Delhi ITAT Infers On-Money from Pre-Sale Cash Deposit, Grants Partial Relief

Sonam Vs ITO (ITAT Delhi)

Delhi ITAT Infers On-Money from Cash Deposit Preceding Registered Sale, Grants Partial Relief by Recognising Household Income and Cash Flow

The Delhi ITAT partly allowed the assessee’s appeal in a reassessment involving cash deposits of ₹15.09 lakh in a bank account. The assessee, a vegetable vendor, contended that the deposits were sourced from business income, cash withdrawals, inter-bank transfers with her husband, and sale proceeds of a plot. The Tribunal rejected the challenge to the validity of the reassessment, holding that the notices issued to the address available in the department’s records and through electronic mode constituted valid service. The Tribunal also held that since no original assessment under section 143(3) had been made, reopening beyond four years was permissible within the statutory limitation period.

On merits, the Tribunal noted that the CIT(A) had already analysed the monthly cash flow and granted partial relief by considering cash withdrawals and household expenses. However, the Tribunal found that the CIT(A) had failed to give due credit for the regular income earned by both the assessee and her husband, who were accepted to be vegetable vendors. Applying the test of preponderance of probabilities, the Tribunal granted an additional credit of ₹2.40 lakh (₹15,000 per month each for the husband and wife from April to November 2011), thereby reducing the unexplained cash deficit for that period to ₹3,72,234.

The Tribunal, however, drew an adverse inference regarding the sale of a plot. Since the assessee had deposited ₹8.65 lakh in cash one day before executing the registered sale deed for ₹3.77 lakh, it held that the difference of ₹4.88 lakh represented on-money received on the sale, taxable in the assessee’s hands on the touchstone of preponderance of probabilities. At the same time, the Tribunal observed that the authorities had wrongly treated the entire sale consideration as income and directed the Assessing Officer to compute capital gains after allowing the benefit of the cost of acquisition, based on evidence to be produced by the assessee.

Accordingly, the Tribunal directed the Assessing Officer to tax ₹4.88 lakh as unexplained on-money, ₹3,72,234 as unexplained cash deficit, compute the capital gains on the registered sale of the plot after allowing the cost of acquisition, and grant consequential relief. The appeal was partly allowed and restored to the Assessing Officer for giving effect to these directions.

Cases Discussed

• Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. (SC),1987(2) SCC 107
• The Principal CIT Vs Samcor Glass Ltd. & M/s Samtel Color Ltd. (Delhi High Court)
• CIT (Central)-I Vs. Chetan Gupta (Delhi High Court),ITA No. 72/2014
• ITO Vs. Hepta Developers Pvt. Ltd. (ITAT Delhi),ITA No. 3608/Del/2014
• Chandresh Bhai Jayanti Bhai Patel Vs. ITO,C/SCA/15172/2018 dated 10.12.2018
• CIT Vs. Dr. Ajay Prakash,Appeal No. 551 of 2009, Order dated 22.09.2013
• CIT Vs. Mintu Kalita (Gauhati High Court),(2002) 253 ITR 334
• Venkat Naicken Trust and another Vs. ITO and another (Madras High Court),(2000) 242 ITR 141
• Keshav Narayan Banarjee Vs. CIT (Calcutta High Court),(1999) 238 ITR 694
• Kaushalya Bai Vs. CIT (Madhya Pradesh High Court),(1999) 238 ITR 1008
• Dinanath Vs. CIT (J&K High Court),(1994) 72 Taxman 174
• Shri RK Updhyaya V Shanabhai P Patel (SC),(1987) 166 ITR 163
• Major Tikka Khushwant Singh Vs. Commissioner of Income Tax, Patiala and Anr. (Punjab and Haryana High Court),(1975) 101 ITR 106
• Shanabhai B Patel Vs. R.K. Upadhyay, Income Tax Officer, Ahmadabad (Gujarat High Court),(1974) 96 ITR 141
• N. Natraj Vs. Fifth Income Tax Officer (Mysore High Court),(1965) 56 ITR 250
• Narayan Chetty and Anr. Vs. Income Tax Officer, Nellore and Others (SC),(1959) 35 ITR 388
• Madan Lal Agarwal Vs. CIT (Allahabad High Court),144 ITR 745

FULL TEXT OF THE ORDER OF ITAT DELHI

This appeal in ITA No. 3084/Del/2026 for Assessment Year: 2012-13 has arisen form the learned CIT(A)’s appellate order u/s 250 of the Income-tax Act, 1961(in Short “Act”), dated 11.12.2025 in DIN & Order No: ITBA/APL/S/250/2025-26/1083584214(1), which in turn has arisen from the assessment order dated 11.12.2019 passed by the AO u/s 144 read with section 147 of the 1961 Act.

2. The grounds of appeal raised by the assessee in Memo of appeal filed with the Income Tax Appellate Tribunal, Delhi Benches, New Delhi, reads as under:-

“1. Impugned assessment order passed by assessing officer without application of mind and without considering the facts of the case.

2. The ld. Assessing officer erred in rejecting the appellant explanation regarding the source of cash deposit without proper inquiry or verification.

3. The ld. Assessing officer has made addition without considering the fact that the assessee has deposited the cash was generated from sale of vegetable and personal saving of assessee.

4. Notice under section 148 issued by assessing unit has not been served to the assessee.

5. Assessing Officer passed the order under section 147/144 without considering the fact that assessee has filed his return.”

3. At the outset it is observed that this appeal is filed belatedly by the assessee by 24 days beyond the time prescribed u/s 253(3) of the 1961 Act. The assessee has filed doctors prescriptions etc issued by Fortis Hospital , AIIMS Hospital , Jiwan Clinic(Greater NOIDA) as well Doctor Vinod Vasishtha to contend that herself and her husband was suffering from illhealth, which was the main reason for filing this appeal belatedly with the Tribunal. It is further submitted that the assessee has good prima-facie case on merits, and irreparable loss and injustice will be caused to the assessee, if the delay in filing this appeal is not condoned. Thus, the assessee has prayed that the delay in filing this appeal be condoned, and the appeal be heard on merits. Ld. Sr. DR objected to condonation of delay, but has fairly submitted that the Bench may take decision on this matter.After hearing both the parties and after going through the contents of the condonation application and other materials on record, I condone the delay of 24 days in filing this appeal belatedly by the assessee beyond the time prescribed u/s 253(3) of the 1961 Act, and proceed to adjudicate this appeal on merits in accordance with law. When substantial justice is pitted against the technicalities, the Courts will lean towards advancement of substantial justice, unless malice is at writ large or there is negligence on the part of the litigant. I do not find any malice or negligence on the part of the assessee in filing this appeal belatedly. Reliance is placed on the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. 1987(2) SCC 107.

4. The brief facts of the case are that as per PAN Base information, the assessee has deposited cash of Rs.15,09,500/- in Punjab National Bank, during impugned assessment year:2012-13. Therefore, reopening proceeding u/s 147 of the 1961 Act were initiated by ld. Assessing Officer against the assessee, after recording reasons & obtaining prior approval u/s 151 of the 1961 Act of the ld. Pr. Commissioner of Income Tax, Noida . Consequently, a notice u/s 148 of the 1961 Act was issued by the AO to the assessee, on 26.03.2019. No compliance was made by the assessee to the aforesaid notice. Consequently, notice u/s 142(1) of the 1961 Act was issued by the AO to the assessee, but again the same remained un-complied with by the assessee. Finally, notice u/s 144 of the Act was issued by AO on 21.11.2019 to the assessee, as to why the addition of Rs.15,09,500/- to the income of the assessee on account of unexplained cash deposit in Saving Bank Account maintained with Punjab National Bank be not made in the hands of the assessee, but again there was no response of the assessee , which led the AO to make additions of Rs. 15,09,500/- in the hands of the assessee towards unexplained cash deposit in the bank , wherein income of the assessee was assessed at Rs. 16,96,350/- u/s 144 r.w.s 147 of the 1961 Act , as against returned income of Rs. 1,86,850/-.

5. Being aggrieved , the assessee filed first appeal with ld. CIT(A), wherein the assessee raised grounds of appeal, both legal as well as on merits, challenging the additions as were made by the AO to the income of the assessee. The assessee submitted before the Ld. CIT(A) that assessee had not received notices issued by the AO during reassessment proceedings , and it is only when notice of recovery of demand was received by the person(tenant) residing at the old address of the assessee, the said letter was given by the tenant to the assessee. It was submitted that the assessee applied for certified copy of the assessment order which was received on 18.02.2020 , and the appeal was filed in the same month . It was submitted that there was change of address. The assessee submitted that she had shifted from old address i.e. B-96, Sector 66, Noida to the new address i.e. Gali No.6-Deepak Vihar Colony, Khora, since August 2017 , and is living with her husband. The assessee filed an affidavit to that effect before the CIT(A). It was submitted that the counsel who prepared appeal wrongly mentioned the old address in Form 35. It was submitted that re-assessment order passed by the AO be set aside because the same has been issued without obtaining a subjective satisfaction by the ld. PCIT and Additional Commissioner of Income Tax as the approval obtained under section 151 of the Act is mechanical and without application of mind. Thus, it was submitted that the entire proceedings initiated by the AO under the provisions of Section 147 and 148 of the 1961 Act are invalid , and thus the reassessment order passed by the AO is liable to be quashed. It was submitted that the ld. AO erred in initiating proceedings beyond the period of four years u/s 148 of the 1961 Act without alleging that there is any failure on the part of the assessee to disclose material facts fully and truly at the time of filing of return of income. The assesse made following submissions before learned CIT(A) during appellate proceedings, which are reproduced as hereunder:-

“4. SUBMISSION OF THE APPELLANT.:- During the appellate proceedings, the appellant has furnished online written submission.

“1. Assessee & her husband Mr. Bindusar s/o Babu Ram PAN no. AMDPB3970D are petty business man. Bank A/C of both are separate & both frequently transfer money from one A/C to another (from assessee’s A/C to her husband’s A/C & vice versa).

2. Bank statement of both Assessee & her husband Mr. Bindusar are attached here with from where your good self shall notice that, they are mostly depositing/withdrawing small amount of Rs.10,000/- or so which goes to suggest that they are small businessman.

3. Summary of the Saving Bank A/c of assessee & her husband Mr. Bindusar is as given below.

ASSESSEE Mrs. SONAM BANK SUMMARY PUNJAB NATIONAL BANK S/A NO.
4613000100011852
PAN No. CGSPS9510H

PARTICULAR	AMOUNT
OPENING BALANCE (01-04-2011)	28,764
CASH DEPOSIT	15,09,500
BANK INTEREST	15,949
CASH WITHDRAWN	5,17,200
TFR TO BINDUSAR (Husband)	10,00,000
BANK CHARGES	132
CLOSING BALANCE (31-03-2012)	36,881

BINDUSAR’S BANK SUMMARY PUNJAB NATIONAL BANK S/A
NO.4660000100008603
PAN NO.AMBDPB3970D

PARTICULAR	AMOUNT
OPENING BALANCE (01-04-2011)	52,402
CASH DEPOSIT	91,000
TFR FROM ASSESSEE A/C (Wife)	10,00,000
BANK INTEREST	3,375
CASH WITHDRAWN	11,29,100
LOAN PAID	1,07,304
BANK CHARGES	402
CLOSING BALANCE (31-03-2012)	10,171

CONSOLIDATE POSTION O TWO SB A/C OF A & HER HUSBAND

PARTICULAR	AMOUNT
OPENING BALANCE	81,166
CASH DEPOSIT	16,00,500
LOAN PAID	1,07,304
CASH WITHDRAWAL	16,46,300
BANK INTEREST	19,324
BANK CHARGES	534
CLOSING BALANCE	47,052

4. Assessee has sold one plot for Rs 3,77,000/- in cash. Copy of sale deed is attached and cash deposit in bank are out of his receipt of cash from sale of plot also.

From consolidated statement of bank it is clear cash deposit are out of cash withdrawn and there is no cash deposit out of books.

Total cash deposit into both A/c is Rs. 16,00,500/- and amount withdrawn is Rs.16,46,300/-

There is no cash deposit out of books & addition of Rs. 15,09,500/- needs deletion.

Her husband Mr. Bindusar S/o Babu Ram (PAN: AMDPB3970D) has not been filing his ITR as his income is below the income liable to TAX.

We may add that couple has net cash withdrawal of Rs 4,22,800/- includes cash received on sale of plot Rs 3,77,000/- are sufficient to meet the household expenses. DETAILS

Excess of cash withdrawal over deposit	45,800/-
Cash sale of plot	3,77,000/-
Total	4,22,800/-

Hope you will find in order

We shall be glad to furnish any other details/documents n hearing from you.

4. REOPENING OF CASE BEYOND FOUR YEARS

Reliance is placed on the ruling of The Principal CIT Vs Samcor Glass Ltd. & M/s Samtel Color Ltd. (Delhi High Court).

5. In this case E-return of income was filed declaring income of Rs. 1,86,50/-. Thereafter, on the basis of PAN Base information that the assessee has made cash deposits aggregating to Rs.15,09,500/- in her Saving Bank Account maintained with the Punjab National Bank during financial year 2011-12 relevant to assessment year 2012-13, a notice U/s 148 was issued on 26.03.2019. Subsequently assessment was completed on 11.12.2019 ex-parte U/s 147/144 of the Income Tax Act, 1961 on a total income of Rs. 16,96,350/-after making addition of Rs. 15,09,500/- treating the same as unexplained cash deposits for non compliance with the notices U/s 148, 142(1) and 144 of the Income Tax Act, 1961 (which were not served upon the assessee). Copy Assessment Order dated 11.12.2019 is enclosed for your ready reference as per annexure-1.

6. It is submitted before your honour that the appellant has only received the notice U/s 221(1) of the Income Tax Act, 1961 regarding the recovery of demand from her old address i.e. B-96, Sector 66, Noida (the assessee has shifted from the said address to the new address i.e. Gali No. 6 Deepak Vihar Colony, Khora since year 2017 (i.e. before the initiation of the proceedings)). It is pertinent to mention here that the person living on the old address (on which Department has issued notice of Demand) has only received notice of Demand which he gave to the appellant, neither the assessee nor any other person (living on the address i.e. B-66) has received any notice U/s 148, 142(1) or any Assessment Order (in this regard Affidavit of the of the person living on the old address) is enclosed for your kind consideration as per annexure-2). Thereafter, the assessee went to the Income Tax Office to know the demand created against her and she came to know that Assessment Order has been passed in her case.

It is further submitted that the assessee has neither received any notice U/s 148 and 142(1) nor were any Assessment Order for assessment year 2012-13 was received. Therefore, on 18.02.2020, the appellant has received the certified copy of Assessment Order. The appellant was completely unaware and oblivion to reassessment proceedings as the notice U/s 148 and notices U/s 142(1) were not received by her. Affidavit of the appellant that no Notice U/s 148 was served upon her and in support of address change is enclosed for your kind consideration as per annnexure-3. It is submitted that mere issuance of notice U/s 148 for reopening of the assessment by the Department is not sufficient. Service thereof to the assessee is also necessary. In this case, notice issued by the Department could not be served upon her. The Department, therefore, had to follow the procedure preşcribed under Income Tax Rules to serve such notice but the same has not been done. When an assessee pleads that he had not been served with notice, it was for the Department to place relevant material to substantiate and prove that the assessee was served with the notice. Without valid service of the notice, reassessment proceedings could not have been done.

No Service of notice U/s 148 of the income Tax Act, 1961

7. Further, it is consistent view of the courts that not mere issuance of notice of reopening of assessment but its service on the assessee, that too, within the time framed envisaged U/s 149 of the Income Tax Act, 1961 is necessary for a valid reopening the assessment. There is no service of notice U/s 148 of the Act, on the assessee and it is quite clear that in the absence of service of notice, the proceedings have been initiated in the violation of time limit prescribed U/s 149 of the Act’ There are procedural requirement under the Income Tax Act which are spread over three sections i.e., 147, 148 and 149 of the Act. The period of limitation within which notice u/s 148 has to be issued is- specified in section 149 of the Act. Section 153(2)of the Act stipulates that no order of re-assessment can be passed beyond the period of one year from the expiry of financial year in which service of notice was affected. Section 148(1), however, is clear that no re assessment can take place without service of notice being effected on the assessee or his authorized representative’ Further, this case neither attracts provisions of section 292BBof the Act’ hence’ it is clear case of no service of notice. The assessee has placed reliance on the following case laws.

1. In the case of Shri RK Updhyaya V Shanabhai P Patel (1987) 166 ITR 163 (SC), the Supreme Court explained that “the mandate of section 148(1) is that re-assessment shall not be made until there has been service”. However, the said decision does state that jurisdiction becomes vested in the Assessing Officer to proceed with the assessment once notice is issued within a period of limitation. It also emphasized that no re-assessment shall be made “until there has been service”. The legal position, therefore, even under the Income Tax Act, 1961 is that service of notice U/s 148 of the Act is a jurisdiction requirement for completing the reassessment. This has been emphasized in several other decisions of the High Court as well.

II. Decisions of Hon’ble High Court of Allahabad in the case of Madan Lal Agarwal Vs. CIT 144 ITR 745 and CIT Vs. Dr. Ajay Prakash in appeal No. 551 of 2009 Order dated 22.09.2013 in which it was held that there being no valid evidence of proper service of the notice U/s 148 of the Act, the impugned Order passed by the Ld. Assessing Officer becomes bad-in-law and liable to be quashed.

Decision of Hon’ble High Court of Gujrat in the case of Chandresh Bhai Jayanti Bhai Patel Vs. ITO C/SCA/15172/2018 dated 10.12.2018, the Hon’ble High Court held that proper notice U/s 148 of the Income Tax Act, 1961 for initiating re-assessment proceedings is not a mere procedural requirement but the service of the prescribed notice on the assessee is a condition precedent to the validity of the re-assessment made U/s 147 of the Income Tax Act, 1961.

IV. The Assessing Officer, before making the assessment, re-assessment or re-computation U/s 147, shall serve upon the assessee a notice U/s 148. The notice should not only be served but should be served on the proper person entitled to receive the same on behalf of the assessee. It is often assumed that notice issued for service by registered post is sufficient but it is not so. Unless there is evidence of service of such notice on the proper person or acknowledgement of service, it will be not a valid service: –

a. Keshav Narayan Banarjee Vs. CIT (1999) 238 ITR 694 (Cal).

b. Smt. Kaushalya Bai Vs. CIT (1999) 238 ITR 1008 (MP).

V. In the case of C.N. Natraj Vs. Fifth Income Tax Officer (1965) 56 ITR 250 (Mys), the Hon’ble High Court of Mysore dealing with the case where the notice U/s 148 of the Income Tax Act, 1961 was issued, held as under: –

“there is no doubt that a notice prescribed U/s 148 of the Act for initiating re-assessment proceedings is not a mere procedural requirement, the service of the prescribed notice on the assessee is condition precedent to the validity of any re-assessment made U/s 147. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the Income Tax Officer without a notice or in pursuance of an invalid notice would be illegal and void.”

VI. In the case of Dinanath Vs. CIT (1994) 72 taxman 174 (J&K), notice U/s 143(2) of the Act was served upon one S who was neither a member of the family of the assessee nor his duly authorized agent. However, S had been accepting the notice on behalf of the assessee and prosecuting the cases on his behalf earlier before the Income Tax Authorities. The Hon’ble High Court held that the notice and assessment was invalid and observed as under. –

“the object of issuance of notice or summons is to intimate the concerned parties to appear and answer the queries or the question sought to be clarified by the Court or authorities. As serious consequences are likely to follow, a notice or prescribed by the law”.

VII. The Hon’ble Delhi High Court in the case of CIT (Central) -I Vs. Chetan Gupta on 15.09.2015 in ITA No. 72/2014 has summarized and concluded the relevant provisions as under: –

(i) Under Section 148 of the Act, the issue of notice to the assessee and service of such notice upon the assessee are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements.

(ii) For the Assessing Officer to exercise jurisdiction to reopen an assessment, notice U/s 148(1) has to be mandatorily issued to the assessee. Further. Assessing Officer cannot complete the reassessment proceedings without service of the notice so issued upon the assessee in accordance with the section 282(1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC.

(iii) Although there is change in the scheme of section 147, 148 and 149 of the Act from the corresponding section 34 of the 1922 Act, the legal requirement of service of notice upon the assessee in terms of section 148 read with section 282(1) and section 153(2) of the Act is a jurisdictional pre-condition to finalizing the reassessment.

(iv) The onus is on the Revenue to show that proper service of notice has been effected U/s 148 of the Act on the assessee or an agent duly empowered by him to accept notices on his behalf. In the present case, the Revenue has failed to discharge that onus.

(v) The mere fact that an assessee or some other persons on his behalf not duly authorized participated in the reassessment proceedings after coming to know of it will not constitute a waiver of the requirement of effecting proper service of notice on the assessee U/s 148 of the Act.

(vi) Reassessment proceedings finalized by an Assessing Officer without effecting proper service of notice on the assessee U/s 148(1) of the Act are invalid and liable to be quashed.

VIII. Decision of Hon’ble Guhati High Court in the case of CIT Vs. Mintu Kalita (2002) 253 ITR 334, it was held that service of notice was not a procedural requirement but a condition precedent for initiation of proceedings.

IX. Decision of Hon’ble Madras High Court in the case of Venkat Naicken Trust and another Vs. ITO and another (2000) 242 ITR 141 (Mad), has held that when an assessee pleads that he had not been served with notice, it was for the Department to place relevant material to substantiate and prove that the assessee was served with the notice. Reliance was placed on the Affidavit by Mr. Rajeev Aggarwal that neither he, any of the Directors nor an authorized person had received notice dated 11.09.1998 issued U/s 148 of the Act. Consequently, when the notice U/s 147/148 of the Act was not duly served, the Assessing Officer in Delhi could not have passed a valid and legally sustainable Assessment Order.

X. In ITA No. 3608/Del/2014 ITO Vs. Hepta Developers Pvt. Ltd., has held that as the notice U/s 148, which is foundation of the reassessment proceedings, was not served upon the assessee, the whole proceedings are held as void-ab-initio.

8. Further, the assessee has also placed reliance on the following case laws: –

a. Y. Narayan Chetty and Anr. Vs. Income Tax Officer, Nellore and Others reported in (1959) 35 ITR 388 (SC).

b. Shanabhai B Patel Vs. R.K. Upadhyay, Income Tax Officer, Ahmadabad reported in (1974) 96 ITR 141 (Guj. HC). DEPAR

c. Major Tikka Khushwant Singh Vs. Commissioner of Income Tax, Patiala and Anr. Reported in (1975) 101 ITR 106 (P and H HC).

As per the above decisions, thus, the notice of reassessment U/s 148 of the Income Tax Act, 1961 had to be served upon the assessee. In the light of the above stated facts and legal pronouncements, your honour is requested to kindly quash the impugned Assessment Order as it is void-ab-initio for which the assessee and her family member shall feel highly obliged.

PRAYER

It is humbly prayed that in the interest of equity and natural justice, the impugned Assessment Order, being null and void on legal grounds against the assessee and the same may kindly be quashed and impugned addition may also kindly be deleted in the interest of equity and justice.”

5.2 The Ld. CIT(A) after considering the reply of the assessee granted relief of Rs.3,24,266/- to the assessee, and upheld the additions to the tune of Rs.11,85,234/- , by holding as under:

“5.1 I have carefully gone through the assessment order u/s 144 read with section 147, the grounds of appeal and submission made by the appellant in this regard. Briefly stating facts of the case is that the appellant filed return of income for the A.Y 2011-12 declaring total income of Rs.1,86,850/-, On the basis of information in possession of the assessing officer, the case was reopened for assessment u/s 147 of the Act and notice u/s 148 was issued on 26.03.2019 and duly served. However, there was no response to the said notice. The case was taken up for scrutiny and hearing notices were served upon the appellant. But there was no compliance to such notices. The assessment was therefore completed to the best judgment of the assessing officer u/s 144 read with section 147 dated 11.12.2019 on a total income of Rs. 16,96,350/-, Addition on account of unexplained money deposited in bank account was made.

5.2 Grounds of appeal no. 2, 3 and 4 are against not serving the notice u/s 148 for reopening of assessment and other hearing notices. Facts involved in the issue is that the return of income filed by appellant was reopened for assessment u/s 147 of the I.T. Act and after obtaining sanction of competent authority, notice u/s 148 was issued. The said notice was sent by speed post and it was not returned back unserved by postal authority. After the case was taken up for scrutiny, hearing notices u/s 142(1) and show cause notice u/s 144 of the Act were issued and again sent by speed post. These notices were also not returned back unserved by postal authority. On the other hand, during appellate proceedings, the appellant claimed that she did not receive any of the notices as these were sent to her old address at Sector 66, Noida whereas she had long ago shifted to the new address at Deepak Vihar Colony, Khora. She claimed that she was made aware of the notices and subsequent assessment order only after one of her relatives had handed over a letter for recovery of demand issued by assessing officer on a much later date which was sent to the same old address where all other notices were earlier sent. She therefore argued that since the notices were not served upon her properly and she was not allowed opportunity of hearing before completion of assessment, the impugned assessment order u/s 144 r.w.s. 147 should be held as ab-initio-void and quashed.

Having analysed the facts involved, I find that the assessing officer had issued all the notices [u/s 148, 142(1) and 144] by speed post at the address available in records and ITD Systems. The fact that these were not returned back unserved proves that these were duly delivered. It is another matter whether these reached appellant’s hands or not. Appellant claimed that she had shifted from that address to another one long back. But she had not stated anywhere whether she had informed the assessing officer about the change of her address or whether she took any step to update the address in e-filing portal. Appellant herself admitted that the letter issued by AO for recovery of outstanding demand was delivered at the old address and one of her relatives had handed over the same to her. There is therefore no reason to believe that the earlier statutory notices were not delivered and not reached her hand in the same way. Another significant point to clarify here is that appellant’s profile in e-filing portal revealed that the notices u/s 142(1) and show cause notice u/s 144 were issued over such portal also in electronic mode. The service of all the notices were therefore valid service as per the provisions of section 282 of the I.T. Act. Appellant’s argument is therefore rejected and these grounds of appeal dismissed.

5.3 Grounds of appeal no. 5, 6, 7 and 8 are towards reasons for delay in filing of this appeal. Since these are not in the nature of grievance against the assessment order per- se, these are not adjudicated upon. Ground of appeal no. 9 is against action of the AO in issuing notice u/s 148 without obtaining sanction of competent authority in a proper manner. Facts involved in the issue is that the assessing officer had issued notice u/s 148 after recording the reason for reopening and after obtaining prior sanction of Principal Commissioner as per section 151 of the Act. On the other hand, the appellant argued that the sanction was not obtained in subjective manner and was done in mechanical way and without application of mind. In this regard, I find that although the appellant has raised ground of appeal on this issue, she has not stated anything further in her written submission during the appellate proceedings. It is not clear as to on what basis the appellant has alleged that the sanction to issue notice u/s 148 was not obtained in proper manner and that it was against the provisions of law. In the absence of further clarification and evidence, the action of the AO in this regard is held to be valid and as per law. This ground of appeal is dismissed.

5.4 Ground of appeal no. 10 is against reopening of assessment u/s 147, issue of notice u/s 148 and completion of assessment u/s 144 of the Act. It may be stated that issues related to this ground have already been discussed in the aforementioned paras and not adjudicated upon separately.

5.5 Ground of appeal no. 11 is against initiating the proceedings beyond the period of four years under section 148 of the Act without alleging that there is any failure of the appellant to disclose material facts fully and truly, at the time of filing of return of income. In this regard I would like to first highlight the provisions contained in section 147 as under:-

“147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year):

Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.”

It is therefore clear from the 1st proviso below section 147 that restriction to reopen an assessment beyond 4 years is applicable only when the case has been earlier subjected to regular assessment u/s 143(3) or 147 of the Act. In the present case, no such regular assessment was made earlier. I would also like to highlight the provisions contained in section 149 as under:-

“149. (1) No notice under section 148 shall be issued for the relevant assessment year ,-

(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c);

(b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year,

(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.”

It is therefore clear that notice u/s 148 can be issued even after 4 years from the end of the relevant assessment year if the income which has escaped assessment or is likely to have escaped assessment exceeds Rs.1,00,000/-. In this case, as per reasons recorded by AO, the income likely to have escaped assessment was Rs.15,09,500/-. Hence, there is no infirmity in AO’s action of reopening the assessment and issue notice u/s 148 even after expiry of 4 years from the end of the relevant assessment year. In view of above discussion, appellant’s argument is not correct and hence the ground of appeal is dismissed.

5.6 Ground of appeal no. 1 is against the merit of addition made in the assessment order towards unexplained cash deposited in bank account. Facts involved in the issue is that the appellant was found to have deposited cash of Rs.15,09,500/- in her bank account with Punjab National Bank during the relevant financial year. Since the taxable income of Rs.1.86 lakhs disclosed by her in return of income was not commensurate with the amount of cash so deposited, the assessing officer issued notices asking the appellant to explain the source of such cash with necessary evidence. But as already discussed in above paras, there was no compliance from appellant and therefore the AO had added the entire cash so deposited as unexplained money. On the other hand, during appellate proceedings, the appellant claimed that she and her husband-Shri. Bindusar, maintained bank accounts in their respective names with the same bank and branch and the cash deposited by her in her bank account was out of cash which was in both of their hands as on 01.04.2011 as well as out of cash regularly withdrawn by both of them from their account. She submitted a yearly cash flow statement of herself, her husband and jointly as under:-

APPELLANT (SONAM)

PARTICULAR	AMOUNT
OPENING BALANCE (01-04-2011)	28,764
CASH DEPOSIT	15,09,500
BANK INTEREST	15,949
CASH WITHDRWAN	5,17,200
TFR TO BINDUSAR (Husband)	10,00,000
BANK CHARGES	132
CLOSING BALANCE (31-03-2012)	36,881

APELLANT HUSBAND (BINDUSAR)

PARTICULAR	AMOUNT
OPENING BALANCE (01-04-2011)	52,402
CASH DEPOSIT	91,000
TRF FROM ASSESSEE A/C (Wife)	10,00,000
BANK INTEREST	3,375
CASH WITHDRAWN	11,29,100
LOAN PAID	1,07,304
BANK CHARGES	402
CLOSING BALANCE (31-03-2012)	10,171

CONSOLIDATE POSITION OF TWO SB A/C OF APPELLANT & HER HUSBAND.

PARTICULAR	AMOUNT
OPENING BALANCE	81,166
CASH DEPOSIT	16,00,500
LOAN PAID	1,07,304
CASH WITHDRWAN	16,46,300
BANK INTEREST	19,324
BANK CHARGES	534
CLOSING BALANCE	47,052

The appellant also claimed that the cash for household expenses were met by cash of Rs.3,77,000/- received by way of sale of property by her during the year and excess of cash withdrawn over that deposited by both of them. The total cash spent by them for household expenses was stated to be Rs.4,22,800/- which for sake of convenience is held at Rs.4,20,000/-. It is another matter that appellant’s claim that household expenses were met by cash received from sale of property is false and which is discussed in subsequent paras. But the fact is, by her own admission, cash utilized by her and her husband for household expenses was Rs.4,20,000/-. A synopsis of cash deposited and withdrawn by appellant and her husband as obtained from respective bank statements is given as under:-

	SONAM-PAN-CGSPS9510H-AY 2012-13
	SONAM PUNJAB BANK 01.04.2011 TO 31.03.2012 58 S/A No.4613000100011850
DATE	CASH WITHDRAWN	CASH DEPOSITED	Period of 1 month	TOTAL WITHDRWAN	TOTAL DEPOSITED
08-Apr-11	0	10.000
13-Apr-11	0	20.000
27-Apr-11	0	11.000	April 2011	0	41,000
13-May-11	0	17000	May 2011	O	17000
08-Jun-11	0	22.000
20-Jun-11	0	15.000	June 2011	0	37,000
04-July-11	0	10.000
11-July-11	0	20.000
26-July-11	0	10.000	July 2011	0	40,000
03-Aug-11	0	500
17-Aug-11	0	43.000
25-Aug-11	0	35.000
29-Aug-11	0	50.000	Aug 2011	0	1,28,500
14-Sep-11	0	20.000
15-Sep-11	10.000	0
27-Sep-11	0	1,00,000	Sep 2011	10,000	1,20,000
10-Oct-11	0	10,000
12-Oct-11	0	20,000
19-Oct-11	0	7,000
28-Oct-11	10,000	0
28-Oct-11	10,000	0
28-Oct-11	1,000
29-Oct-11	10,000	0

 

29-Oct-11	5,000	0	October 2011	36,000	37,000
02-Nov-11	0	10,000
15-Nov-11	0	23,000
21-Nov-11	0	10,000
23-Nov-11	0	35,000	November 2011	0	78,000
04-Dec-11	1,000	0
04-Dec-11	10,000	0
04-Dec-11	10,000	0
05-Dec-11	0	42,000
12-Dec-11	0	8,65,000
14-Dec-11	0	14,000
29-Dec-11	0	15,000	December 2011	21,000	9,36,000
03-Jan-12	0	10,000
07-Jan-12	1,50,000	0
14-Jan-12	0	10,000
25-Jan-12	3,00,000	0
27-Jan-12	200	0	January 2012	4,50,200	10,000
01-Feb-12	0	13,000
14-Feb-12	0	18,000	February 2012	0	31,000
01-Mar-12	0	12,000
14-Mar-12	0	12,000	March 2012	0	24,000

–

	BINDUSAR
	BINDUSAR PNB BANK 01.04.20211 TO 31.03.2012 58 5/A NO. 4660000100008603
DATE	CASH WITHDRAWN	CASH DEPOSITED	Period of 1 month	TOTAL WITHDRAWN	TOTAL DEPOSITED
02-Apr-11	1,800	0
06-Apr-11	5,000	0
09-Apr-11	0	6,000
11-Apr-11	5,000	0
11-Apr-11	500	0
11-Apr-11	600	0	April 2011	12,900	6,000
04-May-11	300	0
05-May-11	400	0
05-May-11	1,000	0
08-May-11	500	0	May 2011	2,200	0
11-Jun-11	6,000	0	June 2011	6,000	0
19-Jul-11	10,000	0
19-Jul-11	10,000	0
19-Jul-11	5,000	0
26-Jul-11	5,000	0	July 2011	30,000	0
			August 2011	0	0
07-Sep-11	0	9,500
12-Sep-11	2,500	0
18-Sep-11	1,000	0	September 2011	3,500	9,500
02-Oct-11	5,500	0
04-Oct-11	0	20,500
15-Oct-11	10,000	0
15-Oct-11	0	10,000
15-Oct-11	10,000	0
15-Oct-11	4,000	0
17-Oct-11	500	0	October 2011	30,000	30,500
27-Nov-10	500	0	November 2011	500	0
			December 2011	0	0
26-Jan-12	10,000	0
26-Jan-12	10,000	0
27-Jan-12	0	20,000	January 2012	20,000	20,000
07-Feb-12	10,000	0
07-Feb-12	10,000	0
08-Feb-12	1,00,000	0
23-Feb-12	0	25,000	February 2012	1,20,000	25,000
12-Mar-12	2,000	0
12-Mar-12	9,00,000	0
26-Mar-12	1,000	0
27-Mar-12	500	0	March 2012	9,03,500	0

The following facts are kept in mind while finding out whether appellant’s claim is correct or not:-

1. Combined cash in hand as on 01.04.2011 in possession of them was Rs.81,166/-.

2. Cash used for household expenses per month was Rs.35,000/- (4,20,000 / 12)

The final position of cash on the basis of cash withdrawn and deposited by them and cash needed for household expenses per month is arrived at as under:-

Month of the year	Cash in hand as on 1st day of the month	Cash withdrawn from bank	Cash deposited + cash utilised for household expenses	Closing cash as on last day of the month	Remarks
April 2011	81,166/-	12,900/-	82,000/-	12,066/-	Excess cash of 12,066/-
May 2011	12,066/-	2,200/-	52,000/-	Nil	Deficit cash of 37,734/-
June 2011	Nil	6,000/-	72,000/-	Nil	Deficit cash of 66,000/-
July 2011	Nil	30,000/-	75,000/-	Nil	Deficit cash of 45,000/-
August 2011	Nil	0	1,63,500/-	Nil	Deficit cash of 1,63,500/-
September 2011	Nil	13,500/-	1,64,500/-	Nil	Deficit cash of 1,51,000/-
October 2011	Nil	66,000/-	1,02,500/-	Nil	Deficit cash of 36,500/-
November 2011	Nil	500/-	1,13,000/-	Nil	Deficit cash of 1,12,500/-
December 2011	Nil	21,000/-	9,71,000/-* (Note 1 below)	Nil	Deficit cash of 5,73,000b* “(Note 2 below)
January 2012	Nil	4,70,200/-	65,0001-	4,05,200/-	Excess cash of 4,05,200/-
February 2012	4,05,200/-	1,20,000/-	91,000/-	4,34,200/-	Excess cash of 4,34,200/-
March 2012	4,34,200/-	9,03,500/-	59,000/-	12,78,700/-	Excess cash of 12,78,700/-

(*Note 1 — Cash of Rs.9,71,000/- deposited in bank included cash of Rs.3,77,000/-received on sale of property.

