JAGMOHAN,BHARATPUR vs. ITO WD 2, BHARATPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.1093/JPR/2025 (Assessment Year:2017-18)

Jagmohan Vs. ITO 32 Saray Mohalla DEEG, Ward 2 Bharatpur Bharatpur �थायीलेखासं./जीआइआरसं./PAN/GIR No:AZXPJ 0174 G Appellant .. Respondent Appellant by : Sh. Shailesh Mantra, CA Respondent by : Sh. Gaurav Awasthi, JCIT Date of Hearing 02.06.2026 Date of Pronouncement 30.06.2026 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”) dated 08- 08-2024. 2. The appeal is delayed for filing by 273 days. Ld. Counsel for the assessee has filed an application seeking condonation of the delay, stating that the delay occurred on account of the fact that he was a

P a g e | 2 ITA No.1093/JPR/2025 Jagmohan small trader in agricultural products residing in a very small Rural area of Deeg,was unfamiliar with the tax laws and procedures, and had relied on a Professional to assist him in the tax procedures, giving him all information which he had asked for, but to his surprise, while some information was given during assessment proceedings, the Professional engaged by him had not participated in the appellate proceedings submitting only one submission in writing, and seeking more time to file further responses. That he was also not conveyed the fact of the Ld. CIT(A) order having been passed, and it was only in the next year when he went to met another Professional for filing his return of income, that he became aware of the fact on checking of his income tax portal that the Ld. CIT(A), order had been passed, that he accordingly, took necessary action for filing of the present appeal, resulting in a delay of 273 days. 3. He therefore, pleaded that there was sufficient cause for delay and great injustice would be caused to the assessee if the delay is not condoned, since the assessee was not having any taxable income, but however, the AO had assessed the income of the assessee at Rs.30,92,060/-, imposing huge financial burden on the assessee by way of taxdemand thereon and interest to be paid also. 4. Ld. DR vehemently opposed the condonation of delay. 5. Having heard both the parties, I am of the view that the assessee has adduced sufficient cause for the delay in filing of the present appeal and juxtaposing the technicalities of delay in the filing of present appeal against the principles of natural justice, I am of the view that the

P a g e | 3 ITA No.1093/JPR/2025 Jagmohan interest of justice should prevail noting that the assessee would be greatly prejudiced against if the delay is not condoned, since the huge addition made to his income would be confirmed without hearing the assessee. I therefore condone the delay in the filing of the present appeal of 273. 6. Taking up the appeal for hearing, the grounds of appeal raised by the assessee read as under:- 1. That the Ld. CIT-A has erred in facts and in law by confirming the addition of Rs. 27,39,677/- as unexplained money u/s 69A of Income Tax Act, 1961 without considering the details available on record. 2. That the Ld. CIT-A has erred in facts and in law by confirming an addition of Rs. 3,52,385/- as trading addition. 3. The assessee craves the right to add, alter OR amend any of the ground of appeal. 7. The assessee had proposed an additional ground of appeal before me, which read as under:- The Ld. Lower authorities has erred in facts and in law applied the provision of section 115BBE of income tax act for AY 2017-18 and calculated tax @ 60% which is against the law. 8. The solitary issue in the present appeal pertains to cash found deposited in the bank account of the assessee during demonetization period, the source of which remained unexplained amounting to Rs.27,39,677/-. The orders of the Authorities below reveal that the AO had noted the total cash deposits in the bank account of the assessee during the entire year to be Rs.69,61,500/-, and noting the assessee to have a total turnover or sales of Rs.44,04,812/-, the cash deposited in the bank account to the said extent was accepted by the AO as duly explained. The balance of the cash deposited was attributed by the

P a g e | 4 ITA No.1093/JPR/2025 Jagmohan assessee to be recovered from debtors on account of sales made in the preceding year. This explanation of the assessee was not believed by the AO since he found that no return of income had been filed by the assessee in the preceding year, to substantiate his explanation that there were debtors outstanding for recovery for the preceding year. Accordingly, he treated the cash deposited in the bank account of the assessee to the tune of Rs.27,39,677/- as from unexplained sources which was confirmed by the Ld. CIT(A). 9. The orders of the Authorities below reveal that the assessee had furnished confirmations from all the debtors from whom he had recovered this amount of Rs.27,39,677/- during the year, but the same were disbelieved by the Authorities below for the reason that they did not contain specific particulars of the debtors so as to enable the Assessing Officer to verify the contents of the same. The names were not clear, the addresses were not specified, were the anomalies noted in the affidavits. 10. The ld. Counsel for the assessee before me, pointed out that Deeg, the place where the assessee resided was a very small place, where they were no specific addresses of persons and it was no difficult to verify the affidavits given by the said persons.That if asked for, the assessee would have produced the persons for verification. 11. Besides, the ld. Counsel for the assessee contended that the bank account of the assessee wherein this cash was found deposited revealed that the assessee had utilised all the cash deposited in his bank account, which was received from the sale made during the year of agricultural

P a g e | 5 ITA No.1093/JPR/2025 Jagmohan produce or on account of recovery from debtors, being immediately withdrawn and payment made to creditors. 12. He drew my attention to the copy of bank statement for the impugned year furnished to the Authorities below placed before me at paper book page No.87-92, and pointed out, the fact that immediately on receipt of cash; assessee had transferred the amounts by NEFT transaction to its creditors. That since he was a dealer of agricultural produce and was operating on credit purchases, earning only margins thereon, immediately on receipt of collection from sales, the amount was utilised to pay off its creditors. That the amount received from debtors also as claimed by the assessee during the year was similarly transferred to creditors. Therefore, he contended that the assessee explanation was genuine. 13. The Ld. DR however, supported the orders of the Authorities below. 14. I find merit in the contention of the ld. Counsel for the assessee that the assessee had duly explained the source of cash deposited in his bank account of Rs.27,39,677/- as being out of collection from debtors during the year. Admittedly, the assessee had filed affidavit of all the debtors. The infirmity noted in the said affidavits alone did not justify the rejection of the same by the AO as ingenuine considering the facts and circumstances of the case where the assessee was a small dealer in agricultural produce in a very small place of Deeg where people could be identified by their name alone. The AO ought to have conducted further inquiry vis a vis the affidavits filed before rejecting the same as

P a g e | 6 ITA No.1093/JPR/2025 Jagmohan ingenuine. The said parties , whose affidavits were filed, could have been produced by the assessee for verification if asked for, but the Revenue Department chose not to do so, but on the contrary, dismissed the affidavits as bogus and fake, merely pointing out infirmities in the same. 15. Moreover, the assessee has fairly demonstrated that all the cash deposited in the bank account during the entire year was used to pay of its creditors through NEFT transaction, which fact, I have noted, emanates from the copy of the bank statement of the assessee itself. Applying the principle of preponderance of probability, therefore, the explanation of the assessee, I hold merits, consideration and accordingly, I hold that the assessee’s explanation of the source of cash deposited of Rs.27,39,677/- in his bank account as being collection made from the debtors cannot be rejected as untrue.The addition, therefore made to the income of the assessee of Rs.27,39,677/- is deleted . 16. In effect, the appeal of the assessee is allowed. Order pronounced in the open court on 30.06.2026.

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 30.06.2026 Mittali, Sr. PS

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