INCOME-TAX OFFICER, WARD-2(2), AJMER, AJMER vs. DUGDH UTPADAK SAHAKARI SAMITI, LASADIYA, KEKRI

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “A” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No. 379/JPR/2026 (Assessment Year:2019-20)

Income-tax Officer Vs. DugdhUtpadak Sahakari Ward-2(2) Samiti, Lasadiya Ajmer Village Lasadiya Tehsil Kekri B.O. Lasadiya, Ajmer �थायीलेखासं./जीआइआरसं./PAN/GIR No:AACAD 7776 M Appellant .. Respondent Appellant by : Sh. Abhimanyu Singh Yadav, Addl CIT Respondent by : Sh. Sunil Porwal, CA (thru V.C.) Date of Hearing 04.08.2026 Date of Pronouncement 10.08.2026 O R D E R Per Annapurna Gupta, AM:- The present appeal has been filed by the Revenue against the order passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”), dated 11.12.2025 under

P a g e | 2 ITA No.379/JPR/2026 DugdhUtpadak Sahakari Samiti Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. The grounds raised by the Revenue read as under:- 1. Whether on the facts & circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 81,82,058/- made u/s 69A r.w.s. 115BBE of the Act, despite the admitted fact that the assessee had not filed any return of income and had completely failed to offer any explanation or supporting evidence before the Assessing Officer during the course of the assessment proceedings u/s 147 of the Act?

P a g e | 3 ITA No.379/JPR/2026 DugdhUtpadak Sahakari Samiti 3. The solitary issue in the present appeal is the deletion of addition made by the AO of Rs.81,82,058/- on account of credits in the bank account of the assessee, the source of which remained unexplained. 4. Before the AO none appeared and therefore the AO added the entire credits in the bank account of the assessee during the impugned year amounting to Rs.81,82,058/-, to the income of the assessee treating it as unexplained money u/s 69A of the Act. The Ld. CIT(A) however deleted the addition considering all evidences produced by the assessee before him under Rule 46A of the Income Tax Rules, 1962, being bank statements, milk purchase invoices, audited financial accounts and payment vouchers as also the affidavit of newly appointed secretary of the assessee society, noting the same to reveal that the credits in the Bank account were through bank transfer from Ajmer Zila Dugdh Utpadak Sahakari Sangh (AZDUSS)- a Government controlled cooperative dairy to whom milk was sold by the assessee after collecting the same from village members. He noted the credits directly corresponded to the ten day milk purchase invoices issued by Ajmer Zila DugdhUtpadak Sahakari Sangh(AZDUSS), specifying milk quantity, FAT, SNF, rate per litre, and the exact amount payable, all of which, he found, reconciled with the bank entries. He also noted that the assessee cooperative society was a long established cooperative society formed in 1975 for the sale of milk collected from village members sold exclusively to Ajmer Zila Dugdh Utpadak Sahakari Sangh (AZDUSS).

P a g e | 4 ITA No.379/JPR/2026 DugdhUtpadak Sahakari Samiti 5. Ld. CIT(A) further found the total milk sales disclosed in the books of the assessee to be fully consistent with the bank credits of Rs.81,82,058/-.Accordingly based on the above factual findings, he held that the credits in the bank account were duly explained and deleted the addition made by the AO. His findings in this regard are contained at para 4.4 to 4.6 of his order as under:- ……………… 4.4 After a thorough examination of the assessment records, the appellant's detailed submissions, the affidavit of the newly appointed secretary, and the extensive documentaryevidence produced under Rule 46A including bank statements, milk purchase invoices. audited financial accounts, and payment vouchers, I find that the AO's addition of Rs. 81,82,058/- under section 69A is unsustainable. The appellant is a long- established cooperative society formed in 1975 for the sole purpose of collecting milk from village members and supplying it exclusively to Ajmer Zila DugdhUtpadak Sahakari Sangh Ltd. (AZDUSS), a government-controlled cooperative dairy. The bank statements clearly show that every substantial credit is received through bank transfers from AZDUSS, marked as "MILK PAYMENT". These credits directly correspond to the 10-day milk purchase invoices issued by AZDUSS, which specify milk quantity, FAT, SNF, rate per litre, and the exact amount payable, all of which reconcile with the bank entries.

