SRI NITAN KUMAR JAISWAL,BHAWANIPATNA vs. THE INCOME TAX OFFICER, BHAWANIPATNA WARD, BHAWANIPATNA, BHAWANIPATNA

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ITA 723/CTK/2025Status: DisposedITAT Cuttack27 May 2026AY 2014-155 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the cash deposits were used for making payments for the purchase of IMFL to OSBC, and the AO had accepted the assessee's purchases and sales, the deposits could not be treated as unexplained income. Therefore, the addition made by the AO and confirmed by the CIT(A) was deleted.

What were the facts?

The assessee, engaged in the liquor business, had cash deposits in his bank accounts. The Assessing Officer (AO) treated these cash deposits as unexplained income, leading to an addition. The assessee contended that these deposits were sale proceeds used for purchasing liquor from OSBC.

What were the issues?

Whether cash deposits in bank accounts, which are used for business purchases, can be treated as unexplained income of the assessee.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI GEORGE MATHAN & RAJESH KUMAR

For Appellant: Shri P.K.Mishra, Adv
For Respondent: Shri Vijaya Singh, Sr. DR
Hearing: 27/05/2026Pronounced: 27/05/2026

1 ITA No.723/Ctc/2026 Assessment Year: 2014-15

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL MEMBER AND RAJESH KUMAR, ACCOUNTANT MEMBER ITA No.723/CTC/2026 Assessment Year: 2014-15 Sri Nitan Kumar Jaiswal Vs. ITO, Ward- Bhawaniptna, S/O:- Lalan Prasad Gupta, Bhawanipatna At:- Jagannath Temple Road, P.O/P.S:- Bhawanipatna, Kalahandi, 766001 PAN/GIR No. AKNPJ 3655 P (Appellant) .. ( Respondent) Assessee by : Shri P.K.Mishra, Adv Revenue by : Shri Vijaya Singh, Sr. DR Date of Hearing : 27/05/2026 Date of Pronouncement : 27/05/2026

O R D E R Per Bench

This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 14/11/2025 for the assessment year 2014-15. 2. Shri P.K.Mishra, ld AR appeared for the assessee and Shri Vijaya Singh, ld Sr. DR appeared for the revenue. 3. It was submitted by ld AR that the assessee is an individual, who is doing liquor business. It was the submission that the return filed by the assessee came to be processed and in page 2 of the assessment order, the Assessing Officer has brought out the difference between the total of the transaction in the various bank accounts

2 ITA No.723/Ctc/2026 Assessment Year: 2014-15

of the assessee. It was the submission that in respect of ICICI Bank, the Assessing Officer has taken the figure of Rs.1,07,57,850/- whereas the actual figure was only Rs.50,81,750/-. The assessee has placed a chart showing the correct figure, as follows: “

4.

It was the submission that even though such variation has been pointed out by the Assessing Officer, no addition admittedly is made. It was the further submission that the Assessing Officer in page 3 of the assessment order has brought out the main addition to an extent of Rs.68,94,050/-. It was the submission that the Assessing Officer has treated the cash deposit in the bank account both ICICI Bank and Indus Ind Bank as unexplained income of the assessee. Ld AR drew our attention to pages 115 to 116 of PB, which read as follows:

3 ITA No.723/Ctc/2026 Assessment Year: 2014-15

“

4 ITA No.723/Ctc/2026 Assessment Year: 2014-15

5.

It was the submission that these amounts are the sale proceeds which are deposited in cash and transferred to Orissa State Beverage Corporation (OSBC) being the purchase price of IMFL. It was the submission that this was part of the purchase price of IMFL. It was the submission that as the cash deposits were for the purchase by demand draft to OSBC, same cannot be treated as unexplained income of the assessee. Ld AR tallied the entries with the entries as brought out by the Assessing Officer. It was the submission that the addition may be deleted. 6. In reply, ld Sr DR submitted that the main variation in the bank account is with regard to ICICI Bank. He submitted that he has no objection if the issue is restored to the file of the Assessing Officer to verify whether the variation was on account of an error on the part of the Assessing Officer or whether the actual figure of Rs.1,07,57,850/- was right figure. 7. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the such variation in the ICICI Bank transaction amount has not resulted in any addition in the assessment. The addition is mainly based on fact that there is cash deposit in the bank account of the assessee, which has been treated as unexplained income of the assessee. The amounts deposited have been used exclusively for the purpose of making payment to OSBC for purchase of IMFL. This being so, it cannot be said that such deposits are unexplained income of the assessee. If it is to be treated as unexplained income of the assessee, then purchases would get affected. If the purchases are affected, obviously, the entire transaction of the assessee would come into question, which had not been done by the AO. The AO has

5 ITA No.723/Ctc/2026 Assessment Year: 2014-15

accepted the purchases and sales of the assessee. This being so, the addition made by the AO and confirmed by the ld CIT(A) stands deleted. 8. In the result, appeal of the assessee stands allowed . Order dictated and pronounced in the open court on 26/05/2026. Sd/- Sd/- (RAJESH KUMAR) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack ; Dated 27/05/2026 RS Copy of the Order forwarded to : 1. The Appellant: Sri Nitan Kumar Jaiswal S/O:- Lalan Prasad Gupta, At:- Jagannath Temple Road, P.O/P.S:- Bhawanipatna, Kalahandi, 766001

2.

The Respondent: ITO, Ward- Bhawaniptna, Bhawanipatna 3. The CIT(A)- 4. Pr.CIT, 5. DR, ITAT, By order 6. Guard file. //True Copy// Asst. Registrar. ITAT, Cuttack

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