A.C.I.T,Circle-37, Kolkata V. Padmaja Shailen Ruparel, Kolkata

ITA 1210/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7756 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWASADDL
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM & DR. A.L.SAINI, AM ITA NO.1210/KOL/2019 (A.Y: 2013-14) ACIT, CIRCLE-37, KOLKATA VS. PADMAJA SHAILEN RUPAREL 33, C.R. AVENUE, KOLKATA- 700012 ./ ./PAN/GIR NO. : ADCPR 4294 G ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY :SMT. RANU BISWAS,ADDL. CIT RESPONDENT BY : NONE / DATE OF HEARING : 17/12/2019 /DATE OF PRONOUNCEMENT: 29/01/2020 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINI NG TO ASSESSMENT YEAR 2013-14, IS DIRECTED AGAINST THE ORDER PASSED BY LD . COMMISSIONER OF INCOME TAX (APPEALS)-11, KOLKATA IN APPEAL NO. 128/CIT(A)-11/C IR-37/15-16/KOL, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY AS SESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT ACT) DATED 31 /12/2015. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING AND LD. DEPARTMENTAL REPRESE NTATIVE(DR), WAS PRESENT FOR THE APPELLANT REVENUE. IN THE ABSENCE OF ANY APPEAR ANCE BY THE ASSESSEE, THE APPEAL IS BEING DISPOSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON MERITS IN TERMS OF RULE 24 OF THE IN COME TAX APPELLATE, TRIBUNAL, RULES, 1963. PADMAJA SHAILENRUPAREL ITA NO.1210/KOL/2019 A.Y: 2013-14 2 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. THAT LD. CIT(A) HAS ERRED IN ALLOWING ASSESSEE'S APPEAL BY ACCEPTING THAT OPENING CAPITAL AS ON FIRST DAY OF AY 2013-14 (AS ON 01.04.2012) WAS BROUGHT FORWARD CAPITAL FROM LAST DAY OF PREVIOUS A Y 2012-13 (AS ON 31.03.2012) WHEN DISCLOSED FIGURE OF CLOSING CAPITA L (AS ON 31.03.2012) IN E-RETURN FOR AY 2012-13 WAS ONLY RS. 1,06,43,052/-, AGAINST THE BROUGHT FORWARD OPENING CAPITAL (AS ON 01.04.2012) OF RS. 3 ,73,00,424/-, AS REFLECTED IN CAPITAL ACCOUNT OF AY 2013-14, FILED B Y ASSESSEE BEFORE ASSESSING OFFICER. 2. THAT LD. CIT(A) HAS ERRED IN ACCEPTING THE UN-SU BSTANTIATED CLAIM OF MERGER OF CAPITAL ACCOUNT, IN RESPECT OF PERSONAL A ND PROFESSIONAL ACCOUNTS OF ASSESSEE FOR AY 2013-14, WHEN NO REASON ABLE EXPLANATION FOR DISCREPANCY IN CLOSING CAPITAL AS ON 31.03.2012 & 0 1.04.2012 WAS FILED BEFORE ASSESSING OFFICER DESPITE REPEATED OPPORTUNI TY ALLOWED BY AO TO ASSESSEE. 3. THAT LD. CIT(A) HAS ERRED IN ACCEPTING RS. 3,76, 00,424/- AS OPENING CAPITAL AS ON 01.04.2012 WITHOUT BRINGING DOCUMENTA RY EVIDENCE ON RECORD WHEN DISCLOSED CLOSING CAPITAL AS ON 31.03.2 012 WAS MUCH LESSER AT RS.1,06,43,052/- IN RETURN OF INCOME FILED FOR A Y 2012-13. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER OR MODIFY ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING OF APPEAL. 4. THESE THREE GROUNDS RAISED BY THE REVENUE ARE IN TERLINKED AND RELATE TO SINGLE ISSUE OF DIFFERENCE IN OPENING CAPITAL ACCOUNT AS O N 01.04.2012 OF RS. 2,69,57,372/- (RS. 376,00,424 RS. 106,43,052) THE REFORE THESE GROUNDS ARE TAKEN TOGETHER FOR THE PURPOSE OF ADJUDICATION OF R EVENUES APPEAL. 5. FACTS OF THE CASE WHICH CAN BE STATED QUITE SHOR TLY ARE AS FOLLOWS: DURING THE ASSESSMENT PROCEEDINGS, THE LD. ASSESSING OFFICER O BSERVED THAT AMOUNT STANDING IN THE CAPITAL ACCOUNT OF THE ASSESSEE AS ON 31.03. 2012 WAS RS. 1,06,43,052/-. HOWEVER, THE OPENING CAPITAL AS ON 01.04.2012 WAS R S. 3,76,00,424/-. THUS, THERE WAS A DIFFERENCE OF RS. 2,69,57,372/-. THE AS SESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE OF RS. 2,69,57,372/-. HOWEVER, THE ASSES SEE COULD NOT EXPLAIN THE DIFFERENCE PROPERLY, THEREFORE THE ASSESSING OFFICE R MADE ADDITION OF RS. 2,69,57,372/- (BEING DIFFERENCE BETWEEN RS. 3,76,00 ,424 RS. 1,06,43,052). PADMAJA SHAILENRUPAREL ITA NO.1210/KOL/2019 A.Y: 2013-14 3 6. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD LD. D.R. AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DR HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. WE NOTE THAT AS PERRETURN OF INCOM E OF A. Y. 2012-13 (E-FILED ON 29/09/2012 AND DATE OF TAX AUDIT REPORT IS 28/09/20 12), THE PROPRIETOR'S CAPITAL AS ON 31.03.2012 IS RS 1,06,43,052/-. AS PER THE RE TURN FILED FOR THE A Y 2013-14 ON 30.09.2013, THE PROPRIETOR'S CAPITAL AS ON 31.03 .2013 WAS TO THE TUNE OF RS 4,00,28,553/-. SO, THE ASSESSING OFFICER NOTICED TH AT THE OPENING AND CLOSING CAPITAL BALANCE OF THE ASSESSEE DOES NOT MATCH WITH THE INCOME INCLUDING TAX FREE INCOME AS DISCLOSED BY THE ASSESSEE IN HER RETURN O F INCOME. THE ASSESSEE WAS REQUESTED TO SUBMIT A COPY OF CAPITAL ACCOUNT. IN R ESPONSE, THE ASSESSEE SUBMITTED A COPY OF CAPITAL ACCOUNT FOR THE FY 2012-13 AND AF TER GOING THROUGH THE SAME,ASSESSING OFFICER NOTICED THAT THE OPENING CAP ITAL IS SHOWN AT RS 3,76,00,424/-,WHEREAS THE PROPRIETOR'S CAPITAL AS O N 31.03.2012 WAS RS. 1,06,43,052/-. SO, THERE WAS A DIFFERENCE OF RS 2,6 9,57,372/- (RS. 37600424 RS. 10643052). THE ASSESSEE WAS REQUESTED TO SUBMIT THE COPY OF AUDITED ACCOUNTS AND TAX AUDIT REPORT FOR THE F Y 2011-12 CORRESPOND ING TO THE A Y 2012-13. IN RESPONSE, THE ASSESSEE FILED A COPY OF THE TAX AUDI T REPORT IN FORM NO.3CD BUT NO COPIES OF AUDITED ACCOUNTS WERE SUBMITTED BY THE AS SESSEE. THE ASSESSEE WAS REQUESTED TO SUBMIT EXPLANATION OF INTRODUCTION OF CAPITAL. IN RESPONSE TO THAT, THE ASSESSEE SUBMITTED A COPY OF CAPITAL ACCOUNT FOR TH E F. Y. 2011-12 AND 2012-13. THE COPY OF CAPITAL ACCOUNT FILED BY THE ASSESSEE F OR THE F Y 2011-12 SHOWS THE CLOSING CAPITAL OF RS. 3,76,00,424/- WHEREAS AS PER THE RETURN FILED FOR A. Y. 2012-13, THE CLOSING CAPITAL WAS RS 1,06,43,052/-. ON REPEATED OPPORTUNITY, THE ASSESSEE COULD NOT CLARIFY THE DIFFERENCE. IN VIEW OF THE ABOVE, SUFFICIENT OPPORTUNITY HAD BEEN GIVEN TO THE ASSESSEE BUT NO E