The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 4.82 crore made as unexplained cash credit in the case of the assessee, citing payments linked to genuine sales transactions. Goldman Stocks & Share Brokers Pvt. Ltd., appellant-assessee, filed its return on 28.09.2013, showing a total income of Rs. Nil. The case was reopened under Section 147 after the AO ( Assessing Officer ) received information from the Deputy Director of Income Tax (Investigation) [DDIT(Inv)], on 01.03.2019, stating that the assessee had received Rs. 4,82,40,000/- through shell companies using its own funds. How to Compute Income from Salary with Tax Planning, Click Here A notice under Section 148 was issued on 26.03.2019, and the assessee filed the return on 05.06.2019.

The AO sent a statutory notice with a questionnaire, which the assessee responded to. The AO found that the assessee received the money through shell companies, while the assessee claimed it came from ICICI Bank and was properly recorded in the books. The AO, after reviewing the case, treated the amount as unexplained cash credit and added it to the income of the assessee in the assessment made on 24.12.2019. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO’s order, noting conflicting findings. The CIT(A) observed that the assessee had submitted various documents, including audited accounts, bank statements, a list of directors, and ledger accounts of M/s Coral Environment Pvt. Ltd., showing the sale of cotton fabrics and payment receipts of Rs. 4,82,40,000/-.

However, the audited report did not mention trade debtors or receivables. The assessee claimed it had trade receivables from M/s Coral Environment Pvt. Ltd. for cotton fabric sales in April 2012. The CIT(A) also noted that the assessee did not provide the documents requested in notices dated 28.12.2023 and 12.01.2024, and thus upheld the AO’s decision. How to Compute Income from Salary with Tax Planning, Click Here The two member bench comprising Pradip Kumar Choubey ( Judicial Member ) and Rajesh Kumar ( Accountant Member ) reviewed the case and found that the assessee, a non-banking finance company, sold cotton knitted fabrics to M/s Coral Environment Pvt. Ltd. during the assessment year and received payments for these sales. The tribunal examined the ledger and found total sales of Rs. 8,64,26,500/- with corresponding payments. The AO had treated two payments, Rs. 1,08,90,000/- and Rs. 3,73,50,000/-, as unexplained. These payments were received through State Bank for sales bills. The tribunal found that the payments were wrongly treated as unexplained and decided to set aside the CIT(A)’s order, directing the AO to delete the addition. Ultimately, the appeal filed by the assessee was allowed