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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Sanjay Garg & Shri Rajesh Kumar]
ORDER Per Shri Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-XXXII, Kolkata [hereinafter referred to as ‘CIT(A)’] dated 03.10.2013 for the assessment year 2006-07.
At the outset, the Ld. Counsel for the assessee submitted that the order of the Co-ordinate Bench passed in was recalled to the extent of ground no. 2 vide miscellaneous order passed in MA No. 145/Kol/2019 arising out of ITA No. 2827/Kol/2013 on the ground that ground no. 2 of the revised grounds of appeal was not adjudicated by the Co-ordinate Bench at the time of while passing this order and hence the order was recalled for this limited purpose and posted for today. The ld counsel of the assessee took the bench through the “The revised ground no. 2” which is reproduced as under:
2. Without prejudice to the Revised Ground no. 1 as preferred to in above, that on the facts and on the circumstances of the case, the Ld. CIT(A) had grossly erred in confirming the addition of Rs. 6,55,130/- by wrongly and illegally invoking the provisions of Section 69/69A of the Act.
Facts in brief are that the AIR information revealed that the assessee has deposited cash amounting to Rs. 10,83,280/- in HDFC Bank, Madhyamgram. The AO during the course of assessment proceedings noted that the assessee has failed to prove the source of deposit of cash along with proofs and evidences and accordingly added the entire amount of Rs. 10,83,280/- to the income of the assessee vide order dated 18.12.2008 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act).
In the appellate proceedings, Ld. CIT(A) partly allowed the appeal of the assessee by sustaining the addition to the extent of Rs. 7,95,130/- comprising Rs.1,40,000/- on account of unsecured loans and Rs.6,55,130/- on account of peak cash. The Ld. CIT(A) sustained the addition to the extent of Rs. 1,40,000/- being unsecured loans raised by the assessee for 9 parties as the same could not be explained by the assessee with evidences and confirmations. In respect of remaining amount of Rs. 9,43,280/- which was calculated by subtracting Rs. 1,40,000/- from the total amount of cash deposited i.e. Rs. 10,83,280/-., the Ld. CIT(A) noted that the cash deposited in the bank account between 16.07.2005 to 23.07.2005 was Rs. 6,65,130/- against which there was no major withdrawal except less than of Rs. 10,000/- withdrawn on 21.07.2005. The remaining cash was treated as unexplained u/s 69/69A of the Act and accordingly sustained the addition to that extent.
The Ld. A.R. submitted before us that the addition of Rs. 6,55,130/- was wrongly sustained by the Ld. CIT(A) u/s 69/69A of the Act for the reasons that the peak was wrongly calculated. The Ld. A.R. submitted that in the appellate order dated 3.10.2013 the Ld. CIT(A) determined the cash deposits at Rs. 6,55,130/- out of which the Tribunal vide order dated 18.07.2018 has already deleted the addition of Rs. 1,40,000/- in respect of unsecured loans. The Ld. A.R. submitted that during the year the assessee has made cash sales of Rs. 4,15,703/- as appearing in the trading profit
3 AY: 2006-07 Shri Ranjit Karmakar and loss account filed before the AO and were accepted by the AO in the assessment proceedings. The Ld. A.R. stated that total of these two items i.e. relief allowed by the Tribunal of Rs. 1,40,000/- and cash sales of assessee of Rs. 4,15,703/- comes to Rs. 5,55,703/- and if this amount is subtracted from the addition as sustained by the Ld. CIT(A) i.e. Rs. 6,55,130/-, the balance remains only Rs. 99,427/- which could at the most be treated as unexplained u/s 69/69A of the Act as that is the peak cash after making the adjustments as discussed above. The Ld. A.R. prayed before the bench the order of ld CIT(A) may be modified by directing the AO to delete the addition to the tune of Rs. 5,55,703/-.
The Ld. D.R. on the other hand relied on the orders of the authorities below.
After hearing the rival submissions and perusing the material on record including the summary of peak cash and relief allowed by the Tribunal in respect of unsecured loans of Rs. 1,40,000/- and cash sales during the year as accepted by the AO, we find merit in the contentions of the ld AR that the peak has wrongly been calculated by the Ld. CIT(A) at Rs. 6,55,130/-. We have carefully examined the peak calculated by the Ld. CIT(A), relief granted of Rs. 1,40,000/- by the Tribunal in respect of loans and cash sales made by the assessee of Rs. 4,15,703/- during the year and are of the considered view the same needs to be recalculated by excluding these amounts as allowed by the Tribunal in respect of unsecured loans of Rs. 1,40,000/- and cash available with the assessee out of cash sales which can be presumed to be deposited in the bank account. Accordingly, we modify the order of Ld. CIT(A) and partly allow the appeal of the assessee by deleting the addition to the tune of Rs. 5,55,703/- out of addition of Rs. 6,55,130/- thereby partly sustaining the addition to the extent of Rs. 99,427/-. The AO is directed accordingly. The ground no. 2 of revised grounds of appeal is partly allowed.
Order is pronounced in the open court on 16th March, 2022.