BHANWAR LAL AJMERA,KISHANGARH vs. INCOME TAX OFFICER, WARD 1, KISHANGARH, KISHANGARH

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ITA 220/JPR/2026Status: DisposedITAT Jaipur13 October 2026AY 2017-186 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal filed by the assessee. The Tribunal noted that the assessee had provided details of party-wise sales, purchases, commodity details, commission received, and other charges for his Adatiya business. The assessee also submitted complete sales/purchases of goods for commission sales, which were vouched, and no defects were pointed out by the AO or CIT(A). The books of account were not rejected. The Tribunal also acknowledged the assessee's contention that the lower authorities did not give a VC hearing. The Tribunal found that the assessee had satisfactorily explained the source of cash withdrawal through his Adatiya and commission business with relevant bills, vouchers, and party details. Therefore, the addition made under Section 69C was liable to be deleted. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The assessee, Bhanwar Lal Ajmera, an individual, filed his return of income for Assessment Year 2017-18 declaring Rs. 3,23,360/-. The case was reopened under Section 147 of the Income Tax Act, 1961, due to a cash withdrawal of Rs. 3,08,30,000/- from his bank account. The assessee explained this withdrawal was from his commission agency (Adatiya business) and agricultural produce trading. He provided a license, computation of income, audited accounts, VAT returns, cash book, and details of cash utilization. The Assessing Officer (AO) rejected this explanation, noting the declared turnover in the ITR (Rs. 40,03,337/-) was significantly lower than the cash withdrawal. The AO made an addition under Section 69C for the unexplained cash withdrawal. The Commissioner of Income Tax (Appeal) confirmed the addition, stating the provided documents were general and lacked a verifiable nexus to the cash withdrawals or specific payments to farmers.

What were the issues?

1. Whether the assessee was denied natural justice due to the non-grant of video conferencing (VC) for personal hearing in faceless assessment proceedings, as per the procedure laid down? 2. Whether the addition of Rs. 3,08,30,000/- made under Section 69C for cash withdrawal from the bank account during the year is sustainable? 3. Whether Section 69C can be invoked when the source of cash withdrawal was explained by the assessee through his Adatiya and commission business, supported by evidence, and no defects were found by the authorities? Assessee's Contentions: - Natural justice was violated as VC hearing was not granted. - The source of cash withdrawal was satisfactorily explained through his Adatiya and commission business, supported by bills, vouchers, and party details. - Section 69C is not applicable as the source of expenditure was explained. - Complete evidence was submitted, and no defects were found by the AO or CIT(A). - Lower authorities erred in making the addition under Section 69C. Revenue's Contentions: - The CIT(A) confirmed the addition, finding the documents general and lacking a direct, verifiable nexus between the cash withdrawals and the claimed turnover or specific payments to identifiable farmers. The CIT(A) noted the absence of primary evidence like farmer-wise details, crop-wise auction details, reconciliation between withdrawals and cash book, and that the day-wise cash book was not supported by vouchers.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri Sunil Porwal, CA
For Respondent: Shri Aanand Swaroop, CIT

आदेश/ORDER

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 10.12.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, arising out of reassessment order passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Asst. Year 2017-18.

I.T.A No. 220/JPR/2026 Page No 2 Bhanwar Lal Ajmera

2.

Brief facts of the case are that the assessee Late Shri Bhanwar Lal Ajmera is an individual and filed his return of income for the Asst. Year 2017-18 on 24.10.2017 declaring total income of Rs. 3,23,360/-. During the Financial Year, the assessee made cash withdrawal of Rs. 3,08,30,000/- from his bank account. Therefore, the case was reopened by issuing notice u/s. 148 of the Act. The assessee responded by filing a return of income. The assessee was issued a final show cause notice. The assessee replied that he was doing business of commission agent (Adatiya business) and trading of agricultural produce in the name of M/s. Mukesh Kumar Rakesh Kumar at Krishi Upaj Mandi Yard, Kishangarh and produced copy of license issued by Krishi Upaj Mandi Samiti Kishangarh, copy of computation of income, audited accounts, details of cash withdrawal from bank account, copy of sale document issued by Krishi Upaj Mandi to farmers, day wise cash book statement, explanation regarding utilization of cash withdrawal and copy of VAT returns. Assessee further submitted that he majorly involved in the business of commission agent. In such kind of business, farmers bring their produce to the business premises of assessee situated at Kishangarh Krishi Upaj Mandi Kishangarh. The assessee acted as commission agent who was licensed dealer and acted as agent of the farmer. As a commission agent, he was responsible for farmer's crop display, basic cleaning, and sorting conducting auction and payment to farmers and assessee gets commission as fixed by the Krishi Upaj Mandi for these activities from the buyers. Apart from that sometimes assessee has also made trading business of agricultural produce. The assessee also get his books of account audited by Charted Accountant and duly shown turnover of Rs. 4.79 crores in his

I.T.A No. 220/JPR/2026 Page No 3 Bhanwar Lal Ajmera

VAT return filed with the Sales Tax Department. The assessee has shown commission amounting to Rs. 8,56,405/- as gross receipt in his return of income and in question of addition on account of withdrawal of cash from bank account, the above explanation was not accepted by the AO and held that assessee has shown total turnover of Rs. 40,03,337/- in his ITR as against assessee has shown Rs. 3,23,360/-. Therefore, the AO held that the cash withdrawal of Rs. 3.08 crores is not acceptable and made addition u/s. 69C of the Act and demanded tax thereon.

3.

Aggrieved against the reassessment order, the assessee filed the appeal before Ld. CIT(A) who has confirmed the addition by observing as follows:-

“……..5.5.4 The appellant has argued that all cash withdrawals were out of business receipts arising from commission (Adatiya) and trading activity, and that audited accounts, VAT returns, mandi licence, sale bills, cash book, bank statements, etc. were filed. However, on a careful examination, these documents are found to be general in nature and do not establish a direct, verifiable nexus between the huge cash withdrawals of Rs. 3.08 crore and (a) the claimed total turnover of about Rs. 4.79 crore or (b) specific payments to identifiable farmers.

The Ld. AO had repeatedly called for farmer-wise and transaction-wise details, such as:  Identity and confirmation of farmers to whom cash was allegedly paid,  Crop-wise auction and sale details,  Mandi / auction receipts linked to specific cash withdrawals and payouts,  Daily cash-payment registers with name-wise particulars, and  Reconciliation between bank withdrawals and the day-wise cash book.

I.T.A No. 220/JPR/2026 Page No 4 Bhanwar Lal Ajmera

5.5.5 The appellant has not produced these primary evidences. The day- wise cash book filed is not supported by underlying vouchers, and no cogent reconciliation has been demonstrated between book entries and the bank withdrawals of Rs. 3.08 crore. Mere production of audited financial statements or VAT returns cannot, by itself, prove the genuineness of large cash movements, especially when the AO has specifically questioned their source and utilization.”

4.

Aggrieved against the appellate order, assessee is in appeal before us raising the following grounds of appeal:-

1.

That as per procedure laid down in faceless assessment proceedings, video conferencing (VC) for personal hearing in must, not granted and thus natural justice avoided. 2. That confirming the addition of Rs. 30830000/- u/sec. 69C of Act for cash withdrawal from bank account during the year. 3. That neither the AO, NFAC / CIT(A), NFAC has challenged for the source of such CASH WITHDRAWAL and under these circumstances no provision u/sec. 69C can be initiated. Further complete evidence was submitted and no defects therein found. 4. Any other matter with prior permission of the chair. 5. Heard the rival submissions and perused the materials available on record including paper book filed by the assessee which is running to 43 pages, wherein copy of the Mandi Registration Certificate in the name of late assessee, audited financial accounts, VAT returns in Form 10A for the whole assessment year, copy of Mandi Arat sale/purchase details, copy of day wise cash book for the assessment year and screen shot of video conferencing hearing request before Ld. CIT(A). Ld. Counsel submitted the above details which were furnished before Ld. CIT(A). However without considering the same, Ld. CIT(A) confirmed the addition made by the AO. From page no. 25 to 34 of the Paper Book, the assessee has filed the details of party wise sales made during

I.T.A No. 220/JPR/2026 Page No 5 Bhanwar Lal Ajmera

the year alongwith complete details of the parties namely name, address, PAN, transaction amount and further the details of corresponding purchases in relation to sales made Aaditiya business having complete detail of commodity purchase, its quantity, rate, amount received, commission received and other charges during the year. Similarly, complete sales /purchases of goods for commission sales are vouched and no defects therein pointed out by the AO or by the Ld. CIT(A) and no books of account are rejected. The Ld. CIT(A) also not given VC hearing to the assessee to explain its case. Thus, the lower authorities are not correct in making the withdrawal of cash from bank accounts as addition u/s. 69C of the Act. Whereas, section 69C applies only in a case where source of expenditure is not explained by the assessee, but in the present case the assessee satisfactorily explained the source through Aaditiya business and commission business with relevant bills, vouchers, party details, etc. Therefore, the addition made on this count is liable to be deleted.

6.

In the result, the appeal filed by the assessee is hereby allowed.

Order pronounced in the open court on 13-10-2026

Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 13/10/2026 Dhananjay K., Sr. PS

I.T.A No. 220/JPR/2026 Page No 6 Bhanwar Lal Ajmera

आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, जयपुर

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