RAJ KUMAR JAISWAL, JASPUR,JASPUR vs. ITO, WARD-2, RAIGARH, RAIGARH

आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 24.03.2026 for the assessment year 2017-18 as per the grounds of appeal on record.

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running from 09-11-2016 to 30-12-2016 in the Punjab National Bank. Though the assessee had not furnished any details, the same have been obtained from the Punjab National Bank u/s 133(6) of the Act. The details of the cash deposited by the assessee during the demonetization period worth Rs. 21,50,000/- in the SBN notes are given as under:- Date BANK A/c No. Denomination Quantity Value 13-11-2016 500 1600 800000 16-11-2016 1000 50 50000 Punjab National 4043002100006695 -do- 500 1800 900000 Bank 23-11-2016 1000 200 200000 18-12-2016 1000 200 200000 Total 21,50,000/-

While asking for the reply u/s 142(1) of the Act, the assessee was requested to furnish the details of the cash deposited during the demonetization period by giving the bifurcation between the cash deposited in the SBN notes and that in the new currency. However, the assessee failed to furnish any details thereof. Therefore, the assessee was issued the show cause on 24-12-2019 communicating him the proposed addition and asking him to furnish the reply by on or before 26-12-019. To the show cause the assessee did not submit any reply by the stipulated date and time. However, the reply was received on official mail@caigarh.ito2 @incometax.gov.in. However, the reply has been taken on record. 5. Discussion on the reply of the show causes: the relevant extracts of the reply of the assessee reproduced below: 1. “As may be appreciated from the bank statements submitted of Punjab National Bnak A/c no ending 6695 the immediate source of cash deposit is sale of liquor to consumers and the subsequent disposal of cash was utilized for purchasing liquor and this fact is verifiable from bank statement of Punjab National Bank where it is clearly indicated that the payment was made to Jharkhand State Beverages Corporation Ltd. (JSBCL) The bank statement itself is credible evidence that cash received on sale of liquor is used for purchase of liquor Therefore, it is not a case of direct cash deposit without immediate source of cash in the similar case of liquor licensee Smt. Rani Shrivatav, Raipur at Circle

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2(1), Raipur SCN was issued and assessee submitted reply in same lines and the assessment was competed without any reservations. The copy of the assessment order is enclosed herewith as Annexure-1 for your kind perusal” The reply of the assessee was gone through, however I don't find any merit therein. Despite repeatedly being in SBN notes, requested to furnish the documents that can establish the source of cash deposited during the demonetization in but the assessee did not furnish any such document. Therefore, main requirement of the section 68 of the Act and that is obligation upon the assessee to explain the cash credited in his books, but the assessee by not supplying anything failed to substantiate his contention as to the nature and source of cash deposited during the SBN notes. Further, the facts and the circumstances of the case referred to by the Assessee might be different not having any concomitant correlation with the underlying one. Given this backdrop, the contention of the assessee has not been found acceptable. 2. As regards to documentary proof it is pertinent to submit here that the assessee has filed copy of excise License No. 06/266/2016-17 for the year 2015- 17 and other relevant documents. This is standing evidence of the fact that the assessee carried liquor business and the cash deposited in the bank account relates to liquor business. As requested earlier this fact may kindly be enquired into from the excise Office" The aforesaid contention but has not been found within the realms of admittance. Can the assessee claim by furnishing a copy of Excise License for the year 2016-17 absolves him from the onus cast upon him by the section 68 of the Act? When the issue relates to the period of demonetization where there is strong possibility that the unaccounted income of the assessee lying in the form of liquid might have found its way to the bank account of the assessee. Given this backdrop, how the assessee can claim license of liquor is the standing evidence, it is to be kept in the mind that the decision of demonetization was unprecedented one and was aimed at stamping out the menace of the black economy from Indian Economy, in such background, the assessee needs to furnish the credible explanation accompanied with the documentary proof to explain the source of cash deposited into the bank account being the cash sale. Therefore, the contention of assessee being found lacking evidence is not accepted.

