HRUDANANDA SAHU,BOLANGIR V. ITO, WARD-1, BOLANGIR, BOLANGIR

ITA 646/CTK/2025

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The case involves Hrudananda Sahu, an individual engaged in trading onions and potatoes, who appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi. The primary contention was the assessment of undisclosed income amounting to Rs.57,12,900, attributed to cash deposits in the assessee's bank account. The AO had treated the entire amount as undisclosed income, which the assessee contested, providing evidence of business transactions through the same account. The Tribunal considered the submissions and evidence, including bank statements and previous tax returns, and decided to assess the income at a presumptive rate of 10% on the total cash deposits, acknowledging the business activities of the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837301 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 20-11-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY SINGH
• Assessee Lawyers: JAGAMOHAN PATTANAIK
• Keywords: Peak credit
• Section: 44AD

Judgement Text

" आयकर अपीलȣय अͬधकरण, कटक Ûयायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आयकर अपील सं/ITA No.646/CTK/2025 (Ǔनधा[रण वष[ / Assessment Year : 2016-2017) Hrudananda Sahu, At-Lachut, Saintala, Bolangir-767032 Vs ITO, Ward-1, Bolangir PAN No. :MPOPS 7342 C (अपीलाथȸ /Appellant) .. (Ĥ×यथȸ / Respondent) Ǔनधा[ǐरती कȧ ओर से /Assessee by : Shri Jagamohan Pattanaik, Advocate राजèव कȧ ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 18/02/2026 घोषणा कȧ तारȣख/Date of Pronouncement : 18/02/2026 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 15.10.2025 for the assessment year 2016-2017. 2. It was submitted by the Ld.AR that the assessee is an individual, who is doing trading in onion & potato. It was submission that during the course of assessment, the AO had issued notice u/s.148 of the Act and the assessee had filed its return of income. There was a deposit in the bank account of the assessee to an extent of Rs.57,12,900/-. It was submission that the AO brought to tax the entire cash deposits of Rs.57,12,900/- as the undisclosed income of the assessee. It was submission that the assessee had also made purchases through the bank account and the same were through transfers to the suppliers of the onions and potatoes. It was Printed from counselvise.com ITA No.646/CTK/2025 2 submission that the assessee has been earning 8 to 10% from his business. It is the prayer that the income of the assessee may be estimated. 3. In reply, the ld. Sr. DR submitted that the assessee has not proved that he is a dealer in onions and potatoes. It was submission that the assessee should be directed to prove his business. 4. In reply, the Ld. AR submitted that in subsequent years also the assessee has been filing his return from its dealing in potatoes and onions and though no scrutiny assessment has been done, the returns have been accepted under section 143(1) of the Act. 5. We have considered the rival submission. A perusal of the paper book filed by the assessee, most specifically the copy of the bank accounts shows that there are both deposits and withdrawals from the said bank accounts. Clearly this is the business activity of the assessee. When there are both credits and withdrawals from the bank account, obviously in the worst case scenario would be to assess the peak credits. Even the provisions of section of 44AD of the Act provides for assessing the income at 8%. This being so, as the assessee has been declaring an income of 10% for the subsequent years, in the interest of justice, the AO has directed to assess the income of the assessee at 10% of the total cash deposits. 6. In the result, appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 18/02/2026. Sd/- (MADHUSUDAN SAWDIA) Sd/- (GEORGE MATHAN) लेखा सदèय/ ACCOUNTANT MEMBER ÛयाǓयक सदèय / JUDICIAL MEMBER Ǒदनांक Dated 18/02/2026 Prakash Kumar Mishra, Sr.P.S. Printed from counselvise.com ITA No.646/CTK/2025 3 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Assistant Registrar) आयकर अपीलȣय अͬधकरण, कटक/ITAT, Cuttack 1. अपीलाथŎ / The Appellant - 2. ŮȑथŎ / The Respondent- 3. आयकर आयुƅ(अपील) / The CIT(A), 4. आयकर आयुÈत / CIT 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, कटक / DR, ITAT, Cuttack 6. गाड[ फाईल / Guard file. स×याͪपत ĤǓत //True Copy// Printed from counselvise.com "