JETHANAND H VARANDANI (HUF),KOLKATA vs. I.T.O., WARD - 29(1), KOLKATA

Shri Somnath Ghosh, ld.AR appeared on behalf of the assessee and Shri Shankar Naskar, ld. Sr.DR appeared on behalf of the revenue.

It was submitted by the ld. AR that the assessee had during the assessment year 2017-2018 and the impugned assessment year 2018- 2019 sold saree to M/s Faithful Cloth Merchants Pvt. Ltd.. The total sales was to an extent of Rs.30,13,950/-, however, it was the submission that the AO has taken figure at Rs.30,11,125/-. it was the submission that the assessee had sold during the assessment year 2017-2018 sarees to an extent of Rs.15,08,700/- and during the impugned assessment year sarees were sold at Rs.15,02,250/-. The ld.AR drew my attention to page 19 of the

It was the submission that that on 25.01.2017 and 22.04.2017 sarees were sold and the entire payment of Rs.10,05,850/- was received on three payments namely on 28.04.2017 for an extent of Rs.15,02,250/-, two payments on 29.04.2017 of Rs.10,15,850/- and Rs.5,02,850/-. It was the submission that the Assessing Officer had issued notice u/s.133(6) of the Act to the purchaser. The Assessing Officer had also sent his Inspector to the address of M/s Faithful Cloth Merchants Pvt. Ltd.. It was the submission that at page 14 the Inspector report has been specifically extracted wherein in the second last paragraph of the report the Inspector confirmed that he had met with one Shri Basudev Roy, who claimed to be the owner of the house and had confirmed the existence of M/s Faithful Cloth Merchants Pvt. Ltd. at the premises for few years back. Ld.AR further drew my attention to page 15 at para 4.6.1 of the assessment order to submit that notice u/s.133(6) of the Act has been issued to the said Faithful Cloth Merchants Pvt. Ltd. and they have responded to the said notice and had provided copies of the invoices, bank details and ledger copies, however, on the ground that no delivery challan, lorry receipt, lorry registration number and weigh bridge slips provided, the Assessing Officer treated the sale to M/s Faithful Cloth Merchants Pvt. Ltd. as bogus transaction and treated the same as unexplained money received by the assessee. It was the submission that the transactions having been proved, insofar as M/s Faithful Cloth Merchants Pvt. Ltd. having confirmed the transaction before the Assessing Officer in response to notice issued u/s.133(6) of the Act and the owner of the building having confirmed the existence of the business during the relevant period, it could not be said that the assessee has not proved the transaction. It was the submission that the assessee has sold sarees and there was no possibility of using lorry or weigh bridge. It was the submission that the addition made by the ld. Assessing Officer and confirmed by the ld.CIT(A) is liable to be deleted.

5. In reply, ld. Sr. DR submitted that the details in regard to transactions were not produced by the assessee. He reiterated the stand taken by the Assessing Officer that there was no lorry receipts and weigh bridge slips. It was the submission that the transaction was bogus transaction.

I have considered the rival submissions. At the outset, a perusal of the assessment order shows that the Assessing Officer has treated the amount at Rs.30,11,125/- as unexplained money u/s.69A of the Act. The turnover of the assessee in the impugned assessment year is at Rs.15,02,250/-. The turnover of the assessee for preceding assessment year is at Rs.19,64,550/-. The assessee is repeatedly filing his return u/s.44AD of the Act. Therefore, if the Assessing Officer is proposing to shift the turnover of the assessee to the unexplained money, obviously he should have adjusted the turnover, this has not been done by the Assessing Officer. A perusal of the assessment order also clearly shows that the Assessing Officer had deputed his Inspector for verification of the address. The Inspector mentioned that he has information that the business in the name and style of M/s Faithfull Cloth Merchants Pvt. Ltd. did exist at the address provided by the assessee. A further perusal of the assessment order clearly shows that Faithful Cloth Merchants Pvt. Ltd had responded to the notice issued u/s.133(6) of the Act and they have provided the bank details, invoices and ledger extracts. It is also an admitted fact by the AO that the transactions are through banking channels. There is no allegation by the AO that the bank details that has been provided by M/s Faithful Cloth Merchants Pvt. Ltd., contain cash transaction. This clearly shows that the assessee has proved the identity, genuineness and creditworthiness of the said M/s Faithful Cloth Merchants Pvt. Ltd. though the same is not required to be proved insofar as it is only a sale of sarees to the said M/s Faithful Cloth Merchants Pvt. Ltd.. As it is noticed that the details as called for by the AO as provided by the assessee and the purchaser being M/s Faithful Cloth Merchants pvt. Ltd., I am of the view that the same cannot be treated as unexplained money u/s.69A of the Act in the hands of the assessee. Thus, the addition as made by the ld. AO and confirmed by the ld.CIT(A) stands deleted.

In the result, appeal of the assessee is allowed.