KRISHNA MOHAN ,PATNA vs. ACIT, CIRCLE-14, PATNA , PATNA

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ITA 476/PAT/2025Status: HeardITAT Patna09 December 2025AY 2017-18Bench: SHRI DUVVURU RL REDDY (Vice President), SHRI RAJESH KUMAR (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposits represented cash sales duly accounted for in the assessee's books, which were audited and not rejected by the AO. The addition was considered a double taxation of the same income and Section 69A was wrongly invoked.

What were the facts?

The assessee deposited ₹5,63,35,000 in cash during the demonetization period. The Assessing Officer treated this amount as unexplained money and added it to the assessee's income, citing a significant rise in turnover. The CIT(A) upheld this addition.

What were the issues?

Whether cash deposits during demonetization, representing accounted cash sales, can be treated as unexplained income under Section 69A, leading to double taxation. Whether additional evidence submitted under Rule 46A should have been admitted.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3)

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Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA

For Appellant: Shri Manish Rastogi, AR
For Respondent: Shri Md. AH Chowdhary, DR
Hearing: 27.11.2025Pronounced: 09.12.2025

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 03.09.2025 for the AY 2017-18.

2.

The only issue raised in the various grounds of appeal is against the confirmation of addition of ₹5,63,35,000/- by the learned CIT (A) as made by the learned AO on account of cash deposited in the bank during the demonetization period. The assessee has also challenged the order of learned CIT (A) on the ground that the admission of additional under Rule 46A without referring the same to the learned AO.

2.2. In the appellate proceedings, the learned CIT (A) also dismissed the appeal of the assessee after taking into consideration the reply/ submission of the assessee. The learned CIT (A) while upholding the order of the learned AO even held that the assessee has not furnish any documents/ proof to corroborate huge cash deposited during demonetization period.

2.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee is engaged in the business of wholesale trading of Tobacco and Chewing Begel Nuts (pan masala) under the name and style of M/s Maa Ambay Traders.

2.4. Besides, addition was made by the learned AO u/s 69A of the Act which is not correct section under which this addition could not be made. The case of the assessee is squarely covered by the decision of this Tribunal in the case of Ragini Verma Vs ACIT Circle-49(1), Kolkata in for A.Y.2017-18, order dated 13-06-2024. The operating part thereof is extracted as under: - “7. After hearing the rival contentions and perusing the material on record including the decisions cited before us, we observe that the assessee has shown to have done trading in sarees in Kolkata. We also note that all the transactions of sale and purchases were made in cash and the assessee has also maintained the books of account and recorded the transactions as regards purchase and sales therein. This is undisputed that the cash deposited in to the bank account of assessee was out of cash books and a finding to that effect has been given by the AO as well. We also note that the AO has not rejected the books of account and even sale was not doubted. Therefore the action of the AO by adding the cash sales u/s 69A amounted to double addition which is not permissible under the Act. First by way of accepting the sales and secondly by way of making further addition towards cash sales u/s 69A of theAct. The case of assessee finds support from the decision of Co-ordinate Bench in the case of ITO vs. Joydeb Kundu (supra) wherein the Hon’ble Bench has held as under:

3.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 09.12.2025.

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