NEERAJ SINGH,AGRA vs. DEPUTY COMMISSIONER OF INCOME TAX, ALIGARH

INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “SMC”: AGRA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER

ITA No.186/AGR/2026 (Assessment Year: 2021-22) Neeraj Singh, Vs. DCIT, Pipal Mandi, Bichpuri, Central Circle, Agra Aligarh (Appellant) (Respondent) PAN: HCTPS9564M Assessee by : Shri Deependra Mohan, CA Revenue by: Shri Anil Kumar, Sr. DR Date of Hearing 21/05/2026 Date of pronouncement 02/06/2026

O R D E R 1. The appeal in ITA No. 186/AGR/2026 for AY 2021-22, arises out of the order of the ld. Commissioner of Income Tax (Appeals)-4, Kanpur [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 17.12.2025 against the order of assessment passed u/s 144 r.w.s. 148 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 29.12.2017 by the Assessing Officer, DCIT, Central Circle, Aligarh (hereinafter referred to as ‘ld. AO’). 2. The first issue to be decided in this appeal is as to whether an addition of Rs. 24,01,300/- on account of seized cash by Police could be added in the hands of the assessee herein in the facts and circumstances of the instant case. 3. I have heard the rival submissions and perused the material available on record. The assessee is an individual and had not filed her return of income for the AY 2021-22, as her income does not exceed the maximum amount not chargeable to tax. During the AY 2021-22, the cash of Rs. 24,01,000/- was intercepted by Mathura Police in custody of assessee and Shri Rahul from the car. The assessee submitted that said cash belongs to Mr Deepak. The assessee is the sister-in-law of Mr. Deepak. Mr Deepak also had confirmed this fact before the ADIT, Investigation, Wing-2, Agra vide letter dated 17.11.2021 in response to the proceeding initiated u/s 131(1A) of the Act. In the said letter dated 17.11.2021 enclosed in pages 8 to 9 of the paper book, Mr. Deepak specifically stated that Mr. Rahul had passed away in the meanwhile and that Mr. Deepak is regularly assessed to income tax and had enclosed the computation of total income along with the Income Tax Returns; that he is engaged in agricultural activities by taking agricultural lands on lease from the land owners in addition to his own own agricultural land and after production of agricultural produce being rice(dhan) etc, on the said lands, sells it to the different mandis and that after selling, the consideration was received, which was utilized for repayment to the persons from whom the lands were taken on lease and other allied expenditures incurred for carrying on agricultural activities. He also confirmed that this activity was carried out for so many years. Mr Deepak also submitted copy of mandi receipts from Krishi Utpadan Mandi Samiti Khair to prove the evidence of sale of agricultural produce in the Mandis. He also submitted the third-party confirmations as provided by the land owners wherein they have admitted that they have leased out their agricultural land to Mr. Deepak and furnished copy of khasra and khatauni of the said lands to evidence the existence of said agricultural lands. In the said letter, Mr Deepak categorically owned up the cash seized by the police authorities on 27.11.2020 in the sum of Rs. 24,01,300, that the same was earned by him on account of selling of agricultural produce. However, Mr Deepak even wrote yet another letter dated 22.12.2022 to the ld AO of the assessee herein (letter is enclosed in pages 3 and 4 of the paper book), confirming the facts that were stated in letter dated 17.11.2021. Further, in this letter dated 22.12.2022, Mr Deepak also stated that as the assessee’s father is a drunker and her mother is of old age, the assessee gave the cash to his brother Boby Balyan, for making the payment to the land owners from whom the agricultural land was taken on lease. Late Shri Rahul, brother of the assessee and Mrs. Neeraj, wife of Boby Balyan was taking the cash to make the payment on behalf of Mr. Deepak to the land owners, when on the way, Mathura Police seized the cash on 27.11.2020. Mr. Deepak also enclosed the copy of confirmations along with copy of Aadhaar card of the land owners and Khasara/Khatauni to prove the existence of the land. Despite all these confirmations, the ld AO in the hands of the assessee framed an assessment u/s 144 r.w.s. 148 of the Act on 28.3.2024 by making an addition of Rs. 24,01,300/- along with estimated addition of Rs. 2 lakhs on account of basic household expenses. This action of the ld AO was upheld by the ld CIT(A). 4. The ld AR before me even placed on record scrutiny assessment order of Mr. Deepak framed u/s 143(3) of the Act for AY 2021-22 dated 30.12.2022, wherein Mr. Deepak had reiterated before his Assessing officer that the cash seized by the police of Rs. 24,01,300 belongs to him and claimed ownership for the same. Despite this, the very same AO who has assessed the assessee herein, chose not to make any addition in the hands of Mr. Deepak and proceeded to make the addition on account of seized cash of Rs. 24,01,300 in the hands of the assessee. I find that the stand taken by the assessee, Late Mr Rahul and Mr. Deepak before the Investigation Wing, was categorical that seized cash of Rs. 24,01,300 belongs to only Mr Deepak as the same had been owned up by him. In fact, Mr Deepak had also written letter dated 22.12.2022 before the Assessing Officer (enclosed in page 3 and 4 of the paper book) before the ld AO of the assessee by owning the seized cash of Rs. 24,01,300. It is pertinent to note that the Assessing Officer of the assessee and the Assessing Officer of the Mr. Deepak is the same person. Mr. Deepak had also written in his letter that the assessee was only a carrier of cash which stood intercepted by the police enroute which was meant for payments to be made to agriculture land owners on behalf of Mr Deepak. This is a plausible Page | 3 explanation given by Mr. Deepak. When Mr. Deepak had come forward and own up the cash of Rs. 24,01,300, where is the need for the said sum to be even considered and added in the hands of the assessee. I have no hesitation to delete the addition of Rs. 24,01,300 in the hands of the assessee. The grounds raised in this regard are allowed. 5. The next issue to be decided in this is as to whether ld CIT(A) was justified in confirming the addition of Rs. 2 lakhs on account of basic household expenses on an estimated basis in the facts and circumstances of the instant case. 6. I have heard the rival submissions and perused the material available on record. At the outset, the assessee had not even filed return for the year under consideration as she has no taxable income. She is a home maker and had not incurred any household expenses out of her income. There is absolutely no basis for estimating income of Rs. 2 lakhs in the hands of the assessee on account of household expenses. Hence, the addition made is hereby deleted and grounds raised in that regard are allowed. 7. No other issues and grounds were argued before me and hence other grounds are dismissed as not pressed. 8. In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 02/06/2026.

-Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 02/06/2026 A K Keot Copy forwarded to 1. Applicant