THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ)

&

Shri Girish Agrawal, Accountant Member I.T.A. No. 187/KOL/2024 Assessment Year: 2017-2018 Svarna Textiles Limited,…....………………….Appellant

7, Old Ballygunge, 2nd Lane, Ballygunge, Kolkata-700019 [PAN:AARCS6490A]

-Vs.-

Income Tax Officer,…….…………………….…Respondent Ward-12(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by:

Shri S.K. Pransukha, FCA, appeared on behalf of the assessee Shri Supriya Pal, Addl. CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing : April 10, 2024 Date of pronouncing the order : May 6, 2024 O R D E R Per Rajpal Yadav, Vice-President (KZ):-

The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 29.12.2023 passed for A.Y. 2017-18.

2. The solitary grievance of the assessee is that ld. CIT(Appeals) has erred in confirming the addition made by the ld.

Assessing Officer amounting to Rs.10,05,000/-.

3. Brief facts of the case are that during demonetization period, the assessee has made deposit of Rs.10,05,000/-. It did not file income-tax return under section 139(1). The ld. Assessing Officer has issued a notice under section 148 of the Income Tax Act inviting the return of income within thirty days, which was filed by the assessee declaring total income of Rs.6,33,940/-. Subsequently notices under section 143(2) and 142(1) were issued and served upon the assessee. Though the assessee did not file its return of income under section 139(1) within due date but it has filed its Form 3CA (Audit Report along with P & L Account and Balance-sheet) on 06.11.2017. In other words, the return ought to have been filed by 31st March, 2018, which was not filed, but the audit report was filed before the due date. The ld. Assessing Officer thereafter observed that in the HDFC Bank, the assessee has made deposits of Rs.10,05,000/-. The ld. Assessing Officer has recorded the statement of the Director of the assessee-Company- Shri Ashish Tibrewalla on oath under section 131 of the Income Tax Act on 17.06.2019. The ld. Assessing Officer has reproduced questions and answers of the statement from pages no. 2 to 3 of the assessment order. The ld. Assessing Officer thereafter rejected the contentions of the assessee vide which it has explained the source of Rs.10,05,000/-.

4. Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.

5. With the assistance of ld. Representatives, we have gone through the record carefully. The explanation of the assessee was that it is engaged in the business of manufacturing and trading of clothes and garments. It is also in the export of garments. In reply to Question No. 17 that the payment was made to send yarns and fabrics for dyeing purpose to contracted dyeing factory Wonder Crafts Bhagalpur. He also disclosed as to how the trading activity for sale of garment is being undertaken. According to the assessee, it has 15 to 20 employees. The source of the cash deposit was attributed to cash sales in the past. The assessee has referred to cash balance available in the audited accounts. The ld. Counsel for the assessee drew our attention towards page no. 5 of the paper book, where summary of cash in hand from 1st April to 31st December, 2016 has been placed on record, which reads as under:-

Summary of cash in hand from 01.04.2016 to 31.12.2016

6. Let us evaluate the reasons assigned by the ld. Assessing