PRAMOD PATRA,CUTTACK vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1), CUTTACK, CUTTACK

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ITA 165/CTK/2025Status: DisposedITAT Cuttack23 September 2025AY 2010-11Bench: SHRI GEORGE MATHAN (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the AO had questioned the investments in the new business and estimated an addition. However, the assessee's bank statements showed significant cash withdrawals that could cover the investments. The Sr. DR conceded that no fresh assets were found.

What were the facts?

The assessee started a new business of an IFL shop and made investments. The Assessing Officer (AO) questioned these investments and made an estimated addition of Rs. 8,04,786/- on the ground that the assessee did not have sufficient cash flow. The assessee provided bank statements showing cash withdrawals totaling Rs. 13.3 lakhs, which were claimed to be adequate to cover the investments.

What were the issues?

Whether the addition made by the AO on account of alleged lack of cash flow for investments is justified when the assessee has shown adequate cash withdrawals from the bank.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH CUTTACK

Before: SHRI GEORGE MATHAN

Hearing: 23/09/2025Pronounced: 23/09/2025

O R D E R This is an appeal filed by the assessee against the order of the Addl/JCIT(A)-10,Mumbai dated 07/01/2025 passed in Appeal No. CIT(A),Cuttack/10131/2017-18 for the assessment year 2010-2011.

2.

It was submitted by the Ld. AR that the assesee had during the assessment year 2010-11 started a new business of IFL shop. It was submission that the investments in the shop was questioned by the AO and an estimated addition of Rs.8,04,786/- was made on the ground that the assesee did not have the cash flow for making such investments. The Ld. AR, has placed before me the bank account statement of the assesee for the impugned assessment year. The bank account shows the cash withdrawals on 04-12-2009, 05-01-2010, 04-02-2010 and 04-03-2010 total into Rs.13.3lakhs/-. It was the submission that the cash withdrawals itself 2 is adequate to cover the investments. The copy of the relevant bank statement is as follows:-

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