Kulut Samabay Krishi Unnayan Samity Ltd. Vs ACIT (ITAT Kolkata)
In a matter concerning the assessment year 2017-18, the Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has partially allowed an appeal filed by Kulut Samabay Krishi Unnayan Samity Ltd., a cooperative society. The Tribunal has remanded the central issue—an addition of Rs.77 lakh to the society’s income under Section 69A of the Income Tax Act, 1961, for unexplained cash deposits during the demonetization period—back to the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for fresh consideration.
The society, which engages in supplying agricultural products and providing credit facilities to its members, had initially filed a nil return, claiming a substantial deduction under Section 80P of the Act. During the scrutiny assessment, the Assessing Officer (AO) not only rejected the Section 80P deduction claim of Rs.19,19,016/- but also focused on cash deposited in the bank accounts involving Specified Bank Notes (SBNs). The AO ultimately added Rs.77,00,000/- as unexplained money under Section 69A, concluding that the assessee was the owner of the money, the funds were not recorded in the books, and the nature and source were not satisfactorily explained. The AO’s order suggested that the transactions were part of a “well mechanized and colorful manner to defraud the revenue.” This assessment was subsequently confirmed by the Ld. CIT(A).