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Apart from the above two main points of contention, the other points raised by the assessee have already been discussed in above paras. They will be touched upon in the ensuing discussion. 6. As cast upon by the section 68 of the Income Tax Act, 1961, it is the onus of the assessee to establish the cash credits appearing in the books of account, which in the underlying case were claimed to have been on account of cash sales. However, the assessee did not furnish any details of the cash sale made by him during the year under consideration. Though the details of the stock uplifted from the excise department were given, but the assessee did not furnish any other details that can support the source of the cash deposited by him during the year under consideration. When repeatedly asked about the source of the cash deposited during the year, he did not give any documentary proof. He only said that he was the benamidar, but in support of his contention, he did not furnish any proper documentary proof. Thus, it is unambiguously proved that the unaccounted income has been introduced in the garb of cash sale. By paying the NP on such bogus cash sale, he tried to get away with his unaccounted income on which otherwise the tax would have been paid at 60% tax rate, besides attracting the penalty and surcharge. Thus, the modus operandi of the assessee has been clearly been to introduce his unaccounted income by showing it as the cash sale. As cast upon by the section 68 of the Income Tax Act, 1961, it is the onus of the assessee to establish the cash credits appearing in the books of account, which in the underlying case the assessee, could not explain. Thus, it is unambiguously proved that the unaccounted income has been introduced in the garb of cash sale. The relevant extract of section 68 of the Income Tax Act, 1961 is reproduced below:- “Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income as the income of the of that previous year… 7. Going by the above extract of the Act and in the light of description in the preceding paras, it becomes amply clear that the assessee. The conditions for the applicability of section 68 of the Act are:- The existence of the books of accounts maintained by the assessee himself A credit entry in the books of accounts and The absence of a satisfactory explanation by the assessee

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In the underlying case all the three conditions as stipulated in the Act are satisfied. The assessee is maintaining the books of accounts but he has not furnished any explanation giving the source of cash deposited in the SBN Notes. The phraseology of section 68 is clear. The legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income tax as the income of the assessee of that previous year. The legislative mandate is not in terms of the words shall be charged to Income Tax as the income of the assessee of that previous year. In CIT vs Smt. P.K. Noorjahan, the Hon'ble Supreme Court while interpreting phraseology used in section 69 has held that in creating the legal fiction the phraseology employs the word may & not shall. Thus, the un-satisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of assessee. Therefore, according to section 68, the first burden is on the assessee to satisfactorily explain the credit entry in the books of account of the previous year, if the explanation given by the assessee is satisfactorily explained, then the entry will not be charged with the income of the previous of year of the assessee. In case the explanation offered by the assessee is not satisfactory or the source offered by the assessee is not satisfactory, then in that case, the amount should be taken to be the income of the assesse 7.1 In Nanak Chandra laxman Das vs. CIT, The Allahabad high Court has taken the view that where any sum is found credited in the books of the assessee, the initial onus is on the assessee to offer an explanation of the nature and source of the cash credit. If the explanation is not found satisfactory or reasonable, the Income Tax Officer can treat such money as the assessee's income from the undisclosed sources. It is not necessary for the Income Tax Officer to locate the exact source of the credits. 7.2 Unexplained cash credit may be charged to Income Tax, the section requires that the Assessing Officer must be satisfied that the explanation offered by the assessee is genuine, but it also provides that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income tax.

