SIBARAM RAUT,BERHAMPUR vs. ITO WARD-2, BERHAMPUR

Shri Krishna Prasad Padhy, ld. A.R. appeared on behalf of the assessee and Shri Sanjib Banerjee, Sr.DR represented on behalf of the revenue.

It was submitted by the ld. AR that the assessee is a dealer of fruits on commission basis. It was the submission that during demonetization period, the assessee had deposited Rs. 25,39,000/- in Specified Bank Notes (SBN) in his bank account with ICICI Bank Ltd. and has also issued cheques to the suppliers of the fruits. It was the submission that the Assessing Officer in the course of assessment, took the stand that Sibaram Raut Vs ITO Rs. 10,00,000/- is a reasonable amount which could have been deposited during demonetization period and made addition of Rs. 15,39,000/- as unexplained money of the assessee under Section 69A of the Income Tax Act, 1961 (in short, the Act). It was the submission that the assessee is dealing in perishable commodity and once the product is sold, the assessee is bound to take whatever currency the purchasers paid in so far as he cannot take back the perishable goods. It was the submission that the bank account of the assessee clearly shows that there are substantial transactions in cash only by the assessee. It is only in regard to the demonetization period that the Assessing Officer holds that there is unaccounted income of the assessee. It was the submission that the assessee is dealing in perishable commodity being fruits, would obviously receive the payments in cash. It was the prayer that the addition as made by the Assessing Officer and as confirmed by the ld. Addl./JCIT(A) is liable to be deleted.

In reply, the ld. Sr.DR vehemently supported the order of the Assessing Officer and the ld. Addl./JCIT(A).

We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the Assessing Officer has taken the stand that the assessee is supplying fruits on commission basis to various persons in Orissa. The Assessing Officer accepts that the fruits supplied to the retailers in around Brahmapur town and the collection Sibaram Raut Vs ITO of the commission sale proceeds are made through the staff regularly touring to various places to collect the money. The Assessing Officer then proceeds further to hold that Rs. 10,00,000/- is proper and normal business account but has treated Rs. 15,39,000/- as income from undisclosed sources. The assessee when filing his return, has disclosed income of Rs. 3,30,590/- in respect of the entire transaction during the year. Once the assessee has considered the entire transactions in the bank account when computing his total income, a portion of the same cannot be treated as undisclosed income of the assessee. This being so, as it is noticed that the Assessing Officer himself has accepted Rs. 10,00,000/- out of the SBN deposited in the bank account as probable business transaction of the assessee and has given no reason for treating the balance of Rs. 15,39,000/- as undisclosed income of the assessee and also on account of the fact that this amount of Rs. 25,39,000/- has been included in the computation in respect of the income of the assessee disclosed at Rs. 3,30,590/-, the addition as made by the Assessing Officer and as confirmed by the ld. CIT(A) stands deleted.

In the result, this appeal of the assessee is allowed. Order dictated and pronounced in the open court on 24/02/2026.