Sarika Garg vs ITO, Ward-1(2)(3)

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of CIT(A)/Addl./JCIT(A), Thane dated 18.03.2026, for Assessment Year 2017-18.

Shri Rohit Agarwal, appearing on behalf of the assessee submits that the assessee is engaged in taking tuition classes. The assessee in her return of income for A.Y. 2017-18 has declared income from tuitions under the head 'Business & Profession' and has also declared Income from Other Sources i.e. interest income from savings bank account. The AO in scrutiny assessment proceedings questioned cash deposits of Rs.10,65,000/- in assessee’s Bank Account during the period of demonetization. The assessee explained source of cash deposits as under:

Aggrieved by the assessment order dated 30.11.2019, the assessee filed appeal before the ld. CIT(A), but remained unsuccessful. Hence, the present appeal.

The ld. counsel submits that the assessee had entered into an agreement for purchase of land on 16.11.2013 and had paid Rs.5,00,000/- as advance. The said agreement did not mature, hence, the amount was returned by the seller in cash. The deed of cancellation of agreement dated 31.10.2016 is at page 30 of the paper book. Further, the assessee had received gift of Rs.1,50,000/- from her father, a copy of the gift deed dated 24.10.2016 is at page 24 of the paper book. The assessee has also received gift of Rs.3,00,000/- from her mausa Ji, Sh. Suresh Chand, copy of gift deed dated 25.10.2016 is at page 26 of the paper book. The AO never issued notice u/s 133(6) of the Act to the persons from whom the assessee had received the amount in cash. The AO merely on presumptions and assumptions has come to the conclusion that the source of amounts explained by the assessee are not genuine. Even the ld. CIT(A) has not examined the documents furnished by the assessee to prove source of cash deposits.

Per contra, Shri Manoj Kumar representing the department vehemently defend the impugned order and prayed for dismissing appeal of the assessee. The ld. DR reiterated the observations of the AO and the ld. CIT(A) and prayed for upholding the same.

Both sides heard. Orders of the lower authorities examined. The documents furnished by the assessee in support of her contentions considered. During the course of assessment proceedings, the AO observed that there were cash deposits of Rs.10,65,000/- in Bank account of the assessee during demonetization. The assessee was asked to explain source of said cash deposits. The assessee explained the source of cash received as under:

The assessee has filed paper book containing relevant documents viz. confirmation of gift from father of the assessee, confirmation of gift from Shri Suresh Chand, copy of Bayana receipts indicating payment of advance for purchase of four Bighas Agricultural land at village Durveshpur, Distt. Meerut, copy of receipt indicating cancellation of Bayana and refund of Rs.5,00,000/-. I find that though these documents were furnished before the ld. CIT(A). No remand report was sought by the CIT(A) on the additional evidence filed by the assessee. Instead the documents furnished by the assessee were rejected holding them to be non-genuine. Once, the person making gift has filed a confirmation, the same should have either been accepted, or if there is any element of doubt, the notice u/s 133(6) of the Act could have been issued for making further verification and enquiries. Likewise, in respect of transaction of purchase of land and the cancellation of Bayana deed, the same could also have been verified, as the name and address of the seller was very much available on Bayana receipts as well as cancellation of Bayana. The authorities below have taken no pains to examine the documents placed on record by the assessee. Taking into consideration, entire facts of the case and the documents available on record, I am satisfied that the assessee has been able to explain the source of cash deposits in the bank, hence no addition is warranted.

In the result, impugned order is set aside and the appeal is allowed.