MOHAMMAD MOSHIM SHIK ,MALDA. V. ITO, WARD-3(2), MALDA. , MALDA

ITA 1078/KOL/2023

AI Insights

The case involves Mohammad Moshim Shik, a fish trader operating under the name 'Moshim Fish Agency', who appealed against the order of the National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 1,78,00,000 to his income for the Assessment Year 2017-18. This addition was initially made by the Assessing Officer (AO) on the grounds that the cash deposits made during the demonetization period were unexplained. The Tribunal examined the evidence, including bank statements and balance sheets, and found that the cash deposits were part of the assessee's regular business activities and were not unexplained. The Tribunal also noted that adding these deposits as unexplained money would result in double taxation, which is not permissible under the law.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772199 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: Ragini Verma Vs ACIT Circle-49(1)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: SOUMITRA CHOUDHURY; PRANABESH SARKAR
• Keywords: Set aside; Business income; Opportunity of being heard; Unexplained cash credit; Unexplained investment; Deemed to accrue or arise in india
• Section: 143(3); 68; 69; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.1078/KOL/2023 (Assessment Year:2017-18) Mohammad Moshim Shik 15, Mirachak Sarada pally, Churipatti, B.s. Road, English Bazar, Malda, West Bengal-732101 Vs. Income Tax Officer, 3(2), Malda, IT Office, Netaji Market Complex, 1st Floor, Rathbari, malda, West Bengal-732101 (Appellant) (Respondent) PAN No. BYLPS2037K Assessee by : Shri Soumitra Choudhury & Shri Pranabesh Sarkar, AR Revenue by : Shri S.B. Chakraborthy, DR Date of hearing: 12.08.2025 Date of pronouncement: 28.08.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 04.09.2023 for the AY 2017-18. 02. The only issue raised by the assessee in various grounds of appeal is against the confirmation of addition of Rs. 1,78,00,000/- as made by the learned AO on account of cash deposit during demonetization period by treating the same as unexplained money under Section 69A of the Income-tax Act, 1961 (the Act). 03. The facts in brief are that the assessee is a fish trader under the name and style of ‘Moshim Fish Agency’. The assessee filed the return Printed from counselvise.com Page | 2 ITA No.1078/KOL/2023 Mohammad Moshim Shik; A.Y. 2017-18 of income on 15-08-2017, declaring total income of Rs. 7,38,760/-. The case of the assessee was selected for scrutiny under CASS for the reason that the assessee had deposited huge cash of ₹1,78,00,000/- during demonetization period. Accordingly, statutory notices along with questionnaire was duly issued and served upon the assessee. The assessee submitted various documents/ evidences before the learned AO during the assessment proceedings and the learned AO observed on the basis of the same documents that there were some discrepancies noticed during the assessment proceedings. The learned AO noted that the assessee has deposited huge cash during demonetization period, and accordingly issued notice under Section 133(6) of the Act to Bandhan Bank, English bazar branch and details of SBNs (Specified Bank Notes) deposited during demonetization period were called for. Thereafter, the ld. ld. AO on the basis of such statement prepared cash deposits, which aggregated to ₹1,78,000,000/- commencing from 10-11-2016 to 6-12-2016 as discussed in Paragraph 3.1 of the assessment order. The ld. AO also noted that, as per the information, the assessee was a Kachha Arahtia and thus the remuneration consisted of only commission and therefore, there is no question on total sales and purchase in the hands of the assessee. Finally, the ld. AO treated the amount of ₹1,78,000,000 as unexplained money u/s 69A of the Act and added the same to the income of the assessee, which was also affirmed by the ld. CIT (A). 04. After hearing the rival contention and perusing the materials available on record, including the evidences filed before us in the form of balance sheet, bank statements, etc., we find that the assessee is running a business in fish under the name and style of ‘Moshim Fish Agency’. During the year, the assessee has declared total income of Printed from counselvise.com Page | 3 ITA No.1078/KOL/2023 Mohammad Moshim Shik; A.Y. 2017-18 ₹7,38,760. We observe from the copy of the bank statement, which is available from page number 5 to 34, that assessee has been depositing cash frequently and out of such deposit remitting money to the fish suppliers regularly, as is apparent from the bank statement by way of RTGS. We note that the deposits were almost evenly spread throughout the year. We note that the case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) for the reason that the assessee has deposited ₹1,78,000,000 during demonetization period. But as a matter of fact, the same flow of cash there into the bank account during the period other than demonetization period was there. Therefore, presumption and assumption of the authorities below are incorrect that money deposited during demonetization period is unexplained money liable to be added under section 69 of the Act. We have also examined the copy of the balance sheet from assessment year 2015-16 to 201718 and observe that the assessee has been continuously in this trade of business and has been regularly filing the return of income, declaring the income from fish trading. A perusal of a state bank of India statement as stated above reveals that the cash is being deposited and sent to the fish suppliers and the balance at bank the year-end was only ₹10,80,194/- which was duly disclosed by the assessee in the balance sheet. Therefore, in our considered opinion, the cash deposited which has been treated by the ld. AO as unexplained money has already been considered by the assessee while arriving at this income and profits were determined accordingly. We even note that during demonetization period against each cash deposit, there had been remittance to the fish suppliers, which were not being disputed by the ld. lower authorities. Therefore, we do not find any reason to sustain the addition. Moreover, adding the only cash deposited during Printed from counselvise.com Page | 4 ITA No.1078/KOL/2023 Mohammad Moshim Shik; A.Y. 2017-18 this period of demonetization as unexplained money under Section 69A of the Act would result into double taxation of income, which is not permissible under the Act. The case of the assessee finds support from the decision of this Tribunal in the case of Ragini Verma Vs ACIT Circle-49(1)