INCOME TAX OFFICER, WARD-25(1), KOLKATA, KOLKATA vs. SANTA SARKAR, KOLKATA

Revenue has raised following grounds of appeal:

The facts in brief are that the assessee filed its return of income on 07.11.2022, declaring total income of ₹ 44,40,160/-. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were duly issued and served upon the assessee. The assessee filed the details and information as called for by the ld. Assessing Officer. The assessee is engaged in the wholesale trading business and dealer and distribution of ITC Limited, Adani Wilmer Ltd and Bharti Airtel Ltd. The ld. AO during the course of assessment proceedings called upon the assessee to explain the huge cash deposited of ₹14,54,40,700/ and ₹99,11,76,825/- in her books of accounts maintained with Axis Bank and ICICI Bank respectively. The total cash deposits aggregated to ₹113,66,67,525/-. The ld. AO also noted that the assessee has taken unsecured loans of ₹5,69,65,533/- and has current liabilities of ₹37,83,084/-. The assessee accordingly in his reply before the ld. AO submitted that cash received into the bank account were out of sales which were received by the assessee in the ordinary course of business and thereafter remittances were made to the suppliers. Finally, in Para 3.4.9, the ld. AO noted that the assessee has not submitted the cash flow statement for reconciliation of cash receipts during the year and has merely furnished the cash book showing receipts from small traders/ business persons. The ld. AO further noted that the assessee turnover as per GSTR-3B, was ₹46,51,64,157/-, whereas the cash deposited was ₹113,66,67,525/- and thus the assessee has not explained the differential amount of

In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into account submissions, contention and evidences filed by the assessee which were also produced before the ld. AO in the assessment proceedings. The ld. CIT (A) while deleting the addition has observed and held as under:-

After hearing the rival contentions and perusing the materials available on record, we find that assessee is an authorized dealer and distributor of ITC Ltd., Adani Wilmer Ltd. and Bharti Products and Airtel Telecom Products. During the year assessee has shown turnover of ₹46,51,64,157/- as turnover of M/s Sristy Telecom, which was duly considered by the ld. AO, however, the AO completely overlooked the total GST and CESS component of ₹31,91,07,789/- and also total

In the result, the appeal of the Revenue is dismissed.