IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.879/KOL/2024 (Assessment Year:2017-18)

ITO, Ward-24 Mundukhola Baksagarh SKUS Ltd.

Aaykar Bhavan, G.T. Road, Baksararh, Panchpara, Hoogly, Vs. Khadinamore, Chinsurah, West Bengal-712501 Hooghly, West Benga 712101 (Appellant) (

Respondent)

PAN No. AABAM7385E Assessee by : Shri Saumitra Choudhury, AR Revenue by : Shri Sailen Samadder, DR Date of hearing: 17.12.2024 Date of pronouncement : 15.01.2025

O R D E R

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 16.03.2024 for the AY 2017-18.

02. The ground no.1 is general in nature and does not require any specific adjudication.

03. The issue raised in ground no. 2 is against the confirmation of addition of ₹45,89,500/- by ld. CIT (A) as made by the ld. AO u/s 69A of the Income-tax Act, 1961 (the Act) as unexplained investment.

04. The facts in brief are that the assessee filed the return of income on

19.12.2017, showing total income as Nil, after claiming the deduction u/s 80P of ₹19,97,385/-. The case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) and statutory notices were duly served upon the assessee along with the questionnaire and were also replied by the assessee by furnishing the necessary details / information. The ld. AO upon perusal of the said details/ information observed that the assessee has deposited cash into its different bank accounts and accordingly, the assessee was required by the AO to furnish the details of cash sales and cash deposits into the bank. The assessee submitted the copies of bank statements, audited accounts, bank loans, Bye laws of the society, details of cash deposited during demonetization period etc. The assessee also submitted the list of members of the society from whom the SBNs were received during the demonetization period. The assessee is a co-operative society engaged in selling fertilizers to its members and does not carrying on any banking business. The assessee has 4,000 members which has been accepted by the ld. Assessing Officer. The assessee submitted before the ld. AO that the money was received from the members of the assessee against sale of fertilizers. However, reply of the assessee was not accepted as satisfactory by the ld. AO for the reasons that the assessee is not allowed to accept SBNs during demonetization period against sale of fertilizers except in banking business and therefore, concluded that the sources of cash deposits remained unexplained. Finally, the ld. AO treated the cash as unexplained investment u/s 69A of the Act and added the same to the income of the assessee and deduction u/s 80P of the Act was also denied.

05. In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee simply on the ground that the assessee has taken different view before him that the cash was received from the debtors and therefore held that the ld. AO’s order cannot be faulted with.

06. After hearing the rival contentions and perusing the material available on record, we find that the assessee is coop. credit society is carrying on the business as purchase and sale of fertilizers and pesticides to its members , which was not doubted by the AO. We have examined the books of accounts comprising cash book for the period 08.11.2016 to 31.12.2016 and found that the assessee has received the cash on account of sale of fertilizers and pesticides.

07. The only objection of the ld. AO was that the sales consideration were not received in legal tender as the specified bank notes (SBNs) were not legal tender after 09.11.2016 and therefore, he added ₹45,89,500/- to the income of the assessee and brough to tax u/s 115BBE of the Act at 60%. In the appellate proceedings, the case of the assessee was simply dismissed by the ld. CIT (A) with