DINESH KHATRI,FARIDABAD vs. ACIT CENT CIRCLE 2 FARIDABAD, FARIDABAD

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ITA 8625/DEL/2025Status: DisposedITAT Delhi21 January 2026AY 2012-133 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided that the impugned cash deposits of Rs. 25.95 lakhs were not unexplained. The reasoning was based on the fact that the assessee had withdrawn a total of Rs. 48.40 lakhs in the relevant financial year 2011-12, and the cash flow statement filed by the assessee, which was not disputed by the lower authorities, indicated that these deposits represented the assessee's cash withdrawals. The Tribunal inferred that the cash deposits were almost double the cash withdrawals made in the relevant financial year. Therefore, no merit was found in the impugned addition, and it was deleted. The appeal was allowed.

What were the facts?

The assessee, Sh. Dinesh Khatri, is in appeal against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon, dated 22.10.2025. This order pertains to assessment year 2012-13 and involves proceedings under section 147 read with section 143(3) of the Income-tax Act, 1961. The dispute concerns cash deposits amounting to Rs. 25.95 lakhs. The assessee had withdrawn Rs. 48.40 lakhs in the financial year 2011-12, which included the impugned cash deposits. The assessee's cash flow statement for the relevant period was not disputed by the lower authorities.

What were the issues?

1. Whether the Tribunal could uphold the addition of Rs. 25.95 lakhs as unexplained cash deposits, as treated by the lower authorities? Assessee's contentions: The assessee did not appear before the Tribunal, and therefore, no arguments were recorded on their behalf. Revenue's contentions: The learned departmental representative argued that the lower authorities had rightly treated the assessee's impugned cash deposits amounting to Rs. 25.95 lakhs as unexplained and that this finding deserves to be upheld.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 21.01.2026

ORDER This assessee’s appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals)-3 [in short, the “CIT(A)”], Gurgaon’s order dated 22.10.2025 passed in case no. 10260/CIT(A)-3/GGN/2019-20, involving proceedings under section 147 r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.

2.

Learned departmental representative refers to both the lower authorities’ respective assessment and lower appellate findings in question to vehemently contents that they have rightly treated the assessee’s impugned cash deposits amounting to Rs.25.95 lakhs as unexplained which deserves to be upheld before the tribunal.

3.

I have given my thoughtful consideration to the assessee’s and the Revenue’s respective pleadings. It emerges from the CIT(A)’s lower appellate discussion at page 6 that the assessee had withdrawn a total amount of Rs.48.40 lakhs in the relevant financial year 2011-12 which also involved cash deposits of Rs.25.95 lakhs forming subject matter of addition. The assessee has further filed his cash flow statement which has not been disputed in both the learned lower authorities’ respective detailed discussion. The necessary inference which would arise in the given facts is that the assessee’s impugned cash deposits represent his almost double cash withdrawals made in the relevant financial year; and, therefore, no merit is found in the impugned addition which stands deleted in very terms.

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