BALJEET SINGH,KANPUR vs. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1(2)(1), KANPUR

2017-18 against impugned appellate order dated 13/08/2025 (DIN & Order No.ITBA/APL/S/250/2025- 26/1079558154(1) of Addl/ Jt. Commissioner of Income Tax (Appeals) [“ADDL/JCIT(A)” for short].

(B) The facts of the case, in brief, are that the assessee is an individual and filed his return of income on 30/10/2017 for the year under consideration declaring total income of Rs.16,24,350/-. The Assessing Officer completed the assessment and passed assessment order under section 143(3) of the I.T. Act and determined the total income of the assessee at Rs.24,24,350/- by making addition of Rs.8,00,000/- under section 69A of the Act. Being aggrieved, the assessee went in appeal before the learned CIT(A). Vide impugned appellate order dated 13/08/20225, the learned CIT(A) has dismissed the appeal of the assessee. Being further aggrieved, the assessee is in appeal before the Income Tax Appellate Tribunal.

(C) During the course of hearing before the Tribunal, the learned Counsel for the assessee submitted that the assessee made sales both in cash and in credit. The Assessing Officer found that the sales made in cash were disproportionate compared to the earlier years and concluded that the sales did not appear to be genuine. He further submitted that Assessing Officer suspected that the assessee had inflated his sales thereby generated cash. The books of account were produced, which were examined and test checked. No defects in the same were pointed out or found. The books of account are accepted. No specific transaction in either sale and purchase has been found to be bogus. No justification has been provided for quantification. He submitted that the Assessing Officer on the basis of suspicion, conjecture and surmises, has treated part of the sales to be non- genuine. In view of the above submissions, learned Counsel for the assessee submitted that the addition made by the Assessing Officer and confirmed by learned CIT(A) may be deleted. Learned Departmental Representative for Revenue supported the orders of the authorities below.

(D) Both sides have been heard. Materials on record have been perused. The assessee has deposited Rs.15,00,000/- in cash during demonetization period. The Assessing Officer disallowed Rs.8,00,000/- on ad-hoc basis and added to the income of the assessee. When the books of account are accepted, purchase is not doubted, no specific transaction either in sale or purchase has been found to be bogus and no justification has been provided for quantification, the addition made by the Assessing Officer is based only on doubt, surmises and guess work. No case has been made by Revenue to sustain this addition of Rs.8,00,000/-. In the specific facts and circumstances of the present case, the explanation tendered from assessee’s side is acceptable. Accordingly, in specific facts and circumstances of the present case, the aforesaid addition of Rs.8,00,000/- is deleted and the appeal is allowed.

(E) In the result, the appeal of the assessee stands allowed.

(Order pronounced in the open court on 28/11/2025)