SANJAY KUMAR JAIN,JABALPUR vs. INCOME TAX OFFICER WARD 2(1), JABALPUR

ITA 218/JAB/2025Status: DisposedITAT Jabalpur30 September 2026AY 2017-1813 pages
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What did the Tribunal hold?

The Tribunal held that the additions made by the Assessing Officer were primarily on two counts: the alleged difference in turnover and the alleged unexplained cash deposits. The assessee contended that the turnover difference arose from the AO's erroneous comparison of bank credits (Rs. 1,84,50,445/-) with declared sales (Rs. 96,03,650/-). The assessee also claimed that cash deposits were out of business transactions recorded in the books of accounts. The Tribunal observed that the assessee had furnished some explanation regarding cash deposits and turnover, which should have been verified by the AO. In the absence of such verification by the lower authorities, the assessee's claims remained unverifiable. Consequently, the Tribunal set aside the impugned order and restored the assessment to the AO for fresh assessment, directing the assessee to furnish all material evidence. The grounds raised were allowed for statistical purposes.

What were the facts?

The assessee, Shri Sanjay Kumar Jain, filed an appeal against the order of the NFAC, Delhi, for assessment year 2017-18. The Assessing Officer (AO) initiated scrutiny as the assessee had not filed a return of income. The AO noted cash deposits in the assessee's bank account and, after providing opportunities for explanation which were allegedly not availed, made two additions: Rs. 13,07,556/- on account of business income and Rs. 21,06,000/- as unexplained cash deposits. The assessee appealed to the CIT(A), submitting evidence for business income and explaining cash deposits as out of business proceeds. However, the CIT(A) dismissed the appeal. The assessee then appealed to the ITAT, citing health issues of his brother who handled tax matters as a reason for non-filing and non-representation before the AO.

What were the issues?

1. Whether the Ld. CIT(A) erred in treating the turnover at Rs. 1,63,44,445/- against the declared turnover of Rs. 96,03,650/-, when the assessee provided explanations and evidence for credit entries in bank accounts? (Question of law and fact, concerning Section 69A of the Income Tax Act, 1961). 2. Whether the Ld. CIT(A) erred in sustaining the addition of Rs. 21,06,000/- under Section 69A as cash deposited during the demonetization period, when the deposit was claimed to be out of cash in hand from business proceeds and all details with evidence were submitted? (Question of law and fact, concerning Section 69A of the Income Tax Act, 1961). 3. Whether the Ld. CIT(A) erred in invoking the provisions of Section 115BBE of the Income Tax Act, 1961? (Question of law). Assessee's contentions: The turnover difference was due to the AO's erroneous comparison of bank credits with declared sales. The cash deposits were from business income duly recorded in books. Evidence was submitted to the lower authorities. The AO and CIT(A) failed to consider the facts and explanations properly. The assessee relied on various case laws. Revenue's contentions: Sufficient opportunity was given to the assessee, which the assessee failed to avail. Therefore, no interference with the orders of the lower authorities is warranted.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR BENCH “SMC”, JABALPUR

Before: SHRI KUL BHARAT

For Appellant: Shri Rahul Badia, CA
For Respondent: Shri Rahul Padhya, JC-2

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 22.05.2025 pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: -

“1. The order passed by the Ld CIT (A) supporting the order of Ld AO is bad in law and facts, void ab initio and with juri iction.

2.

That the Ld CIT (A) erred in law and facts of the case in treating the turnover at Rs 1,63,44,445/- against the turnover declared of Rs 96,03,650/-. The assessee has given explanation for all credit entries in the bank accounts by submitting bank ledger with evidences.

3.

That the Ld CIT(A) erred in law

The order continues below.

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