SANJAY AGRAWAL,MATHURA vs. INCOME TAX OFFICER 1(3)(1), MATHURA, MATHURA

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ITA 214/AGR/2024Status: DisposedITAT Agra18 February 2025AY 2017-18Bench: HON’BLE SHRI SATBEER SINGH GODARA (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that for transactions prior to 01.04.2017, the rate of tax is not 60% as per the Madras High Court ruling in S.M.I.L.E. Microfinance Ltd. Therefore, the nature of the transaction becomes immaterial, and it should be subjected to the normal rate of tax.

What were the facts?

The assessee, engaged in trading ornaments, made a transaction of Rs. 29.75 Lacs for 1 Kg bullion. The Assessing Officer treated these receipts as unexplained cash credit under Section 69A, while the assessee treated it as a sale transaction. The CIT(A) confirmed the addition.

What were the issues?

Whether the impugned transaction of bullion sale should be treated as a sale turnover or unexplained cash credit attracting higher tax rates.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AGRA

Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Respondent: Shri Shailendra Shrivastava – Ld. Sr. DR

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1.

Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 19-05-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 30-12-2019. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee is stated to be engaged in trading of ornaments under proprietorship concern by the name M/s Swarn Yamuna Jewellers.

2.

During assessment proceedings, it transpired that the assessee made transaction of Rs.29.75 Lacs on 29-11-2016 with M/s Olivia Tradelinks Ltd. with regard to sale of 1 Kg bullion. Since no business activity was carried out by that entity, the receipts of Rs.29.75 Lacs as received by the assessee in his bank account from that entity was held to be bogus and added as unexplained cash credit u/s 69A r.w.s. 115BBE. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us.

3.

It is apparent that the assessee has treated the impugned receipts as sale transaction whereas Ld. AO has added the same u/s 69A which would be subjected to higher rate of tax @60%. However, Hon’ble High Court of Madras in the case of S.M.I.L.E. Microfinance Ltd. vs. ACIT (WP (MD) No.2078 of 2020 dated 19-11-2024) has held that the revenue is empowered to impose 60% rate of tax for the transactions from 01.04.2017 onwards and not prior to the said cut-off date. In such a case, the nature of transaction would become immaterial. In other words, whether the impugned receipts are treated as business receipts or income from other sources, the same would be subjected to normal rate of tax. Therefore, we direct Ld. AO to accept the impugned transaction as sale turnover only.

4.

The appeal stands allowed. Order pronounced on 18th February, 2025.

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