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Judgment
The instant appeal filed by the assessee is directed against the order dated 06.01.2026 passed by the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [hereinafter referred to as the Ld. CIT(A)] under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') arising out of the Assessment Order dated 18.11.2019 passed by the ITO, Ward 1(13), Panipat (hereinafter referred to as ‘the ld. AO’) under Section 144 of the Act for Assessment Year 2017-18.
The grounds raised by the assesse read as under:-
“1.That the order of the Ld. CIT (Appeals) is against law and facts.
2.That the Ld. CIT (Appeals) erred in dismissing the appeal of the appellant and in confirming the addition of Rs.9,27,000/- made by the Ld. AO on account of cash deposit by the appellant in his bank account.
3.That the Ld. CIT (Appeals) erred in dismissing the appeal of the appellant and in confirming the addition of Rs.8,20,000/- made by the Ld. AO on account of payment received from M/s Apex Hospital by treating it as unexplained.
4.That the Ld. CIT (Appeals) erred in dismissing the appeal of the appellant and thereby confirmed the action of Ld. AO in charging tax at the rate of 60 percent u/s 115BBE of the Act, although the amended provision is applicable from A.Y. 2018-19 onwards and not applicable on A.Y. 2017-18.
5.That the appellant craves leave to add, alter, modify, amend OR withdraw any of the ground of appeal at the time of hearing.”
The Ld. A.O. had completed the assessment upon making addition of Rs. 9,27,000/- with the following observation: -
“As per Cash Transaction information available with this office, the assessee had deposited cash amounting to Rs.18,54,000/- in his Joint bank account maintained with Allahabad Bank, Panipat during the demonetization period i.e. 9.11.2016 to 30.12.2016 but no return of income was filed in this case. Accordingly, notice u/s 142(1) was issued to the assessee vide this office letter dated 13.03.2018 to file his return of income on or before 31.03.2018 but there was no compliance from the assessee. As such, as per Board Guidelines proceedings u/s 144 of the Income Tax Act,1961 were initiated in this case and notices u/s 142(1) were issued to the assessee vide this office letter dated 22.04.2019 to explain the source of cash deposit made during the F.Y.2016--17 relevant to A.Y.2017-18. On 03.05.2019 reply was received in DAK from the assessee in which it is contended that the assessee is agriculturist for last 30 years and he was not involved in any business activities during the F.Y.2016-17, he stated that he had only agricultural income of Rs.12,82,916/- in his name for A.Y.2017-18. In connection to the bank account, it was submitted that the account is a joint bank account with Sh. Mahavir Singh, brother of the assessee. The statutory notices u/s 142(1) were issued from time to time and proceedings were attended by the assessee on 26.08.2019 and 25.09.2019. The assessee filed affidavit of Sh. Mahavir Singh, his brother in which it is affirmed that the account is operated by him and the assessee and he has also deposited the cash in the bank account.
On perusal of bank statement of the assessee, it is seen that cash of Rs.18,54,000/- has been deposited in cash in the bank account on various dates. The assessee has submitted Nakal Jamabandi Form for 23 acres of land and Form in his name for the period 04.04.2016 to 31.12.2016. However, no certified copy of account from Adhtia is furnished by the assessee nor any income and expenditure account in respect of agricultural income was filed which could justify that the amount has actually been received by the assessee. As such cash deposit of Rs.9,27,000/- as his share in the Joint Bank account remained unexplained. Accordingly, an addition of Rs.9,27,000/- is made u/s 69A of the Income Tax Act,1961 in this case.”
Further that upon perusal of the bank statement, it was noticed that the assessee has received credit entries worth Rs.8,20,000/- in the name of M/s Apex Hospital, the assessee in his reply submitted on 25.09.2019 stated that he had given the property on rent to Vipin Singhal and Kuldeep Rathi who thereafter merged his property and ran the Apex hospital, he has received this amount from them for payment of interest of Rs.8,20,000/-against loan raised by him on this property.
Interest certificate received from HBA which can prove that he had made payment on account of interest of Rs.7,69,168/- on borrowed capital for property at Apex Hospital, Sanoli Road, though asked for by the Ld. A.O.nothing was submitted. Further, information was called for under Section 133(6) of the IT Act,1961 from the M/s Apex Hospital regarding nature of deposit of Rs.8,20,000/- in the account of the assessee but the same remained uncomplied with and the payment of Rs.8,20,000/- received from Apex Hospital as remained unexplained the same was added to the total income of the assessee.
Before the Ld. CIT(A) the appellant filed submissions dated 16.03.2021, 23.04.2024, 09.10.2024 and 05.12.2025 and furnished copies of Demand notice issued by Debt Recovery Tribunal and decisions held by the Debt Recovery Tribunal, dropping the proceedings under SARFAESI Act, Settlement Letters on dues pending with UCO bank, Letters of withdrawal of UCO bank’s charges on mortgaged property, ITR filed on 24.09.2019 declaring exempt agricultural income of Rs. 7,69,750/-, FIR copy in respect of accusation of the appellant, against alleged owners of M/s Apex Hospital, J Forms, Declaration letter issued by the Allahabad bank regarding the payment dues of loan etc. Regarding the cash deposits made in the joint account of the appellant, the appellant stated the sale proceeds of the agricultural produce were deposited in this joint account and mentioned some names of the parties involved in the sale deal. The appellant has furnished the copies of J Forms and Jamabandi Form (document showing the ownership and cultivation details of a land) before this office. The appellant has however, nowhere submitted any details in respect of expenses incurred on cultivation or certified copy of registered account from the respective Adhtia. Thus, in the absence of proper submissions by the appellant, the cash deposits to the tune of Rs. 9,27,000/- remain un-explained.
With regard to the receipt of Rs. 8,20,000/- from the M/s Apex Hospital, the appellant has stated that his property was leased to the M/s Apex Hospital and loan taken on this property became Non-Performing Asset in due course of time. Further, the appellant has stated that, when this property was about to be auctioned as per proceedings under the SARFAESI Act, M/s Apex Hospital in order to save the property from being auctioned, had deposited cash of Rs. 8,20,000/- in the loan account held by the appellant. The appellant has submitted a copy of letter from the Allahabad Bank saying that the appellant has an account towards the mortgage of property. However, the same does not particularly mention that the loan was taken for the purpose of leasing a property to the M/s Apex Hospital or any such interest is paid by the M/s Apex Hospital on account of interest on the said borrowed loan. Thus, the receipt of Rs. 8,20,000/- in the hands of appellant remain un-explained. However, these documentary evidencesdoes not clearly show the reasons for the Cash Deposits of Rs. 9,27,000/- or for the credit by M/s Apex Hospital of Rs. 8,20,000/- in the account of the appellant. In that view of the matter the addition was, therefore, confirmed by the Ld. CIT(A).
At the time of hearing of the instant appeal, the Ld. Counsel appearing for the assessee initially sought for time to file paper bookwhich wasrejected by us having regard to this particularly aspect of the matter that the assessee has not been able to file effective documentary evidences in support of the reason for cash deposit of Rs. 9,27,000/- or that the credit by M/s Apex Hospital of Rs. 8,20,000/- in the account of the appellant and, therefore, in order to prevent the miscarriage of justice, we would like to give a further opportunity to the assessee to justify its case by adducing further evidences to the Ld. CIT(A) in support of cash deposit and credit by M/s Apex Hospital of Rs. 8,20,000/-. Thus, the appeal is disposedofof by remitting the issue to the file of the CIT(A) to decide the same afresh and the Ld. CIT(A) is further directed to obtain a Remand Report from the Ld. A.O., once the requisite details as above are furnished by the assessee before him. The Ld. CIT(A) is further directed to pass a reasoned order in accordance with law.
In the result, appeal filed by the Assessee is allowed for statistical purpose.