Case Law Details
Anshuman Agarwal Vs ACIT (ITAT Agra)
In Anshuman Agarwal Vs ACIT, the Income Tax Appellate Tribunal (ITAT), Agra, partly allowed the assessee’s appeal against the order of the Commissioner of Income-Tax (Appeals)/NFAC for Assessment Year 2017-18.
The assessee, a salaried employee earning commission income from property dealing and rental activities, filed his return of income on 15.08.2017 declaring total income of Rs. 28,90,710/-. The case was selected for limited scrutiny under CASS due to large cash deposits during the demonetisation period compared to returned income. The original assessment under Section 143(3) assessed income at Rs. 38,19,815/- after making an addition of Rs. 9,29,105/-. Subsequently, the Principal CIT set aside the assessment for fresh adjudication.
During the fresh proceedings, the assessee explained that out of the proposed addition of Rs. 22,75,000/-, an amount of Rs. 7,72,605/- represented opening cash in hand as on 01.04.2016. The Assessing Officer accepted this explanation and sustained the remaining addition. Before the CIT(A), the assessee submitted that total cash deposits amounted to Rs. 87,77,500/-, out of which Rs. 75 lakhs had been declared under the Income Declaration Scheme, 2016. The balance cash deposits of Rs. 12,77,500/- were examined, and after considering opening cash in hand, an addition was sustained for unexplained deposits.
The CIT(A) observed that the assessee had deposited Rs. 5,04,895/- over and above the declared cash in the receipts and payments account. The assessee claimed that Rs. 4,32,000/- represented commission income and Rs. 90,000/- represented agricultural income already disclosed in the return. However, the CIT(A) did not accept the explanation and confirmed the addition.
Before the Tribunal, the assessee argued that the commission income and agricultural income had already been disclosed in the original return filed on 15.08.2017 and should be considered as explained sources for the cash deposits. The Department contended that adequate relief had already been granted and that the assessee had failed to properly explain the additional cash deposits.
The Tribunal observed that the Assessing Officer had not considered the commission income of Rs. 4,32,000/- and agricultural income of Rs. 90,000/- while making the addition of Rs. 5,04,895/-. It held that commission income was a regular disclosed source of income and credit for the same should have been allowed against the cash deposits. However, the Tribunal found that the agricultural income was not properly substantiated during the assessment proceedings. Accordingly, it directed the Assessing Officer to allow relief of Rs. 4,32,000/- and sustained the balance addition of Rs. 90,000/- as an unsubstantiated source. The appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT AGRA
The assessee has filed appeal against the order of the Learned Commissioner of Income-Tax (Appeals)/ NFAC, Delhi [“Ld. CIT(A)”, for short] dated 30.10.2025 for the Assessment Year 2017-18.
2. The brief facts of the case are that, assessee is a salaried employee earning commission from property dealing on renting of flats and residential houses. He filed its return of income on 15.08.2017 declaring total income of Rs. 28,90,710/-.
3. The case of the assessee was selected for limited scrutiny under CASS for the reasons large value cash deposits during the demonetisation period as compared to return income. The assessment was completed under section 143(3) of the Act on 22.11.2019, assessed the total income at Rs. 38,19,815/- with the addition of Rs. 9,29,105/-. The case of the assessee was set aside by the Principal CIT 1, Agra by treating the original assessment order under section 143(3) of the Act dated 22.11.2019 as erroneous and prejudicial to the interest of Revenue. It was set aside to the assessing officer to make afresh assessment denovo. After several notices issued to the assessee in the set aside proceedings, the assessee filed his reply dated 23.03.2020 and it was submitted that Rs. 7,72,605/- was shown as opening cash in hand as on 01.04.2016 in the receipts and payment accounts submitted for the year under consideration. After considering the detailed submissions, the assessing officer observed that as per his reply dated 23.03.2020, it was stated that out of Rs. 22,75,000/- proposed to be added Rs. 7,72,605/- was shown as opening cash in hand as on 01.04.2016 in the receipts and payment accounts submitted for the impugned year. Accordingly, he sustained the addition.
4. Aggrieved with the above order, the assessee filed an appeal before NFAC, Delhi. Before Ld. CIT(A), the assessee submitted that he has deposited total cash to the extent of Rs. 87,77,500/- in his bank account. Out of this amount, the assessee declared Rs. 75 lakhs under income declaration scheme, 2016. The assessing officer issued a show-cause notice seeking explanation of the assessee regarding balance cash deposited i.e. Rs. 12,77,500/- in his bank account. The assessee filed the reply and after considering the opening cash in hand, the difference was added to the income of the assessee. After considering the submissions of the assessee, learned CIT(A) observed that the assessee has deposited Rs. 5,04,895/- over and above the declared cash in its receipt and payment submitted before the learned AO. He further observed that the assessee has declared source of income in cash to the extent of Rs. 4,32,000/- and balance amount of Rs. 90,000/- from agricultural income received in cash. However, Ld. CIT(A) found not acceptable the above said explanation and sustained the additions made by the assessing officer.
5. Aggrieved with the above order, the assessee is in appeal before us, raising following grounds of appeal:
“1. That the Ld. CIT(A) has factually erred in confirming the addition of Rs. 504895 made by the Assessment Unit for so called unexplained income under section 69A of the I T Act.
2. That since the impugned amount of addition of Rs. 504895 is duly covered from the Commission income of Rs. 432000 and agriculture income of Rs. 9000 shown in the Income Tax Return filed and accepted in the assessment order Ld. CIT(A) should have deleted the addition instead of confirming the same.
3. That under the fact and circumstance of the case the addition of Rs. 504895 which has been confirmed by Ld. CIT(A) is wrong and arbitrary and hence deserves to be deleted.”
6. At the time of hearing, learned AR brought to our notice the relevant facts on record and he brought to our notice page 4 of the paper book, which is return of income filed by the assessee on 15.8.2017 and further brought to our notice computation of total income at page 5 of the paper book, wherein the assessee has declared Rs. 4,32,000/- as commission income and Rs. 90,000/- as agricultural income. He submitted that this income was already declared in its original return of income filed on 15.8.2017. He prayed that the addition made by the assessing officer is not justified.
7. On the other hand, learned DR brought to our notice page 20 of the assessment order and submitted that the assessing officer has considered all the submissions made by the assessee and also allowed the opening cash balance. The assessee has not explained the proper explanation for additional cash deposited during the year to the extent of Rs. 5,04,895/-. The assessing officer has already given substantial relief to the assessee.
In rejoinder, Ld. AR brought to our notice page 19 of the assessment order wherein the Assessing officer has already accepted the commission income declared by the assessee to the extent of Rs. 4,32,000/-. He prayed that the assessee has already explained the source of cash deposit.
8. Considered the rival submissions and material placed on record, we observed that during the year under consideration, the assessee has deposited Rs. 87,77,500/-. Since, the assessee has declared in Income declaration Scheme, 2016 to the extent of Rs. 75 lacs, the Assessing Officer after eliminating the above declaration of income the net cash deposited by the assessee is Rs. 12,77,500/- out of which the assessee has declared opening cash in hand to the extent of Rs. 7,72,605/- as on 01.04.2016, after adjusting the same, the Assessing Officer has proceeded to make the addition to the extent of Rs. 5,04,895/- as unexplained income. We noticed that the Assessing Officer has not considered the other income earned by the assessee during the year under consideration to the extent of commission income declared in its return of income to the extent of Rs. 4,32,000/- and Agricultural income to the extent of Rs. 90,000/- which comes to Rs. 5,22,000/-. Since, the commission income is declared income in its return of income, in our considered view the assessing officer should have given credit to the same. As far as the agricultural income is concerned, it is not properly substantiated, no doubt it is declared as additional income. The same is not explained during the assessment proceedings, therefore, we are inclined to allow the cash deposit made by the assessee to the extent of commission income declared which is regular source of income for the assessee. Therefore, we direct the Assessing Officer to allow to the extent of Rs. 4,32,000/-and difference amount of Rs. 90,000/- is sustained as unsubstantiated source.
9. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on this 09th April, 2026.
Author Bio
