SUSHIL KUMAR CHOUDHARY,SIWAN V. DC/ACIT CIRCLE-3, DARBHANGA

ITA 269/PAT/2023

AI Insights

The case involves an appeal by Sushil Kumar Choudhary against the order of the National Faceless Appeal Centre, Delhi, which confirmed the addition of \\u20b932,21,000 to the assessee's income for the Assessment Year 2017-18. This addition was initially made by the AO, suspecting the deposits as unexplained money during the demonetization period. The Tribunal examined the assessee's business activities, cash sales, and financial records, concluding that the assessee had legitimate sources for the cash deposits, thus overturning the lower authorities' decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473832 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 12-09-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KR. SHUKLA
• Assessee Lawyers: A.K. RASTOGI; RAKESH KUMAR; ARS
• Keywords: Set aside
• Section: 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, PATNA (Through Virtual hearing at Kolkata) BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM ITA No.269/Pat/2023 (Assessment Year: 2017-18) Sushil Kumar Choudhary M/s Radhey Shyam Banwarilal Goushala Road, Siwan Bihar-841226 Vs. DC/ACIT, Circle -3 Income Tax Office, Opp Old Bus Stand, Lalbagh, Darbhanga, Bihar-846004 (Appellant) (Respondent) PAN No. ADFPC5368R Assessee by : Sh. A.K. Rastogi & Sh. Rakesh Kumar, Ars Revenue by : Sh. Ajay Kr. Shukla, DR Date of hearing: 13.11.2024 Date of pronouncement : 27.11.2024 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 13.07.2023 for the AY 2017-18. 02. The only issue in the grounds of appeal is against the confirmation of addition of ₹32,21,000/- by CIT (A) as made by the ld. AO on account of unexplained money being cash deposited during demonetization period. 03. The facts in brief are that the assessee is a dealer of products of Hindustan Uniliver Ltd a FMGC products manufacturing company and Page | 2 ITA No.269/PAT/2023 Sushil Kumar Choudhary; A.Y. 2017-18 is carrying on the business under the name and style of M/s Radhey Shyam Banwarilal. The assessee also derived income from other sources. During the year, the assessee filed the return of income on 1.11.2017, declaring total income of ₹26,33,894/-. The case of the assessee was selected for limited scrutiny for the reason that large amount of cash deposited in the bank account during the year. The statutory notices were duly issued and served upon to the assessee. The proceedings were attended before the ld. AO by the ld. Counsel for the assessee and details of sales, purchases as well as cash sales for the period prior to demonetization period and post thereto were filed. Besides, the cash sales for the F.Y. 2015-16 and 2016-17, were also filed to give an idea about assessee’s volume of operation. The ld. AO analyzed the pattern of cash deposits during the period 9.11.2016 to 30.12.2016. The details were extracted on page nos. 3 to 5, where it was noted that the total cash deposits were ₹4,01,24,000/- during he Impugned financial year out of which ₹32,21,000/- was deposited on 10.11.2016 in old currency notes. The ld. AO thereafter extracted the total cash sales, including in other receipts during the period commencing from 1st April, 2016 to 8th November, 2016 in F.Y. 2015- 16 and 2016-17 on page no.6 of the assessment order. Finally, the ld. AO treated the cash deposit of ₹32,21,000/- on 10th November, 2015, as unexplained money and added to the total income of the assessee u/s 69 read with Section 115BBE of the Act on the ground that the assessee has not furnished any evidences apart from the furnishing the details of month wise cash deposit into the bank account. 04. The ld. CIT (A) also confirmed the finding made by the AO in the assessment order for the same reason that the assessee has not produced any evidences before the ld. AO in the form of cash book, Page | 3 ITA No.269/PAT/2023 Sushil Kumar Choudhary; A.Y. 2017-18 ledger and other evidences. Aggrieved, assessee is in appeal before us. 05. After hearing the rival contentions and perusing the material available on record, we find that the assessee is a dealer in Biscuit, Horlicks, Medicine, Refine and other Products of Hindustan Unilever Ltd a FMGC company and has a huge turnover during the financial year of ₹32,04,00,269/-. The total purchases during the financial year were 27,87,55,187/-. We further observe that the cash sales during the year were ₹22,85,46,193/-. We have also examined the comparative sales of the assessee in the preceding two years, which is also been dealt with by the ld. AO in page 6 of the assessment order and is extracted below:- Particulars From 01.04.2014 to 0.11.2014 From 01.04.2015 to 08.11.2015 From 01.04.2016 to 08.11.2016 Total purchases 27,87,55,187 2,25,30,909 22,69,57,415 Total Sales 28,82,7,195 22,52,95,715 32,04,00,269 Cash Sale 27,20,87,376 22,45,65,020 22,83,46,193 Other than Cash sale - - - Any other cash receipt 6,42,207 22,398 16,423 06. Thus it is abundantly clear from the above table that assessee has sufficient sources available with him to source the cash deposits into the bank account. We note that the scheme of demonetization was announced on 8 November 2016.We have examined the copy of VAT returns, cash books, ledger and annual return in form RT 3. We also examined the copies of the balance sheet, profit and loss account, audited balance sheet long with annexures and find that the details referred to above were in complete agreement with the said audited accounts. Therefore, based on the above said history of the assessee, we are of the considered view that the assessee has a huge cash sale Page | 4 ITA No.269/PAT/2023 Sushil Kumar Choudhary; A.Y. 2017-18 which were consistently being made over the years including the current financial year and therefore, the action of the ld. AO in making the addition of ₹32,22,000/- on the ground of old currencynotes is wrong and cannot be sustained. Accordingly, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 27.11.2024. Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 27.11.2024 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, Patna "