Yogesh Sharma, Kolkata V. ITO, Ward 48(3), Kolkata, Kolkata

ITA 1085/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1087 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Salary income; Accommodation entries
• Section: 131

Judgement Text

1 ITA NO. 1085/KOL/2017 YOGESH SHARMA, AY 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 1085/KOL/2017 ASSESSMENT YEAR: 2012-13 YOGESH SHARMA (PAN: BFAPS7590K) VS. INCOME-TAX OFFICER, WD-48(3), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 19.11.2018 DATE OF PRONOUNCEMENT 30.11.2018 FOR THE APPELLANT SHRI MIRAJ D. SHAH, AR FOR THE RESPONDENT SHRI SAURABH KUMAR, ADDL. CIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-14, KOLKATA DATED 30.01.2017 FOR AY 2012-13. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF THE LD. CIT(A) IN UPHOLDING THE ADDITION OF RS.2,80,77,500/- AS UNEX PLAINED CASH CREDIT ON ACCOUNT OF CASH DEPOSIT FOUND IN THE ASSESSEES SYNDICATE BANK ACCO UNT. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO ON CIB INFORMATION THAT THE ASSESSEE HAS DEPOSITED A TOTAL OF RS.2,80,77,500/- IN CASH IN HI S BANK ACCOUNT IN THE CAPACITY OF HIS PROPRIETORSHIP CONCERN M/S. TIRUPATI SUPPLIER CALLE D FOR THE BANK STATEMENT OF THE RELEVANT BANK ACCOUNT AND EXAMINED THE SAME AND ACCORDING TO THE AO IT TALLIED WITH THE CIB INFORMATION. ON BEING SERVED A NOTICE BY THE AO, T HE LD. AR OF THE ASSESSEE APPEARED AND FILED ONE BANK STATEMENT OF SYNDICATE BANK AND THER EAFTER THE AO ISSUED NOTICE U/S. 131 OF THE ACT AND TOOK THE STATEMENT OF THE ASSESSEE AND AS PER THE AO IN HIS DEPOSITION THE ASSESSEE ANSWERED THAT HE EARNED SALARY INCOME, BUS INESS INCOME AND OTHER INCOME FROM 2 ITA NO. 1085/KOL/2017 YOGESH SHARMA, AY 2012-13 OTHER SOURCES AND THAT IN THE RELEVANT ASSESSMENT Y EAR HE WAS APPOINTED AS SUPERVISING EXECUTIVE IN THE OFFICE OF THE M/S. ASHIKA STOCK BR OKING ON A SALARY OF RS. 15,000/- PER MONTH. BEFORE THE AO THE ASSESSEE IN HIS FIRST STA TEMENT SUBMITTED THAT HE WAS IN THE BUSINESS OF TRADING OF SAREES UNDER THE TRADE NAME OF M/S. TIRUPATI SUPPLIERS WHOSE MAIN BUSINESS WAS PURCHASE AND SALES OF SAREES AND HAD N O PARTICULAR SELLER AS SUCH. HE ALSO REVEALED BEFORE THE AO THAT HE HAD ONLY FIXED DEPOS IT AT HDFC BANK AMOUNTING TO RS.60,000/- AND HAD NO SHARES, MUTUAL FUNDS ETC. TH EREAFTER, ACCORDING TO AO, THE ASSESSEE SUBMITTED A LETTER ON 02.02.2015 WHEREIN HE SUBMITT ED THAT M/S. TIRUPATI SUPPLIER WAS IN FACT CONTROLLED AND OPERATED BY MR. PANKAJ BAID, PA N-AGWPB7807N AND WHOSE ADDRESS WAS FURNISHED TO AO AND IT WAS BROUGHT TO THE NOTIC E OF AO THAT MR. PANKAJ BAID WAS A FRIEND OF HIS LATE FATHER AND THAT THE BANK ACCOUNT S (IDBI & HDFC) IN QUESTION WERE OPENED IN THE NAME OF M/S. TIRUPATI SUPPLIER, AS A PROPRIE TORSHIP CONCERN OF THE ASSESSEE. IT WAS ALSO BROUGHT TO THE NOTICE OF AO THAT MODUS-OPERAND I WAS THAT AFTER MR. PANKAJ BAID OPENED THE BANK ACCOUNTS IN ASSESSEE NAME, MR. BAID GOT THE CHEQUE BOOKS PERTAINING TO THESE BANK ACCOUNT SIGNED FROM THE ASSESSEE THROUG H HIS FATHER. ACCORDING TO THE ASSESSEE, THE PURPOSE OF MR. PANKAJ BAID GETTING THESE BANK ACCOUNTS OPENED IN HIS NAME WAS WITH THE OBJECTIVE OF PROVIDING ACCOMMODATION ENTRIES T O VARIOUS PARTIES. AND FOR USING HIS BANK ACCOUNT FOR PROVIDING ACCOMMODATION ENTRIES, M R. BAID GAVE A COMMISSION @.05% ON THE DEPOSIT MADE IN THE BANK ACCOUNT TO HIS FATHER. THEREAFTER, HE ALSO PROVIDED THE NAME OF SOME COMPANIES TO WHOM CHEQUE HAS BEEN ISSUED BY HI M AFTER THE CASH WAS DEPOSITED IN HIS ACCOUNT. HE EVEN ATTACHED THE COPY OF THE MASTER D ATA AS PER THE MCA ALONG WITH HIS LETTER TO THE AO. THEREAFTER, HE REQUESTED THE AO TO TREA T THE AMOUNTS DEPOSITED IN HIS BANK ACCOUNT AS ACCOMMODATION ENTRIES AND TAX ONLY THE C OMMISSION @ .05% WHICH THE ASSESSEE EARNED ON THE TOTAL DEPOSIT. THEREAFTER, THE AO IS SUED 131 NOTICE ON SHRI PANKAJ BAID WHO APPEARED BEFORE THE AO AND DENIED HAVING ANY CONNEC TION WITH THE ASSESSEE. SO, THE AO CONCLUDED THAT THE MONEY DEPOSITED IN THE BANK ACCO UNT WAS THE UNDISCLOSED MONEY OF THE ASSESSEE AND THEREAFTER MADE THE ADDITION OF RS.2.8 0 CR. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO CONFIRM THE SAME. AGGRIEVED, THE ASSESSEE IS BEFORE US. 3 ITA NO. 1085/KOL/2017 YOGESH SHARMA, AY 2012-13 4. BEFORE US, THE LD. AR STATED THAT THE ASSESSEE GOT A MEAGER SALARY OF RS.15,000/- PER MONTH AND HAD ONLY RS.60000/- IN ITS FIXED DEPOSIT AND THAT ASSESSEE WAS ONLY A NAME LENDER AND THE MONEY WHICH WAS DEPOSITED IN CASH IN HIS AC COUNT AT THE BEHEST OF MR. PANKAJ BAID WAS IMMEDIATELY TRANSFERRED BY CHEQUE IN THE NAME O F BENEFICIARY COMPANIES WHOSE DETAILS WERE GIVEN TO THE AO BUT NO STEPS WERE TAKEN BY THE AO TO IDENTIFY THE REAL BENEFICIARIES SO THAT THEY COULD HAVE BEEN IDENTIFIED AND TAXED AS PER LAW. AND THE ASSESSEES BANK ACCOUNT WAS USED ONLY AS A PASS THROUGH FOR BENEFICIARIES A ND ASSESSEE CAN BE AT BEST TAXED ON THE COMMISSION HE EARNED FOR ALLOWING USAGE OF HIS BANK ACCOUNT. 5. WE NOTE THAT THE STATUS OF THE ASSESSEE AS AN EM PLOYEE OF M/S. ASHIKA STOCK BROKING FOR THE YEAR UNDER CONSIDERATION AND WAS DRAWING A SALARY OF RS. 15000/- PER MONTH HAS NOT BEEN FOUND FALSE. THE ASSESSEE HAS SUBMITTED BEFOR E THE AO THAT HE HAS ACTED AS PER THE INSTRUCTION OF MR. PANKAJ BAID WHO INTRODUCED HIM T O THE BANKS (IDBI BANK, BRABOURNE ROAD, HDFC BANK P/34, INDIA EXCHANGE PLACE) AND THE BANK ACCOUNTS WERE OPERATED IN THE NAME OF M/S. TIRUPATI SUPPLIERS AT THE BEHEST OF SH RI PANKAJ BAID WHO WAS AN ACCOMMODATION ENTRY OPERATOR, WHO GAVE ASSESSEE COM MMISSION @ 0.5% OF THE CASH DEPOSIT FOR ISSUING CHEQUES FROM HIS BANK ACCOUNT A ND SINCE WE NOTE THAT THERE IS NO BALANCE IN HIS BANK ACCOUNTS WORTH MENTIONING WHICH FACT ON LY POINTS TO ONE DIRECTION THAT IS THE CASH DEPOSITED IN HIS ACCOUNT HAS IMMEDIATELY TRANS FERRED TO COMPANIES [BENEFICIARIES] CANNOT BE THE INCOME OF THE ASSESSEE FROM HIS UNDIS CLOSED SOURCE. THE ASSESSEES BANK ACCOUNT HAS BEEN MISUTILISED BY HIS LATE FATHERS F RIEND MR. BAID WHO ROUTED THE CASH THROUGH ASSESSEES BANK ACCOUNT TO BENEFICIARIES WH ICH FACT IS EVIDENT FROM A PERUSAL OF THE BANK STATEMENT AND REMAND REPORT OF AO. IN SUCH A S CENARIO, RATHER THAN FINDING OUT THE REAL BENEFICIARY IN THE WHOLE MODUS OPERANDI, THE AO FAI LED TO COLLECT ANY MATERIAL OR AT LEAST COULD NOT EXPOSE ANY FALSITY IN THE AVERMENTS SUBMI TTED BY THE ASSESSEE U/S. 131 OF THE ACT. IN SUCH CIRCUMSTANCES MAKING HUGE ADDITION IN ASSES SEES HAND OF THE ENTIRE DEPOSIT OF CASH IN HIS BANK ACCOUNT WHICH ADMITTEDLY HAS GOT OUT OF HIS BANK ACCOUNT TO SOME OTHER