INCOME TAX OFFICER, WARD-28(5), SPM CIVIC CENTRE, NEW DELHI vs. ANJALI GUPTA, NEW DELHI

PER AMITABH SHUKLA, AM:

This appeal by Revenue is directed against the order of National
Faceless Appeal Centre, Delhi, [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 07.10.2022, for Assessment Year 2017-18. 2. The Ld. Departmental Representative (‘DR’) informed that the only issue arising in the present appeal is the action of Ld. CIT(A) in ITA no.- 3198/Del/2023

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deleting the addition of Rs. 78 lakhs made by the Ld. AO, under Section 69A of the Act. It was submitted that the case pertains to cash deposits made during the year. The assessee was reportedly earning income from house property as well as other sources. Verification of bank statement maintained with the Federal Bank indicated cash deposit of Rs. 78 lakhs out of which Rs. 18 lakhs was made in the demonetization period. On being queried, by the Ld. Assessing Officer
(‘AO’), the assessee informed that the cash deposit represents cash withdrawals in earlier period viz financial year 2013-14, 2014-15 and 2015-16. The Ld. AO doubted the hypothesis propounded by the assessee as to the need for making such heavy cash withdrawals without any specific purpose. Consequently, holding that there is no connection between the cash withdrawals and the corresponding deposit as also applying the human probability test of keeping large cash idle at home, the Ld. AO made the impugned addition of Rs. 78
lakhs. The Ld. DR, thus, argued that the action of the Ld. AO is as per correct appreciation of the facts of the case and deserves to be sustained. The Ld. DR submitted that the relief accorded by Ld. CIT(A) is not based upon true appreciation of the facts and that the argument of AO making addition on conjectures and premises is incorrect. The ITA no.- 3198/Del/2023

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Ld. Counsel for the assessee argued that, the Ld. First Appellate
Authority has accorded relief after comprehensively analysis the full fact of the case and the evidence on record.
3. We have heard rival submission in the light of the material available on record. Before us, the Ld. Counsel for the assessee has filed a detailed Paper Book showing cash withdrawals and deposits made by the assessee in previous financial years. It was contended that the assessee has withdrawn cash withdrawals in F.Y. 2015-16
and that the closing cash in hand as on 31.03.2016, was Rs.
64,85,476/-. It was stated that out of the same cash deposit of Rs. 60
lakhs was made on 19.05.2016. The Ld. Counsel submitted that the impugned amount of Rs. 64,85,476/-, was also offered by it in its wealth tax return, for A.Y. 2016-17. Necessary copies of wealth tax return have also been filed by the assessee in support of his contention. Upon considerations of the cash withdrawals and deposits made by the assessee in previous financial years as well as perusal of wealth tax return, we are of the view that there exists a proximate nexus between cash withdrawals of previous financial years and cash deposits made in the present year. Accordingly, we are of the view that ITA no.- 3198/Del/2023

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there is no case for interference with the order of the Ld. CIT(A), at this stage. Therefore, the order of Ld. CIT(A) is confirmed and all the grounds of appeal raised by the Revenue are dismissed.
4. In the result, appeal of the revenue is dismissed.
Order pronounced in the Open Court on 13.03.2025 (VIKAS AWASTHY)
ACCOUNTANT MEMBER

Dated: 13/03/2025. Pooja/-