*Note 2 — Deficit cash of Rs.5,73,000/- has been arrived at after accounting for cash of Rs.3,77,000/- received on sale of property)

A family runs their day-to-day household activity by using cash on a month-to-month basis. A situation where cash outgo in a particular month is more than aggregate of cash in hand at the beginning of the month and incoming cash during the month i.e. cash deficit is out of question. The above chart reflects that this is exactly what has happened to the family of appellant and her husband. Although there were huge incoming cash in the months of January, February and March 2012, but such excess cash in no way explain the cash outgo which already occurred in the earlier 9 months. The appellant, on the other hand has cleverly ignored the month wise position and instead tried to explain the whole thing on yearly basis. Here, another very significant point requires mention. The appellant has claimed that household expenses were partly met up by incoming cash of Rs.3,77,000/- by way of sale of property. The fact is, the property was sold on 13th December by deed of sale and cash of Rs.8,65,000/- was deposited by her in her bank account on the previous day i.e. 12th December. There is therefore no dispute that the cash deposited on 12th December included the cash received on sale of property. The cash of Rs.3,77,000/-was deposited in bank and did not remain in appellant’s hands and used towards household expenses as claimed by her. This claim is therefore totally false. The above discussed facts and the chart as above reveals that the appellant had deficit cash of Rs.11,85,234/- from May 2011 onwards and till December 2011. As already discussed above, since the matter is concerned with running family household activity on a month-to-month basis, such deficit cash cannot be claimed to have been met up with excess cash of last three months of the financial year. Since there was non-compliance to notices at the time of assessment and appellant submitted details and documents such as bank statements of herself and her husband and sale deed of property, these documents were fresh evidence. These were therefore admitted and remanded to assessing officer for remand report as per Rule 46A of I.T. Rules. The assessing officer submitted remand report dated 31.10.2025. The relevant portion of the report which was conclusion on the merit of the addition is produced as under:-

“The assessee during the appellate proceedings submitted that the assessee and her husband Mr. Bindusar S/o Babu Ram PAN: AMDPB3970D are petty business man. The claim of the assessee seems genuine as the assessee has filed ITR for

AY 2012-13 declaring business income of Rs. 1,86,850/- for the year under consideration. Further, the assessee stated that the assessee and her husband maintained separate bank accounts & both frequently transfer money from one A/c to another A/c. After examination of the bank statement of the assessee found that there is frequent cash deposit/account transfer and withdrawal from both of their bank accounts Therefore, the explanation submitted by the assessee may be accepted upto the gross receipts of the assessee shown in ITR and cash in hand available with assessee.

The assessee has stated that the assessee has sold one plot for Rs.3,77,000/- in cash and this cash amount of Rs. 3,77,000/- is deposited in bank account. After perusal of bank account statement and sale deed submitted by the assessee, it is noticed that the assessee has sold residential plot for consideration of Rs.3,77,000/- in cash on 13.12.2011 and the assessee has deposited Rs.8,65,000/- on 12.12.2011. In view of the above, the contention of the assessee regarding cash deposit on 12.12.2011 may be accepted upto Rs. 3,77,000/-.”

It is clear from AO’s remand report that he has also pointed towards the same discrepancy as mentioned by me above. The deficit cash of Rs.11,85,234/- from the months of May to December, 2011 is therefore treated as unexplained cash in the hands of appellant. Addition to the extent of Rs.11,85,234/- is therefore confirmed and balance Rs.3,24,266/- is directed to be deleted. This ground of appeal is therefore partly allowed.

SUBHRO DAS
ADDL/JCIT (A)-6 KOLKATA

5.3. Thus, in nut-shell the ld. CIT(A) vide detailed order uphold the additions made on legal jurisdictional ground raised by the assessee, and also confirmed the additions on merits to the tune of Rs. 11,85,234/-towards deficit cash from the month of May to December, 2011 by treating the same as unexplained cash in the hands of the assessee, wherein part relief was granted by ld. CIT(A) to the tune of Rs. 3,24,266/-.

6. The Ld. Counsel for the assessee opened argument before the Bench by submitting that assesse is a vegetable vendor. It is submitted by ld. Counsel for the assessee that her husband is also vegetable vendor. It was submitted that there was cash deposit of Rs. 15,09,500/- in her bank account , out of which Rs. 11,85,234/- was held to unexplained cash in her hand being cash deficit from May to December, 2011. It was submitted that assesse has shifted her residence from B-96, Sector 66, Noida to Gali No. 6, Deepak Vihar Khora, Colony Labour Chowk, Gautam Budh Nagar, NOIDA-201301, UP and hence notices during assessment proceedings were not received.

7. I have considered rival submissions and have perused the materials on record. I have observed that the assessee has claimed that she is vegetable vendor. The assessee had originally filed return of income u/s 139, declaring income of Rs. 1,86,850/-. The case of the assessee was reopened by Revenue based on PAN base information that the assessee has deposited cash of Rs. 15,09,500/- in her saving bank account with Punjab National Bank. The AO after obtaining approval of ld. PCIT u/s 151 of the 1961 Act, issued notice dated 26.03.2019 u/s 148 of the 1961 Act to the assessee. The assessee did not comply with the aforesaid notice as no reply/response was filed by the assessee nor any return of income was filed in pursuance to aforesaid notice issued by the AO to the assessee u/s 148 of the 1961 Act . Thereafter, the AO issued notice u/s 142(1) as well SCN to the assessee, but there was no response from the assessee. It is pertinent to mention that originally no assessment was framed by Revenue u/s 143(3) of the 1961 Act, and first proviso to Section 147 of the 1961 Act is not applicable. The assessment was reopened within six years from the end of the assessment year, and first proviso to Section 147 is not applicable. The assessee did not participated in reassessment proceedings, which led AO make best judgment assessment wherein AO added an amount of Rs. 15,09,500/- being cash deposits made by the assessee in her PNB saving bank account as unexplained cash deposits in the bank account. The contention of the assessee is that the assessment has been framed without servicing of the notice u/s 148 of the 1961 Act. The assessee has claimed that she changed her address from B-96, Sector 66, Noida to the new address i.e. Gali No.6-Deepak Vihar Colony, Khora since August 2017 , and is living with her husband. It is contended that no notice u/s 148, 142(1) and 144 were received by the assessee due to change of address. It is contended that even assessment order was not received, and it is only when recovery proceedings started by the Revenue, she became aware of the assessment order passed by the AO. I have observed that in Form No 35 filed with ld. CIT(A), Form No. 36 filed with the ITAT as well even in the recent medical doctors prescription of 2025/2026 etc filed with ITAT, the assessee has shown her address as B-96, Sector-66, Noida, U.P. Even, Aadhar Card copy filed by the assessee with the ITAT bears assessee’s address as B-96, Sector-66, NOIDA. The Revenue has contended that no notices issued by the AO to assessee’s address B-96, Sector 66, NOIDA, which were sent by speed post , came back undelivered. It is also contended by Revenue, that apart from speed post, the notices were also sent electronically, which were also delivered / served on the assessee. The assessee has not brought on record any evidence wrt informing department about her aforestated new address. Thus, this plea raised by the assessee that notice u/s 148 was not served, lacks merit and is hereby rejected. Further, it is the contention of the assessee that the AO finalized assessment without considering that the assessee has filed return of income. It is observed that no return of income in pursuance to notice issued by the AO u/s 148 was filed by the assessee. No evidence to contrary is brought on record. The assessee did filed return of income originally u/s 139 declaring income of Rs, 1,86,850/- for which due credit has been given by the AO while framing re-assessment .The assessee has also raised plea that the AO has passed assessment order without due application of mind and without considering the facts of the case. Infact, it is the assessee who did not participated in assessment proceedings. There was cash deposit of huge amount of Rs. 15,09,500/- in assessee’s saving bank account with PNB, while return of income was filed for an amount of Rs. 1,86,850/-. Thus, there was a huge gap and mismatch between the income declared in return of income vis-à-vis cash deposits in saving bank account of the assessee maintained with PNB. This triggered the reopening of the concluded assessment. The assessee did not participated in reassessment proceedings. The assessee did not file any return of income in pursuance to notice issued by the AO u/s.148 of the 1961 Act. The AO passed best judgment assessment based upon material available on record . The ld. CIT(A) adjudicated appeal and allowed certain relief based on material available on record. The ld. CIT(A) even called for remand report from AO during first appellate proceedings. The assessee participated in appellate proceedings before ld. CIT(A). It is well settled that proceedings before ld. CIT(A) are extension of assessment proceedings, and powers of ld. CIT(A) are co-terminus with the powers of the AO which even include power of enhancement. The ld. CIT(A) passed a detailed order analyzing in details all aspects as well facts and circumstance surrounding the case of the assessee, and granted partial relief to the assessee. Thus, no prejudice whatsoever is caused to the assessee, as principles of natural justice were duly complied with. It is rather the assessee who did not participated in assessment proceedings. Thus, this contention lacks merit and is rejected. Now , coming to the merits of the additions as were sustained by ld. CIT(A) wherein ld. CIT(A) confirmed additions to the tune of Rs.11,85,234/- being deficit cash from the months of May to December, 2011 which was treated as unexplained cash in the hands of the assessee, while ld. CIT(A) granted relief to the assessee to the tune of Rs. 3,24,266/-. The Revenue has not come in appeal against the appellate order passed by ld. CIT(A) nor any Cross Objections are filed. Thus, the appellate order passed by ld. CIT(A) has attained finality so far as Revenue is concerned. The assessee has contended that she is vegetable vendor. It is also claimed that her husband is also vegetable vendor. The ld. CIT(A) accepted this contention of the assessee. It is claimed that her husband is not filing return of income with department as his income is below taxable limit. It is also claimed that both the assessee as well her husband are maintaining separate saving bank accounts with PNB , and there are frequent transfers from one bank account to other. The assessee demonstrated before ld. CIT(A) about frequent transfers from one account to the other account. The ld. CIT(A) accepted and considered this aspect while passing appellate order. It is contended before ld. CIT(A) that personal expenses of the family is Rs. 35,000/- per month. The ld. CIT(A) considered personal drawings for household expenses to the tune of Rs. 4,20,000/- for the family. It is also contended before ld. CIT(A) that the assessee sold plot of land for Rs. 3,77,000/- vide sale deed dated 13.12.2011. It is claimed that the assessee received said amount of Rs. 3,77,000/- in cash. It is observed that the assessee deposited cash of Rs. 8,65,000/- in her bank account on 12.12.2011 which is just one day before the sale deed of the plot was executed. Thus, I hold on the touch stone of pre-ponderance of probabilities that the differential amount of Rs.4,88,000/- ( Rs. 8,65,000/- – Rs. 3,77,000/- )is the receipt which is the on-money received on sale of property. I direct authorities to bring this amount of Rs. 4,88,000/- to tax in the hands of the assessee being on-money received on sale of plot of land. Further, I have observed that the authorities have not brought to tax capital gains on sale of plot of land which was sold for Rs. 3,77,000/- vide registered sale deed dated 13.12.2011, and instead the entire amount has been brought to taxation , while the assessee is entitled for deduction for cost of acquisition as provided under the 1961 Act. The assessee is directed to produce evidence of cost of acquisition of the aforesaid plot before the AO, and the AO shall compute capital gain chargeable to tax and bring the same to tax as provided under the 1961 Act instead of bringing entire amount of sale proceed of plot of land as specified in sale deed to the tune of Rs. 3,77,000/- to tax. I have also observed that there was cash deficit of Rs. 6,12,234/- as prepared by ld. CIT(A) (page 26 of the appellate order) from May 2011 to November, 2011, but ld. CIT(A) has not given the benefit of the income earned by both the assessee and her husband during the said period. The assessee has filed income tax return for the year under consideration declaring income of Rs. 1,86,850/- , while it is claimed that the assessee’s husband was vegetable vendor but since the income was below taxable limit, no return of income was filed. The threshold limit for zero taxation was Rs. 1,80,000/- during the year which was the income where upto which tax chargeable was Rs. Nil during the year under consideration. Thus. Credit for both husband and wife @ Rs. 15000 per month for each of them is required to be taken on touch stone of preponderance of probabilities, which amounts to credit of Rs. 2,40,000/- , from April, 2011 to November, 2011. Thus, the remaining amount of Rs. 3,72,234/- (Rs. 6,12,234/- – Rs. 2,40,000/- ) shall be brought to tax as deficit cash which remained unexplained , from April, 2011 to November, 2011. So far as January, 2012 to March, 2012 is concerned,, there are sufficient cash withdrawal by both husband and wife from the bank account, which does not warrant any additions towards deficit cash being unexplained in the hands of the assessee. Thus, in nutshell , firstly an amount of Rs.4,88,000/- shall be brought to tax as deficit cash which remained unexplained for December, 2011 being held to be on-money received on sale of property on touchstone of preponderance of probabilities, secondly an amount of Rs. 3,72,234/- shall be brought to tax by the AO being deficit cash being unexplained in the hands of the assessee as detailed above, and thirdly an AO shall compute capital gains chargeable to tax in the hands of the assesse on sale of plot of land for Rs. 3,77,000/- which got registered vide sale deed dated 13.12.2011, for which the assessee shall furnish complete details of cost of acquisition as well copy of sale deed of plot of land . Thus, the appeal of the assessee is partly allowed as indicated above, and the matter is restored to the file of the AO in accordance with my aforesaid directions. I order accordingly.

8. In the result, the appeal filed by the assessee is partly allowed in the manner as indicated above.

Order is pronounced in the Open Court on .06.08.2026