ACIT, CENTRAL CIRCLE-2, PATNA vs. M/S GAURAV RICE & FOOD PROCESSING PVT LTD, PATNA

PDF · subscribers
ITA 16/PAT/2021Status: HeardITAT Patna09 December 2025AY 2016-177 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the decision of the CIT(A) and dismissed the Revenue's appeal. The Tribunal noted that the CIT(A) had deleted the addition of ₹87,65,840 on the grounds that the assessee had furnished evidence to the AO, and the AO had failed to conduct any independent inquiry. Regarding the addition of ₹1,25,00,000, the CIT(A) had noted that ₹18,88,000 was received from Shri Jawahar Lal for share allotment and ₹1,06,12,000 was against the sale of rice/broken rice, with supporting documents provided by the assessee. The CIT(A) found that the AO had ignored the assessee's submissions and failed to conduct independent inquiries. The Tribunal found the CIT(A)'s order to be well-reasoned and speaking, requiring no interference. Therefore, the appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue has appealed against the order of the Commissioner of Income-tax (Appeals) [CIT(A)] dated January 29, 2021, for Assessment Year 2016-17. The appeal concerns the deletion of additions totaling ₹87,65,840, including ₹18,50,000, made under Section 68 of the Income Tax Act, 1961, as unexplained cash credits by the Assessing Officer (AO). A search under Section 132 was conducted on the assessee on August 11, 2017, following information about intercepted cash. A notice under Section 153A was issued, and the assessee filed a return of income. The AO analyzed documents and made additions for subscription received as unexplained cash credit and for share capital issued, deeming them unexplained cash credits due to failure to prove identity, creditworthiness, and genuineness of transactions.

What were the issues?

1. Whether the addition of ₹87,65,840, including ₹18,50,000, made under Section 68 of the Income Tax Act, 1961, on account of unexplained cash credit is justified? Assessee's Contentions: The assessee argued that the AO did not rely on any material found or seized during the search but based the addition on post-search inquiries by the ADIT. The assessee contended that it discharged its onus under Section 68 by providing documentary evidence, which the AO failed to controvert or disprove through independent inquiry. The assessee also submitted that ₹18,50,000 was refunded through banking channels and ₹48,25,000 was appropriated towards share capital held in staff, with supporting lists and appropriation charts, which the AO ignored. The assessee relied on case laws such as Jai Steel (India) v. Asstt. CIT. Revenue's Contentions: The Revenue's appeal challenges the deletion of the additions made by the AO. The specific arguments of the Revenue are not detailed in the provided text, but the appeal is against the CIT(A)'s decision to delete the additions.

Which sections of the Income-tax Act were involved?

Section 68,Section 132,Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA

Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM

For Appellant: Shri A.K. Rastogi
For Respondent: Shri Md. AH Chowdhary, DR
Hearing: 24.11.2025Pronounced: 09.12.2025

This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Patna-3(hereinafter referred to as the “Ld. CIT(A)”] dated 29.01.2021 for the AY 2016-17.

2.

The issue raised in ground nos.1 and 2 are against the deletion of addition of ₹87,65,840/- including Rs. 18,50,000/- made under Section 68 of the Act in respect of unexplained cash credit by the learned Assessing Officer.

3.

The facts in brief are that a search action under Section 132 of the Act was conducted on the assessee on 11.08.2017, at the residential office and factory premises of the assessee after an information was

4.

In the appellate proceedings, the learned CIT (A) deleted the addition by observing and holding as under: - “3.1 Finding and decision: I have gone through the assessment order & written submission of the appellant. In the present year under consideration there are two issues first with regard addition of Rs. 87,65,840/- on account of unexplained cash credit under section 68 & secondly addition of Rs. 1,25,00,000/- in respect of unexplained cash credit under section 68 of the Income tax Act.

The undisputed fact is that a search and seizure operations u/s 132(1) of the Income Tax Act, 1961 was conducted on 11.08.2017 in Gaurav Rice Mill group cases of Patna. The appellant Sunil Kumar is related to Gaurav Rice mill group and also subjected to search. Apparently as can be seen from the assessment order the AD has not referred to any material either found or seized during the course of search based on which addition was made. However, the AO do referred to post search enquiry done by the

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 09.12.2025.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →