MAMATA PANDA,KENDRAPARA vs. ITO WARD KENDRAPARA, KENDRAPARA

1 ITA No.785 /CTC/2026 Assessment Year: 2017-18

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL MEMBER AND G. GURUSAMY, ACCOUNTANT MEMBER ITA No.785 /CTC/2026 Assessment Year: 2017-18 Mamata Panda, Bilabalarampur, Vs. ITO, Ward, Kendrapara Kantia, Karilopatana, Kendrapara. PAN/GIR No.DGZPP 6262 B (Appellant) .. ( Respondent) Assessee by : Shri P.R.Mohanty, Adv Revenue by : Shri Vijaya Singh ld Sr DR Date of Hearing : 06/10/2026 Date of Pronouncement : 06/10/2026

O R D E R Per Bench This is an appeal filed by the assessee against the order of the ld Addl/JCIT(A)- 1, Chandigarh dated 18.3.2026 in Appeal No.CIT(A),Cuttac/10567/2019-20 for the assessment year 2017-18. 2. Shri P.R.Mohanty, ld AR appeared for the assessee and Shri Vijaya Singh, ld Sr. DR appeared for the revenue. 3. It was submitted by ld AR that the assessee is an individual carries on business of milk & milk products on wholesale basis. The assessee purchases milk from Pragati Milk Products pvt Ltd., Jagatpur and sell the same. It was the submission that the turnover of the assaewssee was Rs.4,11,17,545/-. It was the submission that the assessee had made purchase of milk at Rs.12,43,000/- in cash from Pragati Milk

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Products Pvt ltd., It was the submission that the Assessing Officer invoked the provisions of section 40A(3) of the Act and had disallowed cash payment even though Pragati Milk Products Pvt Ltd., had confirmed the transaction. It was the submission that there is no doubt in regard to genuineness of transaction and it is only because cash was paid, disallowance has been made. It was the submission that the assessee only purchases and sale diary products from Pragati Milk Products Pvt Ltd. It was the submission that under section 40A(3), the assessee should be granted exemption in respect of the purchases. 4. In reply, ld Sr DR submitted that the dairy products should not be restricted to company insofar as the purchases are from the cattle owners. It was the submission that the assessee has made purchases from the Company and the assessee has substantial purchases of more than Rs.3 crores from the said company and the assessee has not given any justifiable reason in cash payments. It was fairly submitted by ld Sr DR that genuineness of the purchase is not in dispute. 5. We have considered the rival submissions. A perusal of the facts in present case clearly shows that the total income disclosed by the assessee during the year is Rs.3,83,930/-. The disallowance as made u/s.40A(3) of the Act is Rs.12,43,000/-. The assessee has made purchases of milk products. Milk products are the products that can get damage being perishable goods. No producer will sell the products on credit. There is confirmation from Pragati Milk Products Pvt Ltd., that no credit has been given to the assessee. For the purposes of business of the assessee, admittedly, the assessee has made purchases in cash. This being so, the assessee has reasonable cause for the payment in cash and purchases are not disputed. The genuineness of

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the transactions is not disputed. This being so, the addition as made by the AO and confirmed by ld CIT(A) stands deleted. 6. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 06/10/2026. Sd/- Sd/- (G. GURUSAMY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack ; Dated 06/10/2026 RS Copy of the Order forwarded to : 1. The Appellant: Mamata Panda, Bilabalarampur, Kantia, Karilopatana, Kendrapara.