INCOME TAX OFFICER, WARD-3(2), PURULIA, PURULIA V. LADHURKA C S SHOP, PURULIA

ITA 749/KOL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the National Faceless Appeal Centre, which had deleted an addition of \\u20b991,02,400/- to the income of Ladhurka C S Shop for the Assessment Year 2017-18. The addition was initially made by the Assessing Officer under section 69A of the Income-tax Act, 1961, suspecting the cash deposits in the assessee's bank account to be unexplained. However, during the appellate proceedings, the assessee provided detailed explanations and documents, which led to the deletion of the addition by the CIT (A). The Tribunal dismissed the Revenue's appeal, agreeing with the CIT (A)'s decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360824 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN
• Assessee Lawyers: SRUTI DATTA
• Section: 147; 148; 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.749/KOL/2024 (Assessment Year: 2017-18) Income Tax Officer, Ward 3(2), Purulia, South Lake road, Opp. Subhas park, West Bengal-723101 Vs. Ladhurka C S Shop, Purulia AT-Jambad, PO-Ladhurka, PS- Hura, West Bengal 723148 (Appellant) (Respondent) PAN No. AAACFL8996J Assessee by : Ms. Sruti Datta, AR Revenue by : Shri Sallongyaden, DR Date of hearing: 13.05.2025 Date of pronouncement : 19.05.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 02.02.2024 for the AY 2017-18. 02. At the outset, we observe that the appeal of the Revenue is barred by limitation of 3 days for which condonation petition has been filed by the Revenue. 03. After hearing the rival contentions and perusing the contents of the condonation petition, we are inclined to condone the delay by treating the reasons for delay to be bonafide and genuine. 04. The issue raised by the Revenue in its appeal is against the deletion of ₹91,02,400/- by the ld. CIT (A) as made by the ld. AO u/s 69A of the Income-tax Act, 1961 (the Act) in respect of cash deposited in the bank account. Page | 2 ITA No.749/KOL/2024 Ladhurka C S Shop; A.Y. 2017-18 05. The facts in brief are that the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 31.03.2021, which was complied with by filing the return of income on 10.04.2021. The notice u/s 143(2) of the Act was issued on 04.05.2021. Thereafter, the notice u/s 142(1) of the Act along with questionnaire was issued calling for the details from the assessee in respect of cash deposited of ₹91,02,400/- in the SBI Account at Purulia branch during the F.Y. 2016-17. The assessee did not respond to the said notices and finally, the same was treated as unexplained money and added to the income of the assessee in the assessment framed u/s 147 read with section 144 of the Act dated 16.03.2022. 06. In the appellate proceedings, the assessee filed all the information and details before the ld. CIT (A) and ld. CIT (A) called for the remand report from the AO, which was duly submitted and after taking into account the remand reports the addition was deleted. The ld. CIT (A) while deleting the addition observed and held as under:- “4. Decision: 4.1. During the course of appeal proceedings, hearing notices were sent and the appellant e-filed documents / submissions. I have gone through the facts of the case and also submissions made by the appellant. The issues raised in the grounds which require adjudication, are as under: 4.2. The AO in the Assessment Order has stated that “further from the bank account submitted by the assessee it is noticed that there is total deposits during the FY 2016- 17 were only of Rs.52,44,050/-. Even bank statement submitted by the assessee was also overwritten, which further make submission of the assessee suspicious. Further even after requesting to explain such discrepancy, the assessee has not submitted any reply. The assessee made purchase of Rs.1,14,21,452/- but as per bank account statement there were total debit only of Rs.53,25,658/-, which shows that the assessee either made payments of purchases in cash or used another bank account which is not disclosed by the assessee during the assessment proceedings. From the above facts supports that the assessee used another bank account or to say the assessee deposited cash receipts in its partners (firms Bank account in which PAN of partner was given instead of Firm/assessee) bank account.Which also substantiated by concerned bank in reply to the notice issued u/s.133(6) during the assessment proceedings of partner.” Page | 3 ITA No.749/KOL/2024 Ladhurka C S Shop; A.Y. 2017-18 4.3. Whereas, during the course of appeal proceedings, the appellant has filed its written submissions as under:- “The assessee has a CA in SBI with A/c No,32306469707. In this bank account, all the business transactions with respect to Sales and Purchase is done by the assessee during the A.Y.2017-18 in the form of cash deposit with respect to the cash sales done. Party payment through NEFT / RTGS / Cheque. The assessee deals with retail trading in Country Spirits products with proper license from Government of West Bengal. Henceforth, the cash deposit done amounting to Rs.91,86,850/- is respect with cash sales during the F.Y.2016-17. The same sales had been reported in Income-Tax Return for the relevant F.Y.” 4.4. It is also submitted by the appellant that, all the business transactions with respect to Sales & Purchases was done by the appellant during the A.Y.2017-18 in the form of Cash Deposit with respect to the Cash Sales done and the payments was done through NEFT /REGS/ Cheque. The appellant also stated that, it submitted bank statement in two parts before the AO as under: Whereas, the AO has treated part of the bank account for the whole year and stated that “the deposit during the F.Y.2016-17 were only Rs.51,44,050/0 and the total debit was only Rs.53,25,658/-.” But, actually the total deposit was Rs.91,86,850/- (Rs.52,44,050 + Rs.39,42,800), which was deposited out of cash sale of Rs.1,25,26,785/- and the rest was used for other business purposes. Further, the total debit was Rs.91,66,999/- (Rs.53,25,658 + Rs,38,41,341). 4.5. In view of the above, the AO was asked remand report to confirm the above contention of the appellant. Accordingly, the AO has submitted remand report on 08.01.2024 and stated that the total cash deposit during the year was Rs.9,86,850/- and the total debit was Rs,91,67,077/- in the said bank account of the appellant (A/c.No.32306469707) maintained in SBI, Purulia Branch. 4.6. In view of the above, I am of the considered view that the cash deposit made by the appellant in the said bank A/c. of SBI, Purulia Branch amounting to Rs.91,86,850/- was out of the liquor sales made by the appellant which was amounting to Rs.1,25,26,785/- during the year. The above facts also confirmed by the AO in the remand report dated 08.01.2004. Accordingly, the addition made by the AO on account of cash deposit u/s.69A of the Act is not sustainable and hereby deleted. 5. As a result, the appeal filed by the appellant is hereby allowed” 07. After hearing the rival contentions and perusing the materials available on record, we find that though the assessee did not appear before the ld. AO, however, in the appellate proceedings the assessee Page | 4 ITA No.749/KOL/2024 Ladhurka C S Shop; A.Y. 2017-18 filed all the documents on which the ld. CIT (A) called for the remand report from the ld. AO on 08.01.2024 on the issue of cash deposited by the assessee in the bank account. The remand report was submitted by the ld. AO confirming therein that the deposit of the cash was out of cash sales of liquors. The ld. CIT (A) passed a very detail and speaking order based on the remand report. Therefore, we do not find any infirmity in the appellate order and accordingly, the same is upheld by dismissing the appeal of the revenue. 08. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 19.05.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 19.05.2025 Sudip Sarkar, Sr.PS 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 "