VIPAN KUMAR THAMMAN,DERABASSI vs. INCOME TAX OFFICER, WARD-2(5),CHANDIGARH, CHANDIGARH

1

IN THE INCOME TAX APPELLATE TRIBUNAL
“B” BENCH, CHANDIGARH

PHYSICAL HEARING

BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT
AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

आयकर अपील सं./ ITA No.502/CHANDI/2024
(िनधाŊरण वषŊ / Assessment Year: 2011-12)
Shri Vipan Kumar Thamman
C/o Sh. Tejmohan Singh (Advocate)
# 527 Sector 10-D, Chandigarh
बनाम/ Vs.
ITO
Ward -2(5)
Chandigarh
̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ACIPT-2756-J
(अपीलाथŎ/Appellant)
:
(ŮȑथŎ / Respondent)

अपीलाथŎकीओरसे/ Appellant by : Sh. Tejmohan Singh (Advocate) – Ld. AR
ŮȑथŎकीओरसे/Respondent by :
Dr Ranjit Kaur (Addl. CIT) – Ld. Sr. DR

सुनवाईकीतारीख/Date of Hearing
:
09-09-2025
घोषणाकीतारीख /Date of Pronouncement
:
16-09-2025

आदेश / O R D E R

Manoj Kumar Aggarwal (Accountant Member)

well as on merits supporting the case of the assessee. The Ld. Sr. DR also advanced arguments supporting the orders of lower authorities.
Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
2. The assessee’s return of income for this year was subjected to scrutiny u/s 143(3) on 17-10-2014. However, the case was reopened on the ground that the assessee made cash deposit of Rs.183.05 Lacs in its Bank Account No.55029085429 held with SBOP, Dera Bassi, the details of which were not furnished by the assessee at the time of regular assessment proceedings. Accordingly, the case was reopened and a notice u/s 148 was issued to the assessee on 27-01-2016. In the reassessment proceedings, the assessee was required to explain the source of cash deposit in this bank account. It was noted by Ld. AO that the assessee had filed cash flow statement during regular assessment proceedings for three bank accounts excluding the stated bank account wherein huge cash deposits were made by the assessee.
On the source of cash deposits, the assessee furnished certain reply /
explanation on the basis of which Ld. AO proceeded to examine the source of each credit entry in the bank. Finally, the explanation for deposits of Rs.112 Lacs was not accepted and the same was therefore, added to the income of the assessee.
3. The Ld. CIT(A) upheld the reopening by observing that Ld. AO had bona fide belief that the income of the assessee had escaped assessment. The notice was issued on the basis of credible information. On merits, the additions were substantially confirmed on following observations: -
5.4. I have gone through the facts of the case in hand and also the submissions made by the appellant and the findings by the AO. At the time of completing the assessment, the AO has made the following additions on account of unexplained cash deposits.
1) With regard to cash deposits of Rs. 10,00,000/- , the appellant had stated that the same were made out of the withdrawals made out of the funds transferred from his housing loan account No 0065099916887. The AO has rightly added the amount of Rs.10,00,000/- as unexplained deposit observing that the loan taken for construction could only be utilized for the purpose for which the loan was taken. Moreover, no prudent man would keep money idle at home for which he is paying interest. The appellant could not adduce any documentary evidence to prove the cash withdrawals. Thus, the addition made of Rs.10,00,000/- on this account is confirmed.
2) With regard to deposit of Rs. 59,50,000/-, it was observed by the AO that during the course of assessment proceedings, the appellant has furnished an affidavit of Shri P.L
Midha, Director of the Company in support of the claim along with copies of bank statement. However, it was observed by the AO that no cash withdrawal was made from the account of M/S U.T Builders &Promoters' on these dates. In view of the facts discussed by the AO, addition of Rs, 59,50,000/- is justified.
3) During the course of assessment proceedings, the appellant submitted that this deposit was made out of withdrawals of Rs 10,00,000/- was made on 03.02.2011. However, on the perusal of bank statement, the AO held that it revealed that an amount of Rs 10,00,000/- was remitted through RTGS in account No 1103430214. That no cash withdrawal amounting to Rs 10,00,000/- on that date was made. Keeping in view the facts of the case that no cash withdrawal was made on 03.02.2011, the AO is justified in making the addition of Rs. 10,00,000/- and thus is accordingly confirmed.
4) With regard to the deposit of Rs. 30,00,000/- on 04.02.2011, the appellant had submitted an affidavitfrom Smt Poonam Midha W/O Shri P.L Midha R/o House No 65
Sector 18 A Chandigarh. However, the AO noticed that the perusal of Bank accountreveals that no cash withdrawal was made from her bank account on this date.
Accordingly, the AO is justified in making the addition of Rs. 30,00,000/-as income from undisclosed sources. From the facts indicated above, it is observed that the addition of Rs.1,09,50,000/- (Rs.10,00,000/-+ Rs.59,50,000/-+ Rs.10,00,000/- + Rs.30,00,000/-) has been made on account of unexplained cash deposits, which fall within the preview of Section 68 of IT Act 1961.”

The Ld. CIT(A) thus rendered finding on each of the credits and finally, confirmed the addition of Rs.109.50 Lacs which is the grievance of the assessee.
4. From the facts, it clearly emerges that the impugned bank account which form the very basis of reopening was not disclosed by 4

the assessee during the course of regular assessment proceedings.
The same was not considered while preparing the cash flow statement as furnished during the course of regular assessment proceedings.
Subsequently, certain information was received by Ld. AO with respect to cash deposit in the said bank account and accordingly, the case was reopened and the assessee was required to explain the sources of the deposits in the stated bank account. The case was reopened vide notice u/s 148 dated 27-01-2016 which is placed in the paper book. As per this notice, the assessee was required to file return of income within 20 days from the day of service of this notice. However, the assessee has failed to do so. In our considered opinion, this notice put the reassessment proceedings in motion qua the assessee and the assessee was required to follow the mandate of this notice. However, the said notice has remained non-complied with by the assessee until
15-07-2016 when the assessee raised objection to reopening and offered the already filed return of income in response to this notice.
The assessee has clearly failed to adhere to the terms of notice of Sec.148. The copy of reasons recorded was thereafter served by Ld.
AO on 18-07-2016. Therefore, the legal arguments are urged by Ld.
AR are found to be without much substance.
5. Proceeding further, we find that before issuing notice u/s 148, due approval has been taken by Ld. AO from Addl. CIT, Range-II.
Chandigarh which is kept on Page No.4 of the paper book. Along with this notice, Ld. AO has quantified the quantum of probable income which has escaped assessment. The reasons leading to formation of 5

belief of escapement of income were enclosed with the proposal as a separate annexure. In the annexure, the details of deposits in the said bank accounts have duly been specified and it was observed that the above noted bank account was not furnished by the assessee during the course of original assessment. The necessary enquiry was made u/s 133(6). Upon perusal of assessee’s submissions thereto, it was found that the assessee failed to offer any explanation with regard to non-disclosure of said bank account and the source of cash deposits in the said bank account. On these facts, a belief was formed that income of Rs.183.05 Lacs escaped assessment for this year.
6. After due consideration of all the above stated facts, we are of the considered opinion that the assessee’s case was validly reopened and the reassessment juri iction of Ld. AO could not be faulted with. It could clearly be seen that the formation of belief of escapement of income was on the basis of tangible material and a concrete proposal was put forward by Ld. AO before approving authority before reopening the case of the assessee. It was the primary obligation of the assessee to disclose all the bank accounts during the course of regular assessment proceedings but the assessee failed to do so. The said bank account was not taken into account while preparing cash flow statement as filed during the course of regular assessment proceedings. There is clear escapement of income. The Ld. AR has relied on various case laws to support the legal grounds. However, upon perusal of the same, we find these case laws to be distinguishable on facts. In the present case, a valid approval was 6

given by approving authority with due application of law and the same could not be faulted with. The legal ground as urged by Ld. AR stand dismissed. The legal ground relating to non-issuance of notice u/s 143(2) has not been pressed during hearing before us. Now, we proceed on the merits of the case.
7. The prime argument of the assessee is that the deposits have been received in the said bank account in the capacity of association of persons (AOP) consisting of 20 members. The AOP decided to purchases certain property and each of the members contributed and deposited their respective share in the said bank account. The assessee also obtained bank loan of Rs.12 Lacs which was withdrawn and deposited in the said bank account. However, Ld. AO rejected the same on the ground that considering the time gap, no prudent person would keep interest-bearing money idle. The deposits of Rs.59.50 Lacs are stated to be sourced out of advances given by M/s UT Builders &
Promoters Ltd. In support, the assessee has furnished affidavit of director of that entity. However, Ld. AO rejected the same on the ground that there were no withdrawals in the bank account of the lender. Similar findings were rendered for other deposits. Upon due consideration of factual matrix, we are of the considered opinion that the primary obligation to prove the source of cash deposit was on the assessee but the assessee failed to do so. At the same time, Ld. AO has not conducted any independent enquiries to rebut the documents of the assessee. On these facts, we restore the issue on merits, back to the file of Ld. AO for fresh adjudication with a direction to the 7

assessee to plead and prove the source of impugned cash deposit of Rs.109.50 Lacs. The corresponding grounds stand allowed for statistical purposes.
8. The appeal stands partly allowed for statistical purposes.
Order pronounced on 16-09-2025. (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL)
VICE PRESIDENT ACCOUNTANT MEMBER

Dated: 16-09-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to :
1. अपीलाथŎ/Appellant
2. ŮȑथŎ/Respondent
3. आयकरआयुƅ/CIT
4. िवभागीयŮितिनिध/DR
5. गाडŊफाईल/GF