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Facts
The assessee company filed its return for AY 2017-18 declaring a loss. The case was selected for scrutiny due to abnormal cash deposits during demonetization. The assessment was completed with additions on account of unexplained cash deposits and unsecured loans, and a disallowance. The CIT(A) partly allowed the appeal, granting relief on the unsecured loan addition.
Held
The Tribunal noted that the assessee had filed a detailed reply regarding the cash deposit addition which was not considered by the AO. The Tribunal restored the issue of cash deposits to the AO for fresh consideration on merits after giving the assessee an opportunity to substantiate its claim. The ground relating to disallowance was not pressed.
Key Issues
Whether the addition on account of unexplained cash deposits under Section 69A was justified and whether the disallowance under Section 40(a)(ia) was correctly made.
Sections Cited
69A, 40(a)(ia), 48(a)(i), 250, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE & MRS. RENU JAUHRI, HON’BLE
Mohan Udyog Pvt. Ltd Vs ITO Ward 17(3) Shop No. 3, B Block Market Delhi Ashok Vihar, Phase-I New Delhi- 52 (APPELLANT) (RESPONDENT) PAN No. AAECM0639E Assessee by : Smt. Rano Jain, Advocate, Ms. Mansi Jain, CA, Shri Tanishq Ahuja, Advocate, Shri Sidharth Bajaj, Advocate Revenue/Department by : Shri Ajay Kumar Arora, Sr. DR Date of Hearing: 21.01.2026 Date of Pronouncement: 21.01.2026 ORDER PER RENU JAUHRI : The above captioned appeal is preferred by the assessee against the order dated 04.08.2025, passed by Ld. CIT(A)/NFAC, Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as, “Act”) in Appeal No. CIT(A), Delhi- 6/10352/2019-20.
The assessee has raised following grounds of appeal which are reproduced as under:
1. On the facts and circumstances of the case order passed by the National Faceless Appeal Centre (NFAC) is bad both in the law and on facts.
2. (i) On the facts and circumstances of the case NFAC has erred both on facts and in law in confirming the addition of 1 | P a g e 6381_DEL_2025_Mohan Udyog Pvt Ltd Rs. 33,50,000/- made by the Assessing Officer under section 69A of the Act on account of cash deposited in the bank. (ii) That the abovesaid addition was made under section 69A of the Act, despite the fact that the receipts were business receipts duly recorded in the books of account, hence the said section does not apply to the relevant facts and circumstances. (iii) That the addition was made without rejecting the books of accounts, as such leading to double taxation of the same amount.
3 On the facts and circumstances of the case NFAC has erred both on facts and in law in confirming the action of the Assessing Officer in making disallowance of an amount of Rs 31,386/- invoking the provisions of section 40(a)(ia) of the Act. 4. Appellant craves leave to add, amend or alter any of the grounds of appeal.”
Brief facts are that the assessee company filed return for A.Y. 2017-18 on 30.10.2017, declaring loss of Rs. 2,78,094/-. The case was selected for scrutiny due to abnormal cash deposits during the demonetization period. The assessment was completed u/s 143(3) of the Act vide order dated 19.12.2019 at an income of Rs. 92,81,386/- after making addition on account of unexplained cash deposits u/s 69A at Rs. 33,50,000/-, addition on account of unsecured loan of Rs. 59,00,000/- and disallowance u/s 48(a)(i) of Rs. 31386/-. Aggrieved, the assessee preferred an appeal before Ld. CIT(A).
The appeal was partly allowed by the Ld. CIT(A) vide order dated 04.08.2025 whereby relief on account of addition made in respect of unsecured loan was granted. Further aggrieved, the assessee has filed an appeal before the Tribunal, challenging the addition or Rs. 33,50,000/- u/s 69A made on account of cash deposits in the bank accounts and disallowance of Rs. 31,386/- u/s 48(a)(i) of the Act. Before us, Ld. AR has submitted that the ground relating to 2 | P a g e 6381_DEL_2025_Mohan Udyog Pvt Ltd disallowance u/s 48(a)(i) is not being pressed. He has further submitted that the assessee had filed detailed reply dated 07.12.2019 to the show-cause notice with regard to proposed addition on account of cash deposits during demonetization period which has not been considered by the Ld. AO.
After hearing both the parties and in the interest of justice, we deem it appropriate to restore this issue back to the Ld. Jurisdictional AO for fresh consideration on merits after giving due opportunity to the assessee to substantiate its claim.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 21-01-2026.