PRAFULLA KUMAR PRADHAN,RAJ SUNAKAHALA vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), BHUBANESWAR , BHUBANESWAR
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MANISH AGARWAL
आयकर अपीलीय आयकर अपीलीय अिधकरण अिधकरण, कटक कटक �यायपीठ �यायपीठ,कटक आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण कटक कटक �यायपीठ �यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER आयकर अपील संसंसंसं/ITA ITA ITA No.488/CTK/2024 ITA (िनधा�रण िनधा�रण िनधा�रण वष� िनधा�रण वष� वष� / Assessment Year : 2017-2018) वष� Prafulla Kumar Pradhan, Vs DCIT, Circle-2(1), Bhubaneswar At: Kauripatana, PO: Raj Sunakhala, PS: Bolagarh, Dist: Khordha PAN No. :ARHPP 9716 E (अपीलाथ� अपीलाथ� /Appellant) (��यथ� ��यथ� / Respondent) अपीलाथ� अपीलाथ� ��यथ� ��यथ� .. िनधा�रती िनधा�रती क� िनधा�रती िनधा�रती क� क� ओर क� ओर ओर सेसेसेसे /Assessee by ओर : Shri P.R.Mohanty, Advocate राज�व क� राज�व क� ओर ओर सेसेसेसे /Revenue by राज�व राज�व क� क� ओर ओर : Shri S.C.Mohanty, Sr.DR सुनवाई क� तारीख / Date of Hearing : 27/01/2025 घोषणा क� तारीख/Date of Pronouncement : 27/01/2025 आदेश / O R D E R आदेश आदेश आदेश Per Bench : This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 30.09.2024, passed in Appeal No.CIT(A), Bhubaneswar vide DIN & Order No.ITBA/NFAC/S/250/2024-25/1069269209(1) for the assessment year 2017-2018, on the following grounds of appeal :- 1. For that order dated 30.09.2024 as passed under Section 250 of the I.T.Act, 1961 by the Commissioner of Income Tax (Appeals) Income Tax Department hereinafter referred to as the learned CIT(Appeals) dismissing the appeal is not just and legal on the facts and in the circumstances of the case. 2. For that the learned CIT(Appeals) without properly appreciating the submissions of the appellant from its proper perspective should not have confirmed the addition of Rs.10,98,000/- u/s.69 of the I.T.Act, 1961 on the facts and in the circumstances of the case. 3. For that the learned Assessing Officer having admitted that the appellant was having only cash sales and the appellant was used to deposit the cash in the bank account the learned AO is not justified to make addition of Rs.10,98,000/- u/s.69 of the I.T.Act, 1961 on the facts and in the circumstances of the case.
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The assessee is represented by Shri P.R.Mohanty, Advocate and
department is represented by Shri S.C.Mohanty, Sr. DR.
The only issue involved in this case with regard to addition of
Rs.10,98,000/- made u/s.69 of the Act on account of cash deposited in
the bank during demonetization period under SBN.
It was submitted by the Id. AR that the cash was deposited out of
the cash sales made during the year. The assessee is dealing in IMFL
and accepted cash which includes the SBN taken against cash sales
during demonetization period. The Id. AR submitted that the cash was
accepted in SBN under compulsion as the customers came to the shop
and had taken the goods i.e. liquor bottle and after opening the same
asked the assessee to accept sale consideration in SBN. In the case of
liquor, once the bottle is opened, no one can accept it as sales return,
therefore, the assessee has no other alternative but to accept the sale
consideration in any denomination irrespective of the fact whether it is
SBN or any other currency. It was the submission that the AO has not
rejected the books of accounts nor stock declared by the assessee was
disturbed. The sales declared by the assessee were also accepted. He,
therefore, submitted that there was a reasonable cause in accepting the
SBN which was deposited in the bank and the source of the same was
duly explained and thus the addition made deserves to be deleted.
In reply, Id. Sr. DR submitted that the cash was received in SBN
during the demonetization and the assessee being a trader in IMFL is not
authorized to collect such SBN currency, therefore, the addition made by
3 ITA No.488/CTK/2024
the AO is correct. Accordingly, the Id. Sr. DR vehemently supported the
orders of the lower authorities
We have heard the rival submissions and perused the material
available on record. It is perused that in this case the assessee has
deposited total cash out of Rs.16,98,000/- in SBN during the
demonetization period. The AO after giving credit of average sales of
Rs.6,00,000/- held Rs. 10,98,000/- as unexplained. From the perusal of
the order, it is seen that the AO nowhere held that the SBN accepted by
the assessee during the demonetization is unauthorized and he himself
had accepted the sales as well as stock declared by the assessee. It is
not a case where provisions of Section 145(3) of the Act are invoked and
income is estimated. The assessee is dealing in IMFL and had made
retail sales of liquor wherein many cases customers took the goods and
opened up the cap. Once the liquor bottle is opened, it cannot be returned
to the seller as it cannot be accepted by any other customer and is a total
loss to seller. Due to this compulsion and exceptional circumstances, the
assessee had to accept the SBN in those cases. Though we are of the
view that SBN cannot be accepted during demonetization except
authorized by the RBI, however, as the circumstances narrated above are
beyond the control of the assessee, therefore, it is a reasonable cause
where to protect the interest of business and to avoid total loss, SBN were
accepted from such customers. The AO has already allowed
Rs.6,00,000/- as unexplained out of such sales in SBN and also accepted
the trading results declared by the assessee wherein such cash sales in
4 ITA No.488/CTK/2024
SBN was included in total sales by the assessee. Looking to these
circumstances, we are of the considered view that the addition of Rs.
10,98,000/- made by the AO and confirmed by the Id. CIT(A) should be
deleted as the assessee has demonstrated the exceptional circumstances
under which such cash was accepted under SBN. In view of these facts,
the addition of Rs. 10,98,000/- made by the AO is hereby deleted.
In the result, appeal of the assessee is allowed.
Order dictated and pronounced in the open court on 27/01/2025.
Sd/- Sd/- (GEORGE MATHAN) (MANISH AGARWAL) लेखा सद�य/ ACCOUNTANT MEMBER �याियक सद�य �याियक सद�य / JUDICIAL MEMBER �याियक �याियक सद�य सद�य कटक कटक Cuttack; �दनांक Dated 27/01/2025 कटक कटक Prakash Kumar Mishra, Sr.P.S. आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत अपीलाथ� / The Appellant- 1. Prafulla Kumar Pradhan, At: Kauripatana, PO: Raj Sunakhala, PS: Bolagarh, Dist: Khordha ��यथ� / The Respondent- 2. DCIT, Circle-2(1), Bhubaneswar आयकर आयु�(अपील) / The CIT(A), 3. आयकर आयु� / CIT 4. आदेशानुसार/ BY आदेशानुसार आदेशानुसार आदेशानुसार िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, कटक कटक / DR, ITAT, 5. कटक कटक ORDER, Cuttack गाड� फाईल / Guard file. 6. स�यािपत �ित //True Copy// (Assistant Registrar) आयकर अपीलीय आयकर अपीलीय अिधकरण अिधकरण, आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण कटक कटक/ITAT, Cuttack कटक कटक
