FIELD CLUB SOCIETY,UDAIPUR vs. ITO WARD 2(2) UDAIPUR, UDAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR

BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 731/Jodh/2024 (Assessment Year 2017-18)

Field Club Society, Field Club Income Tax Officer, Society, Fatehhpura, Udaipur Ward No. 2(2), Udaipur PAN No. AAATF0728L Assessee by Shri Shrawan Gupta Advocate, (Virtually) Revenue by Shri Ghanshyam Meena- Addl. CIT-DR (Virtually) Date of Hearing 09.04.2026. Date of Pronouncement 27.04.2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order dated 28.06.2024 of the Commissioner of Income Tax Appeal ADDL/JCIT (A)-1 Kolkata [hereinafter referred to as the ADDL/JCIT(A)] with respect to the assessment year 2017-18 challenging therein confirmation of the addition on account of cash deposit in the bank account during the demonetization period under Section 69A of the Act.

2 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) 1. The impugned assessment order u/s 143(3) dated 26.12.2019 as well as the notice issued are bad in law and on facts of the case, for want of jurisdiction, barred by limitation, without proper approval or satisfaction and various other reasons and hence the same may kindly be quashed. 2. Rs.9,60,778/- : The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.9,60,778/- made by the ld. AO on account cash deposits in the bank account during the demonetization period as alleged unexplained money/income u/s 69A. The Ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full. The ld. AO has also grossly erred in law as well as on the facts of the case invoking the provisions of Sec. 115BBE for taxing the income at the higher rate, without issue any show cause notice and also not applicable in the present case. The Ld. AO has also erred in not considering the vital facts and material available on record in their t 3. The ld. AO has grossly erred in law as well as on the facts of the case in not allowing the carried forward losses of Rs.3,33,752/-. The Ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition the ld. AO may kindly be directed to allow the carried forward loss in full. 4. The ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B,C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full. 5. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.

3 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) total income of Rs. Nil. During the course of scrutiny assessment, the AO has noted that the assessee has deposited cash of Rs. 34,34,000/- in his bank account during demonetization period out of which the old high denomination currency notes of Rs. 13,69,000/- was deposited in its bank account. The AO being not satisfied with the reply filed by the Assessee has made addition of Rs. 9,60,778/- as unexplained money under Section 69A of the Act by charging tax rate under Section 115 BBE of the Act at the rate of 60%.

4 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) difference of Rs.9,60,778/- The assessee was required vide notice u/s 142(1) dated 20.12.2012 to produce complete books of account and bills and vouchers for verification on 24.12.2019. It was also informed to the assessee that in case the assessee failed to produce complete bills and vouchers alongwith books of account, assessment would be completed on the basis of information available on record. The assessee had not complied with the notice so issued by this office. This showed that the assessee had nothing to say about the discrepancy so noticed in cash deposited during the demonetisation period. Therefore, Rs.9,60,778/- was brought to tax in the hands of the assessee as unexplained money u/s 69A of the I.T. Act being deposited into bank account of the assessee by adding it to assessee's NIL income. As per the provisions of Section 69A, the onus is on the appellant to prove the nature and source of acquisition of old high denomination notes that were deposited during the demonetisation period. The Assessing Officer had given adequate opportunity to the appellant for furnishing an explanation of the above noted discrepancy but, the appellant failed to satisfactorily explain the deposits of Rs. 9,60,778/-. Moreover, the appellant could not file any satisfactory explanation along with documentary evidence to explain the source of difference of cash deposits of Rs. 9,60,778/- during the appellate proceedings. Taking the totality of the facts and circumstances in view, it is quite evident that Appellant was found to be the owner of Unexplained Money of Rs. 9,60,778/- in terms of s. 69A and hence, there is no need to interfere with the decision of the Assessing officer. Case laws cited by the assessee are distinguishable on facts & law. Accordingly, Ground No. 1 raised by the appellant is dismissed. 5. The Ld. Counsel for the assessee submitted that the appellant assessee is a Field Club Society which is formed under Mewar Society

5 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) Registration Act having many points of sales and services, mainly there are 4 bars, sport, marriage garden, restaurant, guest house etc. The Ld. AR contended that the appellant has kept staff of employees at the fees/sales point to collect and receive the fee and sales receipts amounts where they maintains cash books for each sales point but the accounts of these sales points were reconciled on 2/3 days basis at the main office. The appellant has produced the reconciled cash book of sale the points as on 08.11.2016 where the cash in hand has been shown at Rs. 14,30,492/- (ABP Page No. 20). However, the AO has taken into consideration one cash book entry of Rs. 4,08,222/- only of one sale point ignoring the consolidated cash book of all the sales points. The appellant has also filed the list of persons along with the sales/service receipts as per Annexure-8 for reference. The counsel has argued that the appellant has produced books of accounts during the assessment proceedings comprising of cash book, ledger, supporting bills and details as mentioned on para 4 on page no. 2 of the assessment order. Thus, the AR argued that the allegations of the Lower Authorities are itself contradictory with regards to the maintenance of the cash books. The counsel has contended that the Lower Authorities have not appreciated correct and true material facts related to the cash deposits

6 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) out of the business sales by the assessee appellant. He argued that Ld. AO has misinterpreted the facts by taking into consideration only one cash book of one sale point and based on mere presumption and suspicion he has made the addition. It is settled law that no addition can be made based on suspicion. In support, he placed reliance on the various case laws in written submissions placed on record.

7 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) evidence. The contentions of the department without rebutting the documentary evidence filed by the assessee as regards to the source of cash deposited out of the business sales of the 4 sales/services points cannot be accepted.

8 ITA No. 731/Jodh/2024 (Assessment Year 2017-18)  Kanpur Steel Co. Ltd. Vs. CIT 32 ITR 56(All)  CIT Vs. Kulwant Rai 291 ITR 36 (Del) It has been observed that the addition made by the AO merely on suspicion was not desirable in the eyes of law. 9. It is noted that the AO has not issued any show cause notice before making the addition by invoking the provisions of Section 69A and 115BBE which is against the principle of law. As per mandate, where any adverse view is to be taken by the department without being confronted to the assessee is held as bad in law. In the present case the appellant has duly explained the source of cash deposited in the bank account amounting to Rs. 9,60,778/- out of his business cash sales during the demonetization period. Therefore, we hold that the decision of the Ld. CIT(A) in confirming the aforesaid addition is perverse to the facts on record. 10. In the above view, we hold that addition made on account of unexplained cash deposited in the bank account of the assessee during the demonetization period under Section 69A of the Act of Rs. 9,60,778/- is unwarranted and accordingly, the addition of Rs. 9,60,778/- is deleted. Thus the ground No. 2 of the appeal is allowed.

9 ITA No. 731/Jodh/2024 (Assessment Year 2017-18) 11. In Ground No. 3, the appellant has challenged the disallowance of carried forward losses of Rs. 3,33,752/-. 12. The issue challenged by the appellant in the aforesaid ground no. 3 is not arising out of the impugned order passed by the Ld. JCIT(A) and therefore, this ground is dismissed as not maintainable. 13. In the backdrop of the aforesaid discussion, the appeal of the assessee is allowed in the manner discussed as above.

Order pronounced on 27/04/2026 in the open court.

SD/- SD/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 27/04/2026. Pritesh Vaishnav PS TRUE COPY Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,