KAMDHENU UDYOG PVT. LTD.,KOLKATA. vs. A.C.I.T., CIRCLE - 12(1), KOLKATA

ITA 478/KOL/2025Status: DisposedITAT Kolkata26 August 2025AY 2017-2018Bench: SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY (Judicial Member)7 pages
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What did the Tribunal hold?

The Tribunal held that the Ld. AO's rejection of the books of account under Section 145(3) was invalid as no specific defects were recorded and findings were contradictory. It further ruled that the addition of ₹1,42,72,500/- as unexplained cash credit under Section 68 was improper, following judicial precedents that discourage additions based on conjecture when sales are duly recorded in books. Grounds 2 and 3 of the assessee's appeal were allowed.

What were the facts?

Assessee, Kamdhenu Udyog Pvt. Ltd., engaged in poultry feed manufacturing, filed its return for AY 2017-18. During assessment, the AO noted a cash deposit of ₹1,42,72,500/- during the demonetization period, rejected the books of account under Section 145(3) citing manipulated cash sales and increased related party purchases, and treated the deposit as unexplained cash credit under Section 68. The Ld. CIT(A) upheld the AO's decision.

What were the issues?

Validity of rejection of books of account under Section 145(3) and addition of demonetized cash deposit as unexplained cash credit under Section 68.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 145(3),Section 68,Section 115BBE

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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

For Appellant: Shri Siddharth Agarwal, AR
For Respondent: Shri Somnath Das Biswas, DR
Hearing: 08.07.2025Pronounced: 26.08.2025

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 24.02.2025 for the AY 2017-18. 02. Ground no.1, is not pressed at the time of hearing and accordingly, the same is dismissed as not pressed.

03.

Ground no.2, is against the upholding of assessment order by the ld. CIT (A) wherein the books of accounts were rejected by the ld. AO u/s 145(3) of the Act without the necessary conditions as envisaged by the said section being satisfied. Kamdhenu Udyog Pvt. Ltd.; A.Y. 2017-18

04.

The facts in brief are that the

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