BRAJGOPAL GUPTA,DABRA V. ITO, GWALIOR

ITA 248/AGR/2024

AI Insights

The case involves multiple appeals related to the assessment year 2018-19, where the assessee, Shri Brajgopal Gupta, contested the quantum additions and penalties imposed by the lower tax authorities. The appeals were heard by the Income Tax Appellate Tribunal in Agra, which considered the submissions of the revenue represented by Shri Sukesh Kumar Jain, Ld. CIT-DR, as the assessee did not appear. The primary issues revolved around the additions made to the assessee's income under sections 69A and 144 r.w.s. 147 of the Income Tax Act, concerning unexplained cash withdrawals and deposits, and the imposition of penalties under section 271AAC(1).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41040 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: S.M.I.L.E. Microfinance Ltd. vs. ACIT (WP (MD) No.2078 of 2020 dated 19-11-2024)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE; SUKESH KUMAR JAIN LD.
• Assessee Lawyers: WAY OF RTGS
• Section: 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकरअपील सं. / ITA No.246/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2018-19) & 2. आयकरअपील सं. / ITA No.247/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2018-19) & 3. आयकरअपील सं. / ITA No.248/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2018-19) Shri Brajgopal Gupta 54, Harsi Road infront of Sanyas Ashram MP 475110 बनाम/ Vs. ITO Gawalior (MP) ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ARMPG-7098-M (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) & 4. आयकरअपील सं. / ITA No.264/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2018-19) ITO Gawalior (MP) बनाम/ Vs. Shri Brajgopal Gupta 54, Harsi Road infront of Sanyas Ashram MP 475110 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ARMPG-7098-M (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) Assessee by : None Revenue by : Shri Sukesh Kumar Jain – Ld. CIT-DR सुनवाईकीतारीख/Date of Hearing : 20-02-2025 घोषणाकीतारीख /Date of Pronouncement : 28-03-2025 2 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The assessee is in further appeal before us against quantum additions as well as against penalties as levied by lower authorities. The revenue is also in further appeal against relief granted by Ld. CIT(A) on quantum additions. At the time of hearing, none appeared for assessee and accordingly, the appeals were heard with the able assistance of Ld. CIT-DR who pleaded for restoration of assessment orders as well as confirmation of penalty orders of Ld. AO. First, we take up quantum appeal which arises out of the order of Ld. Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 15-05-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s. 147 of the Act on 14-03-2023. 2. The assessee’s case was reopened to examine the financial transactions as reported to the department. The assessee was show caused but the assessee remained non-compliant. Left with no option, Ld. AO added cash withdrawals of Rs.406.66 Lacs to the income of the assessee as unexplained money u/s 69A. The assessee made cash deposits of Rs.50.30 Lacs which were also added u/s 69A. The assessee earned contractual receipts of Rs.0.30 Lacs against which Ld. AO estimated income at 8%. The assessee earned interest of Rs.0.51 Lacs which was added as income from other sources. The Tax Auditor reported income of Rs.13.43 Lacs. After adding all these components, Ld. AO determined total income of Rs.470.93 Lacs on best judgment basis. 3 3. The Ld. CIT(A), at para 10.6, observed that the cash withdrawals were made out of amount received by the assessee by way of RTGS / NEFT. The credit transactions were out of trading activities and therefore, cash withdrawals were out of trading receipts only. The Ld. AO observed that the assessee made cash deposits of Rs.50.30 Lacs and made cash withdrawals of Rs.406.66 Lacs. Since the source of withdrawals was out of trading receipts, the same could not be added to the income of the assessee. Accordingly, the addition of Rs.406.66 Lacs was deleted whereas addition of cash deposit for Rs.50.30 Lacs was sustained. The adjudication of Ld. CIT(A) has led to cross-appeals before us. 4. The factual findings as rendered by Ld. CIT(A) remain uncontroverted before us. It is the finding of Ld. CIT(A) that cash withdrawals were out of trading receipts. However, the income from trading activities has not been estimated. Therefore, we estimate the same at 5% of withdrawals of Rs.406.66 Lacs. The addition of cash deposit for Rs.50.30 Lacs is sustained since the assessee has failed to establish the sources thereof. The addition as sustained by us would be subjected to normal rate of tax in terms of decision of Hon’ble High Court of Madras (Madurai Bench) in S.M.I.L.E. Microfinance Ltd. vs. ACIT (WP (MD) No.2078 of 2020 dated 19-11-2024) holding that the revenue is empowered to impose 60% rate of tax for the transactions from 01.04.2017 onwards and not prior to the said cut-off date. The Ld. AO is directed to re-compute the income of the assessee. The cross-appeals stand partly allowed accordingly. 5. Against quantum addition of Rs.13.97 Lacs, Ld. AO levied penalty of Rs.1.19 Lacs vide its order dated 20-07-2023, For quantum addition of 4 Rs.456.96 Lacs, Ld. AO levied penalty u/s 271AAC(1) for Rs.27.41 Lacs. The same was confirmed by Ld. CIT(A). Aggrieved, the assessee is in further appeal before us. 6. Considering our view in quantum appeal wherein we have estimated the income of the assessee and relied on the cited decision of Hon’ble High Court holding that the income would be subjected to normal rate of tax, we would hold that it is not a fit case for levy of impugned penalties. When the income is estimated, the same would not automatically lead to a conclusion that the assessee concealed its particulars of income. By deleting both the penalties, we allow the appeal of the assessee. 7. In the result, ITA No.246/Agr/2024 & ITA No.264/Agr/2024 stand partly allowed. ITA Nos.247 & 248/Agr/2024 stand allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) Ɋाियक सद˟ /JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER Dated: 28-03-2025 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT AGRA "