Rajender Tuteja vs Ward-43(8)

PER MANISH AGARWAL, AM :

The present appeal is filed by assessee against the order dated 17.06.2025 by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. CIT(A), Delhi-15/10595/2019-20 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 23.12.2019 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18.

Brief facts of the case are that the assessee is an individual and e-filed his return of income on 29.10.2017, declaring total income at INR 17,30,850/-. The assessee is engaged in the business of trading of rubber chemical and allied products under his proprietorship firm namely, M/s Gem Pujita Rubchem. The case of the assessee was taken up for scrutiny as during the period of demonetization, the assessee has deposited INR 56,20,000/- in SBN in his bank account. Regarding the source of the same, it was stated that assessee was in the process of buying agricultural land for a sum of INR 1.00 crore however, since the deal was got delayed and was not materialized and the amount withdrawn was kept by the assessee with him and when the demonetization was announced, the cash so available was deposited in the bank. Regarding the source, it was explained that the said cash was accumulation of the bank withdrawals and the cash sales made for which cash flow statement was submitted before the AO which is available in the Paper Book page 26. However, the AO has not accepted the contention of the assessee and made the addition u/s 68/115BBE of the Act for the cash deposited in SBN as unexplained credits and total income was assessed at INR 73,50,850/-.

Against the said order, the assessee filed an appeal before Ld. CIT(A) who vide impugned order dated 17.06.2025, dismissed the appeal of the assessee.

Aggrieved by the order of Ld. CIT(A), the assessee preferred the present appeal before the Tribunal.

All the Grounds of appeal taken by the assessee are with respect to the addition of INR 56,20,000/- made u/s 68/115BBE of the Act and therefore, they are taken together for consideration.

Heard the contentions of both the parties at length and perused the material available on record. It was the claim of the assessee that was available with him as accumulation of bank withdrawals made from time to time and cash sales made during the year. All these documents were filed before the AO however, the AO failed to appreciate these facts and made the addition. Ld. Sr. DR submits that the documents placed are self-serving documents and could not be accepted.

On careful consideration of the facts and from the observation of the documents filed by the assessee, it is observed that assessee has been able to establish that sufficient cash was available with him out of bank withdrawals made from time to time and accumulation of cash sales however, the assessee has not filed day-to-day cash book in support of the same. Before us, neither any reason was stated as to why the cash was withdrawn on regular interval when sufficient cash balance was available with the assessee. These facts need to be verified which have not been done by the lower authorities.

Under these circumstances, we set aside the order of the lower authorities and remand the issue back to the file of AO with the direction to examine the claim of the assessee of bank withdrawals vis-a-vis purpose of utilization of such withdrawals despite of having sufficient cash balance available and decide the same as per law.

With these directions, all Ground of appeal raised by the assessee are allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.