SURENDRA PAL SINGH SAHNI,KOTA vs. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOTA, KOTA

3.1 As per information available on the system of the revenue and information given by the assessee in it's ITR it was noticed during the period FY 2016-17 in the bank account no. 51100070532 of SBI deposited total cash amounts Rs. 22,85,500/- including Rs. 11,56,500/- during the demonetization period, i.e. 09.11.2016 to 30.12.2016 and in other bank account no. 0362101003892 of Canara Bank total cash deposited Rs. 7,24,000/- including Rs. 7,24,000/- during demonetization period. Thus total cash was deposited in demonetization period was Rs. 22,85,500/- and whole FY Rs. 30,09,500/- in both the accounts.

Specifically, source of such deposits was asked vide query letter dated 21.09.2019 in the performa prescribed for ready reference in addition of furnish of other information. The assessee vide reply dated 22.06.2019 submitted that "5. That the source of income for cash deposits amounting period is as under-

This amount of Rs. 724000/- has been deposited by the assessee out of cash withdrawal of Rs. 500000/- on 28.10.2016 and 410000/- on 21.09.2016 from SB а/с по. 51091198302 which is belong to my son Rajesh Kumar Agarwal, further we have to inform you that assessee has given a loan of Rs. 600,000/- vide cheque no 688004 and Rs. 300,000/- vide cheque no 68005 dated 21.09.2016 totaling Rs. 9,00,000/-- copy SB a/c No. 51091198302 of my son enclosed herewith.

She also submitted that the source of income for cash deposit Rs. 15,56,500/- deposited in SBI/SBBJ, Adrash Nagar, Jaipur during demonetization period is as under-

The above amount of Rs. 1556500/- by the assessee out of cash withdrawal of Rs. 400,000/- on 23.09.2016 and Rs. 10,00,000/- on 01.10.2016 out of a/c no 51100070532 with SBBJ Jaipur and the balance of Rs. 156,500/- out of withdrawal of assessee's son bank account Rs. 910,000/-. The assessee's son withdrawal 910,000/- by cash as stated above and repayment made in cash Rs. 900,000/- to his father".

Ld. AO considered the reply of assessee and had examined. Ld. AO noted that on 21.09.2019 the assessee given advance Rs. 6,00,000/- through cheque no. 688004 and Rs. 3,00,000/- through cheque no. 688005 Rs. 3,00,000/- which was credited in the bank account of Rajesh Agarwal (son of the assessee) and further on 27.09.2016 through a cheque no. 688007 the assessee got cash withdrawn through his son Rajesh Agarwal. On the other hand, on the same day, i.e on 21.09.2019 Shri Rajesh Agarwal 5,00,000/-. The total cash withdrawn of Rs 9,10,000/- has claimed as source of the assessee. Means advances given to Rajesh Agarwal Rs. 12,00,000/- by the assessee and taken back of Rs. 9,10,000/- Here is very discrepancy in the facts that the assessee gave Rs. 6,00,000 3,00,000/- on 21.09.2019 through cheque to his son Rajesh Agarwal and taken back on the same day Rs. 4,10,000/- on 21.09.2019, it how justifiable if the assessee needed of cash Rs. 4,10,000/- on 21.09.2019 then why he issued cheque to his son and why deposited in his account through cheque and why got cash withdrawn from his account. The assessee could withdraw directly from his own bank account therefore the submission of assessee considered as contradictory to the facts and general practice of loan providing and recovery. The other submission in respect of source of Rs 15,56,500/- from SBI account that the assessee withdrawn Rs. 4,00,000/- on 23.09.2016 and Rs. 10,00,000/- on 01.10.2016 is admitted but the remaining Rs. 1,56,500/- is not accepted being connected with withdrawal of his son Rajesh Agarwal. The reason for non admissibility is on record because in the statements u/s 131 of the Act Shri Rajesh Agarwal has admitted in reply to question no. 7 & 8 that the loan was taken from his father, i.e the assessee Rs 9,00,000/- and from his other relative Amit purchased Flat and other needs. Therefore after examining all the facts and statements of witness Rajesh Agarwal, it is concluded that the cash withdrawal by Rajesh Agarwal of Rs. 4,10,000/- on 21.09.2016 and Rs. 5,00,000/- on 28.10.2016 were used for furniture and fittings and other personal needs which were not for repayment to his father, i.e the assessee, therefore the submission of the assessee is admitted only extent to Rs. 14,00,000/- The balance cash deposits in his bank accounts of Rs. 8,85,500/- is not admitted as from explained sources, therefore the cash deposits of Rs. 8,85,500/- was added to the total income of the assessee u/s 69A of the Income Tax Act, 1961 as unexplained money under head Income from Other Sources.

3.2 During the assessment proceedings the assessee suo-moto vide reply filed on 22.06.2019 submitted that "3. The requisite computation of total income (as per revised return of income) enclosed herewith. The assessee voluntary & suo moto enclosed revised return of income along with challan Rs. 65860/- dated 19.06.2019 & challan Rs. 26260/- dated 16/07/2019 The original return was wrongly filed showing professional income of Rs 5,60,825/- (after claiming deduction for expenses @50% u/s 44ADA of I.T.Act 1961 out of Rs. 11,21,649/-) and shown professional income of Rs. 5,60,825/-. In fact this amount of Rs. 11,21,649/-was interest income as per form 26AS on which neither deduction for expenses @50% is allowable u/s 44ADA of IT Act 1961 nor it is professional income. The assessee is a 72 years old person having no any professional qualification, hence the original return was filed by the mistake of his chartered accountant/advocate who claimed deduction 50% as expenses u/s 44ADA of the IT. Act 1961 out of interest income of Rs. 11,27,649/- The assessee does not know anything about his return who given the income and Geeta Devi Agarwal vs. ITO source of his income to his chartered accountant/advocate. Although in original return of income the receipt is interest income as per form 26AS for the relevant year, now as per advice of advocate the assessee suo moto and voluntary enclosed herewith revised return of income for his correct income and income tax payable thereon u/s 140A of IT Act of 1961 of Rs. 65860/- & Rs. 26260/- have been deposited on 19/06/2019 & on 16/07/2019 respectively Challan of Rs. 65880/- & 26260/- enclosed herewith. The assessee Suo moto & voluntary also show properly income and show correct interest from saving bank account of Rs 41,852/- Instead Rs. 10468/- shown in the original return. That to avoid litigation and get peace of mind the assessee surrender Rs. 20,000/- as interest income from sundry debtors to whom the assessee has given about Rs. 2,00,000/- on interest @ 18% to 24% pa as the assessee could not collect interest due from all the debtors and principal amount has been taken without any interest from some debtors."

Therefore in view of above submission, the assessee declared suo moto income through computation sheet enclosed with reply dated 22.06.2019 admitting income of Rs. 6,45,810/- (12,61,100 shown in revised computation 615,290 shown in original ITR) which is added hereunder under undisclosed interest income u/s 68 of the Act.

6. I have carefully considered the assessment order, the grounds of appeal and other relevant material on record. Regarding the cash deposit of Rs. 22,85,500/-, the appellant stated that withdrawals of Rs. 4,00,000/- on 23.09.2016 and Rs. 10,00,000 on 01.10.2016 were the sources of Rs. 15,56,500 deposited in the SBI account, which was accepted by the assessing officer. Additionally, the appellant asserted that Rs. 9,10,000 withdrawn from Rajesh Agarwal/son's account-pertaining to an advance Geeta Devi Agarwal vs. ITO of Rs. 9,00,000 given to him-was the source of a Rs. 7,24,000 deposits in Canara Bank account and Rs. 1,56,500, the balance deposit in the SBI account. However, this assertion was not accepted as Rajesh Agarwal confirmed receiving Rs. 9,00,000 from his father and Rs. 5,76,000 from Amit Goyal for furniture and fittings in a new flat. The assessing officer also questioned why the appellant issued cheques for deposit into his son's account and then withdrew the cash from that account instead of withdrawing directly from his own bank account. Therefore, the submission made by the assessee appeared contradictory to standard loan practices. As per common human practice, cash withdrawn from any individual's bank account is generally not available for redeposit, and the withdrawals made for specific purposes are expended accordingly. In the appellant's case, an advance of Rs.9,00,000 was made, and the son withdrew Rs.9.10,000 for expenses related to furniture and fixtures in the new flat Further, human probability and logic also challenge the claim that the appellant issued cheques to his son to withdraw cash from his son's account rather than from his own account. Further, in the absence of any argument and material from the appellant, countering the above conclusion, I do not find any reason to interfere with addition made by the assessing officer and confirm the same. Regarding the addition of Rs.6.45,810, which represents additional income offered by the appellant through revised computation and return, this amount stems from interest income of Rs.11.21.649 as per Form 26AS. According to the appellant's submission in Para 5 of the assessment order, the appellant had forgone the claim of expenses. Given the appellant's detailed submission explaining the revised income, there is no merit in the appellant's ground challenging the addition, and it is dismissed.

7. In view of the above, the addition made by the Assessing Officer is hereby confirmed, and the appeal is dismissed.”

5. As the assessee did not find any favour, from the appeal so filed before the ld. CIT(A) the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the ld. AR of the assessee, has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below:

“The assessee is an Individual. During the year under consideration the assessee derived income from interest. Return of income was filed on 05.08.2017 disclosing total income of Rs. 6,15,290/-. A copy of acknowledgement of return along-with computation of total income is available on paper book page No…1. The case was selected for scrutiny under CASS. The learned AO completed assessment under section 143(3) on n 09.12.2019, determining total income at Rs. 21,46,600/- inter-alia making the following additions. S Particulars Amount No. 1 Unexplained income under section 69A on account of Cash 8,85,500.00 deposit in bank 885000/- u/s 68 of the IT Act 2 Additions under section 68 6,45,810.00 Total 15,31,310.00

Aggrieved with the order passed by the learned AO the assessee went in appeal before the learned CIT(A). During the course of pendency of appeal before the learned CIT(A) the asseseee had requested the learned AO, ITO ward 1 (4), Jaipur vide letter dated 20.01.2020 to furnish copy of order sheet, copy of statements recorded under section 131 of Shri Rajesh Agarwal which was used against the assessee while framing the assessment order and for inspection of assessment record. A copy of the letter dated 20.01.2020 furnished before the learned AO is available on paper book page No 2.. . However the learned AO till date (05.05.2025) failed to furnish the required information. In the absence of which the asseseee failed to contest Appeal before the learned CIT(A). The learned AO did not furnish information taking the excuse that the relevant records are unavailable/untraceable. However the assessee had to suffer on account of inaction on the part of the learned AO as the appeal of the assessee was dismissed by the learned CIT (A) vide order dated 24.01.2025. Aggrieved with the order of the learned CIT(A) the assessee has come before the Hon’ble Tribunal. It is submitted that during the pendency of appellate proceedings with the learned CIT (A), the assessee died on 25.03.2021. Copy of death certificate is available on paper book page No 3. It is submitted that this fact was informed to the income Tax Department on 13.03.2024 in response to hearing Geeta Devi Agarwal vs. ITO notice dated 30.01.2024 issued by the learned CIT (A) under section 250 of the income Tax Act 1961. Further his wife Smt. Geeta Devi was appointed as legal heir of him. It is relevant to submitted that the learned CIT(A) has dismissed the appeal of the assessee not on merits but simply on the ground that the assessee did not appear and did not avail the opportunity given to him. It is submitted that after intimating death of the assessee and appointing legal heir the learned CIT(A) was bound to issue notice in the name of legal heir, however no notice was issued in the name of the legal heir. All the notices including the notice for hearing in the name of deceased person are ab initio void. Further It is submitted that it was incumbent upon the learned CIT(A) that despite non appearance of the assessee the appeal should have been decided on merits. The assessee discusses the individual grounds of appeal as under GROUNDS OF APPEAL

1. That in the facts and circumstances of the case and in law the order passed under section 143(3) of the Income tax Act by the learned AO and confirmed by the learned CIT A is ab initio Void and is liable to be quashed

2. That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the order of the learned AO not passed in accordance with law.

3. That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the action of the learned AO in making the additions of Rs, 8,85,000/- deposited in cash in the bank account under section 69A of the income tax Act.

4. That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the action of the learned assessing officer in applying the section 68 on income of Rs. 6,45,810/- surrendered by the assessee in revised computation which is again illegal and deserves to be deleted.

5. That in the facts and circumstances of the case and in law the learned CIT Appeal has erred in passing the order in the name of deceased persons in-spite of the fact that this fact was communicated well before in time to the learned CIT (A) on 13.03.2024 that the assessee has died on 25.03.2021 and the name of the legal heir was Smt. Geeta Devi.

6. That in the facts and circumstances of the case and in law the order passed by the learned AO is without providing of adequate opportunity and hence against the principal of natural justice therefore deserves to be quashed

7. That on the facts and circumstances of the case and in law the learned CIT A has erred in confirming the action of the learned AO in determining total income of the assessee at Rs. 21,46,600/-

8. The CIT A has erred in confirming the action of the learned AO in applying the provision of section 115BBE

9. That the appellant craves to add/alter/amend the Grounds of Appeal before the final hearing is completed Ground NO. 1 & 2

1. That in the facts and circumstances of the case and in law the order passed under section 143(3) of the Income tax Act by the learned AO and confirmed by the learned CIT A is ab initio Void and is liable to be quashed

2. That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the order of the learned AO not passed in accordance with law

It is submitted that during the year under consideration the assessee has deposited cash worth Rs. 22,80,500/- in the saving bank accounts. Complete details of deposit of cash in the different bank accounts are as under S No Date Name of Bank Account No Amount 1 10.11.2016 Canara Bank 0362101003892 1,80,000/- 2 15.11.2016 1,00,000/- 3 15.11.2016 50,000/- 4 28.11.2016 2,00,000/- 5 02.12.2016 1,94,000/- 6 13.11.2016 State Bank of India 511000705632 4,50,000/- 7 15.11.2016 10,00,000/- 8 03.12.2016 1,00,000/- 22.12.2016 6,500/- Total 22,85,500/- Correct total is 22,80,500/-

Before the learned AO the assessee has submitted that the aforesaid amount of Rs. 22,80,500/- was deposited in the bank account out of the earlier cash withdrawals from the saving bank account of the assessee and his son. The complete details of cash withdrawls form bank account is as under:-

Date Name of bank Account No A/c holder Name Amount 21.09.2016 SBBJ 5101198302 Rajesh Kr Ag (son) 4,10,000.00 23.09.2016 SBI 51100070532 Assessee 4,00,000.00 01.10.2016 SBI 51100070532 Assessee 10,00,000.00 28.10.2016 SBBJ 5101198302 Rajesh Kr Ag (son) 5,00,000.00 Total 23,10,000.00 =========

On perusal of the above statement it reveals that the assessee and his son was having cash worth Rs. 23,10,000/- out of cash withdrawals from the bank account. Out of the above cash the assessee has deposited cash worth Rs. 22,80,500/- in the bank account as noted above during the demonetization period. Cash flow statement of the assessee is as under:-

Date Name of Bank opening Receipts deposit Balance 21.09.2016 SBBJ 0.00 410000.00 410000.00 23.09.2016 SBI 410000.00 400000.00 810000.00 01.10.2016 SBI 810000.00 1000000.00 1810000.00 28.10.2016 SBBJ 1810000.00 500000.00 2310000.00 10.11.2016 Canara Bank 2310000.00 0.00 180000.00 2130000.00 13.11.2016 SBI 2130000.00 0.00 450000.00 1680000.00 15.11.2016 Canara Bank 1680000.00 100000.00 1580000.00 15.11.2016 Canara Bank 1580000.00 50000.00 1530000.00 15.11.2016 SBI 1530000.00 1000000.00 530000.00 28.11.2016 Canara Bank 530000.00 200000.00 330000.00 02.12.2016 Canara Bank 330000.00 194000.00 136000.00 03.12.2016 136000.00 100000.00 36000.00 22.12.2016 36000.00 6500.00 29500.00

2310000.00 2280500.00

From the above table it is crystal clear that the assessee has explained source of entire cash deposited in the bank account during demonetization period. However the learned AO has accepted cash to the tune of Rs. 14,00,000/- (Rs. 4,00,000/- on 23.09.2016 and Rs. 10,00,000/- on 01.10.2016) as explained and balance Rs. 9,10,000/- ( Rs. 4,10,000/- on 21.09.2016 and Rs. 5,00,000/- on Geeta Devi Agarwal vs. ITO 28.10.2016) as unexplained. From the perusal of the assessment order passed by the learned AO it is revealed that the amount withdrawn from the account of the assessee has been treated as explained/genuine and the amount withdrawn from the account of Shri Rajesh Agarwal son of the assessee has not been accepted. The Ground mentioned in the assessment order for not treating cash withdrawn from the account of the son of the assessee is as under:-

“Here is very discrepancy in the facts that the assessee gave Rs. 6,00,000/- + Rs. 3,00,000/- on 21.09.2016 (written in the order as 21.09.2019) through cheque to his son Rajesh Agarwal and taken back on the same day Rs., 4,10,000/- on 21.09.2016 (written in the order as 21.09.2019). It how justifiable if the assessee needed of cash Rs. 4,10,000/- on 21.09.2019 then why he issued cheque to his son and why deposited in his account through cheque and why got cash withdrawn from his account. The assessee could withdraw directly from his own bank account.”

During the course of assessment proceedings the learned AO has recorded the statements of Shri Rajesh Agarwal S/o of the assessee under section 131 of the income Tax Act. In the order passed by the learned AO at para 2 of page No. 4 the learned AO has mentioned that “The reason for non admissibility is on record because in the statements under section 131 Shri Rajesh Agarwal has admitted in reply to question no. 7 & 8 that the loan was taken from his father i.e. the assessee Rs. 9,00,000/- and from his other relative Amit Goyal Rs. 5,76,000/- was taken for furniture and fittings in his newly purchased Flat and other needs. Therefore after examining all the fats and statements of witness Shri Rajesh Agarwal, it is concluded that the cash withdrawals by Rajesh Agarwal of Rs. 4,10,000/- on 21.09.2016 and Rs. 5,00,000/- on 28.10.2016 were used for furniture and fittings and other personal need which were not for repayments to his father i.e. assessee, therefore the submission of the assessee is admitted only extent to Rs,. 14,00,000/-. The balance cash deposit in his bank account of Rs,. 8,85,000/- is not admitted as from explained sources.”

In this regard it is submitted that Smt. Neetu Jain W/o Shri Rajesh Agarwal s/o the assessee has purchased a new Flat at for Rs. 23,00,000/- under registered sale deed dated 27.10.2016. (Copy of sale deed dated 27.10.2016 is available on paper book page No 4 to 13.) The perusal of the 3rd para on page No. 4 of the registered sale deed discloses that possession of the flat was taken on 27.10.2016 therefore the work of furnishing could have been done only after Geeta Devi Agarwal vs. ITO 27.10.2016 and not earlier. It is submitted that no work of furniture could be started immediately as the new purchased flat require other minor works and the furniture work was started much later in the month of December 2016. The assessee withdraw cash from bank for furniture from November 2016 and upto to March 2017. A copy of bank statement for the relevant period is available on paper book page No…….. In these facts and circumstances the cash withdrawn Rs. 4,10,000/- on 21.09.2016 and Rs. 5,00,000/- on 28.10.2016 was available with the assessee family and the same was utilized in depositing the same in the bank account of the assessee. The learned AO wrongly rejected the explanation of the assessee on the ground that in the statement Shri Rajesh Kumar stated to have withdrawn the money for purposes of furniture work. It is submitted that in the statement recorded on 29.11.2019 (Three year after) Shri Rajesh Kumar could not recollect the facts minutely as on what date the funds were used for purposes for Furniture. Further in the statement also Shri Rajesh Kumar has not specified when the work of furniture was executed. (no question on this issue was asked by the department). The submission of the assessee is that as on the date of deposit in the bank account on 15.11.2016 the amount withdrawn by Shri Rajesh Kumar of Rs. 9,10,000/- was available with the assessee. Thus the entire deposit in the bank account stand fully explained. It is also relevant to submit that since the money withdrawn by Shri Rajesh Kumar Agarwal on 21.09.2016 and 28.10.2016 in old currency these could not be kept after demonetization hence it was necessary to deposit the same in the bank account. Thus the bank account of the assessee was used for this purpose.

It is submitted that in reply to question No. 7 & 8 of statements recorded on 29.11.2019 the assessee has correctly replied that the said amount was withdrawn for the purposes of furniture in the newly purchased flat. The relevant portion of the statement (Certified copy provided the learned AO on 15.05.2025) is scanned below

The perusal of the above statement reveals that shri Rajesh kumar S/o the assessee in response to question – what was the purpose of withdrawls of cash from bank, had stated that the said money was withdrawn from the bank for the purposes of furniture in the flat. However he has never stated that the amount was used in the purchase of furniture till the date of demonetization. The submission of the assessee is that it is true that the amount was withdrawn for furniture but was not used till the date of demonization as the flat was purchased on 27.10.2016 and thereafter only the possession of the flat was handed over to the wife of the son of the assessee by the Developer.

Therefore the assumption, presumption of the learned AO that the said amount out of withdrawal from the bank account of Shri Rajesh Agarwal (Son of the assessee) is used for fitting of furniture and fixture of newly purchased flat is baseless. It is submitted that the possession of the Flat was taken over on 27.10.2016 wherein the work of furniture was pending. And planning for furnishing the Flat was going on. But till the date of demonetization (08.11.2016) the work of finishing and furnishing were not started. Thus the amount withdrawals by Shri Rajesh Agarwal (Son of the assessee) from his bank account were lying with the family of the assessee and on declaring of demonetization the said amount (withdrawn from the account of son shri Rajesh Agarwal) alongwith the amount lying with the assessee, out of withdrawals from bank account of the assessee, was deposited in the bank account of the assessee. In view of the above facts it is the submission of the assessee that the entire amount deposited in the bank account of the assessee during demonization is fully explained. Thus the source of deposit of Rs. 22,80,500/- during demonetization period in the bank account of the asessee is as under -

Date Name of bank Account No A/c holder Name Amount 21.09.2016 SBBJ 5101198302 Rajesh Kr Ag (son) 4,10,000.00 23.09.2016 SBI 51100070532 Assessee 4,00,000.00 01.10.2016 SBI 51100070532 Assessee 10,00,000.00 28.10.2016 SBBJ 5101198302 Rajesh Kr Ag (son) 5,00,000.00 Total 23,10,000.00 ========= Thus the submission of the assessee is that the learned AO has made the addition on suspicion, on guess work, assumption, presumption and conjectures. It is settled position of law that suspicion however strong cannot take the place of evidence Following case laws are quoted in support. a Uma Charan Shaw & Bros 37 ITR 271 b CIT Vs Anupam Kapoor 299 ITR 179 ( P&H) c CIT Vs Dhiraj Lal Girdhari Lal 26 OTR 736 d Lal chand Bhagat Ambika Ram (1959) 37 ITR 288 e State Vs Guljari lal Tondan AIR 1979 (SC) f J A Naidoo Vs State of Maharastra AIR 1979 SC 1537 g Krishnand Vs State of MP AIR 1977 SC 796 h Dhakeshwari Cotton Mills 26 ITR 775 SC 40 I Omar Saha 37 ITR 151 (SC) Further It is submitted that the learned AO has made the addition under section 69A of the income tax Act 961 which is wrong as the provisions of section 69 A is not applicable upon the assessee. As noted supra the assessee is not maintaining any books of accounts and has filed his return of income in form 4S under section 44 ADA under presumptive taxation scheme of the department. The provision of section 69 A is reproduced here under:-

Section 69 A 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded 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, bullion, Geeta Devi Agarwal vs. ITO jewellery or other valuable article, 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.

On perusal of the provisions of section 69A it reveals that it is applicable only when the assessee is found to be the owner of money bullion, jewellery or other valuable article and such money bullion jewellery or valuable article is not recorded in the books of a taxpayer, for which he offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, may be charged to income-tax as the income of the taxpayer of that year.

Conditions to be satisfied for applicability of section 69A From the reading of section 69A, following conditions can be stated to attract the applicability of section 69A :

1 Assessee is found to be owner of money bullion jewellery 2. Assessee has maintained ‘books’ 3 Such money, bullion, jewellery or valuable article is not recorded in the books maintained by the taxpayer of a sum during the year. 4. The taxpayer offers no explanation about the nature and source of such money, bullion, jewellery or valuable article or the explanation offered by the taxpayer in the opinion of the Assessing Officer is not satisfactory.

If all the above conditions exist, such money, bullion, jewellery or valuable article may be charged to tax as income of the taxpayer of that year.

In this case the asseseee has not been found to be owner of money bullion or valuable article. Therefore the provisions are not applicable.

In view of the above the provisions of section 69 A is not applicable on the assessee. Following case laws are quoted in support a) Hon’ble Supreme Court is directly on the issue which is very much relevant in the context of taxation of on money. The Hon’ble Supreme Court in the case of CIT v. P.V. Kalyana Sundaram (2007) 294 ITR 49, under similar circumstances held in favor of the assessee. The relevant portion of order is reproduced here under :– Geeta Devi Agarwal vs. ITO “We have heard learned counsel for the parties and have gone through the record. It is true that the Division Bench of the High Court has borrowed extensively from the orders of the Tribunal and the Commissioner and passed them off as if they were themselves the author(s). We feel that quoting from an order of some authority particularly a specialized one cannot per se be faulted as this procedure can often help in making for brevity and precision, but we agree with Mr. Vahanvati to the extent that any “borrowed words” used in a judgment must be acknowledged as such in any appropriate manner as a courtesy to the true author(s). Be that as it may, we are of the opinion that the three questions reproduced above can, in no way, be called substantial questions of law. The fact as to the actual sale price of the property, the implication of the contradictory statements made by Rajarathinam or whether reliance could be placed on the loose sheets recovered in the course of the raid are all question of fact. We therefore find no infirmity in the order of the High Court. Accordingly, we dismiss the appeal.” b) CIT Vs Ravi Kumar P&H HC in 294 ITR 78, dated 16 July 2007 The assessee was found to be in possession of loose slips and not any valuable article or things. Neither the possession nor the ownership of any jewelry mentioned in the slips was proved. Therefore, the Tribunal had rightly held that the provisions of section 69A of the Act were not applicable. The Tribunal also held that if the assessee failed to explain the contents of the slips, it was for the Revenue to prove on the basis of material on record that they represented transactions of sales or stock in trade before making any addition on this score. The assessee had duly explained that these were rough calculations and the assessee’s explanation had not been rebutted by any material evidence. c) Durga Kamal Rice Mills v. CIT [2003] 130 Taxman 553 (Cal.). Ownership is one of the Considerations – The material difference between Section 68 and 69A is that Section 68 does not require that the amount is to be owned by the Assessee. It only deals with any amount shown in the books of accounts of the assessee whereas Section 69A deals with money, etc., owned by the assessee and found in his possession. – d) Riveria Properties (P) Ltd. Vs. ITO (ITAT Mumbai) date of judgement 27.10.2017 Assessing officer is not correct in coming to the conclusion that on money is exchanged between the parties based on a loose sheet found in the premises of a third person. To sustain the addition, the assessing officer should have conducted an independent inquiry about the value of the property and Geeta Devi Agarwal vs. ITO ascertain whether any under valuation is done, if so what is the correct value of the property. Further, the assessing officer did not brought on record any evidence to support his contention to say that there is on-money exchanged between the parties. In the absence of proper inquiry and sufficient evidences, we find no reason to confirm addition made by the assessing officer towards on money. Therefore, we direct the assessing officer to delete addition of Rs. 3,05,00,000 made towards on money. e) Doon Valley Roller Flour Mills P limited Vs IAC (1989) 31 ITD 238 (Del) f) ACIT V Sri Radheshyam Poddar (1992 41 ITD 449 (Cal.) g) Kollipara Subba Rao Vs ITO (1990) 32 ITD 668 (hyd.) h) CIT V D K Gupta (2009) 308 ITR 230 (Del) i) Amar Natvarlal shah Vs ACIT (1997) 60 ITD 560 (Ahd) j) Brijlal Roopchand V ITO (1991) 40 TTJ (indore) 668 k) ACIT V Ashok Kumar Poddar (2008) 16 DTR (kol.) (Trib.) 55

Further it is submitted that the order passed by the learned CIT(A) is not in accordance with law as the same has been passed in the name of deceased whereas the assessee had intimated the fact of death of Shri Badrilal Agarwal on 25.03.2021 and that legal heir was appointed Smt. Geeta Devi Agarwal. This fact was intimated under letter dated 13.03.2024 . The screen shot of the intimation furnished for death of assessee shri Badrilal Agarwal is as under-

Copy of acknowledgement for intimation of death Copy of acknowledgement for intimation of death is available on paper book is available on paper book page no…14. In the facts and circumstances of the case the order passed by In the facts and circumstances of the case the order passed by In the facts and circumstances of the case the order passed by the learned CIT(A) is no next. the learned CIT(A) is no next.

Ground No. 3

That in the facts and circumstances of the case and in law the learned CIT (A) That in the facts and circumstances of the case and in law the learned CIT (A) That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the action of the learned AO in making the additions of Rs, nfirming the action of the learned AO in making the additions of Rs, nfirming the action of the learned AO in making the additions of Rs, 8,85,000/- deposited in cash in the bank account under section 69A of the income deposited in cash in the bank account under section 69A of the income deposited in cash in the bank account under section 69A of the income tax Act.

The assessee derived income by giving petty loans on interest, No Book of The assessee derived income by giving petty loans on interest, No Book of The assessee derived income by giving petty loans on interest, No Book of accounts have been m accounts have been maintained during the year under consideration. The aintained during the year under consideration. The learned AO noticed that there were deposits in bank to the tune of Rs. learned AO noticed that there were deposits in bank to the tune of Rs. learned AO noticed that there were deposits in bank to the tune of Rs. 22,85,000/- both in canara bank and SBI. The assessee explained the sources both in canara bank and SBI. The assessee explained the sources both in canara bank and SBI. The assessee explained the sources of the deposit, which included amount received from his of the deposit, which included amount received from his son Shri Rajesh Agarwal son Shri Rajesh Agarwal Geeta Devi Agarwal vs. ITO Rs. 4,10,000/- on 21.09.2016 and Rs. 5,00,0000/- on 28.10.2016. The learned AO did not accept the money received from son Shri Rajesh Agarwal on the ground that Shri Rajesh Agarwal had taken money on 21.09.2016 from the assessee itself. The learned AO questioned the propriety of giving loan and taken back the same on the same date. This is so in respect of Rs 4,10,000/ received back by the assesee on 21.09.2016 as against 9,10,000/- (Rs. 600000/- + Rs.300000/-) given by the assessee by cheques on 21.09.2016 itself. In this regard it is submitted that the learned AO has failed to appreciate the facts of the case, the assessee had given cheques totaling to Rs. 9,00,000/- on 21-09- 2016. But emergency required taking back money to the extent of Rs. 4,10,000/- on same date and Rs. 5,00,000/- have been received on 28.10.2016. In this respect Affidavit dated 05.08.2019 of Shri Rajesh Kumar Agarwal son of the assesee is available on paper book page No 15.,. and Affidavit dated 05.08.2019 of the assessee (deceased Person) is also available on paper book page No 16 tp 18. It is submitted that money taken from Shri Rajesh Agarwal should not have been disbelieved. The learned AO failed to understand the interrelationship of son and father who could take and give money to meet needs and exigencies. The learned AO has disbelieved the money taken from Shri Rajesh Agarwal on the ground that Shri Rajesh Agarwal in his statement under section 131 stated that loan taken from father was withdrawn for furniture and fitting. In this regard it is the submission of the assessee that flat was purchased on 27.10.2016, then how the amount withdrawn earlier to 27.10.2016 or on the date 27.10.2016 itself could be used for furniture. Copy of sale deed of flat in the name of Smt. Neetu Jain (Daughter in law of the assessee is available on paper book page No cited supra).

However the statement of Shri Rajesh Agarwal has remained untested by cross examination. It is settled principle of law that statement taken at the back of assessee cannot be used against the assessee unless opportunity for cross examination is allowed. The same has not been done in this case. As such additions could not have been made on the basis of statements of Shri Rajesh Agarwal. Therefore the additions deserves to be deleted. The following case laws are quoted in support.

Andman Timber Ind. Vs. Commission of Central Excise (2015) 281 CTR 211 (SC).

(i) The Apex Court has observed that not allowing cross examination is a serious flaw and makes the order nullity. Andman Timber Ind. Vs. Commission of Central Excise (2015) 281 CTR 211 (SC). “not allowing the assessee to cross Geeta Devi Agarwal vs. ITO examine the witness by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order, is a serious flaw which makes the order nullity in as much as it amounted to violation of principle of natural justice because of which the assessee was adversely affected.

(ii) COMMISSIONER OF INCOME TAX vs. BIJU PATNAIK HIGH COURT OF ORISSA 190 ITR 0396

Although answers can be recorded either in favour of the Department or against it, ultimately each answer would again become inconclusive on account of the final findings of fact of the Tribunal that ITO has not given reasonable opportunity to the assessee to rebut the statements recorded ex parte under s. 131 of the Act and to furnish explanation to some of the materials. It is true that Tribunal has not given due weight to the relevant and admissible evidence while recording the findings of fact. However, the findings of the Tribunal on such fact are also vulnerable as they may require reconsideration. If answers in respect of each of the questions are indicated in the absence of reasonable opportunity being afforded to the assessee, they would be of academic interest inasmuch as the answers against the assessee would become vulnerable on account of the need to undo the absence or reasonable opportunity. A clear and conclusive finding binding on the parties can be given only after reasonable opportunity is given to the assessee as found by the Tribunal. No answer should be given in advisory jurisdiction which would not finally decide the issue since final finding can be arrived at only after giving reasonable opportunity to the assessee and explanation given by the assessee would have material bearing on the finding. It is necessary that the Assessing Officer gives opportunity to the assessee. Tribunal has not considered the evidence in its proper perspective while rendering the decision in appeal and accordingly, the findings of the Tribunal are vitiated in law. As the final fact-finding forum, the Tribunal has to consider the same again. Since Tribunal has recorded a finding that reasonable opportunity has not been given to the assessee to give rebuttal evidence and explanation, this can effectively be done by the Assessing Officer. The reference applications are disposed of as above leaving it to the Tribunal to pass consequential orders.

