OM PRAKASH VARMA,AURAIYA vs. ITO WARD 1(1)(2) AGRA, AAYKAR BHAWAN AGRA

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ITA 92/AGR/2026Status: DisposedITAT Agra22 April 2026AY 2021-20227 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(A)'s observation that the assessee failed to produce bank statements and supporting evidence was perverse, as the assessment order itself admitted prior withdrawals exceeding the deposit. The Tribunal also found that the Rs. 3,00,290/- was established as reimbursement payments for office maintenance and transaction fees.

What were the facts?

The assessee deposited Rs. 20,00,000/- in cash into his bank account and claimed Rs. 3,05,290/- as exempt income for office maintenance and transaction fees. The Assessing Officer treated the cash deposit as unexplained and disallowed the exemption, which was upheld by the CIT(A).

What were the issues?

Whether the cash deposit of Rs. 20,00,000/- was unexplained money and whether the Rs. 3,05,290/- received from LIC constituted exempt income.

Which sections of the Income-tax Act were involved?

Section 69A,Section 10

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (DB

Before: SHRI S RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH

For Appellant: Shri Nitin Goyal, Adv. & Shri Amit Goyal, Adv
For Respondent: Shri Harsh Siddharth Gautam, Sr. DR
Hearing: 20.04.2026Pronounced: 22.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 92/Agr/2026 Assessment Year: 2021-22 Om Prakash Varma Vs. ITO Ward 1(1)2, Behind Raghav Palace Aaykar Bhawan Dibiyapur Sanjay Place Auraiya, U.P. – 206 244 Agra - 282 002 PAN : ABBPV1380J (Appellant) (Respondent) Assessee by Shri Nitin Goyal, Adv. & Shri Amit Goyal, Adv. Department by Shri Harsh Siddharth Gautam, Sr. DR Date of hearing 20.04.2026 Date of pronouncement 22.04.2026 ORDER

PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 08.12.2025 passed in Appeal no. NFAC/2020-21/10208481 by the Ld. Commissioner of Income tax(Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment Year A.Y. 2021-22, wherein learned CIT(A) has dismissed assessee's first appeal, confirming the additions made vide, assessment order dated 27.12.2022.

ITA No. 92/Agr/2026

2.

The brief facts leading to this appeal state that the assessee e-filed his return of income for A.Y. 2021-22 on 30.12.2021, declaring total income of Rs. 42,12,350/-. The case was selected for complete scrutiny through CASS for the reasons “claim of large exempt income”. Statutory notices u/s 143(2) r.w.s. 142(1) of the Act, along with show cause notices were issued and served upon the assessee, asking him to explain the basis for claiming the office maintenance of Rs. 3,05,290/- and further, in respect of source of the deposit of cash of Rs. 20,00,000/- in the bank account maintained with Indian Overseas Bank. Assessee, vide reply dated 05.12.2022 responded and furnished copy of salary statement along with letter of LIC. However, Ld. Assessing officer observed that no supporting documentary evidence was filed by the assessee regarding the exempt income of Rs. 3,05,290/- and with respect to the source of Rs. 20,00,000/- deposited in cash, hence, treated as unexplained money and added in the declared income of the assessee. 3. Aggrieved, assessee preferred an appeal before Ld. CIT(A), who dismissed assessee appeal, confirming the above said additions made by the assessing officer. 4. Assessee has raised, the following grounds under appeal before the Tribunal.

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“1. General Ground: That the order passed by the Ld. Commissioner of Income Tax (Appeals) [CIT(A)], NFAC, dated 08/12/2025, confirming the assessment order u/s 143(3), is contrary to law, facts, and the principles of natural justice, and is liable to be set aside. 2. Against Addition of Rs. 20,00,000/- u/s 69A (Unexplained Money): 2.1: That the Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 20,00,000/- u/s 69A of the Act as "unexplained money," ignoring the direct documentary evidence that the source of the said deposit was prior cash withdrawals from the same bank account of the appellant. 2.2: That the authorities failed to appreciate that the Appellant had withdrawn a total of Rs. 28,40,000/- from his Indian Overseas Bank account (Account No. 363801000004000) during the same financial year (specifically between April 2020 and August 2020), which far exceeds the questioned deposit of Rs. 20,00,000/- made on 20/03/2021. 2.3: That the Ld. CIT(A)'s finding that “no bank statement was produced" is factually incorrect and perverse, as the bank statement reflecting both the withdrawals and the deposit was available and clearly explains the source. Even otherwise, the Assessment Order itself admits at Para 3.6 (ii) that the assessee had "withdrawn cash aggregating to Rs. 28,40,000/-". 2.4: That the explanation regarding the cash being withdrawn for the intended marriage of the Appellant's daughter, which was subsequently cancelled due to personal reasons, leading to the re-deposit of the cash, is a plausible and bona fide explanation that should have been accepted. 2.5: That the addition is unsustainable as the source of the deposit is the Appellant's own disclosed bank account (re-deposit of own funds). and the Department has not brought any material on record to show that the withdrawn cash was spent elsewhere. 2.6: Reliance is placed on ITO vs. Rajeev Kumar Gupta [ITA No. 273/Agra/2013, dated 14/02/2014 (ITAT Agra)), where it was held that cash deposits cannot be treated as unexplained when supported by prior withdrawals from the same account, as the entire cash flow cannot be deemed unexplained. 2.7: Further reliance on Vyankatesh Narayan Kulkarni Vs. ITO Ward 3(4) Thane in ITA No. 1850/MUM/2025 (AY: 2017-18)) (ITAT Mumbai, where additions were deleted as withdrawals (Rs. 11,52,000/-) exceeded deposits (Rs. 10,65,000/-), and the revenue failed to prove alternative utilization. Here, withdrawals of Rs. 28,40,000/- clearly cover the deposits of Rs. 20,00,000/-. 2.8. Further reliance on Imran Sherkhan vs. ITO (ITAT Indore) ITA No 1303/Ind/2016, where additions were deleted as withdrawals (Rs. 11,52,000/-) exceeded deposits (Rs. 10,65,000/-), and the revenue. failed to prove alternative utilization. Here, withdrawals of Rs. 28,40,000/- clearly cover the deposits of Rs. 20,00,000/-. 3. Against addition of Rs. 3,05,290/- (Exempt Income Disallowed): reimbursement 3.1: That the learned CIT(A) erred in law and on facts in confirming the disallowance of exemption claimed u/s 10 for Rs. 3.05.290/- received from Life Insurance Corporation of India (LIC) as for office maintenance (Rs. 2,20,000/-). reimbursement expenses (Rs. 5,000/-), and 3 | P a g e

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transaction fee (Rs. 80,290/-), treating it as taxable income, despite submissions of Form 16 and LIC letter confirming its reimbursable nature 3.2:That the Ld. CIT(A) erred in confirming the addition of Rs. 3,05,290/- received from LIC of India as taxable income, failing to appreciate that this amount represents "Office Maintenance Allowance" and "Transaction Fee" which are pure reimbursements of expenses incurred for official duties. 3.3: That the Appellant had furnished a certificate from the Branch Manager, LIC of India (Branch Code 26A), specifically certifying that the payment of Rs. 3,05,290/- was paid towards office maintenance and transaction fees. Reimbursements of actual expenses do not constitute "income" under Section 2(24) of the Act. 4. That the learned CIT(A) erred in dismissing the appeal without granting adequate opportunity or considering the appellant's submissions, including constraints like short response times and portal issues (e.g., premature closure of "Submit Response" tab), violating principles of natural justice u/s 250. Replies were furnished to most notices (e.g., on 09/12/2022. 05/12/2022), and non-response to a few was due to technical glitches. not willful default. The CIT(A) mechanically upheld the AO's order without independent application of mind. 5. That the initiation of penalty proceedings u/s 270A (mis-reporting) and u/s 271AAC by the AO, as noted in the assessment order, is bad in law, as there is no concealment or mis-reporting, and the additions themselves are unsustainable. 6. That the assessed income of Rs. 65,17,635/- is excessive and not in accordance with law and the impugned addition of Rs.2305290/- deserves to be deleted. 7. The appellant craves leave to add, alter, amend, or withdraw any ground(s) of appeal at or before the time of hearing.”

5.

Perused the records and heard Ld. Representative for the appellant assessee and Ld. Sr DR for the respondent revenue. 6. The main point for consideration under appeal is as to whether Ld. CIT(A) has erred in confirming the disallowance of Rs. 3,05,290/- claimed as office maintenance and in confirming the addition of Rs. 20,00,000/- deposited in cash in assessee’s bank account as unexplained money u/s 69A of the Act, as alleged in the aforesaid grounds of appeal?

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7.

Ld. Representative for the appellant assessee has submitted that assessee is a retired LIC officer. During the year under consideration, he withdrew Rs. 28,40,000/- from the bank Account Number 363801000004000, (between April 2010 and August 2020), maintained with Overseas Bank, Auraiya for meeting out the expenses for the marriage of assessee’s daughter, which was to be solemnized on 24.03.2021, however, the marriage was unfortunately cancelled due to COVID-19 and due to the serious illness of grandmother of groom. The assessee, accordingly, redeposited the cash of Rs. 20,00,000/- in the same bank account which was withdrawn earlier. Ld. AR has, further submitted that assessee’s employer LIC, also issued a letter in respect of the payment of Rs. 2,20,000/- as reimbursement in the form of office maintenance and Rs. 80,290/- as transaction fee during financial year 2020-21. Ld. AR submits that despite all bank statements and documentary evidence on record, revenue authorities, particularly, Ld. CIT(A)’s observation that assessee failed to produce vouchers or agreement with LIC during assessment or appellate proceedings, is contrary to the records, hence, perverse. Prayed to allow the appeal. 8. Ld. Sr DR for the respondent revenue has supported the impugned order.

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9.

Perusal of the impugned order shows that Ld. CIT(A), while dismissing assessee’s appeal, has observed that assessee failed to produce bank statements and other supporting evidence to substantiate the nature of payments and terms of reimbursement etc. We find this observation of Ld. CIT as perverse as the furnishing of the bank statements; salary statements and the letter of LIC is confirmed by the contents of the assessment order itself. Ld. Assessing officer has admittedly mentioned in the assessment order that as per the data available with the department, the assessee was found to have deposited cash of Rs.20,00,000/- before which, he withdrew Rs. 28,40,000/- in parts during the year under consideration. This fact is substantiated by the copy of assessee’s bank statements of Indian Overseas Bank filed at page No. 18 to19 and further the bank statements of Central Bank of India filed at page no. 20 to 23 of assessee’s paper book, which was also submitted before Ld. CIT(A). This apart, LIC letter issued by the branch manager, Auraiya is at page 25 of assessee’s paper book, According to which, assessee is reported to have been paid Rs. 2,20,000/- in the head of “office maintenance” and Rs. 80,290/- in the head of “transaction fee”. This payment to a total of Rs. 3,00,290/- seems to have been paid to the assessee as reimbursement by his employer LIC. To this extent, the

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disallowance is unsustainable. The assessee has also filed an affidavit under rule 10 of the ITAT, Rules 1963, in support of his contentions. 10. In view of aforesaid discussion, the source of cash deposit of Rs. 20,00,000/- has been established from the prior withdrawals of Rs. 28,40,000/- made by the assessee from his same bank account during the year under consideration. The exempt income to the extent of Rs. 3,00,290/- (2,20,000+80,290) has also been established as reimbursement payments in respect of “office maintenance” and “transaction fee” respectively. The observation made and conclusion arrived at, by Ld. CIT(A) is against the facts on record, hence, not sustainable. The aforesaid point is accordingly determined partially in positive in favour of the assessee. The appeal liable to be partly allowed. 11. In the result, the assessee’s appeal is partly allowed in above terms. The impugned order dated 08.12.2025 is set aside. Order pronounced on 22.04.2026

Sd- Sd- (S RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22.04.2026 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra 7 | P a g e

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