VIKASH BAFNA,KOLKATA vs. I.T.O., WARD - 30(4), KOLKATA, KOLKATA

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ITA 1192/KOL/2024Status: DisposedITAT Kolkata23 July 2025AY 2017-2018Bench: SHRI GEORGE MATHAN (Judicial Member)7 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

Given the assessee's counsel's submission that they could produce reconciliation of bank entries and payments to Hermes, the Tribunal restored the matter to the Assessing Officer for readjudication. This is to provide the assessee an adequate opportunity to be heard and reconcile the entries.

What were the facts?

The assessee made cash deposits of Rs. 12,79,500/- during the demonetization period, which the AO treated as unexplained money. The assessee claimed these amounts were received from an agreement with Hermes and that income from this business was being disclosed, but admitted inability to reconcile bank entries with payments to Hermes. The DR argued that the assessee's ITRs for previous years showed no business income, contradicting the assessee's claim.

What were the issues?

Whether cash deposits during the demonetization period constitute unexplained money under Section 69A, and whether the assessee can provide proper reconciliation to substantiate the source of these deposits.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3),Section 80TTA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA

Before: SHRI GEORGE MATHAN

Hearing: 23/07/2025Pronounced: 23/07/2025

O R D E R This is an appeal filed by the assessee against the order of the ld. CIT (A), NFAC, Delhi for the Assessment Year 2017-18.

2.

Shri Amit Agarwal, ld AR appeared on behalf of the assessee. Shri Shankar Naskar, ld.Sr. DR appeared on behalf of the revenue.

3.

It was submitted by the ld. AR that the AO has treated the cash deposit in assessee's bank account to an extent of Rs.12,79,500/- as unexplained cash deposit in the hands of the assessee. It was the submission that these were amounts received by the assessee on account of its agreement with The Smart Shop Travel & Beyond operated by one Hermes. It was submitted that the agreement with Hermes was on 12.06.2014 and the assessee had also been disclosing the income therefrom. It was the submission that the assessee has transferred the funds to Hermes also which has not been considered by the AO. It was the submission that admittedly the assessee has not reconciled the bank account, cash deposit with the payments to Hermes. It was the prayer that the issues in this appeal may be restored to the file of ld. AO so that the assessee could reconcile the entries 4. In reply, ld. Sr. DR filed his written submissions, which reads as under:-

1.

5. It was the submission that the assessee has been filing its return of income in ITR-2, which is made for individual and having no business income. It was the submission that the assessee has claimed that the cash deposit which are also out of past savings but no cash as has been disclosed by the assessee. It was the submission that the arguments now placed before the Tribunal are only afterthought.

6.

I have considered the rival submissions. As the ld. AR has categorically submitted that he would be in a position to produce the reconciliation of the bank entries and the cash entries with the payments to Hermes, therefore, in the interest of justice, the issues in this appeal are restored to the file of the ld. AO for readjudication afresh after providing adequate opportunity of being heard to the assessee. The assessee is directed to cooperate with the ld. AO in the readjudication proceedings positively.

7.

In the result, appeal of the assessee is partly allowed for statistical purposes.

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