/11, Vijay Path, Ward4(2) Agarwal Farm Jaipur Mansarowar, Jaipur 302020 �थायीलेखासं./जीआइआरसं./PAN/GIR No: AAJPC 1829 J Appellant .. Respondent

Appellant by : Sh. Tarun Mittal, CA Respondent by : Sh. Gaurav Awasthi

Date of Hearing 01.06.2026 Date of Pronouncement 04.06.2026

O R D E R The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961, (hereinafter referred to as “the Act”). 2. The assessee in this appeal has taken following grounds of appeal:- 1. On the facts and in the circumstances of the case, ld.CIT(A) has grossly erred in rejecting the appeal of assessee in summary manner, without even considering the submission made and evidences adduced. Appellant prays order so passed is not in

P a g e | 2 ITA No.930/JPR/2025 Ramesh Chawala accordance with law and deserves to be quashed and consequent additions confirmed deserve to be deleted. 2. On the facts and in the circumstances of the case and in law, ld.CIT(A) has grossly erred in confirming addition of Rs. 20,00,000/- made by ld.AO arbitrarily, by holding major part of the cash deposited (out of Rs.25,25,000/-) by the assessee during the relevant year as Unexplained Money u/s 69A of the Income Tax Act despite the fact that there were sufficient withdrawals of cash from bank on earlier occasions. Appellant prays that such addition being unjustified and without considering the facts of the case deserves to be deleted. 2.1. That the ld.CIT(A) has further erred in confirming the addition of Rs.20,00,000/- made by ld.AO on account of cash deposited in the bank account of the assessee, by ignoring the details and explanation filed by the assessee, which clearly proved that deposits were made out of cash withdrawn from bank account on earlier occasions. Appellant prays that no evidence whatsoever has been brought on record in support of cash withdrawn earlier being utilised elsewhere, and therefore addition made and confirmed, being solely on presumption deserves to be deleted. 3. On the facts and in the circumstances of the case and in law, ld.CIT(A) has grossly erred in confirming the gross error made in Computation Sheet issued along with Assessment Order, wherein Capital Gain of Rs.30,46,305/- has been added in Total Income, though no such addition is made by AO either in the body of Assessment Order or even in computation of total income as mentioned at the end of Assessment Order. Appellant prays that such addition made in computation sheet being purely mistake apparent from records, deserves to be deleted. 4. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal.

P a g e | 3 ITA No.930/JPR/2025 Ramesh Chawala 5. Ground No.2 and 2.1: relate to the issue of addition made on account of cash found deposited in the Bank account of the assessee to the tune of Rs.20,00,000/-. 6. The orders of the Authorities below reveal that the assessee had explained the source of the cash deposits as from cash withdrawals made earlier from the bank accounts. This explanation of the assessee was found unacceptable by the Revenue authorities for the reason that the withdrawals were found to have been made long back about 15 months prior to deposit. The assessee explained the reason for withdrawal of amounts from his bank account and keeping the cash in hand so as to avoid misuse of his bank balance by his son by withdrawing amounts from his and his spouse’s bank account using debit card. The assessee’s contention was that, he maintained minimum balance in his bank account, so as to avoid such misuse and deposited it back again due to demonetization being declared, resulting in a long gap between withdrawal and redeposit of cash in his bank account. The Revenue Authorities rejected his minimum balance maintenance theory/explanation noting that there was always sufficient balance in the bank account of the assessee. It was therefore held that the withdrawals by the assessee were utilized and the cash deposits, therefore, cannot be said to be explained as out of withdrawals made earlier. 7. Before me, while the ld. Counsel for the assessee has reiterated the contentions made before the Authorities below, the Ld. DR on the other hand, has heavily relied on the findings of the Authorities below.

P a g e | 4 ITA No.930/JPR/2025 Ramesh Chawala 8. I have heard the contentions of both the parties. As noted above, the assessee’s explanation of the source of cash deposit in the Bank account amounting to Rs.20,00,000/- is from cash withdrawal made earlier. The fact that assessee had withdrawn sufficient cash earlier is not disputed, and this explanation has been rejected only for the reason that the withdrawal happened 15 months ago. It is not the case of the Revenue that the assessee has been found to have utilized the cash withdrawn. During the course of hearing, it was pointed out to me, that the assessee was 60 years of age and as explained to the Authorities below, had withdrawn cash so as to avoid mis-utilization of his funds by his son using debit cards. The Revenue has not found any falsity in the contention of the assessee that he regularly withdrew cash from his bank account .They have however rejected the explanation of the assessee as not tenable stating that there was always sufficient balance in the bank account, and it was not that the assessee maintained minimum balance. But this finding of the authorities below has not been demonstrated with specific instances from the bank statement of the assessee. 9. Considering the entire facts and circumstances of the case, therefore, I see no reason to disbelieve the assessee’s explanation to the source of cash deposits in his bank account amounting to Rs.20,00,000/- as out of cash withdrawals made earlier. The fact that the assessee withdrew sufficient amount of cash from bank earlier is not disputed. The Revenue has not found the assessee to have utilized the withdrawal elsewhere/anywhere. The assessee’s explanation of

