PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-4 vs. CHITRAVALI SALES PVT. LTD.
What did the High Court hold?
The Tribunal held that the advances were trade deposits from customers and not unexplained cash credits. Therefore, Section 68 of the Income Tax Act was not applicable.
What were the facts?
The revenue appealed against the ITAT's deletion of an addition of Rs. 7,75,34,884/- representing advances received from 470 persons. The ITAT held these advances were trade deposits from customers, adjusted against sand supplies and sales booked in a subsequent assessment year.
What were the issues?
Whether the advances received by the assessee were unexplained cash credits attracting Section 68, or genuine trade deposits. Whether the ITAT's order was perverse in overlooking evidence regarding the nature of the advances.
Which sections of the Income-tax Act were involved?
Section 68,Section 260A,Section 154,Section 206(C)(4)
AI-generated summary — verify with the full judgment below
OD – 9 ORDER SHEET IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE IA NO: GA/2/2017 (OLD NO: GA/2133/2017) In ITAT/249/2017 PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-4 VS. M/S. CHITRAVALI SALES PVT. LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM A N D THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date: December 2, 2021. Appearance : Mr. D. Chowdhury, Advocate Mr. Madhu Jana, Advocate …for the appellant Mr. Avijit Dey, Advocate Mr. Subash Agarwal, Advocate …for the respondent The Court : This appeal by the revenue filed under Section 260A of the Income Tax Act, 1961 (the Act in brevity) is directed against the order dated 10th August, 2016 passed by the Income Tax Appellate Tribunal “B” Bench, Kolkata (Tribunal) in ITA Nos. 116/Kol/2010 for Assessment Year 2006-07. The Revenue has raised the following substantial questions of law for consideration: - i) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal, “B” Bench,
2 Kolkata was justified in deleting the addition of Rs.7,75,34,884/- being advances received from 470 persons on account of alleged trading of sand whose identity has not been proved ? ii) Whether on the facts and in the circumstances of the case the order passed by the Income Tax Appellate Tribunal “B” Bench, Kolkata was perverse in overlooking the relevant material brought forward by the Income Tax Officer, Ward 3(4) Kolkata in its order dated 30th December, 2008 on record as evidence to establish that the impugned advances was bogus in nature ? The short question involved in the instant case is whether the assesee had discharged the onus cast upon him in explaining the nature of source of credit, the identity of the creditors, genuineness of the transactions and creditworthiness of the parties. The Tribunal after considering the fact found that the amount received by the assessee from 470 persons is only a trade deposit and those persons are customers of the assessee which had been adjusted against the supplies of sand and sales have been booked by the assessee for the Assessment Year 2007-08 which was accepted by the assessing officer and the assessment was completed. Therefore, the Tribunal held that the provisions of Section 68 of the Act cannot be invoked in respect of trade deposit received from the customers. The Tribunal also took note of the decision of this Court in the case of CRYSTAL NETWORKS
3 (P) LTD Vs. CIT in ITA No.158 of 2002 dated 29th July 2010. We find that the Tribunal on facts was satisfied that the provisions of Section 68 would not stand attracted and the fact that assessing officer had accepted the return filed by the assessee for the Assessment Year 2007-08 where the trade advances were duly squared off by the supply of sand by the assessee to the customers and the sales were booked in the said Assessment Year 2007-08 and this has been accepted by the assessing officer vide proceeding u/S. 154 of the Act while granting credit of T.C.S. under Section 206(C)(4) of the Act. Thus we find that there is no question of law, much less substantial questions of law arising in this appeal. Accordingly the appeal stands dismissed. Consequently the application also stands dismissed. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) GH/RS.
More judgments on Section 68
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
- Bliss Dealtrade Private Limited, Kolkata vs Income Tax Officer - Ward 9(2) Kolkata…ITA 208/KOL/2026[2012-13]Status: Disposed21 Oct 2026AY 2012-13
- Hemal Paresh Madeka, Rajkot vs Asst.Commissioner of Income Tax…ITA 955/RJT/2026[2020-21]Status: Disposed19 Oct 2026AY 2020-21
- Ajaybhai Dineshbhai Bagdai, Near Central… vs The Income Tax Officer, Ward-1(2)(1), New…ITA 74/RJT/2026[2013-14]Status: Disposed19 Oct 2026AY 2013-14
Recent GST High Court judgments
Search GST case law →- M/S Rentex Polymers Private Limited vs. Assistant Commissioner Of Central Goods And Services TaxDelhi · 29 Oct 2026
- M/S Maa Shila Traders vs. The State Of BiharPatna · 29 Oct 2026
- M/S Ashish Enterprises vs. Assistant Commissioner Gsto Ward No. 86Delhi · 29 Oct 2026
- M/S. Bhanwal Trading And Company vs. The Union Of INDIARajasthan · 28 Oct 2026
- M/S. Saraswati Enterprises vs. State Of RajasthanRajasthan · 28 Oct 2026