Laveena Jain Vs ITO (ITAT Delhi)
Revenue Cannot Question Assessee’s Wisdom in Retaining Cash-ITAT Delhi Deletes Entire ₹38 Lakh Demon–Cash Deposit and Agricultural Income Additions
This appeal challenged the NFAC order dated 28.07.2025 which had affirmed additions of ₹13,00,000 u/s 69A (cash deposited during demonetization) and ₹25,00,000 u/s 68 (alleged inflated agricultural income), aggregating to ₹38,00,000, besides restricting agricultural income to ₹1,54,450. The selection of the case was for limited scrutiny—agricultural income & demonetization cash deposits. The original return was belated; the revised return correcting agricultural income from ₹39,54,450 to ₹3,95,445 was treated by the AO as non-est.
Tribunal examined the affidavit & supporting bank statements and accepted that the figure of ₹39.54 lakh was a clerical error—an extra “zero”—and that the true agricultural income was ₹3,95,445, a fact not disputed by the Revenue before the Bench. Accordingly, the entire addition arising from the mismatch (₹25 lakh) was deleted.
On the demonetization cash deposit of ₹13 lakh, the Assessee explained that ₹10 lakh had been withdrawn on 21.06.2014 and kept in hand, forming the source of deposit. Tribunal held that the Revenue had no authority to question why the Assessee kept cash for 2 years and 5 months, or why she simultaneously had debit balance in the credit card account. Such questioning was held to be an impermissible intrusion into personal financial choices. The AO’s view, based on suspicion & conjecture, amounted to “over-exercising jurisdiction.” Tribunal emphasized that the role of the Revenue is to examine quantification, not to dictate or judge the Assessee’s financial wisdom.
Finding the explanation adequate and supported by bank records, Tribunal deleted the entire ₹13 lakh addition u/s 69A. With both components unsustainable, the assessment stood substantially dismantled. The appeal of the Assessee was allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
