PAWAN INTERNATIONAL,LUDHIANA V. INCOME TAX OFFICER, LUDHIANA

ITA 417/CHANDI/2024

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The case involves Pawan International, a trader of artificial goods and flowers, who appealed against the order of the Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi. The appeal was concerning the Assessment Year 2017-18, where the CIT(A) confirmed the Assessing Officer's addition of Rs. 32 lacs to the assessee's income, treating it as income from undisclosed sources. The assessee argued that this amount was from the sale proceeds of opening stock, which was sold at discounted rates, resulting in higher sales for the year. The Tribunal agreed with the assessee, noting that the sales tax/VAT returns were filed, and there was no rebuttal to the fact that the assessee had opening stock from which the sales were made.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472625 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 07-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 17-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJEET KAUR
• Assessee Lawyers: ASHWANI KUMAR

Judgement Text

" आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘SMC’, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 417/Chd/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 Pawan International, 1370, Krishna Nagar, Civil Lines, Ludhiana बनाम The ITO, Ludhiana èथायी लेखा सं./PAN NO: AAJFP6044J अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent (Physical Hearing) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Ashwani Kumar, CA राजèव कȧ ओर से/ Revenue by :Dr. Ranjeet Kaur, Sr.DR सुनवाई कȧ तारȣख/Date of Hearing : 07.11.2024 उदघोषणा कȧ तारȣख/Date of Pronouncement : 03.12.2024 आदेश/Order The present appeal has been preferred by the assessee against the order dated 19.02.2024 passed by the Ld. Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] for the Assessment Year 2017- 18. 417 -Chd-2034 Pawan International, Ludhiana 2 2. The Assessee is aggrieved by the action of the ld. CIT(A) in confirming the addition of Rs. 32 lacs made by the Assessing Officer by treating the cash deposits in the bank account of the Assessee as income of the Assessee from undisclosed sources. 3. During the assessment proceedings, the Assessee explained that the aforesaid amount of Rs. 32 lacs were out of sale proceeds of the Assessee. However, the Assessing Officer did not agree with the aforesaid contention of the Assessee. He observed that the cash sales of the Assessee for the year under consideration were higher than that of earlier assessment year. He, therefore, treated the aforesaid cash deposits as unexplained income of the Assessee. The ld. CIT(A) confirmed the addition so made by the Assessing Officer. 4. I have heard the rival contentions and gone through the record. The ld. Counsel for the Assessee has explained that the Assessee during the year, was a trader of artificial goods and flowers. That during the year, the Assessee decided to stop its business. The Assessee, therefore, sold its opening stock at discounted rates resulting into higher sales during the year under consideration as compared to the earlier years. The ld. Counsel for the Assessee has further submitted that there is no rebuttal to the fact on the file that the Assessee was having opening stock out of which the said sales 417 -Chd-2034 Pawan International, Ludhiana 3 were made. That the Sales tax / VAT Return were also filed by the Assessee. 5. The ld. DR could not rebut that the Assessee was having opening stock out of which the sales were stated to have been made. 6. Considering the aforesaid submissions and facts on file, I do not find any justification on the part of the lower authorities in treating the deposits made by the Assessee out of the sales of the opening stock as income from undisclosed sales. The impugned addition made by the Assessing Officer is, therefore, not sustainable. The same is ordered to be deleted. 7. The appeal of the Assessee is allowed. Order pronounced on 03.12.2024. Sd/- (SANJAY GARG) Judicial Member “आर.क े.” आदेशकȧĤǓतͧलͪपअĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकरआयुÈत/ CIT 4. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयआͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar "