Umabayi Gamanagatti Vs ITO (ITAT Bangalore)
Bangalore ITAT Deletes Demonetisation Additions; Confirmations from Debtors Not Mandatory When Sales Are Accepted
The Bangalore ITAT in Umabayi Gamanagatti (through Legal Heir) v. ITO deleted additions of ₹4.50 lakh and ₹6.11 lakh arising from cash deposits during the demonetisation period. The assessee, a petrol and diesel trader, had explained that the cash deposits represented amounts recovered from sundry debtors against sales already recorded in the books of account.
During assessment, the Assessing Officer questioned cash deposits made during the demonetisation period and treated part of the opening cash balance and debtor recoveries as unexplained. Although the CIT(A) granted substantial relief, additions of ₹4.50 lakh and ₹6.11 lakh were sustained mainly because the assessee could not furnish confirmations from certain debtors.
The Tribunal observed that the Revenue had accepted that goods were sold to the concerned parties and that the assessee had produced ledger accounts, party details and sample sales bills. Once the sales were duly recorded in the books and the corresponding sale proceeds were received in cash, the assessee could not be compelled to obtain confirmations from every debtor in the absence of any evidence showing that the transactions were bogus.
ITAT held that non-furnishing of confirmations alone cannot justify an addition when the underlying sales, ledger accounts and supporting documents are already on record. Accordingly, both additions of ₹4,50,000 and ₹6,11,683 were directed to be deleted, and the assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 2702/Bang/2025 for Assessment Year 2017–18 has been filed by Umabayi Gamanagatti, through her legal heir Anil Gamanagatti (the Assessee/Appellant), against the order dated 14.07.2025 passed by the National Faceless Appeal Centre, Delhi (the Ld.CIT(A)). By that order, the Ld. CIT(A) partly allowed the Assessee’s appeal against the assessment order dated 26.12.2019 passed by the Income Tax Officer, Ward–3, Bijapur (the Ld. Assessing Officer), under section 143(3) of the Income Tax Act.
