Dinesh Kumar Vs ITO (ITAT Delhi)
Cash Deposits Explained by Sale of Agricultural Land — ITAT Delhi Deletes Section 69A Addition
The Delhi Bench of the ITAT allowed the appeal of Dinesh Kumar for AY 2015-16 and deleted the addition of ₹38.60 lakh made under section 69A as unexplained money.
The reassessment was initiated on account of large cash deposits and investment in immovable property. The assessee explained the cash deposits as arising from earlier withdrawals, cash loans, and sale of agricultural land. While the AO accepted the source to the extent of ₹8.90 lakh from prior withdrawals, he treated the balance ₹38.60 lakh as unexplained for want of documentary evidence.
Before the Tribunal, the assessee produced the registered sale deed evidencing sale of agricultural land in which he held a ¼ share and showed that part of the sale consideration was received in cash. The Tribunal noted that the dates of cash deposits closely matched the dates of sale and that the assessee had indeed received cash as part of the consideration. Considering the proximity of dates and documentary support, the Tribunal held that the explanation was plausible and duly substantiated.
Accordingly, the addition under section 69A was deleted and the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 10.07.2025, for Assessment Year 2015-16.
2. The assessment in the present case was framed u/s. 147 r.w.s 144 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) vide order dated 30.03.2024 making addition of Rs.38,60,000/- u/s. 69A r.w.s 115BE of the Act. Notice u/s.148 of the Act was issued to the assessee consequent to information received through Risk Management Strategy (RMS) that during the relevant previous year the assessee had deposited cash amounting to Rs.47,50,000/- in his bank account and had also made investment in immovable property amounting to Rs.1,30,50,000/-. Since the assessee had not filed return of income for the year under consideration, proceedings u/s. 147 of the Act were initiated. The assessee filed return of income in response to notice u/s.148 and also furnished certain details. The assessee explained that the cash deposits were out of (i) earlier withdrawal of cash from bank amounting to Rs.8,90,000/-, (ii) cash loans from friends and relatives amounting to Rs.19,00,000/-, and (iii) sale of agricultural land. The Assessing Officer accepted the explanation to the extent of cash withdrawal of Rs.8,90,000/-. However, in respect of the remaining amount of Rs.38,60,000/-, the AO held that the assessee failed to substantiate source of cash deposits with documentary evidence. Accordingly, the unsubstantiated cash deposits were added as unexplained money u/s. 69A of the Act. The assessee carried the matter in appeal before the CIT(A), but remained unsuccessful.
3. Shri Ishwar, appearing on behalf of the assessee submitted that cash deposits in the bank are from earlier withdrawals of cash and sale of agricultural land. To substantiate his argument, he refers to copy of registered sale deed at pages 10 to 16 paper book and bank statement at page 17 of paper book. In so far as cash deposits from earlier withdrawals he submitted that the AO accepted the same. He thus, prayed for deleting the addition of Rs.38,60,000/-.
4. Shri Manoj Kumar, representing the department supported the orders of the authorities below and submitted that the assessee failed to discharge the onus cast upon him to explain the source of cash deposits with supporting evidence.
5. Submissions made by both sides heard, orders of the authorities below perused. The short issue in appeal is the addition of Rs.38,60,000/- sustained by the CIT(A). The AO during assessment proceedings had questioned cash deposits of Rs.47,50,000/- in assessee’s bank account. The assessee explained source of cash deposits as earlier withdrawals from the bank Rs.8,90,000/-and from sale of agricultural land. The AO accepted assessee’s submissions qua cash deposits of Rs.8,90,000/- from earlier withdrawals only. To substantiate deposits of cash from sale of land, the assessee has placed on record copy of registered sale deed dated 05.01.2015 at pages 8 to 10 of the paper book and assessee’s bank statement at page 17 of the paper book. A perusal of sale deed shows that the assessee was coowner of agricultural land admeasuring 56 kanal 96 marla. The assessee was having ¼ share in the said land. This land was sold for a total consideration of Rs.71,54,34,037/- the assessee has received his share in consideration partly by way of cheque for Rs.1,15,75,000/- and the balance in cash. A perusal of the bank statement shows that the assessee has deposited cash Rs.39,50,000/- on 05.01.2015 and Rs.7,50,000/- on 06.01.2015. The proximity of dates of cash deposits in the bank and sale of agricultural land substantiates the plea of assessee that cash depositsin the bank were from part of sale consideration received in cash. The source disclosed by the assessee for deposit of cash is plausible. Hence, the same is accepted.
6. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on Wednesday the 14th day of January, 2026.
