TaxTMI 
TaxTMI 
2026 (3) TMI 1478
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....e. 9th November, 2016 to 30th December, 2016, the assessee has deposited Specified Bank Notes ('SBN') in its bank account maintained with Punjab National Bank to the extent of Rs. 44,98,000/- on 4 occasions as detailed at page 2 of the assessment order. When the assessee was asked to submit the source of the same and it was submitted that the above said deposits are out of cash withdrawals made by the assessee prior to the date of demonetization. The dates are given at page 3 of the assessment order. After considering the submissions of the assessee, the Ld. AO observed that based on the financial statements for the year ending 31.03.2017, the assessee was not engaged in any business activity. It was observed that the revenue was received from sale of its fixed assets only. And further observed that the assessee has incurred certain expenditure under the heads audit fee and other expenses. Vide a letter dated 05.11.2019, the assessee has agreed with the facts that it is not engaged in any business activity during the relevant assessment year. It was reiterated that the cash deposits were out of cash withdrawn and accumulated cash for the purchase of agricultural land from various s....
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.... before the NFAC, Delhi and assessee filed detailed submissions and also filed additional evidences under Rule 46A. After considering the detailed submission, ld. CIT(A) allowed the grounds raised by the assessee with regard to cash deposits during demonetization period, ld. CIT(A) allowed the ground with the following observations: "6.3 After going through the findings of the AO in making the addition of Rs. 44,98,000 u/s 68 of the IT Act and the submissions of the appellant with the documents filed to justify the submissions, it is seen that the AO has made the addition for the cash deposited during demonization period by not accepting the explanation offered by the appellant being out of cash in hand on account of cash withdrawal from the bank during the year. The AO has held that the explanation offered by the appellant company is nothing but a made-up story to cover up the unaccounted income of the appellant company which has been deposited in cash during demonization period. Further, he has also rejected the explanation of the appellant that the cash has been withdrawn for the purpose of business, since no business has been carried out or any expenditure has been mad....
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....up, observed that which was accepted by the Department which is evidence from the fact that the revenue had not filed any appeal before ITAT on this issue. Based on the above observations, the Ld. CIT(A) deleted the addition by observing as under: "7.7. I have gone through the findings of the AO in regard to the addition of Rs. 2,13,16,178/- as Long Term Capital gain on sale of land and the submissions filed by the appellant along with Paper book and the subsequent attachment of case laws, order of the CIT(A) NFAC dated 20.9.24 in the case of group cases on the identical facts along with the remand report dated 25.7.2024 which is part of the above order in support of the ground of appeal that the sale consideration is not taxable being it is sale of rural agricultural land. The AO has treated the same as taxable being a capital asset under section 2(14) and has made the addition of Rs. 2,13,16,178/-. The AO has relied on the Google maps for the measurement of distance holding the land is situated in the distance of 6 KM from the Municipal limit of Dehradun. The appellant on the other hand relied upon various documents placed in the paper book being the certificates issued ....
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....addition made in assessment order on this account is deleted. It is pertinent to mention that the appellant had also requested for an opportunity of being heard through video conference in its submissions. Therefore, opportunity letter for availing VC has been provided to the appellant on 11.7.2025 but the same was not availed by the appellant" 8. Aggrieved with the above order, the revenue is in appeal before us raising following grounds: "Ground No. 1 On facts and circumstances of the case and in law, whether the CIT (A) is justified in deleting the addition of Rs. Addition of Rs. 44,98,000/- made u/s 68 of the I.T. Act, 1961 without appreciating the fact that the assessee was failed to explain the source of cash deposit to the satisfaction of the AO as laid down in section 68 of the I.T. Act, 1961 and the modus operandi of cash in hand as explained by the assessee has been found in contravention to the test human probability as discussed by the Hon'ble Apex Court in the case of Sumati Dayal Vs CIT (214 ITR 801) and Durga Prasad More Vs CIT. Ground No. 2 - On facts and circumstances of the case and in law, whether the CIT (A) is justified in deleting the ....
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....rved that the assessee had cash withdrawals before the declaration of demonetization. The documents submitted by the assessee proves that there is enough cash in the books of account and the same was deposited on account of sudden demonetization announced by the Government. The assessee also deposited the same within the window provided by the Government to re-deposit the same. After considering the detailed findings of Ld. CIT(A), we do not see any reasons to disturb the same. 12. With regard to the sale of agricultural land, we observed that the assessee had submitted detailed submissions before the learned CIT(A) and also submitted additional evidence under Rule 46A. The learned CIT(A) called for a remand report from the Assessing Officer; however, the Assessing Officer did not file any remand report. We noticed that the learned CIT(A) observed that the land owned by the assessee is a block of land besides other family members of the group. The land is sold by all the above parties during the year, and the AO made additions in all the cases, which are in appeal before the first appellate authority, in the cases of other group, the respective FAA, had decided the issue in favo....