4.5 Further, the audited accounts of the cooperative for FY 2018-19 disclose total milk sales. of Rs. 80,42,428/- and related sales of Rs. 1,52,597/- aggregating to Rs.82,05,025/- which is fully consistent with the bank credits of Rs. 81,82,058/-. The appellant has also demonstrated that cash withdrawals from the same account were used solely for disbursing milk payments to the member-farmers, which is supported by vouchers and fulfils the operational structure of a village dairy system. Further, the non-compliance of the appellant during assessment proceedings occurred because the earlier secretary, whose mobile number was linked with the PAN, failed to forward notices after handing over charge, a fact established through a sworn affidavit.

4.6 Since the credits are clearly traceable to genuine, recorded, audited business receipts from a single identifiable government dairy federation, they cannot be treated as unexplained money under section 69A, nor can section 115BBE be invoked. Accordingly, the addition of Rs. 81,82,058/- is hereby deleted, hence the consequential tax under section 115BBE is also cancelled. The AO is directed to delete the addition made of Rs.81,82,058/- under section 69A of the act. The appeal is therefore allowed infavor of the appellant. ………………..

P a g e | 5 ITA No.379/JPR/2026 DugdhUtpadak Sahakari Samiti 6. The solitary contention of the Ld. DR before us was that, the Ld. CIT(A) had entertained and appreciated the additional evidences without confronting the same to the AO and seeking his remand report regarding the veracity of the same, which he contended ,was mandatory as per Rule 46A of the Income Tax Rules, 1962. 7. We find no merit in the argument of the Ld. DR as above. The Ld.CIT(A) has given his finding of all credits in the bank account of the assessee being duly explained primarily considering the notings in the bank statement against the credit entries revealing the parties from whom the amount was received, i.e AZDUSS, which he found was the primary party to whom milk was sold by the assessee and the quantum of sales reflected in the financials of the assessee justifying the credits in the bank account . Both the bank statement of the assessee and its audited financial statements do not constitute additional evidences, since they were part of record of assessment, the bank statement being the basis with the AO to reopen the case of the assessee, since he found the same to reveal huge credits in the bank account of the assessee and the audited financials constituting part of the Return of Income filed by the assessee. 8. The argument of the Ld. DR therefore that the evidences considered by the Ld. CIT(A) ought to have been confronted to the AO , is rejected , noting that they constituted part of the records of assessment. Even otherwise the Ld. DR has not demonstrated as to what purpose would be served by restoring the matter to the AO , considering the factual findings of the Ld.CIT(A) that the credits in the

P a g e | 6 ITA No.379/JPR/2026 DugdhUtpadak Sahakari Samiti bank account of the assessee were narrated in the bank statement to be in relation to AZDUSS , which undeniably is the party to whom milk is sold by the assessee and the quantum of credits in the bank account is found by him to corelate with the figure of sales reflected in the audited financial statements of the assessee. These two facts itself are sufficient to demonstrate the source of bank credits as being from explained sources. 9. In the light of the above, since the Revenue has pointed out no infirmity in the factual findings of the Ld. CIT(A) and their only plea is that the AO should have been confronted with the additional evidence filed by the assessee, in which we find no merit, the appeal of the Revenue is found to be devoid of merits. 10. The appeal filed by the Revenue is therefore dismissed. Order pronounced in the Open Court on 10.08.2026

Sd/- Sd/- (Kuldip Singh) (Annapurna Gupta) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 10.08.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

P a g e | 7 ITA No.379/JPR/2026 DugdhUtpadak Sahakari Samiti By Order, Asst. Registrar ITAT, Jaipur