Arun Prasad vs DCIT, CC-15 New Delhi

PER MANISH AGARWAL, A.M.:

The present appeal is filed by assessee against the order dated 31.12.2025 passed by Ld. Commissioner of Income Tax (A), Delhi-26 [“Ld. CIT(A)”] in Appeal No. CIT(A), Delhi-26/10038/2022-23 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 06.03.2025 passed u/s 143(3) of the Act pertaining to Assessment Year 2023-24.

Brief facts of the case are that the assessee is an individual and filed its return of income on 20.07.2023, declaring total income of INR 3,11,130/-. A search and seizure action u/s 132 of the Act was conducted on 02.05.2024 on Mahananda Group and assessee being one of the employees of the said group, his residence was also searched. Thereafter, the assessment proceedings were initiated by issue of notice u/s 143(2) of the Act. The AO observed that the assessee has deposited cash in his bank accounts to the extent of INR 4,29,100/-which is inconsistent with the income declared and accordingly, had made the addition for the same and total income was assessed at INR 7,40,230/-.

Aggrieved by the said order, the assessee preferred an appeal before the ld. CIT(A) who vide impugned order dated 31.12.2025, dismissed the appeal of the assessee wherein the assessee has claimed that immediate source of the said cash was out of bank withdrawals made from time to time and filed a detailed note of the cash withdrawal which is placed at Paper Book page M-1, 2 & O-1 which were rejected by ld. CIT(A) by holding that no corroborative material was filed.

Aggrieved by the order of ld. CIT(A), the assessee is in appeal before the Tribunal by taking various Grounds of appeal mentioned in the appeal memo.

Since all the Grounds of appeal taken by the assessee are with respect to the confirmation of addition of INR 4,29,100/- being cash deposited in the bank accounts, therefore, they are taken together for consideration.

Heard the contentions of both the parties at length and perused the material available on record. Before us, ld.AR for the assessee has reiterated the same arguments as were made before ld. CIT(A) and claimed that total cash was deposited out of bank withdrawals made from time to time of INR 1,35,500/- by the assessee himself and out of cash of INR 5,30,000/- received from his father who also made withdrawals of INR 7,21,300/- from his bank account from time to time and further INR 35,000/- was received as imprest from the employer M/s India Auto Industries. In support of the claim, assessee has filed copy of ITR, bank statement of his father and also the pension pass book of his father and it was claimed that the father of the assessee was residing with him and borne out day-to-day house hold expenses for which the cash was given to the assessee. The assessee also filed copy of cash book of the employer in respect of imprest received which is placed at page 39 of the Paper Book.

After carefully considering the facts and circumstances of the case, it is observed that the assessee has partly explained the source of cash deposits of INR 4,29,100/- out of the cash received from his father and from the bank withdrawals. Father of the assessee was living with him and has contributed towards the day-to-day house-hold expenses thus, it cannot be said that entire cash withdrawal by the father of the assessee were used for deposit in the bank account. Therefore, in our considered opinion, out of the total cash deposited of INR 4,29,100/-, assessee could be able to explain the source of cash deposited of 3,29,100/- which includes the cash received from the employer of INR. 35000/-as imprest and from bank withdrawals as well received form the father and balance INR 1.00 Lakh is held as unexplained for which no proper explanation could be tendered. Accordingly, all the Grounds of appeal raised by the assessee are partly allowed.

In the result, appeal of the assessee is partly allowed.