AMAR KUMAR AGARWAL,KOLKATA vs. D.C.I.T., CC - 4(3),, KOLKATA

Per Rajesh Kumar, AM:

These Cross appeals of assessee and of the Revenue are against the orders of the Commissioner of Income-tax (Appeals) Kolkata-
27,(hereinafter referred to as the “Ld. CIT(A)”] for the AYs 2017-18 to 2021-22. Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

premises of the assessee including the group concerns of the assessee. The notice u/s 153A of the Act was issued on 08.11.2021, and the assessee in compliance filed the return of income on 21.02.222, disclosing the total income of ₹4,22,940/-. The assessee filed the original return of income on 02.02.2018, declaring the same income. Pertinent to state that the assessee offered the profits u/s 44AD of the Act at the rate of 8% of the of the total turnover. The ld.
AO during the course of assessment proceedings found that the assessee has included profit of ₹1,41,16,660/- from battery sales in the cash flow statement as unaccounted cash received. The ld. AO upon examination of the impounded documents marked as AWF/01
to AWF/18 and AGH/14 and AGR/03 found that unaccounted receipts aggregate to ₹17,64,58,253/-. According to the ld. AO, the assessee claimed the unaccounted cash receipts to be derived from cash sales and accordingly, the cash profit at the rate of 8% was offered amounting to ₹1,41,15,660/- by the assessee by including the same in the cash flow. The ld. AO rejected the theory of the assessee and accordingly, added the entire unaccounted cash receipts amounting to ₹17,64,58,253/- as undisclosed/unaccounted sales as unexplained money u/s 69A of the Act and added to the income of the assessee for the years commencing from 2017-18 to 2021-22 as per the details below:-
A.Y.
Income chargeable u/s 69A of the Act
Income now shown u/s 69A in the ITR on this score is excluded
Unexplained money chargeable to tax u/s 69A of the Act, now further added back to the total income of the assessee
2017-18
₹9,250
₹740
₹8510
2018-19
₹98,32,796
₹7,86,812
₹90,45,984
2019-20
₹7,34,07,220/-
₹58,72,578/-
₹6,75,34,642/-
2020-21
₹8,83,29,212/-
₹70,66,337/-
₹8,12,62,875/-
2021-22
₹48,79,775/-
₹3,90,382/- u/s 44AD
₹44,89,393/-
Total
₹17,64,58,253/-
₹1,41,16,849/-
₹16,27,31,786/-
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

unaccounted sales in battery business, he should cross verify the said claim of the assessee by independent source of verification. However, without doing the same, the AO had opined that these cash receipts are the unexplained money of the assessee as per section 69A of the Act and opined that the assessee had failed to explain the nature & sources of such receipts. It is apposite to mention that total unaccounted sales cannot be treated as undisclosed income in the hands of the assessee. It is a common knowledge that if there are sales, there should be corresponding purchases also. Hence, it would be prudent to determine undisclosed income of the assessee by applying a reasonable profit margin to tax in the hands of the assessee. Only the profit element embedded in the undisclosed cash receipts is liable to be treated as income of the assessee for the purpose of taxation
8.2.5.Reliance may be placed on the judgement of Hon'ble ITAT, Mumbai in the case of DCIT 4(3)(1), Mumbai vs M/s.OPEL Paper Mills Limited, Mumbai, ITA No.
1064/Mum/2019, (Assessment Year 2009-10)on 26 July, 2022, where the Hon'ble
Tribunal had held as under:-
"On appeal before the learned CIT A relief of Rs. 83,60,09,587/ was granted and the balance disallowance of Rs. 112,959,517/- was confirmed. The learned CIT appeal noted that the major items of the expenditure is a purchase of paper from the sister company specialty papers Ltd amounting to Rs 888.827.942/- These transactions were doubted by the leamed assessing officer during the remand proceedings as the purchases aro transacted only through the journal entries and there are no bank transaction as well as there is no transportation receipts connected with these purchases. The claim of the assessee is that these are parties, who are separate and distinct and all of them have duly acknowledged these transactions, which are entered in the books of accounts and in their financial statements. It was also noted that assessee has purchased raw material from another sister concem global paper Impex
Ltd amounting to Rs 1 48,48,200/- out of the total raw material consumed of Rs.
36,240,709. The manufacturing expenses are claimed of only Rs. 6,410,223 out of which a sum of Rs. 4,116,000/- is paid to a related party global paper Impex Ltd at the same address. Major amount of Rs. 15,97,805/- was also paid to a related party without any address. On examination of the documents during the appellate proceedings, the learned CIT - A noted that the purchases and sales are made with the related parties are in the nature of circular transactions made repeatedly. The transactions are not settled through banking channel but are rooted through journal entries. The AO has further stated that there is no evidence of transportation of the goods from buyer to the seller. Therefore, following the decision of the honourableGujarat High Court in CIT versus Smit P Sheth 356 ITR 451 he sustained the disallowance in court to 12.5% of bogus purchases he noted that the total purchases of Rs. 888,827,942/- is made from specialty papers private limited and Rs
14,848,200/- is from another sister concern global paper Impex Ltd amounting in all to Rs. 903,676,142/- and 12.5% of the same comes to Rs. 112,959,517/-. He sustained this addition. He also considered the gross profit ratio of the assessee and stated that it is shown too less by the assessee and therefore it should be ignored. He noted that gross profit ratio of the assessee over a period of 3 years ranges from 0.14% to 1.07%
and gross profit ratio in manufacturing segment is 6.38% to 104.67%. On careful reading of the order of the learned CITA, we do not find any infirmity in the reasoning given for sustaining the disallowance of Rs. 112,959,517/-. Further it is a case of the circular trading entered into by the assessee along with its related parties where there
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

is no evidence whether the rates charged by the parties in the circular rate were at market rate and further when the goods are sold without any physical movement of the goods, the sales and the purchases are not at all reliable. The transactions are also rooted through journal entries. The quantity of goods involved in the circular trading is also not ascertained that how much is involved in circular trading and what is the actual sale and purchase of the assessee. The assessee has purchased 2,44,29,155 KG and sold the same quantity and there is no opening stock and closing stock during the year. Therefore, the explanation of the assessee becomes unreliable with respect to the gross profit shown by the assessee. In view of this, we do not find any infirmity in the order of the learned CIT A in upholding disallowance of expenditure of Rs.
112,959,517/-estimating income at the rate of 12.5% of such bogus purchases."
8.2.6. Further, reliance is also placed in the case of 'M/S. Alokik Steels Pvt. Ltd Village vs Principal Commissioner Of Income on 3 March, 2021, ITA No. 861/JP/2019', the Hon'ble ITAT, Jaipur had held as under:-
"Further, there is no dispute regarding the quantum of unaccounted turnover of Rs
1,77,95,859. The assessee has declared the same in its return of income and which has been accepted by the AO as well as by Ld. Pr. CIT as there is neither any material on record nor any adverse finding recorded by Ld. Pr. CIT disputing the same.
Therefore, as far as the quantum of unaccounted turnover of Rs 1,77,95,859/- is concerned, the order so passed by the AO cannot be held as erroneous and prejudicial to the interest of Revenue. Therefore, the limited issue that remains to be examined is the rate of profit so declared by the assessee on such unaccounted turnover which has not examined by the AO which renders the assessment order as erroneous and prejudicial to the interest of the Revenue and therefore, to this limited extent, the directions of the Ld. Pr. CIT are sustained and the matter is set-aside to the file of the AO to examine the rate of gross profit so declared by the assessee on such unaccounted turnover and decide as per law.
In the result, appeal of the assessee is partly allowed in light of aforesaid directions."
8.2.7.In the case of 'Commissioner of Income Tax v. President Industries, reported in (2002) 258 ITR 654' the Hon'ble High Court of Gujrat had taken a similar view. In the said case, during the course of survey conducted on the premises of the assessee, from the excise records found, an inference was drawn by the Assessing Officer that sales accounting to Rs. 29 lakhs and odd had not been disclosed in the books of account. The Assessing Officer made addition of the entire sum of the said undisclosed sales as income of the assessee for the assessment year 1994-95. Such addition was confirmed by the Commissioner (Appeals). The Tribunal, however, held that "the entire sales could not have been added as income of the assessee, but only to the extent the estimated profits embedded in the sales for which the net profit rate was adopted entailing addition of income on the suppressed amount of sales." Such decision was carried in appeal by the revenue before the High Court. The High Court rejected the appeal, observing that "unless there is a finding to the effect that investment by way of incurring the cost in acquiring the goods which have been sold has been made by the assessee and that has also not been disclosed, such addition could not be sustained."
8.2.8. Further I rely on the decision in the case of 'Commissioner of Income Tax v.
Samir Synthetics Mill, reported in (2010) 326 ITR 410', wherein the Hon'ble Gujrat
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

High Court confirmed the view of the Tribunal accepting only the profit of unaccounted sale for the 8.2.9. In view of the aforesaid judicial pronouncements as well as the discussions held above, it is the profit should be brought to tax not the entire cash receipts, therefore, I estimate the profit in the undisclosed sales/receipts of the assessee from the sale of batteries @12.5% on the cash turnover of the assessee of Rs.9250/- for the AY 2017-
18, which comes to Rs.1156/-. The assessee had already declared income of Rs.740/- on undisclosed receipts at 8% which needs to be reduced. As a result, the addition of Rs. 416/- (Rs. 1156/-minus Rs./- 740 Rs.416/-) is upheld and Rs. 8094/- (Rs. 8510/- minus Rs. 416/-) is deleted. Therefore, these grounds raised by the assessee are partly allowed.”
4.4. After hearing the rival contentions and perusing the materials available on record, we find that the assessee was found who have received unaccounted money/ receipts which were stated to be unaccounted sales of batteries. The ld. AO made the entire addition of the receipts to the income of the assessee u/s 69Aof the Act, whereas the ld. CIT (A) directed the ld. AO to apply a GP rate at the rate of 12.5% on the total undisclosed cash turnover of ₹9,250/- and the profits thereon offered in the return of income of ₹ 740/-. The ld. CIT (A) noted that since the assessee already declared ₹740 on undisclosed receipts at the rate of 8% and therefore, the same needed to be reduced from the undisclosed sales. Thereafter the ld.
CIT (A) directed the AO to make a net addition of ₹416/- @
12.50%thereby partly allowing the appeal of the assessee. In our opinion, the order passed by the ld. CIT (A) is a very reasoned and speaking order while estimating the income on the unaccounted receipts which are stated to be received from cash sales effected outside the books of accounts in respect of batteries by observing that the addition cannot be added u/s 69A of the Act. The section 69A deals with the unexplained money. It states that where the assessee is found to be owner of any money, bullion, jewellery or other valuable articles and such money bullion, jewellery or valuable article is not recorded in the books of account if any maintained by Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

him for any source of income and the assessee offered no explanation as to the nature and source of acquisition of the money, bullion, jewellery and other valuation articles or failed explain of explanation offered by him is not in the opinion of the AO satisfactory then the money or the value of the bullion, jewellery or other valuable article may be deemed to be income of the assessee in the financial year. But the facts before us are different as the assessee was not found to be owner of any money, bullion, jewellery and other valuation articles but some incriminating documents were found from the assessee which revealed that assessee has made some sales from sale of batteries which was unrecorded in the books.
Had there been any seizure of any money, bullion, jewellery and other valuation articles, the action of the AO in invoking section 69A would have been correct. Therefore, we are in agreement with the conclusion drawn by the ld. CIT (A) on this issue that income has to be estimated on the undisclosed sales and not the entire undisclosed sales could be added to the income of the assessee however, we earnestly of the opinion that the GP rate of 12.50% is excessive and is on higher side and it would be reasonable if the same is reduced to 10% on the unaccounted sales/ receipts. The ground no.1 is partly allowed.
5. The issue raised in ground no.2 is against the order of ld. CIT (A) not allowing/ considering the profits derived from undisclosed sales of batteries as application in the cash flow statement while calculating the peak credit by the ld. CIT (A) and accordingly, the ld. CIT (A) should be directed to amend or change that accordingly.
5.1. We have heard the rival contentions and perused the materials on records including the appellate order. We find that the , though we have partly allowed the ground no. 1 by modifying the appellate
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

order and directing the AO to apply GP rate of 10%, but the profit estimated @ 10% cannot be allowed to be taken into account while calculating the peak credit. We do not find any merit or substance in the arguments of the ld. counsel and consequently the ground no. 2
is dismissed.
6. The issue raised in ground no.3 in is against the order of ld. CIT (A) not directing the AO to treat the profit from sale of batteries as business receipt and consequently not subjecting the same to tax u/s 115BBE of the Act.
6.1. The issue raised in this ground is consequential to ground no. 1
wherein is we have already modified the order of learned CIT(A) on the issue of income on the recorded batteries sales by directing the AO to assess the income @ 10%. Since we have accepted that the fact that the only business the assessee had is trading in batteries.
The learned CIT(A) has also accepted the unrecorded batteries sale and directed the AO to apply 12.50% GP rate to estimate and assess the income which we have reduced to 10%. Since this is undisputed that the income estimated by applying GP s from business of sale of batteries, the normal tax rate has to be applied and not the special rate as provided u/s 115BBE of the Act, Consequently the ground no.
3 is allowed.
7. The appeal of the assessee is partly allowed.
A.Y. 2018-19 to 2020-21
IT(SS)A Nos. 87 to 89 (Assessee’s appeal)
8. The issue raised in ground nos. 1, 2 & 3 in IT(SS)A Nos. 87 to 89 &
2007/KOL/2025 are similar to one as decided by us in ground nos.1,2 & 3 in ITA No. 86/KOL/2025 for A.Y. 2017-18. Accordingly,
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

