What did the Tribunal hold?

The Tribunal found that the lower authorities were not justified in making the addition. The assessee's contention regarding the source of funds was not rebutted by the revenue.

The assessee appealed against an addition made by the Assessing Officer for unexplained cash deposits of Rs. 23,67,000/-. The assessee claimed the deposits were out of agricultural income and savings from previous years, citing a calculation mistake by the AO.

What were the issues?

Whether the cash deposits in the bank account were unexplained, and if the assessee's explanation regarding agricultural income and past savings was valid.

Karam Chand Chauhan, Shimla vs ITO | ITAT Chandigarh 2024

(PHYSICAL HEARING) िनधा�रतीक�ओरसे/Assessee by : Shri. Parikshit Aggarwal, C.A. राज�वक�ओरसे/ Revenue by : Shri. Vivek Vardhan, J.C.I.T सुनवाईक�तारीख/Date of Hearing : 13.11.2024 उदघोषणाक�तारीख/Date of Pronouncement : 04.12.2024 आदेश/Order The present appeal has been preferred by the assessee against the orderpassed by the ld. Commissioner of Income Tax, Appeal National Faceless Appeal Centre (NFAC), Delhidated18.10.2023[hereinafter referred to as the “Ld. CIT(A)”] for the Assessment Year:2017-18.The sole issue in this appeal is relating to addition made by the Assessing Officer (hereinafter referred to as the “AO”) on account of unexplained cash deposits of Rs.23,67,000/- in to the Bank A/c of the assessee.

Karam Chand Chauhan v. ITO 2 2. At the outset, the ld. counsel for the assessee has submitted that there is a calculation mistake on the part of the Assessing Officer in arriving out at the figure of Rs. 23.67whereas, actual figure of the deposits in the Bank a/c was Rs. 20.67 lacs. The ld. counsel has further invited my attention to the opening lines of the assessment order to submit that the assessee in the return of income had offered a taxable income of Rs.75,216/- and also declared an agricultural income of Rs.25,85,223/-.

The ld. counsel has further submitted that the aforesaid agricultural income was kept at home. However, due to demonetization declared by the Government, the same was deposited in the bank account. The ld. counsel has further referred to the earlier transaction of the bank account to submit that this was not the only year in which such amount was deposited. He has demonstrated that evenin assessment year 2015-16, the total cash deposits of the assessee were amounting to Rs.65 lacs. He therefore, has submitted that the aforesaid cash deposits were out of the savings of the earlier years and the agricultural income for the year under consideration.

The ld. DR could not rebut the aforesaid contention of the ld. Counsel for the assessee, therefore, I do not find any justification Karam Chand Chauhan v. ITO 3 on the part of the lower authorities in making the impugned addition and the same is accordingly ordered to be deleted.

In the result, the appeal of the assessee stands allowed.

Order pronounced on 04.12.2024.

KARAM CHAND CHAUHAN,SHIMLA vs. INCOME TAX OFFICER, RAMPUR, RAMPUR BUSHAHR

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