M/S. TIRUPATI COMMODITIES PVT. LTD.,KOLKATA vs. I.T.O., WARD - 3(1), KOLKATA

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ITA 196/KOL/2026Status: HeardITAT Kolkata02 September 2026AY 2017-20186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO made additions on a hypothetical basis despite the cash transactions being duly recorded in the audited books of accounts. The interest income was also already offered to tax.

What were the facts?

The assessee, engaged in jute business, did not file a return of income. The AO reopened the case and made additions for cash withdrawals and interest income, treating them as undisclosed income under Section 69A. The CIT(A) upheld these additions.

What were the issues?

Whether cash withdrawals and deposits, duly recorded in audited books, can be added as unexplained income under Section 69A. Whether interest income already offered to tax can be added again.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 148,Section 142(1),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM Shri S.K. Tulsiyan &

For Appellant: Shri S.K. Tulsiyan &, Ms. Mita Rizvi, ARs
For Respondent: Shri Praveen Das Chowdhury, DR
Hearing: 18.08.2026Pronounced: 02.09.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 12.06.2025 for the AY 2017-18.

2.

The only issue raised by the assessee in the various grounds of appeal is against the order of ld. CIT (A) confirming the additions of ₹2,50,17,220/- and ₹2,60,542/- as made by the ld. AO u/s 69A of the Act in respect of cash withdrawals and interest income respectively when these are duly recorded in the books of account.

ITA No.196/KOL/2026 M/s Tirupati CommoditiesPvt. Ltd.; A.Y. 2017-18 3. The facts in brief are that the assessee is engaged in the business of manufacturing and trading of jute and jute products. The assessee has not filed any return of income during the year. Thereafter, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act to verify the issue of cash withdrawals and cash deposits, interest income. The notice u/s 148 of the Act was issued on 31st March, 2021 and there was no compliance to the said notice. Thereafter, the notice u/s 142(1) of the Act, along with questionnaire was issued to the assessee requesting the assessee to file the return of income but again there was no compliance. Thereafter, the case was transferred to faceless assessment on11.11.2021, and notice u/s 142(1) of the Act were issued on 07.12.2021, and 09.02.2022, along with questionnaire calling for various details and evidences. But there was no compliance. Finally, a show cause notice was issued on 18.02.2022, which was complied with by submitting manufacturing and trading of jute and jute products, details of withdrawals from the bank of ₹61,33,900/-, copy of cash book, audited balance sheets, bank statements, day book, copy of challans for income tax payments of ₹7,22,000/-. However, the ld. AO came to the conclusion that the correct income of the assessee could not be ascertained and thus framed the assessment u/s 147 read with section 144 of the Act by adding the entire alleged cash withdrawal and cash deposits of ₹2,15,17,220/- u/s 69A of the Act as undisclosed income beside adding ₹2,60,542/- in respect of interest income. Page 2 of 6

ITA No.196/KOL/2026 M/s Tirupati CommoditiesPvt. Ltd.; A.Y. 2017-18 4. In the appellate proceedings, the ld. CIT (A) passed the order by dismissing the appeal of the assessee after taking into account the facts and evidences available on record.

5.

After hearing the rival contentions and perusing the materials available on record, we find that the assessee is engaged in the business of manufacturing and trading of jute and jute products. During the impugned assessed year, the assessee did not file any return of income. The case of the assessee was reopened for heavy cash deposits and withdrawals from the current account and for verification of interest income. We note that the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 31.03.2021, but again there was no compliance. Thereafter the notices u/s 142(1) of the Act were issued along with questionnaire calling for details and information from the assessee and the assessee furnished before the ld. AO the copies of audited balance sheet, bank statement, day book, copy of challans evidencing of payment of ₹7.22,000/-. The assessee also filed before the ld. AO the copy of cash book showing the complete deposits and withdrawal of money from the current account. However, the ld. AO added the entire amount of cash withdrawals and deposits u/s 69A of the Act as unexplained income on hypothetical basis despite all the evidences available before him and also added the interest income of ₹2,60,542/- despite that the income is already shown in the books of accounts and offered to tax. We note that all the evidences qua the above issues were filed before the Page 3 of 6

ITA No.196/KOL/2026 M/s Tirupati CommoditiesPvt. Ltd.; A.Y. 2017-18 authorities below and were available on records. We also note that the books of accounts were audited by the auditors and the withdrawals from and deposits into current account were duly recorded in the books of account and certified by the auditors. However, the ld. AO added the entire cash deposits and withdrawals aggregating to ₹2,15,17,220/- u/s 69A of the Act as unexplained money which too was incorrect as the assessee never withdrew or deposited such amounts into the current account and also after making an addition of Rs.2,60,542/- on account of as income from the other sources. Thus, we note that the AO totally disregarded the details/facts of actual cash deposits and cash withdrawals from the bank accounts and details of TDS deducted at source on the interest income received during the year. We also note that the provisions of Section 69A of the Act applies only when assessee possesses unexplained cash, bullion or other valuable items not recorded in the books of accounts whereas all the cash deposits and withdrawals were duly recorded by the assessee in the books of accounts which were duly audited by the auditors . The assessee has also filed before us the copy of total cash deposits and withdrawals which aggregated to ₹63,46,400/- and ₹42,43,260/-, whereas the ld. AO has added the cash withdrawals of ₹2,10,45,220/- and cash deposit of ₹4,72,000/- u/s 69A of the Act without giving any detail as to how these figure were arrived at. Therefore, the addition made by the ld. AO is based on the surmises and junctures and not on the basis of records available before him as furnished by the assessee. We note that during the year Page 4 of 6

ITA No.196/KOL/2026 M/s Tirupati CommoditiesPvt. Ltd.; A.Y. 2017-18 the assessee has shown the profit in profit and loss account of ₹47,26,237/- and paid a tax of ₹ 7,22,000/-. We also note that the interest income added by the ld. AO of ₹2,60,652/- was also disclosed as income from other sources in the computation of income and tax has been paid thereon. Therefore, considering these facts and circumstances, we are not in agreement with the conclusion drawn by the ld. Commissioner of Income-tax (Appeals). This being an open and shut case of wrong assessment of income by the AO and further upholding the assessment order by ld. CIT(A) without considering the facts available before them and thus cannot be sustained. Considering these facts and circumstances, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the additions.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced on 02.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 02.09.2026 Sudip Sarkar, Sr.PS

Page 5 of 6

ITA No.196/KOL/2026 M/s Tirupati CommoditiesPvt. Ltd.; A.Y. 2017-18

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

(Manish Bhoi) Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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