ITO WARD 4 (1), PATNA, PATNA vs. SHRI AMBIKA PRASAD GUPTA, PATNA

“8.2 From the above it is clear that the AO is not questioning the source of the cash deposit since he has accepted substantive cash deposited by the appellant in the bank accounts during the months of Apr 2016 to October 2016 and January 2017 to March 2017 as business receipt which makes it clear that it is admitted fact that sales is the source for cash deposits. It is also observed from the details of cash deposits as enumerated in the assessment order that the appellant has deposited total Rs. 1,95,71,000/- as cash on 57 occasions during the period 08.11.2016 to 31.12.2016 in smaller amounts and on regular interval of daily or alternate days which is also indicative of source of cash as regular business receipt. Further the AO has failed to brought any fact which could prove that the cash deposited during the demonetarization period were in banned currency. Thus, it is very evident that the conclusion drawn from the same rejecting total business receipt of the appellant during the demonetization period without finding the nature of currency and treating the same as unexplained credit u/s 68 of the Act was not genuine as no independent findings has been given by the AO. 8.3 As it is evident from the above discussion that the AO has erroneously taken the entire cash deposit during November and December 2016 not from business Ignoring the details of cash sales submitted by appellant without bringing anything contrary to the record, I am of the opinion that there is no case here for Ambika Prasad Gupta treating the entire cash deposit of Rs. 1,95,71,000/- as unexplained cash credit u/s. 68 of the Act and thereby making the addition of Rs. 1,95,71,000/- is unjustified. The addition of Rs.1,95,71,000/- is therefore deleted. Accordingly, these grounds of appeal are allowed.” 1.3 Aggrieved with this action, the Revenue is in appeal with the following grounds:

(i) The Commissioner of Income Tax (Appeal) has erred in providing relief to the assessee by deleting the addition of Rs. 1,95,71,000/- made during the demonetization period without considering the fact that the cash deposit during the demonetization period is abnormal and very high in comparison to rest of the period during the year and cash balance as on 08/11/2016 is very high in comparison to 01/04/2016. (ii) Any other grounds that may be urged at the time of hearing.

2. Before us, the Ld. DR vehemently argued that the assessee had not presented the cash book or bank book for verification and the assessee had also not furnished complete sales and purchase invoices for verification. The Ld. DR read out from various portions of the Ld. AO’s order and stated that in light of unverifiability of the source of cash deposits, the action of Ld. AO was worth upholding. The Ld. DR also pointed out that the Ld. CIT(A) has pointed out certain superficial lacunae in the Ld. AO’s action and was wrongly convinced of the assessee’s bonafides even in the absence of cash books, bank book etc. to grant relief. In conclusion, the Ld. DR argued for restoring the addition made by the Ld. AO.

2.1 The Ld. AR on the other hand, filed a paper book, which incidentally does not have a certificate as required under ITAT Rules to show whether the said documents were before any of the authorities below or not. However, he took us through the audit report and the bank certificate regarding SBNs. Incidentally, the bank certificate is dated 05.05.2023, whereas this appeal itself has been filed on 01.03.2023, Thus the said document could not have been before any of the authorities below. It was argued that the Ld. CIT(A) was convinced by the same documents and facts presented before the Ld. AO and has thereby granted relief. The Ld. AR strongly supported the finding of Ld. CIT(A).

Ambika Prasad Gupta 3. We have considered the rival submissions and also gone through the orders of authorities below. As has been pointed out earlier, a critical document being the bank certificate regarding SBN’s, was obtained after the present appeal has been filed by the department. Clearly this document was neither before the AO nor before the Ld. CIT(A). It is also evident that there has been some laxity on the part of the assessee in presenting the required documents and books of accounts that have been required by the Ld. AO (see extract from AO’s order -supra). It is felt that instead of pointing out shortcomings in the enquiry done by the Ld. AO, the Ld. CIT(A) could have called for a remand report and thereby satisfied herself whether the documents available with the assessee were enough to discharge the burden cast upon him u/s 68 of the Act. In light of the facts and circumstances and in light of the discussion above, we deem it fit to set aside the impugned order and remand this case to the file of Ld. AO for fresh assessment. It is expected that the assessee would file all necessary documents before the Ld. AO and also file the bank certificate regarding SBNs dated 05.05.2023 which has been filed before us. The Ld. AO would give adequate opportunity and pass a reasoned assessment order.

Order pronounced on 19.05.2025