Subrata Saha, Kolkata V. ITO, WD-41(2), KOLKATA, Kolkata

ITA 1075/KOL/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9484 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PROVASH ROY JCITSRDR
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI A.T.VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1075 / KOL / 2015 ASSESSMENT YEAR :2005-06 SUBRATA SAHA C/O D.J. SHAH & CO. KALYAN BHAVAN, 2 ELGIN ROAD, KOLKATA-700 020 [ PAN NO.AVQPS 9056 F ] V/S . INCOME TAX OFFICER, WARD-41(2), 3, GOVT. PLACE, KOLKATA-700 071 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI MIRAJ D SHAH, AR /BY RESPONDENT SHRI PROVASH ROY, JCIT-SR-DR /DATE OF HEARING 07-12-2016 /DATE OF PRONOUNCEMENT 31-01-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS)-XXX, KOLKATA DATED 15.10.2014. ASSESSMENT WAS FRAMED BY ITO WARD-41(2), KOLKATA U/S 1444 R.W.S 14 7/264 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VI DE HIS ORDER DATED 05.10.2010 FOR ASSESSMENT YEAR 2005-06. SHRI MIRAJ D SHAH LD. AUTHORIZED REPRESENTATIVE APP EARED ON BEHALF OF ASSESSEE AND SHRI PROVASH ROY, LD. DEPARTMENTAL REP RESENTATIVE APPEARED ON BEHALF OF REVENUE. ITA NO.1075/KOL/2015 A.Y. 2005-06 SUBRATA SAHA VS ITO WD-41(2) KOL. PAGE 2 2. AT THE VERY OUTSET, WE OBSERVE A DELAY OF JUST O NE DAY IN THE FILING OF ASSESSEES APPEAL, WHICH THOUGH STANDS SUITABLY EXP LAINED PER AN ACCOMPANYING AFFIDAVIT BY THE ASSESSEE. THE APPEAL WAS ACCORDINGLY ADMITTED, AND THE HEARING PROCEEDED WITH. 3. FIRST ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAI NING THE ADDITION OF 10.70 LAKH U/S 69A OF THE ACT ON ACCOUNT OF UNEXPLAINED M ONEY. 4. BRIEFLY, THE FACTS ARE THAT ASSESSEE IN THE PRES ENT CASE IS AN INDIVIDUAL AND DECLARED HIS INCOME FROM BUSINESS AND SHORT TER M CAPITAL GAINS AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAS BEEN MA INTAINING A JOINT BANK ACCOUNT WITH HIS WIFE IN STANDARD CHARTERED BANK BE ARING A/C NO.33410043062, SHYAMBAZAR BRANCH, KOLKATA WHERE A CASH DEPOSIT OF 10.70 LACS WAS MADE. THE SAID BANK ACCOUNT WAS NOT DISCLOSED BY ASSESSEE IN HIS IT RETURN. THE ASSESSEE CLAIMED THAT SAID SU M BELONGED TO HIS WIFE. ACCORDINGLY, AO SUMMONED ASSESSEES WIFE, ETI SAHA BY ISSUING NOTICE U/S. 131(1) OF THE ACT AND EXAMINED HER ON OATH. THE REL EVANT EXTRACT IS REPRODUCED BELOW:- Q3- HOW MANY BANK A/C DID YOU MAINTAIN IN THE FY 0 4-05 [I.E. 1.4.04 TO 31.3.05]? A: SILENCE Q4. WHAT ARE THE NAMES OF BANKS WHERE YOU OPENED YO URE A/C OR RAN YOURE A/C IN THE LAST 4 YEARS WITH NAMES OF BRANCH ES? A: SILENCE AS THE WIFE OF ASSESSEE COULD NOT CLARIFY THE DEPOS IT MADE IN THEIR BANK A/C THEN AO CALLED UPON ASSESSEE TO EXPLAIN THE SOURCE OF MONEY. HOWEVER, ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE SAID C ASH DEPOSIT IN BANK ACCOUNT. ACCORDINGLY, AO TREATED THE CASH DEPOSIT A S UNEXPLAINED MONEY U/S. 69A OF THE ACT. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT CASH WAS DEPOSITED BY HIS W IFE WHICH WAS DISCLOSED ITA NO.1075/KOL/2015 A.Y. 2005-06 SUBRATA SAHA VS ITO WD-41(2) KOL. PAGE 3 IN HER BALANCE-SHEET. HOWEVER, LD. CIT(A) OBSERVED THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF CASH BUT MERELY CHALLENGED TH E ADDITION ON TECHNICAL GROUND. THEREFORE, LD. CIT(A) DISREGARDED THE CLAIM OF ASSESSEE BY OBSERVING AS UNDER:- FROM THE ASSESSMENT ORDER IT BECOMES CLEAR THAT THE APPELLANTS WIFE WAS NOT AWARE OF THE BANK ACCOUNT IN WHICH THE DEPOSIT OF RS.10,70,000/- WAS MADE. SIMILARLY, SHE DOES NOT SEEM TO HAVE SIGNED T HE CHEQUES OR THE DEPOSITS SLIPS. IT APPEARS THAT THE BANK ACCOUNT HA S BEEN FULLY UTILIZED BY THE APPELLANT HIMSELF. THE ARS CLAIM THAT THE DEPOSIT HAS BEEN DISCLOSED IN THE BALANCE SHEET IS ALSO DUBIOUS AS THESE DEPOSITS WER E MADE IN NOVEMBER, 2004 AND JANUARY, 2005 AND THEREFORE THERE IS NO RE ASON WHY THESE AMOUNTS SHOULD APPEAR IN THE BALANCE SHEET, WHICH SHOULD SH OW THE ASSETS AND LIABILITIES AS ON THE LAST DAY OF THE RELEVANT FINA NCIAL YEAR. CLEARLY THUS THE ALLEGED BALANCE SHEET IS A FABRICATED FINANCIAL STA TEMENT INSERTING THE DEPOSITS DETAILS WHICH SHOULD NOT NORMALLY APPEAR I N THE BALANCE SHEET. THE APPELLANT OR THE AR IS SILENT ABOUT THE IMMEDIATE S OURCE OF THE DEPOSIT IN THE JOINT BANK ACCOUNT. THUS THE APPELLANT HAS FAILED T O EXPLAIN SATISFACTORILY THE SOURCE OF CASH DEPOSITS EITHER IN THE ASSESSMENT ST AGE OR IN THE APPEAL STAGE. I THEREFORE HAVE NO REASONS TO ALTER THE DEC ISION OF THE AO IN MAKING THE ADDITION OF RS.10,70,000/-. THE APPELLANT HAS N O BASIS TO CLAIM THAT THE MONEY WAS DEPOSITED BY ETI SAHA IN THE SAID ACCOUNT OR THAT THE DEPOSIT WAS DISCLOSED IN THE BALANCE SHEET OF ETI SAHA. IN THE FACTS AND CIRCUMSTANCES OF THE DEPOSIT AND OPERATING OF THE BANK ACCOUNT AND I GNORANCE OF ETI SAHA ABOUT THE SAID BANK ACCOUNT, IT IS APPARENT THAT TH E MONEY HAS BEEN UTILIZED BY THE APPELLANT WHO WAS ALSO THE ACTUAL OWNER OF T HE MONEY INVOLVED. AS THE SOURCE OF THE SAID MONEY HAS NOT BEEN EXPLAINED SAT ISFACTORILY, THE ADDITION IS UPHELD AND THE GROUND IS NOT ALLOWED. BEING AGGRIEVED BY THIS, ASSESSEE HAS COME UP IN AP PEAL BEFORE US. 6. BEFORE US LD. AR FOR THE ASSESSEE HAS FILED PAPE R BOOK WHICH IS RUNNING PAGES FROM 1 TO 35 AND REITERATED SAME SUBM ISSIONS AS MADE BEFORE LD. CIT(A). LD. AR DREW OUR ATTENTION ON PAGE 19 OF THE PAPER BOOK WHERE THE BALANCE-SHEET OF ASSESSEES WIFE WAS PLACED SHOWING THE AMOUNT OF 10.70 IN HER ACCOUNT. THE LD. AR FURTHER SUBMITTED THAT THE CASH FLOW STATEMENT ALONG WITH BALANCE-SHEET OF ASSESSEE WHICH IS PLACED ON P AGE 21-23 OF PAPER BOOK. LD. AR FURTHER STATED THAT WIFE OF ASSESSEE REMAINE D SILENT WHEN SHE WAS CALLED UPON UNDER OATH U/S. 131(1) OF THE ACT BUT D OES NOT MEAN THAT MONEY BELONGS TO ASSESSEE. THE LD. AR IN SUPPORT OF THAT ASSESSEE CLAIMED RELIED ON THE ORDERS OF ITAT KOLKATA BENCHES IN THE CASE OF ITO WD-35(4) KOLKATA VS. MADAN CHAND SURANA (HUF) IN ITA NO. 2298/KOL/2010 DATED 24.12.2013 AND ITA NO.1075/KOL/2015 A.Y. 2005-06 SUBRATA SAHA VS ITO WD-41(2) KOL. PAGE 4 ITAT HYDERABAD BENCH IN THE CASE OF ITO WARD-12(5) HYDERABAD VS. SMT. GUTHULA NAGAMANY IN ITA NO.1281/HYD/2015 DATED 29-06-2016. THE LD. AR ALTERNATIVELY ARGUED THAT IN CASE ADDITION IS SUSTA INED IN THE HANDS OF ASSESSEE THEN THE PEAK THEORY SHOULD BE APPLIED. TH E LD. AR FURTHER SUBMITTED THAT THE CASH WAS DEPOSITED IN THE BANK B UT THE SAME CASH WAS ALSO WITHDRAWN AND FURTHER DEPOSITED. THEREFORE THE SAME AMOUNT OF CASH WAS ROUTED MANY TIMES. THEREFORE THE PEAK BALANCE S HOULD BE ADDED IN THE TOTAL INCOME OF ASSESSEE. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT NEITHER THE ASSESSEE NOR HIS WIFE HAS PROVED THE SOURCE OF CASH . THE ONUS LIES UPON THE ASSESSEE TO JUSTIFY THE SOURCE OF CASH DEPOSITED IN BANK ACCOUNT. HE VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW . 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT THE ADDITION WAS MADE BY AO FOR THE CASH DEPOSITED IN THEIR BANK ACCOUNT ON THE GROUND THAT THE SOURCE WAS NOT DULY EXPLAINED. THE LD. CIT (A) SUBSEQUENTLY CONFIRMED THE ORDER OF AO. ON PERUSAL THE MATERIALS BEFORE US , WE FIND THAT IT IS THE DUTY OF THE ASSESSEE TO JUSTIFY THE SOURCE OF CASH. IN T HE INSTANT CASE THE ASSESSEE JUST TRYING TO DISCHARGE HIS BURDEN BY STATING THAT CASH BELONGED TO HIS WIFE BUT IN ACTUALITY WIFE ALSO FAILED TO EXPLAIN THE ENTRIE S REFLECTING IN BANK STATEMENT. IN THE ABSENCE ANY SPECIFIC EXPLANATION FROM THE SI DE OF THE ASSESSEE, WE FIND NO INFIRMITY IN THE ORDER OF AUTHORITIES BELOW. HOW EVER, THE ARGUMENT PLACED BY LD. AR FOR THE ASSESSEE THAT THE PEAK CREDIT THE ORY SHOULD BE APPLIED IN THE CASE ON HAND HAS FORCE. IT IS BECAUSE THE CASH WAS DEPOSITED BY ASSESSEE AND THE SAME AMOUNT WAS WITHDRAWN AND SUBSEQUENTLY THE SAME AMOUNT WAS DEPOSITED. BUT ON PERUSAL OF THE FACTS OF THE CASE WE FIND THAT THE ISSUE OF PEAK CREDIT THEORY WAS NOT RAISED BEFORE THE LOWER AUTHORITIES. IN VIEW OF THE ABOVE, IT WILL BE INJUSTICE WITH THE ASSESSEE IF EN TIRE CASH DEPOSITED IS ADDED TO THE TOTAL INCOME OF ASSESSEE. THEREFORE WE ARE OF T HE CONSIDERED VIEW THAT PEAK CASH SHOULD BE ADDED TO THE TOTAL INCOME OF AS SESSEE. WE ALSO FIND THAT ITA NO.1075/KOL/2015 A.Y. 2005-06 SUBRATA SAHA VS ITO WD-41(2) KOL. PAGE 5 THE CASES RELIED BY LD. AR FOR THE ASSESSEE IS DIST INGUISHABLE FROM THE FACTS IN THE CASE OF HAND. IN THOSE CASES THE SOURCE WAS DUL Y EXPLAINED BUT IN THE INSTANT CASE THE ASSESSEE FAILED TO EXPLAIN THE SOU RCE OF CASH DEPOSIT. ACCORDINGLY, IN THE INTEREST OF JUSTICE AND FAIR PL AY WE ARE INCLINED TO RESTORE THIS ISSUE BACK TO THE FILE OF AO FOR FRESH ADJUDIC ATION AS PER LAW AND IN THE LIGHT OF ABOVE STATED DISCUSSION. HENCE, THIS GROUN D OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 31 /01/2017 SD/- SD/- ( !') ( !') (A.T.VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S $!% &- 31 / 01 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SUBRATA SAHA, C/O D.J. SHAH & CO. KALYAN BHAVAN, 2 ELGIN ROAD, KOLKATA-20 2. /RESPONDENT-ITO WARD-41(2), 3 GOVT. PLACE KOLKATA-7 1 3. %.%/0 1 1 2 / CONCERNED CIT KOLKATA 4. 1 1 2- / CIT (A) KOLKATA 5. 567 /0, 1 /0 , / DR, ITAT, KOLKATA 6. 7:; <= / GUARD FILE. BY ORDER/ 1! , /TRUE COPY/ / % 1 /0 ,