INCOME TAX OFFICER, KOLKATA V. NEPAL KUMAR, HOWRAH

ITA 1130/KOL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against the decision of the CIT(A), which had deleted an addition made to the assessee's income for the assessment year 2017-18. The addition was initially made by the Assessing Officer (AO) under Section 68 read with Section 115BBE of the Income Tax Act, 1961, due to unexplained cash deposits amounting to Rs. 1,57,99,220 in the assessee's bank account during the demonetization period. The CIT(A) found that the assessee had substantiated the source of these deposits as proceeds from the sale of SIM cards and coupons, a business activity the assessee was engaged in. The Tribunal, after reviewing the submissions and evidence, concurred with the CIT(A)'s decision and dismissed the Revenue's appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472604 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 16-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PP BARMAN
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Business income; Unexplained cash credit
• Section: 143(3); 250; 68; 69A

Judgement Text

" आयकर अपीलीय अधिकरण न्यायपीठ, कोलकाता । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No. 1130/KOL/2024 Assessment Year: 2017-18 INCOME TAX OFFICER 3No. Government Place, (West) Kolkata-700001, West Bengal Vs NEPAL KUMAR Stash, GIP Colony, Jagacha, Howrah-711112, Kolkata [PAN : AINPK9169M] अपीलार्थी/ (Appellant) प्रत्‍ यर्थी/ (Respondent) Assessee by : Shri Miraj D. Shah, AR Revenue by : Shri PP Barman, Addl. CIT सुनवाई की तारीख/Date of Hearing : 03.10.2024 घोषणा की तारीख /Date of Pronouncement : 16.10.2024 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal filed by the Revenue, pertaining to assessment year 2017-18 is directed against the order passed by the Learned National Faceless Appeal Centre, Delhi (hereinafter referred to as the ‘ld. CIT(A)’) dated 19th March, 2024 passed u/s 250 of the Income Tax Act, 1961 (‘Act’), which is arising out of the assessment order u/s 143(3) of the Income-tax Act, 1961 (the Act) vide order dated 30th December, 2019. 02. The assessee has raised following ground of appeal: - “1. The Ld.CIT(A)-NFAC has erred in fact andcircumstances of the case in deleting the addition of Rs. 1,57,99,220/-made on account of cash deposited in to bank account of assesse considered as unexplained money u/s 69A of the Act despite the fact that the assesse during the course of assessment proceedings had failed to substantive the source of cash deposit with documentary evidences. 2. The Ld.CIT(A)-NFAC has erred in fact andcircumstances on facts in deleting the addition of Rs. 1,57,99,220/- on account of cash deposit in to bank account of assesse in mentioning the unexplained money u/s 69A of the Act instead of the unexplained cash credit u/s 68 of the Actas contains inthe Assessment Order. 3. Page | 2 ITA No.1130/KOL/2024 Nepal Kumar; A.Y. 2017-18 That the appellant craves leave to add, alter and/or amend any of the grounds of appeal during the course of hearing of appeal.” 03. Brief facts of the case are that the assessee is an individual engaged in the business of distribution work of sale of SIM card and coupons of Bharti Airtel Limited. Income of ₹4,78,660/- declared in the e-return for A.Y. 2017-18, dated 18th November, 2017. During the year under consideration, demonetization scheme was announced and Specified bank notes (SBN) totaling to ₹1,57,99,220/- were deposited. The ld. AO based on this information carried out the assessment proceedings and asked the assessee to explain the source of the cash deposit. The assessee claimed that the source of cash deposited is from the sale proceeds and is from the revenue of the business regularly carried out during the year. However, ld. AO was not satisfied and stated that it to be a offspring of afterthought and a cooked-up & concocted conception and invoking the provision of Section 68 read with section 115BBE of the Act made addition of ₹1,59,99,220/- and assessed income at ₹1,64,77,880/-. 04. Aggrieved assessee preferred the appeal before the ld. CIT (A) and successfully demonstrated the source of cash deposits which is from the sale proceeds from business carried out in the name of Maa Durga Enterprise a distributor of Bharti Airtel Limited. The ld. CIT (A) based on the documents filed before him, was satisfied with the source of cash deposit explained by the assessee and accordingly, granted the relief. Aggrieved Revenue is now in appeal before this Tribunal 05. The ld. DR vehemently argued supporting the order of the concerning officer and ld. counsel for the assessee therefore relied on the finding of the ld. CIT (A). Page | 3 ITA No.1130/KOL/2024 Nepal Kumar; A.Y. 2017-18 06. We have heard the rival contentions and perused the records available on record. The sole grievance of the Revenue is against the deletion of addition of ₹1,59,99,220/- made u/s 68 read with section 115BBE of the Act, alleging that the assessee has not explained the source of cash deposits in SBN during the demonetization period. We noticed that the assessee is a distributor of Bharti Airtel Limited. Out of the sale proceed of SIM Card and coupons, payments were made to Bharti Airtel Limited through RTGS system only. Turnover for the year under consideration is 7.92 crore which had further increased to 14.70 cr. and 16.70 cr. during subsequent years. Books of account are regularly audited and tax audit reports stands uploaded on the income tax portal. The ld. CIT (A) after examining the facts of the case deleted the impugned addition of ₹1,57,99,220/- u/s 69A of the Act, which read as under: - “6. The sole issue that arises for consideration in the present appeal is the cash deposits found to have been made by the appellant in his bank account. According to the appellant, he is the sole proprietor of M/s.Maa Durga Enterprise, which is carrying on the business as distributor of Bharti Airtel Limited and the cash deposits made during the relevant period in his bank accounts were out of sale proceeds received from the customers on sale of SIM cards. In support thereof the appellant had submitted before the AO copy of the Distribution Agreement entered into with Bharti Airtel Limited, Bank Statements, Sale Register, Balance Sheet, Final Accounts including Balance Sheet, Profit and Loss Account and expenditure details with ledger copies. However, the AO held that the appellant failed to furnish the cash book and VAT returns as required and hence treated the entire cash deposit of Rs.1,64,77,880/- as unexplained u/s.69A of the Act. Aggrieved, appellant has filed the present appeal. 6.1. According to the appellant, the AO has failed to take cognizance of the details furnished during the course of assessment proceedings and had summarily rejected the evidences filed. The appellant submits that perusal of bank account statement would clearly show that immediately after the cash deposits, corresponding sums were transferred to Bharti Airtel Ltd which corroborates the contentions. The appellant further contends that in the subsequent year, i.e., AY.2018-19, similar cash deposits, of higher volumes were accepted as from out of cash sales. The appellant has furnished the copies of submissions made before the AO during the course of assessment proceedings to support the contentions that all necessary details and evidences were already available before the AO which clearly substantiated the source of cash deposits as from out of the sale proceeds. The appellant further submits that Books of accounts are duly audited and as per RBI notification, acceptance of cash on sale of SIM cards was permitted during demonetization period. It is therefore, contended that addition of the impugned cash deposits as unexplained by the AO is totally arbitrary and unwarranted on the facts of the case. Page | 4 ITA No.1130/KOL/2024 Nepal Kumar; A.Y. 2017-18 6.2. Submissions of the appellant were considered and facts on records including submissions made before the AO were also perused. It is seen that the appellant is carrying on the business as a distributor of Bharti Airtel Ltd and for the relevant period the total sales is Rs.7,92,10,012/- as per the audited final accounts and Tax Audit Report. Perusal of Bank Account statement concerned for the relevant period shows that immediately after the cash deposits, corresponding transfers have also been made on the same day to Bharti Airtel Limited which corroborates appellant’s contention that the cash deposits represented Cash Sales. Further, the appellant had also filed before the AO the Sales Ledger wherefrom the AO could have very well ascertained the Cash Sale component during the relevant period. It is evident that the contentions of the appellant that the impugned cash deposits are from out of its cash sales has been summarily rejected by the AO without bringing on record any tangible evidence or inconsistency in the evidences furnished during the course of assessment proceedings. Considering the above, the impugned addition of Rs.1,57,99,220/- under Section 69A cannot be sustained on facts and in law and is therefore, directed to be deleted. 7. In the result, appeal is “Allowed”. 07. The above facts narrated by ld. CIT (A) in his finding stands uncontroverted by the DR and therefore, considering the fact that assessee is working under a distribution agreement in Bharti Airtel Limited, source of cash deposit is the cash sales of SIM Card / coupons of Bharti Airtel Limited. Cash collected from the cash sales has been deposited in the bank account regularly. The assessee has carried out this business activity in subsequent years and also has effected increased sales. We therefore, fail to find any infirmity in the order of the finding of ld. CIT (A) which has been arrived on after examining the books of accounts, sales ledger, cash book, audited financial statements, etc. which explains the source of alleged cash deposit. The effective grounds of appeal raised by the Revenue are dismissed. 08. In the result, the appeal of the Revenue is dismissed. Order pronounced in the Court on 16th October, 2024 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 16.10.2024 *SS, Sr.Ps Page | 5 ITA No.1130/KOL/2024 Nepal Kumar; A.Y. 2017-18 आदेश की प्रतततिति अग्रेतषत/Copy of the Order forwarded to : 1. अिीिार्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. संबंतित आयकर आयुक्त / Concerned Pr. CIT 4. आयकर आयुक्त ( अिीि ) / The CIT(A)- 5. तवभागीय प्रतततनति , अतिकरण अिीिीय आयकर , कोिकाता/DR,ITAT, Kolkata, 6. गार्ड फाईि / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Sr. PS/ Assistant Registrar आयकर अिीिीय अतिकरण ITAT, Kolkata "