ITO, WD-2(2), COOCHBEHAR, COOCHBIHAR vs. SRI ARJUN PRASAD SINGH, COOCHBIHAR

- These two Revenue’s appeals for assessment years 2010-11 & 2011- 12 challenge correctness of the Commissioner of Income Tax (Appeals)- Jalpaiguri’s common order dated 27.02.2017, passed in case No.04&05/CIT(A)-7/Jal/Wd-2(2)/16-17, reversing the Assessing Officer’s action treating entire cash deposits of ₹1,10,24,186/- and ₹1,13,61,866/- as undisclosed income in the respective assessment order(s), involving the proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’.

Both the parties are very fair at the outset is informing us that CIT(A)’s common order has followed his discussion in latter assessment year 2011-12 mutatis mutandis in former assessment year 2010-11 as follows:- -877/Kol/2017 A.Ys. 10-11 & 11-12 ITO Wd-2(2), Coochbehar Vs. Sh Arjun Prasad Singh Page 2 “3.2 Ground no. 2: This grounds of appeal is against addition of Rs.1,13,61,866/-. The facts of the case are summarized below. ‘Government has given license to Monalisa bottling Industries Pvt. Ltd. for bottling of country liquor. The mother of the assessee is buying the country liquor for sale to the consumers under proprietorship concern M/s Priyagannj, C.S. Shop. In this case Report was received from ITXO [I & CI] that in savings bank account no. 11323865809 cash deposit of Rs.11159500/- has been made. This bank account stands in the name of assessee Arjun Prasad Singh. Notice u/s. 148 was issued. The assessee explained before the Assessing Officer that since her mother is very old therefore all the proceeds of sale of liquor are being deposited in the bank account and from the same bank account cheque is being issued to the supplier Monalisa Bottling Industries Pvt. Ltd., The Assessing Officer asked the assessee to produce books of account to M/s Monalisa Bottling Industries Pvt. Ltd., However the assessee did not produce his books of account since as per him the assessee is not required to produce the books of the said concern as the business of M/s Priyaganj, C.S. Shop is filing its return separately and is assessed separately. The authorized representative also stated that Smt.Lakhpat Kanwar is assessed to tax regularly and no addition has been made in her hand is security assessment for AY 2011-12. He further stated that mother has given power of attorney to the assessee for opening and operating any bank account in respect of Priyaganj, C.S. Shop. 3.3 Findings of Commissioner of Income-tax (Appeals) I have perused the assessment order, submissions of the assessee. I have also seen the bank statement. It is seen induced cash of more than Rs.1 crore has been deposited in this bank account 11323865809. It is also seen from the bank statement that cheques are being regularly issued form this bank account in favour of M/s Monalsa Bottling Industries. I have also seen the power of attorney given by Smt. Lakhpati Kanwar in favour of assessee for opening and operating of bank account. From the above it is very clear that deposits in this bank account relates to sale proceeds of the liquor shop and the cheque has been issued to the supplier of M/s Monalisa Bottling Industries Pvt. Ltd., The obvious inference is that receipt in this bank account relates to Smt. Lakhpati Kanwar and also these transactions are mostly accounted for and reltes to the business of liquor shop. It is also seen that the AO has passed a separate assessment order for AY 2011-12 for Smt. Lakhpati Kanwar in view of the above it is neither correct on the part of the Assessing Officer to insist on production of books of account Smt. Lakhpati Kanwar or reach an inference that entire deposited in bank account are unaccounted. In view of the above the addition is hereby deleted and the grounds of appeal in respect is allowed.”