Case Law Details
Radhakrishna Forex Private Limited Vs ITO (ITAT Kolkata)
The ITAT Kolkata partly allowed the appeal filed by Radhakrishna Forex Private Limited for AY 2018-19 and remanded the matter back to the Commissioner of Income Tax (Appeals) for fresh adjudication on merits. The assessee had originally filed its return declaring total income of ₹1,85,170. During assessment proceedings, the Department found cash deposits of ₹61.76 crore and total credits of ₹62.42 crore in the assessee’s Bank of Baroda account, while the turnover disclosed in the return was ₹61.61 crore. The assessee explained that it was engaged in buying and selling foreign currency and that sale proceeds were deposited into the bank account before being used for currency purchases. The Assessing Officer observed discrepancies between sales figures and bank credits, particularly for November 2016, and sought supporting documents including FLM-5, FLM-8, ledgers, and travel documents. As the assessee allegedly failed to furnish complete details, the difference of ₹81.14 lakh between bank credits and declared turnover was treated as unexplained money under Section 69A and added to income.
The CIT(A) upheld the addition, stating that the assessee had failed to effectively challenge the findings of the Assessing Officer and had only made general submissions without disproving the unexplained excess credits. Before the Tribunal, the assessee argued that adequate opportunity should be granted to explain the differences between bank credits and turnover figures. The Tribunal observed that the findings of the CIT(A) were inconsistent with the assessment order because the Assessing Officer had not individually examined all entries but had merely adopted the difference between total credits and turnover as unexplained income. Considering the facts and circumstances, the Tribunal set aside the order of the CIT(A) and restored the matter for fresh disposal by passing a speaking order after granting reasonable opportunity of hearing to the assessee. The Tribunal also directed compliance with Rule 46A of the Income Tax Rules, 1962 and permitted hearing of the Assessing Officer, if required. Accordingly, the appeal was partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 30.10.2025.
2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. The Ld. Commissioner of Income Tax (Appeal) erred to justify the findings of the AO to add Rs. 81,14,310/- u/s 69A of the Income Tax Act.
2. The Ld. Commissioner of Income Tax (Appeal) erred to confirm that the assessee had a total deposit in the bank account worth Rs. 62,42,88,850/-.
3. The Ld. Commissioner of Income Tax (Appeal) erred to confirm that the difference of declared turnover and total debit is an income from undisclosed sources.
4. The Ld. Commissioner of Income Tax (Appeal) erred to consider that the Assessee submitted all the relevant documents before the Investigating authority as well as CIT(A).
5. The Ld. Commissioner of Income Tax (Appeal) erred to accept the finding of the AO about the turnover and cash deposit for the month of November, 2016, though the same is related to the previous year.
6. That the appellant craves to add, alter, rescind or modify any of the grounds hereinabove.”
3. Brief facts of the case are that the assessee had filed ITR-6 u/s 139 of the Act showing total income of ₹1,85,170/-. As per the information available with the Department, the assessee company had deposited substantial amount of cash to the tune of ₹61,76,92,850/-in the bank account maintained with the Bank of Baroda during the FY 2017-18. The bank account was opened on 22.08.2016 and in the newly opened account there was high value cash deposit and transfer of funds through RTGS. Summons u/s 131 of the Act were issued to the assessee company, in response to which the assessee submitted that its main business was buying and selling of foreign currencies and sale proceeds were deposited into the bank and the said amount was then used for purchasing currencies from various Foreign Exchange Companies. The assessee submitted some copies of FLM 8 (being the return of sale and purchase made for every month) and FLM 5 (Register of sale of foreign currencies to the public). Analysing them and bank statement for Nov, 2016, the Assessing Officer (hereinafter referred to as Ld. ‘AO’) observed that sales for Nov, 2016 were ₹60,64,000/-whereas credit in bank statement found to be ₹72,45,000/-. Therefore, the assessee was asked to submit party-wise ledger of cash deposit along with travel documents (passport) but the assessee made no compliance. On perusal of the bank statement, the Ld. AO observed that during the FY 2017-18, cash deposit was ₹61,76,92,850/- and total credits were ₹62,42,88,850/- whereas the ITR for AY 2018-19 showed total turnover of ₹61,61,74,540/-. During the course of the assessment proceedings u/s 147 of the Act, the assessee did not submit the ITR in response to the notice u/s 148 of the Act and had not submitted requisite details like FL-5, FL-8 and other requisite documents which were called for by the Ld. AO. Since the credits in bank account were more than the sales, and the source of the difference remained unexplained, therefore, the Ld. AO treated the excess amount credited in the bank account of the assessee over the turnover declared in ITR i.e. ₹81,14,310/- [₹62,42,88,850 (-) ₹61,61,74,540] as unexplained money u/s 69A of the Act and added the same to the total income of assessee and completed the assessment at the total income of ₹82,99,480/- u/s 147 r.w.s. 144B of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 30.10.2025 dismissed the appeal of the assessee by holding as under:
“6. Decision: I have considered the facts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under:
6.1 Ground No.1: In this ground the appellant has challenged the addition worth Rs.8114310/- as unexplained money u/s.69A of the Income Tax Act. The case was reopened u/s. 147 of the Income Tax Act on account of cash deposits made by the appellant. The appellant could not produce evidences in support of the deposits worth Rs.8114310/-, hence AO made the addition.
6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. The appellant has mentioned that it has got all the details like Sales Register, Cash Book and Bank Statement to substantiate the claim that all the deposits are out of sale of Foreign Currencies only. It should be mentioned here that as per last para of the assessment order, the AO has analysed all these entries as per FL-5 and FL-8 and other documents, the AO added the excess credit amounts, which remained unexplained in the assessment proceedings. The appellant has not been able to challenge this finding of the AO in the submission before me. Only general submission has been made. It does not help the case of the appellant. Hence the addition of the AO is confirmed and the appeal of the appellant is dismissed.
7. The appeal of the appellant is Dismissed.”
4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
5. Rival contentions were heard and the submissions made have been examined. We note that the findings of the Ld. CIT(A) are in consistent with the findings in the assessment order as the Ld. AO does not appear to have examined all the entries but had adopted the difference between the credits and the turnover for making the addition as the assessee had failed to satisfactorily explain the difference between the two. The Ld. AR requested for an opportunity to be granted in order to explain the difference while the Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld.
6. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). After examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal to him for disposal of the grounds of appeal taken by the assessee on merits by passing a speaking order. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required.
Accordingly, the grounds taken by the assessee in the appeal are partly allowed for statistical purposes.
7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on 2nd April, 2026.
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