Astoria Agro and Allied Industries Pvt. Ltd. Vs DCIT (ITAT Mumbai)
RTGS Sale Receipts Routed via Credit Society Not Unexplained Money; ₹1.52 Cr Additions Deleted for Three Years
Pursuant to a search on a third-party cooperative credit society, the Assessing Officer reopened the assessee sugar manufacturer’s assessments and treated RTGS credits aggregating to ₹39.30 lakh (AY 2014-15), ₹72.25 lakh (AY 2015-16) and ₹40.34 lakh (AY 2016-17) as unexplained money under section 69A, alleging that the assessee was a beneficiary of accommodation entries routed through the credit society.
The Tribunal found that the assessee was carrying on substantial genuine business, having recorded net sales of about ₹104.94 crore in FY 2013-14 (product-wise sales chart reproduced on page 9). It accepted the assessee’s detailed one-to-one reconciliation showing that each RTGS receipt exactly matched specific sale bills raised on ten identified customers (customer-wise RTGS and invoice correlation table reproduced on pages 11–12). Copies of sale invoices, delivery challans, gate passes, customer ledgers and bank statements demonstrated that these were advance sale proceeds from customers for supply of sugar and by-products, duly recorded in the audited books.
The mere fact that customers remitted money through accounts maintained with the searched cooperative credit society was held to explain only the route of funds, not the source. A banking intermediary or conduit cannot be treated as the payer when contemporaneous commercial documents establish that the true source is identified customers against recorded sales.
Since the amounts were fully recorded in the books and their nature and source stood proved as sale realisations, the basic condition for invoking section 69A failed. The Assessing Officer was found to have conflated the remittance channel with the substantive source and ignored primary business evidence.
Holding the additions to be based on conjecture and contrary to commercial realities, the Tribunal deleted the entire additions for all three years. All appeals of the assessee were allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The aforesaid appeals have been filed by the assessee against the consolidated order dated 26.06.2025 passed by the learned Commissioner of Income Tax (Appeals)–52, Mumbai, pertaining to the quantum of reassessment framed under section 147 read with section 144 of the Income-tax Act, 1961 for the Assessment Years 2014-15, 2015-16 and 2016-17.
