AKHTAR RASOOL,MORADABAD vs. ACIT - 2, MORADABAD
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No.
ITBA/NFAC/S/250/2025-26/1077804907(1) dated
25.06.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961. 2. Heard both the parties at length. Case file perused.
Learned counsel submits very fairly that the assessee does not wish to press his first and foremost legal ground challenging non-issuance/service of section 143(2) allegedly vitiating the assessment itself. Rejected accordingly. Akhtar Rasool
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4. We next advert to the sole surviving issue between the parties regarding correctness of the learned lower authorities’
action treating the assessee’s cash deposits of Rs.1,40,00,000/- as unexplained; in assessment order dated 22.12.2019 as upheld in the lower appellate discussion reading as follows:
“6. Decision: -
I have perused facts of the case, assessment order of the AO, submission of the appellant and the documents available on record
&
after considering the same, adjudication of various grounds of appeal is as under:
1 Ground N0.I is general in nature.
2 Ground No. 2 pertains to the addition made by AO of Rs.1,40,00,000/- as unexplained cash credit. The appellant has stated that he made following withdrawals before demonetization period from his bank account for operating the business activities for making cash payments to his suppliers which are mostly small kharkanedars:
The appellant con was withdrawn
Deepak which wa that employee different person withdrawn from Deepak has a pa he resides in M
Voter Ids one at Address. Further brought any coge withdrawal of Rs person and cash undisclosed sour
6.2.1 The conte merit in it. Firs withdrew cash o
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ntended that amount of Rs. 1,40,00
by employee of the appellant as unnecessarily disputed by AO cl of the appellant named Deepak than the person named Deepak w bank. The appellant submitted aternal house in Sambhal but due oradabad. Therefore, he was issu t Sambhal address and one at Mor r, the appellant contended that AO h ent material on record to prove tha s. 1,40,00,000/- was paid to some h was re-deposited in the bank wa rces.
ntion made by appellant is witho stly, the appellant has claimed t of Rs.1,56,00,000/- from 03.11.2
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Akhtar Rasool
0,000/- named laiming k is a who has d that to job ed two adabad has not at cash e other as from out any that he
016 to Akhtar Rasool
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05.11.2016
to make cash payment to his suppliers/kharkanedars. However, it is noticed that on 03.11.2015 opening cash balance of the appellant was Rs.53,53,684/-.
His expense on 03/11/2016
was Rs.9,67,570/- which indicates that, had there been no cash withdrawal, appellant’s opening cash in hand was more than sufficient to meet the expenses. His expense on 04/11/2016 and 05/11/2016 were Rs. 10,12,520/- and Rs.8,95,720/- respectively.
His cash expense till
08/11/2016 were as below:
Date
Amount of cash expense
06/11/016
Rs.40,000/-
07/11/2016
Rs.9,02,898/-
08/11/2016
Rs.35,460/-
09/11/2019
Rs.14,785/-
From the above, it can be seen that maximum cash expenditure the appellant incurred was on 07.11.2016
amounting to Rs. 9,02,898/-. The above facts do not justify cash withdrawal of Rs. 1,56,00,000/- on mere three days before demonetization for the purpose of business payment to suppliers as claimed by the appellant.
Further, the appellant has claimed that AO has unnecessarily doubted about the identity of Deepak claiming that Deepak, employee of the appellant and Deepak, who withdrew cash from bank are different persons. The contention of the appellant is without any substance in it. The Voter ID submitted by the appellant was compared with the Voter ID provided by bank and following discrepancies were found by the AO:
cards following discrepancies were found:
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Akhtar Rasool
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Akhtar Rasool
From the above, as both have diff different signatu
Therefore, is cle from bank or to person from Deep
Moreover, the documentary evi persons are sam same person due and one in M genuineness and the appellant lie failed to do so in The appellant’s discrepancies are test of human discrepancies na
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it is clear that both persons are di fferent date of births, different add ures and different photos in ID ear that Deepak who withdrew th o whom payment was made is di pak who is employee of the appella appellant has not submitted idences in support of his claim tha me and two Voter Ids were issued e to different residences one in Sa
Moradabad.
The onus of provin d correctness of the documents fi ed on him. However, the appella n this case.
contention that due to clerical mis e reported in Voter Ids, does not pa n
probability as there are m
mely DOB, address, signatures, pho
TA No. 5025/Del/2025
Akhtar Rasool ifferent resses, cards.
e cash ifferent nt.
d any at both to the ambhal ng the iled by nt has stakes, ass the multiple otos.
Akhtar Rasool
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From the above facts, it is clear that the argument submitted by the appellant that the cash deposited in banks during the demonetization period was out of cash withdrawals is not correct as the appellant has failed to link the cash deposit with cash withdrawals.
Hon’ble Punjab & Haryana High Court in case of Smt.
Kavita Chandra vs. Commissioner of Income-tax (Appeals)
[2017] 81 taxmann.com 317 (Punjab & Haryana)[07-03-
2017] held that "Cash withdrawals were made for purpose of business and same was not available for redeposit and, assessee was unable to link cash withdrawn from bank to cash deposit, same would be held to be assessee's unexplained income".
In case of Parveen Kumar vs. Commissioner of Income- tax, Ludhiana [2019] 110 taxmann.com 256 (Punjab
&Haryana)[16-03-2018], the Hon’ble Punjab &Haryana
High Court held where there was no specific evidence to explain assessee's stand that amount deposited in bank was actually his salary/income that was withdrawn earlier and rotated from time to time and that same was re- deposited in cash, addition made as undisclosed income was justified.
6.2.2 In view of the above discussion and above mentioned judicial pronouncements, I am of the view that AO has rightly made addition of Rs.1,40,00,000/- as unexplained cash credit. Accordingly, addition made by AO is confirmed. Ground No. 2 of the appeal are dismissed.
6.3
Further, the contention of appellant raised in Ground
No. 4 of the appeal is without any merit in it.
As per Provisions of Section 115BBE, where the total income of an assessee determined by the AO includes any income referred to in section 68, 69, 69A, 69B, 69C or sec 69D of the Act, the said income shall be charged to Income
Tax at sixty percent.
Accordingly, as per provisions of the Act, the said objection of the appellant stands rejected. Ground No. 3 of the appeal is dismissed.”
Akhtar Rasool
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4.1 This is what leaves the assessee aggrieved.
Both the learned representatives reiterate their respective stands against and in support of the impugned addition. The Revenue could hardly dispute that this assessee/an individual manufactures, supplies and exports Indian handicrafts coupled with sale of zinc and aluminum ingots. And that he had declared total business turnover of Rs.33,55,73,563/- which stands accepted in the assessment order itself. That being the case and keeping in mind the fact that possibility of cash purchases and sales in such a situation involving an unorganized sector could not be entirely brushed aside. We thus are of the considered view that a lump sum addition of Rs.8,00,000/- only in the given fact would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.1,32,00,000/- in other words. We make it clear before parting that we have accepted the assessee’s case in principle that the impugned cash deposits form part of his regular business turnover.
So far as assessee’s assessment under Section 115BBE is ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for Akhtar Rasool
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transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only
This assessee’s appeal is partly allowed. Order Pronounced in the Open Court on 02/12/2025. (Manish Agarwal) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 02/12/2025 *Subodh Kumar, Sr. PS*