ACIT, CIRCLE1(3), SURAT, SURAT vs. ASHWINBHAI PARSOTTAMBHAI PATEL, SURAT

िनधा�रती की ओर से /Assessee by Shri P.M. Jagasheth, CA राज� की ओर से /Revenue by Shri Ajay Uke– Sr-DR सुनवाई की तारीख/Date of hearing 10.09.2025 उद्घोषणा की तारीख/Date of pronouncement 28.11.2025 Order under section 254(1) of Income Tax Act PER DINESH MOHAN SINHA, JUDICIAL MEMBER: This appeal by Revenue is directed against the order of National Faceless Appeal Centre (NFAC), Delhi/Ld. Commissioner of Income-tax, Appeal [for short, “Ld. CIT(A)”] dated 06.09.2024 for the assessment year 2017-18, which in turn arises out of an assessment order passed by the Assessing Officer (in short, “AO”) under section 143(3) of Income-tax Act, 1961 (‘the Act’) on 30.12.2019. The Revenue has raised the following grounds of appeal:-

“i. On the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the additions of Rs.1,69,10,000/- made on account of unexplained cash credits within the meaning of section 69A of the Act as the assessee not produced any cogent evidences to prove that the sources cash deposits made in the bank account is explained. ii. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of the unexplained cash deposit made by the Assessing Officer u/s 69A of the Act even though as per the provisions of the said section onus to explain the sources of the such cash deposited in the bank accounts are on the assessee.

(A.Y.17-18) Ashwinbhai P Patel iii. On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. iv. It is therefore prayed that the order of Ld. CIT(A) may kindly be set aside that of the Assessing Officer be restored. v. The appellant craves leave to add alter, amend and/or withdraw any ground of appeal either before or during the course of hearing of the appeal."

2. Brief facts of the case that assessee filed his return of income on 16.01.20218 declaring total income of Rs.1,25,57,600/-. Subsequently return was revised and income declared at Rs.1,44,31,900/-. The case was selected for scrutiny because of there was a cash deposit of Rs.2,48,00,300/-. Notice was issued by the AO which was duly replied by the assessee stating that assessee earned rental income and other sources of income and business income. However, the assessment completed on 30.12.2019 with the addition of Rs.1,65,00,100/-. Against this order the assessee filed an appeal before the Ld.CIT(A). The Ld. CIT(A) on 06.09.2024 deleted the addition made by AO observing as under: “6. I have perused the order passed by the AO and the written submissions filed by the appellant along with the cash book. The appellant in the written submission has furnished the assessment year wise total income declared by him in the ITR. It is submitted by the appellant that for the AY 2016-17, the total income declared by him was Rs.1,78,37,410/- and also paid the tax liability of Rs.64,70,850/-. Although the return was treated as invalid by CPC, he had reported all the income earned during the relevant assessment year and paid corresponding taxes. The appellant has placed his reliance on the cash book submitted before the AO and contended that, the source of cash deposit was duly recorded in his cash book. He has also submitted that, the reasons given by the AO in the assessment order is not acceptable as the AO rejected the ash book without examining the income of the appellant, credits into the bank account, earlier withdrawal of cash from the bank account, cash balance available in cashbook etc. in this connection, he has also placed his reliance on the jurisdictional ITAT i.e. Hon’ble ITAT Surat, as well as decision of the Hon’ble ITAT Mumbai.

7. Upon perusal of the return of income bank account copy and the cash book, it is evident that the appellant is having sufficient source for the cash deposited into the bank account when the appellant has submitted cash book, the AO cannot reject the cash book without assigning any proper reasons. The appellant has withdrawn money from the bank and the same was shown as cash in hand in the cashbook. The AO could not disprove the cash balance available in the cashbook. In view of the above, the cash deposited into the bank account cannot be treated as unexplained money That the Revenue filed an appeal against the impugned order of the Ld. CIT(A) dated 06.09.2024 before us.