MASENGJI KALAJI SOLANKI,BANASKANTHA vs. THE ITO, WARD-3, PALANPUR

Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who dismissed the appeal of the assessee.

Aggrieved, the assessee is now in appeal before the Tribunal.

Before us, Ld. AR submitted that the Assessing Officer failed to consider the details provided by the assessee during the assessment proceedings, more specifically the bank statement and the statement of accounts, which were furnished by the assessee, were not considered while passing the assessment order. He contended that the notice issued by the Assessing Officer under section 148 Act dated 24.03.2018 was issued without acquiring valid jurisdiction. It was argued that since the issuance of this notice was not in accordance with the provisions of the Act, the order dated 30.12.2018 passed u/s 143(3) r.w.s. 147 was not sustainable in the eyes of the law. On merits of the addition made by the Assessing Officer, Ld. AR submitted that the assessee was engaged in the business of being a commission agent for cattle trading, acting as an intermediary between sellers and buyers. Ld. AR submitted that all the amounts deposited into the assessee’s bank account during the relevant period were proceeds from cattle sales and the commission earned thereof. He argued that the Assessing Officer had made the assessment without properly considering the nature of his business and the return of income filed. The Ld. AR, therefore, urged that, on the merits of case also, the cash deposits in assessee’s bank account should not be considered as income and requested that the same be deleted.

The Ld. DR, on the other hand, relied on the orders of the authorities below. He submitted that the assessee could not furnish any evidence being a cattle trader and also no evidence of purchase bills, sales bills, invoices/vouchers, GSTIN, cash book, cash flow statement etc. have been furnished. It was argued that the assessee had not furnished any sale bills or details of work orders or details of the traders who placed orders with him, to substantiate his claim. The Ld. DR submitted that mere filing of affidavits without furnishing further details viz. identity of the persons, trading activity of persons, ITR copies, their books of accounts and assessee ledger in their accounts etc. cannot prove the genuineness of the assessee’s contention. Ld. DR, therefore, contended that in the absence of the details furnished to prove that the commission income earned, the claim of the assessee cannot be ascertained and accepted. The Ld. DR submitted that the assessee has not proved any nexus between the cash deposits/cash withdrawals/transfers by explaining the transactions. He therefore argued that, with no explanation being offered by the assessee, no connection between the transactions can be established.

Heard both the parties and perused all the material available on record.

We find that the assessee has been in the business of cattle trading for years. We have gone through the bank account statement of assessee wherein the deposits and withdrawals are reflected throughout the year. The fact that the assessee is in the business of milk trading and earning of Dalali income is not in dispute. The Revenue has gone only to the issue of deposits, but there have also been cash withdrawals which have been ignored by the Assessing Officer. The deposits have been reflected from April to end of the year so as the withdrawals, which shows a regular pattern of cash business. In the line of cattle business, it cannot be expected that the assessee maintains purchase bills, sales bills, invoices/vouchers, GSTIN, cash book, cash flow statement etc. Hence, keeping in view the peculiar facts and circumstances of the instant case, the addition made by the Assessing Officer u/s 69A of the Act cannot be sustained.

In the result, the appeal of the assessee is allowed.