OMPRAKASH GUPTA,SUNDARGARH vs. ACIT/DCIT, CENTRAL CIRCLE, SAMBALPUR

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ITA 280/CTK/2026Status: DisposedITAT Cuttack07 October 2026AY 2019-204 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal considered the rival submissions and perused the assessment order, noting that the assessee had not produced all the required evidence before the AO to substantiate its claims. The Tribunal observed that the CIT(A) had granted substantial relief based on evidence produced during remand proceedings. However, for the balance additions sustained, the Tribunal, in the interest of justice, decided to restore both issues to the file of the AO for readjudication. The assessee was to be granted an adequate opportunity of being heard. The Tribunal noted that the assessee's submission regarding the disallowance under Section 40A(3) and the receipt from HUF was that the matter be restored for readjudication due to non-production of all evidence. The Tribunal also acknowledged the assessee's claim regarding internal branch transfers and gold found, and the argument that CBDT Circular No. 1916 was not considered. The operative direction was to restore these issues to the AO for readjudication.

What were the facts?

This appeal by the assessee, Omprakash Gupta, concerns assessment year 2019-2020 against an order dated 17/11/2025 by the CIT(A), Bhubaneswar-2. The assessee challenged four additions made by the Assessing Officer (AO). The first addition was a disallowance of Rs. 20 lakhs under Section 40A(3) for payments made for transportation expenses, where the assessee claimed cheques were also used but not all evidence was produced before the AO. The second addition involved Rs. 10 lakhs received from the assessee's HUF, for which the assessee also failed to produce substantiating evidence before the AO. The third issue related to Rs. 4,68,387/- representing internal branch transfers, where the assessee claimed to have produced evidence before the AO and in remand proceedings, but the CIT(A) confirmed the addition. The fourth point concerned 738.72 gms of gold found during a search, with a submission that CBDT Circular No. 1916 was not considered, and the remaining addition was Rs. 1,57,628/-.

What were the issues?

1. Whether the disallowance of Rs. 20 lakhs under Section 40A(3) of the Income Tax Act, 1961, for transportation expenses, where the assessee claimed partial payment by cheque but failed to produce complete evidence before the AO, requires readjudication by the AO? 2. Whether the addition of Rs. 10 lakhs received from the assessee's HUF, for which substantiating evidence was not produced before the AO, requires readjudication by the AO? 3. Whether the addition of Rs. 4,68,387/- representing internal branch transfers, which the assessee claims to have substantiated before the AO and in remand proceedings, but was confirmed by the CIT(A), should be restored to the AO for readjudication, considering the assessee's submission that it can substantiate its claim if the issues are restored? 4. Whether the addition related to 738.72 gms of gold found during search, with a contention that CBDT Circular No. 1916 was not considered, and the remaining addition of Rs. 1,57,628/-, should be restored to the AO for readjudication? Assessee's Contentions: The assessee argued that for the first two issues (Rs. 20 lakhs and Rs. 10 lakhs), the matter should be restored to the AO for readjudication as not all evidence was produced. For the third issue (Rs. 4,68,387/-), the assessee claimed to have produced evidence and that the AO accepted it in remand, but the CIT(A) confirmed the addition, and it should be restored to the AO for substantiation. For the gold found, the assessee argued that CBDT Circular No. 1916 was not considered and the issue should be restored to the AO. The assessee relied on the principle that issues should be restored for readjudication in the interest of justice. Revenue's Contentions: The revenue vehemently opposed setting aside the matter to the AO, submitting that adequate opportunity had already been granted to the assessee.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Before: SHRI GEORGE MATHAN & SHRI GOPALAN GURUSAMY

Hearing: 07/10/2026Pronounced: 07/10/2026

Per Bench: This is an appeal filed by the assessee against the order of the ld. CIT(A), Bhubaneswar-2, in appeal No.CIT(A), Bhubanesar-2/10570/2018- 19, dated 17/11/2025 for the assessment year 2019-2020. 2. Shri P.R.Mohanty, ld. AR appeared on behalf of the assessee and Shri Ashis Chandra Mohanty, ld. CIT-DR appeared on behalf of the revenue.

3.

It was submitted by the ld. AR that there are four additions have been challenged in the appeal of the assessee. The first one being the disallowance u/s.40A(3) of the Act to an extent of Rs.20 lakhs. It was the submission that the assessee has made payment by cheque also in regard to this disallowance. It was submission that these were payments for fuel in 2 respect of the transportation expenses. It was fairly agreed by the ld. AR that the assessee has not produced all the evidence before the AO. It was the prayer that the issue may be restored to the file of ld.AO for readjudication.

4.

Second issue is in regard to an amount of Rs.10 lakhs received from the HUF of the assessee. It was submitted that the assessee in regard to this disallowance also the assessee could not produce evidences to substantiate the same before the AO. It was the prayer that this issue may also be restored to the file of ld. AO for readjudication.

5.

The third issue is in regard to Rs.4,68,387/- representing the internal movement of the said amount from one branch to another and have sufficient cash balance in his hands. It was submitted by the ld. AR that evidences in regard to this disallowance had also been produced before the AO and in the remand proceedings the AO had also accepted the same. However, the addition has been confirmed by the ld. CIT(A). It was the prayer that the if the issues in this appeal are restored to the file of ld.AO, the assessee would be able to substantiate its claim. It was the further submission that during the course of search, 738.72 gms. of gold was found. It was the submission that CBDT Circular No.1916 dated 11.05.1994 has not been considered and for this purpose the issues may be restored to the file of AO for readjudication, insofar as the addition remain is only Rs.1,57,628/-

3

6.

In reply, ld.CIT-DR vehemently opposed for setting aside the matter to the file of ld. AO. It was the submission that adequate opportunity had already been granted to the assessee.

7.

We have considered the rival submissions. A perusal of the assessment order also clearly shows that the assessee has not produced all the evidences required to substantiate his claim before the AO. On the basis of substantial evidences produced in the remand proceedings, the ld. CIT(A) has given substantial relief to the assessee. However, the evidences produced by the assessee to substantiate the claim in regard to the balance addition sustained, in the interest of justice, both issues are restored to the file of AO for readjudication after granting the assessee adequate opportunity of being heard.

8.

In the result, appeal of the assessee is partly allowed for statistical purposes. Order dictated and pronounced in the open court on 07/10/2026. GOPALAN GURUSAMY GEORGE MATHAN लेखा सदस्य/ACCOUNTANT MEMBER न्यानयक सदस्य/JUDICIAL MEMBER दिनाांक Dated 07/10/2026 RS आदेशकीप्रनतललपपअग्रेपर्त/Copy of the Order forwarded to : 1. अपीलार्थी/ The Appellant- प्रत्यर्थी/ The Respondent- 2. आयकरआयुक्त(अपील) / The CIT(A), 3. 4. आयकरआयुक्त/ CIT 5. ववभागीयप्रतततनधि, आयकरअपीलीयअधिकरण, कटक / DR, ITAT, Cuttack 6. गार्डफाईल / Guard file.

4 सत्यावपतप्रतत ////

आदेशािुसार/ BY ORDER,

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