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Facts
The assessee, Satya Narain Agarwal, challenged an addition of Rs. 4,86,143/- made by the AO and sustained by the CIT(A) on account of alleged unexplained cash deposits. The assessee had filed income under presumptive taxation and was not required to maintain regular books of account. The addition arose from a perceived negative cash balance in the assessee's books.
Held
The Tribunal held that the assessee had provided evidence of cash receipts from the sale of immovable properties and had also presented the opening cash balance from the previous year's ITR. These factors, when considered, indicated that there was no negative cash balance and the addition was unsustainable. The Tribunal also noted that registered documents cannot be considered as afterthought.
Key Issues
Whether the addition of Rs. 4,86,143/- on account of unexplained cash deposits is sustainable when the assessee has provided evidence of cash receipts from property sales and the previous year's opening balance explains the cash position.
Sections Cited
143(3), 69A, 44AD, 68
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 565/JP/2025
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 565/JP/2025 fu/kZkj.k o"kZ@Assessment Year : 2015-16 cuke Satya Narain Agarwal ACIT, Vs. B 119, Janta Colony, Circle-05, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABYPA7902J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Tanuj Agarwal, Adv. jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 25/06/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 30/06/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
By way of present appeal, the assessee challenges the order of the Commissioner of Income Tax (Appeals)-02, Gurugram [ for short CIT(A) ] dated 25/03/2025 for assessment year 2015-16. The said order of the ld. CIT(A) arise as against the order dated 18.12.2017 passed under section 143(3) of the Income Tax Act, 1961 [ for short Act] by ACIT, Circle-05, Jaipur [ for short AO ].
“1. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) grossly erred in sustaining an addition of Rs. 4,86,143/- u/s 69A of the Income-tax Act, 1961, as unexplained cash deposits in bank account thereby ignoring the material evidences on record.
2. That the appellant craves leave to add, amend, alter, modify, substitute or delete any ground or grounds of appeal on or before the hearing of the appeal.
Succinctly, the fact as culled out from the records is that the assessee e-filed return showing total income of Rs.35,36,580/- on 09.11.2015, which was processed u/s 143(1) for A.Y. 2015-16. The case was selected for scrutiny on the basis of computer assisted selection for scrutiny (CASS) under Limited Scrutiny on following reasons:
i. Cash deposit in saving bank account is more than the turnover. ii. Sale consideration of property in ITR is less than consideration reported.
The statutory notice u/s 143(2) was issued on 28.07.2016 which was duly served upon the assessee. Thereafter, notice u/s 142(1) with questionnaire was issued on 06.04.2017. The assessee is individual and derives income from Real estate, Long term capital gain and interest income. In response the notice the AR of the Assessee appeared and filed written submission. assessee has deposited cash amounting to Rs. 64,52,500/- saving bank account по. 1939000100722332 maintained with Punjab National Bank. In order to verify the source of cash deposit in bank account(s), assessee vide questionnaire dated 06.04.2017 was asked to furnish copy of saving bank account and to explain source of the cash deposited with documentary evidences. In response to which assessee vide written submission dated submitted as under:-
"the source of cash deposited in bank accounts is from sale proceeds of immovable property. We are enclosing herewith Xerox-copies of Bank Pass Books of UCO & PNB along with copy of Cash Book for the period 01.04.2014 to 31.03.2015."
The details and documents furnished by the assessee were examined and it was noticed that, assessee has deposited/paid excess cash of Rs. 4,86,143/- then available in his cash book and accordingly ld. AO made that solitary addition and completed the assessment proceeding by way of order dated 18.12.2017.
Aggrieved from the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:
Satya Narain Agarwal vs. ACIT “6.3 I have gone through the reply submitted by appellant, impugned assessment order u/s 143(3) of the Act and remand report submitted by the AO, it is revealed that the contention of appellant is not found prima facie to be acceptable. As the appellant had submitted vide his letter dated 23.11.2017 that he had received cash of Rs. 4,80,000/- from the following persons as an advance against the plots sold to them as per details given below:-
(i) Rs. 2,80,000/- from Sh. Raj Kumar against plot no. A-1, A-2 on 25.05.2014.
(ii) Rs. 80,000/- from Sh. Pradeep against plot no. C-22 on 29.05.2014.
(iii) Rs. 2,00,000/- from Sh. Om Prakash Yogi against plot no. B-2, B-3 on 01.06.2014.
The appellant further submitted that the advances received from the above 03 persons was returned back to these parties as the agreement of sale property with them could not be materialized. Even though nowhere in the sale agreement mentioned any reason of the cancellation of the agreement of sale of the properties as well as no mention about the total sale consideration for which sale agreement was to be made. On the basis of the above facts the A.O had not found tenable the contention of assessee. Now during the appellate proceedings, Appellant has submitted that a sum of Rs. 5,25,000/- was received in cash on various dates prior to 12.08.2014 by way of sale of immovable properties through registered sale deed. These sale proceeds have not been included in the cash book of appellant due to mistake on the part of the accountant of the Satya Narain Agrawal, however, these sale proceeds were appearing in another cash book of Shree Balaji Market.
On the basis of the above narrated facts it is proved that appellant has stated his contention in two mode. First appellant had relied upon the sale agreement during the assessment proceedings and secondly sale deed & cash book of Shree Balaji Market & S.N.Agarwal. On going through the cash book of Satyanarain Agarwal & Shree Balaji Market it is revealed that appellant has shown on 12.06.2014 in the cash book of Shree Balaji Market on the credit side payment of Rs. 1,50,000/- to S N Agarwal but the same is not showing in the cash book of Satya Narain Agarwal on debit side. Thus, on 26.06.2014 in the cash book of Shree Balaji Market two entries of Rs. 75,000/- & 2,25,000/- respectively were mentioned on credit side for payment by S.N. Agarwal, but in the cash book of Satya Narain Agarwal no entry of dated 26.06.2014 are mentioned.
Satya Narain Agarwal vs. ACIT Consequently, considering the above narrated facts it is clear that appellant has tried to adjust the unaccounted cash in his book of accounts by making these false and fabricated documents. No such cogent documents are produced before me by which appellant could be substantiate his contention. Hence, these grounds of appeal are dismissed.
6.4 Remaining ground of appeal is general in nature and do not require adjudication. Accordingly, this ground of appeal is rejected/dismissed.
7.0 In the result, the appeal of appellant is hereby dismissed.”
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:
Ground No. 1 That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) grossly erred in sustaining an addition of Rs. 4,86,143/- u/s 69A of the Income-tax Act, 1961, as unexplained cash deposits in bank account thereby ignoring the material evidences on record. Brief Facts : The appellant derives income from immovable property business “Shree Balaji Market” the income which was declared u/s 44AD, income as partner from partnership firms, capital gains and interest income. He filed his return of income declaring total income of Rs.35,36,582/- (paper book page no. 1 to 7. The ld. AO finalized the assessment by making an addition of Rs.4,86,143/- on account of unexplained cash deposits in bank accounts. During assessment proceedings the learned Assessing Officer asked query regarding source of cash deposits of Rs.64,52,500/- in saving bank account no. 1939000100722332 maintained with Punjab National Bank to which the appellant replied that the source of cash deposit is mainly sale proceeds of immovable properties and submitted copy of bank statements/pass books and abstract cash
The learned Assessing Officer concluded that Rs.4,86,143/- was short balance as per cash book submitted by the assessee and finalized the assessment by making an addition of Rs.4,86,143/- u/s 69A of the Income-tax Act. 1961, as unexplained cash deposits in bank account. However, no opportunity was provided by the learned AO to the assessee by issuing a show cause notice before making the impugned addition which is also evident from the assessment order. (para 5.2, 5.3 & 6 at page no. 2 & 3 of the assessment order).
On appeal to the learned CIT(A), the appellant submitted as under:-
1. 1. Firstly that the immovable properties sold in cash through registered sale deeds were not considered while working out the balance of Rs.4,86,143/-.
2. Secondly that the opening cash balance as at 01.04.2014 of the assessee of Rs.8,00,404/- which is verifiable from the income-tax return efiled for the immediately preceding assessment year 2014-15 (paper book page no. 11 to 25, relevant page no. 25) was not considered to the extent of Rs.2,80,000/- while making the impugned addition.
3. Thirdly that the ld. A.O. erred in making the impugned addition without making a specific query or show cause regarding short balance of cash of Rs.4,86,143/- on 12.08.2014 otherwise the appellant could have specifically explained the source of cash deposit and linked it with the sale of immovable properties. In this respect, Ground No. 3 was specifically taken by the appellant in Form No. 35 for not providing sufficient opportunity of being heard which is against the principles of natural justice. An application under Rule 46A for admission of additional evidence of another cash book of business u/s 44AD alongwith copies of registered sale deeds were filed (paper book page no. 67, 26 to 66). The learned CIT(A) called for the remand report from the AO. The learned submitted remand report dated 31.01.2020 which is placed at paper book page no. 68 to 71. The learned AO in his remand report did not at all controvert the three main contentions of the appellant as under:- A) Opening cash balance not properly considered B) Cash received from above five registered sale deeds not considered C) No specific query or show cause was raised/issued in respect of the alleged amount of Rs.4,86,143/- on 12.08.2014. Instead, the AO who submitted the remand report got confused about some of the cancelled agreements which was not even mentioned in the assessment order by the then AO who framed the assessment. The learned CIT(A), NFAC also got confused by the remand report and the abstract cash book and the dismissed the appeal by holding that the assessee tried to adjust the unaccounted cash by false and fabricated documents (page no. 10 of the CIT(A) order).
Being aggrieved, the appellant has preferred this appeal in order to get justice.
Appellant’s Humble Submissions: It is most respectfully submitted that both the lower authorities grossly erred in not properly appreciating the facts as well as the provisions of law. The appellant derives business income as partner from his partnership firms and has also developed and sold immovable properties as “Shree Balaji Market Avenue” scheme, the income from which was declared on presumptive basis under section 44AD of the Income-tax Act, 1961. Source of deposit of cash in bank account was from opening cash balance (Paper Book page no. 11 to 25) and sale of immovable properties through registered sale deeds (paper book page no. 43 to 66). Following documents are submitted herewith :- S.No. Particulars Paper Book Page No. 1 Return of income and computation of total income 1 to 5 2 Profit & Loss A/c, Balance Sheet u/s 44AD 6 to 7 3 Abstract of cash book of Satya Narain Agrawal 8 to 10 submitted before ld. A.O. 4 Return of income & return form filed for A.Y. 2014-15 11 to 25 showing cash balance as at 01.04.2014 at Rs.8,00,404/- i.e. opening cash balance for the year under consideration 5 Copy of registered sale deeds of immovable properties 43 to 66 at Shree Balaji Market Avenue Scheme 6 Copy of abstract of cash book of Shree Balaji Market 26 to 42 Avenue Scheme for the year under consideration
It is humbly submitted that the ld. A.O. grossly erred in making the impugned addition thereby ignoring the submissions of the appellant that the source of cash deposit in bank account is mainly from sale of immovable property which is also evident from para no. 5.1 at page no. 2 of the assessment order. The ld. A.O. further erred in making the impugned addition without making a specific query or show cause regarding short balance of cash of Rs.4,86,143/- on 12.08.2014 otherwise the appellant could have specifically explained the source of cash deposit and linked it with the sale of immovable properties. Admittedly, the appellant also erred during the assessment proceedings in properly linking the cash receipts from sale of immovable properties to the cash deposits in bank account. The short cash balance of Rs.4,86,143/- is because of the following reasons :-
Firstly from the opening cash balance as the opening cash balance as at 01.04.2014 of the assessee was Rs.8,00,404/- which is verifiable from the income- tax return efiled for the immediately preceding assessment year 2014-15 (paper book page no. 11 to 25, relevant page no. 25). This opening balance of Rs.8,00,404/- is shown by the appellant in its two cash books (first of Mr. Satya Narain Agrawal and the second of Shree Balaji Market Scheme, the income the income of which is declared u/s 44AD) as under :-
S.No. Particulars Paper Book Page No. 1 Rs.5,20,404/- opening balance of cash book of Satya Narain 8 to 10 Agrawal 2 Rs.2,80,000/- opening balance of cash book of Shree Balaji 26 to 42 Avenue u/s 44AD Total Rs.8,00,404/-
Hence from the above, it is amply evident that the appellant had additional cash balance to the extent of Rs.2,80,000/- in addition to Rs.5,25,000/- as sale proceeds from immovable properties (explained in detail at s.no. 2 below), total amounting to Rs.8,05,000/- which is more than sufficient to cover short cash balance computed by the ld. A.O. at Rs.4,86,143/- which was added as unexplained cash deposits. The learned CIT(A) forwarded the Rule 46A application of the appellant (paper book page no. 67) alongwith written submissions and paper book of the appellant to the AO against which the learned AO furnished remand report dated (paper book page no. 68 to 71) but the AO didn’t contradict the availability of cash to the extent of Rs.2,80,000/- from opening balance. Even the learned CIT(A) didn’t consider this vital issue while dismissing the appeal instead arbitrarily concluded that the appellant gave fabricated evidence thereby ignoring that how can an income tax return of preceding assessment year e-filed on the income-tax portal be fabricated.
Secondly from sale proceeds of immovable properties through registered sale deeds which were not considered while working out the balance of Rs.4,86,143/- which is evident from the following documents :- S.No. Particulars Paper Book Page No. 1 Abstract of cash book of Satya Narain Agrawal submitted 8 to 10
before ld. A.O. 2 Copy of registered sale deeds of immovable properties at 43 to 66 Shree Balaji Market Avenue Scheme :- A) Rs.1,50,000/- dated 12.06.2014 (Plot No. C-12, C-13, 43 to 47 Buyer Name : Saroj Devi) B) Rs.1,50,000/- dated 12.06.2014 (Plot No. C-36, C-37, Buyer Name : Sunita Devi) C) Rs.75,000/- dated 25.06.2014 (Plot No. B-15, Buyer 48 to 52 Name : Sunil Kumar) D) Rs.75,000/- dated 25.06.2014 (Plot No. B-16, Buyer Name : Akshay Agarwal) 53 to 56 E) Rs.75,000/- dated 02.07.2014 (Plot No. C-20, Buyer Name : Kishore Kumar)
Total Rs.5,25,000/- 57 to 61
62 to 66
From the above, it is amply evident that a sum of Rs.5,25,000/- was received by the appellant in cash on various dates prior to 12.08.2014 in respect of sale of immovable properties through registered sale deed.
These sale proceeds have not been included in the cash book of Mr. Satya Narain Agrawal submitted to the ld. A.O. due to mistake on the part of the accountant of the appellant. These sale proceeds are however appearing in another cash book of Shree Balaji Market which has been furnished at paper book page no. 26 to 42. Even otherwise the appellant is not required to maintain books of account neither for personal transaction nor for presumptive business income u/s 44AD. Whatever the appellant has maintained is an abstract of cash book not otherwise required to maintained under law as books of account are neither required to maintained for personal transactions nor for transactions u/s 44AD. It is further submitted that Article 265 of the Constitution of India states that “No tax shall be levied or collected except by the authority of law.” Departmental authorities must not take advantage of the ignorance of the assessee and it is their duty to assist the taxpayer in every reasonable way particularly in the matter of claiming and securing reliefs. Reliance is being placed on CBDT circular No.14 of 1955 dated 11.04.1955. As evident from the remand report, the present A.O. grossly failed in appreciating the facts as well as contentions of the appellant. He has nothing to say on the crux of the appellant’s submissions with regard to opening cash balance as per preceding year income tax return filed and cash received from sale of properties Satya Narain Agarwal vs. ACIT by way of registered sale deeds at Shree Balaji Market Avenue Scheme. The ld. A.O. in his remand report did not at all controvert the three main contentions of the appellant as under:- a. Opening cash balance not properly considered b. Cash received from above five registered sale deeds not considered c. No specific query or show cause was raised/issued in respect of the alleged amount of Rs.4,86,143/- on 12.08.2014. Instead, the present AO who submitted the remand report got confused about some of the cancelled agreements which was not even mentioned in the assessment order by the then AO who framed the assessment. These cancelled agreements were also not before the CIT(A) as they were not in dispute in the assessment order passed. Raising fresh dispute while calling for remand report on Rule 46A application particularly when these documents doesn’t form part of the Rule 46A application is against the judicial propriety. The learned CIT(A) arbitrarily dismissed the appeal by considering the undisputed cancelled agreements issue from the remand report by ignoring the fact firstly that the learned AO has not disputed this in the assessment order passed and secondly that these agreements were not part of the appeal proceedings at all.
While dismissing the appeal, the learned CIT(A) concluded that on going through the cash books of Satya Narain Agarwal and Shree Balaji Market it is revealed that the appellant has shown on 12.06.2014 in the cash book of Shree Balaji Market on the credit side payment of Rs. 1,50,000/- to S N Agarwal but the same is not showing in the cash book of Satya Narain Agarwal on debit side. Thus, on 26.06.2014 in the cash book of Shree Balaji Market two entries of Rs. 75,000/- & 2,25,000/- respectively were mentioned on credit side for payment by S.N. Agarwal, but in the cash book of Satya Narain Agarwal no entry of dated 26.06.2014 are mentioned (paper book page no. 29 & 8). In this respect, it is humbly submitted firstly that even if the appellant’s accountant has shown cash withdrawals by Satya Narain Agarwal in the cash book of Shree Balaji Market and not shown corresponding cash inflow in the cash book of Satya Narain Agarwal, then it decreasing the cash balance of the appellant which is detrimental to appellant’s own interest as his cash balance is decreasing and not increasing. Hence, no adverse inference can be drawn against the appellant. Secondly, the learned CIT(A) was able to locate the reason for negative cash balance in the cash book of Satya Narain Agarwal to the extent of Rs.4,50,000/- as had the cash inflow been shown in the cash book of Satya Narain Agarwal, the cash balance could not have negative to this extent. Thirdly, in case of any doubt in the mind of learned CIT(A) in the interest of justice he could have clarified it from the appellant by giving him an opportunity of being heard instead of dismissing the appeal and sustaining the addition. Hence, the action of the learned CIT(A) is against judicial propriety and also against the principles of natural justice.
It is further submitted that the learned CIT(A), while dismissing the appeal, has arbitrarily held that the appellant has given fabricated evidence which is erroneous as the evidences in the form of opening cash balance mentioned in the preceding year income tax return e-filed on the income-tax portal cannot be fabricated. Similarly, the registered sale deeds which are registered with the Sub- registrar which is another Government Department cannot be fabricated. It is humbly submitted that both the lower authorities acted arbitrarily merely on surmises and conjectures dehors the material evidences on record. Reliance is being placed on the case of Dhakeshwari Cotton Mills Ltd. 26 ITR 775 wherein Hon’ble Supreme Court held that a suspicion remains a suspicion unless the same is established and can never take place of reality. Assessment cannot be made on guesswork without any reference to any material on record. Alternatively, it is submitted that since the appellant opted for presumptive taxation and filed its return u/s 44AD, any separate addition shall be illegal and unjustified. Reliance is being placed on the judgement of Mahendra Kumar Vs NFAC (ITAT Bangalore) decided on 21.09.2023 wherein it was held that as income is estimated under section 44AD of the Income Tax Act, so addition under section 68/69A of the Income Tax Act is impermissible. Hon’ble ITAT, Bangalore followed the judgment of Hon’ble Punjab & Haryana High Court in the case of CIT vs. Surinder Pal Anand [2010] 192 taxmann 264. In the aforesaid circumstances and in the interest of justice, it is most respectfully requested that the impugned addition, being illegal and unjustified, may kindly be deleted and the appeal may kindly be allowed.”
To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions:
PAGE S.NO. PARTICULARS NOS. Return of income and computation of total income 1 to 5 1 Profit & Loss A/c, Balance Sheet u/s 44AD 6 to 7 2 Abstract of cash book of Satya Narain Agrawal submitted before ld. A.O. 8 to 10 3 Return of income & return form filed for A.Y. 2014-15 showing cash balance as at 11 to 25 01.04.2014 at Rs.8,00,404/- i.e. opening cash balance for the year under consideration 4 Copy of abstract of cash book of Shree Balaji Market Avenue Scheme for the year under 26 to 42 consideration 5
Copy of registered sale deeds of immovable properties at Shree Balaji Market Avenue 43 to 66 Scheme 6
7 Rule 46A Application dated 31st December 2019 67
8 AO Remand Report dated 31.01.2020 submitted in office of CIT Appeals on 04.02.2020 68 to 71
The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee in this appeal challenges the only solitary addition of Rs. 4,86,143/- made by the ld. AO and sustained by the ld. CIT(A). The assessee has filed the ITR disclosing income of Rs. 35,36,580/- under the presumptive taxation and the assessee therefore not liable to maintain regular books of account. However, as the case was to verify the deposit cash deposit more then the turnover disclosed during the course of assessment proceeding based on the incorrect information and without considering the property transaction the cash book submitted wherein the ld. AO found that the as on 12.08.2014 there was negative cash of Rs. 4,86,143/- i.e. cash expended / deposit without there being receipt as alleged by the revenue based on the rough cash book filed by the assessee in the assessment proceeding. Based on that ld. AO made the addition. When the matter carried before the ld. CIT(A), the assessee filed the additional evidence and therefore, the ld. AO was provided an opportunity on those additional evidence filed by the assessee failed to establish the negative balance explanation and therefore, he recommended to sustain the addition. Based on that remand report ld. CIT(A) also takes a view that “the appellant has tried to adjust the unaccounted cash in his books of accounts by making these false and fabricated documents.”
The assessee to counter filed an affidavit and also submitted that the how can the registered documents exactly before the cash alleged to have been considered as negative be considered as fabricated. Considering that aspect he prayed to grant the necessary relief.
The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A) and that of in the remand report. Based on that ld. DR prayed to sustain the addition.
We have heard the rival contentions and perused the material placed on record. Vide ground no. 1 the assessee raised the solitary issue of confirming the addition of Rs. 4,86,143/- u/s 69A of the Act as unexplained cash deposits in bank account thereby ignoring the material evidences on possession of the information that the assessee has deposited cash amounting to Rs. 64,52,500/- saving bank account по. 1939000100722332 maintained with Punjab National Bank and the said deposit is not sufficient to the turnover disclosed by the assessee. Thus, in order to verify the source of cash deposit in bank account(s), assessee was asked to furnish copy of saving bank account and to explain source of the cash deposited with documentary evidences the assessee submitted the deposit of cash along with the copy of the cash book. Ld. AO examined those records and copy of cash book filed. Upon examination he noticed that assessee has deposited/paid excess cash of Rs. 4,86,143/- then available in his cash book and accordingly ld. AO made that addition and considered the balance cash as explained. When the matter carried before the ld. CIT(A) assessee filed the additional evidence which was admitted and forwarded to the ld. AO for his comments based on that remand report ld. CIT(A) given his finding that the assessee has tried to adjust the unaccounted cash in his book of accounts by making these false and fabricated documents.
Before us ld. AR of the assessee argued that the assessee has filed the ITR disclosing income of Rs. 35,36,580/- under the presumptive taxation and the assessee therefore not liable to maintain regular books of then the turnover disclosed during assessment proceeding. In support of that assessee filed cash book wherein the ld. AO found that as on 12.08.2014 there was negative cash of Rs. 4,86,143/- i.e. cash expended / deposit without there being receipt as alleged by the revenue based on the rough cash book filed by the assessee in the assessment proceeding.
Based on that ld. AO made the addition. When the matter was carried before the ld. CIT(A), the assessee filed the additional evidence and therefore, the ld. AO was provided an opportunity on that additional evidence filed by the assessee. Ld. AO contended that in the assessment proceeding the assessee failed to establish the negative balance explanation and therefore, he recommended sustaining the addition. Based on that remand report ld. CIT(A) also takes a view that “the appellant has tried to adjust the unaccounted cash in his books of accounts by making these false and fabricated documents.”
The assessee to counter filed an affidavit and submitted that the how can the registered documents exactly before the cash becomes negative alleged to have been considered as fabricated.
Having heard the arguments, finding of the lower authority and records in the form of submission filed before us, the bench noted that it is taxation and thereby not suppose to maintain the regular books of account.
Explaining the cash deposited the assessee submitted the cash book which was not complete as contended by the assessee and thereby the additional evidence in support of negative cash balance was filed and contended by the assessee that the property transaction cash if considered based on those registered agreement placed on record there is not negative cash balance and in fact the complete cash deposit stands explained. The bench further noted that the assessee vide his letter dated 23.11.2017 contended that he is in receipt of cash of from the following persons as an advance against the plots sold to them as per details given below, which was not considered in the cash book filed before the ld. AO and if the same is considered there is not separate addition of the negative cash balance is required to made :-
(i) Rs. 2,80,000/- from Sh. Raj Kumar against plot no. A-1, A-2 on 25.05.2014.
(ii) Rs. 80,000/- from Sh. Pradeep against plot no. C-22 on 29.05.2014.
(iii) Rs. 2,00,000/- from Sh. Om Prakash Yogi against plot no. B-2, B- 3 on 01.06.2014. forwarded the same to AO. These documents are registered documents and therefore, the same cannot be considered as after thought when the revenue did not controvert the contention of the assessee that the said cash was not included in the cash book filed by the assessee. Before us the assessee in furtherance to the evidence already on record also filed an affidavit wherein it was submitted that the said cash received was available and was not entered into the cash book. He also declared that the opening balance shown in the cash was also taken as incorrect and that fact was supported by the affidavit and that of the ITR of the previous placed on record. Considering both these evidence if that is corrected there is no negative balance for an amount of Rs. 4,86,143/- and therefore, we are of the considered view that since the cash generated by the assessee from those registered deed with that of the corrected opening cash on hand cannot be ignored and were not after thought. Based on these observations we see no reason to sustain that addition and thereby ground no. 1 raised by the assessee is allowed.
Ground no. 2 being general and the same is not required to be adjudicated.
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- Satya Narain Agarwal, Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Circle-5, Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 565/JP/2025) vkns'kkuqlkj@ By order,
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