CHAMRU RAM,CHANDAULI V. DC/ACIT, CIRCLE - 3, VARANASI

ITA 14/VNS/2023

AI Insights

The case involves Chamru Ram, the proprietor of Bagahi Service Station, who appealed against the orders of the Assessing Officer and the CIT(A) concerning the assessment year 2017-18. The primary issues in the appeal included the application of section 145(3) regarding the maintenance of books of account, the applicability of sections 69A and 69C during the demonetization period, and the disallowance of certain welfare expenses. The Tribunal's decision addressed these issues, particularly focusing on the applicability of section 69C to unexplained expenses under the head of compensation to employees/salary and wages.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827141 (ITAT-VARANASI)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 27-01-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G. P. SINGH
• Assessee Lawyers: CHAMRU RAM
• Keywords: Set aside; Difference of opinion
• Section: 69C

Judgement Text

"I.T.A. No.14/VNS/2023 Assessment Year:2017-18 1 IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH, VARANASI BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.14/VNS/2023 Assessment Year: 2017-18 Chamru Ram Prop. Bagahi Service Station, Saiyadraja, Chandauli, Uttar Pradesh -232110 PAN:AGEPR2639A Vs. ACIT, Circle-3, Varanasi. (Appellant) (Respondent) Order u/s 255(4) of the I.T. Act PER ANADEE NATH MISSHRA:A.M. (A) This appeal has been filed by the assessee against impugned appellate order, dated 19/01/2023 (DIN & Order No.ITBA/NFAC/S/250/2022-23/1048934293(1). The grounds of appeal are as under: “1. Because it was fully explained that the books of account have been maintained in due course of business reveals fully and truly each and every aspect of business, the stock register has Appellant by Shri Chamru Ram Respondent by Shri G. P. Singh, Sr. D.R. Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 2 been maintained which clearly indicate the sales amount against the quantity of petrol and diesel sold by the assessee. The learned Assessing Officer has erred and acted illegally in applying the provision of section 145(3) of the I. T. Act. The learned CIT(A) has also erred and acted illegally in confirming the same. 2. Because it was fully explained that the purchase and sales of petrol and diesel i.e. petroleum product against cash were allowed during demonetization period and therefore, the provision of section 69A/69C of the Act is not applicable on the deposit in bank account during demonetization period. The learned Assessing Officer has erred and acted illegally in not placing reliance on the same and erred and acted illegally in applying the provision of section 69A/69C of the I. T. Act on the excess amount and adding back Rs.17,19,275/- u/s 69A of the I. T. Act as well as Rs.9,07,100/- u/s 69C of the I. T. Act. The learned CIT(A) has also erred and acted illegally in confirming the same. 3. Because the learned Assessing Officer has erred and acted illegally in disallowing Rs.1,38,143/- out of workman and staff welfare expenses. The learned CIT(A) has also erred and acted illegally in confirming the same. 4. Because the assessment is bad both on facts and in law and not maintainable.” (B) In this case, there was difference of opinion between Hon'ble Judicial Member and Hon'ble Accountant Member. The question of difference between the Division Bench of the Members is as under: “(1)Whether in the facts and circumstances of the case, the provisions of section 69C are not attracted in respect of the disallowance made by the Assessing Officer on account of unexplained expenses under Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 3 head compensation to employees/salary and wages or the issue is required to be set aside to the record of the Assessing Officer for fresh adjudication ?” (B.1) The Hon'ble Third Member has passed order dated 09/10/2025; which is reproduced below for the ease of reference: Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 4 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 5 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 6 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 7 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 8 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 9 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 10 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 11 (B.2) The aforesaid order dated 13/09/2024 of Hon'ble Third Member is to be read conjointly with the proposed orders authored by the Hon'ble Judicial Member and Hon'ble Accountant Member, which are reproduced below for the ease of reference: Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 12 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 13 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 14 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 15 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 16 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 17 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 18 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 19 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 20 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 21 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 22 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 23 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 24 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 25 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 26 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 27 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 28 Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 29 (B.2.1) As far as the issue regarding applicability of section 69C is concerned, the difference of opinion in the aforesaid proposed orders as referred to in foregoing paragraph (B.2) of this order, has been resolved by the Ld. Third Member vide aforesaid order dated 09/10/2025 referred to in foregoing paragraph (B.1) of this order. Accordingly, it is held that provisions of section 69C are not applicable as far as the additions of Rs.17,19,275/- and Rs.9,07,100/- are concerned. Consequently, ground No. 2 of appeal is allowed. As far as the disallowance of Rs.1,38,143/- is concerned; there was no difference of opinion in the proposed orders, referred to in foregoing paragraph (B.2) of this order. The Members were in agreement in confirming this disallowance. Accordingly, the aforesaid disallowance of Rs.1,38,143/- is confirmed, and ground No. 3 of appeal is dismissed. All the grounds of appeal are treated as disposed of in accordance with the aforesaid. (B.3) In the result, the appeal is partly allowed. (Order pronounced in the open court on 05/01/2026) Sd/. Sd/. (KUL BHARAT) (ANADEE NATH MISSHRA) Vice President Accountant Member Dated:05/01//2026 *Singh Printed from counselvise.com I.T.A. No.14/VNS/2023 Assessment Year:2017-18 30 Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. Concerned CIT 4. D.R. ITAT Printed from counselvise.com "