JOHN IMCHEN,NAGALAND vs. ACIT, CENTRAL CIRCLE-2, GUWAHATI

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ITA 152/GTY/2024Status: DisposedITAT Guwahati20 April 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee failed to substantiate the credits in both assessment and appellate proceedings. However, in the interest of justice, the issue was remitted back to the AO for fresh consideration.

What were the facts?

The assessee, John Imchen, had Rs. 59 lacs credited to his bank account. The Assessing Officer (AO) added this amount to his income under Section 68, stating it was unexplained. The assessee argued that the income was exempt under Section 10(26) and the transaction occurred in an exempted area.

What were the issues?

Whether the addition of Rs. 59 lacs under Section 68 was justified, considering the assessee's claim of exemption under Section 10(26) and the failure to provide substantiation.

Which sections of the Income-tax Act were involved?

Section 68,Section 10(26),Section 132(4),Section 115BBE,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC BENCH”, GUWAHATI

For Appellant: CA :
Hearing: 08.04.2026Pronounced: 20.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC BENCH”, GUWAHATI (VIRTUAL HEARING AT KOLKATA) SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 152/GTY/2024 Assessment Year : 2019-20

John Imchen, Vs. ACIT, Central Circle – 2, 17, PO Box No. 246, Aoyimkum, Guwahati, Village – Dimapur - 797112 Aayakar Bhawan, [PAN: ABGPI9893N] Christian Basi, G.S. Road, Guwahati - 781005 APPELLANT RESPONDENT

Assessee by S.P. Bhati, FCA : Revenue by : Santosh Kumar Karnani, Addl. CIT

Date of hearing : 08.04.2026 Date of Pronouncement : 20.04.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals), Central NER, Guwahati [hereafter “the Ld. CIT(A)] dated 31.05.2024, DIN & order No. ITBA/APL/S/250/2024-25/1065320163(1) challenging the order passee by the Ld. CIT(A) as per the grounds of appeal.

2 ITA No. 152/GTY/2024 John Imchen “1. For that the learned AO is not justified in making addition of Rs. 59,00,000/- u/s 68 of the I.T. Act, 1961 without affording proper opportunity of being heard. 2. For that the learned A.O. is not justified in making addition of Rs. 59,00,000/- u/s 68 of the I.T.Act, 1961 when admittedly I being exempted u/s 10(26) of the I.T. Act, 1961 in respect of any income accruing or arising from exempted area and said transaction being effected in exempted area.” 2. Briefly stated the facts of the case are that Shri Santosh Jasrasaria Is a business man having his origins in Dimapur, Nagaland. Shri Abhishek Mittal, Shri Abhinav Mittal and Smt. Sanchana Gupta are children of Shri Santosh Gasrasaria. The Family is engaged in the business of whole sale trade of foodgrains in the name of three proprietorship firms:

(i) National Commodity Supplier Enterprises, Proprietor Abhinav Mittal

(ii) New Era Enterprise, Proprietor Abhishek Mittal

(iii) Sanna Enterprise, Pro. Sanchana Gupta

There was allegation that the Jasrasaria family is evading tax with the help of tribal individual of Dimapur whose income is exempt from tax u/s 10(26) of the Act. The family was particularly using the firms mentioned below as a front:

1.

NE Enterprises, Prop Sashyongdang AO, BUDPS8340H 2. NCS Enterprises, Prop. John Imchen, ABGPI9893N 3. Nagaland Supply Syndicate, Prop. Mednchinla AO, ATIPM7935P

3 ITA No. 152/GTY/2024 John Imchen 3. The above-named firms were involved in the supply of items like Tetra Pack Milk, dry ration, tinned vegetables and Fish, Tea, & Coffee, Sugar to Director General of Assam Rifles, Himachal Pradesh State Food & Civil Supply Corporation, Delhi State Civil Supplies Corporation Ltd. etc. During the course of search on 08.02.2019, Shri Santosh Jesrasaria was confronted with the documents so seized and statement was recorded u/s 132(4) of the Act. During the course of search, documents was seized and impounded marked SKJ-/01 which is scanned in the assessment order as per the seized documents a sum of Rs. 59 lacs transferred to individual account of Mr. John Imchen in bank account maintained in Canara Bank, Dimapur Branch. The various opportunities were granted to the assessee to justify the amount credited in the bank account of the assessee but the assessee failed to substantiate the credit in the bank account. Accordingly, it was held that the amount credited were remained unexplained and added into the total income of the assessee and applied for the tax purpose u/s 115BBE of the Act.

4.

Aggrieved from the above order of AO, the assessee filed appeal before the Ld. CIT(A) and the Ld. CIT(A) called remand report from the AO. The Ld. CIT(A) after considering the remand reports and rejoinder submitted by the assessee dismissed the appeal of the assessee.

4 ITA No. 152/GTY/2024 John Imchen 5. Aggrieved from above order of the Ld. CIT(A), the assessee is in appeal before the ITAT.

6.

The Ld. AR relied on the submissions made before the lower authorities. The Ld. AR requested that one more opportunity granted to the assessee to substantiate its case.

7.

On the other hand, the Ld. DR relied on the order of lower authorities and submitted that the assessee was granted sufficient opportunities to justify the amount received and could not substantiate the credit of Rs. 59 lacs in terms of section 68 of the Act.

8.

Considering the rival submissions and perusing the entire material available on record and the orders of authorities below. We noted that hear the dispute is regarding the addition of Rs. 59 lacs made by the AO u/s 68 of the Act for the amount deposited in the assessee’s bank account maintained in Kanara Bank, Dimapur. During the course of assessment proceedings and appellate proceedings, the assessee could not substantiate the credits as per the provision of section 68 of the Act. Considering the prayer of the Ld. Counsel, the facts of the case and in the interests of justice, we are remitting this issue back to the file of AO for fresh consideration and decide the issue as per law after giving a reasonable opportunity of being heard to the assesse. The assessee is directed to substantiate his case with cogent documents in support of his claim and not seek unnecessary

5 ITA No. 152/GTY/2024 John Imchen adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

9.

In the result, appeal of the assessee is partly allowed for statistical purposes.

Order pronounced on 20.04.2026

Sd/- Sd/- (Duvvuru RL Reddy) (Laxmi Prasad Sahu) Vice President Accountant Member

Dated: 20.04.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches

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