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Facts
The assessee, an individual engaged in civil contract work, filed his return for AY 2017-18. His case was selected for scrutiny due to large cash deposits made during the demonetization period. The AO made additions totaling Rs. 1,39,67,000 for unexplained cash deposits under Section 69A and Rs. 50,00,000 for an unexplained cash gift from his wife under Section 68, which were subsequently upheld by the CIT(A).
Held
The Income Tax Appellate Tribunal (ITAT) noted that the assessee failed to appear for hearings and did not produce any evidence to controvert the findings of the AO and CIT(A). Consequently, the Tribunal upheld the additions made by the lower authorities, stating that the assessee failed to discharge the onus of proof regarding the genuineness of cash deposits and the gift from his spouse.
Key Issues
Addition for unexplained cash deposits during demonetization under section 69A and addition for unexplained cash gift from spouse under section 68.
Sections Cited
69A, 68, 115BBE, 143(1), 143(2), 142(1), 143(3), 40A(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 20.03.2025 of the Ld. Commissioner of Income Tax (Appeals), the National Faceless Appeal Centre, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2017-18.
None appeared for/on behalf of the assessee when the case called for hearing on 04.12.2025. The assessee failed to appear even on the earlier dates fixed for hearing on 14.07.2025, 23.09.2025 & 10.11.2025. However, the Ld. DR was present on all the above dates of hearing. Under these circumstances, we deem it fit to adjudicate the appeal with the assistance of Ld. DR and the material available on record.
The grounds of appeal raised before this Tribunal is against the action of the Ld. CIT(A)/NFAC in confirming the addition(s) made by the Ld. Assessing Officer (“AO”) on account of – (i) unexplained cash deposits of Rs. 1,39,67,000 under section 69A; and (ii) gift received from wife of Rs.
50,00,000/- as cash credit under section 68 of the Income Tax Act, 1961 (the “Act”).
We have heard the Ld. DR, perused the order of the Ld. AO and CIT(A)/ NFAC. Briefly stated the fact are that the assessee is an individual and engaged in civil contract work. For AY 2017-18, the assessee filed his return of income on 31.10.2017 declaring total income of Rs. 30,00,006/-. The return was initially processed under section 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny under CASS to verify certain issues interalia including large cash deposits during demonetization period. Accordingly, statutory notice(s) under section 143(2) and 142(1) of the Act along with questionnaire as well as show cause notice(s) were issued and duly served upon the assessee from time to time calling for various details / documentary evidences in respect of the issues identified for verification including the said cash deposits. In response thereto, the assessee filed its written submissions which were duly considered but not accepted by the Ld. AO. He proceeded to complete the assessment u/s 143(3) of the Act vide his order dated 26.12.2019 at the assessed total income of Rs. 2,22,88,300/- by making an addition of (i) Rs.1,39,67,000/- as unexplained money under section 69A r.w.s. 115BBE of the Act; (ii) Rs. 50,00,000 as unexplained cash gift under section 68 r.w.s. 115BBE of the Act and (iii) Rs.3,20,700/- on account of disallowance of expenditure under the provisions of section 40A(3) of the Act, to the income of Rs. 30,00,006/- returned by the assessee.
On appeal before the Ld. CIT(A)/NFAC challenging the above addition(s) made by the Ld.AO, the assessee filed written submissions along with documentary evidence(s) in support of his claim. The Ld. CIT(A)/ NFAC was however not satisfied with the explanation/arguments advanced by the assessee and upheld the action of the Ld. AO. After considering the submissions/details filed by the assessee and following certain judicial precedents on the issue relating to the addition of Rs. 1,39,67,00/- under section 69A of the Act on account of unexplained cash deposits during the demonetization period, the Ld. CIT(A)/NFAC observed that “there is no nexus between cash withdrawals made prior to demonetization period and cash deposits made during the demonetization period” and further observed that “assessee has grossly failed to discharge the onus of proof with regard to genuineness of cash deposits made in the bank account during demonetization period”. The Ld. CIT(A)/NFAC therefore affirmed the action of the Ld.AO in making the said addition. With regard to addition made on account of unexplained cash gift of Rs.50,00,000/- under section 68 of the Act, Ld.CIT(A)/NFAC affirmed the addition made by the Ld.AO observing that the claim of the assessee that he had received genuine cash gift from his spouse lacks bonafides.
Since nothing has been produced before us to controvert the findings of the Ld. AO which has been sustained by the Ld. CIT(A)/NFAC, we are unable to take a view contrary to the view taken by the Ld. CIT(A)/ NFAC and uphold the order of the Ld CIT(A)/NFAC. Accordingly, the grounds raised by the assessee are dismissed.
In the result, the appeal of assessee is dismissed.
Order pronounced in open court on 21st January, 2026.
Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE-PRESIDENT पुणे / Pune; दिन ांक / Dated : 21st January, 2026. रदि