(iii) PRAKASH CHAND NAHTA vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF MADHYA PRADESH) (2008) 301 ITR 0134 : Assessment—Validity—Opportunity of being heard vis-a-vis statements of third party—Unaccounted silver ornaments and utensils were found and seized during the search at the assessee’s premises—Assessee explained that the said silver items were purchased from one R & Co.—AO made addition to the income of the Geeta Devi Agarwal vs. ITO assessee after recording the statement of M, proprietor of R & Co., behind the back of the assessee—Not justified—AO has heavily relied upon the statement of M and has ignored the subsequent affidavit filed by M which is in variance of his original statement—Since the statement of M was used against the assessee and an affidavit was filed controverting the same, it was obligatory on the part of the AO to allow the prayer of assessee for cross-examination of M—AO having not summoned M under s. 131 in spite of the request of the assessee, evidence of M could not have been used against the assessee—Therefore, the assessment order is vitiated

(iv) HEIRS AND LRS OF LATE LAXMANBHAI S. PATEL vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF GUJARAT ) (2010) 327 ITR 0290

Opportunity of being heard—During search of one R, key of bank locker along with two packets containing six promissory notes were recovered—Out of those six promissory notes, one was in the sum of Rs. 8,78,358 executed by one K in the capacity of partner of firm DCI—In his statement recorded during search, R stated that the key of locker and the two envelopes were handed over to him by the assessee—K also admitted in his statement recorded on the same day at 2.00 AM midnight that he had executed the pronote and signed it on behalf of DCI after obtaining a sum of Rs. 8,78,358—Later, K filed an affidavit that his statement was recorded at late hours in the night under coercion and pressure— Subsequently, K along with two other partners of DCI, made a voluntary disclosure of a sum of Rs. 11 lacs including the amount of Rs. 8,78,358 and same was assessed in the hands of the three partners—Relying on the statement of R and the retracted statement of K, AO made addition of Rs. 8,78,358 under s. 68 in the hands of assessee also and the same was confirmed by CIT(A) and Tribunal—Not justified—Apparently, there was a violation of principles of natural justice as the statement of one of the important witnesses, namely, R on which heavy reliance was placed by the AO is neither referred to in the assessment order nor copy thereof was given to the assessee nor the assessee was given an opportunity of cross-examining the said R—Authorities could not be absolved from doing so on the ground that the facts stated by R were admitted by the assessee—K had not only retracted his earlier statement but also made a voluntary disclosure, along with two other partners of DCI, in the sum of Rs. 11 lacs which included the amount of pronote of Rs. 8,78,358—Legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, is that if the addition is made, the same is required to be (v) COMMISSIONER OF INCOME TAX vs. EASTERN COMMERCIAL ENTERPRISES (HIGH COURT OF CALCUTTA) 210 ITR 0103 Assessee showing a gross profit rate of 5.2%—Revenue being of the opinion that assessee inflated purchases, called in evidence one S from whom assessee made purchases and applied G.P. rate of 30%—S denied having made any sales to assessee in the face of earlier affidavits confirming such sales— Statement of S not furnished to assessee nor opportunity to cross-examine him given—Cross examination is sine qua non of the due process of taking evidence and no adverse inference can be drawn against a party unless that party is put on notice of the case made out against him—Matter remanded for cross- examination of S with opportunity to assessee to furnish evidence to rebut the evidence of S

(vi) KALRA GLUE FACTORY. vs. SALES TAX TRIBUNAL & ORS. (SUPREME COURT OF INDIA) 167 ITR 0498

Statement which was not tested by cross examination is not good evidence It is further submitted that the learned AO has wrongly invoked provisions of section 69A which are not applicable. The provisions section 69A are quoted in below.

Provisions of section 69A are not applicable

It is submitted that the learned AO has made the addition under section 69A of the income tax Act 961 which is wrong as the provisions of section 69A is not applicable upon the assessee. As noted supra the assessee is not maintaining any books of accounts and has filed his return of income in form 4S under section 44 ADA under presumptive taxation scheme of the department. The provision of section 69A is reproduced here under :-

Section 69 A 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded 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, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the Geeta Devi Agarwal vs. ITO 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.

On perusal of the provisions of section 69A it reveals that it is applicable only when the assessee is found to be the owner of money bullion, jewellery or other valuable article and such money bullion jewellery or valuable article is not recorded in the books of a taxpayer, for which he offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, may be charged to income-tax as the income of the taxpayer of that year.

Conditions to be satisfied for applicability of section 69A From the reading of section 69A, following conditions can be stated to attract the applicability of section 69A :

1 Assessee is found to be owner of money bullion jewellery 2. Assessee has maintained ‘books’ 3 Such money, bullion, jewellery or valuable article is not recorded in the books maintained by the taxpayer of a sum during the year. 4. The taxpayer offers no explanation about the nature and source of such money, bullion, jewellery or valuable article or the explanation offered by the taxpayer in the opinion of the Assessing Officer is not satisfactory.

If all the above conditions exist, such money, bullion, jewellery or valuable article may be charged to tax as income of the taxpayer of that year.

In this case the asseseee has not been found to be owner of money bullion or valuable article. Therefore the provisions are not applicable.

In view of the above the provisions of section 69A is not applicable on the assessee. Following case laws are quoted in support

The following case laws are quoted in support a) Hon’ble Supreme Court is directly on the issue which is very much relevant in the context of taxation of on money. The Hon’ble Supreme Court in the case of CIT v. P.V. Kalyana Sundaram (2007) 294 ITR 49, under similar circumstances held in favor of the assessee. The relevant portion of order is reproduced here under :– Geeta Devi Agarwal vs. ITO “We have heard learned counsel for the parties and have gone through the record. It is true that the Division Bench of the High Court has borrowed extensively from the orders of the Tribunal and the Commissioner and passed them off as if they were themselves the author(s). We feel that quoting from an order of some authority particularly a specialized one cannot per se be faulted as this procedure can often help in making for brevity and precision, but we agree with Mr. Vahanvati to the extent that any “borrowed words” used in a judgment must be acknowledged as such in any appropriate manner as a courtesy to the true author(s). Be that as it may, we are of the opinion that the three questions reproduced above can, in no way, be called substantial questions of law. The fact as to the actual sale price of the property, the implication of the contradictory statements made by Rajarathinam or whether reliance could be placed on the loose sheets recovered in the course of the raid are all question of fact. We therefore find no infirmity in the order of the High Court. Accordingly, we dismiss the appeal.” b) CIT Vs Ravi Kumar P&H HC in 294 ITR 78, dated 16 July 2007 The assessee was found to be in possession of loose slips and not any valuable article or things. Neither the possession nor the ownership of any jewelry mentioned in the slips was proved. Therefore, the Tribunal had rightly held that the provisions of section 69A of the Act were not applicable. The Tribunal also held that if the assessee failed to explain the contents of the slips, it was for the Revenue to prove on the basis of material on record that they represented transactions of sales or stock in trade before making any addition on this score. The assessee had duly explained that these were rough calculations and the assessee’s explanation had not been rebutted by any material evidence. c) Durga Kamal Rice Mills v. CIT [2003] 130 Taxman 553 (Cal.). Ownership is one of the Considerations – The material difference between Section 68 and 69A is that Section 68 does not require that the amount is to be owned by the Assessee. It only deals with any amount shown in the books of accounts of the assessee whereas Section 69A deals with money, etc., owned by the assessee and found in his possession. – d) Riveria Properties (P) Ltd. Vs. ITO (ITAT Mumbai) ITA No. 2748/Mum/2016 date of judgement 27.10.2017 Assessing officer is not correct in coming to the conclusion that on money is exchanged between the parties based on a loose sheet found in the premises of a third person. To sustain the addition, the assessing officer should have conducted an independent inquiry about the value of the property and ascertain whether any under valuation is done, if so what is the correct value of Geeta Devi Agarwal vs. ITO the property. Further, the assessing officer did not brought on record any evidence to support his contention to say that there is on-money exchanged between the parties. In the absence of proper inquiry and sufficient evidences, we find no reason to confirm addition made by the assessing officer towards on money. Therefore, we direct the assessing officer to delete addition of Rs. 3,05,00,000 made towards on money. e) Doon Valley Roller Flour Mills P limited Vs IAC (1989) 31 ITD 238 (Del) f) ACIT V Sri Radheshyam Poddar (1992 41 ITD 449 (Cal.) g) Kollipara Subba Rao Vs ITO (1990) 32 ITD 668 (hyd.) h) CIT V D K Gupta (2009) 308 ITR 230 (Del) i) Amar Natvarlal shah Vs ACIT (1997) 60 ITD 560 (Ahd) j) Brijlal Roopchand V ITO (1991) 40 TTJ (indore) 668 k) ACIT V Ashok Kumar Poddar (2008) 16 DTR (kol.) (Trib.) 55

Ground no. 4

That in the facts and circumstances of the case and in law the learned CIT (A) has erred in confirming the action of the learned assessing officer in applying the section 68 on income of Rs. 6,45,810/- surrendered by the assessee in revised computation which is again illegal and deserves to be deleted.

