Manish Badalia, Kolkata V. I.T.O., Ward - 2(2), Hooghly, Hooghly

ITA 764/KOL/2022

AI Insights

This case involves an appeal by Manish Badalia against the order of the Learned Commissioner of Income-tax (Appeals)- XXXVI, Kolkata, which confirmed the additions made by the Assessing Officer for the Assessment Year 2008-09. The additions were based on the cash peak credit and unexplained other credits in the assessee's bank account. The Tribunal examined the evidence presented by the assessee, including details of coal purchases and advances received from customers, and concluded that the additions were not justified. The Tribunal's decision was based on the finding that the assessee had sufficient documentation to support the transactions and explain the credits in the bank account.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128731 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-07-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Peak credit; Set aside

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA श्री राज े श क ु मार, ल े खा सदस्य एवं श्री संजय शमा ा , न्याधयक सदस्य क े समक्ष Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 764/KOL/2022 Assessment Year: 2008-09 Manish Badalia........................................................Appellant [PAN: AKLPB 6810 A] Vs. ITO, Ward-2(2), Hooghly........................................Respondent Appearances by: Sh. Miraj D. Shah, A/R, appeared on behalf of the Assessee. Sh. P.P. Barman, Addl. CIT, Sr. DR, appeared on behalf of the Revenue. Date of concluding the hearing : July 27 th , 2023 Date of pronouncing the order : August 22 nd , 2023 ORDER Per Rajesh Kumar, Accountant Member: This is an appeal preferred by the assessee against the order of Learned Commissioner of Income-tax (Appeals)- XXXVI, Kolkata [hereinafter referred to Ld. ‘CIT(A)’] dated 28.08.2014 for the Assessment Year (in short ‘AY’) 2008-09. I.T.A. No.: 764/KOL/2022 Assessment Year: 2008-09 Manish Badalia. Page 2 of 5 2. The issue raised in ground nos. 1 & 2 are against the confirmation of Rs. 13,63,510/- by Ld. CIT(A) as added by The Assessing Officer (in short Ld. 'AO') on the basis of cash peak credit. 3. The facts in brief are that the Ld. AO during the course of assessment proceedings noticed that the assessee has deposited cash in his bank account and accordingly, a show cause notice was issued which was never replied by the assessee. Ld. AO concluded that the assessee has not disclosed the bank account in the return of income as well as in the balance sheet prepared by the assessee and consequently added the peak balance of cash deposit of Rs. 13,63,510/- to the income of the assessee. 4. In the appellate proceedings also Ld. CIT(A) simply affirmed the order of Ld. Assessing Officer (in short ld. 'AO'). 5. After hearing rival contentions and perusing the material on record, we find that the assessee has made purchases of coal from Eastern Coal Fields for which the assessee has received cash advances from various customers. We observe that the money received by the assessee from the customers has been utilized for purchase of coal from the Coal Junction. The assessee has furnished the details of payments made to Metal Junction Services Ltd. and Eastern Coal Fields Ltd. at page no. 14 & 15 of the paper book which is extracted below for the sake of ready reference: I.T.A. No.: 764/KOL/2022 Assessment Year: 2008-09 Manish Badalia. Page 3 of 5 6. We observe from the above that the assessee has received advances for coal purchases from seven parties and has also given their PANs along with addresses in the statement extracted above. We further note that during the year the assessee has received Rs. 15,24,980/- from customers towards coal purchase. Considering these documents and also other various evidences filed by the assessee before us, we are of the view that the observations of the authorities below are not correct and cannot be sustained. Accordingly, we set aside the order of Ld. CIT(A) and delete the addition made by Ld. AO. The ground no. 1& 2 are allowed. I.T.A. No.: 764/KOL/2022 Assessment Year: 2008-09 Manish Badalia. Page 4 of 5 7. The issue raised in ground no. 3 is against the confirmation of addition of Rs. 95,832/- by Ld. CIT(A) as made by Ld. AO in respect of unexplained other credits. 8. Ld. AO noted during the course of assessment proceedings that some credits were appearing in the bank account aggregating to Rs. 95,832/- which were not explained by the assessee and accordingly added the same to the income of the assessee. In the appellate proceedings, Ld. CIT(A) affirmed the order of Ld. AO on this issue. 9. After hearing rival contentions and perusing the material on records, we find that the assessee has sufficient source to make the purchases with the amount in the bank account of the assessee as the assessee is in the business of trading in coal. We note that during the year the assessee has received Rs. 15,24,980/- from seven parties aggregating against which the purchases were made to the tune of Rs. 13,52,980/- and sufficient cash is available to explain the other credits. We, accordingly, set aside the order of Ld. CIT(A) and direct Ld. AO to delete the addition. 10. In the result, the appeal filed by the assessee is allowed. Kolkata, the 22 nd August, 2023. Sd/- Sd/- [Sonjoy Sarma] [Rajesh Kumar] Judicial Member Accountant Member Dated: 22.08.2023 Bidhan (P.S.) I.T.A. No.: 764/KOL/2022 Assessment Year: 2008-09 Manish Badalia. Page 5 of 5 Copy of the order forwarded to: 1. Manish Badalia, 90, Phears Lane, 4 th Floor, Room No. 404, Near Central Metro, Kolkata-700 012. 2. ITO, Ward-2(2), Hooghly. 3. CIT(A)-XXXVI, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata