Amar Kumar Agarwal Vs DCIT (ITAT Kolkata)
Unaccounted Sales ≠ Unexplained Money — GP @10% Yes, 69A & 115BBE No; Dumb Papers & Streedhan Save the Day
Kolkata ITAT delivered a comprehensive, issue-wise ruling in the group search cases of Amar Kumar Agarwal for AYs 2017-18 to 2021-22, drawing clear lines between unaccounted business receipts and unexplained money. On battery business cash receipts found during search, Tribunal held that where unaccounted receipts are admittedly from out-of-book sales, entire turnover cannot be taxed u/s 69A. Only the profit element is taxable. While CIT(A) had applied GP @12.5%, Tribunal found it excessive and restricted estimation to GP @10%, firmly holding that such income is business income chargeable at normal rates and not u/s 115BBE.
On jewellery, Tribunal deleted additions u/s 69B, holding that jewellery found (367.760 gms gold & silver) was within CBDT Instruction No.1916 limits, duly explained as streedhan & family heirloom, and could not be treated as unexplained merely due to non-disclosure in returns.
On cash found at residence, Tribunal upheld deletion granted by CIT(A), accepting assessee’s explanation that cash belonged to group concerns, supported by availability of sufficient group cash balances.
Most significantly, Tribunal demolished Revenue’s case on alleged cash loans & interest based on loose papers seized from third-party / group premises. Such documents were held to be “dumb documents”, not bearing assessee’s name, signature or handwriting, and hence outside the scope of s.69A. Even peak theory application by CIT(A) was rejected. Presumption u/s 292C was held inapplicable since documents were not found from assessee’s possession. Entire additions on this count were deleted.
Assessee’s appeals were partly allowed with substantial relief, while all Revenue appeals were dismissed, reaffirming settled law that sales invite profit estimation, not confiscatory taxation under deeming provisions
FULL TEXT OF THE ORDER OF ITAT KOLKATA
