Shri Vinay Baheti, Kolkata V. ITO, WD-24(3), KOLKATA, Kolkata

ITA 1170/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1498 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BISWAS
• Assessee Lawyers: PARNASHREE BANERJEE
• Keywords: Earning of tax free income; Assessment record

Judgement Text

1 ITA NO.1170/KOL/2016 VINAY BAHETI, AY 2010-11 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA () BEFORE .., /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] / I.T.A NO. 1170/KOL/2016 ! ' / ASSESSMENT YEAR: 2010-11 SHRI VINAY BAHETI (PAN:ADAPB4813F) VS. INCOME-TAX OFFICER, WD-24(3), KOLKATA ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING 22.06.2017 DATE OF PRONOUNCEMENT 06.09.2017 FOR THE APPELLANT/ MS. PARNASHREE BANERJEE, AR FOR THE RESPONDENT/ SHRI M. K. BISWAS, JCIT / ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-19, KOLKATA DATED 31.03.2016 FOR AY 2010-11. 2. THE GROUND NO.1 IS GENERAL IN NATURE AND DOES NO T REQUIRE ANY ADJUDICATION. 3. GROUND NOS. 2 AND 3 ARE AGAINST THE ACTION OF TH E LD. CIT(A) CONFIRMING THE ADDITION OF RS. 2 LACS AS UNEXPLAINED MONEY FOUND DEPOSITED WITH ICICI BANK ON 09.07.2009. 4. BRIEF FACTS ARE THAT THE AO NOTED FROM THE PERUS AL OF THE BANK STATEMENT OF ICICI BANK ACCOUNT NO. 018701512854 OF THE ASSESSEE THAT HE HAD DEPOSITED CASH SEVERAL TIMES ABOVE RS.20,000/- AND AMONG THAT THE CASH DEPOSIT O N 09.07.2009 BEING RS. 2 LACS WHICH IS THE HIGHEST AMOUNT (PEAK) OF CASH CREDIT BALANCE, S O HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED MONEY. AGGRIEVED, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO CONFIRM THE SAME ON THE GROUND THAT HE COULD NOT FIND 2 ITA NO.1170/KOL/2016 VINAY BAHETI, AY 2010-11 THE BALANCE SHEET OR CASH FLOW STATEMENT WITH THE R ETURN WHICH HAVE BEEN PURPORTEDLY FILED DURING ASSESSMENT PROCEEDING BEFORE THE AO. AGGRIE VED, THE ASSESSEE IS BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY GO NE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEE HAD BANK ACCO UNT WITH THE ICICI BANK AND HAD PRODUCED THE BANK STATEMENT BEFORE THE AO. THE AO AFTER PERUSAL OF THE BANK STATEMENT OBSERVED THAT THERE HAS BEEN SEVERAL CASH DEPOSIT O F MORE THAN RS. 20,000/- AND AMONG THESE TRANSACTIONS THERE WAS A DEPOSIT OF RS. 2 LACS ON 0 9.07.2009 IN THE SAID BANK WHICH BEING THE HIGHEST SO, HE TREATED THE SAME AS PEAK CASH CREDIT AS UNEXPLAINED AND MADE THE ADDITION. BEFORE THE LD. CIT(A), THE ASSESSEE PRODUCED (I) CO PY OF CASH FLOW STATEMENT FOR THE PERIOD FROM 01.04.2009 TO 09.07.2009, (II) COPY OF BANK ST ATEMENT OF ICICI BANK SAVINGS ACCOUNT FROM 01.04.2009 TO 09.07.2009, (III) COPIES