BANSI LAL KUMHAR,UDAIPUR vs. ACIT CIRCLE-2, UDAIPUR

The impugned assessment order u/s 143(3) dated 19.11.2019 as well as the notice and the action taken by the Id. AO are bad in law and on facts of the case, for want of juri iction, barred by limitation, without proper approval or satisfaction and various other reasons and hence the same may kindly be quashed.

The Id. CIT(A) has grossly erred in law as well as on the facts of the case in passing exparty order without providing adequate and reasonable opportunity of being heard in the gross breach of law. Hence the additions so made by the Id. AO may kindly be quashed and delete.

Rs.14,55,000/-: The Id. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.14,55,000/- u/s 68 made by the Id. AO on account of cash deposited in the bank account during the year as unexplained money in place of rental income i.e by denying the rental income of the assessee. The Ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the Id. AO is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full.

Rs.20,00,000/-: The Id. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.20,00,000/- u/s 68 made by the Id. AO on account of cash deposited in the bank account during the year as unexplained money in place of agriculture income i.e by denying the agriculture income of the assessee. The Ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the Id. AO is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full.

The Id. AO has also grossly erred in law as well as on the facts of the case invoking the provisions of Sec. 115BBE for taxing the income at the higher rate, without issue any show cause notice and also not applicable in the present case. The Ld. AO has also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the provisions of Sec. 115BBE so invoked are also being contrary to the reall facts of the case and not according to the provision of law, hence the same is 6. The Id. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B,C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full.

That the appellant prays your honour indulgence to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 3

In Ground No. 3 & 4, the assessee has challenged that the Id. CIT(A) has erred in law as well as on the facts of the case in confirming the addition of Rs.14,55,000/- and Rs.20,00,000/- u/s 68 made by the Id. AO on account of cash deposited in the bank account during the year as unexplained money rejecting the source of rental income and agricultural income.

At the outset, the Ld. counsel for the assessee, submitted that the assessee has explained in the source of the cash deposited in his bank account during the year under consideration amounting to Rs.14,55,000/- and 20,00,000/- out of the rental income and the agricultural income respectively before the authorities below. However, without controverting or disproving the evidences furnished by the assessee regarding the cash deposit in his bank account, the AO had rejected the source of rental income of the assessee and agricultural income and made addition u/s 68 on account of cash deposited in the bank account during the year as unexplained money which has been confirmed by the Ld. NFAC/CIT (A). The Ld. AO and CIT(A) both have not considered the vital facts and material available on record in true perspective and sense and thus, the addition so made by the Id. AO and confirmed by the Ld. NFAC is contrary to the real facts of the case and in violation to the provision of law.

The Ld. AR explained that the source of cash deposit of Rs.34,50,000/- during demonetization comprises of Rs. 14,00,000/- was rental income from shops situated at Bedla village and Rs.20,00,000/- was Agricultural income. He further submitted that the breakup of cash deposit with the support of bank statement that cash deposits of Rs.19,60,000/- were out of the past savings of Rs.3,60,000/- from the income of preceding years and the balance Rs. 16,00,000/- was out of the Agricultural income derived and declared in the return of Income under the head agricultural income of Rs.20,00,000/-. Не argued that the Ld. AO has failed to appreciate the facts narrated in replies (APB, Pgs.20-25) furnished during the course of assessment along with the evidences placed on records (APB, Pgs. 117,27-148) the past years history.

The AR submitted that there was Free land (Vatika) owned by the assessee adjoining the hotel premises which were given on rent for social functions with rooms. The receipts were booked under the accounting head rent receipt by the accountant and such receipts are duly appearing in the profit and loss account attached with the return of income. The Ld. AO has not appreciated the accounts duly audited u/s 44AD, and report furnished alongwith the return of income. He argued that since the income is already disclosed in the return by the assessee and It is settled legal position that same income cannot be taxed twice. The Ld. AO has not controverted the income declared in the return or disproved as the claim of the assessee by bringing on records any documentary evidence. He placed Reliance is placed on the following judgment:

Shree Sanand Textiles Industries Ltd. V. DCIT vide ITA No. 1166/AHD/2014. 7. The LD. AR also submitted that the assessee is an agriculturist farmer since many years and regularly assessed to income tax. The comparative position of net agricultural income duly declared in the return of income as per past history is as under:

The Addl CIT (DR) supported the impugned order. However, he failed to rebut the contention of the Ld. AR and could not file any contrary decision. We heard both the sides and perused the material on record. Admittedly, the assessee has made cash deposit amounting to Rs. 34,00,000/- in his bank account during the demonetization period and in source explained rental income and Agricultural income with the support of documentary evidence viz- a-viz history of return of income filed by the assessee before the authority below. However, the authorities below were being not satisfied have made addition and confirm the addition as unexplained income of the assessee under section 68 of the Act and charge tax rates under section 115 BBE of the act without appreciating the material evidence filed during the course of the assessment proceedings before the assessing officer. 8

From the record it is evident that the assessee had source of cash deposit of Rs.34,50,000/- during demonetization as it was being comprised of Rs. 14,00,000/- out of the rental income from shops situated at Bedla village; Rs.20,00,000/- was out of the Agricultural income and 3,60,000/- out of the past savings. The source of rental income stands duly disclosed in the return of income and the income once tax cannot be tax again as it tantamount to double taxation as per statute. Furthermore, the source of cash deposits of Rs.19,60,000/- were stands explained out of the past savings of Rs.3,60,000/- and the balance Rs. 16,00,000/- was out of the Agricultural income derived and declared in the return of Income under the head agricultural income of Rs.20,00,000/-. In our view, the authorities below failed to appreciate the facts available on record as per the submission of the assessee, narrated in replies (APB, Pgs.20-25) furnished during the course of assessment along with the evidence placed on records (APB, Pgs.117,27-148) the past years history which were nowhere rebutted.

In our view, the rental income, Agricultural income and past savings declared by the assessee cannot be treated as undisclosed income and the Income Tax authorities ought to have assessed the same either under the head income from house property or under the head income from business. Under no circumstances, such income can be treated as undisclosed income and assessed under the head income from other sources by invoking provisions of section 68 read with section 115 BBE.

In view of that matter, we hold that the impugned order is infirm and perverse to the facts on record in confirming the addition made by the AO u/s 68 and charging Tax u/s 115BBE of the Act. Accordingly, the addition of Rs. 34,00,000/- is deleted.

The assessee gets relief on merits as the addition has been deleted, the other grounds of appeal are rendered academic and infructuous.

In the result the appeal of the assessee is allowed. Order pronounced on.29/...9.../2025 under Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Dated: 29/09/2025 Cpies to: (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File (DR. MITHA LAL MEENA) ACCOUNTANT MEMBER By Oder