SOUPAL KUMAR NATH,NADIA vs. I.T.O., WARD - 41(3), NADIA

ITA 3268/KOL/2025Status: DisposedITAT Kolkata07 October 2026AY 2018-20197 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of ₹4,16,62,280/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, was incorrect and unsustainable. The Tribunal noted that the assessee is an authorized stamp vendor who receives money from property purchasers for stamp duty, deposits it in his bank account, and then remits it to the Government treasury for stamp paper issuance. The Tribunal found that the money was deposited and immediately remitted, not accumulated. Furthermore, the Tribunal observed that similar cash deposits for AY 2017-18 were accepted by the AO in a regular assessment under Section 143(3). Following the principle of consistency, as supported by the Supreme Court in Radhasoami Satsang and the Bombay High Court in Quest Investment Advisors (P.) Ltd., the Tribunal decided that the addition was uncalled for. The Tribunal set aside the order of the CIT(A) and allowed the assessee's appeal.

What were the facts?

The assessee, Soupal Kumar Nath, engaged in the business of computer operator, professional typist, and deed writer, had cash deposits of ₹4,16,62,280/- in his bank accounts during Assessment Year 2018-19. These deposits represented advances received from customers for the purchase of stamp papers and were subsequently remitted to the Government treasury for stamp duty charges. The Assessing Officer (AO) selected the case for limited scrutiny under the e-assessment scheme to verify cash deposits. Despite the assessee providing details and evidence, the AO treated the cash deposits as unexplained cash credit under Section 68 of the Income Tax Act, 1961, and added it to the assessee's income. The National Faceless Appeal Centre (NFAC), Delhi, confirmed the AO's addition. The assessee appealed this order to the ITAT.

What were the issues?

1. Whether the addition of ₹4,16,62,280/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, is sustainable when the cash deposits represent advances received from customers for stamp paper purchases and were remitted to the Government treasury. Assessee's Contentions: The assessee argued that the cash deposits were not unexplained but were advances received from customers for stamp duty payments, which were then remitted to the Government treasury. The assessee also highlighted that similar cash deposits in AY 2017-18 were accepted by the AO, following the principle of consistency. The assessee relied on the decisions in Principal Commissioner of Income-tax-8 vs. Quest Investment Advisors (P.) Ltd. (Bombay High Court) and Radhasoami Satsang vs. Commissioner of Income-tax (Supreme Court) to support the argument of consistency. Revenue's Contentions: The revenue, through the DR, did not present any specific arguments beyond what was recorded in the lower authorities' orders, which confirmed the addition on the grounds that the assessee could not prove the source of cash deposits.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(1),Section 143(3),Section 143(3A),Section 143(3B),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

For Appellant: Shri Somnath Ghosh, AR
For Respondent: Shri Praveen Das Chowdhury
Hearing: 29.09.2026Pronounced: 07.10.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 31.10.2025 for the AY 2018-19. 2. The only issue raised by the assessee in the various grounds of appeal is against the order of ld. CIT (A) confirming the addition of ₹4,16,62,280/- as made by the ld. AO in respect of cash deposited in the disclosed bank accounts which represented the advances received from the customers Soupal Kumar Nath; A.Y. 2018-19 against the purchase of stamp papers and also a

The order continues below.

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