ITA 1794/BANG/2026

Parties Involved

Facts Summary

The assessee, Srinivas.B.S, the legal heir of Suresh, filed an appeal against the order passed by the Additional/Joint Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The appeal was against the addition made under section 69A of the Income Tax Act, 1961, on account of cash deposited during the demonetisation period. The assessee had filed his return of income on 16/11/2017, declaring a total income of ₹ 1,11,498. The return was selected for limited scrutiny under CASS to verify cash deposited during the demonetisation period. The assessee did not respond to the statutory notices issued under section 143(2) and section 142(1) of the Act. The Assessing Officer treated the cash deposit of ₹ 4 lakh as genuine and the cash deposit to the extent of ₹ 11,47,000 as unexplained money under section 69A of the Act. The assessee submitted that he explained the sources of cash withdrawal to an extent of ₹ 25,44,431 from his own bank account, the bank account of his daughter, the bank account of his wife and agricultural income from sale of agricultural produce before the AO. The assessee also furnished additional evidence under Rule 46A of the Income Tax Rules, 1962. The Additional/Joint Commissioner of Income Tax (Appeals) upheld the addition made under section 69A of the Act. The assessee appealed against this order.…

Legal Issues

• 1. The learned CIT(A) has erred in law and on facts in confirming the addition of Rs.11,47,000/- made by the learned AO u/s 69A, without properly appreciating the detailed explanation and documentary evidences furnished by the Appellant demonstrating availability of sufficient cash sources aggregating to Rs.25,44,431/-, which adequately explains the impugned cash deposits of Rs.15,47,000/-
• 2. The learned CIT(A) has erred in law and on facts in sustaining the addition u/s 69A without appreciating that, even assuming that a portion of the cash withdrawals may have been utilised for living expenses, the aggregate cash availability amounted to Rs.25,44,431/-, which was more than sufficient to explain the cash deposits of Rs.15,47,000/- made during the relevant period.
• 3. The learned CIT(A) has erred in law in relying upon the remand report dated 08.01.2026 without furnishing a copy thereof to the Appellant and without affording an opportunity to rebut the adverse findings contained therein, thereby violating the principles of natural justice and rendering the impugned order unsustainable.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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