Shri Narender Singh vs The I.T.O

PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-

This appeal by the assessee is directed against the order of the ld. NFAC, Delhi dated 18.04.2024 pertaining to A.Y 2012-13.

The ld. counsel for the assessee has filed an application for condonation of delay. Having perused the condonation petition, we find that the reason for delay in filing the appeal is that the accountant of the assessee who looked after the assessment proceedings of the assessee left the job and did not intimate the assessee about the intimation of notices. Hence the delay in filing the appeal for which he has filed an affidavit, to be plausible and the assessee has sufficient cause for not filing the appeal in time. Accordingly, we condone the delay and admit the appeal.

Brief facts of the case are that the AO received an information/data from banking authorities, that the assessee has made cash deposits amounting to Rs.52,30,000/- in Bank Account of State bank of India. Further, the AO found that during the year under consideration, the assessee has not filled any ITR for A.Y. 2012-13. As the assessee did not offer any explanation regarding any other source of income or source of cash generation, the Assessing Officer held the cash deposit of Rs.52,30,000/- as unexplained income of the assessee and added the same to the income of the assessee along with interest amounting to Rs. 68,336/-u/s 69A of the Act u/s 144 of the Act.

Aggrieved, the assessee went in appeal before the ld. CIT(A) who confirmed the addition made by the Assessing Officer. Now the aggrieved assessee is before us.

Before us, the ld. counsel for the assessee vehemently stated that the said account in the SBI was in the joint name of the grandfather of the assessee Late Shri Puran Mal and the assessee. It was vehemently argued that the cash deposits were made in the said SBI account by the grandfather of the assessee in the year 2011, which relates to cash withdrawn in 2005. It was further stated that the grandfather of the assessee expired on 29.03.2014. The said amount was deposited by his grandfather out of consideration received from sale of agricultural land.

On the other hand, the ld. DR strongly stated that the cash deposited in 2011 has its roots in the sale of agricultural land made in the year 2005, cannot be considered as satisfactory explanation for cash deposits in 2011 and therefore, the addition may be sustained.

We have heard the rival submissions and have perused the relevant material on record. We find that the assessee in support of his claim has filed a copy of Bank pass book. We find that the said Bank account is in joint name of Puran Mal and the assessee. We also find that in the year 2005, there was credit of Rs. 89,10,375/- on 12.09.2005 in the said bank account SBI which was withdrawn on various dates being 13.09.2005 to 28.10.2005. The assessee has attempted to explain the cash withdrawal in the year 2005 as source from which cash deposit of Rs. 52 lakhs was made from 23.09.2011 to 03.11.2011.

In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit as sales proceeds from agricultural land made five years ago. Although the assessee, prima facie, appears to have discharged its onus of explaining source of cash deposit, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the claim was not substantiated with any supportive documents/evidence. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit are unexplained cash credits, cannot be fully justified. Considering the person having agricultural land and agricultural activities and who are not required to maintain proper books of account to account for such cash credits, the possibility of cash balance being kept in hand cannot be ruled out. In this factual matrix, there is some element of failure to explain some of the cash deposit, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition of cash credit of ₹ 10 lakh only would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes.

In the result, the appeal of the assessee in ITA No. 4099/DEL/2024 is partly allowed.

The order is pronounced in the open court on 04.02.2026.