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7.3 Burden of proof and extent of onus: The onus is on the assessee to prove the source and nature of receipt. The onus of proving the source of a sum of money found to have been received by an assessee is on him. If he disputes the lability for tax, it is for him to show either that the receipt was not income or that it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Revenue is entitled to treat it as taxable income. 7.4 In Govindarajulu Mudaliar vs. CIT, the court came to the conclusion that there is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income Tax Officer is entitled to draw the inference that the receipt are of an assessable nature. 7.5 In Kale Khan Mohammad Hanif vs. Commissioner of Income Tax, the Hon'ble Supreme Court in answering the question whether the burden of proving the source of cash credits is on the assessee observed that it is well established that the onus of proving the source of sum of money found to have been received by the assessee is on him. If he disputes fiability for tax it is for him to show either that the receipt was not income or that if it was, it was exempt from the taxation under the provisions of the Act. In the absence of such proof, the Income Tax Officer is entitled to treat as taxable income. 7.6 Shifting of onus to the department: The language of the section 68 shows that it is general in nature and applies to all credit entries in whomsoever name they may stand, that is, whether in the name of the assessee or a third party. This section has therefore removed the distinction which was drawn in some decisions between the credits held in the name of the assessee and those held in the name of a third party. Under section 68 now the assessee has to prove that such third party was in a position to lend such sums and that he did, in fact, so lend to the assessee in order to satisfy the Income Tax Officer that the credits shown in the books of accounts were genuine. This section has laid the onus of proof on the assessee. 7.7 Assessing Officer must be satisfied: The section requires that the assessing officer must be satisfied that the explanation offered by the assessee is genuine. Section 68 of the Act does not stop at advancing of explanation about the nature and source required to be satisfied that the

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explanation offered by the of accounts by the assesses. The assessing officer is also required to be satisfied that the explanation offered by the assessee is acceptable and/or in other words genuine. When the law has given to the Assessing Officer discretion and it is his satisfaction upon which genuineness has to be decided, his inference on the basis of facts is finding of the fact. In CIT vs Daulat Ram RAwatmull, the Hon’ble Supreme Court held that the fact that the depositor had not been able to give a satisfactory explanation regarding the source of deposits would not be decisive of the matters to whether the depositor was or was not the owner of the amount that person could still be held to be the owner of a sum of money, even though the explanation furnished by him regarding the source of that money was to be incorrect, and that from the simple fact that the explanation regarding the source of money had been found to be false, it would be a remote and fartetched conclusion to hold that the money belonged to the assessee. 7.8 Legal position with regard to treat the transaction entered into by assesses Artificial Transaction Sham, Fictitious and Artificial Transaction: (a) In determining whether a number of transactions of which at least one (the genuine transaction) had no purpose other than tax avoidance should be treated for fiscal purposes not as independent but as forming part of one composite linear transaction for which the tax consequences flowed when was preordained in order to produce a given result, that the transaction had no other purpose than tax mitigation. that there was at that time no practical likelihood that the pre-played everts would not take place in the order ordained, so that the intermediate transaction was not even contemplated practically as having an independent life, and that the pre ordained events did in fact lake place (b) In the context of determining whether a transaction is a sham or illusory transaction or a device or a ruse, the income-tax authorities are entitled to penetrate the veil covering it and certain the truth. The taxing authorities are not required to put on blinkers while looking at the documents produced before them. They are entitled to look into the surrounding circumstances to find out the reality of recitals made in the documents. IN every case, where ingenuity is expended to avoid taxing and welfare legislation, it is the duty to get behind the smoke screen and discover the true state of affairs.

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(c) There is behind taxation laws as much moral section as is behind any other welfare legislation and it is a pretense to say that avoidance of taxation is not unethical and the stands of no less a moral plane than honest payment of taxation. The proper way to construe a taxing statue, while considering a device to avoid tax, is not to ask whether the provisions should be constructed literally or liberally nor whether the transaction is not unreal and not prohibited by the statue, but whether the transaction is a device to avoid tax and whether the transaction is such that the judicial process may accord its approval to it. It is neither fair nor desirable to expect the Legislature to intervene and take care of every device and scheme to avoid taxation. 7.9 Colourable Device: Here is it also pertinent to mention the objective of such edifice as employed by the assessee to bring back on books his unexplained income lying in the form of liquid cash. Thus, the assessee succeeded in bringing back his own unaccounted cash into his books by paying the tax merely as NP on such fake sale, otherwise he was required to pay the tax @ 60% plus interest, surcharge and penalty. The Hon'ble Supreme Court in the case of McDowell Vs CTO 154 ITR 148 (SC) has given strong verdict against any such arrangements by stating that "Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." In view of the Apex Court verdict, this entire arrangement is held as a mere colorable device devised with the aforementioned objectives. 8. Going by the above extract of the Act and in the light of the description in the preceding paras, it becomes amply clear that the assessee failed to discharge the onus as cast upon him in terms of section 68 of the Income Tax Act, 1961. The assessee did not furnish any details explaining the source of cash deposited in the SBN notes during the demonetization period. He simply stated that following the case law laid down in the case of Shri Trilok Singh Dhillon vs DCIT reported in 332 ITR 185 by the Hon'ble Jurisdictional High Court, the assessment should be made in the hands of the beneficiary of the business. The case was gone through but the facts and circumstances of that case have been found entirely different from this one. Therefore, ratio laid down in that case cannot be applicable over here. Moreover, that case was related to survey proceedings initiated against Shri Trilok Singh Dhillon and enough

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proof was unearthed by the department in the survey proceedings that can give the teeth to it that the beneficiary of business was Shri Trilok Sigh Dhillon; but this case was selected through CASS and all the evidences/ documents give the strong impression that Shri Rajkumar Jaiswal himself was doing the liquor business. The case records, the audit report, the bank accounts and the stock records uplifted by the assessee from Excise Department speak lout and clear that Shri Rajkumar Jaisawal was the real beneficiary, and the story of Shri Pratyush Kumar Sahu was cooked up in the eleventh hour to escape from paying the legitimate taxes. As the assessee did not furnish apy explanation Therefore, the addition of Rs. 21,50,000/- is made by the cash sale to the extent of Rs. 21,50,000/-, Penalty treating the same as unexplained cash credit within the meaning of section 68 of the Income Tax Act, 1961 as I am not satisfied with the explanation furnished by the assessee to explain the proceedings in terms of section 271AAC for unexplained income are initially separately. The calculation is to be dome 60% in terms of section 115BBE of the Act. Addition: Rs. 21,50,000/- 9. Subject to the above discussion and taking into account the-facts and circumstances of the case, total income of the assessee is computed as below- Income as shown in the Return of Rs.4,98,180/- Income Addition : As per para 8 u/s 68 of Rs.21,50,000/- the Act Total Income assessed and Rs.26,48,180/- rounded off

Assessed as above u/s 143(3) of the Act. Give credit for prepaid taxes as shown on portals. Tax calculation as per ITNS-150 is enclosed which is a part of this order. Initiate penalty proceedings u/s 271AAC of the Act separately”.

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SBN currency during the demonetization period by the assessee and there is no issue pertaining to the unexplained cash credit, there is no issue of loan transactions in the case of the assessee. The only point of the Revenue was whether the assessee was able to explain the nature and source of the cash deposits made. However, charging section invoked by the A.O and upheld by the Ld. CIT(Appeals)/NFAC was Section 68 which in the present case is misplaced. The correct charging section should have been Section 69A of the Act dealing with unexplained money, hence it is a clear case of non-application of mind by the Revenue authorities since the section in which addition has been made by the A.O does not match with the facts of the assessee’s case and also does not match with trail of enquiry done by the Revenue authorities regarding the assessee.

“4. I have carefully considered the submissions of the parties herein, analyzed the facts and circumstances in this case. That from trail of enquiries as conducted by the both the authorities below and as evident from assessment order, the addition has been made u/s.69 of the Income Tax Act, 1961 (for short ‘the Act’) as unexplained investment whereas the issue was that the assessee had deposited cash of Rs.12 lakhs during demonetization period and whether the nature and source of such cash deposits were proved by the assessee or not. In the case of the assessee there is no evidence to suggest that any investment is made by the assessee outside the books of account and in fact, the purpose of ground verification by deputing Inspector to verify whether the assessee

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was earning through boutique business or not, was to examine the nature and source of such cash deposits only and there is nothing with regard to the applicability of Section 69 of the Act in the case of the assessee. The assesse had made cash deposits during demonetization period and she was required to explain the nature and source of such cash deposits. There is no trail of enquiry by the Department regarding any unexplained investment made during the year by the assesse. It is not the case of the Department that some investment has been made by the assessee which is not explained or outside the books of account of the assessee. Therefore, even without going into the merits of the addition, both A.O as well as Ld. CIT(Appeals)/NFAC has erred in invoking incorrect provision for making addition in the hands of the assessee. 5. There is absolutely non application of mind by the A.O in the case of the assessee. The wrong charging provision to the facts and circumstances of the case regarding the assessee is the result of non-application of mind by the Assessing Officer. That as per the Department when the source of cash deposits have remained unexplained by the assessee the correct provision for charging should have been Section 69A of the Act and not u/s. 69 of the Act. The fact of non-application of mind and mechanical exercise of power by the Revenue Authorities have been heavily condemned by the various Courts and Tribunals. The decision of the Co-ordinate Bench, Mumbai in the case of Shrilekha Damani Vs. DCIT, 173 TTJ 332 (Mumbai) which was approved by the Hon’ble High Court of Bombay in the decision reported in 307 CTR 218 (Bom.) wherein the question of law before the Court was whether the Tribunal was justified in holding that there was non-application of mind on the part of the Revenue authorities while granting approval and the decision of the Tribunal was upheld that the approval granted by the ACIT was without application of mind, therefore, not a valid approval in the eyes of law. In the case of ACIT, Circle-1(2) Vs. Serajuddin & Co., the Hon’ble Supreme Court vide order in SLP (C) Diary No.44989/2023, dated 28.11.2023 dismissed the appeal filed by the Revenue against the order passed by the Hon’ble High Court of Orissa, wherein the Hon’ble High Court had quashed the assessment order on the ground of inadequacy in procedure adopted for granting approval u/s.153D of the Act by expressing dis-coherent note of such mechanical exercise and ritualistic approval processes vitiate the entire assessment proceedings. There are plethora of judgments in which it has been held that quasi- judicial authority has to specially apply mind to the facts of the assessee’s case as well as enquiry conducted and justify the reasoning through which the tax liability is imposed on the assessee. That in absence of proper application of mind or when

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there is mechanical exercise of power, in such scenario, the Courts have always struck down the order of the Revenue authorities. In the recent decision of the Hon’ble Supreme Court in the case of Adani Power Rajasthan Limited Vs. Assistant Commissioner of Income Tax, (SLP Diary No.27752/2024) has held that the A.O cannot Act mechanically or merely echo audit parties objection or higher authorities directions. The A.O must conduct independent enquiry and independently frame reasons to believe that income has escaped assessment. Reassessment and assessment order requires statutory approval. The Hon’ble Supreme Court mandates that sanctioning authority must apply its mind rather granting approval as empty ritual when the assessment was initiated and finalized by the assessing authority without application of mind, hence, the said order is liable to be struck down. 6. Reverting to the facts of the present case, the trail of enquires conducted by the Revenue authorities as evident from the assessment order as well as from the impugned order that though the additions has been made u/s.69 of the Act as unexplained investment whereas, the issue was regarding explaining of the source of cash deposits by the assessee of Rs.12 lacs during demonetization period. The unexplained cash deposits had to be charged u/s.69A of the Act and not u/s.69 of the Act. There is complete non-application of mind by the A.O regarding the enquiry that had been made before finalizing the assessment order and finally the charging section that is invoked against the assessee. In other words, the A.O had framed assessment against the assessee without recording valid satisfaction and reasoning regarding provisions of law, in which, he had proceeded against the assessee. 7. I find that it has been held by the Co-ordinate Bench of the Tribunal, Delhi in the case of Bhawani Castings P. Ltd. Vs. DCIT ITA No.1362/Del/2024, dated 19.11.2024 that when there is no coherence in the reasons recorded for reopening and additions made in the assessment, it is utter non application of mind by the A.O while recording reasons for reopening. 8. In the decision of the Co-ordinate Bench of Delhi in the case of Sanjeev Kumar c/o M/s Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of non-application of mind, it was observed and held as follows: “14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of assessee, wherein the assessee has not only included cash

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receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods Pvt. Ltd. and has also reduced the amount of drawings for household expenses. The copy of return of income of wife of assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly established that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and AO is directed to delete the entire addition. 15. In the result, appeal of the assessee is allowed.” Similarly, in the decision of Hon’ble High Court of 9. Allahabad in the case of Smt. Sarika Jain Vs. The Commissioner of Income Tax, Bareilly and Another, reported in (2018) 407 ITR 254 (All) which decision was referred to and applied in the earlier decision of the Co- ordinate Bench of Delhi (supra), the Hon’ble High Court of Allahabad held as follows: “In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an addition can be made under Section 69-A of the Act.

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In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that "it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant- assessee under Section 68 of the Act. In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law. Accordingly, we answer the question of law, as framed above, in favour of the appellant-assessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it.” 10. This Bench in the case of Prakash Chand Agrawal Vs. ITO, Ward-2, Raigarh (C.G.), ITA No.205/RPR/2026, dated 22.05.2026, has held that when charging section itself is wrong and misplaced and that the Department had proceeded against the assessee without independent application of mind, in such a case, the addition cannot be made in the hands of the assessee based on such wrong provision of law. The relevant observations of the Tribunal are extracted as follows: “……….I further observe that the additions have been made u/s. 68 of the Act which pertains to unexplained cash credit. But in this case, regarding both the additions, there is no trail of any evidence or enquiry by the Department regarding any loan transaction so to justify addition u/s. 68 of the Act as unexplained cash credit. The entire trail of examination is regarding the nature and source of cash deposits and since the addition has been made by the Department stating the said cash deposits were unexplained then the relevant charging section should have been Section 69A and not Section 68 of the Act. Therefore, charging provision itself has been wrongly invoked by the Department which is clearly non application of mind by the quasi judicial authority. I find that it has been held by the Co-ordinate Bench of the

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Tribunal, Delhi in the case of Bhawani Castings P. Ltd. Vs. DCIT (supra) that when there is no coherence in the reasons recorded for reopening and additions made in the assessment, it is utter non application of mind by the A.O while recording reasons for reopening. 16. In the decision of the Co-ordinate Bench of o Delhi in the case of Sanjeev Kumar c/o M/s Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of non- application of mind, it was observed and held as follows: “14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of assessee, wherein the assessee has not only included cash receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods Pvt. Ltd. and has also reduced the amount of drawings for household expenses. The copy of return of income of wife of assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly established that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and AO is directed to delete the entire addition. 15. In the result, appeal of the assessee is allowed.”

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21 Raj Kumar Jaiswal Vs. ITO, Ward-2, Raigarh (C.G.) ITA No.303/RPR/2026

Department against the assessee to tax u/s.69 of the Act. Charging section itself is wrong and misplaced and as evident, there is utter non application of mind by the Revenue authorities. The assessment has been framed in a mechanical manner without judicious reasoning. In view thereof, the assessment framed u/s.143(3) of the Act is held as arbitrary, bad in law, hence, quashed. 12. Since assessment itself is quashed, subsequent proceedings becomes non-est as per law. Rest other grounds stand academic only. 13. That as per the above terms, the appeal of the assessee is allowed.”

22 Raj Kumar Jaiswal Vs. ITO, Ward-2, Raigarh (C.G.) ITA No.303/RPR/2026

Order pronounced in open court on 26th day of May, 2026.

Sd/- (PARTHA SARATHI CHAUDHURY) �या�यक सद�य/JUDICIAL MEMBER रायपुर / Raipur; �दनांक / Dated : 26th May, 2026. SB, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT-1, Raipur (C.G.) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, रायपुर / DR, ITAT, “SMC” Bench, Raipur. गाड� फ़ाइल / Guard File. 5.

Samiran Bera, आदेशानुसार / BY ORDER, Sr. PS, ITAT, // True Copy // Raipur Senior Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur Digitally signed by Samiran Bera, Sr. PS, ITAT, Raipur Date: 2026.05.26 19:06:34 +05'30'