ITO, WARD - 10(2), KOLKATA vs. ASTHA TECHNICAL SERVICES LTD, KOLKATA

Shri Sujit Basu, Advocate appeared on behalf of the assessee and Shri Raja Sengupta, CIT-DR appeared on behalf of the revenue.

It was submitted by the ld. AR that the assessee is a dealer of batteries. It was the submission that for the assessment year 2011-2012, the assessee filed its return of income u/s.44AD. For the assessment year 2012-2013, assessee’s books were audited and returns were found maintained by the assessee. It was the submission of the ld. AR that in the course of assessment, the Assessing Officer had called for details in respect of payments made to the suppliers of the assessee. It was the 2 IT(SS)A No.19&20/KOL/2025 submission that there was admittedly failure on the part of the assessee to provide all the details. Consequently, the Assessing Officer on the ground that the payments made in excess of Rs.20,000/- in cash, had disallowed the entire purchases, which has been made allegedly in cash. It was the submission that these were not cash transactions but were payments made through DDs. It was the submission that the details of purchases through DDs have also been produced before the ld. CIT(A). The ld. CIT(A) on the ground that the data had not been produced before the Assessing Officer as also on the ground that the DDS had been drawn from three banks in Bhutan, had dismissed the appeal of the assessee. It was the submission that the assessee’s businesses is in Jalgaon (India), which is adjacent to Bhutan. It was the submission that the assessee had used the facilities in the banks available at Bhutan as the bank charges in Bhutan were much lower than what are charged in India, where the assessee’s business is conducted. It was fairly agreed by the ld. AR that if an opportunity be granted, the assessee would produce all the evidence before the Assessing Officer. It was the submission that the assessee was under impression that the evidences produced by the assessee would be sent to Assessing Officer for a remand report by the ld. CIT(A). It was the submission that the ld. CIT(A) instead of calling for remand report, dismissed the appeal of the assessee.

In reply, ld. CIT-DR submitted that more than one month time had been granted to the assessee to produce the details before the Assessing Officer and it was only on account of the failure on the part of the assessee 3 IT(SS)A No.19&20/KOL/2025 to produce evidences and therefore, adverse inference was drawn against the assessee. He, thus, submitted that it is not required to restore the matter to the file of Assessing Officer in granting assessee further opportunity to produce the evidence to substantiate his case.

We have considered the rival submissions. Admittedly, the assessee has not produced the required evidence before the Assessing Officer to prove that the purchases are made through DDs. Certain evidences have been produced before the ld. CIT(A). These evidences have completely been disregarded by the ld. CIT(A). This being so, in the interest of justice, the issues in both the appeals appeal are restored to the file of Assessing Officer for readjudication after granting the assessee adequate opportunity of being heard. The assessee shall produce all such evidence, as if so desires, to substantiate its claim before the Assessing Officer when call for by the Assessing Officer.

In the result, both appeals of the assessee are partly allowed for statistical purposes. Order dictated and pronounced in the open court on 01/05/2025.