ITA 1951/BANG/2026

Parties Involved

Facts Summary

The assessee, Sangappa, is an individual engaged in the wholesale trading of charcoal and also serves as a Home Guard. He deposited cash of ₹10,86,800 in his Karnataka Gramin Bank account on six occasions, which he claimed represented sale proceeds from charcoal trading. A notice under section 148 was issued on 25 March 2024, requiring him to file a return of income. The assessee filed the return on 10 May 2024, declaring salary income of ₹25,199 and business income of ₹1,64,364 under section 44AD of the Act. During the assessment proceedings, he explained that the cash deposits arose from his charcoal trading business and that the corresponding income had already been offered under section 44AD. The Assessing Officer asked him to produce details evidencing the movement of goods; however, the assessee failed to do so. Accordingly, the addition was made for the cash deposits after reducing the income already offered by the assessee.…

Legal Issues

• 1. The assessee deposited cash of ₹10,86,000 in Karnataka Gramin Bank, did not file a return of income under section 139(1) of the Act, and consequently an addition of ₹9,22,436 was made under section 69A of the Act, determining the assessee’s total income at ₹11,11,996.
• 2. The assessee did not press the remaining grounds challenging the validity of the assessment and the reopening proceedings.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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