आयकर अपील(cid:547)य अ(cid:876)धकरण,चÖडीगढ़ Ûयायपीठ,चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकरअपीलसं./ ITA No. 404/CHD/2025 (cid:467)नधा(cid:91)रणवष(cid:91) / Assessment Year: 2019-20

The ITO, Dharamshala (HP).	V s	The Rainkh Co-operative Agriculture Service Society Ltd., VPO-Sehorpain, Tehsil-Jwalamukhi Distt. Kangra (HP).
èथायीलेखासं./PAN NO: AADAT4807C
अपीलाथ(cid:568)/Appellant (cid:292)×यथ(cid:568)/Respondent

Assessee by : Shri Sudhir Sehgal, Advocate Revenue by : Shri Vinod Kumar Chaudhary, Sr. DR Date of Hearing : 12.11.2025 Date of Pronouncement : 27.01.2026 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The Revenue is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 05.02.2025 passed for assessment year 2019-20.

2. The Revenue has taken six grounds of appeal, however, its grievance revolves around a single issue, namely, CIT (Appeals) has erred in deleting addition of Rs.1,03,75,000/- which was added by the AO with the aid of Section 69A of the Income Tax Act.

3. The brief facts of the case are that assessee is a Co- operative Agricultural Society Ltd. It has been accepting deposits from its members and also gives credit to its members which is repaid by them on year to year basis. The cash received from the members was deposited by the Society in its bank account. In other words, the deposits received from the members as well as repayment of loan by the members is being deposited in the bank account of the society. The ld. AO confronted the assessee to explain the source of such deposits. The assessee has submitted its audited accounts, list of members and how these monies have been received from each member but ld. AO did not accept the contention of the assessee and made an addition of unexplained investment in the bank deposits.

4. Dissatisfied with the order, the assessee carried the matter in appeal before ld.CIT (Appeals). The ld.CIT (Appeals)

has deleted the addition by recording an elaborate finding which reads as under :

“6. I have considered the facts of the case, assessment order, submission made by the appellant and case laws relied upon. In the present appeal, appellant has raised 7 grounds of appeal and all are against the action of the AO in making addition of cash deposit of Rs. 1,03,75,000/- made in the account held with Kangra Central Co-op. Bank. The facts of the case are that the appellant had not filed its return of income for the year under consideration. It was noticed by the AO that appellant had huge cash deposits during the year and therefore, action u/s.147 of the Act was initiated and notice u/s 148 of the Act dated 27/02/2023. Thereafter, statutory notices were also issued by the AO on various dates. The AO has stated in the assessment order that society did not file speaking reply in compliance of notices issued u/s. 142(1) of the IT Act, 1961 and though appellant furnished its submission, it has failed to submit any explanation during the assessment proceedings to the pointed questions asked by AO. The appellant had failed to prove the sources of cash deposits made as above. The appellant submitted that it is a cooperative agriculture service society ltd registered with the Registrar of Himachal Pradesh Co-op. Society. It provides services of goods item and financial assistance like advance given to its members as well as those people who are covered under notified area as per its bye-laws. The members of the society are the farmers. The society purchase ration from government making payments and thereafter it sale to the farmers / members on government specified rates. Further, appellant had also filed before the AO (i) details of activity (ii)Copy of ITR (iii) P & L account (hand-made) (iv) Bye-laws. The AO found that the income is earned from Savings account, current

Click Here to Read the rest of this document