AMREASH AGRAWAL,SHIVPURI vs. ITO SHIVPURI, SHIVPURI

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ITA 53/AGR/2024Status: DisposedITAT Agra26 May 2025AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal agreed with the assessee's counsel that the revenue authorities had erred in invoking Section 69A of the Act. The Tribunal found that the cash deposited in the assessee's bank accounts was duly accounted for in the assessee's books of accounts. The audited financial statements and bank statements, which were before the revenue authorities, clearly reflected these accounts and the deposits therein. Therefore, the condition precedent for invoking Section 69A, which requires the asset (money) to be not recorded in the books of account, was not satisfied. Consequently, the addition of Rs. 1,52,93,670/- made under Section 69A was held to be unsustainable in law and was directed to be deleted. As the addition under Section 69A was deleted, the issue regarding the applicability of Section 115BBE for levying tax at a special rate was rendered of no consequence. The appeal was allowed in terms of the deletion of the addition.

What were the facts?

The assessee, Amreash Agrawal, filed an appeal against the order of the CIT(A) NFAC, Delhi, for Assessment Year 2017-18. The Assessing Officer (AO) made an addition of Rs. 1,52,93,670/- to the assessee's income under Section 69A of the Income Tax Act, 1961, on account of unexplained cash deposits totaling Rs. 2,55,86,240/- in three bank accounts during the Financial Year 2016-17. The AO attributed Rs. 1,02,92,570/- to the assessee's disclosed turnover from jaggery business and treated the balance as unexplained. Tax was levied on this addition at the special rate under Section 115BBE of the Act. The CIT(A) confirmed the addition and the tax levy. The assessee challenged both the addition and the tax levy.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the addition made under Section 69A of the Income Tax Act, 1961, on account of cash deposits in bank accounts is sustainable, when the assessee claims these accounts were recorded in his books of accounts? (Mixed question of law and fact, turning on Section 69A). 2. Whether, on the facts and circumstances of the case and in law, the applicability of Section 115BBE of the Income Tax Act, 1961, for levying tax at a special rate is sustainable, consequent to the deletion of the addition under Section 69A? (Question of law, turning on Section 115BBE). Assessee's Contention: The assessee argued that the necessary conditions for invoking Section 69A were not met. Specifically, the bank accounts where cash was deposited were duly recorded in the assessee's books of accounts, and the audited financial statements for the relevant period (AY 2017-18) reflected these accounts. Therefore, the cash deposits could not be considered as from unexplained sources. The assessee relied on the provisions of Section 69A, which requires the asset (money) to be not recorded in the books of account and for which no satisfactory explanation is offered. Revenue's Contention: The judgment records that the Ld. DR was unable to controvert the factual contention of the assessee.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH, AGRA

Before: SMT. ANNAPURNA GUPTA & SHRI SUNIL KUMAR SINGH

For Appellant: Shri Pankaj Shah, CA
For Respondent: Shri Shailender Shrivastava, Sr. DR
Hearing: 26.03.2025Pronounced: 26.05.2025

Per Annapurna Gupta, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi dated 16.01.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2017-18.

“1. On the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Appeals) ("CIT(A)") erred in understanding of facts of the case, the appellant prays that said addition be directed to be deleted.

2.

On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition under Section 69A of the Act which is prayed to be deleted.

3.

On the Facts and circumstances of the case and in law the learned CIT(A) erred in confirming the applicability of section 115BBE of the Act which is prayed to be deleted.

4. The Appellant craves leave to add to, alter and/or amend all or any of the foregoing grounds of appeal.”

3. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of cash found deposited in his bank account source of which, remained unexplained, to the tune of Rs.1,52,93,670/-. The addition was made u/s.69A of the Act and tax levied on the same at the special rate prescribed u/s.115BBE of the Act.

4.

The assessment order reveals that cash to the tune of Rs.2,55,86,240/- was found deposited in the following bank account of the assessee:

Sl. Name of the bank and account number F.Y. Amount of cash deposits No. 1 State Bank of India, A/c No. 2016-17 50,000/- 20062345489 2 Central Bank of India, A/c No. 2016-17 1,05,38,240/- 3950642457 3 Central Bank of India, A/c No. 2016-17 1,49,98,000/- 2 | P a g e

5.

The assessee explained the same as relating to his business of jaggery. The AO, however, noted that the assessee has disclosed a turnover of only Rs.1,02,92,570/- . Accordingly attributing the cash deposited in the bank account to his sales of jaggery to this extent i.e. Rs.1.02 Crores, the balance of Rs.1.52 Crores was treated as from unexplained sources and added to the income of the assessee u/s.69A of the Act. Tax was levied on the same in terms of the provisions of Section 115BBE of the Act. The same was confirmed by the Ld. CIT(A) and the assessee has challenged both the additions made u/s.69A of the Act as also the levy of the tax u/s.115BBE of the Act in the grounds raised before us.

6.

The solitary contention of the Ld. Counsel for the assessee was that the Ld. CIT(A)’s order confirming the addition was totally incorrect for the reason that the assessee had demonstrated to the Ld. CIT(A) that all the three bank accounts were duly recorded in the books of accounts of the assessee pertaining to the business of jaggery conducted by him and, therefore, all the cash deposited therein were duly recorded in his books of accounts.That there was no case, therefore, of the source of cash deposit

3 | P a g e contention was that Section 69A of the Act deems income, those assets, including money, found not recorded in the books of accounts of the assessee and the assessee offering no explanation of the nature and source of acquisition of the same . He drew our attention to the provisions of Section 69A of the Act in this regard as under:

“69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.”

7.

He contended that the necessary condition to be fulfilled for invoking Section 69A of the Act, therefore, was that: i. The assessee should be found to be owner of an asset not recorded in his books of accounts; ii. No explanation is offered by the assessee of the source of acquiring such asset.

8.

Ld. Counsel for the assessee pointed out that audited results of the assessee were there before both AO & CIT(A). The audited financial statement clearly reflected the impugned bank accounts of the assessee

4 | P a g e the income of the assessee. In this regard, he drew our attention to paper book page no.62 to 66, which was audited balance sheet of the assessee.

Referring to page no.62, which was statement of assets and liabilities of the assessee’s business in the name of M/s. Charu Trading Company for the year ended 31.03.2017 pertaining to the assessment year impugned before us i.e. A.Y. 2017-18,he pointed out that both the Central Bank of India accounts, OD and mortgage loan was reflected therein as also the State Bank of India accounts of the assessee. He, thereafter, drew our attention to the bank statements of these three bank accounts for the impugned year at P.B 22-36 and pointed out that the closing balance reflected therein was reflected in the balance sheet of the assessee and it was these bank statements which showed cash deposited therein which was being picked up by the AO for making addition to the income of the assessee u/s.69A of the Act. He contended, therefore, that it was clear from the records before the Revenue authorities that the bank accounts noted by the AO to have cash deposited therein were duly accounted for in the books of accounts of the assessee and, therefore, there was no case for invoking the provision u/s.69A of the Act.

9.

The Ld. DR was unable to controvert the factual contention of the assessee. 5 | P a g e for the assessee that the Revenue authorities below had erred in invoking Section 69A of the Act of treating as income cash found deposited in the bank account of the assessee, which was duly accounted for in the books of the assessee. The addition made to the income of the assessee of Rs.1,52,93,670/-, therefore, we hold is not sustainable in law and direct deletion of the same. Ground of appeal No.2 raised by the assessee is allowed.

11. Since, we have deleted the addition made u/s.69A of the Act, the ground raised by the assessee challenging invocation of Section 115BBE of the Act for levying tax at special rate is of no consequence.

12.

In the result, appeal filed by the assessee is allowed in above terms.

Order pronounced in the open court on 26.05.2025.

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