SHRI DHARMENDER NARULA,FEROZEPUR vs. INCOME TAX OFFICER WARD-3(2), FEROZEPUR

per the commission ledger account of the same party, the appellant had offered and credited his P/L account by Rs. 7,02,565/- (which amounts to 4.52% commission on Rs. 1,55,51,616/-). Without even deducting the amount of Rs. 7,02,565/- already offered by the appellant on account of this party and without mentioning any comparable profit figures of similarly placed assessees, the AO went ahead to make addition of entire amount of Rs. 12,44,129/-. He further observed: “ (a) The claim of the appellant was acceptable and no additions were required to be made to his income in respect of transactions of Rs.1,55,51,616/- with M/s Suresh Chander Kalra & Co. Additions of Rs.12,44,129/- made on this account are hereby deleted.”

4.1 However, the ld. CIT(A) sustained the addition of Rs.12,61,845/- on account of unexplained cash deposit in Axis Bank A/c XXXXX40416 by observing as follows: “(b) The claim of the appellant is not acceptable on the issue of unexplained cash deposits of Rs. 12,61,845/- in Axis bank account no. 40416. Addition of Rs. 12,61,845/- made by the AO on this account is hereby upheld. It is also noted that the AO

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treated such cash deposits as unexplained but mentioned the addition made under section as 68 of the Act.” 4.2 He further observed as follows: “However, the addition of Rs. 12,61,845/- made by the AO u/s 68 of the Act on account of unexplained cash deposits in Axis Bank account no. 40416 has been upheld, albeit u/s 69A of the Act. It is also noted that there is nothing in the Act which prevents the AO from adding the unexplained credits in the hands of the assessee without rejecting books of accounts. Hence, this ground of appeal is dismissed.’ 5. Now the assessee is in appeal before the tribunal regarding the addition of Rs.12,61,845/- on account of alleged unexplained cash deposit in Axis Bank A/c XXXXX40416. The assessee has filed a paper book containing the bank statement of Axis Bank for the entire financial year and copy of Axis Bank ledger A/c in the books of the assessee where it is found that the total deposits for the year in Axis Bank A/c under appeal was Rs.12,62,991/- in cash on various dates throughout the entire financial year and corresponding withdrawals from the same bank a/c on various dates total to Rs.12,61,845/-, leaving a meagre balance of Rs.1,145/- as on 31st March 2015 and it is seen that the total deposits and withdrawals in this Axis Bank A/c XXXXX40416 for the year under appeal are almost the same.

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5.1 He further submitted copies of license issued by Mandi Karan Board of Katcha and pakka Arthiya in support of his contention that he is engaged in the business of earning commission from wholesale trading of fruits and vegetables. 5.2 The ld. AR of the assessee further submitted that the total cash deposit made on various dates in this Axis Bank A/c is basically collection of sale proceeds from various retailers to whom fruits and vegetables has been supplied. It is the retailers who deposit the money in cash in the assessee’s bank account from various places were the goods has been supplied and the said amount is withdrawn by the assessee by cheques and payments are made to the various suppliers from whom the goods has been collected. 5.3 He further submitted that since fruits and vegetables are fast moving items the same cannot be held in one place for long, and it has to be distributed immediately since the goods are perishable. As a result, distribution of goods are generally made on arrival and collection is made at the end of the day and cash is deposited directly into the bank account, by the party, next morning. 5.4 He further submitted that the entire deposit in the account for the year has been added back by the AO on account of unexplained cash deposit and he has totally ignored the withdrawals from the said bank account throughout year which is utilised for payments, which not legally acceptable and he prayed for deleting the said

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addition considering the fact that he is just a commission agent and his income is restricted to the percentage of the total billings. 6. The ld. DR relied on the order of the ld. CIT(A) and has also pointed out from page ‘M’ of the paper book to submits that it is already recorded by the AO that the information filed by the assessee was verified from documentary evidences furnished where it is found that the assessee has not accounted the bank a/c of Axis Bank in the original return and has prayed for sustaining the order of the appellate authority. 7. We have heard the rival submissions and considered the materials on record and we find that the total cash deposit in Axis Bank A/c XXXXX40416, which is sustained by the ld. first appellate authority is Rs.12,62,991/-, and at the same time we find that the total withdrawals through the entire year tantamount to Rs.12,61,845/-, which means the cash deposits and cash withdrawals are almost the same. As such, for proper appreciation of facts, we find that the entire cash deposits in the said bank account cannot be sustained, and it is also admitted that the assessee is engaged as a trader in trading of fruits and vegetables and has also admitted to have been earning commission. As such, in our opinion we determine the assessee to have earned profits from this transaction as recorded in Axis Bank A/c XXXXX40416 @ 8% of the total deposits which comes to Rs.1,01,039/-. As such,

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we restrict the addition on this ground to Rs.1,00,000/- (one lakh only) instead of Rs.12.61 lakhs and the assessee gets consequential relief. 8. In the result, the appeal of the assessee is partly allowed.

Order pronounced on 21.07.2025 under Rule 34(4) of the Income Tax Appellate Tribunal Rules 1963.

Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (UDAYAN DASGUPTA) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order

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