P a g e | 5 ITA No.930/JPR/2025 Ramesh Chawala habitually withdrawing amounts from his bank for personal reasons and maintaining minimum balance therein has not been found to be outrightly false. In fact I have found the Revenue rejection of assesse’s explanation stating that the assessee maintained sufficient balance in his bank account to be not supported with specific instances pointed out from the bank account of the assessee. Moreover the definition of sufficient varies from person to person considering various factors. The orders of the authorities below does not clearly bring out how they arrived at a finding that the assessee maintained sufficient balance in its bank account to reject assesses explanation .I am of the view that the entire case of the revenue rests on presumptions and assumptions. Accordingly, I hold that, there is no reason at all for treating the cash deposit in his bank account as from an unexplained source. I, accordingly, delete the addition made to the income of the assessee of cash deposited in the bank account of the assessee to the extent of Rs.20,00,000/- u/s 69A of the Act. 10. Ground of Appeal No.2 and 2.1 of the assessee stands allowed. 11. Ground of Appeal No.3: relating to the issue of denial of claim of exemption of the assessee u/s 54F of the Act amounting to Rs.30,46,305/- . 12. It was demonstrated before me, and it was the case of the ld. Counsel for the assessee that while the AO had in his speaking order, after discussing the issue had held the claim of exemption u/s 54F of the Act allowable to the assessee and even in the computation of income ,which was part of the assessment order , the AO had made no

P a g e | 6 ITA No.930/JPR/2025 Ramesh Chawala addition on account of denial of claim exemption u/s 54F of the Act. However, he pointed out that, in the computation sheet which accompanied the demand notice raised on the assessee, in consequence, to the assessment so framed, an addition of Rs.30,46,305/- was made to the income of the assessee as “Income from Capital Gains”. 13. All the above facts were demonstrated to me, from the assessment order, wherein the findings of the AO regarding the assessee’s claim of exemption u/s 54F of the Act on account of claim against “Income from Capital Gains” earned was held to be acceptable and no addition on account of capital gains was made to the income assessed of the assessee, and from the computation sheet accompanying the demand notice u/s 54F showing addition to the income of the assessee of “Income from Capital Gains” amounting to Rs.30,46,305/-. It was pointed out to me, that despite pointing out all these facts to Ld. CIT(A), he had simply confirmed the addition made in the computation sheet. 14. Thus, the case of the ld. Counsel for the assessee before me was that, while the AO found and held no addition being warranted under the head “Income from Capital Gains” in the assessment framed for the impugned year in the case of the assessee, however, the computation sheet accompanying demand notice inadvertently, had made addition on account of “Income from Capital Gains” to the tune of Rs.30,46,305/-, which inadvertent error needed to be corrected and the addition made be directed to be not considered for computing the tax demand on the assessee.

P a g e | 7 ITA No.930/JPR/2025 Ramesh Chawala 15. The Ld. DR before me fairly agreed to the facts pointed out by the ld. Counsel for the assessee as above, more pertinently that the AO had accepted assessee’s explanation with regards to computation of capital gains returned by the assessee and had held no addition to be made under the said head. 16. In the light of the above admitted facts, that the computation sheet accompanying the demand notice had inadvertently made an addition of “Income from Capital Gains” amounting to Rs.30,46,305/-, I direct the AO to compute the taxable income of the assessee for the purposes of issuing demand notice on the assessee in accordance with the assessment order , i.e. without making any addition under the head long term capital gains . 17. Ground of appeal No.3 raised by the assessee is allowed. 18. In effect, appeal of the assessee stands allowed. Order pronounced in the open court on 04.06.2026

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 04.06.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

P a g e | 8 ITA No.930/JPR/2025 Ramesh Chawala By Order,

Asst. Registrar ITAT, Jaipur