GORAVANAHALLI KALEGOWDA PUTTASWAMY,MANDYA vs. DCIT, CIRCLE-1(1), MYSURU

The assessee has raised the following grounds of appeal:

Brief facts of the case are that the assessee is an individual, engaged in the business of retail selling of LPG cylinders under his proprietary concern running under the name and style of M/s. Guru Bharat Gas Agency. The assessee maintained regular books of accounts on a day-to-day basis and the accounts are also audited by a Chartered Accountant under the provisions contained in section 44AB of the Act. The assessee filed his return of income for the AY 2015-16 on 30.9.2015 by declaring total income of Rs.15,88,090/-. The said return was thereafter processed u/s 143(1) of the Act by accepting the returned income. The case of the assessee was subsequently selected for limited scrutiny through CASS and thereafter converted as a complete scrutiny with the prior approval of the Principal Commissioner of Income Tax, Mysore. Accordingly, the statutory notices u/s 143(2) as well as 142(1) of the Act were issued from time to time. During the course of assessment proceedings, as reflected in the cash book, the AO observed that the assessee had made cash payment in excess of Rs.20,000/- which are the expenditures related to the business of the assessee as detailed below: a) Sri Ganapathi - Rs. 1,69,620/- b) Ameco Maddur - Rs.29,16,530/- c) Kawasaki, Bangalore - Rs.61,74,708/- Total - Rs.92,60,850/-

Aggrieved by the assessment completed u/s 143(3) of the Act dated 21.12.2017, the assessee preferred an appeal before the ld. CIT(A)/NFAC.

The ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing that the assessee despite giving sufficient opportunities to submit his response along with supporting documents, did not comply to any of the notices. The ld. CIT(A)/NFAC also observed that before the AO also, the assessee could not justify these cash payments.

Again, aggrieved by the order of ld. CIT(A)/NFAC dated 22.10.2025, the assessee has filed the present appeal before this Tribunal.

Before us, the ld. A.R. of the assessee vehemently submitted that the assessee is a retail supplier of the LPG gas cylinders and the books of accounts are duly audited by the CA. Further, the ld. A.R.

The ld. D.R. on the other hand supported the orders of the authorities below and vehemently submitted that the assessee is very callous in his approach before both the authorities below and did not submit any evidences/documents/information to substantiate his claim.

We have heard the rival submissions and perused the materials available on record. On perusal of the order of assessment, we noticed that the AO has disallowed Rs.92,60,850/- under the provisions contained u/s 40A(3) of the Act in respect of 3 parties by alleging that the assessee had made cash payment in excess of Rs.20,000/- in a day. Further, on perusal of the order of ld. CIT(A)/NFAC, we also noticed that although the ld. CIT(A)/NFAC observed that the issue involved requires further examination but as the assessee did not provide any explanation or supporting evidences, the ld. CIT(A)/NFAC was not in a position to differ from the view of the AO. Before us, the ld. A.R. of the assessee vehemently contended that the entire amount was paid to 3 parties are through proper banking channel but inadvertently recorded in the books of accounts as cash payments and accordingly prayed that one more opportunity may be granted before the ld. CIT(A)/NFAC to

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