MITTAL RICE & GENERAL INDUSTRIES,AMBALA CITY vs. INCOME TAX OFFICER WARD 4 AMBALA , AMABALA CANT

ITA 1421/CHANDI/2025Status: DisposedITAT Chandigarh16 March 2026AY 2017-18Bench: SHRI RAJPAL YADAV (Vice President), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found no logic in the AO's arbitrary selection of Rs.42 lacs as sale proceeds, especially when the assessee's turnover was significantly higher and no defects were found in the books of account.

What were the facts?

During the demonetization period, Rs.72 lacs were deposited in the assessee's bank account. The AO accepted Rs.42 lacs as sale consideration and treated the rest as unexplained, adding Rs.30 lacs to the income.

What were the issues?

Whether the addition of Rs.30 lacs as unexplained credit is justified when the AO could not point out any defects in the books of account and arbitrarily selected a portion of the bank deposit as unexplained.

Which sections of the Income-tax Act were involved?

Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH

Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Ajay Jain, CA
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR
Hearing: 17.02.2026Pronounced: 16.03.2026

PER RAJPAL YADAV, VP

The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 18.09.2025 passed for assessment year 2017-18. 2. The solitary grievance of the assessee is assessee is that ld.CIT (Appeals) has erred in confirming the addition of A.Y.2017-18 2

Rs.30 lacs which was added by the AO on account of unexplained credits available in the bank account.

3.

The brief facts of the case are that assessee has filed its return of income electronically on 31.03.2017. The case of the assessee

The order continues below.

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