XPLANATION COULD BE FILED, NO SOURCE OF SUCH INTRODUCTION OF CAPITAL COULD BE FIL ED BY THE ASSESSEE AND AS SUCH THE AMOUNT OF RS 2,69,57,372/- WAS ADDED TO THE TOT AL INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT, 1961. PADMAJA SHAILENRUPAREL ITA NO.1210/KOL/2019 A.Y: 2013-14 4 WE NOTE THAT DURING THE ASSESSMENT PROCEEDINGS, TH E LD. A.O OBSERVED THAT AMOUNT STANDING IN THE CAPITAL ACCOUNT OF THE ASSES SEE AS ON 31.03.2012 WAS RS. 1,06,43,052/-. HOWEVER, THE OPENING CAPITAL AS ON 01.04.2012 WAS RS. 3,76,00,424/-. THUS, THERE WAS A DIFFERENCE OF RS. 2, 69, 57,372/-. THE A.O CALLED FOR THE EXPLANATION OF THE ASSESSEE, BUT HE NOTES T HAT DESPITE SUFFICIENT OPPORTUNITIES GRANTED NO EXPLANATION WAS FILED BY T HE ASSESSEE RELATED TO SOURCE OF INTRODUCTION OF CAPITAL AMOUNTING TO RS. 2,69,57 ,372/-. HE, THEREFORE, ADDED THIS AMOUNT TO THE TAXABLE INCOME OF THE ASSESSEE. DURING THE APPELLATE PROCEEDINGS, THE LD. A.R FOR T HE ASSESSEE STATED THAT PRIOR TO THE ASSESSMENT YEAR 2013-14, THE APPELLANT USED TO MAINTAIN SEPARATE BALANCE SHEET AND CAPITAL ACCOUNTS FOR HER PERSONAL AND PRO FESSIONAL TRANSACTIONS. IN THE SAID YEAR, THE APPELLANT DECIDED TO MERGE BOTH OF H ER ACCOUNTS INTO ONE AND THAT IS WHY, THE BALANCE FROM HER PERSONAL ACCOUNT GOT ADDE D TO HER CAPITAL IN THE PROFESSIONAL ACCOUNT. THE LD A.R WAS ASKED TO EXPLAIN IF THE SAID PERSONA L AND PROFESSIONAL ACCOUNTS WERE DISCLOSED IN THE RETURN OF INCOME FILED BY THE APPELLANT DURING THE EARLIER YEAR. HE WAS ALSO REQUESTED TO FURNISH COPIES OF RE TURN OF INCOME ALONG WITH ALL THE FINANCIAL STATEMENTS. THE SAME WERE FILED AND I T WAS OBSERVED BY THE LD. CIT(A) THAT THE APPELLANT HAD MAINTAINED TWO SEPARA TE ACCOUNTS, ONE PERTAINING TO HER PROFESSIONAL EARNINGS AND THE OTHER PERTAINI NG TO HER PERSONAL EARNINGS AND TAXES WERE PAID BY THE ASSESSEE ON ALL HER EARNINGS . THEREFORE, THE TWO ACCOUNTS IN QUESTION ARE DISCLOSED ACCOUNTS. THE REASON FOR THE DIFFERENCE OF RS. 2,69,57,372/- HAS ARISEN BECAUSE THE ASSESSEE HAS M ERGED HER PERSONAL AND PROFESSIONAL ACCOUNTS. WE NOTE THAT THE LD. CIT(A) HAS CO-TERMINUS POWER AS THAT OF ASSESSING OFFICER AND HE EXAMINED THE PERSONAL A CCOUNTS AND PROFESSIONAL ACCOUNTS OF THE ASSESSEE AND HE NOTICED THAT DIFFER ENCE HAS ARISEN BECAUSE ASSESSEE MERGED HER PERSONAL ACCOUNTS WITH PROFESSI ONAL ACCOUNTS. THE LD. CIT(A) EXAMINED THE REASON OF DIFFERENCE AND DELETE D THE ADDITION. WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD. CIT(A ), HENCE WE DISMISS THE APPEAL OF REVENUE. PADMAJA SHAILENRUPAREL ITA NO.1210/KOL/2019 A.Y: 2013-14 5 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 29.01.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE:29/01/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-37, KOLKATA 2. PADMAJA SHAILEN RUPAREL 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES