ACIT, CENTRAL CIRCLE-2, PATNA vs. M/S GAURAV RICE & FOOD PROCESSING PVT LTD, PATNA
Facts
A search action was conducted on the assessee, and the Assessing Officer made additions of ₹87,65,840/- (including ₹18,50,000/-) and ₹1,25,00,000/- under Section 68 for unexplained cash credit and share capital, treating them as non-genuine. The CIT(A) deleted both additions, finding that the assessee had discharged its onus by providing sufficient evidence which the AO failed to properly consider or contradict. The Revenue filed an appeal against the CIT(A)'s order before the ITAT.
Held
The ITAT upheld the order of the CIT(A), noting that the AO had failed to conduct independent inquiries or provide additional evidence to controvert the documentary evidence furnished by the assessee. The tribunal found that the assessee had discharged its onus under Section 68 by proving the identity, creditworthiness of investors, and genuineness of transactions. The CIT(A)'s order was deemed reasoned and speaking, warranting no interference.
Key Issues
Deletion of additions made under Section 68 for unexplained cash credit and share capital, specifically whether the assessee discharged its onus and if the AO conducted a proper inquiry; applicability of search assessment provisions (153A/C) in absence of incriminating material.
Sections Cited
Section 68, Section 132, Section 153A, Section 153C
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
Per Rajesh Kumar, AM:
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.
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.
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
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
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 09.12.2025.
Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Patna, Dated: 09.12.2025 Sudip Sarkar, Sr.PS
Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Patna
