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Facts
The revenue appealed against the CIT(A)'s order deleting an addition of Rs.6,52,81,621/- made by the Assessing Officer under Section 68 for cash deposits in the assessee's bank account. The assessee contended that the deposits were sourced from realization of opening debtors, current year sales, and opening cash in hand, as supported by audited books of account.
Held
The Tribunal upheld the CIT(A)'s decision, confirming that the assessee had adequately explained the source of cash deposits through audited books, which were not rejected by the AO. The cash availability was substantiated by realizations from opening debtors, current sales, and opening cash in hand. Consequently, the revenue's appeal and the assessee's cross-objection were both dismissed.
Key Issues
Whether the deletion of addition under Section 68 of the Income Tax Act for unexplained cash deposits was justified, given the assessee's explanation and audited books of account.
Sections Cited
68, 145(3)
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
निर्धाररती की ओर से /Assessee by Shri S.K.Tulsiyan, Advocate & Lata Goyal, AR रधजस्व की ओर से /Revenue by : None सुनवाई की तारीख / Date of Hearing : 11/12/2025 घोषणा की तारीख/Date of Pronouncement : 11/12/2025 आदेश / O R D E R Per Bench : The revenue has filed appeal against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 17.04.2025 for the assessment year 2018-2019. The assessee has also filed cross objection in revenue’s appeal.
At the outset, the revenue has submitted an adjournment petition, which reads as under:-
“ 3. The adjournment petition is rejected and the appeal is being disposed off.
&CO73/Kol/2025 4. It was submitted that in revenue’s appeal, the revenue has challenged the action of the ld CIT(A) in deleting the addition made by the Assessing officer of Rs.6,52,81,621/- made u/s.68 of the Act on the cash deposit in the bank account of the assessee. It was the submission that the Assessing Officer had called the assessee in regard to the cash deposited in the bank account of the assessee. It was the submission that the total cash deposit in the bank account of the assessee was Rs.9,77,97,777.69 which has been extracted by the Assessing Officer in page 7 of the order. It was the submission that this was the amount shown by the assessee in reply to the Assessing Officer. It was the submission that this amount was the realization from the current year’s sales and the realisation in the bank from the opening balance. It was the submission that the realization from the opening debtors was Rs.4,96,77,578/- and the cash realisation during the year was only Rs.4,08,07,424/-. It was the submission that the Assessing Officer initially proposed to disallow Rs.5,77,16,621/- out of cash deposit as non-genuine. Subsequently, the Assessing Officer disallowed Rs.6,52,81,621/-. It was the submission that the Assessing Officer did not mention from where this figure has been derived. It was the submission that the total receivable in the account of the assessee as on 31.3.2017 was only Rs.6,07,24,497/- as has also been recorded by the Assessing Officer in page 13 of the assessment order. It was the submission that on appeal, ld CIT(A) has deleted the addition on the ground that there was realization of opening debtors to an extent of &CO73/Kol/2025 Rs.4.96 crores, realization of the current year sales of Rs.4.08 crores and opening cash in hand of Rs.37.61 lakhs. It was the submission that the ld CIT(A) has taken on record the fact that the book of accounts of the assessee are audited and the realisation from the debtors and sales are consistently done by the assessee and the AO has not rejected the books of account of the assessee u/s.145(3)of the Act nor established that the cash was not available. Ld AR relied on the judgment of Hon’ble Bombay High Court in the case of Lavanya Land Pvt Ltd. reported in [2017] 397 ITR 246 (Bom), to hold that once the books of account are audited and not rejected by the AO, same cannot be treated as unexplained. Ld CIT (A) has relied on the judgment of Hon’ble Delhi High Court in the case of CIT vs. Smt. Jamnadevi Agrawal, 328 ITR 412 (Del) to hold that the assessee has discharged its onus and the revenue has not discharged the onus which has shifted to the revenue. It was the submission that the addition as made by the AO has been rightly deleted by ld CIT(A).
We have considered the rival submissions as also the paper book filed by the assessee. The paper book contains cash book of the assessee from pages 70 to 279. A perusal of the paper book clearly shows that the balance sheet of the assessee shows the reduction on account of realization of the opening debtors by Rs.4.96 crores. The cash book also shows adequate cash availability. The opening cash in hand also shown at Rs.37.61 lakhs. These facts as recorded by the ld CIT(A) remained substantiated. Once these facts remained substantiated, there is cash &CO73/Kol/2025 availability of Rs.9,77,97,737/-, this figure is substantiated by the books of account, this figures is an audited figure, this figure has not been disturbed by the AO. The revenue has also not been able to show how this figure of Rs.6,52,81,621/- is now being disputed and how this figure has been arrived at, this has also not evident from the assessment order. A perusal of the assessment order clearly shows that this issue has been discussed extensively but how this figure has been arrived at is not mentioned anywhere. In any case, it is clear that the assessee has cash availability for deposit in the bank account on various dates to an extent of Rs.9,77,97,737/-. As long as the assessee had this amount of cash availability for depositing in its bank account, any addition as proposed by the AO in regard to cash deposit would no more survive as the cash availability is supported by the cash book as also the audited balance sheet. Should the realization from the opening debtors be questioned, then obviously, the balance sheet would come under question. Should the realization from the current year’s sale be questioned then the stock book would come under question both have not questioned and the ld.CIT(A) has rightly drawn the conclusion that the books of accounts have not been rejected. This being so, we find no error in the order of the ld CIT(A) which calls for to interfere. Accordingly, we uphold the order of the ld.CIT(A) and dismiss the appeal of the revenue.
&CO73/Kol/2025 6. As we have already dismissed the appeal of the revenue, the cross objection does not survive for consideration. Consequently, the cross objection filed by the assessee stands dismissed. 7. In the result, appeal of the revenue and cross objection of the assessee, both are dismissed. Order dictated and pronounced in the open court on 11/12/2025.