Section 68 Additions for Demonetisation Cash Deposits Deleted: ITAT Raipur

Prakash Chand Agrawal Vs ITO (ITAT Raipur)

The assessee appealed against the order of the CIT(A)/NFAC confirming additions of ₹22,73,882 and ₹2,32,186 made under Section 68 of the Income Tax Act for Assessment Year 2017-18. The Tribunal first condoned a delay of 261 days after accepting the assessee’s explanation regarding change of counsel and ill health. On merits, the additions related to cash deposits made in two current bank accounts during the demonetisation period. The Assessing Officer treated increased cash sales as artificially inflated and also added ₹2,32,186 based on revised VAT returns. The assessee contended that the increased sales were attributable to the festive season, corresponding increases in purchases and stock, audited books of account, and revised VAT returns correcting clerical omissions. The Tribunal found that the Revenue had accepted the nature of the assessee’s business, books of account, purchases and opening stock, had not established any undisclosed source of income, and had not conducted any independent enquiry to disprove the sales. It held that the additions were unsupported by corroborative evidence and that the amount of ₹2,32,186 formed part of the revised VAT return. The Tribunal further observed that the additions had been made under Section 68, although the Department’s entire enquiry related to the nature and source of cash deposits and not unexplained cash credits, indicating invocation of an incorrect charging provision. Accordingly, it held both additions to be unjustified, arbitrary and bad in law, directed deletion of the additions and allowed the appeal.

Cases Discussed

• Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos. …/2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024], dated 31.01.2025.
• Inder Singh Vs. State of Madhya Pradesh, Civil Appeal No. …/2025, Special Leave Petition (Civil) No. 6145 of 2024, dated 21.03.2025.
• Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No. 17/2025, dated 24.02.2025.
• Payel Verma Vs. Income Tax Officer, Ward-1(3), Bhilai (C.G.), ITA No. 341/RPR/2024, dated 09.04.2025.
• Shri Tukaram Vs. ITO, Ward Dhamtari, ITA No. 168/RPR/2025, A.Y. 2017-18, dated 21.04.2025.
• Sanjeev Kumar c/o M/s Raj Kumar & Associates Vs. ITO Ward 2(3)(2), Bulandshahr, 2023 (10) TMI 1027 – ITAT Delhi.
• Collector, Land Acquisition Vs. Mst. Katiji & Ors., 167 ITR 471 (SC).

FULL TEXT OF THE ORDER OF ITAT RAIPUR

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 11.04.2025 for the assessment year 2017-18 as per the grounds of appeal on record.

2. At the very outset, it is noted that the appeal is time barred by 261 days. That explaining the said delay, the Ld. Counsel for the assessee had filed condonation petition a/w. affidavit and therein, plea taken was that in Form 35, email id of erstwhile counsel was given and before the order of the Ld. CIT(Appeals)/NFAC was passed, the assessee had changed his counsel. The earlier counsel did not inform the assessee about passing of the order of the Ld. CIT(Appeals)/NFAC and nor any further communication had been sent from the Department.

3. The Revenue in its counter affidavit contended that it was the duty incumbent upon the assessee to inform the Department about changing of his counsel and inform the valid address on which notices and communication etc. should be sent to the assessee. Since this was not done hence, delay should not be condoned.

4. That as rebuttal to this counter affidavit, the Ld. Counsel for the assessee submitted various medical prescriptions which covers the period when the order of the Ld. CIT(Appeals)/NFAC was passed till filing of appeal by the assessee and proves that during the said relevant period the assessee was not well physically. The Ld. Counsel submitted that since the assessee was not well as evident from medical prescriptions, hence he could not communicate to the Department regarding change of his counsel which resulted in the delay in filing this appeal. That on question put forth to the Ld. Sr. DR by the Bench whether this constitutes a reasonable cause for condonation of delay, the Ld. Sr. DR fairly conceded that due to ill health condition of the assessee as evident from prescriptions which definitely covers the time period when the Ld. CIT(Appeals)/NFAC had passed order till the time the appeal was filed, it is reasonable that the assessee due to such ill health condition was prevented due to sufficient cause to communicate to the Department regarding the change of counsel.

5. Having heard the submissions of the parties and considering the following judicial pronouncements viz. (i) Collector, Land Acquisition Vs. Mst. Katiji & Ors, reported in 167 ITR 471 (SC); (ii) Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………………. /2025 [Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31.01.2025; (iii) Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025 and (iv) Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No………………. /2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21^st March, 2025, the said delay of 261 days is condoned and the matter is heard on merits.

6. That as per grounds of appeal, the assessee is aggrieved with the confirmation of additions of Rs.22,73,882/- and Rs.2,32,186/- by the Ld. CIT(Appeals)/NFAC as made by A.O u/s. 68 of the Income Tax Act, 1961 (for short ‘the Act’).

7. That regarding the first addition of Rs.22,73,882/-, it was noted by the A.O that large cash deposits were made by the assessee in his two bank accounts i.e. Bank of India and HDFC bank both being current accounts during the relevant year including the time of demonetization period between 09.11.2016 to 30.12.2016. The source of the said cash deposits in the bank account by the assessee was claimed out of cash sales during the year and opening cash balance. The A.O observed that cash balance as on 01.04.2016 was much lesser than the cash balance in hand of the appellant as on 08.11.2016. The A.O also observed that cash deposits as compared with the preceding financial year was increased from Rs.2,76,50,000 to Rs.3,24,37,300/-. It was further concluded by the A.O as follows:

“i. The cash sales between 01.11.2016 to 08.11.2016 has been artificially inflated by the appellant as there is a 4.71 times increase in the cash sales during this period as compared to the corresponding period in 2015. This defies human probability.

ii. A close perusal of sales invoices issued by the appellant between 01.11.2016 to 08.11.2016 would reveal that in some of the invoices only the names of the purchasers are mentioned without any address while in most of the invoices even the names of the purchasers are missing, even when the size of single sale bill ranges from Rs.18,000/- to Rs. 20,000/-. Even the customers’ copies of the bills were not given to them and the same were lying with the appellant. Therefore, the cash sales bills generated by the appellant during this period were only to artificially inflate its sales so as to generate sufficient balance of cash in hand to stage-manage the impugned cash deposits in bank account.

iii. The average value of monthly sales from April, 2016 to October, 2016 comes of the Act only Rs.26,00,000/- whereas the cash sales for the month of November, 2016 itself have been shown at Rs.60.92 lakhs.

iv. The availability of stock is not an evidence which can prove the genuineness of sale as the unexplained cash deposits made by the appellant in his bank account has made purchase of stock possible for him.

v. When questioned about details of cash purchases, the appellant brushed it aside stating that it is not possible for a shopkeeper dealing in grocery items to maintain complete details of purchasing parties.

5.1.3 Under these factual matrices, the AO estimated the reasonable cash sale that could have been made by the appellant from 01.11.2016 to 08.11.2016 on the basis of ratio of said cash sale over total turnover achieved during the corresponding period in 2015. As cash sales during 01.11.2015 to 08.11.2015 was Rs.6,51,040/- as against the total turn over for F.Y.2015-16 of Rs.3,00,18,919/- which gave rise to ratio of 2.17%, the A.O accepted the reasonable cash sales made by the appellant from 01.11.2016 to 08.11.2016 at Rs.7,95,412/- (2.17% of total turnover for F.Y.2016-17 being Rs.3,66,54,928/-). Accordingly, the A.O added the balance sum of Rs.22,73,882/- (Rs.30,69,204/- (-) Rs.7,95,412/-) to the total income of the appellant u/s. 68 of the Act being unexplained cash deposits.”

8. Before the Ld. CIT(Appeals)/NFAC, the assessee made the following submissions:-

i. cash balance in hand with the appellant as on 01.04.2016 and 08.11.2016, when compared with the corresponding period in 2015 was not abnormal. Comparison of the cash balances on the relevant dates has been given by the appellant by way of a table as under:

Comparision of cash balance shown as per books for your kind reference;

ii. The period covered between 22.10.2016 to 08.11.2016 was a festive season wherein various festivals like Diwali, Govardhan Pooja, Ankut, Bhai Dooj, Kali Pooja, Chtigt Pooja etc. fell and the region of Kharsia is surrounded by several villages that are totally dependent on Kharsia for food grains. This was the reason for an increase in sale during the period 01.11.2016 to 08.11.2016. To substantiate his point, the appellant has given the comparative figures of stock, purchases, and sales made between 22^nd October and 8th November of 2015 and 2016. The said tables are reproduced hereunder:

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iii. Further, the appellant has also given comparative analysis of cash deposited by him in his bank account during the concerned FY vis-a-vis FY 2015-16, demonstrating that cash deposited during the concerned year was lesser than the preceding FY in terms of percentage of turnover. The comparative figures in tabular form are reproduced hereunder:

Therefore, the addition made 12x the AO was based only on estimation and not any realistic findings.^— N.

9. The Ld. CIT(Appeals)/ NFAC on these two additions has held and observed as follows:

5.1.4 The contentions of the AO and the appellant and the facts of the case have been closely perused. It is found that there is no doubt that during the period 01.11.2016 to 08.11.2016 the cash sales of the appellant has jumped 4.71 times as compared with the cash sales of the corresponding period made in 2015. The appellant has tried to justify his stance by contending that the period under consideration i.e. 22.10.2016 to 08.11.2016 was period of festivals and therefore the sales of the appellant jumped the way it did. The appellant has also tried to justify its sales by mentioning that corresponding increase in stock was also present during the said period. With regard to stock, the AO has contended that its availability is not evidence which can prove the genuineness of sale, as the unexplained cash deposits made by the appellant in his bank account has made purchase of stock possible for him. It is found that the major reliance of the appellant is on the fact that the period between 22.10.2016 to 08.11.2016 was a festive season. However, in India in general the said period in any calendar year is a festive season marked by various festivals as mentioned by the appellant. Therefore, this alone cannot be taken as a reason for more than four-fold increase in cash sales of the appellant during first 8 days of November, 2016, vis-a-vis corresponding period in 2015. It is the claim of the appellant that source of cash deposited by him in his bank account is his cash sales. The said cash sales are evidenced by him by way of submission of relevant sales invoices. In the said sales invoices, as mentioned above, the AO has brought out various lacunae such as in some of the invoices only the names of the purchasers are mentioned without any address while in most of the invoices even the names of the purchasers are missing, even when the size of single sale bill ranges from Rs. 18,000/- to Rs. 20,000/-. Even the customers’ copies of the bills were not given to them and the same were lying with the appellant. It is therefore, contended by the AO that the cash sales bills generated by the appellant during this period were only to artificially inflate its sales so as to generate sufficient balance of cash in hand to stage-manage the impugned cash deposits in bank account. During the course of the current appellate proceedings, ttie^..‘appellant has not brought on record anything to controvert these findings of the AO with respect to lacunae in his sales bills. The onus lies on the appellant to prove to the satisfaction of the Revenue about the nature and source of cash deposited by him in his bank account. As the appellant claims the source of said cash deposits to be his cash sales, he ought to produce relevant sales invoices which can be verified and therefore be acceptable as credible evidence in support of his claim. However, to the contrary, it is found that defective sales bills have been produced by the appellant that are non-verifiable as to their authenticity, and hence non-acceptable as evidence to prove the nature and source of cash deposited by him. The appellant has only relied upon circumstantial evidences in the form of comparative analysis of cash-in-hand available with him on various dates and cash deposited by him in his bank accounts as a ratio of his total sales, during the current year vis-a-vis during the preceding year. The genuineness of its alleged source of cash deposits, viz., cash sales, has left to be satisfactorily explained by the appellant. Under these circumstances, I do not find any reason to deviate from the Order of the AO and consequently the ground of appeal raised by the appellant is dismissed.

5.2 Ground of appeal no. 2: In this ground, the appellant challenges the addition made by the AO of Rs. 2,32,186/- u/s. 68 of the Act.

5.2.1 During the course of assessment proceedings, the appellant was asked to furnish copies of his VAT returns for all the Quarters of the year, including revised returns, if any, and also furnish the reasons for revising the said return. In response, the appellant submitted the details which have been tabulated by the AO on pages 9 and 10 of the Order as under:

Reason for revision In the third quarter of FY 2016-17. purchase amounting to Rs. 225892/- and the sale amounted to Ps. 232566/-had been missed out, that is why return for the same was revised. The detads are as below:

Purchase invoice details missed out

Sale make derails messed out

Based on the revision of the VAT return of Quarter 3, the AO contended that there were back dating of cash sales which were fictitious in nature, by the appellant, amounting to Rs. 2,32,186/- which has been shown to have been made by him to unidentified persons. Therefore, the AO added the impugned sum to the Total Income of the appellant u/s. 68 of the Act.

5.2.2 Per contra, during the course of the current appellate proceedings, it has been claimed by the appellant that the addition made by the AO was unrealistic as the quarterly return of VAT for Quarter 3 was revised by him owing to certain clerical mistakes and his books of accounts are duly audited u/s. 44AB of the Act.

5.2.3 It is observed that Quarter 3 coincides with the period wherein the above discussed period – 01.11.2016 to 08.11.2016 — falls, and also the period wherein demonetization was announced by the Government of India. It has already been discussed above, as to how the cash sales bills produced by the appellant before the AO were infested with shortcomings therein. The AO has taken reference of the said

10. I have heard the rival contentions, analyzed the facts and circumstances in this case and carefully considered the documents on record. This is a case where addition has been made by the Department regarding cash deposits in two bank’s current account of the assessee by stating that the assessee was not able to justify the nature and source of such cash deposits. It was observed by the A.O and upheld by the Ld. CIT(Appeals)/NFAC that there was a substantial increase in the sales as well as cash in hand in the present year as compared to earlier year. The assessee had explained that entire money was earned through sales as per disclosed sources and that if sale had increased then the purchase had also increased as had been demonstrated before the Revenue Authorities. Therefore, sales were genuine considering the increase of the purchases and increase in the opening stock. The assessee further submitted that due to festive season during the period 01.11.2016 to 08.11.2016 and further that region of Kharsia was surrounded by several villages that were totally dependent on Kharsia for food grains was the main reason for increase in sale. To substantiate this point, the assessee had provided comparative figure of stocks, purchases and sales made between 22ⁿd October and 8^th November, 2015 & 16.

11. The Revenue authorities disallowed the claim of the assessee as non genuine and fake only on the ground that such cash deposits were made during demonetization period and that according to the Revenue authorities, the assessee was unable to explain through relevant bills/vouchers the increase in sales. I am of the considered view that such action of the Revenue authorities is incorrect for the fact that they have not disputed the source of income of the assessee. They have admitted the nature and substance of the business conducted by the assessee and there is no evidence placed on record by the Department to suggest that the assessee had some undisclosed sources of income. The assessee on the other hand had provided books of accounts which were duly audited, complete comparative chart regarding stocks, purchases and sales and had established that there has been increased in the sale since even corresponding purchases were also increased during the relevant year. Therefore, it cannot be said that such sales were fictitious solely because the entire bills and vouchers were not produced. It is known fact that the assessee is operating in mufassil town and every sale is made to the villagers and petty customers in the nearby areas, therefore, it may not have been possible to record entire sale transactions through sale bills but when corresponding purchases and stock has been explained before the Department, against which, no questions were asked and was accepted, in such scenario, sales made cannot be held to be false and fictitious. The Ld. CIT(Appeals)/NFAC had not conducted any independent inquiry also in terms with Section 250(4) & (6) of the Act against the submissions placed on record by the assessee. That when the Department has accepted the source of income of the assessee, that when the Department has not brought on record any undisclosed sources of income of the assessee, that when audited accounts of the assessee have been accepted by the Department, that when the Department has not doubted purchases and opening stock during the relevant year, in such scenario, it is not open for the Department to disbelieve sale figure generated by the assessee. Both the A.O and the Ld. CIT(Appeals)/NFAC had rested on the submissions of the assessee without conducting any enquiry. Failure on the part of the Department cannot be ground for additions on the assessee when all documentary evidences has been furnished explaining increased sales.

12. There is no corroborative evidence brought on record by the Revenue to justify the addition made. The Revenue had made the additions since the cash deposits were done during demonetization period in SBNs currency. However, they have failed to bring on record any evidence that the cash deposits were unexplained. This Bench in the case of Shri Tukaram Vs, ITO, Ward Dhamtari, ITA No.168/RPR/2025, A.Y.2017-18, dated 21.04.2025 had an occasion to deal with similar facts and circumstances wherein it had considered another decision of this Bench in the case of Payel Verma Vs. the Income Tax Officer, Ward-1(3), Bhilai, ITA No.341/RPR/2024, dated 09.05.2025. In the case of Shri Tukaram Vs, ITO, Ward Dhamtari (supra), the Tribunal has held and observed as follows:

”3. In this regard, it is noted that the revenue authorities have accepted the business of the assessee and there is no dispute with regard to the purchase/sales reported by the assessee. Further, the department has not brought on record any evidence suggesting any alternative source of income of the assessee other than the disclosed sources of income. The only contention of the department regarding addition is that such cash deposits were made in SBNs currency during demonetization period. The department has failed to bring out that such cash deposits are unexplained since the fact remains that the department has not disputed the business source income of the assessee. Therefore, in effect addition cannot be made in this case u/s. 69A of the Act. That the ITAT, Raipur in the case of Payel Verma Vs. the Income Tax Officer, Ward-1(3), Bhilai (C.G.), ITA No. 341/RPR/2024, dated 09.04.2025, on identical facts and issues held as follows:

”4. I have carefully considered the submission of the parties herein, analyzed the facts and circumstances in this case. The department had not disputed the nature of business of the assessee that the assessee is a wholesaler and selling goods to the retailers. The department had also not disputed that some of the retailers are also petty pan-walas/pan shop owners who do not have adequate documents either from the perspective of the income tax or from the perspective of the sales tax. Some of the petty pan-walas also conducts their business in some carts/trolley and they are not available every time at one single place. These realities have also not been disputed by the department. The Department has not questioned the turnover of the assessee and also has accepted the business module conducted by the assessee. Books of accounts of the assessee has also been accepted by the department. When all these parameters have been fulfilled by the assessee, there cannot be any addition u/s.69A of the Act treating the cash deposits in the bank account as unexplained money of the assessee. In view thereof, I set-aside the order of the Ld. CIT(Appeals)/NFAC and direct the A.O to delete the addition of Rs.17,61,000/- from the hands of the assessee.”

Respectfully following the same parity of reasoning and in the similar set of facts and circumstances, the department is directed to delete the addition of Rs.2,29,500/- from the hands of the assessee.

4. As per the above terms the grounds of appeal raised by the assesse are allowed.

5. In the result, appeal of the assessee is allowed.”

13. That on examining the facts and circumstances and as per judicial pronouncements as afore-stated, on the same parity of reasoning, it is held that the additions of Rs.22,73,882/- is unfounded, misplaced and arbitrary. The A.O is directed to delete the same from the hands of the assessee providing appeal effect of this order.

14. As regards the addition of Rs.2,32,186/-, it was submitted by the Ld. Counsel for the assessee that certain sale invoices dated 31.12.2016 aggregating to Rs.2,32,186/- were inadvertently omitted while filing the Quarter-3 VAT return due to clerical oversight and upon detection during statutory audit, the VAT return was voluntarily revised on 01.03.2017 in regular course much before any enquiry or scrutiny by the Department.

Note: In Quarter Q3 2016-17, purchase amounting to Rs. 225,892/- and sale amounting to Rs. 232,566/- were missed from the return; therefore, the return for the same was revised.

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15. The Revenue authorities have not brought on record any reasoning for disallowance of the said amount. Neither the A.O nor the Ld. CIT(Appeals)/NFAC had brought any reasoning for refuting the contention of the assessee that the said amount is as per revised VAT return. The Revenue had clubbed the first addition and on the same basis has upheld this addition also. As I have examined in the foregoing paras regarding genuineness of the business activities of the assessee, genuineness of sales a/w. increase of purchases and stocks which never was doubted by the Department and specifically regarding this issue, when it is on record that such amount of Rs.2,32,186/- is a part of revised VAT return, therefore, addition of this amount also is arbitrary, bad in law and misplaced and the A.O is directed to delete the additions accordingly. I further observe that the additions have been made u/s. 68 of the Act which pertains to unexplained cash credit. But in this case, regarding both the additions, there is no trail of any evidence or enquiry by the Department regarding any loan transaction so to justify addition u/s. 68 of the Act as unexplained cash credit. The entire trail of examination is regarding the nature and source of cash deposits and since the addition has been made by the Department stating the said cash deposits were unexplained then the relevant charging section should have been Section 69A and not Section 68 of the Act. Therefore, charging provision itself has been wrongly invoked by the Department which is clearly non application of mind by the quasi judicial authority. I find that it has been held by the Co-ordinate Bench of the Tribunal, Delhi in the case of Bhawani Castings P. Ltd. Vs. DCIT (supra) that when there is no coherence in the reasons recorded for reopening and additions made in the assessment, it is utter non application of mind by the A.O while recording reasons for reopening.

In the decision of the Co-ordinate Bench of o Delhi in the case of Sanjeev Kumar c/o M/s Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of non-application of mind, it was observed and held as follows:

“14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of assessee, wherein the assessee has not only included cash receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods Pvt. Ltd. and has also reduced the amount of drawings for household expenses. The copy of return of income of wife of assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly established that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon’ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and

AO is directed to delete the entire addition.

15. In the result, appeal of the assessee is allowed.”

17. Similarly, in the decision of Hon’ble High Court of Allahabad in the case of Smt. Sarika Jain Vs. The Commissioner of Income Tax, Bareilly and Another, reported in (2018) 407 ITR 254 (All) which decision was referred to and applied in the earlier decision of the Co­ordinate Bench of Delhi (supra), the Hon’ble High Court of Allahabad held as follows:

“In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an addition can be made under Section 69-A of the Act.

In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that “it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant-assessee under Section 68 of the Act.

In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law.

Accordingly, we answer the question of law, as framed above, in favour of the appellant-assessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it.”

18. Therefore, on both these counts, additions made by the A.O and sustained by the Ld. CIT(Appeals)/NFAC is unjustified, arbitrary and bad in law.

19. That as per above terms, the appeal of the assessee is allowed.

Order pronounced in open court on 22^nd day of May, 2026.