2023 (5) TMI 945 - AT - Income Tax

Tribunal directs deletion of Rs. 11,00,000 income addition under Income Tax Act

Winsher Sales Pvt. Ltd. Versus ITO, Ward-6 (2), Kolkata

Winsher Sales Pvt. Ltd. Versus ITO, Ward-6 (2), Kolkata - TMI Issues:The judgment involves the issue of confirming a cash credit of Rs. 11,00,000/- under section 68 of the Income Tax Act, 1961.Summary:Issue 1:The only issue raised in the appeal is against the confirmation of Rs. 11,00,000/- as a cash credit by the Ld. CIT(A) under section 68 of the Act.The case involved the reopening of assessment under section 147 based on information received regarding cash deposits in a bank account and subsequent transfers. The AO treated Rs. 11,00,000/- as an unexplained cash credit and added it to the assessee's income. In the appellate proceedings, the Ld. CIT(A) affirmed the AO's order, emphasizing the onus on the assessee to explain the source of cash deposits. The Ld. CIT(A) dismissed the appeal, citing discrepancies in the bank statements and lack of cooperation from the assessee.Issue 2:The second issue pertains to the analysis of the transactions involving the sale of equity shares and the transfer of funds.Upon further examination, it was revealed that the assessee had sold 2700 equity shares to Santosh Agency for Rs. 27,00,000/- and received the payment through banking channels. Additionally, M/s Patra Bastralaya had transferred Rs. 11,00,000/- to Santosh Agency before the amount was remitted to the assessee's account. The Tribunal observed that the addition of Rs. 11,00,000/- should have been made in the hands of Santosh Agency, not the present assessee, as the source of the source was in question. The Tribunal directed the AO to delete the addition of Rs. 11,00,000/- from the assessee's income under section 68.In conclusion, the Tribunal allowed the appeal of the assessee, setting aside the order of the Ld. CIT(A) and directing the AO to delete the addition of Rs. 11,00,000/- from the assessee's income.