ITO, Ward - 1(1), Midnapore, Midnapore V. Kala Baran Banerjee, Paschim Medinipur

ITA 102/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99828 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMITABH CHOWDHURY
• Assessee Lawyers: SUJIT SEKHARESWAR ROY
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 102 / KOL / 2012 ASSESSMENT YEAR :2008-09 ITO WARD-1(1), OFFICE OF THE JOINT, CIT RANGE-1, MIDNAPORE, AMARAVATI (1 ST FLOOR), KERANITOLA, MIDNAPORE-721101 V/S . KALA BARAN BANERJEE VILL. UTTAR SIRSHA, P.O. SIRSHA, DIST.PASCHIM MEDINIPUR, PIN 721 260 [ PAN NO. AJSPB 5857 D ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI AMITABH CHOWDHURY, ADDL-CIT-DR /BY RESPONDENT SHRI SUJIT SEKHARESWAR ROY, ADVOCATE /DATE OF HEARING 22-09-2015 /DATE OF PRONOUNCEMENT 28-09-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA IN APPEAL NO.41 1/CIT(A)-XXXVI/KOL/R- 1,MID./10-11 DATED 04.11.2011. ASSESSMENT WAS FRAME D BY ACIT, RANJE- 1,MIDNAPORE U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 23.12.2010 FOR A SSESSMENT YEAR 2008-09. 2. AT THE OUTSET, IT WAS NOTICED THAT THE ASSESSEE HAS PREPARED TWO SETS OF AUDITED FINANCIAL STATEMENTS ONE FOR THE INCOME TAX AND OTHER FOR THE BANK. THE FINANCIAL STATEMENTS PREPARED FOR THE BANK WERE HAVING INFLATED FIGURES OF OPENING STOCK, CAPITAL EMPLOYED, LAND & BUILDING AN D DRAWINGS ETC. AND THE REASONS FOR THE INFLATED FIGURES IS TO SHOW A HEALT HY PICTURE OF THE BUSINESS IN ITA NO.102/KOL/2012 A.Y. 2008-09 ITO WD-1(1), MID. V. KALA BARAN BANERJEE PAGE 2 ORDER TO HAVE THE CASH CREDIT FACILITY FROM THE BAN K. HOWEVER THE FIGURE OF THE NET PROFIT WAS SHOWN EXACTLY THE SAME IN THE BOTH S ETS OF AUDITED BALANCE SHEET. THE AO REJECTED THE RETURN SUBMITTED WITH TH E INCOME TAX DEPARTMENT UNDER SECTION 145(3) OF THE ACT AND CONSIDERED THE BALANCE SHEET SUBMITTED WITH THE BANK FOR THE PURPOSE OF ASSESSMENT. ACCORD INGLY THE AO HAS MADE THE ADDITION OF THE DIFFERENCE SHOWN BETWEEN BOTH T HE SET OF BALANCE SHEET AS ENUMERATED BELOW : (I) DIFFERENCE IN OPENING STOCK OF RS.9,80000/-; (II) DIFFERENCE IN OPENING CAPITAL OF RS.22,45,038/ -; (III) DIFFERENCE IN LAND & BUILDING AS UNACCOUNTED INVESTMENT OF RS.8,99,870/- (IV) DIFFERENCE IN DRAWINGS AS UNEXPLAINED EXPENDIT URE OF RS.6,67,506/-. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE C IT(A) WHO HAS DELETED THE ADDITION MADE BY THE AO, HAVING THE RELIANCE ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS N. SWAMY (2000) 241 ITR 363 (MAD), IT IS HELD THAT THE ASSESSEES INCOME IS TO BE ASSESSED BY THE ITO ON THE BASIS OF MATERIAL WHICH IS REQUIRED TO BE CONSI DERED FOR THE PURPOSE OF ASSESSMENT AND NOT ON THE BASIS OF THE STATEMENT WH ICH THE ASSESSEE MAY HAVE GIVEN TO A THIRD PARTY, EVEN IF IT BE A BANK. THE MERE FACT THAT THE ASSESSEE HAD MADE SUCH A STATEMENT BY ITSELF CANNOT BE TREATED AS HAVING RESULTED IN AN IRREBUTTABLE PRESUMPTION AGAINST THE ASSESSEE. THE BURDEN OF PROVING THAT THE ASSESSEE HAD UNDISCLOSED INCOME IS ON THE REVENUE. THAT BURDEN CANNOT BE SAID TO BE DISCHARGED BY MERELY RE FERRING TO THE STATEMENT GIVEN BY THE ASSESSEE TO A THIRD PARTY. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US ON THE FO LLOWING GROUNDS : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A)-XXXVI, KOLKATA, HAS ERRED BOTH IN FACTS AND IN LAW IN DELETING THE ADDITION OF RS.9,80,000/- MADE BY THE ASSESSING OFF ICER IN RESPECT OF THE DIFFERENCE OF OPENING STOCK AS PER AUDITED A/C. AS AT 31-03-2008 SUBMITTED BY THE ASSESSEE TO THE BANK AND AS PER AU DITED A/C AS AT 31- 03-2008 SUBMITTED BY THE ASSESSEE ALONG WITH THE RE TURN OF INCOME. ITA NO.102/KOL/2012 A.Y. 2008-09 ITO WD-1(1), MID. V. KALA BARAN BANERJEE PAGE 3 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A)-XXXVI, KOLKATA, HAS ERRED BOTH IN FACTS AND IN LAW IN DELETING THE ADDITION OF RS.22,45,038/- MADE BY THE ASSESSING OF FICER IN RESPECT OF THE DIFFERENCE IN OPENING CAPITAL AS PER AUDITED A/ C AS AT 31-03-2008 SUBMITTED BY THE ASSESSEE TO THE BANK AND AS PER A UDITED A/C AS AT 31- 03-2008 SUBMITTED BY THE ASSESSEE ALONG WITH THE RE TURN OF INCOME. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A)-XXXVI, KOLKATA, HAS ERRED BOTH IN FACTS AND IN LAW IN DELETING THE ADDITION OF RS.8,88,870/- MADE BY THE ASSESSING OFF ICER U/S 69B IN RESPECT OF THE DIFFERENCE IN LAND & BUILDING AS UNA CCOUNTED INVESTMENT AS PER AUDITED A/C AS AT 31-03-2008 SUBMITTED BY TH E ASSESSEE TO THE BANK AND AS PER AUDITED A/C AS AT 3-03-2008 SUBMITT ED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A)- XXXVI, KOLKATA, HAS ERRED BOTH IN FACTS AND IN LAW IN DELETING THE ADDITION OF RS.6,67,506/- MADE BY THE ASSESSING OFF ICER U/S 69C IN RESPECT OF THE DIFFERENCE IN DRAWINGS AS UNEXPLAINE D EXPENDITURE AS PER AUDITED A/C AS AT 31-03-2008 SUBMITTED BY ASSESSEE TO THE BANK AND AS PER AUDITED A/C AS AT 31-03-2008 SUBMITTED BY THE A SSESSEE ALONG WITH THE RETURN OF INCOME. MR. AMITABH CHOWDHURY LD. DEPARTMENTAL REPRESENTATI VE APPEARING ON BEHALF OF REVENUE AND THE MR. SUJIT SEKHARESWAR ROY LD. AUTHORIZED REPRESENTATIVE APPEARING ON BEHALF OF ASSESSEE. 4. WE HAVE HEARD RIVAL PARTIES AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. BEFORE US, LD. DR SUBMITTED THAT THE ADDITI ONS HAD BEEN DELETED BY LD. CIT(A) WITHOUT HAVING ANY REMAND REPORT FROM TH E AO AND THE SUBMISSION MADE BY THE AR BEFORE CIT(A) HAS NEVER BEEN CONFRON TED BY AO. SO IN THIS CASE LD. DR PRAYS THAT MATTER SHOULD BE REMITTED BA CK TO THE FILE OF AO WITH A DIRECTION TO DECIDE THE MATTER AFRESH. ON THE CONTR ARY, LD. AR SUPPORTED THE ORDER OF LD. CIT(A). 5. AFTER CAREFUL EXAMINATION AND THE FACTS OF THE P RESENT CASE WE OBSERVE THAT ORDER PASSED BY AO IS ON THE BASIS OF DETAILS WHICH WAS SUBMITTED BEFORE BANK FOR SANCTIONING LOAN AND AO REJECTED THE FINAN CIAL STATEMENTS SUBMITTED BY ASSESSEE TO DEPARTMENT. HOWEVER, IT WAS FURTHER OBSERVED BY LD. CIT(A) ITA NO.102/KOL/2012 A.Y. 2008-09 ITO WD-1(1), MID. V. KALA BARAN BANERJEE PAGE 4 HAS GIVEN THE RELIEF TO ASSESSEE AFTER HAVING RELIA NCE IN THE JUDGMENT STATED ABOVE. IT IS FURTHER OBSERVED THAT THE ASSESSMENT H AS ACTUALLY NOT BEEN CARRIED OUT IN THIS CASE. THE CIT(A) SHOULD HAVE RESTORED T HE FILE TO THE AO WITH THE DIRECTION TO FRAME THE ASSESSMENT AS PER LAW ON TH E BASIS OF INFORMATION SUBMITTED IN THE INCOME TAX RETURN. HOWEVER IN THE INTEREST OF JUSTICE AND FAIR PLAY WE ARE OF THE VIEW THAT THIS MATTER SHOULD BE RESTORED TO THE FILE OF AO FOR FRESH EXAMINATION AND PASS ORDER ACCORDING TO LAW A FTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. IT IS ALSO IMPORTANT TO NOTE THAT THE ASSESSEE SHOULD COOPERATE IN THE ASSESSMENT PROCEED INGS. 6. IN THE RESULT, APPEAL FILED BY REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 28/ 09/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP - 28/09/2015 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT-ITO, WARD-1(1), OFFICE OF THE JCIT, RA NGE-1, AMARAVATI (1 ST FLOOR), KERANITOLA, MIDNAPORE 721 101 2. / RESPONDENT-KALA BARAN BANERJEE VILL. UTTAR SIRSH A, P.O. SIRSHA, DIST PASCHIMMEDINIPUR, PIN-721260 3. - 0 / CONCERNED CIT KOLKATA 4. 0- / CIT (A) KOLKATA 5. 2 55-, -, / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / -,