JAGDISH PRASAD JAT,TONK vs. ITO, TONK, TONK

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 1403/JPR/2025 (Assessment Year:2010-11)

Jagdish Prasad Jat Vs. ITO Village Devpura, P.O. Tonk Arniya Kedar Tehsil Tonk, District Tonk-304001 �थायीलेखासं./जीआइआरसं./PAN/GIR No:AUEPJ 4314 L Appellant .. Respondent Appellant by : Sh. Mukesh Khandelwal Respondent by : Sh. Gaurav Awasthi, JCIT Date of Hearing 03.06.2026 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 Office of the Commissioner of Income Tax (Appeal), Addl/JCIT (A) Agra (hereinafter referred to as “Ld. CIT(A)”), u/s 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:-

P a g e | 2 ITA No. 1403/JPR/2025 Jagdish Prasad Jat 1. That the Id. CIT (A) has erred in law and on facts in sustaining the order of the ld. AO in holding that a sum of Rs. 7,00,000/-out of loan advanced for Rs. 9,00,000/- is unexplained asset of the appellant. 2. That the appellant craves leave to add, amend, alter, with draw any ground of appeal before OR during hearing of the appeal. 3. The solitary issue in the present appeal relates toaddition made to the income of the assessee on account of cash loan advanced of Rs.9 lakhs during the year the source of which allegedly remained unexplained. 4. Ld. Counsel for the assessee, at the outset itself, stated that none appeared before the Ld. CIT(A) on behalf of the assessee and accordingly the Ld. CIT(A) passed the order ex parte. He however, contended that all evidences and explanation regarding the source of Rs.9 lakhs loan advanced by the assessee were placed during assessment proceedings and he would rely on the same for arguing the case of the assessee before me. 5. Pointing out the facts of the case, the ld. Counsel for the assessee contended that the case of the assessee for impugned year was reopened on the information available with the AO that the assessee had advanced cash loan to one Mr. Ankit Mittal amounting to Rs.9 lakhs in the year 2010, and on investigation conducted with the assessee he was unable to give a satisfactory explanation regarding the source of the same. 6. Ld. Counsel for the assessee further pointed out from the assessment order, that during assessment proceedings, the assessee contended that, the cash loan was sourced out of his personal savings of

P a g e | 3 ITA No. 1403/JPR/2025 Jagdish Prasad Jat Rs.3,70,000/- and loans taken from close relatives amounting to Rs.5,30,000/- , but the AO disbelieved assessee’s explanation regarding the loan being sourced from close relatives to the extent of Rs.5,30,000/-, and with regards to assessee’s explanation of the source emanating from his personal savings, the AO accepted the same to be extent of Rs. 2 lakhs alone. Accordingly, he pointed out, the AO made addition of an amount of Rs.7 lacs to the returned income of the assessee (Rs.5,30,000/-+ Rs.1,70,000/-).He pointed out that the assessee had filed return of income declaring income of Rs.1,25,400/- as “income from the other sources” and net agricultural income of Rs.65,400/-. 7. Ld. Counsel for the assessee pointed out that, with respect to the source of cash loan advanced to the extent of Rs.5,30,000/-, emanating from loans taken from six creditors, that the assessee had given all details of the said creditors including their names and addresses, their affidavits, and also the copy of their jamabandis as evidences of their creditworthiness. That despite filing of such evidences, the AO rejected this explanation merely because during investigation conducted on the assessee regarding the source of this cash loan the assessee had not attributed any amount to have been sourced from loans taken from others, but had attributed the entire loan advanced of Rs.9 lacs to be from his own personal savings. Noting the contradiction in the statement of the assessee regarding the source of loan advanced in investigation proceedings and during assessment proceedings, the AO rejected the explanation of the assessee given during assessment

P a g e | 4 ITA No. 1403/JPR/2025 Jagdish Prasad Jat proceedings, despite evidences filed by the assessee, to support his contention. 8. The ld. DR was unable to controvert the contention of the ld. Counsel for the assessee as above, that the assessee’s explanation of the loan advanced by the assessee to the extent of Rs.5,30,000/-, was explained as sourced from six creditors, which was duly corroborated with all evidences, but was rejected by the AO merely because it was contrary to the explanation furnished by the assessee regarding the said cash loan advanced to the extent of Rs.5,30,000/-, during investigation proceedings. 9. Noting the above admitted facts, I am not inclined to agree with the AOs finding that the source of loan advanced to the extent of Rs.5,30,000/-, remained unexplained. The assessee having furnished all documentary evidences to corroborate its explanation of Rs.5,30,000/- being advanced to it from creditors, the AO was duty bound to verify the claim of the assessee. His rejection of the assessee’s explanation merely because he had given a different explanation earlier during investigation, I hold is a completely unjustified. When the assessee had furnished all details of the parties who had advanced loan to him, duly supported with their affidavits, and also evidenced their creditworthiness by furnishing their jamabandis, I hold that the assessee had discharged its onus to prove the source of cash advanced to the extent of Rs.5,30,000/-. The AO having not pointed out any infirmity in the explanation of the assessee duly corroborated with the evidences furnished, I hold that there was no case with the AO at all oftreating the

P a g e | 5 ITA No. 1403/JPR/2025 Jagdish Prasad Jat loan advanced to the extent of Rs.5,30,000/- as out of unexplained sources. The addition made therefore to the extent of Rs.5,30,000/-, I hold isnot sustainable and direct deletion of the same. 10. With regards to assessee’s explanation, of the source of the balance amount of Rs.3,70,000/- advanced during the year as being out of his own personal savings, I find that the AOs restriction of the benefit to be granted to the assessee in this regard upto Rs.2 lacs, to be an entirely arbitrary exercise without any basis at all. The assessee in support of its contention of having advanced Rs.3,70,000/- out of his personal savings, I find, had stated that he was earning income from agricultural activities and from the sale of milk of domestic animals and supported his contentions with certificate from Devpura Dugdh Utpadak Sehkari Samiti Limited, which certified that the assessee had been supplying milk of Rs.10,000-12,000/- per month since 2007, the impugned assessment year before me, being AY 2010-11 pertaining to Financial Year 2009-10. 11. Similarly, the agricultural income had been supported with a copy of land jamabandi, showing the assessee’s share in the land at 6.16 Bigha. The AO has also noted the assessee to have shown dairy income in the range of Rs.80,540/- in the Financial Year 2006-07 to Rs.1,25,400 in Financial Year 2009-10, and similarly agricultural income in the range of Rs.65,400/- in Financial Year 2006-07 to Rs.92,775 in Financial Year 2009-10. 12. Considering all the above facts, the Ld. AO has arbitrarily estimated the savings available with the assessee for the impugned year

P a g e | 6 ITA No. 1403/JPR/2025 Jagdish Prasad Jat to be Rs.2 lacs. There is no basis given by the AO for such estimation. And considering the data noted by the AO wherein the assessee admittedly has been earning around Rs.1.5-2 lacs every year since Financial Year 2006-07 to Financial Year 2009-10, which is approximately 4 years and noting the fact that the assessee resided in a Rural area and was an agriculturalist himself, I do not consider savings of Rs.3,70,000/- by the assessee to be not justified. 13. Therefore, I hold that the source of Rs.3,70,000/- of the cash loan advanced by the assessee from his personal savings also stands explained. And accordingly, the addition made by the AO of Rs.1,70,000/- out of the same is held to be not sustainable and I direct the deletion of the same also. 14. In effect, the entire addition made to the income of the assessee amounting to Rs.7 lacs is directed to be deleted. 15. In result, 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 Copy forwarded to: 1. Appellant

P a g e | 7 ITA No. 1403/JPR/2025 Jagdish Prasad Jat 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur