SANKOPARA COUNTRY SPIRIT SHOP,MURSHIDABAD vs. ACIT, CIR. 42, MURSHIDABAD

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ITA 483/KOL/2024Status: DisposedITAT Kolkata02 December 2024AY 2017-18Bench: SHRI RAJESH KUMAR (Accountant Member), SHRI PRADIP KUMAR CHOUBEY (Judicial Member)7 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 held that the cash deposits were out of the assessee's sale proceeds from the ordinary course of business, supported by sales tallies and audited financial statements. The AO and CIT(A) failed to provide contrary evidence.

What were the facts?

The assessee, running a country liquor shop, deposited ₹2,15,77,110 in cash during the demonetization period. The Assessing Officer (AO) treated ₹1,40,37,000 as unexplained income under Section 69A after allowing for opening cash balance.

What were the issues?

Whether cash deposits made during demonetization, explained as business sale proceeds, can be treated as unexplained income under Section 69A without contrary evidence.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Saumitra Choudhury, AR
For Respondent: Shri Pradip Kumar Biswas, DR
Hearing: 27.11.2024Pronounced: 02.12.2024

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 18.08.2023 for the AY 2017-18.

2.

The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition of ₹1,40,37,000/- by ld. CIT (A) as made by the ld. AO on account of cash deposit during the demonetization period.

3.

The facts in brief are that the assessee was running a country liquor shop during the instant year and filed its return of income on

4.

In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO by holding and observing as under:-

“6.9 In view of the above facts, I have come to the conclusion that the appellant's response that debts were realized in old notes cannot be accepted since old notes were no longer valid currency/legal tender during this period and could not have been accepted [except by business who were granted exceptions for the same]. The debts in books should have been realized in the new currency alone. The appellant has been able to “5. We have heard the rival contentions and perused the material on record. The assessee before us explained that they are in the business of distribution of FMCG products and are the authorised distributor for M/s. Hindustan Unilever Limited, M/s. Britannia Industries Ltd and M/s. Kalleesuwari Refinery Private Limited etc. They purchase in wholesale from the manufacturers and sell them to retail outlets spread over their area of operation. Payments are collected from them either on the same day of sales are in due course. Irrespective of their collection, assessee has to make payments to our suppliers. The Turnover of the assessee for the last three years are as under: Financial Year 2014-15 43.44 crores. Financial Year 2015-16 48.17 crores Financial Year 2016-17 57.93 crores

7.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 02.12.2024.

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