ITO WARD-46(1), KOLKATA, KOLKATA V. ALOKE KUMAR BANERJEE, HOWRAH

ITA 861/KOL/2024

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A), which had deleted several additions made by the AO to the income of Aloke Kumar Banerjee, a proprietor of a petrol pump business, for the assessment year 2011-2012. The additions pertained to unexplained cash deposits, differences in capital accounts, and unaccounted commission and income from fixed deposits and miscellaneous sources. The CIT(A) found that the AO had either misinterpreted the facts or had incorrectly added the same income twice under different heads. The Tribunal, after reviewing the submissions and evidence, concurred with the CIT(A)'s decisions and dismissed the revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126289 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILEN SAMADDER
• Assessee Lawyers: ANUJ MUSADDI
• Keywords: Business income; Unexplained cash credit; FORM 26AS; Dismissed; National Faceless Appeal; HRA; Transactions; Deleted; Explanation
• Section: 68

Judgement Text

" आयकर अपीलीय अधिकरण, “बी ” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER आयकर अपील सं/ITA No.861/KOL/2024 (नििाारण वर्ा / Assessment Year : 2011-2012) ITO, Ward-46(1), Kolkata Vs Aloke Kumar Banerjee, Unit No.A/08/05, Kolkata West International City, Howrah Amta Road & Bombay Road Crossing Salap More, Howrah-711409 PAN No. :AILPB 4570 D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Anuj Musaddi, AR राजस्व की ओर से /Revenue by : Shri Sailen Samadder, Addl. CIT-Sr. DR सुनवाई की तारीख / Date of Hearing : 20/02/2025 घोषणा की तारीख/Date of Pronouncement : 21/04/2025 आदेश / O R D E R Per Rajesh Kumar, AM : This is an appeal filed by the revenue against the order dated 15.02.2024 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2011-2012, on the following grounds :- 1. Whether on the facts and circumstances of the case, the Ld CIT(A) was right in law as well as on facts in deleting the addition of Rs. 2,87,12,120/- as unexplained cash deposited in bank accounts without considering the facts that the asseseee failed to reconcile the cash deposit of Rs. 2,87,12,210/-. 2. Whether on the facts and circumstances of the case, the Ld CIT(A) was right in law as well as on facts in deleting the addition of Rs. 1,71,925 as difference in capital account as unexplained cash credit into books of assesee u/s 68 of the IT Act, without considering the facts that the difference of Rs. 171925/- could not be explained by the assessee. ITA No.861/KOL/2024 2 3. Whether on the facts and circumstances of the case, the Ld CIT(A) was right in law as well as on facts in deleting the addition of Rs. 29,55,960/- as commission received from the HPCL, without considering the facts that the assessee failed to produce satisfactory explanation. 4. Whether on the facts and circumstances of the case, the Ld CIT(A) was right in law as well as on facts in deleting the addition of Rs. 9,94,405/- (7.96.725/- + 1,97.680) as income from FD & Misc income in the head of income from other sources, without considering the facts that the assessee did not consider the amount as income from other source. 2. In Ground No.1, the revenue has challenged the deletion of addition of Rs.2,87,12,120/- by the ld. CIT(A), which was made by the AO on account of unexplained cash deposited in the bank account. 3. Facts in brief are that the assessee is engaged in the business of running of petrol pump under the proprietorship concern namely M/s Auto Care Centre at Indo American More, Dr. Zakir Hossain Avenue, Durgapur. The AO on the basis of AIR information has taken the total cash deposited cash into his bank account at Rs.21,47,02,666/-, whereas the assessee has deposited only Rs.18,59,90,456/- in Axis Bank saving account, thus, there is a difference amount of Rs.2,87,12,210/- which has been treated by the AO as unexplained cash and added the same to the total income of the assessee. 4. The ld. CIT(A) in appellate proceedings allowed this isuse in favour of the assessee taking into consideration the submissions of the assessee by observing and holding as under :- 4.2. I have considered the facts of the case, assessment order and appellant's submissions. The Assessing Officer on the basis of AIR & CIB information, held that total cash deposit into bank a/c's should be Rs.21,47,02,666/- whereas the assessee deposited only Rs. 18,59,90,456/- in Axis Bank saving account, thus the difference amount of Rs.2,87,12,210/- is unexplained and ITA No.861/KOL/2024 3 added to the total income. The appellant has explained that both AIR & CIB information have been drawn from assessee's Saving Bank A/c No. 910010029302353 with Axis Bank, Durgapur Branch. The appellant has also uploaded the copies/ summary of all current, saving and overdraft bank accounts and cash flow statement to substantiate his claim. I have carefully verified the various documents filed by the appellant and I find that the appellant's claim is correct. Both AIR & CIB data has been taken from a single saving bank a/c no. 910010029302353 Axis Bank, Durgapur Branch and the AO has committed a mistake in treating these data separately and adding these two amounts to hold that actual cash deposited was less than what was indicated in these two statements. If this mistake is corrected, then there remains no excess cash deposit of Rs.2,87, 12, 120/- as held by the AO. The addition has been made on wrong facts, the same is deleted. The ground no. 1 raised by the appellant regarding this issue is allowed. 4. After hearing the rival contentions of the parties and perusing the material available on record, we find that the assessee’s books of accounts were audited and in the cash transactions were on account of sale of petrol, diesel and other goods which were shown in the books of accounts of the assessee. Similarly, the cash deposited in the bank account were also reflected in the cash book which has been dealt with by the ld. CIT(A) in the para as reproduced hereinabove. Accordingly, we do not find any infirmity in the order of the ld. CIT(A) and therefore uphold the same. Thus, ground No.1 is dismissed. 5. Ground No.2 is against the deletion of addition of Rs.1,71,925/- by the ld. CIT(A), which was made by the AO on account of difference in capital account treating the same as unexplained cash credit into books of the assessee u/s.68 of the Act and added the same to the total income of the assessee. 6. The AO during the course of assessment proceedings observed that the assessee has introduced capital of Rs.11,87,000/- in the bank ITA No.861/KOL/2024 4 account of the assessee, however, in the balance sheet, the assessee disclosed the amount of capital introduction at Rs.13,58,925/- and hence, a difference of Rs.1,71,925/- which was not explained by the assessee, and was added to the total income of the assessee u/s.68 of the Act treating the same as unexplained cash credit. 7. In the appellate proceedings, the ld. CIT(A) after taking into account the contention and submissions of the assessee deleted the addition by observing and holding as under :- 5.2. I have considered the facts of the case, assessment order and appellant's submissions. The AO held that capital introduced in balance sheet was Rs. 13,58,925/- whereas as per bank statement the inflow was Rs. 11,87,000/-, thus, difference of Rs. 1,71,925/- is added as income. The appellant has explained that capital introduced was Rs. 16,01,020/-(Rs. 10,00,000/- in Bank, Rs. 37,000/- Cash & Rs.5,64,020/- I.T. Refund) and withdrawal from capital a/c was Rs.2,42,095/-, thus, increase in capital account was Rs. 13,58,925/-, Considering the reconciliation given by the appellant which is reproduced in para 5.1 supra, I am inclined to agree with the appellant's claim. The AO has taken only the amount of Rs. 11,50,000/- (Rs. 10,50,000/- into Axis bank - 3791 Current a/c and Rs. 1,00,000/- into Axis bank 2353 Saving a/c) and Rs. 37000/- in cash to arrive at a figure of Rs. 11,87,000/- as capital introduced during the year. The addition of Rs. 1,71,925/- is based on wrong appreciation of facts, the same is directed to be deleted. The ground no. 2 raised by the appellant regarding this issue is allowed. 8. After hearing the rival contentions of the parties and perusing the material available on record, we find that the amount shown in the capital account was net of withdrawals and the ld. CIT(A) has given a detailed finding to that effect after considering the reconciliation produced by the assessee, which is reproduced in para 5.1 to the appellate order. Accordingly, we do not see any reason to interfere with the order of the ld. CIT(A) and therefore uphold the same. Thus, ground No.2 is dismissed. ITA No.861/KOL/2024 5 9. In ground No.3, the issue raised is against the action of the ld. CIT(A) in deleting the addition of Rs.29,55,960/- which was made by the AO on account of commission received from the HPCL. 10. Facts in brief are that during the year the assessee received commission of Rs.39,62,615/- from HPCL, which was appearing in Form 26AS. The assessee claimed the expenses against the said commissions and disclosed the net income of Rs.7,06,655/-. The AO by misconstruing the facts issued show cause notice to the assessee as to why that commission to Rs.39,62,615/- received from HPCL should not be treated as income in the hands of the assessee and finally the same was added after making allowance for income already declared by the assessee of Rs.7,06,655/- thereby making an addition of Rs.29,55,960/-. In the appellate proceedings the assessee filed detailed submissions and made argument before the ld. CIT(A) which has been reproduced by the ld. CIT(A) in its order at para 6.1 and after taking into consideration the said reply and submissions of the assessee allowed the said ground of assessee on this issue. 11. After hearing the rival contentions of the parties and perusing the material available on record, we observe that the assessee has fully explained as to how the net commission income of Rs.7,06,655/- has been arrived at. The assessee has submitted before the ld. CIT(A) details of the expenses along with proofs incurred under the head lifting of petroleum product after making payments, selling of goods to retail customers, managing staff including payment of salary, PF& ESI etc., ITA No.861/KOL/2024 6 pump and property maintenance and all other pump related issues i.e. safety & security expenses etc. The ld. CIT(A) after taking into account all these details deleted the addition. We, therefore, do not see any reason to interference with the order of the ld. CIT(A). Accordingly we uphold the same. Ground No.3 of the revenue is dismissed. 12. Ground No.4 is against the deletion of addition of Rs.9,94,405/- by the ld. CIT(A), which was made by the AO on account of income received by the assessee from FD & miscellaneous income under the head of income from other sources. 13. The AO during the course of assessment proceedings observed that the assessee has earned f Rs.7,96,725/- and Rs.1,97,680/- which had been credited as interest on FD and miscellaneous income respectively and was duly shown by the assessee in its profit and loss account. However, the AO on wrong understanding of facts treated the same as income from other sources. During the appellate proceedings, the assessee filed detailed submission explaining the nature of income and the ld. CIT(A) considering the same deleted the said addition after observing and holding as under :- 7.2. I have considered the facts of the case, assessment order and appellant's submissions. The AO stated that Rs.7,96,725/- & Rs.1,97,680/-credited to Profit & Loss a/c as interest on FD and miscellaneous income are treated as income from other sources and added to total income. The appellant has submitted that FD was pledged for obtaining bank guarantee and miscellaneous income consists of sale of empty drum, unused spares, loose tools etc., the same being business receipts are credited to P&L: a/c and even if the AO is taxing the same as \"income from other sources\" then corresponding deduction should be given from business income. I find force in the appellant's contention. The AO's action has resulted into taxing these two amounts twice amounting to double addition of the same income thus inherently wrong. The ITA No.861/KOL/2024 7 additions of Rs.7,96,725/- and Rs. 1,97,680/- are deleted. Ground nos. 4&5 raised by the appellant regarding these additions are allowed. 14. Having considered the rival contentions and the appellate order passed by the ld.CIT(A), we note that the ld. CIT(A) has recorded a clear finding that if the addition made by the AO is sustained ,it would amount to double taxation in the hands of the assessee in respect of the same income. Therefore, we do not see any reason to interfere with the findings recorded by the ld. CIT(A) in this regard which is correct and therefore we uphold the same. This ground of revenue is dismissed. 15. In the result, appeal of the revenue is dismissed. Order pronounced in the open court on 21/04/2025. Sd/- (PRADIP KUMAR CHOUBEY) Sd/- (RAJESH KUMAR) न्यानयक सदस्य / JUDICIAL MEMBER लेखा सदस्य/ ACCOUNTANT MEMBER कोलकाता Kolkata; ददनाांक Dated 21/04/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// "