SULEKHA CHOWDHURY,KOLKATA vs. I.T.O WD - 49(1),KOLKATA, KOLKATA

This appeal of the assessee arises out of the order of the Learned CIT (A),XXXII, Kolkata in Appeal No. 213/XXXII/09-10/49(1)/Kol dated 18-10-2012 for the assessment year 2007-08 against the order of assessment passed by the ld.AO u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).

2.1 The brief facts of the issue are that the assessee is a retail trader engaged in the business of purchase and sale of fish and fish products. The return of income for the assessment year 2007-08 was filed by the assessee herein in terms of section 44AF of the Act. The ld.AO found that there were cash deposits between 14-03-2007 to 28-03-2007 to the tune of Rs. 14,76,000/- in the bank account of the assessee. In response to the show-cause notice, the assessee replied that the source of cash deposits were from sale proceeds received in cash from M/s. Atta Exports and also stated that the entire sales made are also duly

1 Smt. Sulekha Chowdhury disclosed in the return of income filed by the assessee. The ld.AO also issued summons to M/s. Atta Exports u/s. 131 of the I.T Act, 1961 calling for submission of various details by the assessee. The said party, M/s. Atta Exports, failed to appear in person before the ld.AO, but gave its replies in writing directly to the ld.AO, wherein he had categorically stated that he had paid a sum of Rs.14,76,000/- in cash to the assessee for purchase of fish and fish products from the assessee. The ld.AO also observed that the assessee does not have any infrastructural facility in the form of Cold Storage Plant or Freezer for storing the fish bought by the assessee. Hence, he disbelieved the version of the assessee as well as the reply letter of M/s. Atta Exports that the source of cash deposits emanate out of sale proceeds of fish. The ld. AO accordingly brought the total cash deposits of Rs.14,76,000/- to tax as unexplained cash credit u/s. 68 of the Act. This action of the ld.AO was also upheld by the ld.CIT(A) on 1st appeal. Aggrieved, the assessee is in appeal before us on the following grounds:- 1. For that in the facts and circumstances of the case the assessment order passed was in violation of principals" of natural justice hence is bad in law and be quashed.

2. For that in the facts and circumstances of the case the CIT (A) erred in adding Rs.14,76,000/- as income of the assessee. The addition being uncalled for, the same be deleted.

3. The appellant craves leave to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal.

Before us the ld.AR argued that M/s. Atta Exports has specifically replied before the ld.AO that it had allowed the assessee to use its Cold Storage facility for storing the fish before it is exported by M/s. Atta Exports. M/s. Atta Exports had also specifically stated that no rent is being collected by it from the assessee for storage facility. He further stated that the assessee had already disclosed the sum of Rs.14,76,000/- as sales in its P & L account, which is also confirmed by M/s. Atta Exports. By adding the same i.e Rs. 14,76,000/- again as cash credit would only result in double addition. In response to this the ld.Sr.DR vehemently supported the orders of the lower authorities.

2 Smt. Sulekha Chowdhury 2.3 We have heard the rival submissions and perused the materials available on record including the paper book filed by the assessee before us. We find that the assessee had explained the sources of cash deposits to be emanating out of sale proceeds of fish to M/s. Atta Exports. We also find from confirmation given by M/s. Atta Exports before the ld.AO, which is also part of the paper book as filed by the assessee before us that M/s. Atta Exports had indeed duly confirmed the payment of Rs.14,76,000/- in cash to the assessee for purchases made by it from the assessee. We also find that M/s. Atta Exports had duly stated in its response to summon proceedings u/s. 131 of the Act before the ld.AO that it had allowed its Cold Storage facility to be used by the assessee free of rent before it is exported by M/s. Atta Exports. We also find that the finding given by the lower authorities that sale is made by the assessee to a single party to the tune of Rs.14,76,000/- is factually incorrect as total sales recorded in the P & L account of the assessee is of Rs.28,40,600/-. From the details filed by the assessee in the paper book, we are thoroughly satisfied that the source for cash deposits had emanated only out of sale proceeds of the assessee, which has been duly offered to tax by the assessee in her return and adding the same again as unexplained cash credit would only result in double addition. We also find lot of force in the alternative arguments of the ld.AR that from the confirmation filed by M/s. Atta exports, it clearly emanated that source of cash deposit is only out of sale proceeds of fish and the income of the assessee is determined u/s. 44AF of the Act, and hence there is no scope for making any further addition towards business receipts by invoking the provisions of section 68 or 69 of the Act. The reliance placed by the assessee on the following judgments in this regard:- • A.Y 2008-09 dtd. 30-03-2012 in the case of Sri Subir Kumar Sinha Vs. Addl. Commissioner of Income Tax, Range-2, Durgapur • ITA Nos. 854 to 856/Kol/2010 A.Ys 2003-04 to 2006-07 dtd. 25-11-2011 in the case of Kapil Dey, Kolkata Vs. Income Tax Officer, W 49(2), Kolkata • Punjab & Haryana High Court in the case of CIT Vs. Surinder Pal Anand dtd. June 29,2010 reported in (2010) 6 taxmann.com 7 (P&H)

2.4. In view of the aforesaid facts and circumstances and respectfully following judicial precedents, which are directly applicable on the point, we have no hesitation in directing the ld.AO to delete the impugned addition so made in the sum of Rs.14,76,000/- by the ld.AO and confirmed by the ld.CIT(A). Accordingly, the grounds raised by the assessee are allowed.

3 Smt. Sulekha Chowdhury

THIS ORDER IS PRONOUNCED IN OPEN COURT ON 13 -01-2016