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Judgment
The appeal in ITA No.8224/Del/2026 for AY 2013-14, arises out of the order of the Id National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'Id. CIT(A)', in short] dated 24.06.2026 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 21.09.2021 by the Assessing Officer, National Faceless Assessment Centre, Delhi (hereinafter referred to as 'Id. AO').
The assessee has raised the following grounds of appeal:-
"1.That the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, has erred both on facts and in law in confirming the assessment order passed under section 143(3) read with section 254 and section 144B of the Income-tax Act, 1961, and in sustaining the addition of Rs.28,23,948/-.
2.That the learned CIT(A) has failed to appreciate that the Assessing Officer did not properly comply with the specific directions issued by the Hon'ble ITAT while setting aside the matter for fresh adjudication and verification of the additional evidence produced by the appellant.
3.That the learned CIT(A) has erred in sustaining the addition of Rs.28,23,948/-by invoking the provisions of section 68, although the impugned amount represented cash deposits in bank accounts and not unexplained cash credits in the books of account of the appellant, and therefore the provisions of section 68 were wrongly invoked.
4.That the learned CIT(A) has failed to appreciate that complete details of the source of cash deposits, including the ledger account, current account of the partnership firm M/s D.P. Enterprises, ledger of M/s Pradeep Mittal & Company, and other supporting records, were furnished, which sufficiently explained the source of the deposits.
5.That the learned CIT(A) has erred in holding that the appellant failed to establish the source of cash deposits without pointing out any defect, discrepancy or falsity in the books of account, ledger accounts or documentary evidence furnished by the appellant.
6.That the learned CIT(A) has ignored the fact that the appellant was carrying on regular business, was regularly assessed to tax, maintained regular books of account and had disclosed all business activities, and therefore the addition merely on the basis of cash deposits is arbitrary and unjustified.
7.That the learned CIT(A) has erred in rejecting the explanation regarding cash withdrawn from M/s D.P. Enterprises and M/s Pradeep Mittal & Company without making any independent enquiry from the partnership firm or examining its books of account, despite the complete particulars being available on record.
8.That the learned CIT(A) has failed to appreciate that once the source of cash was explained with supporting books and ledger accounts, no addition could legally be sustained merely because the explanation was not accepted to the satisfaction of the Assessing Officer.
9.That the learned CIT(A) has erred in confirming the addition without appreciating that the Assessing Officer neither rejected the books of account nor established that the cash deposits represented income from undisclosed sources.
10.That the impugned appellate order is contrary to the facts, evidence available on record, the directions of the Hon'ble ITAT and the settled principles of law, and is therefore liable to be set aside.
11.That the appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal before or at the time of hearing.”
I have heard the rival submissions and perused the materials available on record. The return of income for AY 2013-14 was filed by the assessee (individual) on 27.09.2013 declaring total income of Rs. 2,68,290/- The assessment was originally completed u/s 143(3) of the Act on 29.03.2016 determining the total income of Rs. 36,92,874/-. The following additions were made in the original assessment:-
a. unexplained expenditure- ad hoc addition Rs. 50,000/-
b. unexplained cash deposit in bank account Rs. 28,23,948/-
c. addition on account of commodity exchange transaction @2% net profit of total turnover of Rs. 2,74,34,800/- Rs. 5,50,636/-
The assessee preferred first appeal before the ld CIT(A). The ld CIT(A) deleted the ad hoc disallowance of Rs. 50,000 and the addition on account of net profit estimation on commodity exchange transaction of Rs. 5,50,636/- and confirmed remaining addition on account of cash deposits in the sum of Rs. 28,23,948/-. The assessee preferred an appeal to this Tribunal. Before the Tribunal in the first round, the assessee furnished certain additional evidences in support of his contentions. The said additional evidences were admitted and the Tribunal restored the appeal to the file of ld AO to decide the matter afresh in the light of the evidences furnished.
The ld AO in the second round reiterated the old addition on account of cash deposits in the sum of Rs 28,23,948/- and determined the total income of the assessee at Rs. 30,92,238/-. This action of the ld AO was upheld by the ld CIT(A). It is very clear that the Tribunal had admitted the additional evidences in the first round and directed the ld AO to examine the same de novo in the light of the additional evidences. Those evidences were not considered by the ld AO in the second round of proceedings. The assessee had also submitted that he is a partner in M/s. DP Enterprises, Kaiserganj, Meerut and drawing remuneration apart from interest on capital and net profit from the said partnership firm. The assessee has also submitted that there were frequent withdrawals from the firm made by him in cash and the said cash were deposited by him in his saving bank account. The assessee had furnished the copy of current account, the capital account, cash flow statement etc before the Tribunal in the first round of proceedings to prove his contentions. All these documents duly require factual verification by the ld AO. Hence, in the interest of justice and fairplay, I deem it fit and appropriate to restore this appeal to the file of the ld AO to examine the source of cash deposits made in the bank account in the light of additional evidences submitted by the assessee before the Tribunal in the first round. The assessee is also at liberty to furnish fresh evidences, if any, in support of his contentions. With these observations, grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29-Sep-2026.