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Judgment
Per Renu Jauhri, Accountant Member:
This appeal by the assessee is directed against the order dated 13.03.2026 of the National Faceless Appeal Centre, Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the assessment order dated 28.03.2025 passed under section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by Ward 54(1), Delhi (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2020-21.
Grounds of appeal filed by the Assessee are reproduced as under:
“1.That the order of Ld. AO and CIT (A) are bad in Law and against facts of the case.
2.That the Ld. A.O. erred in making addition of Rs. 237000/- while doing assessment u/s 147 of the I T Act 1961 without considering the fact that evidences of source of money submitted.
3.That the Ld. A.O. erred in making addition of Rs.4,37,000/- in computation sheet which has no relevance in assessment order. The CIT(A) has erred in passing order without considering the fact that “mistake apparent on the face” need to be addressed.
4.That the Ld. AO and the CIT (A) erred in not considering the documents/ details furnished in support of claim of the appellant.
5.That the Ld. CIT(A) also erred in not following various judgments of jurisdictional High Court and ITAT.
6.That the appellant carves leave to add, alter, modify or delete any of the ground of appeal.”
Brief facts of the case are that the assessee filed his return for A.Y. 2020-21 on 29.12.2020 declaring income of Rs. 4,98,320/- which included income from retail business u/s 44AD and interest income.
Subsequently, during the course of a search u/s 132 carried out on 4.1.2024 in Bhutani Group of cases, it was found that the assessee had paid cash of Rs. 2,37,000/-as consideration for purchase of immovable property during F.Y. 2019-20. Accordingly, notice u/s 148 was issued after following the prescribed procedure.
In response, the assessee filed return on 19.06.2024, declaring total income of Rs. 4,98,320/-. During the course of assessment proceedings, the assessee accepted that the cash was paid by him but denied that the same was unexplained. Since no documentary evidences were furnished to support the contention that the cash was paid out of explained sources, the AO treated the entire sum of Rs. 2,37,000/- as unexplained and added it u/s 69 of the Act to the income of the assessee. Accordingly, assessment u/s 147 r.w.s. 143(3) of the Act was completed at an income of Rs. 7,35,320/- vide order dated 28.03.2025.
Aggrieved, the assessee preferred an appeal before the CIT(A) challenging the addition of Rs. 2,37,000/- and also adoption of the figure at Rs. 4,37,000/- in the tax computation sheet erroneously. However, the CIT(A) vide order dated 13.03.2026, dismissed the assessee’s appeal.
Further aggrieved, the assessee has filed appeal before the Tribunal.
Before us, Ld. AR submitted that the assessee had explained that the source of cash was withdrawals from his saving account. Further, he had opted for presumptive taxation u/s 44AD and, therefore, was not required to maintain books of accounts. The source of withdrawal from bank account was out of maturity proceeds of fixed deposits created earlier out of past savings. Copy of the bank statement and a certificate from the Bank confirming these facts have been filed in this regard.
Further, Ld. AR has submitted that the provisions of section 69 of the Act were not applicable in this case as the same can be invoked only when investments are not recorded in the books of account or the source is not explained which is not the case.
Ld. AR also pointed out that even though the AO had made an addition of Rs. 2,37,000/- in the assessment order, the figure was erroneously taken as 4,37,000/- in the computation sheet. This issue was not considered by the CIT(A) while dismissing the appeal.
Ld. DR, on the other hand, strongly relied upon the orders of the lower authorities and submitted that the AO was justified in making the impugned addition as requisite documentary evidences were not filed during the course of assessment proceedings.
We have heard the rival submissions and perused the material available on record. It is evident from the copy of bank statement and the certificate issued by the bank that the source of cash deposited with M/s Bhutani Infra, is duly explained to be out of withdrawals from saving account in which maturity proceeds of FDRs were credited.
Hence, we are of the considered view, that the addition made on account of unexplained investment of Rs. 2,37,000/- (wrongly mentioned as 4,37,000/- in computation sheet) is not justified and the same is hereby deleted.
In the result, appeal of the assessee is allowed.