CHANNAN SINGH, ,SANGRUR vs. JAO INCOME TAX OFFICER, WARD SUNAM, PUNJAB

During assessment proceedings, Ld. AO noted that the assessee deposited cash of Rs.9.80 Lacs in its bank account out of which an amount of Rs.7.50 Lacs was deposited on 30-04-2011. The Ld. AO added the same to the income of the assessee as unexplained money for want of any evidences as forthcoming from the assessee. The declared agricultural income of Rs.3.50 Lacs was assessed as ‘Nil’ for the same very reason.

During first appeal, the assessee’s additional evidences were subjected to remand proceedings wherein Ld. AO opposed admission of additional evidences and reiterated the assessment so framed against the assessee. The assessee pointed out that the deposit of Rs.7.50 Lacs was sourced out of earlier withdrawals of Rs.30 Lacs on 18-04-2011. However, Ld. CIT(A) rejected the same on the ground that the returned income was not commensurate with cash withdrawals and the assessee did not explain the reason for withdrawal of Rs.30 Lacs. Accordingly, the addition was confirmed against which the assessee is in further appeal before us. 4 The undisputed fact that emerges is that the assessee has withdrawn cash of Rs.30 Lacs around 12 days back from the date of impugned deposit. The source of withdrawal has not been doubted. The only reason to reject the claim is that the assessee did not explain the reason for withdrawal of Rs.30 Lacs. Further, the returned income is alleged to be not commensurate with the cash withdrawals. This is despite the fact that the credit in bank account which forms the very source of cash withdrawals has not been questioned by any of lower authorities. Therefore, the confirmation of impugned addition is without any sound logic or reasoning. This being so, we delete the impugned addition of Rs.7.50 Lacs. No other ground has been urged in the appeal. 5. The appeal stand allowed. Order pronounced on 04-09-2025 Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 04-09-2025 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR