SASALAKUNTE KASIMSAB ALIPEER,DAVANGERE vs. ITO WARD-1 DAVANGERE, DAVANGERE

ITA 177/BANG/2026Status: DisposedITAT Bangalore28 September 2026AY 2017-187 pages
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What did the Tribunal hold?

The Tribunal allowed Ground No. 2, holding that the addition of ₹1,250,000 based on the survey declaration was unsustainable. The Tribunal noted that the assessee's actual gross profit rate of 9.88%, as evidenced by audited annual accounts, was substantially the same as the 10% rate declared during the survey. Furthermore, the assessee's excise licence prohibited the sale of items other than liquor and beer in sealed bottles, and no evidence of unaccounted sales was found during the survey. The Tribunal found no basis to sustain the addition and directed its deletion. The Tribunal also allowed Ground No. 3, finding that the addition of ₹13,27,500 relating to demonetisation deposits was unwarranted. While the CIT(A) confirmed the addition for want of a day-to-day cash book and cash-flow statement, the Tribunal noted that month-wise cash-flow data was available in the paper book and had been furnished to the lower authorities. The Tribunal concluded that the assessee had sufficiently explained the source of the cash deposits from cash sales and directed the deletion of this addition.

What were the facts?

The assessee, an individual running a wine shop, filed an appeal against the order of the CIT(A) for Assessment Year 2017-18. The CIT(A) had dismissed the assessee's appeal against an assessment order under section 143(3) which determined the total income at ₹3,428,180, significantly higher than the returned income of ₹850,680. The dispute arose from additions made by the Assessing Officer (AO) following a survey under section 133A. During the survey, the assessee admitted a higher gross profit rate and offered additional income. The AO also made an addition concerning cash deposits made during the demonetisation period. The CIT(A) upheld these additions, albeit with a direction for verification regarding the survey declaration.

What were the issues?

1. Whether the addition of ₹12,50,000 on account of the alleged survey declaration is justified, or if the learned CIT(A)/NFAC ought to have deleted it or sustained it only to the extent of any unoffered income, as per section 143(3) read with section 133A of the Income-tax Act, 1961. - Assessee's contention: The addition is unwarranted as the actual gross profit rate of 9.88% is substantially the same as the 10% declared during the survey, and no unaccounted sales were found. This addition amounts to a double addition. - Revenue's contention: Not explicitly recorded, but implicitly supports the AO's order upheld by the CIT(A). 2. Whether the addition of ₹13,27,500 in respect of cash deposits made during the demonetisation period, treating the same as unexplained money under section 69A of the Act, is correct, or if the learned CIT(A)/NFAC ought to have deleted it, as per section 143(3) read with section 69A of the Income-tax Act, 1961. - Assessee's contention: The cash deposits are explained by cash on hand from substantial cash sales during the financial year. The audited books of account and month-wise cash flow data support this explanation. - Revenue's contention: Not explicitly recorded, but implicitly supports the AO's order upheld by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 69A,Section 69C,Section 234B,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

01.

The Assessee filed this appeal against the appellate order dated 22 December 2025, passed by the Commissioner of Income Tax (Appeals)-2, Panaji (the learned CIT(A)), for Assessment Year 2017–18. The learned CIT(A) dismissed the Assessee’s appeal against the assessment order passed under section 143(3) of the Income-tax Act, 1961 (the Act), which determined the Assessee’s total income at ₹3,428,180, in contrast to the returned incom

The order continues below.

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