During the course of assessment proceedings the assessee came to know that his earlier counsel has inadvertently claimed deduction of 50% under section 44ADA against income of Rs 11,21,649/- which in-fact was interest income. Accordingly revised computation was submitted suo moto voluntarily during the course of assessment proceedings admitting additional income of Rs. 6,45,810/-. The total interest income receipt by the assessee was 11,21,649/-. After reducing the same from income disclosed in the income of Rs. 6,65,290/- shown in the return of income additional income of Rs. 6,45,810/- was surrendered during the course of assessment proceedings. The action of the assessee was a bonafide action. The only source of income of the assessee was interest. While computing the income, the learned AO has applied the provision of section 68 as well as provision of section 115BBE which were totally not called for. It is established position of law that section 68 is applicable in respect of cash credits in the books of account maintained by the assessee. The assessee has not maintained any books of accounts further there are no cash credits. The assessee has only submitted revised computation disclosing interest income. The provisions of section 68 are not attracted even distantly. The learned AO has not brought any material on recorded that income disclosed was not interest income and was from any other source. For applicability of section 68 the Geeta Devi Agarwal vs. ITO Hon,ble Supreme Court held in the case of Baladin Ram V/s CIT 71 ITR 427 – Regarding the applicability of section 68 the supreme court in the case of Baladin Ram V/s CIT 71 ITR 427 has held as under :- It has been held that : - It was observed that section 68 arises for consideration only when the following circumstances exist:- The matter concerns event was that took place on or after 1st April,1962 i) (the date of the coming into force of the Act 1961 Act), ii) The assessee maintains account books for his previous year iii) The cash credit entry appears in such books of account : and iv) The assessing officer enquiring into the matter comes to the conclusion that the undisclosed income of the assessee. The perusal of the aforesaid decision of the Hon’ble Supreme Court mandates that section 68 is applicable only when there is a credit entry in the books of account maintained by the assessee. In this case of the assessed the learned AO has not discussed that there is any credit entry in any name appearing in the Books of accounts of the assessee. The additions has been made in a vague manner hence the provisions of section 68 are not applicable.

A. It is submitted that during the course of assessment proceeding the assessee found that some mistakes have taken place by the counsel of the assessee in the income disclosed in the return of income originally filed on 05.08.2017. Therefore the assessee voluntarily and suo moto submitted revised computation/return of income after depositing the challan of Rs 65,860.00 on dated 19.06.2016 and challan of Rs, 26,260/- on dated 16.07.2016 alongwith his submission dated 22.06.2016. It is admitted fact that the assessee has filed revised computation of income/his revised return of income voluntarily and suo moto and without pointing out any mistake or omission by the learned AO. However inspite of this admitted fact that the assessee has voluntarily and suo moto has submitted revised return during the course of assessment proceeding the learned AO has erred in not considering the same and has treated Rs. 6,45,810/- surrendered by the assessee in revised computation with revised return of income as undisclosed income of the assessee under section 68 of the IT Act 1961 and applied the provisions of section 115BBE for rate of tax purposes. It is submitted that the learned AO has not brought any material on record to controvert that the income disclosed in revised computation was not interest income. Further the learned AO has also not brought any material on record that Geeta Devi Agarwal vs. ITO the assessee had any income other than income from interest. The learned AO grossly eared in applying provisions of section 68 which are not applicable even distantly.

It is further submitted that the learned AO has no material to change the nature of income disclosed by the assessee as interest income. In these facts and circumstance the income disclosed by the assessee in the revised computation required to be accepted as it is. The Hob’bl;e ITAt is requested to accept the plea of the assessee and grant relief

B. Section 68 is not applicable in the case of the Assessee

1) Addition made under section 68 is Unlawful

The action of the learned AO in making the addition under section 68 is unlawful. The provisions of section 68 is quoted below. Cash Credits.

“68.Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income- tax as the income of the assessee of that previous year :

Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless— (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB)of section 10.”

Geeta Devi Agarwal vs. ITO The perusal of section 68 reveals that it is applicable only when the books of account are maintained by the assessee and entry of credit in such books of accounts are found unexplained

The conditions for the applicability of Section 68 are

All the following three conditions cumulatively should fulfill before applying the provisions of section 68 of the income tax Act 1961. However In the case of the asseseee the only source of income is income from interest income for which the assessee is neither liable to maintained nor he maintained any books of account. The assessee has filed his return of income in form 4S under presumptive taxation. Therefore first conditions that there is must be books of accounts. When there is no books of account the question of credit entry in the Books of account does not arise. Further it is submitted that the assessee has already disclosed interest income in the revised computation/return of income and hence nothing remains undisclosed.

The learned AO in the entire assessment order passed by him has no where mentioned of any credit entry in the books of accounts which remains unexplained. Therefore the addition made under section 68 is totally uncalled for and deserves to be deleted.

Regarding the applicability of section 68 the Hon’ble Supreme Sourt in the case of Baladin Ram V/s CIT 71 ITR 427 has held as under :-

It has been held that : -

It was observed that section 68 arises for consideration only when the following circumstances exist:-

The matter concerns event was that took place on or after 1st April,1962 i) (the date of the coming into force of the Act 1961 Act), ii) The assessee maintains account books for his previous year Geeta Devi Agarwal vs. ITO iii) The cash credit entry appears in such books of account : and iv) The assessing officer enquiring into the matter comes to the conclusion that it is the undisclosed income of the assessee.

C. The perusal of the aforesaid decision of the Hon’ble Supreme Court mandates that section 68 is applicable only when there is a credit entry in the books of account maintained by the assessee. In this case of the assessed the learned AO has not discussed of any credit entry in any name appearing in the Books of accounts of the assessee. The additions has been made in a vague manner hence the provisions of section 68 are not applicable. In view of the above position of law the learned AO was not justified in applying the provisions of section 68 and 115BBE on income already disclosed by the assessee. Ground NO. 5

That in the facts and circumstances of the case and in law the learned CIT Appeal has erred in passing the order in the name of deceased persons in-spite of the fact that this fact was communicated well before in time to the learned CIT (A) on 13.03.2024 that the assessee has died on 25.03.2021 and the name of the legal heir was Smt. Geeta Devi.

Although in it is submitted that the CIT(A) has passed order in the name of the deceased despite the fact that name of the legal heir was communicated to the learned CIT(A) well in time on 13.03.2024 i.e. before the passing of Appellate order. Whereas the learned CIT(A) has passed the Appellate order on 24.01.2025. The screen shot of the intimation furnished for death of assessee shri Badrilal Agarwal is as under-

Copy of acknowledgement for intimation of death is available on paper book Copy of acknowledgement for intimation of death is available on paper book Copy of acknowledgement for intimation of death is available on paper book page no cited supra. . Although as per the settled legal position the order passed Although as per the settled legal position the order passed in the name of deceased is no next, but the assesses submits that the appeal in the name of deceased is no next, but the assesses submits that the appeal in the name of deceased is no next, but the assesses submits that the appeal may be decided by the Hon’ble ITAT as the issues involved are very small. may be decided by the Hon’ble ITAT as the issues involved are very small. may be decided by the Hon’ble ITAT as the issues involved are very small.

Ground No. 6

That in the facts and cir That in the facts and circumstances of the case and in law the order passed by cumstances of the case and in law the order passed by the learned AO is without providing of adequate opportunity and hence against the learned AO is without providing of adequate opportunity and hence against the learned AO is without providing of adequate opportunity and hence against the principal of natural justice therefore deserves to be quashed the principal of natural justice therefore deserves to be quashed the principal of natural justice therefore deserves to be quashed

It is submitted that the learned CIT(A) erred in confir It is submitted that the learned CIT(A) erred in confirming the action of the learned ming the action of the learned AO with respect to the amounts taken by the assessee from his son i. e. Rs. AO with respect to the amounts taken by the assessee from his son i. e. Rs. AO with respect to the amounts taken by the assessee from his son i. e. Rs. 4,10,000/- on 21.09.2016 and Rs. 5,00,000/ on 21.09.2016 and Rs. 5,00,000/- on 28.10.2016. The learned AO has on 28.10.2016. The learned AO has mentioned that in his statement recorded under section 131 on 29.11.20 mentioned that in his statement recorded under section 131 on 29.11.20 mentioned that in his statement recorded under section 131 on 29.11.2019 the son of the assessee Rajesh kumar Agarwal simply stated that the money was son of the assessee Rajesh kumar Agarwal simply stated that the money was son of the assessee Rajesh kumar Agarwal simply stated that the money was withdrawn by him for purposes of furniture and other needs. Copy of the withdrawn by him for purposes of furniture and other needs. Copy of the withdrawn by him for purposes of furniture and other needs. Copy of the statement is available on paper book page No. 19 to 21 statement is available on paper book page No. 19 to 21 statement is available on paper book page No. 19 to 21. It is relevant to Geeta Devi Agarwal vs. ITO mentioned that the son of the assessee did not state that the money was utilized for purposes of furniture. This statement has wrongly been made the basis of addition. The assessee has already submitted that the flat in the name of wife of son was purchased on 27.10.2016 itself therefore no furniture was work could have been done immediately. Hence the money withdrawn by the son of the assessee was lying with the family of the assessee and was used for depositing in the bank account of the assessee. The learned AO has wrongly relied upon the statement of Shri Rajesh Kumar Agarwal without allowing opportunity for cross examination to the assessee. It is settled position of law that statement taken at the back of the assessee cannot be used against the assessee unless opportunity for cross examination is allowed. This has not been done In this case. On this account alone the addition deserves to be deleted. The following case laws are quoted in support

Andman Timber Ind. Vs. Commission of Central Excise (2015) 281 CTR 211 (SC).

(i) The Apex Court has observed that not allowing cross examination is a serious flaw and makes the order nullity. Andman Timber Ind. Vs. Commission of Central Excise (2015) 281 CTR 211 (SC). “not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order, is a serious flaw which makes the order nullity in as much as it amounted to violation of principle of natural justice because of which the assessee was adversely affected.

(ii) COMMISSIONER OF INCOME TAX vs. BIJU PATNAIK HIGH COURT OF ORISSA 190 ITR 0396

Although answers can be recorded either in favour of the Department or against it, ultimately each answer would again become inconclusive on account of the final findings of fact of the Tribunal that ITO has not given reasonable opportunity to the assessee to rebut the statements recorded ex parte under s. 131 of the Act and to furnish explanation to some of the materials. It is true that Tribunal has not given due weight to the relevant and admissible evidence while recording the findings of fact. However, the findings of the Tribunal on such fact are also vulnerable as they may require reconsideration. If answers in respect of each of the questions are indicated in the absence of reasonable opportunity being afforded to the assessee, they would be of academic interest inasmuch as the answers against the assessee would become vulnerable on account of the need to undo the absence or reasonable opportunity. A clear and conclusive finding Geeta Devi Agarwal vs. ITO binding on the parties can be given only after reasonable opportunity is given to the assessee as found by the Tribunal. No answer should be given in advisory jurisdiction which would not finally decide the issue since final finding can be arrived at only after giving reasonable opportunity to the assessee and explanation given by the assessee would have material bearing on the finding. It is necessary that the Assessing Officer gives opportunity to the assessee. Tribunal has not considered the evidence in its proper perspective while rendering the decision in appeal and accordingly, the findings of the Tribunal are vitiated in law. As the final fact-finding forum, the Tribunal has to consider the same again. Since Tribunal has recorded a finding that reasonable opportunity has not been given to the assessee to give rebuttal evidence and explanation, this can effectively be done by the Assessing Officer. The reference applications are disposed of as above leaving it to the Tribunal to pass consequential orders.

(iii) PRAKASH CHAND NAHTA vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF MADHYA PRADESH) (2008) 301 ITR 0134 :

Assessment—Validity—Opportunity of being heard vis-a-vis statements of third party—Unaccounted silver ornaments and utensils were found and seized during the search at the assessee’s premises—Assessee explained that the said silver items were purchased from one R & Co.—AO made addition to the income of the assessee after recording the statement of M, proprietor of R & Co., behind the back of the assessee—Not justified—AO has heavily relied upon the statement of M and has ignored the subsequent affidavit filed by M which is in variance of his original statement—Since the statement of M was used against the assessee and an affidavit was filed controverting the same, it was obligatory on the part of the AO to allow the prayer of assessee for cross-examination of M—AO having not summoned M under s. 131 in spite of the request of the assessee, evidence of M could not have been used against the assessee—Therefore, the assessment order is vitiated

(iv) HEIRS AND LRS OF LATE LAXMANBHAI S. PATEL vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF GUJARAT ) (2010) 327 ITR 0290

Opportunity of being heard—During search of one R, key of bank locker along with two packets containing six promissory notes were recovered—Out of those six promissory notes, one was in the sum of Rs. 8,78,358 executed by one K in the capacity of partner of firm DCI—In his statement recorded during search, R stated that the key of locker and the two envelopes were handed over to him by Geeta Devi Agarwal vs. ITO the assessee—K also admitted in his statement recorded on the same day at 2.00 AM midnight that he had executed the pronote and signed it on behalf of DCI after obtaining a sum of Rs. 8,78,358—Later, K filed an affidavit that his statement was recorded at late hours in the night under coercion and pressure— Subsequently, K along with two other partners of DCI, made a voluntary disclosure of a sum of Rs. 11 lacs including the amount of Rs. 8,78,358 and same was assessed in the hands of the three partners—Relying on the statement of R and the retracted statement of K, AO made addition of Rs. 8,78,358 under s. 68 in the hands of assessee also and the same was confirmed by CIT(A) and Tribunal—Not justified—Apparently, there was a violation of principles of natural justice as the statement of one of the important witnesses, namely, R on which heavy reliance was placed by the AO is neither referred to in the assessment order nor copy thereof was given to the assessee nor the assessee was given an opportunity of cross-examining the said R—Authorities could not be absolved from doing so on the ground that the facts stated by R were admitted by the assessee—K had not only retracted his earlier statement but also made a voluntary disclosure, along with two other partners of DCI, in the sum of Rs. 11 lacs which included the amount of pronote of Rs. 8,78,358—Legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, is that if the addition is made, the same is required to be deleted on the ground of violation of the principles of natural justice—Orders of all the three authorities set aside and addition deleted.

(v) COMMISSIONER OF INCOME TAX vs. EASTERN COMMERCIAL ENTERPRISES (HIGH COURT OF CALCUTTA) 210 ITR 0103

Assessee showing a gross profit rate of 5.2%—Revenue being of the opinion that assessee inflated purchases, called in evidence one S from whom assessee made purchases and applied G.P. rate of 30%—S denied having made any sales to assessee in the face of earlier affidavits confirming such sales— Statement of S not furnished to assessee nor opportunity to cross-examine him given—Cross examination is sine qua non of the due process of taking evidence and no adverse inference can be drawn against a party unless that party is put on notice of the case made out against him—Matter remanded for cross- examination of S with opportunity to assessee to furnish evidence to rebut the evidence of S

Statement which was not tested by cross examination is not good evidence It is further submitted that the learned AO has wrongly invoked provisions of section 69A which are not applicable. The provisions section 69A are quoted in below.

The ratio of the aforesaid decisions are equally applicable to the facts of the case. Therefore the order passed by the learned AO and confirmed by the learned CIT (A) is without providing of adequate opportunity and hence against the principal of natural justice, therefore deserves to be quashed Ground No. 7 That on the facts and circumstances of the case and in law the learned CIT A has erred in confirming the action of the learned AO in determining total income of the assessee at Rs. 21,46,600/- As discussed in the forgoing grounds of Appeal.

Ground No. 8

The CIT A has erred in confirming the action of the learned AO in applying the provision of section 115BBE

In the case of the assessee, tax has been charged as per provisions of section 115BBE while calculating tax as per computation sheet but in the assessment order there is no murmur/direction/observation of the learned AO for applying provisions of section 115BBE. It is further submitted that during the course of assessment proceedings the asseseee had voluntarily submitted a revised computation of income disclosing additional income of interest of Rs. 6,45,810/- because his earlier counsel had inadvertently and wrongly claimed deduction under section 44ADA considering interest income as professional income. The mistake committed by the counsel was voluntarily corrected and rectified by the assessee by furnishing revised computation. This fact is mentioned by the learned AO in the assessment order that the revised computation/revised return was filed by the assessee volulntarily. This speaks about the bona-fide of the assessee. The assessee had no other sources of income accept interest income. The provisions of section 68 have been erroneously applied by the learned AO. In view of this it is submitted that provisions of section 115BBE are also not applicable in the case of the assessee. Further no additions in this case deserve to be survived. In this case only normal rates of taxes are applicable which have already been paid by the assessee. The Hon’ble ITAT is humbly requested to give direction for non applicability of the provisions of section 115BBE.

Ground No. 9

That the appellant craves to add/alter/amend the Grounds of Appeal before the final hearing is completed

Not pressed.

S No Particulars Paper book page No(s) 1 copy of acknowledgement of return along-with computation of total income 1 2 A copy of the letter dated 20.01.2020 furnished before the learned AO 2 3 Copy of death certificate of assesseee shri Badri Lal Agarwal 3 4 Copy of Purchase/sale deed of flat dated 27.10.2016 in the name of daughter in law 4 to 13 smt. Neetu jain 4 copy of bank statement of the assessee for the period Nov 2016 to March 2017 22 to 25 6 Copy of acknowledgement for intimation of death of assessee shri Badri Lal Agarwal 14 7 Affidavit dated 05.08.2019 of Shri Rajesh Kumar Agarwal 15 8 Affidavit dated 05.08.2019 of the assessee (deceased Person) 16 to 18 9 Copy of the statement of shri Rajesh Kumar dated 29.11.2016 provided to the 19 to 21 assessee by the learned AO on…27.05.2025

7. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee filed the revised computation of the income and therefore, the same is required to be admitted. In support of his contention he relied upon the decision of Hon’ble tax appeal no. 493 of 2017. As regards the addition of Rs. 8,85,500/- not considered as sourced from son he relied upon the written submission and evidence placed on record and submitted that based on the facts already on record the addition is required to be deleted. He also relied upon the affidavit filed.

Vide Ground no. 3 the assessee challenges the finding of the ld.

CIT(A) in sustaining the addition of Rs. 8,85,000/- being the amount deposited in cash in the bank account under section 69A of the income tax Act. The brief facts related to the dispute are that the assessee deposited cash of Rs. 22,85,500 as tabulated by the ld. AO vide para 4 page 2 of his order. The ld. AO considered the submission of the assessee and of Rs. 8,85,500/- was considered as unexplained money as per provision of section 69A of the Act. When the matter carried before the ld. CIT(A) he did not find any merit in the submission of the assessee and thereby confirmed the addition based on the observations made by the ld. AO in his order. The ld. AO contended that the explanation of the assessee being contradictory and therefore, the explanation furnished were not considered by both the lower authority.

Before us the ld. AR of the assessee submitted a cash flow statement which is reproduced here in below ;

Date Name of Bank opening Receipts deposit Balance 21.09.2016 SBBJ 0.00 410000.00 410000.00 23.09.2016 SBI 410000.00 400000.00 810000.00 1810000.0 01.10.2016 SBI 810000.00 1000000.00 0 1810000.0 2310000.0 28.10.2016 SBBJ 0 500000.00 0 2310000.0 2130000.0 10.11.2016 Canara Bank 0 0.00 180000.00 0 2130000.0 1680000.0 13.11.2016 SBI 0 0.00 450000.00 0 1680000.0 1580000.0 15.11.2016 Canara Bank 0 100000.00 0 1580000.0 1530000.0 15.11.2016 Canara Bank 0 50000.00 0 1530000.0 1000000.0 15.11.2016 SBI 0 0 530000.00 28.11.2016 Canara Bank 530000.00 200000.00 330000.00

2280500.0 2310000.00 0

From the chart so submitted it was argued by the ld. AR of the assessee that out of cash deposit of Rs. 22,80,500 the assessee has sufficient withdrawal of Rs. 23,10,000/-. The lower authority only considered the explanation of Rs. 14,00,000/- and balance was added as unexplained money in the hands of the assessee without considering the explanation of the assessee. For the balance amount as is evident from the submission of the assessee that it was received from the son of the assessee and thereby the assessee explained the complete source of cash deposit as under :

Name of A/c holder Date bank Account No Name Amount Rajesh Kr Ag 21.09.2016 SBBJ 5101198302 (son) 4,10,000.00 23.09.2016 SBI 51100070532 Assessee 4,00,000.00 01.10.2016 SBI 51100070532 Assessee 10,00,000.00 Rajesh Kr Ag 28.10.2016 SBBJ 5101198302 (son) 5,00,000.00 Total 23,10,000.00

Record reveals that the lower authority did not consider the explanation of the assessee so far as it relates to the cash received from 05.08.2019 which was not considered. The ld. AO relied upon the statement recorded where the son of the assessee submitted that the purpose of the cash withdrawal was to prepare the furniture in the flat and therefore, the cash withdrawal made by the son of the assessee was not considered as explained. During the course of hearing the ld. AR of the assessee submitted that the assessee lower authority did not consider the submission supported by the evidence and merely based on the assumption, presumption of the learned AO that the said amount out of withdrawal from the bank account of Shri Rajesh Agarwal (Son of the assessee) is used for fitting of furniture and fixture of newly purchased flat is baseless because the possession of the Flat was taken over on 27.10.2016 wherein the work of furniture was pending. And planning for furnishing the Flat was going on. But till the date of demonetization (08.11.2016) the work of finishing and furnishing were not started and therefore, considering the demonetization withdrawals by Shri Rajesh Agarwal (Son of the assessee) from his bank account were lying with the family of the assessee and on declaring of demonetization the said amount (withdrawn from the account of son shri Rajesh Agarwal) alongwith the amount lying with the assessee, out of withdrawals from bank account of arguments raised and supported by the evidence in form of deed of purchase of flat in the name of Neetu Jain, affidavit of the son of the assessee we are of the considered view that the cash deposit is duly supported from the declared source which was not disputed and therefore there is no base even to support the contention of the assessee as the same is in contradictory to the record filed by the assessee. Considering that factual aspect being not disputed we see no reason to sustain the addition of Rs. 8,85,500/- made by the ld. AO and the same is directed to be deleted. Based on this observation ground no. 3 raised by the assessee is allowed.

Record reveals that the assessee suo moto in the assessment proceeding filed the revised computation and paid the tax on the income offered in the revised computation of income. The assessee in the revised computation of income filed declared the additional income of Rs.

6,45,810/- [ Original ITR Rs. 6,15,290/- revised Computation of income amount as undisclosed income as per provision of section 68 of the Act and thereby assessed as such. A propose this ground the relevant finding of the ld. CIT(A) is as under :

Regarding the addition of Rs.6.45,810, which represents additional income offered by the appellant through revised computation and return, this amount stems from interest income of Rs.11.21.649 as per Form 26AS. According to the appellant's submission in Para 5 of the assessment order, the appellant had forgone the claim of expenses. Given the appellant's detailed submission explaining the revised income, there is no merit in the appellant's ground challenging the addition, and it is dismissed. Before us the ld. AR of the assessee serviced the decision of Hon’ble Gujarat High Court in the case of PCIT Vs. Babubhai Ramanbhai Patel in tax appeal no. 493 of 2017 wherein the Gujarat High Court held that ;

Geeta Devi Agarwal vs. ITO 6. Sub-section (5) of Section 139, therefore, gives right to an assessee who has furnished a return under sub-section (1) or sub-section (4) to revise such return on discovery of any omission or a wrong statement. Such revised return, however, can be filed before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. This is precisely what the assessee did while exercising the right to revise the return. Sub- section (5) of Section 139 does not envisage a situation whereupon revising the return if a case for loss arises which the assessee wishes to carry forward, the same would be impermissible. In terms, sub-section (5) of Section 139 allows the assessee to revise the return filed under sub- section (1) or sub-section (4) as long as the time frame provided therein is adhered to and the requirement of the revised return has arisen on discovery of any omission or a wrong statement in the return originally filed. Accepting the contention of the revenue would amount to limiting the scope of revising the return already filed by the assessee flowing from sub-section (5). No such language or intention flows from such provision. 6.1 The Allahabad High Court in case of Dhampur Sugar Mills Ltd. v. CIT [1973] 90 ITR 236, in the context of the Income Tax Act, 1922 held that the assessee is given a right to file a correct and complete return if he discovers an error or omission in the return filed earlier. The assessment can be completed only on the basis of the correct and complete return. The earlier return, after a revised return has been filed, cannot form the basis of assessment although it may be used to indicate the conduct of the assessee. There is a clear distinction between a revised return and a correction of return. Once a revised return is filed, the original return must be taken to have been withdrawn and substituted by a fresh return for the purpose of assessment.

8. In view of the above discussion, we do not find any error in the view of the Appellate Tribunal. Tax appeal is, therefore, dismissed. As is not disputed by the revenue about the filling of the income by revised computation and payment of tax thereupon the addition made by the ld. AO and sustained by the ld. CIT(A) is directed to be deleted upon respectfully these observations ground no.4 raised by the assessee is allowed.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 30/06/2025.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 30/06/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Geeta Devi Agarwal through Legal heir Smt. Geeta Devi, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward 1(4), Jaipur 3. vk;dj vk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 450/JP/2025) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत