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Income Tax Appellate Tribunal, “A” BENCH KOLKATA
Before: Shri Sanjay Garg & Shri Girish Agrawal
order : March 16, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 27.06.2022 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
The brief facts of the case are that the assessee is engaged in the business of manufacturing and trading of footwear. The Assessing Officer during the assessment proceedings noted that the assessee had shown huge cash sales in the month of October 2016 i.e. during the demonetisation period and deposited the cash amount in his bank accounts. The Assessing Officer was of the view that the aforesaid cash deposit was unaccounted income of the assessee. Assessment Year: 2017-18 Rankup Footwear Industries Pvt. Ltd The ld. CIT(A) also confirmed the addition made by the Assessing Officer.
Before us, the ld. Counsel for the assessee has submitted that the assessee is in the business of manufacturing and trading of footwear items. That the assessees made a particular type of local shoe which was generally sold during the puja period in West Bengal which falls generally in the month of October. That the assessee had sold the footwear and deposited the cash amount in the bank account. That the sales of the assessee have not been disputed by the Assessing Officer. Even the purchases of the raw material has also not been disputed. The cash balance in the books of account of the assessee has also been accepted. Under the circumstances, only because of the aforesaid sales happened to be made in the month of October 2016, i.e. during the demonetisation period, the aforesaid sales cannot be said to be the unaccounted income of the assessee. The assessee to prove his claim furnished the following documents:
Copy of Trade License.
2. Copy of Rent Agreement for its business premises. 3. Copies of Invoices for import of Plant & Machinery. 4. Copy of Electric Bill. 5. Copy of VAT registration Certificate issued by Government Department. 6. Copies of Bank Statement showing Bank transaction relating to business transactions. 7. Copies of Audited Profit & Loss Account and Balance Sheet and Tax Audit Report u/s 44AB of the Income Tax Act 1961 for the FY 2016-17 relevant to Assessment Year 2017-18. 8. Copies of Sales Register for the FY 2016-17. 9. Copies of Sales Invoice for the FY 2016-17. 10. Copies of VAT returns filed before the VAT Department (i.e. Sales Tax Department), Government of West Bengal. 11. Summary Statement of Sales as per VAT Act for the FY 2016-17. 12. Copies of VAT Challans for payment of VAT in respect of sales made by the assessee company for the FY 2016-17.
Assessment Year: 2017-18 Rankup Footwear Industries Pvt. Ltd 13. Copy of Stock Register for the FY 2016-17 substantiating the sources of Sales made for the FY 2016-17 The ld. counsel for the assessee submitted that the aforesaid documents/return filed before the various Government authorities during the assessment year under consideration clearly proved the genuineness of the assessee’s entity and nature of its business activities carried on during the financial year 2016-17 relevant to assessment year 2017-18. The ld. counsel has further relied upon the following case laws: i. Lalchand Bhagat Ambica Ram vs. CIT 37 ITR P-288 (1959) Supreme Court ii. Lakshmi Rice Mills vs. CIT 97 ITR P-258 (1974) Patna High Court iii. Kanpur Steel Co. Ltd. vs. CIT 32 ITR P-56 (1957) Allahabad High Court iv. R.S. Diamonds India (P) Ltd. vs. ACIT 145 taxmann.com P-545 Mumbai ITAT (dt. 26.07.2022) v. ITO vs. Shri Pabitra Majumder ITA No.: 53/K/2021 Kolkata ITAT (Dt. 15.09.2022) vi. DCIT vs. M/s. Roop Fashion ITA No.: 136/Chd/2021 Chandigarh ITAT (dt.14.06.2022) vii. ACIT vs. Hirapanna Jewellers 128 taxmann.com P-291 Visakhapatnam ITAT (12.05.2021) viii. ITO vs. M/s. Manasa Medicals ITA No.: 552/Bank/2022 Bangalore ITAT (31.10.2022)
The ld. counsel submitted that when the assessee has duly proved the purchases and the sales have not been disputed and the books of account have also not been rejected, then there is no justification on the part of the Assessing Officer to treat the sale receipts as unaccounted income of the assessee.
The ld. DR, on the other hand, has submitted that the huge sales in the month of October as compared to the remaining period of the year create a doubt about the genuineness of the sales. That most of Assessment Year: 2017-18 Rankup Footwear Industries Pvt. Ltd the sales were out of the Kolkata and had faraway places. However, the ld. AR has explained that the local show-wear were sold during the puja festival and further that the assessee’s customer and traders buy footwear from the assessee and carry to other places for sale purposes.
Considering the aforesaid circumstances and documentary evidences furnished by the assessee and that books of accounts of the assessee have not been rejected and the sales have been accepted and in view of the case laws relied by the assessee, we do not find any justification on the part of the lower authorities in making the impugned additions. The same is accordingly ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed.