ALKA SRIVASTAVA,LUCKNOW vs. ACIT/DCIT CIRCLE-(1)(1)(1)AGRA, AGARA

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ITA 403/AGR/2026Status: DisposedITAT Agra07 October 2026AY 2020-202111 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the additional evidence sought to be produced by the assessee, including a cash ledger/book and bank statement, was necessary for a just adjudication of the issue. The Tribunal agreed that these additional evidences needed to be admitted for the adjudication of the issue involved in the present appeal. Consequently, the Tribunal set aside the order of the CIT(A) and restored the matter to the file of the AO for a fresh assessment on this issue. The AO was directed to provide a reasonable opportunity of being heard to the assessee and proceed in accordance with law. The grounds of appeal were allowed for statistical purposes. The Tribunal did not decide the substantive issue on merits but remanded the matter for fresh consideration based on the admitted additional evidence.

What were the facts?

The assessee, Alka Srivastava, filed her return of income for Assessment Year 2020-21 declaring a total income of Rs. 34,63,490/-. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 by issuing a notice under Section 148 on 30.03.2024, based on information regarding on-money payments for a flat. The assessee did not file a return in response to this notice. During assessment, the AO observed a cash deposit of Rs. 19,34,500/- in the assessee's HDFC bank account, which was deemed exceptionally high compared to earlier years. The AO added this amount to the assessee's income under Section 69A read with Section 115BBE, treating it as unexplained. The assessee contended that these deposits represented business receipts declared under Section 44AD, but the AO found insufficient documentary evidence. The CIT(A) upheld the AO's addition, finding no direct nexus between the cash deposits and declared business receipts, and noting the lump-sum nature of deposits.

What were the issues?

1. Whether the addition of Rs. 19,34,500/- made by the AO under Section 69A read with Section 115BBE of the Income Tax Act, 1961, on account of cash deposits in the bank account, is sustainable when the assessee has opted for presumptive taxation under Section 44AD of the Act? (Question of law and fact, turning on Sections 69A, 115BBE, and 44AD). Assessee's contentions: - The cash deposits are part of the business turnover declared under Section 44AD and represent gross receipts. - Once turnover is accepted or not disproved, income is taxable only on a presumptive basis, and no separate addition can be made for cash deposits representing business receipts. - Section 44AD is a complete code, and no further scrutiny of individual entries is warranted unless specifically disproved. - Adding the same amount as turnover under Section 44AD and as unexplained cash credits under Section 69A amounts to double taxation. - Relied on CIT v. Surinder Pal Anand (2010) 192 Taxman 264 (P&H HC). Revenue's contentions: - The AO and CIT(A) supported the orders below and opposed the filing of additional evidence at the Tribunal stage.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 148,Section 144,Section 250,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (DB

Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Rajeev Kumar, Advocate
For Respondent: Shri Anil Kumar, Sr. DR
Hearing: 21.07.2026Pronounced: 21.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE : SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER

ITA No. 403/Agr/2026 Assessment Year: 2020-21 Alka Srivastava, Vs. ACIT/DCIT, Circle 1(1)(1), A-1/303, Eldico Elegance, Agra, Aayakar Bhawan, Sanjay Vibhuti Khand, Gomti Nagar, Place, M.G. Road, Agra- Lucknow (UP)- 226010 282002 PAN :AKYPS9675D (Appellant) (Respondent) Assessee by Shri Rajeev Kumar, Advocate Department by Shri Anil Kumar, Sr. DR Date of hearing 21.07.2026 Date of pronouncement 21.07.2026 ORDER PER : BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER: This appeal is directed against the impugned order dated 04.03.2026 passed in appeal No. NFAC/2019-20/10481332 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. 2020-21, wherein ld. CIT(A) has partly allowed assessee’s appeal for statistical purposes.

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2.

Brief facts of the case: The assessee filed her return of income for A.Y. 2020-21 declaring total income of Rs. 34,63,490/- Based on the certain information about payment of on-money for purchase of a flat, the AO after recording reasons to believe, issued a notice u/s 148 of the Act dated 30.03.2024 to the assessee. However, the AO noted that no return of income was filed by the assessee in response to notice u/s 148.

2.2 The AO, inter alia, noted that the assessee had made a cash deposit of Rs. 19,34 500/- in her HDFC Bank A/c No. 50100137855613 during the year under consideration which was exceptionally high as compared to earlier years and held the same to be unexplained u/s 69A of the Act and added a sum of Rs. 19,34,500/- u/s 69A read with section 115BBE of the Act vide order dated 29.03.2025 passed u/s 147 r.w.s. 144 of the Act. The relevant extract of the assessment order is reproduced as under : “Further, during the assessment proceedings, it was seen that the cash deposit in her bank account maintained with HDFC A/c No. 50100137855613 was exceptionally high during the period under consider with in comparison to F.Y.2018-19 & 2020-21. Vide the show Cause Notice dated 16.03.2025, the Assessee was also asked to show cause as to why an income of Rs.19,34,500/- may not be added in her taxable income u/s 69A r.w.s. 115BBE of the I.T. Act, 1961. In compliance to the above, the Assessee has submitted that she had offered more business in the particular financial year compared to other financial years therefore her receipts was more in the assessment year under consideration i.e. A.Y. 2020- 2 | P a g e

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21 in comparision to other financial years (2018-2019 & 2020- 21). All the receipts of the assesse was on bank record and was shown in ITR and the assesse paid tax on it more than other years. After perusal of the reply of the assesse, it was found that the Assessee has not furnished any documentary evidences in this regard in support of her cash deposit. She has only submitted some invoices in this regard which seems insufficient. Hence, in absence of any documentary evidences cash deposit of Rs. 19,34,500/- is squarely covered u/s 69A of the I. T. Act, 1961. Accordingly, an addition of Rs.19,34,500/- is hereby made to the Income of the Assessee for the year under consideration u/s 69A of the Income Tax Act, 1961. (Addition of Rs.19,34,500/- u/s 69A of the Income Tax Act.”

3.

Aggrieved with the assessment order, the appellant preferred an appeal before the learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee on this issue and the relevant extract of the order of the ld. CIT(A) is reproduced as under : “8.5 Grounds of Appeal Nos. 12, 13, 14 and 15 8.5.1 Vide these grounds of appeal, the appellant has challenged the addition of Rs. 19,34,500/- made by the AO u/s 69A read with section 115BBE of the Income-tax Act, 1961 on account of cash deposits in HDFC Bank A/c No. 50100137855613. The appellant has contended that she had opted for presumptive taxation under section 44AD of the Act and had declared gross receipts of Rs.35,90,731/-, out of which Rs. 18,94,500/- was received in cash (including Rs.40,000/- received from her husband), and therefore the addition made u/s 69A amounts to double taxation. 8.5.2 The appellant submitted that under section 44AD, she is not required to maintain books of account and profit is deemed at prescribed rate on gross receipts declared. It was argued that once income is declared under presumptive scheme, no separate addition can be made in respect of cash deposits representing business receipts. Reliance was placed on judicial pronouncements to contend that addition u/s 69A is not sustainable where income is declared u/s 44AD. 3 | P a g e

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8.5.3 The AO, however, observed that during assessment proceedings it was found that cash deposits of Rs. 19,34,500/- in the said bank account were exceptionally high during the relevant financial year as compared to F.Y. 2018-19 and 2020- 21. The assessee was issued show cause notice dated 16.03.2025 asking her to explain why he said amount should not be treated as unexplained u/s 69A. In response, the assessee submitted that she had more business during the year and that all receipts were reflected in the return of income. However, the AO recorded that no documentary evidence was furnished to substantiate that the specific cash deposits represented declared business receipts and that only some invoices were submitted which were found insufficient. Accordingly, the AO held that in absence of satisfactory explanation, the cash deposits are squarely covered u/s 69A of the Act. 8.5.4 I have carefully considered the assessment order and submissions of the appellant. It is observed that though the appellant has declared gross receipts under section 44AD, she has not established a direct nexus between the specific cash deposits of Rs.19,34,500/- and the business receipts declared in the return. Mere assertion that deposits represent business receipts, without reconciliation, party-wise details, or corroborative evidence in the form of bills raised against the parties on various dates, does not satisfactorily explain the nature and source of such deposits. It is not the case of appellant that she does not maintain any record of events organised and amount received. During assessment proceedings, the appellant has furnished copies of sample bills (5 in No) on which details of event and amount received is mentioned. Therefore, the appellant could have furnished the entire set of bills, bifurcation of amount received in cash/through bank date wise to at least prima facie establish link between business receipts and cash deposits in the bank account, which she failed to do. 8.5.5 The presumptive scheme under section 44AD simplifies computation of profits but does not dispense with the requirement to explain specific cash deposits when called upon to do so. Where the assessee fails to satisfactorily explain the nature and source of money found credited in bank account, provisions of section 69A are attracted notwithstanding declaration of income under section 44AD. The appellant has not furnished any cogent material to rebut the finding of the AO that documentary evidence in support of cash deposits was not produced. 4 | P a g e

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8.5.6 It is noted from the bank statements that the cash deposits are not regular in nature or on routine business dates but are made in substantial lump sums on specific dates. The deposits have been made as under: 08.08.2019 - Rs.2,00,000/- ,09.08.2019 - Rs.2,00,000/-, 16.08.2019 - Rs.2,00,000/-, 17.08.2019 - Rs.2,00,000/-, 05.11.2019 Rs.2,00,000/-, 16.12.2019-Rs.1,99,500/-, 19.12.2019 Rs.2,00,000/-and 07.01.2020 - Rs.3,50,000/-. The pattern of deposits reflects clustered high-value cash deposits within short intervals rather than day-to-day business collections. The appellant has not furnished any reconciliation statement, party-wise cash receipt details or contemporaneous cash book entries to correlate these specific deposits with declared business receipts. In absence of such correlation and supporting evidence, the explanation that the deposits represent normal business receipts under section 44AD cannot be accepted. 8.5.7 In view of the above discussion, the pattern of substantial lump-sum cash deposits on specific dates, without corresponding reconciliation or supporting documentary evidence, does not support the appellant's contention that the deposits represent routine business receipts declared under section 44AD of the Act. The appellant has failed to satisfactorily explain the nature and source of the cash deposits of Rs. 19,34,500/- within the meaning of section 69A of the Act. Accordingly, the addition made by the Assessing Officer u/s 69A read with section 115BBE is upheld and the related grounds of appeal are dismissed.”

4.

Aggrieved with the said order, the assessee is in appeal before us on the following grounds of appeal : "1. That the order of the learned Commissioner of Income Tax (Appeals) is bad in law and on facts and is liable to be set aside. 2. That the learned CIT(A) erred in confirming the addition of 19,34,500/- on account of cash deposits, without properly appreciating the facts, circumstances, and applicable legal provisions. 3. That the learned CIT(A) failed to appreciate that the appellant is engaged in business and has duly opted for presumptive taxation under section 44AD, under which income is declared at 5 | P a g e

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the prescribed rate and detailed maintenance of books of account is not mandatory. 4. That the learned CIT(A) erred in holding that the appellant was required to furnish detailed, party-wise cash receipts, and cash book entries, ignoring the very spirit and intent of section 44AD, which provides relief from maintaining detailed books of account. 5. That the learned CIT(A) failed to consider that the cash deposits were out of regular business receipts, and once income is declared under section 44AD, individual cash entries cannot be dissected unless there is concrete evidence of income from undisclosed sources. 6. That the learned CIT(A) erred in drawing adverse inference merely due to absence of reconciliation statements, without bringing any material on record to prove that the cash deposits represented income from sources other than the declared business. 7. That the addition sustained is arbitrary, excessive, and not based on proper appreciation of facts and law, and therefore deserves to be deleted. 8. That the appellant is carry a business as Director/ advisor of Events Management and charged as professional fee approx. fifteen to twenty thousands, which is inherently cash-intensive due to the payments received from individuals, and further Industry practice of receiving cash in small amounts below 20,000 per receipt. 9. That as per provisions of the Income Tax Act, 1961, there is no restriction on receiving cash receipts in the normal course of business. Section 269ST restricts receipts above ₹2,00,000 per person per day / per transaction, which is not violated in this case. 10. The cash deposits made by appellant represent accumulated business receipts received in the ordinary course of business, each individual receipt being below ₹20,000, duly recorded in cash book and later deposited into bank. Hence, the same cannot be treated as un explained under section 69A. 11. That the appellant is furnishing herewith, party-wise cash receipts, and cash book entries. Further if the bench required and permits, the appellant is ready to produce copy of invoice books, cash books for your kind perusal.

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12.

That there is linkage in business activities of appellant, with accumulation of cash balance over a few days and deposit of cash in the bank. This is a normal business cycle for cash- intensive activities. 13. That there exists a clear and direct nexus between, Business receipts, Cash availability Bank deposits 14. That as per Section 44AA of the Income Tax Act, 1961, persons opting for Section 44AD are exempt from maintaining detailed books. Therefore, demanding cash book party-wise details, reconciliation defeats the very purpose of presumptive taxation. 15. That the Cash Deposits are Part of Business Turnover, the deposits in bank represent gross receipts/turnover. Once turnover is accepted (or not disproved), the income is taxable only on presumptive basis. The department has not established that deposits are from non-business sources. 16. That the Section 44AD of Income Tax Act is a complete code in itself for computing business income on presumptive basis. Once income is declared under Section 44AD, the appellant is not required to maintain books of accounts and no requirement to explain individual entries unless specifically disproved Further the intent of legislature is to simplify compliance for small taxpayers. 17. That If deposits are treated as turnover and income is declared under Section 44AD, the same amount cannot again be added as unexplained cash credits under Section 69A of the Income Tax Act, 1961. (a) CIT v. Surinder Pal Anand (2010) 192 Taxman 264 (P&H HC) The Honorable High Court held that When income. declared under Section 44AD, no further disallowance or scrutiny of individual entries is warranted and Cash deposits cannot be separately added unless proven to be from non-business sources. 18. That the Ld. CIT has misinterpretation the provision and applying it without appreciating the spirit of the Section 69A of the Act. Section 69A says that: "Where in any financial year the assessee is found to be the owner of any money, xxxxX-XXXX-XXXX-Xxxxx is not recorded 7 | P a g e

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in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, XXXXXXXXXXXX, or the explanation offered by him is not, in the opinion of the Assessing Officer satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." In the present matter the assessee has self-disclosed her turnover in Income tax return as the source of business income and maintained the cash book and party wise cash receipts. 19. That the appellant craves leave to add, amend, alter, or withdraw any ground of appeal at the time of hearing."

5.

At the time of hearing, the learned AR submitted that to substantiate and adjudicate the aforementioned grounds justly, the appellant seeks to produce certain additional documents/evidence, i.e., cash ledger/book, bank statement that could not be produced during the assessment or the first appellate authority. It was further submitted that the same may be admitted under Rule 29 of the ITAT Rules, 1963. In this regard, the relevant submission of the assessee is reproduced as under :

“Sub.: Application for filing additional grounds of appeal u/r 29 of ITAT Sir, In the aforesaid appeal, the counsel of the appellant is intended to file additional ground of appeal. That the appellant has filed an appeal on 18.05.2026 before this Hon’ble Tribunal against the order passed by the learned Commissioner, Income Tax (Appeal) dated 04 March, 2026 for the financial year 2019-20 (A.Y. 2020-21).

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That to substantiate and adjudicate the aforementioned grounds justly, the appellant seeks to produce certain additional documents/evidence that could not be produced during the assessment or the first appellate authority. Now, the appellant is filing cash ledger/book, bank statement. It is necessary in the interest of substantial justice and for proper adjudication of appeal that these additional grounds and evidence be admitted under rule 29 of ITAT Rules, 1963. The respondent will not be prejudiced by admission of these grounds and documents. Prayer In the light of the above, it is most humbly prayed that this Hon’ble Tribunal may be pleased to admit the additional grounds of appeal raised herein above.” 6. On the other hand, the ld. Sr. DR supported the orders of the authorities below and opposed the filing of the additional evidences at this stage. 7. We have heard both the parties and perused the material on record. On perusal of the assessment order, the AO did not accept the explanation of the assessee that the cash deposit of Rs. 19,34,500/- was her business receipt on the ground that the assessee did not furnish any evidence in support of the above claim. The learned CIT(A) while dismissing the appeal of the assessee also observed that though the assessee had declared gross receipts u/s. 44AD of the Act, but the assessee had not established a direct nexus between the specific cash deposits of Rs.19,34,500/- and the business receipts declared in the return. Further, the learned CIT(A) also noted that the cash deposits were not regular in nature or on routine business dates, but were made in 9 | P a g e

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substantial lumpsums on specific dates as noted by the learned CIT(A) in his order. Now, the assessee by way of additional evidences, is filing cash book, bank statement to support the above claim that the cash deposit in her bank account were business receipts and further, the cash flow statement in support of her claim of the cash deposits. In this regard, we agree with the assessee that these additional evidences need to be admitted for the adjudication of the issue involved in the present appeal. Accordingly, the additional evidences filed by the assessee vide letter dated 21.07.2026 are admitted. Since, the claim made by the assessee by way of additional evidences filed before us requires factual verification, we set aside the order of the learned CIT(A) and restore the matter to the file of the AO for fresh assessment on this issue after providing a reasonable opportunity of being heard to the assessee and in accordance with law. Grounds of appeal filed by the assessee stand allowed for statistical purposes.

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8.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 21/07/2026.

Sd/- Sd/- (SUNIL KUMAR SINGH) (BRAJESH KUMAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 07/10/2026 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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