PALLAB GUPTA,KOLKATA vs. D.C.I.T., CC-4(4), KOLKATA

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ITA 534/KOL/2026Status: DisposedITAT Kolkata07 October 2026AY 2023-20246 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 9,00,000/- made by the AO and confirmed by the CIT(A) under Section 68 of the Income Tax Act, 1961, was not tenable. The Tribunal considered the written submissions and documents filed by the assessee before the lower authorities, including the audit financial statement, balance sheet, tax audit report, and the return of income for the immediately previous year (AY 2022-23) which showed closing cash in hand. The Tribunal noted that the assessee had consistently returned income of over Rs. 1 crore for the last three years and for AY 2024-25. Crucially, the Tribunal observed that the ledger copy of the capital account reflecting the introduction of Rs. 9,00,000/- in cash was provided during assessment proceedings, and these transactions were part of the regular books of accounts. The daily cash flow table also supported the introduction of funds. Therefore, finding substance in the assessee's submissions and documents, the Tribunal deleted the addition. The appeal of the assessee was allowed.

What were the facts?

The assessee, Pallab Gupta, an individual, filed a return of income for Assessment Year 2023-24 declaring a total income of Rs. 1,25,56,560/-. The Assessing Officer (AO) selected the case for scrutiny, examining a cash deposit of Rs. 9,00,000/- to the business bank account and Rs. 16,49,060/- incurred as personal expenses in the initial stage of business. Despite explanations, the AO added both amounts to the assessee's income, assessing the total income at Rs. 1,51,05,620/-. The assessee appealed to the CIT(A), who partly allowed the appeal by deleting the addition of Rs. 16,49,060/- but confirming the addition of Rs. 9,00,000/-. The assessee has now filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of Rs. 9,00,000/- made by the AO and confirmed by the CIT(A) under Section 68 of the Income Tax Act, 1961, is justified, considering the documents and explanations provided by the assessee. Assessee's contention: The assessee argued that both lower authorities erred in confirming the addition despite the submission of all relevant documents, including cash flow statements and government documents, during assessment and appellate proceedings. The assessee contended that the AO and CIT(A) wrongly held that the assessee failed to furnish the ledger copy and cash flow statement, and that the addition is unjustified and liable for deletion. Revenue's contention: The Senior Departmental Representative (Sr. DR) supported the impugned order.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No 534 /KOL/2026 Assessment Year- 2023-24 Pallab Gupta.......................................................................................................Appellant P 11 Sector A, Gita Villa Metro Politon, Co Op Housing. [PAN No. ADXPG9669D]

Vs. Deputy Commissioner of Income Tax.........................,..……………....……….Respondent Central Circle- 4(4), Kolkata, West Bengal- 700107 Appearances by: Sanjay Chatterjee, AR, appeared on behalf of the Appellant. Praveen Das Chowdhury, (Sr. D.R), appeared on behalf of the Respondent. Date of concluding the hearing: August 20, 2026 Date of pronouncing the order: October 07 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 09.12.2025 of the Office Of the National Faceless Appeal Centre (NFAC), Delhi passed under Section 143(3) of the Assessment Year 2023-24 of the Income- Tax Act, 1961 (hereinafter referred to as “the Act”). 2. The brief facts of the case of the assessee is that assessee is an individual filed return of income declaring total income of Rs. 1,25,56,560/-. The case of the assessee was selected for scrutiny in which two issues came up for examination, cash deposit of Rs. 9,00,000/- to the bank account of business and Rs. 16,49,060/- incurred as expense by the assessee in personal capacity in

ITA No.534/Kol/2026 the initial stage of business. Notice u/s 142(1) of the Act as well as the show cause notices were sent, in response to the same explanation has been filed by the assessee but Assessing Officers did not accept the explanation and assessed the total income at Rs. 1,51,05,620/- by adding Rs.9,00,000/- and 16,49,060/-. Aggrieved by the said order assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been partly allowed as the CIT(A) has deleted the addition of Rs. 16,49,060/- but confirm the addition of Rs. 9,00,000/--. Being aggrieved by and dissatisfied the assessee preferred appeal before us. 3. The Ld. AR challenges the very impugned order by submitting that both the lower authorities have erred in confirming the addition ignoring the fact that assessee has filed all the relevant documents in course of assessment proceeding as well as appellate proceeding being evidenced from the index of appeal of paper book at page no. 46. The Ld. AR further submits that Assessing Officers and CIT(A) did not consider the government documents i.e. the cash flow which was filed during the assessment proceedings and wrongly held that assessee has failed to furnish the ledger copy and cash flow statement. The prayer of the AR is that addition made by the AO confirmed by the CIT(A) as unjustified and liable to be deleted. Contrary to that Ld. DR supports the impugned order. 4. Upon hearing the submission of the counsel of the respective parties and on perusal of the facts of the case we find that assessee is an individual engaged in the business of running a petrol pump under a dealership agreement with the Indian Oil Corporation. Apart from the dealership business

ITA No.534/Kol/2026 the assessee is also engaged in providing various business auxiliary services and also organize theatres under the name of Sri Chaitanya Opera. The sole addition u/s 68 of the Act amounting to Rs. 9,00,000 representing cash deposits to bank. We find that assessee has filed written submission before the lower authorities in which he filed the details of payments of firm which is also evidenced from the document filed by the assessee such as audit financial statement, balance-sheet and tax audit report. The Ld. AR has also filed the return of income of the assessee in the immediately previous year i.e. A.Y. 2022-23 that goes to establish the closing cash in hand reported in the Scheduled-AL was Rs. 96,600/-. The income returned was Rs. 1,08,32,310/-. It is further pertinent to mention here that assessee has filed return of income for more than Rs. 1 crore for last three years and for the current A.Y of 2024-25 as per the tax audit return file the taxable income as more than Rs. 1 Crore. We find that during the assessment proceedings the ledger copy of the capital account was provided and summarized transaction details were also given the assessee has provided the ledger copy of the capital account reflecting introduction of Rs. 9,00,000/- in cash. Entire transactions are the part of regular books of accounts. The daily table of the cash flow filed by the assessee during the assessment proceedings as reproduced herein below:- Date Payment from Receipt in Running Remarks Firm Firm Balance 03-Apr-22 5,00,000/- 1,00,000/- 1,00,000/- (Cr) 24-Apr-22 5,00,000/- 4,00,000/- 21-My-22 5,00,000/- 9,00,000/- 28-Jun-22 5,00,000/- 14,00,000/-

ITA No.534/Kol/2026 27-Jul-22 5,00,000/- 19,00,000/- 28-Aug-22 5,00,000/- 24,00,000/- 23-Sep-22 5,00,000/- 29,00,000/- 28-Oct-22 5,00,000/- 34,00,000/- 26-Nov-22 5,00,000/- 39,00,000/- 17-Dec-22 5,00,000/- 8,00,000/- 31,00,000/- 30-Dec-22 5,00,000/- 36,00,000/- 24-Jan-23 5,00,000/- 41,00,000/- 21-Feb-23 5,00,000/- 46,00,000/- 26-Mar-23 5,00,000/- 60,00,000/- 9,00,000/-

4.1. In view of the discussions made above and considering the submission as well as documents filed by the assessee, we find substance that the addition made by the AO confirmed by the CIT(A) u/s 68 is not at all tenable under law, accordingly addition deleted. Accordingly, the appeal of the assessee is allowed. Kolkata, the 7th October, 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member DC Dated: 07. 10.2026.

ITA No.534/Kol/2026

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order

ITA No.534/Kol/2026

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