our decision would, mutatis mutandis, apply to these appeals of assessee in ITA Nos. 87 to 89/KOL/2025, 2007/KOL/2025 as well. Hence, the ground Nos 1, 2 & 3 are partly allowed.
For A.Y. 2021-22
9. The issue raised in ground no. 4 to 10 in ITA No. 2007/KOL/2025 for A.Y. 2021-22 in this appeal is against the confirmation of addition of ₹51,57,830/- by the ld. CIT (A) as made by the ld. AO on account of undisclosed jewellery.
9.1. The facts in brief are that during the course of search jewellery ornaments / silver items were found in the possession of the assessee and his family which were valued by the departmental valuation officer. The ld. AO noted that the purchases of jewellery for aggregating sum of ₹51,57,830/- as per the entries in the seized documents Mark AGR-2 have been sourced from the outside books and so, unexplained cash receipt from unverifiable sources.
Therefore, it falls within the ambit of the Section 69B of the Act.
Accordingly, the same was added as unexplained investment u/s 69B of the Act read with section 155BBE of the Act in the hands of the assessee.
9.2. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO on this issue by observing and holding as under:-
“9.2.1. I have perused the assessment order as well as submission of the assessee and observed that during the search and seizure operation in the case of assessee, jewellery ornaments and silver items were found in possession of Smt. Aditi Agarwal
(wife of the assessee). These jewellery and silver items were valued by the Department Valuer as under:
Name
Valuation made/ Inventory
Weight
Jewellery found
₹22,54,552/-
367.760gm
Jewellery seized
-
-
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

Silver
₹1,40,251/-

Silver Seized
--

Further, in the course of assessment proceedings, the AO noticed the entries (in the seized documents AGR-02) related with the purchase of jewellery for aggregating sum of Rs. 51,57,830/- and opined thatthese purchases were sourced from out of books/unexplained cash receipts and treated it as unexplained investment u/s 698 of the Act in the assessment order dated 30.03.2022
9.2.2. However, the assessee had contested in its submission that the jewelry was purchased by the appellant and his wife from earlier earnings. Part of the jewelry is "streedhan" belonging to the appellant's wife, so it shouldn't be added to the appellant's income. The assessee also pointed on the fact that the value of the jewelry should reflect earlier years, not the current valuation. Further, the assessee also claimed that the total weight of the jewelry, 367.760 grams, is below the eligibility limit set by CBDT instruction no 1916, so the addition is unjustified. The appellant claimed that the jewelry is owned by his wife Abanti Agarwal, received during their marriage. Additionally, the jewelry's weight is under the limit for family members, meaning it should be treated as explained.
9.2.3 The AO in the assessment order pointed on the fact that the assessee and his wife never disclosed any jewellery acquired in any manner or from any sources whatsoever in their respective ITRs, not to speak of filling of WTRs by them. In such circumstances, CBDT's said instruction cannot come to rescue. Therefore, it can be noted that the submission field by the assessee could not explain the source of the jewellery purchase and hence, it can be added as undisclosed income to the total income of the assessee.
9.2.4. Reliance can be placed on "CIT v. RatanlalVyaparilal Jain (2011) 339 ITR 351
(Guj HC)" where The Gujarat High Court held that "jewelry within the limits prescribed by the CBDT Circular (500g for married women, 250 g for unmarried women, 100 g for men) cannot be seized, even if not fully explained. It can only be added as undisclosed income if the taxpayer fails to prove its source." In the absence of assessee's explanation of the source the AO rightly added Rs. 51,57,830/- the value of Gold and Jewellery as undisclosed investment u/s 69B of the Act. Therefore, these grounds of appeal raised by the assessee are dismissed.
9.3. After hearing the rival contentions and perusing the materials available on record, we find that the jewellery found during the course of search is within the permissible limit as allowed to be retained by any assessee and his family members in terms of CBDT
Instruction No.1916 dated 11/05/2014. We also note that jewellery seized was only ₹367.760 grams of gold and 2780 grams silver which is explained being Streedhan and family heirloom and therefore, the addition made by the ld. AO and sustained by the ld. CIT (A) is Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

wrong and cannot be sustained. The case of the assessee find support from the decisions:-
1. Ashok Chaddha – 202 Taxman 395 (Del)
2. Suresh Bansal, ITA 833/Del/2017 dt 0.05.2018
3. Tara Devi Goenka-122 ITR (T) 14 (Kol AT)
9.4. Consequently, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. The ground no. 4 to 10 are allowed.
10. The issue raised in ground no.11 in ITA No. 2007/KOL/2025 for A.Y.
2021-22, is against the confirmation of addition of ₹17,10,340/- by the ld. CIT (A) as made by the ld. AO towards cash found at the residence of the appellant u/s 69 read with section 115BBE of the Act.
10.1. The facts in brief are that the ld. AO noted that during the assessment proceedings, the assessee did not maintain any cash book of account. Further, the ld. AO noted that no entries of cash payment to the assessee by any group concerns is found on the date of search or immediately prior to this and also the return filed by the assessee from 2015-16 to 2018-19, also do not sustained the unaccounted cash. Accordingly, cash of ₹17,16,340/- was added u/s 69A of the Act as unexplained money.
10.2. The ld. CIT (A) confirmed the order of the ld. AO on this issue by observing and holding as under:-
“10.2.1. I have perused the assessment order as well as submission of the assessee and observed that during the search and seizure operation in the case of assessee, cash of Rs. 17,60,340/- was found and out of this, amount of Rs. 15,00,000/- has been seized. In the course of assessment proceeding, it was explained by the assessee that these cash pertained to the group concerns/entity/companies lying with the assessee in the capacity of director/key person of the Agarwal group. However, the AO
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

opined that no entry of cash payment to the assessee by group concerns is found in the cash book of the group concerns and therefore added the entire cash of Rs.
17,60,340/- as unexplained money u/s 69A of the Act to the total income of the assessee.
10.2.2. The assessee contested that the cash of Rs.17,60,340/- found at residence which belonged to the group companies and was held for custody only. The appellant had properly submitted the fact that such cash was held on behalf of group companies, however, the AO did not accept the assessee's argument. The assessee submitted the available cash balance of the group companies of Rs.2,35,00,180/-. Hence, the cash found at the premises of the assessee is duly explained. Therefore, the addition of Rs.
17,60,340/- is deleted. As a result, these grounds of appeal raised by the assessee are allowed.”
10.3. After hearing the rival contentions and perusing the materials available on record, we find that the order passed by the learned CIT(A) is very reasoned order and does not require any interference. Moreover, the assessee has failed to controvert the finding of the learned CIT(A). Accordingly, we dismiss the ground no.
11 in the assessee’s appeal.
For A.Y. 2017-18
11. The issue raised by the Revenue in ground of appeals is against the order of learned. CIT(A) deleting the addition to partly deleting the addition to the tune of Rs. 1,15,06,726/- by applying peak theory as gains the addition of Rs. 3,57,73,732/- (cash Loan Rs. 3,12,00,000/- plus Interest Rs. 45,73,732/-) made by the AO.
11.1. The facts in brief are that during the course of search, certain incriminating documents marked as AGH02, AGH04, AGH05,
AGH08, AGH10, AGH11, AGH13, AGH14, AGH15 and AGH16 were seized from the office premises at B-2/2, 2nd Floor, Gillander House,
8 N.S. Road Kolkata-1. Similarly, the documents marked as AGR-2
and AGR-3, were seized from other premises at HB-165, Salt Lake
City, Kolkata. The ld. AO noted that certain cash transactions were Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

recorded in those seized documents amounting to ₹3,12,00,000/- as cash loans received on which the interest of ₹45,73,732/- was paid which are summarized below:-
2017-18
Ajay
-
1729726
AGH-02
Das babu
2500000
48500
AGH-02
Dinesh Khaitan
23400000
171680
AGH-02
Dolan Majumdar

81411
AGH-02
RK Saraf
40,00,000
11,12,054
AGH-02
Saikat Roy

18861
AGH-02
Vishnu Poddar
1300000

AGH-02
Fufaji

1344000
AGH-13
Dipakkedia

67500
AGH-13
Total
31200000
4573732

the years. The peak credit balance for the AY 2017-18 is Rs 3.51,63,089/-. In this way, the net peak credit for the AY 2017-18 found to be Rs. 2.42,67,006/- [peak credit balance of Rs. 3,51,63,089/- less opening balance of Rs.1,08,96,083/-). Hence, it is quite logical to make addition of 'net peak amount for the AY 2017-18 i.e., of Rs.
2,42,67,006/-. As a result, the addition of Rs. 2,42,67,006/- is confirmed u/s 69A of the Act and rest of the addition u/s 69A of the Act of Rs.1,15,06,726/- is deleted (Rs.
3,57,73,732/- less Rs. 2,42,67,006/- Rs. 1,15,06,726/-). Hence, these grounds of appeal raised by the assessee are partly allowed.”
11.4. After hearing the rival contentions and perusing the materials available on record, we find that the documents as stated above were seized from the premises of other business entities and not from the residential premises of the assessee. We note that the documents seized by the search team were not containing the name of the assessee or bears the signature of the assessee nor were in the hand writing of the assessee. We observe from the these documents that it is not mentioned whether the amount is loan, deposit, or what. Therefore the addition made by the ld. AO u/s 69A of the Act is patently wrong and cannot be sustained as the section 69A of the Act is applicable to money, bullion, jewellery or other valuable articles of which the assessee was found to be owner and such money bullion, jewellery or valuable article is not recorded in the books of account if any maintained by him for any source of income and the assessee offered no explanation as to the nature and source of acquisition of the money, bullion, jewellery and other valuation articles or failed explain of explanation offered by him is not in the opinion of the AO satisfactory then the money or the value of the bullion, jewellery or other valuable article may be deemed to be income of the assessee in the financial year. which is not the case before us.
11.5. In the present case, the documents were seized at most, in our opinion, these documents are dumb documents and the theory of the ld. CIT (A) on making the addition on the PEAK balance appears
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

to be unreasonable and unplausible. These are the dumb documents and do not fall within the purview of Section 69A of the Act. The case of the assessee find support from the following decisions:-
“1. CBI vs. V.C. Shukla (1998) taxmann.com 2155 (SC)
2. Common cause V. U.O.I 394 ITR 220 (SC)
3. PCIT Vs. UmeshIshrani (2019) 108 taxmann.com 437 (Bom)
4. K.P. Varghese V. ITO 131 ITR 597 (SC)
5. S.P. Goyal V.DCIT (2002) 82 ITD 85 (Mumbai AT)”
11.6. Moreover, the presumption as provided in Section 292C of the Act cannot be taken against the assessee as these documents were not found from the assessee but from the associate concerns and that the presumption is to be drawn in respect of impugned transactions in the hands of the person from whose possession or control the books of accounts/ documents, etc. were found. Even the presumption u/s 292C of the Act is rebuttable when the assessee proved that he has not done any such transactions even in respect of such transactions as were contained in the loose paper which were found during the course of search. This was held by the Hon'ble Delhi
CIT(A) treating the unaccounted cash receipts as unaccounted batteries sales and applying GP rate of 12.50% by overlooking the fact that there was no evidences of purchase of batteries as against
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

the addition made by the AO as unexplained money u/s 69A of the Act.
13. Since we have already upheld the findings of learned CIT(A) on this issue that unaccounted cash receipts are in facts unrecorded batteries sales but modified the direction of the learned CIT(A) by reducing the GP rate to 10%. Consequently, the grounds no 2 to 7
become infructuous and are dismissed.
For A.Ys. 2018-19, 2020-21, 2021-22, 2019-2020
ITA Nos. 1496 to 1499& 1440/KOL/2025 (Revenue’s appeal)
14. The issues raised in the revenue’s appeals are similar to ones as decided by us in IT No. 1496/KOL/2025 A.Y. 2017-18 in Revenue’s appeal. Accordingly, our decision would, mutatis mutandis, apply to these appeals of revenue in ITA Nos. 1497 to 1499 &
1440/KOL/2025 as well. Hence, the appeals of the revenue are dismissed.
15. In the result, the appeals of the assessee are partly allowed and appeals of the Revenue are dismissed.
Order pronounced in the open court on 18.12.2025. (PRADIP KUMAR CHOUBEY)
(RAJESH KUMAR)
(JUDICIAL MEMBER)
(ACCOUNTANT MEMBER)

Kolkata, Dated: 18.12.2025
Sudip Sarkar, Sr.PS
Amar Kumar Agarwal; A.Ys. 17-18 to 21-22

Copy of the Order forwarded to:

BY ORDER,//

Sr. Private Secretary/ Asst.