Sri Banwarilall Shah, Paschim Medinipur V. ITO, WD-39(4), MIDNAPORE, Paschim Medinipur

ITA 1050/KOL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5146 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 28-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: GAUTAM GHOSH
• Keywords: Gift; Income from undisclosed sources; Opportunity of being heard; Source of fund; Assessment record
• Section: 154

Judgement Text

I.T.A. NO. 1050/KOL./2015 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1050/KOL/ 2015 ASSESSMENT YEAR: 2008-2009 SHRI BANWARILALL SHAH,............................. .........................APPELLANT BULBULCHATTI, P.O. KHARAGPUR, DIST. PASCHIM MEDINIPUR-721 301 [PAN : AMBPS 8280 K] -VS.- INCOME TAX OFFICER,................................ ............................RESPONDENT WARD-39(4), MIDNAPORE, SAHOO BHAWAN, OPPOSITE TO ZILLA PARISHAD, PASCHIM MEDINIPUR-721 101 APPEARANCES BY: SHRI GAUTAM GHOSH, ADVOCATE, FOR THE ASSESSEE SHRI PRABAL CHOUDHURY, JCIT, SR. D.R., FOR THE DEPA RTMENT DATE OF CONCLUDING THE HEARING : JANUARY 07, 2016 DATE OF PRONOUNCING THE ORDER : JANUARY 13, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA DATED 30.06.2014 FOR THE ASSESSMENT YEAR 2008-09. 2. AS NOTED, AT THE OUTSET, THERE IS A DELAY OF 311 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TRIBU NAL. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION SEEKING CONDONATI ON OF THE SAID DELAY ON THE FOLLOWING GROUNDS:- (1) THAT YOUR PETITIONER RECEIVED THE APPEAL ORDER DATED 30.06.2014. ON 22.07.2014 THERE BEING SOME MISTAKES APPARENT ON RECORD YOUR APPELLANT FILED A PETITION FOR RECTI FICATION U/S 154 OF INCOME TAX ACT, 1961 ON 31.07.2014. (2) THAT THE PETITION WAS HEARD ON 12.11.2014 AND Y OUR APPELLANT FILED ALL THE DOCUMENTS IN SUPPORT OF THE CLAIM BUT TILL DATE NO ORDER HAS BEEN PASSED. I.T.A. NO. 1050/KOL./2015 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 5 (3) THAT YOUR APPELLANT BEING DISSATISFIED WITH THE NO ACTION OF THE LD. CIT(APPEALS). YOUR APPELLANT FILED THIS INS TANT APPEAL U/S 253 OF INCOME TAX ACT, 1961. (4) THAT THE DELAY IN FILING THE APPEAL WAS DUE TO THE FACT THAT YOURE APPELLANT FILED A RECTIFICATION APPLICATION U/S 154 OF THE INCOME TAX ACT, 1961 AGAINST THE APPEAL ORDER BEFOR E THE LD. CIT(A)-XXXVI ON 31.07.2014 AND THE SAME IS PENDING. KEEPING IN VIEW THE REASONS GIVEN BY THE ASSESSEE I N HIS APPLICATION, I AM SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY ON THE PART OF THE ASSESSEE IN FILING HIS APPEAL BEFORE THE TRIBUNAL. LD. D.R. HAS ALSO NOT RAISED ANY CONTENTION TO DISPUTE THIS POSITION. I, THEREFORE, CONDONE THE SAID DELAY AND PROCEED TO DISPOSE OF THE APPEAL OF THE ASSESSEE ON MERIT. 3. IN GROUND NO. 1, THE ASSESSEE HAS DISPUTED THE D ISALLOWANCE OF RS.57,100/- MADE BY THE ASSESSING OFFICER AND CONFI RMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF INTEREST. 4. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 09.03.2009 DECLARING TOTAL INCOME OF RS.1,99,460/- INCLUDING A GRICULTURAL INCOME OF RS.25,000/-. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESESE HAS UTIL IZED THE INTEREST BEARING BORROWED FUNDS FOR GIVING PERSONAL LOANS TO HIS TWO SONS MR. MANOJ SHAH AND MR. RAJESH SHAH AMOUNTING TO RS.9,60 ,000/- AND RS.4,83,000/- RESPECTIVELY. HE, THEREFORE, WORKED O UT THE INTEREST ATTRIBUTABLE TO THE SAID LOANS ON PROPORTIONATE BAS IS AT RS.57,100/- AND MADE A DISALLOWANCE TO THAT EXTENT. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID DISALLOWANCE. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LIMITED CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE ME IS THAT A LOAN OF RS.9,60,000/- ONLY WAS GIVEN BY THE ASSESSEE TO HIS SON MR. MANOJ SHAH OUT OF INTEREST I.T.A. NO. 1050/KOL./2015 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 5 BEARING BORROWED FUNDS, BUT THERE WAS NO SUCH LOAN OF RS.4,83,000/- GIVEN BY THE ASSESSEE TO HIS SON MR. RAJESH SHAH IN THE YEAR UNDER CONSIDERATION AS ALLEGED BY THE ASSESSING OFFICER. THE LD. D.R. HAS CONTENDED THAT THIS PLEA RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL REQUIRES VERIFICATION BY THE ASSESSING OFFICER. I FIND MERIT IN THIS CONTENTION OF THE LD. D.R. AND SINCE THE LD. C OUNSEL FOR THE ASSESSEE HAS ALSO NOT RAISED ANY OBJECTION IN THIS REGARD, I RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPO SE OF VERIFYING THE CLAIM OF THE ASSESSEE THAT THERE WAS NO LOAN OF RS.4,83,0 00/- GIVEN BY THE ASSESSEE AT ALL TO HIS SON MR. RAJESH SHAH DURING T HE YEAR UNDER CONSIDERATION WARRANTING ANY DISALLOWANCE ON ACCOUN T OF INTEREST ATTRIBUTABLE TO SUCH LOAN. GROUND NO. 1 IS ACCORDIN GLY TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO. 2 RELATES TO THE ADDITION OF RS.5,55,662/- MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF GIFT GIVEN BY TH E ASSESSEE TO HIS SON TREATING THE SAME AS INCOME OF THE ASSESSEE FROM UN DISCLOSED SOURCES. 7. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAD GIVEN GIFT OF RS.5,55,662/- IN CASH TO HIS SON MR. MANOJ SHAH ON 23.07.2007. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN THE SOURCE OF FUNDS UT ILIZED FOR GIVING THE SAME GIFT. THE EXPLANATION OFFERED BY THE ASSESSEE IN THIS REGARD WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER AND HE AD DED THE AMOUNT OF GIFT OF RS.5,,55,662/- TO THE TOTAL INCOME OF THE ASSESS EE TREATING THE SAME AS HIS UNDISCLOSED INCOME FOR THE FOLLOWING REASONS GI VEN IN PARAGRAPHS NO. 7 OF HIS ORDER:- 7. IN REPLY TO THE SHOW CAUSE LETTER, THE ASSESSEE HAS STATED THAT THE GIFT OF RS.5,55,662/ - TOWARDS MR. MANOJ S HAH, FOR THE PURPOSE OF LAND PURCHASE, WAS MADE OUT OF BUSINESS AND IN HIS LETTER DATED 25/05/2010,THE ASSESSEE HAS STATED THA T CAPITAL HAS ACTUALLY BEEN WITHDRAWN FROM M/S SURAJ SERVICE STATION FOR THE PURPOSE OF THE SAID GIFT. THE REPLY AND THE EXPLANATION IS NOT ACCEPTED AS THE TOTAL WITHDRAWAL FROM M/S SU RAJ SERVICE I.T.A. NO. 1050/KOL./2015 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 5 STATION IS RS.13,48,386/ -(RS.7,26,172/- IS GIFT MA DE TOWARDS MANOJ SHAH FOR THE BUSINESS PURPOSE +RS.4,17,714/- IS LOAN MADE TO MANOJ SHAH + RS.2,00,000/ -LOAN TO RAJESH S HAH +RS.4,500/-)ONLY AND IT HAS ALSO BEEN ESTABLISHED F ROM THE AUDITED CAPITAL AND BALANCE SHEET OF THE FIRM AND T HE LEDGER ACCOUNT OF MR. BANWARILAL SHAH. SO IT HAS BEEN ESTA BLISHED THAT THE AMOUNT OF RS.5,55,662/- GIVEN TO HIS SON MR. MA NOJ SHAH IS FROM HIS UNDISCLOSED INCOME AND THAT INCOME IS ADDE D TO HIS TOTAL INCOME AS INCOME FROM UNDISCLOSED SOURCES. 8. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FILED A DETAILED SUBMISSION ALONG WITH CASH FLOW STATEMENT TO EXPLAIN THE SOURCE OF FUND UTILIZED FOR GIVING GIFT IN QUESTION. THE L D. CIT(APPEALS), HOWEVER, DID NOT FIND THE SAME TO BE ACCEPTABLE AND CONFIRME D THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE FOR THE FOLL OWING REASONS GIVEN IN PARAGRAPH NO. 4.3 OF HIS IMPUGNED ORDER:- 4.3 APPELLANT'S SUBMISSION AND FACTS AVAILABLE ON RECORD IS CAREFULLY CONSIDERED. THE ASSESSMENT RECORD WAS ALS O CALLED FOR AND VERIFIED. ON PERUSAL OF THE RECORD, AND AS HIGH LIGHTED BY AO IN THE ORDER, IT IS EVIDENT THAT TOTAL WITHDRAWAL B Y ASSESSEE FROM SURAJ SERVICE STATION DURING THE YEAR WAS RS.1 3,48,386/- ONLY. OUT OF THIS WITHDRAWAL RS.11,43,886/- WAS GIV EN BY CHEQUES IN JANUARY,2008 TO HIS SON MANOJ SAHA. THE BALANCE SUM OUT OF THE WITHDRAWAL OF RS.2,00,000/- WAS GIVE N TO OTHER SON RAJESH SAHA. SO THERE WAS NO SOURCE TO EXPLAIN CASH GIFT OF RS.5,55,662/- MADE IN THE MONTH OF JULY'07 BY THE A SSESSEE. ASSESSEE'S CLAIM THAT THE SOURCE WAS OUT OF WITHDRA WAL FROM THE FIRM M/S. SURAJ SERVICE STATION IS NON-EXISTENT AS EXPLAINED ABOVE AND AS IS BORNE BY RECORD OF DRAWINGS FROM TH E FIRM AS AVAILABLE IN ASSESSMENT RECORD. THEREFORE, THE AO W AS CORRECT IN ADDING THE GIFT HAVING BEEN MADE FROM UNDISCLOSE D SOURCES. THE ADDITION MADE IN THIS REGARD IS SUSTAINED. 9. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE RELEVANT FIGURES TAKE N BY THE LD. CIT(APPEALS) WHILE REJECTING THE EXPLANATION OF THE ASSESSEE AS REGARDS THE SOURCE OF FUNDS UTILIZED FOR GIVING THE GIFT IN QUESTION IN HIS IMPUGNED ORDER, ARE NOT TALLYING WITH THE FIGURES APPEARING IN THE CASH FLOW STATEMENT PREPARED AND FURNISHED BY THE ASSESSEE BE FORE THE LD. CIT(APPEALS) (COPY OF WHICH AT PAGE 22 OF HIS PAPER BOOK). HE HAS ALSO SUBMITTED THAT THE ASSESSEE HAS ALREADY MOVED AN AP PLICATION UNDER I.T.A. NO. 1050/KOL./2015 ASSESSMENT YEAR: 2008-2009 PAGE 5 OF 5 SECTION 154 SEEKING RECTIFICATION OF THE IMPUGNED O RDER OF THE LD. CIT(APPEALS), BUT THE SAME HAS NOT BEEN DISPOSED OF BY THE LD. CIT(APPEALS) SO FAR. HE HAS ALSO POINTED OUT THAT S OME OF THE SOURCES OF FUNDS GIVEN BY THE ASSESSEE IN CASH FLOW STATEMENT HAVE NOT BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(APPEALS) WHILE DE CIDING THE ISSUE AGAINST THE ASSESSEE. KEEPING IN VIEW ALL THESE SUB MISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE, I CONSIDER IT FAIR AN D PROPER AND IN THE INTEREST OF JUSTICE TO REMIT THIS MATTER BACK TO TH E LD. CIT(APPEALS) FOR DECIDING THIS ISSUE AFRESH AFTER TAKING INTO CONSID ERATION THE CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE AND AFTER GIVIN G THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD. GROUND N O. 2 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 13, 2016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 13 TH DAY OF JANUARY, 2016 COPIES TO : (1) SHRI BANWARILALL SHAH, BULBULCHATTI, P.O. KHARAGPUR, DIST. PASCHIM MEDINIPUR-721 301 (2) INCOME TAX OFFICER, WARD-39(4), MIDNAPORE, SAHOO BHAWAN, OPPOSITE TO ZILLA PARISHAD, PASCHIM MEDINIPUR-721 101 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXXVI, KOL KATA, (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.