M/s. D. K. Industries, Kolkata V. ITO, Ward 34(3), Kolkata, Kolkata

ITA 1086/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1823 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 16-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P MUKHERJEE
• Assessee Lawyers: K L BOTHRA
• Keywords: Income from undisclosed sources
• Section: 143(3); 131; 68

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1086 / KOL / 20 17 ASSESSMENT YEAR :2010-11 M/S D. K. INDUSTRIES 2, CLIVE GHAT STREET, 3 RD FLOOR, KOLKATA-700001 [ PAN NO.AABFD 9250 E ] V/S . INCOME TAX OFFICER, WARD-34(3), 110, SHANTI PALLY, AAYAKAR BHAWAN, PURVA, KOLKATA-107 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI K.L. BOTHRA, ADVOCATE /BY RESPONDENT SHRI P. MUKHERJEE, ADDL. CIT-DR /DATE OF HEARING 14-08-2018 /DATE OF PRONOUNCEMENT 05-09-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATAS ORDER DATED 02.03.2017, PASSED IN CASE NO.119/CIT(A)-10/WD-34(3)/2013-14/KO L, AFFIRMING THE ASSESSING OFFICERS ACTION ADDING AN AMOUNT OF 22 LAC AS INCOME FROM UNDISCLOSED SOURCES IN ASSESSMENT ORDER DATED 08.03 .2013, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES VEHEMENTLY ARGUING AGAINST A ND IN FAVOUR OF IMPUGNED ADDITION OF INCOME FROM UNDISCLOSED SOURCE OF 22 LAC. CASE FILE PERUSED. 2. BOTH THE LEARNED REPRESENTATIVES TAKE US TO CIT( A)S DETAILED DISCUSSION ON THE ABOVE SOLE ISSUE READING AS UNDER :- ITA NO.1086/KOL/2017 A.Y. 2010-11 M/S D. K. INDUSTRIES VS. ITO WED-34(3), K OL. PAGE 2 03. GROUNDS NO. 1& 2 RELATE TO THE ACTION OF LD. AO IN ADDING RS.22,00,000/- UNDER HEAD INCOME FROM UNDISCLOSED SOURCES. THE M ATTER HAS BEEN DEALT WITH BY LD. AO AS UNDER:- DURING THE COURSE OF SCRUTINY, IT WAS FOUND OUT TH AT IN THE ABN MO BANK ACCOUNT (ACCOUNT NO.113110, BRABOURNE ROAD, KO LKATA_ OF THE ASSESSEE CASH AMOUNTING TO RS.22,00,000/- WAS DEPOS ITED DURING THE YEAR. DURING THE COURSE OF HEARING ON 16.11.2012, THE ASS ESSEE THROUGH ITS AR WAS ASKED TO EXPLAIN TO EXPLAIN THE SOURCE OF CA SH DEPOSITS. NO EXPLANATION/REPLY WAS FILED BY THE ASSESSEE. ON 23.11.2012, WHEN NO REPLY/EXPLANATION WITH REGAR D TO CASH DEPOSITS WAS FILED, SUMMONS U/S. 131 OF THE INCOME TAX ACT, 1961 WAS SERVED ON THE ASSESSEE. 9. 11.2.2013, SRI K.L. BOTHRA, ADV., A/R OF THE ASS ESSEE APPEARED AND FILED A SUBMISSION WITH REGARD TO CASH DEPOSITS IN THE BANK ACCOUNT ALONG WITH DEBTORS-PARTY LEDGER. FOR THE SAKE OF CLARITY, THE SUBMISSION IS REPRODUCED HEREUNDER:- KINDLY REFER YOU LETTER DATED 264.11.1`2 AN 1`.12. 2013 REQUIRING THE ASSESSEE TO GIVE SOURCE OF CASH DEPOSITS WITH ABN A MRO BANK ON VARIOUS DATES WITH EVIDENCES. IT IS SUBMITTED THAT THE ASSESSEE HAS RECEIVED CASH FROM VARIOUS PARTIES AS ADVANCE AGAIN ST THE SALE OF GRAM WHOLE. HOWEVER, THE ASSESSEE COULD NOT DELIVER THE COMMODITY AS IT WAS NOT POSSIBLE TO SUPPLY BECAUSE OF MARKET CONDITIONS AND CROP ETC. UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAS RE-PAID THE AFORESAID MONEY TO THE PARTIES BY BEARER CHEQUES. THE LEDGER COPY OF THESE TRANSACTIONS IS ENCLOSED HEREWITH. WHEN ASKED TO FILE/SUBMIT COMPLETE POSTAL ADDRESS O F THE CLAIMED DEBTORS FROM WHICH THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED CASH, TOTALING TO RS.22 LACS, THE A/R STATED THAT THE ASS ESSEE IS NOT IN A POSITION TO SUBMIT THE ADDRESSES OF THE DEBTORS NAM ELY- I) JOSHI BROTHERS, II) TAUN TADNG CO, III) VED PRAKASH & CO. , IV) BAJRANG TRADING CO., V) SHARMA STORES, VI) MALINI INDUSTRIE S AND VII) JAYSHREE UDYOG. ON THAT VERY DATE, THE A/R REQUESTED TO CONC LUDE THE HEARINGS/PROCEEDINGS AS THE ASSESSEE IS NOT IN A PO SITION TO GIVE ANY FURTHER DOCUMENTS/EVIDENCE IN RESPECT OF DETAILS AN D LEDGER COPY FILED IN SUPPORT OF CASH DEPOSITS OF RS.22 LACS IN THE B ANK ACCOUNT OF THE ASSESSEE. 10. AGAIN ON 8.3.2013, ACCOUNTANT OF THE ASSESSEE S RI B.R. GULGULIA APPEARED AND FILED SUBMISSION WHICH READS AS: KINDL Y NOTE WE HAVE RECEIVED CASH ADVANCE FORM OUR DEBTORS FOR SUPPLY OF GRAM WH ICH HAD TO REFUND TO THE SAID CUSTOMERS BECAUSE OF QUALITY WAS NOT APPROVED. 1. THE CAREFUL EXAMINATION OF THE SUBMISSION CLEARL Y SHOWS THE INTENTION OF ASSESSEE BEHIND THE SUBMISSION. IT WANTED TO SHRUG ITS RESPONSIBILITY OF DISCHARGING ITS ONUS AS ENVISAGED UNDER THE PROVISI ON OF SECTION 68 OF THE INCOME-TAX ACT, 1961. WHAT WAS SUBMITTED BY THE ASS ESSEE IS- 1. SUBMISSION CLAIMING THAT THE SOURCE OF CASH RECEIPTS OF RS.22 LACS DEPOSITED IN THE BANK ACCOUNT IS ADVANCE FROM CUSTOMERS FOR WHOLE GRAM WH ICH IT CLAIMED TO HAVE ITA NO.1086/KOL/2017 A.Y. 2010-11 M/S D. K. INDUSTRIES VS. ITO WED-34(3), K OL. PAGE 3 REFUNDED THE SAME TO THEM BY BEARER CHEQUES 2. LEDGER ACCOUNTS (ONLY SHOWING DEBITS AND CREDIT OF SIMILAR AMOUNT) OF THE SEVEN DEBTOR FROM WHICH THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED CASH TOTA LING TO RS.22 LACS. 12. I HAVE CONSIDERED THE SUBMISSIONS FILED BEFORE ME AND QUOTED ABOVE. THESE SHOW THAT THE ASSESSEE DOES NOT HAVE ANY EXPL ANATION AT ALL TO EXPLAIN THE SOURCE OF CASH DEPOSITS. THE ASSESSEE DID NOT E VEN TRY TO FURNISH THE ADDRESS OF ANY OF THE CLAIMED DEBTORS FROM WHICH IT HAS CLAIMED TO HAVE RECEIVED CASH. THE ALLEGED REPAYMENT OF ADVANCE TO THE CLAIMED DEBTORS IS ALSO NOT SUPPORTED WITH ANY EVIDENCE. NO MONEY RECE IPTS FROM THE CLAIMED DEBTORS HAVE BEEN SUBMITTED. IDENTITY (AND ALSO THE CREDITWORTHINESS AS WELL AS GENUINENESS OF THE TRANSACTIONS) OF THE CLAIMED DEBTOR REMAINED UNVERIFIED. 13. CLAIMED RE-PAYMENT OF ALLEGED ADVANCES: THE ASS ESSEE I ITS SUBMISSION QUOTED ABOVE HAS STATED THAT THE ALLEGED ADVANCES R ECEIVED FROM THE CLAIMED DEBTORS HAD BEEN REPAID THROUGH BEARER CHEQUE. THE SUCH REPAYMENTS HAVE SUMMARIZED BELOW: SL. NO. DATE CHEQUE NO. USED WITHDRAWAL/PAYMENTS AMOUNT OF WITHDRAWAL/PAYMENTS 1 6/11/09 593090 3 LACS 2 14/11/09 593095 2 LACS 3 16/11/09 593095 3 LACS 4 17/11/09 593097 2 LACS 5 18/11/09 593094 3 LACS 6 20/11/09 593098 3 LACS 7 23/11/09 593099 3 LACS 8 25/11/09 593100 3 LACS FROM THE BANK, COPY OF CHEQUES (BOTH SIDES) REFERRE D ABOVE, HAVE BEEN OBTAINED. EACH OF THE CHEQUE CONTAIN SEAL IMPRESSIO N OF: A/C PAYEE & CROSSING CANCELLED PLEASE PAY CASH ON THE FRONT SID E. BOTH SIDE OF THE CHEQUES CONTAIN SEAL IMPRESSION OF FOR D K INDUST RIES-PARTNER. ANY OF COPIES OF CHEQUES AS MENTIONED ABOVE DOES NOT CONTAIN ASSE SSMENT YEAR NAME WHETHER FULL OR SHORT OF THE CLAIMED DEBTORS WHOSE NAMES HAVE BEEN MENTIONED ABOVE. 14. THE SUBMISSION/EXPLANATION OF THE ASSESSEE WITH REAR TO CASH DEPOSITS IS NOT TENABLE AS IT DOES CONTAIN ANY MERIT IN IT. REA SONS ARE ELABORATED IN THE FOLLOWING PARAGRAPHS. 15. WHAT THE ASSESSEE PRODUCED FOR EXPLANATION OF C ASH DEPOSITS) LEDGER ACCOUNTS OF SEVEN PARTIES I) JOSHI BROTHERS, II) TARUN TRADING CO. III) VED PRAKASH & CO., IV) BAAJRANG TRADING CO;., V) SHARMA STORES, VI) MALANI INDUSTRIES AND VII) JAYSHREE UDYOG. NEITHER ANY ADD RESS NOR ANY CONFIRMATION OF ACCOUNT FROM THESE PARTIES HAVE BEEN FILED. THE ASSESSEE STATED THAT NO FURTHER EVIDENCE/DOCUMENT IS AVAILABLE WITH IT. 16. MOST OF SIGNATURES ON COPY OF PAY-IN-SLIPS USED FOR MAKING CASH DEPOSITS OBTAINED FROM THE BANK ARE NOT LEGIBLE. STILL, SOME OF THE SIGNATURES ARE MATCHING WITH EACH OTHER. SIGNATURES ON PAY-IN SLIP S USED ON 20/5/09 (TWO), 21/05/09 (THREE) AND 2/5/09 (THREE) ARE MATCHING WI TH EACH OTHER. SIGNATURE ON THE BACK SIDE OF CHEQUE, CLAIMED TO BE USED FOR REPAYMENT, DATED 2011/2009 MATCHES WITH SIGNATURE O N PAY-IN-SLIP USED FOR CASH DEPOSITS ON 21/05/09(THREE). ITA NO.1086/KOL/2017 A.Y. 2010-11 M/S D. K. INDUSTRIES VS. ITO WED-34(3), K OL. PAGE 4 NO EXPLANATION WAS OFFERED BY THE ASSESSEE. NO EXPL ANATION WITH REGARD TO THE SOURCE OF CASH DEPOSITS IN THE BANK A CCOUNT HAS BEEN SUBMITTED BY THE ASSESSEE. 17. THE ABOVE SUBMISSION OF THE ASSESSEE AND DETAIL S/EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE WAS CONSIDERED. BUT THE CONT ENTION OF THE ASSESSEE WAS NOT ACCEPTABLE FOR THE FOLLOWING REASONS:- (I) THE ASSESSEE WAS UNABLE TO PUT FORWARD ANY EVID ENCE IN SUPPORT OF IDENTITY AND CREDITWORTHINESS OF CLAIMED DEPOSITORS AND GENUINENESS OF TRANSACTIONS/. NO IRREFUTABLE EVIDENCE WAS BROUGHT ON RECORD BY THE ASSESSEE TO EXPLAIN THE CASH DEPOSITS IN THE BANK A CCOUNT. (II) IN THE CASE OF CASH CREDIT ENTRY IT IS NECESSA RY FOR THE ASSESSEE TO PROVE NOT ONLY THE IDENTITY OF THE CREDITOR BUT ALS O TO PROVE THE CAPACITY OF THE CREDITORS TO ADVANCE THE MONEY AND THE GENUI NENESS OF THE TRANSACTIONS. C KANT & CO. V. CIT (1980) 126 ITR 63 (CAL). (III) THE LAW IS WELL SETTLED THAT THE ONUS OF PROV ING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE IS ON HIM/HER. WHERE THE NATURE AND SOURCE OF A RECEIPT WHETHER IT BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN TO THE REVENUE TO OLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BU9RDEN LIES ON THE REVENUE TO HOE THAT THE INCOME IS FORM ANY PARTICULAR SOURCE RASHAN DI HATTI V. IT [1977] 10 7 ITR 938 (SC); KALE KHAN MOHANNAD HANIF V. CIT [1963] 50 ITR 1 (SC). (IV) THE ONUS IS ON THE ASSESSEE TO DISCHARGE THE O NUS THAT THE CASH CREDITOR IN A MAN OF MEANS TO ALLOW THE CASH CREDIT . (V) IN VIEW OF SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR THE SAME MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABO UT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORILY. IN SUCH A CASE THERE IS, PRIMA FACI E, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY,, AND IF HE FA ILS TO REBUT, THE SAID EVIDENCE BEING UN-REBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT IT WAS ARE RECEIPT OF AN INCOME NATURE. SUMATI DAYAL V CIT [1995] 214 ITR 801. 18. SO, I MADE THE ADDITION OF RS.22,00,000/- AS IN COME FROM UNDISCLOSED SOURCES TO THE TOTAL INCOME OF THE ASSESSEE. PENALT Y U/S. 271(1)(C) IS ATTRACTED ON THIS ADDITION. 3. LEARNED AUTHORIZED REPRESENTATIVE VEHEMENTLY CO NTENDS DURING THE COURSE OF HEARING BEFORE US THAT ASSESSEE HAD SUFFI CIENTLY PROVED ITS CASE OF HAVING RECEIVED THE IMPUGNED SUM OF VARIOUS DENOMIN ATIONS OF TWO AND THREE LAC OF CASH FOR SUPPLY OF GRAM COMMODITY WHICH WAS LATTER REFUNDED TO THE VERY CUSTOMERS. WE FIND NO MERIT IN THE INSTANT ARG UMENT. THE ASSESSEE HAS FILED PAPER BOOK COMPRISING OF ITS RETURN, AUDIT RE PORT, BALANCE-SHEET, PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT ETC., THERE IS NO GRA M STOCK INDICATED IN ITS ITA NO.1086/KOL/2017 A.Y. 2010-11 M/S D. K. INDUSTRIES VS. ITO WED-34(3), K OL. PAGE 5 STOCK-IN-TRADE. LEARNED COUNSEL FAIRLY ADMITTED DUR ING THE COURSE OF HEARING THAT THE ASSESSEE HAS ALSO BEEN SHOWING MINIMAL TAX ABLE INCOME ONLY IN ITS BOOKS OF ACCOUNTS. THE FACT ALSO REMAINS THAT THE A SSESSEE HAS ITSELF PROVE THE PAYMENTS TO HAVE RECEIVED IN CASH FOLLOWED BY R EPAYMENT THEREOF TO THE VERY CUSTOMERS THROUGH BEARER CHEQUE. THEIR IDENTIT Y, GENUINENESS AND CREDITWORTHINESS HAS GONE UNPROVED THEREFORE. WE CO NCLUDE IN ALL THESE FACTS THAT BOTH THE LOWER AUTHORITIES HAVE RIGHTY TREATED THE ASSESSEES SO-CALLED ADVANCE OF 22 LAC TO BE ITS INCOME FROM OTHER UNDISCLOSED SOUR CES. ITS SOLE SUBSTANTIVE GRIEVANCE IS REJECTED. 4. THIS ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 05/09/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 05 / 09 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S D. K. INDUSTRIES, 2 CLIVE GHAT STREE T, 3 RD FLOOR, KOLKATA-001 2. /RESPONDENT-ITO WARD-34(3),110, SHANTIPALLY, AAYAKA R BHAWAN, POORVA, KOL-107 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,