MOHAMMAD RAHISH,FIROZABAD vs. ITO WARD 2(2)(2), FIROZABAD

ITA 413/AGR/2026Status: DisposedITAT Agra22 October 2026AY 2019-207 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal. The assessee contended that he was engaged in both trading and bangle businesses and had declared income from both in his return. The written submissions, supported by the computation of income, showed an income of Rs. 1,51,200/- under Section 44AD and Rs. 2,06,262/- from Khawaja Traders. The Tribunal found the assessee's explanation reasonable and supported by the computation of income. Consequently, the addition of Rs. 2,29,000/- made by the AO was deleted. Ground No. 1 of the appeal was accordingly allowed. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The assessee, Mohammad Rahish, is appealing an order from the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2019-20. The Assessing Officer (AO) initiated reassessment proceedings under Section 148A of the Income Tax Act, 1961, based on information regarding cash deposits of Rs. 1,36,43,800/- in a current account and property purchase of Rs. 9,87,075/-. The assessee had declared an income of Rs. 3,18,010/-. During the reassessment proceedings, the AO accepted cash deposits of Rs. 31,41,000/- but added Rs. 2,29,000/- on account of cash deposits in a Canara Bank savings account, which the assessee claimed were proceeds from his bangle business. The AO found this explanation untenable as the income from bangle work was not disclosed in the return. The CIT(A) upheld the AO's addition.

What were the issues?

1. Whether the NFAC erred in law and facts by confirming the AO's action of assessing Rs. 2,29,000/- as cash deposit, which represented proceeds from the bangle business declared in the assessee's income tax return for the respective AY, thereby violating Section 69A read with Section 115BBE of the Income Tax Act, 1961? Assessee's Contention: The assessee argued that the cash deposits of Rs. 2,29,000/- in the Canara Bank account were from the sale proceeds of his bangle business, 'Rahish Bangle Suppliers,' and that income from this business was duly declared in his income tax return. The assessee also relied on the decision in Vineet Mittal v. ITO and other cited cases, arguing that once the initial reason for reassessment (Rs. 31,41,200/- cash deposit in Khawaja Traders' account) was explained and accepted, the AO could not assess other income. Revenue's Contention: The revenue, through the Sr. DR, did not present arguments but relied on the orders of the AO and CIT(A). The AO had concluded that the income from bangle work was not disclosed in the ITR, making the explanation for the cash deposits untenable. The CIT(A) agreed that the assessee failed to establish the proximate nexus of the cash deposits with suitable evidence and that the claim was factually incorrect as verified by the AO.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 139,Section 143(3),Section 250,Section 69A,Section 115BBE,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (SMC

Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH

Hearing: 19.08.2026Pronounced: 22.10.2026

PER : BRAJESH KUMAR SINGH, AM: This appeal is directed against the impugned order dated 20.03.2026 passed in appeal No NFAC/2018-19/10338426 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 the “Act”) for the A.Y. 2019-20, wherein ld. CIT(A) has dismissed assessee’s appeal.

2.

In this case, the AO had information that the assessee had deposited cash amounting to Rs.1,36,43,800/- in his current account and had also purchased property amounting to Rs.9,87,075/-. The AO noted that the assessee was an individual person and had filed return of income u/s. 139 of the Act, declaring income of Rs.3,18

The order continues below.

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