KAMAKHYA PRASAD TASA,JORHAT vs. INCOME TAX OFFICER, JORHAT

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ITA 119/GTY/2024Status: DisposedITAT Guwahati08 July 2025AY 2015-16Bench: SHRI MANOMOHAN DAS (Judicial Member), SHRI RAKESH MISHRA (Accountant Member)8 pages
AI SummaryAllowed

What did the Tribunal hold?

The ITAT observed that the AO accepted other sources of cash but rejected the explanation for paddy trading. Since the assessee had declared a net profit of 8.52% on the turnover of ₹38,65,000/- under section 44AD without adverse findings, and the AO failed to conduct proper inquiry into the assessee's claims of purchases (some by cheque), the addition under section 69A was deemed unwarranted. The ITAT directed the AO to delete the addition of ₹38,65,000/-.

What were the facts?

The assessee's original assessment was set aside u/s 263 due to observations regarding large cash deposits in his bank accounts. The Assessing Officer (AO) subsequently added ₹38,65,000/- under section 69A as unexplained cash, representing proceeds from trading of agricultural items, because the assessee could not provide details of buyers/sellers. The assessee had declared income from business under section 44AD, explaining the cash deposit with opening cash, gifts, and proceeds from own agricultural produce and trading, but lacked detailed records for the trading part. The CIT(A) upheld the AO's addition.

What were the issues?

Whether an addition under section 69A for cash deposits from agricultural trading turnover is justified when the assessee declared income under section 44AD, and the AO did not sufficiently inquire into the source of funds or rebut the assessee's explanations.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 263,Section 142(1),Section 69A,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI BENCH AT KOLKATA

Before: SHRI MANOMOHAN DAS & SHRI RAKESH MISHRA

order

: 08 July, 2025 ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

1.

This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2015-16 dated 09.05.2024, “5. Findings of the case and decision:- I have carefully considered the facts of the case, finding of the AO in the assessment order, submission of the appellant and material on record. From the facts of the case it is noticed that in this case the assessment order u/s 143(3) of the Act, was finalized on 30.08.2017, at total income of Rs.07,40,500/-. Subsequently, the department noticed that the appellant had deposited huge cash in the beginning of the financial year, which was more than the opening cash balance and cash generated during the period. In view of these facts, the Pr. Commissioner of Income Tax, Jorhat, had set aside the assessment order u/s 263 of the Act, on 20.02.2020, by observing as under:- “I have gone through the assessment order, assessment orders as well as submission of the A.R. of the assessee. On going through records, it is found that the assessee’s business turnover of whole of the financial year is not related to the cash deposits made to his bank accounts, in the beginning of the financial year 2014-15. It is found from records that out of cash deposits of Rs. 61,04,000/- made to assessee’s bank account at the beginning of the financial year 2014-15, Rs.9,56,000/- was opening cash-in-hand of the assessee and Rs.15,00,000/- was stated as “gift” received from relatives. For balance of Rs.36,48,000/- of cash deposits made in the beginning of the financial year 2014-15 [i.e. Rs. 61,04,000/- minus Rs. 9,56,000/- minus Rs. 15,00,000/-], the assessee could not provide any plausible explanation regarding the source

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