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Facts
The assessee appealed against the CIT(A)'s order which upheld an addition of Rs. 40,55,603 as unexplained cash-in-hand under Section 69A for AY 2017-18. The assessee contended that this amount originated from bank withdrawals in FY 2015-16, disputing the assessment year, the applicability of Section 115BBE, and the initiation of penalty proceedings under Section 270A.
Held
The Tribunal noted that the CIT(A) confirmed the addition due to the assessee's failure to provide documentary evidence for the opening cash balance. However, upon reviewing bank statements and ledgers submitted by the AR, the Tribunal directed the Assessing Officer to re-examine these records to verify the factual availability of cash.
Key Issues
Whether the addition of unexplained cash-in-hand under Section 69A was justified, the correct assessment year for such an addition, the applicability of Section 115BBE tax rates, and the validity of penalty proceedings under Section 270A.
Sections Cited
69A, 115BBE, 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 20.06.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18.
The assessee has raised the following grounds of appeal:
1. On the facts and in the circumstances of the case as well as in law, the Ld. Commissioner of Income Tax (Appeals) at National Faceless Appeal centre has erred in upholding the addition of Rs.40,55,603/- being opening balance of cash in hand as on 01.04.2016 as unexplained money u/s.69A of the Income Tax Act, 1961.
Asst. Year : 2017-18 - 2– 2. On the facts and in the circumstances of the case well as in law, the Ld. Commissioner of Income Tax (Appeals) at National Faceless Appeal Centre has erred in dismissing the appeal of the appellant disregarding the fact that the opening balance of cash-in hand as on 01.04.2016 is part of the cash withdrawals from bank accounts in the F.Y 2015-16 and balance as on 31.03.2016. Therefore, addition if any needs to be made in assessment year 2016-17 instead of assessment year 2017-18.
3. On the facts and in the circumstances of the case as well in law, the Ld. Commissioner of Income tax (Appeals) at National Faceless Appeal Centre has erred in upholding the applicable tax rate u/s.115BBE disregarding the fact that the provisions of Section 115BBE are applicable prospectively from Assessment Year 2018-19.
On the facts and in the circumstances of the case as well as in law, the Ld. Commissioner of Income Tax(Appeals) at National Faceless Appeal Centre has erred in upholding initiation of penalty proceedings u/s.270A for alleged under reporting of income in spite of categorical demonstration by appellant with documentary evidence that there was no underreporting of any such income.
The appellant further reserves its right to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.
The Ld. CIT(A) upheld the action of the Assessing Officer on the grounds that the assessee failed to produce documentary evidence supporting the opening cash balance and further assessee had withdrawn only a minor amount towards regular expenses. Accordingly, the Ld. CIT(A) held that the cash-in-hand claimed by the assessee could not be accepted. Before us, the Ld. AR submitted copies of the bank account statements and the relevant ledgers. Considering the bank statements filed, we direct the Assessing Officer to examine the same and verify the factual availability of cash at the end of the year based on these records.
The order is pronounced in the open Court on 14.11.2025.
S /- Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 14.11.2025 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy