SONU JAIN,AGRA vs. ITO WD(1)(1)(2), AGRA

ITA 671/AGR/2026Status: DisposedITAT Agra16 October 2026AY 2024-257 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 8,00,000 was unsustainable. The assessee derived income from trading agricultural machinery parts, and their sales turnover was not disturbed by the revenue. The presumptive income declared under Section 44AD was accepted by the AO, who also accepted the turnover by estimating income at 8%. The Tribunal found that the exact nature of the business relationship between Shri Rupesh Kumar Jain and the assessee was not necessary to determine, especially since maintaining books of account is not mandated under Section 44AD. The AO's observations regarding the lack of transportation/GST details on bills were not a valid basis for the addition when the presumptive income declared under Section 44AD had been accepted and not disturbed. This view was supported by the decision of the coordinate Chandigarh bench in Nand Lal Popli (supra). The impugned order of the CIT(A) was therefore held to be unsustainable in law. The addition of Rs. 8,00,000 was deleted.

What were the facts?

The assessee, Sonu Jain, filed a return for AY 2024-25 declaring Rs. 2,84,680. The case was selected for scrutiny. Information from an investigation wing search on Shri Rupesh Kumar Jain revealed an unaccounted cash transaction of Rs. 8,00,000 between them. The assessee claimed this was for purchasing agricultural goods from Delhi through Shri Rupesh Kumar Jain and Bobby Jain. Shri Rupesh Kumar Jain stated he was involved in cash transactions and earned commission. The Assessing Officer (AO) treated the transaction as not a regular business transaction, deemed purchase bills fictitious due to lack of GST and transportation details, and noted the absence of stock registers and cash books. Consequently, the AO added Rs. 8,00,000 as undisclosed income under Section 69C r.w.s. 115BBE and Rs. 16,000 as commission. The CIT(A) partly allowed the appeal, confirming the Rs. 8,00,000 addition but deleting the Rs. 16,000 addition.

What were the issues?

1. Whether the addition of Rs. 8,00,000 as unaccounted cash/unexplained income under Section 69C r.w.s. 115BBE of the Income Tax Act, 1961, is sustainable, considering the assessee declared presumptive income under Section 44AD for the year under consideration? Assessee's Contention: The assessee argued that the addition is illegal and arbitrary, based on assumptions. The assessee, engaged in trading agricultural machinery parts, opted for presumptive taxation under Section 44AD and is not required to maintain books of account. The sales declared under Section 44AD were accepted by the AO. The assessee relied on the ITAT Chandigarh decision in Nand Lal Popli v. The DCIT. Revenue's Contention: The learned Senior Departmental Representative supported the impugned order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 69C,Section 115BBE,Section 44AD,Section 143(3),Section 144B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (SMC

Before: SUNIL KUMAR SINGHBRAJESH KUMAR SINGH

For Appellant: Shri Rajni Kant Verma, Adv
For Respondent: Shri Anil Kumar, Sr (DR)
Hearing: 12.10.2026Pronounced: 16.10.2026

PER:SUNIL KUMAR SINGH, J.M.

This appeal is directed against the impugned order dated 13.08.2026 passed in appeal No NFAC/2023-24/10564498 by the ld. Commissioner of Income Tax/ NFAC (Delhi) [(hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2024-25, wherein ld CIT(A) has partly allowed assessee’s appeal. 2(i). The brief facts state that assessee filed return of income on 19.06.2024 for A.Y. 2024-25, declaring total income of Rs. 2,84,680/-, which comprises income from business and other sources. The case was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS). On the basis of the information received from

The order continues below.

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