BENEFICIARY OR LAYERS THROUGH WHICH THE REAL BENEFI CIARY GETS THE ULTIMATE BENEFIT CANNOT BE COUNTENANCED. AND IT IS A FACT THAT THE DEPARTMENT WILL NOT BE ABLE TO RECOVER THE TAX ALSO FROM PERSON OF NO MEANS. ONLY IF THE REAL BENEFICI ARY IS TRACED OUT THE DEPARTMENT WILL BE 4 ITA NO. 1085/KOL/2017 YOGESH SHARMA, AY 2012-13 ABLE TO RECOVER THE TAX DUE TO THE STATE. WE NOTE T HAT THE AO IN THE REMAND REPORT GIVEN TO LD. CIT(A) HAS CLEARLY BROUGHT OUT THE NAME OF PRIV ATE LTD. COMPANIES TO WHOM THE ASSESSEE HAD ISSUED CHEQUE AFTER THE CASH WAS DEPOS ITED IN HIS ACCOUNTS AFTER INSTRUCTION FROM SHRI BAID. FROM A PERUSAL OF THE REMAND REPOR T OF AO WE NOTE THAT ASSESSEE HAD ISSUED CHEQUES TO THE FOLLOWING COMPANIES : 5 ITA NO. 1085/KOL/2017 YOGESH SHARMA, AY 2012-13 AND WE NOTE THAT NO ENQUIRES WAS MADE BY AO TO E XPOSE THE REAL BENEFICIARIES WHEN HE KNEW VERY WELL THAT CASH DEPOSITED IN ASSESSEES BA NK ACCOUNT HAS BEEN TRANSFERRED TO THE AFORESAID COMPANIES. AND IT HAS TO BE KEPT IN MIND THAT BY MAKING ADDITIONS IN WRONG HANDS FROM WHOM TAX CANNOT BE RECOVERED, HELP ONLY THE UL TIMATE BENEFICIARY AND NOT EVEN THE DEPARTMENT. 6. SO FROM A PERUSAL OF THE ABOVE REMAND REPORT, IT IS EVIDENT THAT AO WAS AWARE THAT THE CASH WHICH WAS DEPOSITED IN ASSESSEES BANK ACC OUNT WAS GOING BY RTGS TO COMPANIES NAMED IN THE REMAND REPORT. IN SUCH A SCENARIO, TAK ING INTO ACCOUNT, THE FACTS AND CIRCUMSTANCES AND THE CASE ESPECIALLY THE FACT THAT ASSESSEE WAS AN EMPLOYEE OF A PRIVATE LTD. COMPANY AND DREW ONLY RS.15,000/- PER MONTH AN D HAD ONLY RS.60,000/- AS FIXED DEPOSIT, CANNOT BE SADDLED WITH THE MONEY WHICH HAS BEEN DEPOSITED IN CASH IN HIS ACCOUNTS AND TRANSFERRED IMMEDIATELY THEREAFTER BY CHEQUE/RT GS TO BANK ACCOUNT OF BENEFICIARIES AND WHEN ASSESSEE HAS COME FORWARD AND ADMITTED THA T HIS BANK ACCOUNT WAS OPERATED AT THE BEHEST OF MR. BAID WHOSE SELF SERVING STATEMENT WA S BELIEVED BY AO WITHOUT CARRYING OUT 6 ITA NO. 1085/KOL/2017 YOGESH SHARMA, AY 2012-13 ANY ENQUIRY TO BRING OUT THE REAL BENEFICIARY OF TH E ACCOMMODATION ENTRY CANNOT BE COUNTENANCED AND WHEN AO WAS AWARE THAT THE MONEY H AS MOVED OUT OF THE ASSESSEES BANK ACCOUNT THE ONLY INFERENCE THAT CAN BE DRAWN IS THA T ASSESSEE WAS ONLY A NAME LENDER OF THESE BANK ACCOUNT FOR WHICH 0.5% OF COMMISSION ASS ESSEE GOT CAN BE ONLY TREATED AS HIS INCOME AND SO TAKING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, FOR THE INTEREST OF JUSTICE AND FAIR-PLAY, WE ARE INCLI NED TO DELETE THE ADDITION AS ORDERED BY THE AO/LD. CIT(A). HOWEVER, THE ASSESSEES BANK ACCOUN T SINCE USED FOR DEPOSIT AND TRANSFER OF CASH IS AN ACTIVITY FOR WHICH A COMMISSION OF 0. 5% WAS EARNED, NEEDS TO BE COMPUTED AS THE INCOME OF THE ASSESSEE AND FOR THAT INCOME, THE ASSESSEE HAS TO BE ASSESSED TO TAX. WITH THE AFORESAID DIRECTION, WE PARTIALLY ALLOW THE APP EAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH NOVEMBE R, 2018. SD/- SD/- (M. BALAGANESH) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30TH NOVEMBER, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT SHRI YOGESH SHARMA, C/O D. J. SHAH & CO ., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA-700 020. 2 RESPONDENT ITO, WARD-48(3), KOLKATA 3 4 5 CIT(A)-14, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY