DCIT,CIRCLE-49(1), KOLKATA, KOLKATA vs. SUMIT DUTTA, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.846/KOL/2025 Assessment Year: (2017-18) DCIT, Sumit Dutta, Circle – 49(1), Vs. Uttarapan Building, Block- DS – I & III, 2nd Flor, Ultadanga, Kolkata Kolkata – 700054, West Bengal [PAN: ADOPD0940M] (Appellant) .. (Respondent) Appellant by : Shri Praveen Das Chowdhury, Sr. DR Respondent by: Shri Rip Das, CA Date of Hearing 30.06.2026 Date of Pronouncement 08.07.2026

O R D E R PER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER:

This appeal filed by the revenue is directed against the order dated 07.03.2025 of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “ld. CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year (A.Y.) 2017-18.

ITA No.846/Kol/2025/A.Y. 2017-18 DCIT vs. Sumit Dutta No.300400000230 of Bank of Baroda, in the name of M/s Freedom Services. Hence, the assessment was re-opened u/s 148 of the Act. In the absence of any response from the assessee, assessment u/s 14 r.w.s. 147 of the Act, was completed by making addition to Rs.12,56,16,036/- as unexplained money u/s 69A of the Act.

“6. Decision; Apparently, the tax computation mistake is already rectified by the assessing officer. This office verified the audited books of accounts and cash book of the assessee vis-à-vis bank statement and found that the entire cash sales reflected in the cash book is recorded as sales in the P&L account. This in turn was deposited in the bank account. In fact, the total turnover is shown as Rs.13,04,65,433. Section 69A reads as follows; Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." Section 69A stipulates that the taxpayer must be found in possession or ownership of certain assets, including cash or other valuables and such assets should not be recorded in the books of accounts maintained by the assessee. The section aims to tax unexplained assets or money where ownership is undisputed but the source remains unaccounted for in the books of accounts. In the instant case, the entire credits in bank account are recorded and reconciled with the appellant's books of accounts. 6.1 Supreme Court in the case of Laxmichand Baijnath vs CIT in 35 ITR 416 held that amount credited in business books can normally be presumed as related to business. Payments received from various customers cannot be doubted until contrary material is brought on record. To treat a receipt as unexplained income the AO needs to be in possession of some material indicating that the assessee has received certain amounts which have not been reflected in the books of account. Receipts recorded in the books of accounts

ITA No.846/Kol/2025/A.Y. 2017-18 DCIT vs. Sumit Dutta were already part of the income which was already credited in P&L account. Details of payees are included in appellant's books and A.O. has not given any valid finding regarding irregularities regarding sales made by the appellant. In this case there is no doubt that cash was generated from business and recorded in the cash book. All the cash receipts and expenses incurred by the assessee have been duly incorporated in the cash book. The cash book is a summary of the transactions which are carried out in cash demonstrating the source of receipt of cash and payment of cash. Thus, it cannot be said that cash deposits were made by the assessee outside the books of accounts. So, these cash deposits do not warrant addition under section 69A as the source is clear as per books of accounts. In the case of Aurobindo Sanitary Stores v. CTC (2005) Reported in 276 ITR 549 Orissa High Court held that for applying Section 69, the Assessing Officer must first come to a finding that the assessee made investments which are not recorded in the books of account and thereafter call for an explanation from the assessee about the nature and source of the investments and if he finds that no such explanation was furnished by the assessee firm or the explanation offered by the assessee was not satisfactory, he could treat the value of the investments to be the income of the assessee-firm of the financial year in which it has made the investments. Hence it is held that cash sales which is shown as income and is duly entered in the regular books of accounts cannot be taxed again under section 69A. As a result, the appeal is allowed.” 4. Being aggrieved, dissatisfied, the revenue preferred appeal before us by taking following grounds:

“(i) Whether the Ld.CIT(A) is justified by law in deleting the addition of Rs.12,56,16,036/- made by the AO u/s 69A vide order u/s 147/144/1448 of the I. T. Act, 1961 dated 15.05.2023 for the Asst. Yr.2017-18 due to cash deposits and other credits in the bank account of the assessee. (ii) Whether the Ld.CIT(A) is justified by law in deleting the addition when the assessee failed to furnish the details of purchase invoices, bills, ledger accounts etc., during the course of assessment proceedings as well as Remand Proceedings which are crucial documents to explain the source of said deposits. (iii) That the appellant craves leave to add/alter any/all grounds of appeal before or at the time of the hearing of the appeal.” 5. Contrary to that, learned AR supports the impugned order thereby submitting that there is no infirmity in the impugned order as the assessee

ITA No.846/Kol/2025/A.Y. 2017-18 DCIT vs. Sumit Dutta achieved total gross sale turnover of Rs.13,04,65,433/- out of his business activities of distribution/trading of sales of LPG cylinder under the name of M/s Freedom Services and in such type of business 100% of the customers are end users of LPG Gas and consumes / procures the gas cylinders against cash payment only. The ld. AR further submits that in course of appellate proceedings, the assessee has furnished several documents such as bank statements, cash book, ITR and ld. CIT(A) has asked for remand report from the AO that has been discussed by the ld. CIT(A) and thereafter passed order in favour of the assessee.

ITA No.846/Kol/2025/A.Y. 2017-18 DCIT vs. Sumit Dutta 7. Keeping in view the discussion made above and considering the findings of the ld. CIT(A), we do not find any merit in the submission of the revenue. Accordingly, the appeal of the revenue is hereby dismissed.

The order is pronounced in the open Court on 08/07/2026.

Sd/- Sd/- (Rajesh Kumar) (Pradip Kumar Choubey) ACCOUNTANT MEMBER JUDICIAL MEMBER Kolkata, Dated: 08/07/2026 SAMANTA आदेश�ȧĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: \ �Ȣ�ȡ�ȸ/ The Appellant 1. 2. Ĥ×��ȸ/ The Respondent 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[फाईल/ Guard file

BY ORDER, // TRUE COPY // Asstt. Registrar, ITAT, Kolkata