RAJIA SULTANA KHATUN,PURBA MEDINIPUR vs. ITO, WARD 27(3),, HALDIA

Per Pradip Kumar Choubey, Judicial Member:

This appeal filed by the assessee is directed against the order dated
04.03.2025 of the National Faceless Appeal Centre passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2018–19. 2. Brief facts of the case are that the assessee has not filed return of income for the A.Y 2018-19 and as per information received, the assessee had made huge financial transaction by way of cash deposits/cash withdrawals in her bank accounts and also received interest income during F.Y 2017-18 relevant to A.Y 2018-19. The case was selected for scrutiny u/s 148 of the Act and proceedings u/s 147/148 were initiated after taking necessary approval from competent authority. Further, notice u/s 148 of the Act were issued and various
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statutory notices were issued on different dates to the assessee.
However, the assessee did not comply to any of the notices issued. In order to verify the transaction, copy of bank statement for the relevant period was called for from the concerned bank and it was found that the appellant has deposited cash of Rs. 2,00,000/-through bearer Cheque and the same was added to the income of the assessee as unexplained income u/s 68 of the Act. Further, on perusal of the bank statement obtained from the Bank- Mugberia Central Co-op Bank Ltd, the Assessing Officer noticed that the assessee had made huge cash withdrawal of Rs. 61,50,000/- from her bank account during the period under consideration and the appellant did not able to explain the source of cash withdrawals, hence, the Assessing Officer added Rs. 61,50,000/- as unexplained expenditure u/s 69C of the Act. The Assessing Officer also added Rs.11,000/- as interest received to the total income of the assessee.
3. Being aggrieved by the said order, the assessee filed an appeal before the Ld. CIT(A) wherein also the appeal of the assessee has been dismissed.
4. Being aggrieved and dissatisfied by the order of the Ld. CIT(A), the assessee is in appeal before us challenging the very impugned order thereby submitting that the Assessing Officer as well as the ld. CIT(A) were not justified in confirming the addition of Rs.61,50,000/- ignoring the submission of the assessee that the assessee withdrawn the funds for utilization of the same and bank has also submitted a letter for clarification that there is only one amount of withdrawal in the current account number of the assessee and due to some technical issue in uploading of SFT-03 return in portal for the same transaction has been shown repeatedly. The ld. AR submits that the addition made by the Assessing Officer for Rs. 61,50,000/- for cash withdrawal made out of Rajia Sultana Khatun

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sale proceeds of human hair by the assessee as the assessee was running the Human hair business and such amount stilled for payment of purchase of human hair and human hair is collected for remote villagers on door-to-door basis with very little transactions value for each transaction, hence all payments are made in cash within the restriction under section 40A(3) of the Act. In this respect, the ld. AR relied on the decision of the Coordinate Kolkata Bench of the Tribunal in the case of ITO vs. Rupsana Bibi passed in ITA No.1239/Kol/2019 dated
27.06.2022 and submitted that in the business of trading of hair, the net profit rate is normally very low and the estimation of net profit should be keeping in view the turnover of the assessee in that period.
5. Contrary to that, the ld. DR supports the impugned order.
6. Upon hearing the submissions of the counsels of the respective parties and we have perused the impugned order and it appears to us that the case of the assessee was selected for scrutiny u/s 148 of the Act on the ground that the assessee made huge financial transaction by way of cash deposits in bank account and the assessee was non-filer of ITR for the year under consideration and the transaction remain unexplained. On perusal of the assessment order, it reveals that assessee made cash deposits of Rs.1,84,50,000/- during the F.Y 2017-
18. We find that the ld. AR submitted that there was cash withdrawal of Rs.61,50,000/- but due to technical mistake in uploading of SFT-03
return in portal for the same transaction which was shown repeatedly and the ld. AR submitted a certificate from Mugberia Central Cooperative
Bank Ltd. to verify the said transaction, which is as under:
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31.03.2018. Going over the aforesaid documents, we find that the aggregate turnover for the relevant period was Rs.72,13,823/- as the assessee is engaged in the business of trading in human hair and purchases hair from small vendors belonging to remote villages, the transactions are mainly on cash basis within the restriction under section 40A(3) of the Act. Going over the above-stated decision and the discussion made above, we are of the view that net profit rate should be @1.15%. Accordingly, we set aside the orders of both the lower authorities and remit the appeal of the assessee before the Assessing
Officer to calculate the net profit rate on the turnover of Rs.72,13,823/-
@ 1.15%.
7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Kolkata, the 5th December, 2025. [Rajesh Kumar]

[Pradip Kumar Choubey]
Accountant Member

Judicial Member

Dated: 05.12.2025. RS

Copy of the order forwarded to:
1. Appellant -
2. Respondent -
3. CIT(A)-
4. CIT- ,

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By order