Rohit Raj Kumar vs ITO, Ward 71(1)

This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Bhubaneswar [in short ‘the CIT(A)’] dated 26.2.2026, for assessment year 2012-13.

Shri Ayush Garg, appearing on behalf of assessee, submits that solitary addition made by the AO in the instant case is of Rs. 32,91,150/- u/s. 69A of the Act on account unexplained deposits in the bank account of the asssessee. The ld. Counsel submits that the assessee was the Director of M/s Fortune Abodes Private Limited during the period relevant to assessment year under appeal. The said company is engaged in the business of civil construction. The payments to the labourers were made by the company through the assessee. Explaining mode of payment, the ld. Counsel submits that the cash amount was withdrawn from current account of the company at Chennai and was deposited in the bank account of the assessee. Cash payments were made to the labourers at a project being executed by the company at Chennai. He further explained that the assessee was making payments on behalf of the assessee company to the labourers after withdrawing cash from his bank account. He furnished bank statements to show that the amount withdrawn from the bank account of the company was deposited in the assessee’s bank account immediately after withdrawal. He submits that the assessee can explain and establish nexus between cash withdrawal from the bank account of company and the deposits of cash in the bank account of the assessee.

Shri Manoj Kumar, representing the department strongly supported findings of the AO and the CIT(A). Without prejudice, he submits that the submissions made by the ld. Counsel have to be examined and for that purpose matter can be restored back to the AO.

Both sides heard, orders of lower authorities examined and perused the records. The solitary issue for consideration in the instant appeal is regarding addition of Rs. 32,91,150 made in the hands of the assessee u/s. 69A. The assesee has explained the source of cash deposits in his bank account as amounts withdrawn from company’s current account for making payment to the daily labourers. The assessee tried to explain and establish nexus between the cash amount withdrawn from the company’s current account and the same cash being allegedly deposited in the bank account of the assessee. The said transactions require detailed verification at the level of AO. I am of the considered view, if the assessee is able to establish one to one nexus of cash withdrawal and deposits in the bank account of assessee, no addition is warranted. The AO shall examine the transactions as per above directions and complete the assessment denovo, after allowing reasonable opportunity of making submissions to the assessee, in accordance with law.

In the result, appeal of the assessee is allowed for statistical purpose in the aforesaid terms.