BIBHU PRASAD SAHOO,PURI V. INCOME TAX OFFICER WARD 62(3), KOLKATA

ITA 21/KOL/2025

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The case involves Bibhu Prasad Sahoo, an individual with rental income, who appealed against the order of the CIT(A) confirming the addition of \\u20b91,31,465/- to his income as unexplained cash deposit during the demonetization period. The Assessing Officer (AO) had initially treated this amount as unexplained, adding it to the assessee's income. The CIT(A) upheld this decision, noting the lack of sufficient evidence to prove the source of the cash deposits. However, the Tribunal found that the assessee had provided a reasonable explanation that the deposits were from rental income, which was plausible given the amount of rent collected and the period of demonetization.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775905 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 03-01-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Deemed to accrue or arise in india
• Section: 143(3); 142(1); 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 21/KOL/2025 Assessment Year: 2017-18 Bibhu Prasad Sahoo Vs. Income Tax Officer, Ward- 62(3), Kolkata (Appellant) (Respondent) PAN: AKOPS7115G Appearances: Assessee represented by : Santosh Kumar Sabat, AR. Department represented by : Ranu Biswas, Addl. CIT, Sr. DR. Date of concluding the hearing : 30-July-2025 Date of pronouncing the order : 09-September-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Addl/JCIT(A)- 10, Mumbai [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 2017-18 dated 11.11.2024, which has been passed against the assessment order u/s 143(3) of the Act, dated 30.12.2019. 2. The assessee is in appeal before the Bench raising the following grounds of appeal: “1. The Assessment Order U/s.143 (3) as well the appellate order is against law, weight of evidences and probabilities of the case. 2. That, the Assessing Officer as well as 1st Appellate Authority has erred in law as well as on facts in additions of Rs.131,465/- as unexplained cash Printed from counselvise.com Page | 2 I.T.A. No.: 21/KOL/2025 Assessment Year: 2017-18 Bibhu Prasad Sahoo. in spite of submissions of evidence before the Income tax e-proceeding portal, is arbitrary, illegal and unjustified in law. 3. That, the Appellant craves leave and reserves its rights to vary, amend, alter and/or add to the grounds of appeal and to produce other documentary evidences as may be necessary at the time of hearing of the appeal. 4. For these and among other grounds that may emerge at the time of hearing it is prayed that the order of assessment be quashed in the interest of justice and equity.” 3. Brief facts of the case are that the assessee is an Individual having rental income from property. During the AY 2017-18, the assessee filed his income tax return showing income from House Property amounting to ₹7,15,295/- and interest income of ₹37,638/-. The case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (in short 'CASS'). Accordingly notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee requiring source of cash deposits in the bank during the year. In reply to the said notice, the assessee filed a computation of income along with some deeds but the assessee did not furnish any submission regarding cash deposits in the bank account maintained with Axis Bank, Puri. The cash deposited to the tune of ₹1,55,565/- during the demonetization period was treated by the Assessing Officer (hereinafter referred to as Ld. 'AO') as unexplained cash and added to the total income of the assessee. The Ld. AO noted that the assessee had not filed any submission with respect to the source of cash deposited. Hence, a sum of ₹1,31,465/- was treated as the assessee’s unexplained cash and added to the total income and the total income of the assessee was assessed at ₹6,98,035/- u/s 143(3) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 11.11.2024, dismissed the appeal of the assessee by holding that the cash deposits were out of rent received. However, the appellant could not Printed from counselvise.com Page | 3 I.T.A. No.: 21/KOL/2025 Assessment Year: 2017-18 Bibhu Prasad Sahoo. submit any confirmation from the respective parties that they paid the rent in cash. The onus was on the appellant to establish the source and nature of the cash deposits. However, the appellant failed to establish with corresponding evidence. Hence the additions made by the AO are confirmed. Further, the AO did not mention the corresponding section under which these additions had been made. Since the cash deposits are nothing but his unexplained investment, the addition is confirmed as unexplained investment u/s 69 of the Act and in view of the above, the appeal of the appellant is dismissed. 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made have been examined. It is was submitted before us that the assessee had filed the return of income for the assessment year 2017-18 on 23-09-2017 declaring total income of Rs.5,66,570/- after claiming deduction of Rs.1,86,365/- under Chapter VI-A of the Act. He had shown income from house property at Rs.7,15,295/- on the total rental receipt of Rs.10,32,000/- and income from other sources under the head income from interest of Rs.37,638/-. In response to the statutory notices received, the assessee filed various details like computation of total income and lease agreements. During the course of the assessment proceedings, the Ld. AO observed that the assessee had made deposits of Rs.1,31,465/- with the Bank during the demonetization period on three different dates. After considering the assessee’s reply, the Ld. AO made the addition of Rs.1,31,465/- as unexplained money u/s 69A by treating it to be the assessee’s deemed income, which has been confirmed by the Ld. CIT(A). It is submitted that the Ld. AO as well as Printed from counselvise.com Page | 4 I.T.A. No.: 21/KOL/2025 Assessment Year: 2017-18 Bibhu Prasad Sahoo. the Ld. CIT(A) did not consider the submission made that the assessee’s rental income is collected through cash which has been disclosed in the computation of total income. The deposited amount was only ₹1.31 Lakh for which the assessee submitted that it was the rent received in cash. The assessee has filed details of the rent received and copy of agreements have also been filed, which are also filed before the Ld. AO. It was requested that since the source is explained, the addition made may be deleted. 6. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Ld. AO notes in the assessment order that in reply to the notice issued, the assessee filed a computation of income along with some deeds but the assessee did not furnish any submission regarding cash deposits in the bank account maintained with Axis Bank, Puri (A/c. No.916060013009399 for Rs.23,90,900/-, A/c. No.916060041331248 for Rs.24,87,333/-, A/c. No.911010040173715 for Rs.1,75,565/-). However, the in the other two bank accounts, deposits amounting to ₹48,78,233/- were accepted while the deposit in the 3rd account was not accepted and a sum of ₹1,31,465/- was added. Considering the total rent of ₹10,32,000/- received from the four apartments owned by the assessee (eight properties) during the year, the deposited amount of ₹1,31,465/- which has been added, works out to rent of a month and a half and it is not unusual to keep rent received in cash, which has been deposited in the bank during the period of demonetisation. As there is no justification for the addition made which has been confirmed by the Ld. CIT(A), the Ld. AO is directed to delete the addition of ₹ 1,31,465/- made. Hence, Ground No. 2 is allowed. Ground Nos. 1, 3 and 4 being general in nature do not require any separate adjudication. Printed from counselvise.com Page | 5 I.T.A. No.: 21/KOL/2025 Assessment Year: 2017-18 Bibhu Prasad Sahoo. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 9th September, 2025. Sd/- Sd/- [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 09.09.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 6 I.T.A. No.: 21/KOL/2025 Assessment Year: 2017-18 Bibhu Prasad Sahoo. Copy of the order forwarded to: 1. Bibhu Prasad Sahoo, Sarvodaya Nagar Puri, Odisha, 752002. 2. Income Tax Officer, Ward-62(3), Kolkata. 3. Addl/JCIT(A)-10, Mumbai. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "