PRAHLAD SINGH YADAV,NOIDA vs. ASSESSING OFFICER, NOIDA
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Per Satbeer Singh Godara, Judicial Member: This assessee’s appeal for Assessment Year 2015-16, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1077757920(1) dated 25.06.2025, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961. 2. Heard both the parties at length. Case file perused.
Learned counsel submits at the outset that the assessee does not wish to press for his legal ground challenging validity of the impugned reopening herein. Rejected accordingly.
Next comes the assessee’s latter twin substantive grounds inter alia seeking to reverse both the learned lower authorities’ action treating his cash deposits of Rs.20,00,000/- as unexplained followed by interest on enhanced land acquisition Prahlad Singh Yadav
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compensation amounting to Rs.23,63,278/- treated as taxable u/s 56(2)(viii), respectively, as upheld in the CIT(A)’s lower appellate discussion reading as under:
“4. I have carefully considered the assessment order, the grounds of appeal, the submission filed by the assessee and other relevant material on record.
1. With regard to the addition of Rs.28,00,000 as cash deposits in the bank account deemed unexplained money under Section 69A of the Act, the appellant submitted that a cash deposit of Rs.10,00,000 on 20/07/2014 was made from cash withdrawals intended for the purchase of land. The appellant explained that the purchase could not be finalized due to the seller backing out, leading to the redeposit of the amount into the bank account. Concerning the cash deposit of Rs.18,00,000 on 05/12/2014, the appellant stated it was received as an advance payment from a prospective buyer for a proposed property sale. Due to subsequent disagreements, the full amount was returned to the buyer within five days through two withdrawals of Rs.9,00,000 each on 10/12/2014. The appellant also provided a cash flow statement detailing these transactions.
2. Upon reviewing the cash flow statement, it was noted that prior to the deposit of Rs. 10,00,000 on 20/07/2014, the appellant had withdrawn rs.8,00,000 on three occasions. The appellant claimed additional savings of Rs.2,00,000 to justify cash deposit of Rs.10,00,000. However, evidence from the State Bank of India statement only confirmed withdrawals totaling Rs.8,00,000. As the appellant did not provide proof for the additional Rs.2,00,000, this amount is treated as unexplained money under Section 69A of the Act.
3. Regarding the cash deposit of Rs.18,00,000, the appellant's claim of receiving an advance from a prospective buyer lacked supporting documentation. Despite the appellant's assertion that the transaction failed and necessitated returning the advance, no documentary evidence substantiated this claim. Consequently, the explanation for the cash deposit of Rs.18,00,000 on 05/12/2014 is not accepted, and the Assessing Officer's addition to the extent of Rs.20,00,000 is upheld. Prahlad Singh Yadav
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4.4. In relation to the addition of Rs.23,63,278 as interest on compensation received from the New Okhla
Industrial Development Authority, though grounds were raised in Form #35, no written argument or mention was made in the submissions before this Authority.
Accordingly, it is concluded that the appellant did not press the grounds concerning the addition of Rs.23,63,278/-, resulting in their dismissal.”
Both the learned representatives reiterate their respective stands against and in support of the impugned twin additions. We note in this factual backdrop that so far as the former addition of Rs.28,00,000/- is concerned, the assessee had indeed deposited this cash amount wherein he could explain re- deposits of Rs.8,00,000/- withdrawn earlier which made the learned CIT(A) to uphold the remaining amount of Rs.20,00,000/- in his hands. The Revenue could hardly dispute that this assessee has also placed copy of his revenue records indicating him to be an agriculturist wherein possibility of cash sales and past savings in such an organized sector could not be per se ruled out. This is indeed coupled with the fact that both the learned lower authorities have also considered his family’s accumulated past savings as well. We thus deem it appropriate in this factual backdrop that a further lump sum addition of Rs.10,00,000/- would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.10,00,000/- in other words. Necessary computation shall follow as per law. Prahlad Singh Yadav
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6. Next comes the latter issue of assessment of the assessee’s interest on enhanced compensation addition of Rs.23,63,278/- made after invoking section 57(iv) r.w.s. 56
r.w.s. 145A(b) of the Act.
Learned Sr. DR representing the department vehemently argues that the instant issue is no more res integra in light of Mahender Pal Narang Vs. CBDT (2020) 423 ITR 13 (P&H) as well as PCIT Vs. Inderjit Singh Sodhi HUF (2024) 161 taxmann.com 301 (Del.) wherein the department has succeeded before their lordships that the impugned interest component ought to be assessed as income from “other” sources only.
The assessee on the other hand places strong reliance on Movaliya Bhikhubhai Balabhai vs. ITO (2016) 388 ITR 343 (Guj.), Rupesh Rashmikant Shah vs. Union of India (2019) 108 come from hon’ble juri ictional high court at Allahabad. That being the case, we hereby quote CIT Vs. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) to decide the issue in the assessee’s favour in very terms. Both the learned lower authorities’ action holding the assessee’s interest income on enhanced land acquisition compensation as taxable stands reversed therefore.
No other ground or argument has been pressed before us.
This assessee’s appeal is partly allowed in above terms. Order Pronounced in the Open Court on 27/11/2025. (Manish Agarwal) (Satbeer Singh Godara) Accountant Member Judicial Member
Dated: 27/11/2025
*Subodh Kumar, Sr. PS*