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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 28.08.2024 for the AY 2022-23.
Revenue has raised following grounds of appeal:
“1. That, on the facts and circumstances of the case, the Ld. CIT (A) had erred in law by taking into account additional evidences from the appellant without allowing reasonable opportunity to the Assessing Officer as per provisions laid down in Rule 46A of the IT Rule, 1962.
2. That on the facts and circumstances of the case the Ld. CIT (A) erred in deleting the addition made by the Assessing Officer amounting to ₹67,15,03,368/- u/s 69a of the Income-tax Act, 1961 without appreciating the fact that the Assessing Officer passed the order u/s 143(3) read with Section 144B taking into cognizance all he documents and evidences filed by the assessee.”
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:-
4.1. From the perusal of the assessment order in respect of the above issue it is noted that the assessing officer has taken into consideration only the turnover of M/s Sristy Traders & M/s Sristy Telecom of Rs.46,51,64,157 only, overlooking the total GST and cess component of Rs.31,91,07,789 and the total collection in the business of M/s Sristy Telecom for Airtel Money at Rs.43.72 crores, which resulted in a situation where the assessing officer was looking for explanation for the balance cash deposit of Rs.67,15,03,368. The appellant during the course of this proceeding submitted a detailed explanation about the cash deposits as well as reconciliation of the same with the turnover and cash collection made in the businesses of M/s Sristy Traders and M/s Sristy Telecom The appellant also submitted reconciliation of the taxable value of the turnover with the GST & CESS components. 4.2. Having carefully perused the appellant submission and the reconciliation statements submitted by the appellant, I am of the considered view that the appellant had satisfactorily explained the cash deposits in the bank accounts and it appears that the assessing officer had ignored the GST component of the turnover and the cash collection of M/s Sristy Telecom in respect of the agency business of Airtel Money and wrongly concluded that the cash deposit of Rs.67,15,03,368 was to be explained by the appellant. In the above circumstances, I do not find any merit in the addition made by the assessing officer and accordingly the appellant deserves relief on ground No.1 relating to the addition of Rs. 67,15,03,368.
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.
Order pronounced in the open court on 31.01.2025.