Shri Probhat Mustafi, Dakshin Dinajpur V. ITO, Ward - 1, Balurghat, Dakshin Dinajpur

ITA 1003/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59641 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 11-07-2011
• Court: TRIBUNAL
• Department Lawyers: DEBASIS ROY LD
• Assessee Lawyers: P R DATTA LD
• Keywords: Unexplained cash credit; Unexplained investment; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 131; 68

Judgement Text

, B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B CALCUTTA () BEFORE , SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER /AND ! '# ! , SHRI N.VIJAYA KUMARAN, JUDICIAL MEMBER $ / ITA NO. 1003/KOL/2011 %!& '(/ ASSESSMENT YEAR: 2005-06 SRI PROBHAT MUSTAFI PAN : AFEPM 3258B I.T.O WARD-1, BALURGHAT (*+ / APPELLANT ) - ! - - VERSUS - . (-*+/ RESPONDENT ) *+ . / / FOR THE APPELLANT: / SHRI P.R. DATTA, LD. AR -*+ . / / FOR THE RESPONDENT: / SHRI DEBASIS ROY, LD.DR . !0 . 1 /DATE OF HEARING : 16-02-2012 2' . 1 /DATE OF PRONOUNCEMENT: 23-03-2012 3 / ORDER ! '# ! , , , , , , ,, , SHRI N. VIJAYA KUMARAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS FOR THE ASSESSMENT YEAR 2005-06. IT IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), JALPAIGURI DATED 16-03-2011. 2. THE APPEAL FILED BY ASSESSEE IS TIME BARRED BY 1 6 DAYS. FOR WHICH A CONDONATION PETITION DATED 08-07-2011 HAS BEEN FILED BY THE ASS ESSEE, WHEREIN IT HAS BEEN STATED AS UNDER :- DUE TO RECURRING ATTACK OF CHEST PAIN AND BREATHING PROBLEM I HAVE BEEN SICK DURING THE PERIOD FROM 23/06/2011 T O 07/07/2011 AND WAS UNABLE TO ATTEND MY REGULAR COMMERCIAL ACTIVITI ES. RESULTANTLY I HAVE FAILED TO FILE MY APPEAL BEFORE THE HONOURABLE TRIBUNAL WITHIN 25-06-2011 I.E. ON THE DUE DATE AND REQUEST YOU TO KINDLY CONDONE THE DELAY AND ACCEPT THE FILING OF T HE APPEAL. 2.1 AFTER CONSIDERING THE ABOVE AND HEARING BOTH TH E PARTIES, WE CONDONE THE DELAY AND THE APPEAL IS ADMITTED. 3. THE GROUNDS OF APPEAL ARE AS UNDER :- 01 THAT THE LEARNED CIT (APPEALS) HAS ERRED AND CO MMITTED INJUSTICE TO YOUR APPELLANT IN NOT CONSIDERING THE SMALLNESS OF TRADING ACTIVITIES OF ITA NO.1003/KOL/2011B_NVK 2 YOUR APPELLANT WHO FOR COMPELLING REASONS ENGAGED N ON PROFESSIONAL ACCOUNTANT HAVING HARDLY ANY KNOWLEDGE OF ACCOUNTIN G. STANDARD AND COMMITTED A MISTAKE IN REPRESENTING THE INVESTMENT OF RS.40,000/- CLUBBED WITH CASH BALANCE UNDER THE HEAD CASH-IN-H AND & OTHERS IN THE BALANCE SHEET INSTEAD OF SHOWING THE BALANCES A S INVESTMENT OF RS. 40,000!- AND CASH IN HAND OF RS. 17,005/- SEPARATEL Y CAUSING ADDITION OF RS. 40,000/- UNDER THE HEAD UNEXPLAINED INVESTMENT WHICH BEING BAD IN LAW AS WELL AS IN FACT, DESERVES TO BE DELETED IN F ULL. 02 THAT THE LEARNED CIT (APPEALS) ALSO ERRED IN CO NFIRMING THE ADDITION OF RS.8,00,000/- MADE BY THE ASSESSING OFF ICER AS CASH CREDIT U/S 68 OF THE ACT WHO WITHOUT ISSUING NOTICES EITHE R U/S 133 (B) OR U/S 131 TO THE LOAN CREDITORS, INSPITE OF HAVING DETAIL ED LIST OF LOAN CREDITORS WITH THEIR RESPECTIVE ADDRESSES IN HIS POSSESSION, FOR VERIFICATION IN ONE HAND AND NEGLECTED TO ALLOW NATURAL JUSTICE TO YOUR APPELLANT IN NOT ALLOWING TIME TO DEFEND HIS CASE ON THE OTHER, ARBI TRARILY PASSED THE ASSESSMENT ORDER U1S143 (3)/144 OF THE ACT ON THE G ROUND OF NON ATTENDANCE ON A PARTICULAR DAY WHICH IS UNLAWFUL, U NWANTED, VINDICTIVE AND AGAINST NATURAL LAW OF JUSTICE DEMANDING ANNULM ENT AND OR RESTORATION FOR VERIFICATION AFRESH. 03 THAT YOUR APPELLANT CRAVES LEAVE TO ADD OR ALTE R ANY OF THE GROUND OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 4. THE FIRST ISSUE IS ON THE ADDITION OF RS. 40, 000/ IN RESPECT OF INVESTMENT MADE IN M/S. S.M TRADERS. 5. WE HEARD THE LEARNED COUNSEL FOR THE ASSESSEE AND THE LEARNED DR AT LENGTH. 6. RELEVANT FACTS ARE THAT THE ASSESSEE WAS EN GAGED IN TRADING OF JUTE AND CEREALS. THE ASSESSEE HAD INVESTED AN AMOUNT OF RS. 40,000/- WI TH M/S. S.M TRADERS. THE AO WAS OF THE VIEW THIS INVESTMENT HAS NOT BEEN REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE. THE ASSESSEE EXPLAINED THAT THIS INVESTMENT WAS MADE OUT OF CASH IN HAND AND ALSO REFLECTED IN THE BOOKS OF THE ASSESSEE. THE AO ON PERUSAL OF THE BALANCE SHE ET AND BOOKS OF ACCOUNT FOUND THAT AS ON 31-3-05 THE ASSESSEE HAS WRONGLY SHOWN IT AT HIGHER FIGURE AND IT WAS NOT SEPARATELY SHOWN IN THE BALANCE SHEET. FOR THE NON EXPLANATION OF SOURC E OF INVESTMENT THE AO TREATED IT AS UNEXPLAINED INVESTMENT. 7. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) CONFIRMED THE GIVEN FINDINGS OF THE AO. ITA NO.1003/KOL/2011B_NVK 3 8. .BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS INVESTMENT HAS BEEN MADE AS CONTRIBUTION TO PARTNERS CAPITAL SHOWN IN THE BOOKS OF ASSESSEE. HE ALSO PRODUCED BEFORE THE AO/ITO HIS WRITTEN SUBMISSIONS DATED 12 -09-2007. IT IS ONLY THE SOURCE I.E. DOUBTED. THE LEARNED COUNSEL FOR THE ASSESSEE BEFOR E THE AUTHORITIES BELOW AND BEFORE US ALSO EXPLAINED THAT IT IS THE CONTRIBUTION BY WAY OF PA RTNERS CAPITAL SHOWN IN THE BOOKS OF THE ASSESSEE. THE DEPARTMENT NEVER MADE FURTHER ENQU IRY REGARDING THE CONTRIBUTION OF PARTNERS CAPITAL. IN THE ABSENCE OF THE SAME THE ASSESSEE C ANNOT BE PENALISED. HENCE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND ALLOW THE CLAIM OF THE ASSESSEE IN FULL. 9. SECOND GROUND IS ON THE ADDITION OF RS. 8,00,00 0/- ON UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 10. RELEVANT FACT IS THAT THE ASSESSEE HAS PURCHASE D JUTE AND OTHER AGRICULTURAL CROPS FROM DIFFERENT FARMERS. IT IS DIFFICULT TO PROVIDE EAC H NAME AND ADDRESS OF THE FARMERS. THERE IS NUMEROUS PURCHASE TRANSACTION DURING THE YEAR. HOW EVER, THE ASSESSEE COULD PRODUCE CASH PURCHASE MEMOS AND RELEVANT BOOKS OF ACCOUNT AS MAI NTAINED BY IT FOR THE NAME AND ADDRESSES OF THE FARMERS. HOWEVER, THIS WAS DISBELIEVED BY TH E AUTHORITIES BELOW. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS OF THE VIE W THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE BEFORE THE AO INSPITE OF SUFFICIENT O PPORTUNITIES TO DISCHARGE THE BURDEN. 11. FURTHER ADDITIONAL EVIDENCE FILED BY THE ASSESS EE ALSO NOT ADMITTED AT THE STAGE BY THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS). HE REJ ECTED THE SAME THAT IT WAS A FRESH EVIDENCE. HOWEVER, THIS WAS AMPLY EXPLAINED THAT I T IS THE EVIDENCE TO SHOW THE CREDITWORTHINESS, GENUINENESS OF THE TRANSACTIONS, CAPACITY OF THE PARTIES AND IDENTITY OF THE PARTIES. AS OPPORTUNITY IS DENIED, WE ARE OF THE V IEW THAT ADDITIONAL EVIDENCE FILED IN THE PAPER BOOK UNDER RULE 18(4) OF THE ITAT RULES HAS TO BE TAKEN INTO CONSIDERATION AND THE AO SHOULD PROCEED AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER AFFORDING SUFFICIENT OPPORTUNITY OF BEING HEARD. THE LEARNED COMMISSION ER OF INCOME-TAX (APPEALS) HAS HEARD THE MATTER ON 26-5-08 AS A FINAL HEARING AND THE ORDER WAS PASSED ON 16-3-2011 I.E. AFTER THE GAP OF 3 YEARS. HENCE, IN THE INTEREST OF NATURAL JUSTI CE, WE REVERSE THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE AND REMIT THE SAME BACK TO THE FILE OF THE ITA NO.1003/KOL/2011B_NVK 4 AO FOR PROPER ADJUDICATION INCLUDING THE ADDITIO NAL EVIDENCE IN THE FORM OF CONFIRMATIONS AND AFFIDAVITS, WHICH THE AO HAS TO DECIDE IN ACCOR DANCE WITH LAW. WE ALSO DIRECT THE ASSESSEE TO COOPERATE WITH THE DEPARTMENT, WHO WILL DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 12. IN THE RESULT, THE ASSESSEES APPEAL IS PAR TLY ALLOWED AS STATED ABOVE.. 4 3 5 ! 6 47 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 23 -03-2012 SD/- SD/- ( , ) ( PRAMOD KUMAR, ACCOUNTANT MEMBER) ( ! '# ! , ) ( N.VIJAYA KUMARAN, JUDICIAL MEMBER ) DATED: 23-03-2012 *PP SR.PS/ 3 . %%' 8''/ COPY OF THE ORDER FORWARDED TO: 1. *+ /APPELLANT- SRI PROBHAT MUSTAFI VILL : SITALA PAR A P.O KUSHMANDI DIST: D.DINAJPUR. 2 -*+ / RESPONDENT : I.T.O W 1, BALURGHAT. 3. %3!/ CIT, 4. %3! ()/ CIT(A), 5. ?%6 %!/ DR, KOLKATA BENCHES, KOLKATA [-' %/ TRUE COPY] 3!/ BY ORDER, 4 # /ASSTT REGISTRAR PRONOUNCED ON 23/3/12 SD/- SD/- [JM] [AM]