DINESH KUMAR ACHARYA, BALODA BAZAR,BALODA BAZAR V. INCOME TAX OFFICER, BHATAPARA, BALODA BAZAR

ITA 109/RPR/2025

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The case involves Dinesh Kumar Acharya, a dealer of Indian Oil Corporation Ltd., who faced scrutiny for cash deposits of Rs.1,50,000 made during the demonetization period in India. The Income Tax Officer (ITO) added this amount as unexplained money under Section 69A of the Income Tax Act, 1961, during the assessment year 2017-18. The assessee appealed against this addition, arguing that the deposits were from legitimate sources, including savings from his business and agricultural income. The CIT(Appeals) partially relieved the assessee by deleting some ad-hoc disallowances but sustained the addition of Rs.1,50,000. The Tribunal, however, found that the department did not dispute the business activities or the books of account of the assessee, leading to the conclusion that the source of the deposits was explainable and thus, the addition was deleted.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35746 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: VEEKAAS S SHARMA
• Keywords: Business income
• Section: 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.109/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2017-18 Dinesh Kumar Acharya 1, Main Road, Kasdol, Baloda Bazar-493 335 (C.G.) PAN : AFAPA4354A .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Bhatapara (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Veekaas S Sharma, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 03.04.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 04.04.2025 2 Dinesh Kumar Acharya Vs. ITO, Bhatapara ITA No.109/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC dated 30.12.2024 for the assessment year 2017-18 as per the following grounds of appeal: “1. On the facts and in the circumstances of the case, the Learned AO has erred on facts and in law in making addition of Rs.1,50,000/- on account of Cash deposit in Bank during demonetization period u/s.69A and the Learned ADDL/JCIT(A)-3, Delhi has erred in confirming the addition to the tune of Rs.1,50,000/- inasmuch as the said deposit was made out of explainable sources, as such, the addition so made is illegal, arbitrary, unjustified and unsustainable on several grounds, hence, it is prayed that the addition of Rs.1,50,000/- confirmed by the Learned ADDL/JCIT (A)-3, Delhi may kindly be deleted. 2. The Appellant craves leave to add, amend, alter vary and/or withdraw any or all the above grounds of Appeal.” 2. Brief facts in this case are that the assessee is a dealer of Indian Oil Corporation Ltd. and engaged in trading of petroleum products in the name and style of M/s. Jagannath Maharaj Petrolium, Kasdol. The assessee had filed his return of income for A.Y.2017-18 on 31.10.2017 declaring income of Rs.4,69,680/-. Thereafter, the case of the assessee was selected for scrutiny assessment. 3. During the course of assessment proceedings, it was observed by the A.O that though the assessee had made cash deposits of Rs.1,50,000/- in demonetized currency during demonetization period, but 3 Dinesh Kumar Acharya Vs. ITO, Bhatapara ITA No.109/RPR/2025 had failed to explain the source of the same. Accordingly, the A.O made an addition of Rs.1,50,000/- u/s.69A of the Act treating the same as unexplained money. Also, the A.O made ad-hoc disallowances viz. (i) disallowance out of office expenses: Rs.38,899/-; and (ii) disallowance out of sales promotion expenses : Rs.31,670/-. 4. Aggrieved the assessee carried the matter in appeal before the Ld. CIT(Appeals)/NFAC who had granted partial relief to the assessee to the extent of deleting the ad-hoc disallowances. The appeal before this bench is with regard to the addition u/s. 69A of the Act which was sustained by the Ld. CIT(Appeals)/NFAC. 5. At the time of hearing before this bench, the Ld. Counsel submitted that the source of the cash deposits of Rs.1,50,000/- during demonetization period was out of the accumulated savings of the assessee arising from the disclosed source of business. He further submitted that the assessee owns 8 acres of agricultural land and was deriving agricultural income therefrom and the same had been disclosed in the return of income of the assessee since F.Y.2013-14, the accumulation in savings are also from this source. Therefore, since the source of cash deposits are explained it cannot be unexplained money in the hands of assessee and the addition should be deleted. 4 Dinesh Kumar Acharya Vs. ITO, Bhatapara ITA No.109/RPR/2025 6. The Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the sub-ordinate authorities. 7. I have heard the parties herein, carefully considered the materials available on record and analyzed the facts and circumstances of the case. On a perusal of the order of the Ld. CIT(Appeals)/NFAC, it is observed that such cash deposits of Rs.1,50,000/- had been done during the demonetization period. As per the CBDT Circular No.03/2017, dated 21.01.2017, it is stated that cash deposits upto Rs.2,50,000/- made by the assessee is not the subject matter of further verification. In this regard, the Ld. Sr. DR explaining the exception of the said circular submitted that if the assessee who is doing business and deriving income from business, then with regard to such assessee this circular will not be applicable. Meaning thereby, the aforesaid circular will only apply to persons having income other than business income. 8. I have carefully considered these parameters and at the same time, it is observed that the department has neither disputed the business activities of the assessee i.e. trading of petroleum products nor the purchase/sales of the assessee. Further, the department had not disputed the books of account of the assessee a/w. agricultural income. The only grievance of the department is that the cash deposits of Rs.1,50,000/- was made during the demonetization period for which the addition had 5 Dinesh Kumar Acharya Vs. ITO, Bhatapara ITA No.109/RPR/2025 been made u/s. 69A of the Act treating the same as unexplained money. That when the business of the assessee was not disputed by the department, then there is no parameter by which, it can be said that the money or source of money is unexplained. Further, the department has not brought out on record any other alternative source of income by the assessee or any evidence to show that there may be possibility of earning income from other sources apart from the disclosed sources of business. In such scenario, it cannot be said that such cash deposits of Rs.1,50,000/- is unexplained so to invoke Section 69A of the Act. Accordingly, I set-aside the order of the Ld. CIT(Appeals)/NFAC and delete the addition of Rs.1,50,000/- made/sustained by the sub-ordinate authorities. 9. As per the above terms, the grounds of appeal raised by the assessee are allowed. 10. In the result, appeal of the assessee is allowed. Order pronounced in open court on 04th day of April, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 04th April, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 6 Dinesh Kumar Acharya Vs. ITO, Bhatapara ITA No.109/RPR/2025 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur "