BASUDEBPUR UTTARBARH SAMABAY KRISHI UNNAYAN SAMITY LTD.,EAST MIDNAPORE V. A.C.I.T., CIRCLE - 27(1), HALDIA, PURBA MEDINIPUR

ITA 1263/KOL/2024

AI Insights

The case involves Basudebpur Uttarbarh Samabay Krishi Unnayan Samity Ltd., a cooperative society engaged in banking and member services, which appealed against the CIT(A)'s decision enhancing its taxable profit despite reporting a net loss. The Assessing Officer (AO) had initially made several additions to the income based on unexplained cash deposits during the demonetization period, but these were not contested by the Revenue. The primary contention was the incorrect enhancement of income by the CIT(A), which the Tribunal found to be a factual error, leading to the setting aside of the CIT(A)'s order on this specific issue.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473875 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDAN DAS
• Assessee Lawyers: SOUMITRA CHOUDHURY; PRANABESH SARKAR; ARS
• Keywords: Set aside
• Section: 144; 142(1); 69A; 80P

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM ITA No.1263/KOL/2024 (Assessment Year:2017-18) Basudebpur Uttarbarh Samabay Krishi Unnayan Samity Ltd. Bsudebpur, Egra, Purba Medinipur, West Bengal-721452 Vs. ACIT, Circle 27(1), Haldia, Basudevpur, Khanjanchak, haldia, Purba Medinipur, West Bengal-721602 (Appellant) (Respondent) PAN No. AABAB3986C Assessee by : Shri Soumitra Choudhury & Shri Pranabesh Sarkar, Ars Revenue by : Shri Chandan Das, DR Date of hearing: 07.11.2024 Date of pronouncement : 29.01.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 21.03.2024 for the AY 2017-18. 02. The ground no.1 and 2 are general in nature and need no specific adjudication. 03. The issue raised in ground no.3 is against the order of ld. CIT (A), enhancing the taxable profit of ₹48,70,648/- as chargeable to tax, thereby denying deduction u/s 80P of the Act despite the fact that there was net loss of ₹48,70,648/- as per Profit and Loss account and as such the finding of ld. CIT (A) is completely arbitrary, unjustified and illegal. Page | 2 ITA No.1263/KOL/2024 BasudebpurUttarbarhSamabay Krishi Unnayan Samity Ltd.; A.Y. 2017-18 04. The facts in brief are that the assessee did not file any return of income during the year for the reason that it has incurred loss of ₹48,70,648/- as per Profit and Loss account. The ld. AO issued notice u/s 142(1) of the Act on 14.12.2017, calling the assessee to prepare and furnish a correct return of income in respect of which the assessee is assessable under the Act during the previous year relevant to A.Y. 2017-18. However, the assessee failed to respond to the said notice. Thereafter, the ld. AO on the basis of data and information gathered during online verification under operation 'clean money’ found that assessee has deposited huge cash money during the demonetization period but has not filed any return of income. According to the ld. AO the assessee has deposited cash aggregating to ₹87,79,500/- in three bank accounts as detailed in page no.2 of the assessment order. The ld. AO made four additions to the income of the assessee namely (i) addition u/s 69A of the Act of ₹87,79,500/- towards unexplained money, (ii) undisclosed profit of ₹15,35,110/- ,(iii) interest income of ₹6,59,987/- and (iv) commission earned ₹2,53,679/-, in the assessment framed u/s 144 of the Act dated 20.12.2019. 05. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has challenged the enhancement of income made by the ld. CIT (A) on account of taxable profit of ₹48,70,648/- which was in fact the loss incurred by the assessee during the year as is apparent from the audited profit nd loss account while the additions made by the ld. AO during the assessment proceedings were deleted by the ld. CIT (A). The Revenue is not in appeal before us against the order of ld CIT(A)deleting the addituions and only the assessee is in appeal challenging the enhancement of income by ₹48,70,648/-. On perusal of the Profit and Loss account filed before us a copy of which is also available before Page | 3 ITA No.1263/KOL/2024 BasudebpurUttarbarhSamabay Krishi Unnayan Samity Ltd.; A.Y. 2017-18 the ld. CIT (A), we note that during the instant financial year, the assessee incurred loss of ₹48,70,648/- from the operation. A copy of the said profit and loss account is available in the paper book at page 6 and 7. We further note that the assessee is a co-operative society who has been engaged in the business of banking and providing facility to its members and the accounts were statutorily audited by the Government cooperative auditors appointed by The Registrar of Cooperative Societies, Co-operation department, Government of West Bengal, We note that the assessee has duly filed the Audit Report dated 20.01.2020 including audited profit and loss account with no adverse finding. Therefore, this is factual mistake on the part of the ld. CIT (A) in taking the amount of such loss as taxable profit during the year which in our opinion needs to be corrected. Accordingly, we set aside the order of ld. CIT (A) on this issue and direct the ld. AO to delete the addition made by enhancement. 06. Since, we have directed to delete of addition of ₹48,70,648/-, which was the amount of income enhanced by the ld. CIT (A) therefore, ther is no need for adjudication of the issue of deduction u/s 80P of the Act. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 29.01.2025. Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 29.01.2025 Sudip Sarkar, Sr.PS Page | 4 ITA No.1263/KOL/2024 BasudebpurUttarbarhSamabay Krishi Unnayan Samity Ltd.; A.Y. 2017-18 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "