M/S. VANDANA GARG,HOWRAH vs. ITO, WD- 47(1), KOLKATA. , KOLKATA

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ITA 1118/KOL/2023Status: DisposedITAT Kolkata01 January 2024AY 2017-18Bench: Shri Rajesh Kumar (Accountant Member)5 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 made in the ordinary course of business, supported by the assessee's business activities and commission income. Therefore, the addition was not justified.

What were the facts?

The assessee, an Amway sales agent, deposited cash from sales into a credit card account to pay the supplier, as cash payments were not accepted. The Assessing Officer made an addition for unexplained money based on these deposits.

What were the issues?

Whether cash deposits made into a credit card account for business payments can be treated as unexplained money under Section 69A.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Rajesh Kumar

Assessment Year: 2017-2018 M/s. Vandana Garg IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member Assessment Year: 2017-2018 M/s. Vandana Garg,.................................Appellant Flat 1/C, 15, Abhoy Guha Road, Liluah, Howrah-711204, West Bengal [PAN: AMEPG0647B] -Vs.- Income Tax Officer,.................................Respondent Ward-47(1), Kolkata, 3, Government Place, Kolkata-700001 Appearances by: Shri Abhishek Bansal, FCA and Shri Ashish Goenka, FCA, appeared on behalf of the assessee Shri Vijay Kumar, Addl. CIT, appeared on behalf of the Revenue Date of concluding the hearing : December 20, 2023 Date of pronouncing the order : January 01, 2024 O R D E R

This appeal at the instance of assessee for assessment year 2017-18 is directed against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 17.08.2023, which is arising out of the order under section 143(3) of the Act on 30.11.2019 framed by Income Tax Officer, Ward-47(1), Kolkata.

Assessment Year: 2017-2018 M/s. Vandana Garg 2. The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition of Rs.5,26,105/- as made by the ld. Assessing Officer on the ground of unexplained money under section 69A of the Income Tax Act, 1961.

3.

The facts in brief are that the assessee filed return of income on 14.03.2018 electronically declaring total income of Rs.1,29,420/-. It is pertinent to state that the case of the assessee was selected for limited scrutiny through CASS on account of large cash deposits in SBI credit card to the tune of Rs.5,26,105/-. The assessee is working as an sales agent of M/s. Amway India Enterprises Pvt. Limited. The assessee sells the product of the Company in the market through chain system module and realizes cash for sale of product of M/s. Amway India Enterprises Pvt. Limited. The said cash is deposited into the SBI Credit Card because the supplier of the products i.e. M/s. Amway India Enterprises Pvt. Limited does not accept the payment in cash and whatever sales are made are deposited is cash into the credit card account.

4.

The ld. CIT(Appeals) affirmed the order of ld. Assessing Officer by observing and holding as under:- “I have carefully considered that facts and circumstances of the case. Reply of the appellant is general and nature and without any supporting evidences. No details of purchase and cash sales have been filed from which the source of the cash deposits in the SBI Gold Credit Card could be 2

Assessment Year: 2017-2018 M/s. Vandana Garg verified during the assessment as well as appellate proceedings. Hence, the source of cash deposits remains unexplained and the addition made is sustained. The total payment made was Rs.5,19,835/- as against the addition of Rs.5,26,105/-. Hence, the total addition required to be added is Rs.5,19,835/- only. The balance amount of Rs.6,270/- is deleted”.

4.1. The ld. CIT(Appeals) partly allowed the appeal of the assessee by deleting the addition to the extent of Rs.6,270/- and thus sustained the addition of Rs.5,19,835/-.

5.

After hearing the rival contentions and perusing the material available on record, I observe that undisputedly the assessee is an agent of M/s. Amway India Enterprises Pvt. Limited and sells its product in the market. Whatever cash is received from sale of the products is deposited in the SBI Gold Credit Card account and then remitted to the account of the company on which company pays commission to the assessee in lieu of the sales made during the year. I note that the total cash payments on SBI Gold Credit Card were to the tune of Rs.5,19,835/- and the assessee has received commission on the total amount of sales, which has been shown as income from other sources. The computation of income also shows Rs.1,31,371/- as commission a copy of which is filed at page 24 of the paper book. The assessee’s total income comprise of commission received, interest from SB Account, interest from income tax and tuition income, which comes to Rs.2,23,470/-, which has shown as income from other sources. I also note that 3

Assessment Year: 2017-2018 M/s. Vandana Garg M/s. Amway India Enterprises Pvt. Limited has deducted TDS of Rs.10,713/- on the commission paid to the assessee. Under these circumstances, I am of the view that the assessee is genuinely doing business and the cash was deposited in the SBI Gold Credit Card account in the ordinary course of business as is evident from the transactions of M/s. Amway India Enterprises Pvt. Limited. Accordingly we are not in concurrence with the conclusion drawn by the ld. CIT(Appeals) and accordingly the order of ld. CIT(Appeals) is set aside and the Assessing Officer is directed to delete the addition.

6.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 01/01/2024. Sd/- (Rajesh Kumar) Accountant Member Kolkata, the 1st day of January, 2024 Copies to :(1) M/s. Vandana Garg, Flat 1/C, 15, Abhoy Guha Road, Liluah, Howrah-711204, West Bengal (2) Income Tax Officer, Ward-47(1), Kolkata, 3, Government Place,Kolkata-700001 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi; 4) Commissioner of Income Tax-;

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