KIRAN AGARWAL,KOLKATA vs. ITO, WARD 46(1), KOLKATA

Shri Siddharth Agarwal, Advocate appeared on behalf of the assessee and Shri Vineet Kumar, Addl. CIT appeared on behalf of the revenue.

It was the submission by the Ld. AR that the assessee is an individual and she did not have any specific business activity. However, during the year, the assessee has claimed that the assessee is deriving income from Kiran Agarwal, AY: 2021-22 commission, consultancy etc. The assessee has filed her return of income declaring in the return of income the total income at Rs.4,32,300/- and the income consists of income from capital gains and other sources. It was the submission that the assessee had sold her residential house during the relevant assessment year. The assessee is also having income from other sources being business in equities quoted and unquoted shares, mutual funds etc. It was the submission that the return filed by the assessee came to be processed and the return came to be selected for scrutiny on account of the reason of large cash deposits in the bank account and that the assessee had also purchased/sold one or more properties during the year. It was the submission that the Ld. AO had examined the bank account of the assessee and had found cash deposit of Rs.1,23,75,000/- in the bank account of the assessee with Punjab National Bank bearing A/c. No. 06261010000880. When the assessee was questioned regarding the cash deposits, the assessee submitted that the said bank account belonged to Modern Industries. She had further submitted that she had sold certain diamond and diamond jewelleries, gold coins and silver utensils which had already been disclosed in the VDIS of 1997. She had mentioned that she had sold these jewelleries and utensils for an amount of Rs.1,01,96,578/- on different dates to different buyers in cash and deposited the same in different dates in her bank account. She had also submitted that she had sold raw jute/jute bags worth Rs. 4,00,000/- in cash and deposited the same cash in her bank account. It was the further submission that many of her well-wishers and friends contacted her and asked her to transfer some amount in their personal bank account and offered cash against that transfer and she charged a commission of 1% for the transaction and had taken a sum of Rs.14,99,929/-, 1% of which comes to Rs.15,000/-. The Assessing Officer did not accept any of the replies made by the assessee in so far as no substantial proof was produced. It was further submitted that during the year under scrutiny, she had withdrawn a sum of Rs.2,25,000/- Kiran Agarwal, AY: 2021-22 and kept the cash balance deposited for few days in her above bank account. The Ld. AR has placed before us an index of additional evidence which contain sample copies of sale bills in connection with the sale of jewellery, sample copies of sale bills in connection with the sale of jute bags and the statement showing details of transactions in connection with the commission income. At the time of hearing, it was submitted by the Ld. AR that the commission income is to the extent of Rs.14,99,929/- and these were 1% of the commission received by the assessee on her assistance in helping her relatives and friends to identify properties for the purchase and sale. The list of the commission and the persons from whom commission has been received is as follows:

A sample of the bills/receipt in respect of the sale of gold jewellery set reads as follows:

In reply, the ld. Sr. DR vehemently opposed the prayer for setting aside the assessment order. It was the submission that by setting aside the issue, it would only be keeping the process alive for long and it should not be permitted. It was the submission that adequate opportunity had been given to the assessee and the assessee has not used that opportunity and fresh opportunity should not be granted to the assessee.

We have considered the rival submissions. A perusal of the facts of the present case clearly shows that three basic sources have been claimed by the assessee for the cash deposit of Rs.1,23,75,000/-. The first, the sale of gold and gold jewellery. The said amount in regard to the same is to an extent of Rs.1,01,96,578/-. A perusal of the sample bills which have been produced clearly show that these bills are serially numbered. It is claimed by the assessee that the names and addresses are available in the bills. It is claimed that these sales have been made to friends and relatives. Admittedly, these evidences were not filed before the Assessing Officer. This being so, in the interest of justice, the issue of the sale of gold coins and gold jewellery are restored to the file of the Assessing Officer for verification after granting the assessee, adequate opportunity to substantiate her case. The assessee shall produce the purchasers of the jewellery before the Assessing Officer for examination to prove the transactions. The Assessing Officer shall also verify from the bank account of the assessee for preceding years as to whether there is any receipt from the sale of gold jewellery which has been declared in the VDIS scheme. Obviously, if there has been earlier sale of jewellery in the preceding years, then that declaration in VDIS shall Kiran Agarwal, AY: 2021-22 also specifically be examined by the Assessing Officer. The second source is the sale of raw jute and jute bags of Rs. 4,00,000/-. It is to be read along with third source being the commission income receipt. This is because a perusal of the commission income source chart which has been extracted earlier shows one of the items to be Rima Jute Bag, Purulia for an amount of Rs.4,60,000/-. How this has got connected with the sale of jute bags of Rs. 4,00,000/- and whether the assessee has shown the transaction for the purchase and sale of the jute bags especially, these transactions or whether the transaction has got a commission is to be specifically examined. It must also be specifically mentioned here that the sample bills which have been produced do not cover even 10% of the actual addition made, therefore, liberty is granted to the assessee to produce all such bills before the Assessing Officer to prove these purchases/sales in regard to the issue for the purchase and sale of jute and jute bags. The details of the sellers are not available though the Ld. AR claims that the jute bags were purchased on credit, the names of the sellers are unavailable nor are they are in possession. The Assessing Officer shall examine the entire transaction in that regard. Coming to the issue of commission, the assessee in her reply has given the meaning that the commission was for the cash deposit in her bank account and the subsequent issue of cheque but now the Ld. AR has submitted that the transaction is in regard to the commission received by the assessee on account of assistance to her well wishers and family friends in the purchase and sale of properties. In any case, the list of the persons from whom she has received the commission has been provided. The Assessing Officer shall examine each of these persons to verify whether they have purchased or sold any property and what is the actual nature of this transaction. The Assessing Officer shall also verify whether the assessee has paid service tax on the said amount as the commission exceeds the exemption amount of service tax. The duty

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