Loading judgment…
Facts
The assessee's appeal concerns additions made for cash deposits and reimbursement of labour charges. The first addition of Rs.48,50,000 was treated as unexplained by the AO, while the second addition of Rs.1,60,07,807 was for labour charges paid to Shri Banti Kumar Agarwal.
Held
The Tribunal held that the cash deposit of Rs.48,50,000 was sourced from the assessee's withdrawal of Rs.1,03,00,000, thus deleting the addition. For the labour charges, it was held that since the amount was treated as income in the hands of Shri Banti Kumar Agarwal, the expenditure was genuine in the hands of the assessee, leading to the deletion of the addition.
Key Issues
Whether the cash deposit and labour charge payment were unexplained and thus liable for addition to the assessee's income.
Sections Cited
IT Act, Section 4
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
(िनधा�रण वष� / Assessment Year : 2015-2016) Sri Siba Shankar Das (Deceased) Vs DCIT, Circle-2(1), Sambalpur Through Legal Heir Smt. Ritanjali Das, Nuapada, Bhawanipatna, Kalahandi-766001 PAN No. :ABRPD 7341 K (अपीलाथ� /Appellant) .. (��थ� / Respondent) िनधा�रती की ओर से /Assessee by : Shri P.R. Mohanty, AR राज� की ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई की तारीख / Date of Hearing : 02/12/2025 घोषणा की तारीख/Date of Pronouncement : 02/12/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 02.06.2025 for the assessment year 2015-2016.
It was submitted by the ld. AR that two additions are made in the impugned appeal, first is for an amount of Rs.48,50,000/- representing two cash deposit, one of Rs.30 lakhs and another is Rs.18,50,000/- on 02.04.2014. It was the submission that the AO treated the cash deposit as unexplained. The ld. AR placed before me a copy of the bank account of the assessee maintained with State Bank of India Bhawanipatna branch which shows the assessee has withdrawn cash of Rs.1,03,00,000/- and the cash deposit on 02.04.2015. It was the submission that the source for the 31.03.2014. It was further submitted that there is no other cash deposit in the bank account of the assessee.
In reply, ld. Sr. DR vehemently supported the orders of the ld. AO and ld. CIT(A). It was the submission that the assessee has not proved that the amount of Rs.48,50,000/- deposited in the bank account came out of the said Rs.1,03,00,000/-.
We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the immediately before the cash deposit the bank entry itself shows Rs.1,03,00,000/-. The assessee is said to be a super contractor and during the period he was making substantial payments in cash. There are substantial withdrawal of cash in his bank account and most of the entries of receipts being credit in the bank account are through cheque clearance. The only cash deposit is an amount of Rs.30 lakhs in the State Bank of India and Rs.18,50,000/- in Utkal Gramin Bank on 02.04.2014. This being so, as it is noticed that the assessee has withdrawn Rs.1,03,00,000/- on 31.03.2014 the said amount is treated as the source for the cash deposit of Rs,48,50,000/- cash in the bank account of the assessee. Consequently, the addition as made by the AO and as confirmed by the ld. CIT(A) stands deleted.
The second issue raised by the ld. AR was in respect of an addition of Rs.1,60,07,807/- being the reimbursement of labour charges paid to Shri Banti Kumar Agarwal. It was the submission that Shri Banti Kumar Agarwal was also a super contractor and as the assessee’s contract work was in highly maoist infected area transporting the cash to the said location was Shri Banti Kumar Agarwal to make the payment of the labour charges which would be reimbursed by the assessee. It was the submission that the payment of Rs.1,60,07,807/- was same through account payee transfers to Shri Banti Kumar Agarwal. It was the submission that in the assessment of Shri Banti Kumar Agarwal also the AO has treated the said amount as a protective assessment on account of the fact that Shri Banti Kumar Agarwal has shown the amount as an advance received from the assessee. It was the submission that the transfer of the money from the assessee to Shri Banti Kumar Agarwal is not in dispute. The assessee had claimed the said amount as reimbursement of expenses. Shri Banti Kumar Agarwal has shown the said amount as advance received. It was the submission that Shri Banti Kumar Agarwal might have also shown the said labour charges paid from the said advances. The evidence is not available to the assessee. It was the submission that as the transactions are through the bank accounts and as the transactions have also been verified and found to be correct in the hands of Shri Banti Kumar Agarwal, the same cannot be disallowed in the hands of the assessee. It was the submission that the addition is liable to be deleted.
In reply, ld. Sr. DR submitted that the assessee has not proved that the payment to Shri Banti Kumar Agarwal was towards reimbursement of expenses. It was the submission that the addition as made by the AO and as confirmed by the ld. CIT(A) is liable to be upheld.