OF BALA NCE SHEET AS AT 31.03.2010 AND I. T. ACKNOWLEDGMENT FOR AY 2009-10, (IV) COPY OF INCOME & EXPENDITURE ACCOUNT FOR THE YEAR 31.03.2010 AND (V) DATE WISE DESCRIPTION/NARRATION OF BANK TRANSACTIONS FROM APRIL, 2007 TO MARCH, 2010. WITH THE AFORESAID DOCUMENTS THE ASSE SSEE PLEADED BEFORE THE LD. CIT(A) THAT THE CASH IN HAND AS PER THE CASH FLOW STATEMEN T AS ON 31.03.2009 WAS OF RS.3,40,737/- AND CASH WITHDRAWAL OF 13 DAYS BETWEEN 23.04.2009 T O 27.06.2009 WAS TO THE TUNE OF RS.1,45,000/-. THUS, AN AMOUNT OF RS.4,85,737/- WA S IN THE HANDS OF THE ASSESSEE AS ON 09.07.2009. IT WAS EXPLAINED TO THE LD. CIT(A) THA T THE CASH DEPOSIT OF RS.10,000/- WAS MADE ON 23.04.2009, RS.50,000/- WAS DEPOSITED ON 04 .05.2009 AND RS.2 LACS WAS DEPOSITED ON 09.07.2009 MAKING A TOTAL DEPOSIT OF RS.2,60,000 /-. THUS, CLOSING BALANCE OF CASH IN HAND AS ON 09.07.2009 WAS RS.2,25,737/-. THUS, THE ASSESSEE EXPLAINED THAT THERE WAS ENOUGH CASH IN HAND FOR THE DEPOSIT OF RS. 2 LACS A ND THE AOS OBSERVATION THAT THE ASSESSEE FREQUENTLY USED TO DEPOSIT THE MONEY WAS NOT AS PER THE FACTS EMERGING FROM A PERUSAL OF THE BANK STATEMENT. HOWEVER, THE LD. CIT(A) BRUSHED AS IDE ALL THESE EVIDENCES AND ON THE SPECIOUS PLEA THAT HE COULD NOT FIND THE BALANCE S HEET ALONG WITH THE RETURN OF INCOME FROM THE ASSESSMENT RECORDS AND HE DID NOT ACCEPT THE SU BMISSIONS BASED ON THE DOCUMENTS PRODUCED BEFORE HIM AND DISMISSED THE APPEAL OF THE ASSESSEE. WE NOTE THAT THE CASH IN HAND AS PER THE CASH FLOW STATEMENT AS ON 31.03.200 9 WAS OF RS.3,40,737/- AND CASH WITHDRAWAL OF 13 DAYS BETWEEN 23.04.2009 TO 27.06.2 009 WAS TO THE TUNE OF RS.1,45,000/-. THUS, AN AMOUNT OF RS.4,85,737/- WAS IN THE HANDS O F THE ASSESSEE AS ON 09.07.2009. IT WAS 3 ITA NO.1170/KOL/2016 VINAY BAHETI, AY 2010-11 EXPLAINED TO THE LD. CIT(A) THAT THE CASH DEPOSIT O F RS.10,000/- WAS MADE ON 23.04.2009, RS.50,000/- WAS DEPOSITED ON 04.05.2009 AND RS.2 LA CS WAS DEPOSITED ON 09.07.2009 MAKING A TOTAL DEPOSIT OF RS.2,60,000/-. THUS, CLOS ING BALANCE OF CASH IN HAND AS ON 09.07.2009 WAS RS.2,25,737/-. THUS, THE ASSESSEE E XPLAINED THAT THERE WAS ENOUGH CASH IN HAND FOR THE DEPOSIT OF RS. 2 LACS. SO, WE FIND FR OM THE OBSERVATION OF THE AO THAT THE ASSESSEE USED TO FREQUENTLY DEPOSIT THE CASH OF MOR E THAN RS. 20000/- IS FOUND TO BE ERRONEOUS AND THE LD. CIT(A)S ACTION IN NOT APPREC IATING THE EVIDENCE WHICH WERE BROUGHT ON RECORD VITIATES THE IMPUGNED ORDER AND, THEREFOR E, WE DIRECT THE DELETION OF ADDITION OF RS. 2 LACS. THIS ISSUE OF ASSESSEES APPEAL IS ALLO WED. 6. THE NEXT ISSUE IS IN RESPECT TO THE DIRECTION OF LD. CIT(A) IN RELATION TO THE DIVIDEND INCOME OF RS.28,024/-. WE NOTE THAT THE ASSESSEE C LAIMED DIVIDEND INCOME OF RS.28,024/- FROM INVESTMENT IN SHARES AMOUNTING TO RS.6,27,186/ - WHICH ACCORDING TO THE ASSESSEE WAS EXEMPT U/S. 10(23F) OF THE ACT. HOWEVER, THE AO AF TER PERUSAL OF THE SUBMISSION FILED BY THE ASSESSEE SHOWN AT SL. NO. 6 THAT NO INCOME FROM CAPITAL GAIN OR LOSS WAS OF THE OPINION THAT THE DIVIDEND INCOME WHICH THE ASSESSEE CLAIMED AS EXEMPT U/S. 10(23F) OF THE ACT OF RS.28,024/- IS COMPLETELY INCORRECT AND HE TREATED IT AS INCOME FROM OTHER SOURCES. ON APPEAL, THE LD. CIT(A) DIRECTED THE AO TO GIVE AN O PPORTUNITY TO PRODUCE THE DETAILS OF RS.28,024/- DIVIDEND INCOME CLAIMED AS EXEMPT AND C ONSIDER THE CLAIM AS PER LAW AFTER NECESSARY VERIFICATION. BEFORE US, THE LD. AR CONT ENDED THAT THE DIVIDEND INCOME OF RS.28,024/- WAS RECEIVED BY THE ASSESSEE ON INVESTM ENT IN SHARES AMOUNTING TO RS.6,27,186/- WHICH WAS EXEMPT U/S. 10(23F) OF THE ACT AND WHICH WAS CREDITED IN THE ICICI BANK ACCOUNT THROUGH ECS FROM THE RESPECTIVE COMPANIES. THE AO TREATED THE SAID EXEMPT INCOME DULY REFLECTED IN ROI AND INCOME AND EXPENDITURE ACCOUNT AS INCOME FROM OTHER SOURCES ON THE GROUND THAT THE ASSESSEE HAS N OT DECLARED ANY CAPITAL GAIN OR LOSS. WE DO NOT UNDERSTAND THE RELEVANCE OF CAPITAL GAIN OR LOSS WHEN DIVIDEND INCOME IS CLAIMED AS EXEMPT BY THE ASSESSEE. WE COULD HAVE APPRECIATED I F THE AO COULD HAVE ASKED WHETHER THERE WAS ANY EXPENDITURE FOR EARNING THE DIVIDEND INCOME CLAIMED BY THE ASSESSEE OR WHATEVER QUERIES HE HAS TO ASK ABOUT TO ASCERTAIN T HE CHARACTER OF THE RECEIPT WHICH THE ASSESSEE HAS CLAIMED TO BE DIVIDEND INCOME OR IF HE DOUBTED ITS GENUINENESS OF THE RECEIPT ITSELF. HOWEVER, WHEN THE RELEVANT BANK STATEMENT, BALANCE SHEET AND P&L ACCOUNT WERE 4 ITA NO.1170/KOL/2016 VINAY BAHETI, AY 2010-11 ON RECORD, THE REASONING OF THE AO TO DISALLOW THE CLAIM EXPOSES THE NON-APPLICATION OF MIND AND HE MISDIRECTED HIMSELF ON AN IRRELEVANT AN D ERRONEOUS CONSIDERATION. THE REASONING FOR NOT ALLOWING THE CLAIM IS THUS ERRONE OUS AND, THEREFORE, TAKING NOTE OF THE BANK STATEMENT AND OTHER MATERIALS PRODUCED BY THE ASSES SEE TO SUBSTANTIATE THE CLAIM, WE DIRECT THE AO TO DELETE THE ADDITION. THIS GROUND OF APPE AL OF ASSESSEE IS ALSO ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 06.09.2017 SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :6 TH SEPTEMBER, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI VINAY BAHETI, NATURAL RESIDENCY, 6 TH FLOOR, BLOCK-5, 76/1, GOLAGHATA ROAD, KOL-700 048. 2 RESPONDENT ITO, WARD-24(3), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECY.,