Agraj Anand Vs ITO (ITAT Patna)
Section 143(3): Uploaded Evidence Cannot Be Ignored While Estimating Income—Demonetisation Deposit and Profit Additions Sent Back for Fresh Assessment
Background of the Dispute
The assessee challenged the order dated 15 October 2025 passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi, sustaining additions made in an assessment under section 143(3).
The assessment order dated 19 December 2019 involved two principal disputes: ₹63,55,000 relating to cash deposited during demonetisation and ₹1,98,012 arising from application of an 8% profit rate under section 44AD.
The assessee’s central grievance was that information and supporting details had been uploaded during assessment, but the Assessing Officer proceeded as though those details had not been furnished. According to the assessee, the Commissioner also confirmed the additions without properly considering that material.
The Tribunal found substance in this procedural objection and restored all issues to the Assessing Officer for a fresh assessment.
Delay of 19 Days Condoned
The appeal before the Tribunal was filed with a delay of 19 days.
The assessee submitted a condonation application explaining the reasons. The Tribunal accepted the explanation, condoned the delay and proceeded to hear the appeal.
The order does not reproduce the particular circumstances causing the delay. Its acceptance should therefore be understood as a decision on the explanation furnished in this case.
Demonetisation Deposits Claimed to Arise from Business Cash
The assessee disputed an addition of ₹63,55,000 section 68 concerning deposits in a current bank account during the demonetisation period.
In the grounds of appeal, the assessee contended that cash was available from business transactions and that the Assessing Officer had ignored this explanation.
The assessee characterised the addition as resting on suspicion arising from the deposits, rather than a proper examination of the available business cash.
These were the assessee’s contentions. The Tribunal did not determine that the cash deposits were explained or accept the claimed business source on merits.
Instead, its examination focused on whether the information furnished by the assessee had actually been considered before the addition was made and sustained.
Separate Challenge to Application of Section 44AD
The assessee also challenged an addition of ₹1,98,012, arising from application of an 8% profit rate to disclosed turnover.
According to the grounds, business profit had already been computed and offered to tax. The assessee further argued that section 44AD should not have been applied because the return was based on books audited under section 44AB.
The Tribunal did not decide the applicability of section 44AD, the correctness of the 8% rate or the amount of business income assessable.
That dispute was included in the issues restored for fresh examination.
Rival Submissions Before the Tribunal
The authorised representative submitted that the required details had been furnished to the Assessing Officer but had not been considered. He also complained that the Commissioner had mechanically confirmed the disputed additions.
The Departmental Representative supported the orders of the lower authorities and sought dismissal of the appeal.
The Tribunal examined the assessment order and the available record to determine whether the assessee’s complaint was supported.
Tribunal Found That Uploaded Details Were Not Considered
The Tribunal noted that the assessee had uploaded information and details for the Assessing Officer’s consideration.
Nevertheless, the Assessing Officer recorded that details had not been furnished and proceeded to estimate income.
The Tribunal found it apparent that the assessee’s information had not been considered by either the Assessing Officer or the Commissioner.
An assessment could not stand on the premise that details were absent when the record showed that information had been uploaded but remained unexamined.
The appropriate course was therefore a fresh assessment in which the available material would receive proper consideration.
All Issues Restored for De Novo Assessment
The Tribunal set aside the impugned assessment and restored all issues to the Assessing Officer.
The Assessing Officer was directed to frame a de novo assessment, taking into account the information and details furnished by the assessee and providing an opportunity of hearing.
The appeal was partly allowed for statistical purposes.
The direction did not amount to deletion of the disputed additions on substantive grounds. Their sustainability remains to be determined after examining the evidence.
Author’s Comments
The ruling highlights the difference between filing evidence and having that evidence examined. Electronic submission serves its purpose only when the assessment addresses the material placed on record.
An adverse conclusion based on supposed non-furnishing becomes vulnerable where the record establishes that relevant details were uploaded and overlooked.
At the same time, uploading documents does not establish that the explanation is correct. The fresh assessment must test the claimed business cash against the relevant records and separately examine the basis for estimating business income.
The decision grants reconsideration, not substantive acceptance of the cash source or rejection of section 44AD. Its practical value lies in the Tribunal’s insistence that assessment and appellate findings engage with the evidence actually furnished.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PATNA
The present Appeal has been filed by the Assessee against the order of the NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”), dated 15.10.2025 passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), for the Assessment Year 2017-18 on following Grounds of Appeal:-
1.1. For that, on the fact & circumstances of the case, the assessment order u/s.143(3) by making arbitrary addition is bad in law & fact and also the procedure of assessment.
2. For that, on the fact & circumstances of the case, the learned Assessing Officer erred in making addition u/s 68 r.w.s.158BBE of the Act on the mere basis of cash deposits made into Current Bank Account No.31721170938 during the demonetization period ignoring the cash available from business transactions. The basis of addition shown by the Ld. AO in the assessment order revealed that attempt of addition is nothing but on mere suspicious which cannot be sustainable in the eye of law. Therefore, such hypothetical addition of Rs.63,55,000/- is arbitrary, wrong, unjustified and hence, liable to be deleted. https://taxguru.in/ Agraj Anand: A.Y: 2017-18
3. For that, on the fact & circumstances of the case, the learned Assessing Officer erred in making addition u/s 44AD of the Income Tax Act, 1961 of Rs.1,98,012/- by applying profit @ 8% on the disclosed turnover on which the assessee has already determined the profit of business and paid tax thereon. Secondly section 44AD of the Act is not applicable in the instance case because return of income has been filed on the basis of books of account audited u/s44AB of the Act. Therefore, such addition is baseless, arbitrary and without application of mind, hence, the addition of Rs.1,98,012/- is fit to be deleted.
4. For that, the appellant craves, leave to add, modify and amend any of the grounds of the appeal at the time of hearing.
2. There is a delay of 19 days in filing the present Appeal. Assessee filed an application for condonation of delay explaining the cause for the delay. For the reasons stated in the application for condonation of delay, the delay of 19 days in filing the present Appeal is hereby condoned. The appeal is taken up for adjudication.
3. Brief facts of the case are that, an Assessment Order came to be passed u/s 143(3) of the Act on 19.12.2019 by making certain additions. Aggrieved by the Assessment Order dated 19.12.2019, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 15.10.2025, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 15.10.2025, Assessee filed the present Appeal.
4. The Ld. AR contended that all the details were filed before the Assessing Officer but the Assessing Officer failed to consider any of the submissions made before him and the Ld. CIT(A) has mechanically confirmed the impugned addition. https://taxguru.in/ Agraj Anand: A.Y: 2017-18
5. Per contra, the Ld. DR relying on the order of the Authorities below, sought for dismissal of the Appeal.
6. We have heard the parties and perused the material available on record. From the perusal of the assessment order, it is seen that the Assessee has uploaded certain information and details for the consideration of the Assessing officer. However, the Assessing officer observes that details were not furnished and hence proceeded to estimate the income. It is apparent that the information and details of the Appellant has not been considered both by the Assessing officer and the Ld. CIT(A). Therefore, we consider it fit to set aside the impugned assessment and restore all the issues to the file of the Assessing officer to frame de novo assessment taking into consideration the information and details furnished by the Assessee. The Assessing officer shall frame the assessment after affording opportunity of hearing to the Assessee.
7. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on 13.10.2026.
