BHAI BHAI CO.,SILIGURI vs. I.T.O., WARD - 1(2),, SILIGURI

Appearances by: Assessee represented by : Siddharth Agarwal, Advocate Department represented by : Dheeraj Kumar, Addl. CIT Date of concluding the hearing : 26.08.2025 Date of pronouncing the order : 01.09.2025 O R D E R

PER SANJAY AWASTHI, ACCOUNTANT MEMBER

1.1 In this case, the Ld. AO made an addition of Rs. 62,00,000/- u/s 68 of the Act. This amount constituted cash withdrawals made by the assessee from his own bank account over a period of time. It is a matter of record that the case was selected for scrutiny to verify substantial cash deposits Bhai Bhai Co. during the demonetisation period. The Ld. AO doubted the reasons why the assessee would need so much of cash for his business as a commission agent in fruits and made the impugned addition.

1.1 The assessee carried this matter in appeal, where also he could not succeed since the Ld. CIT(A) disbelieved his claim that all the impugned transactions were on account of business exigency and the same were duly shown as part of the turnover of this business.

1.2 Further aggrieved, the assessee is in appeal before the ITAT with the following grounds:

“1. For that the Ld. CIT(A) was not justified in confirming the addition of Rs. 62,00,000/- made by the AO on account of withdrawal from bank by wrongly invoking the provisions of sec. 68 of the Act. 2. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.”

2. Before us, the Ld. AR argued that the assessee was a commission agent for a business dealing in fruits. It was the submission that in in his line of business cash purchases and sales happened in a routine manner and hence the assessee needed cash from time to time for the purposes of his business. It was pointed out that during the said period, the assessee had withdrawn of Rs. 62,00,000/- and deposited Rs. 45,43,365/- in his bank accounts. It was the submission that the Ld. AO committed an error in merely assuming that the impugned amount was undisclosed, whereas the said amount were a result of constant withdrawals and deposits in the bank accounts. The Ld. AR argued that in the assessee’s line of trade such cash transactions would be routinely required. The Ld. AR argued that the impugned amount was very much part of the turnover of business and was duly reflected in the books of accounts. The Ld. AR pointed out that in any case, the provisions of section 68 of the Act would not be attracted since the impugned amount was a result of withdrawals from the banks.

2.1 The Ld. DR relied on the orders of authorities below.

Order pronounced on 01.09.2025