BISHNU SEN PAL,AMBITHI, DHENKANAL vs. ITO, DHENKANAL

Shri P.R.Mohanty, P.R.Mohanty, ld AR assisted by assisted by Ms assisted by Ms Layatmika Nath, intern ‘The law College The law College’, Cuttack appeared for the assessee. Shri the assessee. Shri S.C.Mohanty, ld Sr DR , ld Sr DR, assisted by Ms Swagtika Behera, intern , assisted by Ms Swagtika Behera, intern ‘The law College’, Cuttack , Cuttack represented on behalf of the revenue. represented on behalf of the revenue.

It was submitted by ld AR that the assessee is an individual It was submitted by ld AR that the assessee is an individual It was submitted by ld AR that the assessee is an individual and dealer for milk and milk products of dealer for milk and milk products of ‘Pragati’ brand of dairy products. It brand of dairy products. It

In regard to addition representing the estimated income at 4% of the turnover, it was the submission that no comparative method has been considered by the Assessing Officer. It was the submission that the agreement of distributorship for ‘Pragati’ brand of dairy products has also been submitted by the assessee before the Assessing Officer which has also not been considered by the Assessing Officer. It was the submission that P a g e 2 | 5 the assessee was entitled to commission of 25 paise to 50 paise for every packet of milk distribution by the assessee. It was the submission that the estimation of income of the assessee at 4% was far excessive and is liable to reduced.

In reply, ld Sr DR submitted that the assessee was a distributor of milk products of ‘Pragati’ brand of dairy products, which was provided the demonetized currency in milk booths. It was the submission that the assessee is not running milk booth and consequently, the assessee shall not be entitled to receive any demonetized currency.

In regard to estimation of income, it was the submission that the assessee was not maintaining any books of account and consequently, estimation as made by the Assessing officer is liable to be upheld. It was the submission that the assessee has not represented his case before the first appellate authority.

I have considered the rival submissions. A perusal of the facts in the present case shows that the assessee is a distributor of milk products of ‘Pragati’ brand of dairy products. A perusal of the reply to an RTI by the RBI shows that the milk booths are permitted to receive old notes of 500 & 1000 for utility till 15.12.2016 and extended further period till 31.12.2016. Admittedly, the assessee is a distributor of milk products, in short ‘milk booths’ purchased from the distributor and sale the product and pay the P a g e 3 | 5 amount. Obviously, the SBN currency received by the milk booths would automatically got transferred to distributor for onward transmission and onward supply of the products. Admittedly, milk is a perishable commodity. Being a perishable commodity, the credit given is also very short. Thus, the assessee admittedly would be considered as part of the milk booths system. Consequently, as the RBI has permitted the milk booths to receive old 500 and 1000 SBNs for utility, the addition as made by the Assessing Officer and confirmed by the ld CIT(A) to the extent of Rs.12,63,000/- is unsustainable , consequently deleted.

In the result, appeal of the assessee stands allowed.