ANUJ KUMAR,NEW DELHI vs. INCOME TAX OFFICER, NEW DELHI

It transpires during the course of hearing that the assessee/appellant herein is aggrieved against the CIT(A)/NFAC’s lower appellate discussion upholding the Assessing Officer’s action treating his cash deposits of Rs.50.17 lakhs made in assessment order dated 08.12.2019; reading as under: “7.1 Ground No. 1 is with regard to the addition on account of unexplained cash u/s. 69A. As per the assessment order, during the course of assessment proceedings, it was observed that assesse has deposited total cash of Rs.50, 17,000/- in his different bank accounts during the year. The assesse was asked to furnish proper and satisfactory information with regard to the nature and source of cash deposited in his bank accounts to the tune of Rs.50,17,000/-. The AO held that the onus of proving the source of a sum of money found to have been received by an assessee is on him. Where the nature and source of a receipt, is not satisfactorily explained by the assesse, it is open to the revenue to hold that it is the income of the assesse and no further burden lies on the revenue to show that the income is from any other particular source. In view of the above, the AO held that the cash deposits to the tune of Rs.50,17,000/- is nothing but the income of the assesse from undisclosed sources.

2 During the course of appellate proceedings, it was submitted that the assessee had dealership of Escorts Tractors since 2011 and the same was renewed on 30.04.2015 for up to 29.4.2017. The assesse has been making cash sales and depositing the cash in his account and then remitting the same to Escorts Tactors.

3 I have gone through the grounds of appeal, statement of facts, assessment order and the submissions of the appellant. Remand report submitted by the AO and the rejoinder of the appellant has also been perused. In the remand report, the AO submitted as follows:

3.1 In the rejoinder the appellant has submitted that the turnover of the appellant was Rs. 1,93,14,125/- out of which Rs.95,75,125/- was from sale of goods and Rs.97,39,000/- was from civil construction and contract work. The appellant had duly recorded the transactions in its books of accounts and the addition of Rs.50,17,000/- on account of cash deposits which has already been accounted by the assesse and has been duly offered for taxation.

3.2 The submissions have been verified by the AO during the course of remand proceedings and submitted that VAT return submitted by the appellant show the gross turnover at Rs.95,75,125/- and the same is not sufficient to justify the cash deposits during the year. During the appellate proceedings, the appellant had filed Form 3CB, bank account statement and copy of cash book. But he had not filed any documentary evidence that he had earned the income by way of cash. He also failed to establish that he had undertaken the contract works during the year

3.3 During the course of appellate proceedings the appellant need to submit documentary evidence to prove that the cash deposits are only from business. The assessee contested in appeal that the assessment order is totally arbitrary and not proper and justified. The appellant has to prove or rebut with cogent evidence against the facts and findings of the AO in the assessment order. In view of the above discussion, it is held that the AO correctly held that the assessee failed to discharge the onus through filing necessary explanation of source of investment with sufficient documentary evidence. Therefore, the addition of Rs.50,17,000/- made by the AO is confirmed u/s. 69 of the Act. Ground No. 1 is dismissed. 8. In the result, the appeal is DISMISSED.”

We have given our thoughtful consideration to the assessee’s and the Revenue’s vehement rival submissions reiterating their 4 | P a g e respective stands. The assessee, more particularly, takes us to his paper-book at page 87 indicating him as engaged in regular business activity of escort tractor dealership wherein possibility of cash collections/receipts involving a highly unorganized agricultural sector could not be ruled out in entirety as is the Revenue’s stand before us. Learned counsel further invites our attention to the assessee’s books of account maintained all along even in preceding assessment year wherein his regular business activity to this effect stood duly accepted. The fact however remains that he has not been able to get all the relevant facts verified followed by the necessary reconciliation of his business receipts vis-à-vis cash deposits in both the lower proceedings. We thus deem it appropriate in this factual backdrop that a lumpsum addition of Rs. 4 lakhs only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.46.70 lakhs in other words thereupon. 4. So far as assessee’s assessment under section 115BBE is concerned, we quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on 5 | P a g e the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law. 5. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court on 8th October, 2025 (MANISH AGARWAL) JUDICIAL MEMBER