INCOME TAX OFFICER, JHUNJHUNU vs. SARDAR SHAHR KRAY VIKRAY SAHAKARI SAMITI LTD, SARDARSHAHR

ITA 429/JPR/2026Status: DisposedITAT Jaipur08 October 2026AY 2018-199 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the deletion of the addition of Rs 83,25,325 made under section 69A. The Tribunal noted that the assessee's audited accounts were not rejected by the AO under section 145. The AO had accepted the assessee's turnover and had not recorded any finding that the cash deposited was not recorded in its books. The Tribunal found that the AO's addition was based solely on dissatisfaction with the source of deposits, not on the absence of recording. The Tribunal rejected the Revenue's contention that no cash flow statement was filed, noting it was mentioned in the assessment order. It also found that the assessee's explanation was consistent, encompassing cash sales, withdrawals, and member recoveries. The Tribunal clarified that the CIT(A)'s examination of specific deposits was illustrative of a broader finding on all deposits. The Tribunal dismissed the Revenue's argument regarding cheque payments contradicting cash withdrawal claims, stating it did not affect the principal source of cash sales and recoveries. The Tribunal also rejected the Revenue's alternative prayer for remand, considering it an attempt to reinitiate assessment proceedings. The ratio is that where an assessee provides a plausible explanation for cash deposits, supported by business receipts and audited accounts, and the AO fails to demonstrate that the deposits are from an unrecorded source, the addition under section 69A cannot be sustained.

What were the facts?

The Revenue appealed the order of the CIT(A) dated 19.12.2025 for AY 2018-19, which deleted an addition of Rs 83,25,325 made by the AO under section 69A. The AO had reopened the case based on cash deposits in the assessee's bank accounts. The assessee, a co-operative society, had not filed a return initially but later filed one declaring nil income. The AO treated cash deposits in Axis Bank (Rs 71,55,300) and Churu Central Co-operative Bank (Rs 11,70,025) as unexplained. The assessee claimed these deposits originated from cash sales and cash withdrawals. The CIT(A) deleted the addition, finding the explanation supported by bank statements, GST returns, and sample invoices.

What were the issues?

1. Whether, on the facts and in law, the CIT(A) was justified in deleting the entire addition made under section 69A of the Act, ignoring the assessee's failure to substantiate its claim of cash deposits from cash sales and cash withdrawals with documentary evidence? 2. Whether, on the facts and in law, the CIT(A) was justified in allowing the appeal, ignoring that the assessee failed to produce a cash book, cash flow statement, or documentary evidence of cash sales, rendering the source of cash deposits unexplained? 3. Whether, on the facts and in law, the CIT(A) was justified in ignoring that the assessee made cash payments via cheque to some persons, contradicting its claim that cash deposits were from cash withdrawals? Revenue's Contentions: The Revenue argued that the burden to explain the source of cash lies on the assessee. It contended that the assessee's explanation shifted and was inconsistent. The Revenue asserted that no proper cash book, cash sales register, or stock register was produced, and the provided cash flow statement was merely a summary. It also argued that the CIT(A) did not examine all deposits and that withdrawals claimed as redeposits were actually cheque payments. The Revenue further contended that the CIT(A) did not follow Rule 46A(3) by not calling for a remand report if additional evidence was considered. Assessee's Contentions: The assessee, represented by none before the Tribunal, had argued before the CIT(A) that deposits represented cash sales of seeds, fertilisers, and pesticides, recovery of credit extended to members, and previously withdrawn cash. It relied on letters submitted to the AO, bank statements, audit report, sample sale invoices, GST returns, and cash flow statement. The assessee did not press grounds 1, 3, and 4 before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144B,Section 148,Section 142(1),Section 145,Section 46A(3)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, JAIPUR Before: Shri Kuldip Singh, Judicial Member And Shri Prakash, Accountant Member ITA No: 429/JPR/2026 Assessment Year: 2018-19 PAN: AABAS 3368 P (Respondent) Assessee Represented: None Revenue Represented: Mrs. Namita Patel, JCIT Date of hearing : 23-09-2026 Date of pronouncement : 08-10-2026

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Revenue is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the learned CIT(A)"] dated 19.12.2025 for the assessment year 2018-19, arising out of the assessment order dated 25.03.2023 passed by the Assessing Officer (hereinafter referred to as "the AO") under section 147 read with section 144B of the Income Tax Act, 1961 (hereinafter referred to as "the Act").

2.

The grounds of appeal raised by the Revenue before us in the memorandum of appeal in Form No. 36 read as under:

"

1.

Whether on the facts and circumstances of the case and

The order continues below.

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