Sanjib Kumar Nag, Kolkata V. ITO, Ward-51(2), Kolkata, Kolkata

ITA 1230/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78356 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APURBA DAS
• Assessee Lawyers: T K CHAKRABORTY
• Keywords: Peak credit
• Section: 133(6)

Judgement Text

I.T.A. NO.: 1230/KOL./2012 AS SESSMENT YEAR : 2008-2009 PAGE 1 TO 5 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI SHAMIM YAHYA (A CCOUNTANT MEMBER) I.T.A. NO.: 1230/KOL./ 2012 ASSESSMENT YEAR : 2008-2009 SANJIB KUMAR NAG,.................................. ..........................APPELLANT 123, GHOSHPARA ROAD, GHUSHIPARA, P.O. BARRACKPORE, KOLKATA-700 120 [PAN : ABQPN 1734 R] -VS.- INCOME TAX OFFICER,...........................,.... ...........RESPONDENT WARD-51(2), KOLKATA, UTTARAPAN, DS-2 & DS-3, MANICKTALLA CIVIC CENTRE, KOLKATA-700 054 APPEARANCES BY: SHRI T.K. CHAKRABORTY, ADVOCATE, FOR THE ASSESSEE SHRI APURBA DAS, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 01, 2014 DATE OF PRONOUNCING THE ORDER : JULY 03, 2014 O R D E R PER SHAMIM YAHYA: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 01.06.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. GROUNDS OF APPEAL ARE AS UNDER :- (1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(APPEAL) WAS NOT JUSTIFIED IN CONFIRMING THE ORD ER OF THE AO U/S 271(1)(C) OF THE I.T. ACT RESULTING IN IMPOSITI ON OF PENALTY OF RS.1,38,236/- ON ESTIMATED PROFIT WITHOUT CONSID ERING THE SUBMISSION OF THE APPELLANT. I.T.A. NO.: 1230/KOL./2012 AS SESSMENT YEAR : 2008-2009 PAGE 1 TO 5 2 (2) THAT THE LD. CIT(A) ALSO ERRED IN LAW IN CONFIR MING PENALTY U/S 271(1)(C) OF THE I.T. ACT ON THE PEAK CREDIT OF RS.33,473/- WHICH IS A PART OF THE ESTIMATED TURNOVER AND FOR W HICH NO MATERIAL WAS BROUGHT ON RECORD IN THE INDEPENDENT P ENALTY PROCEEDINGS. 3. IN THIS CASE, AS PER AIR INFORMATION THE ASSESSI NG OFFICER NOTED THAT THE ASSESSEE IS MAINTAINING ONE ACCOUNT IN AXIS BAN K, BARRACKPORE BRANCH. ACCORDINGLY NOTICE UNDER SECTION 133(6) WAS SENT FOR SEEKING INFORMATION. ASSESSING OFFICER FOUND THAT THERE WER E HUGE CASH DEPOSITS MADE. IN THIS REGARD, A SHOW-CAUSE NOTICE WAS ISSUE D TO THE ASSESSEE. ASSESSEE EXPLAINED THAT DEPOSITS MADE IN THE ACCOUN T WERE ACTUALLY SALES FROM HIS BUSINESS, WHICH WERE ERRONEOUSLY NOT SHOWN . ASSESSEE ALSO DECLARED TO HAVE EARNED GROSS PROFIT @ 25% ON THE S ALES. ACCORDINGLY TOTAL DEPOSITS AMOUNTING TO RS.16,55,582/- WAS TREA TED AS UNDISCLOSED SALES AND GROSS PROFIT THEREON WAS COMPUTED AT RS.4 ,13,895/-. ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAS MADE SALES OUTSIDE THE BOOKS. FOR THIS ASSESSING OFFICER COMPUTED THAT ASS ESSEE HAS USED UNDISCLOSED CAPITAL FOR THIS PURPOSE. HENCE PEAK CR EDIT IN THIS BANK ACCOUNT AMOUNTING TO RS.33,473/- WAS ALSO ADDED AS UNDISCLOSED CAPITAL OF THE ASSESSEE. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE ALSO INITIATED. IN REPLY ASSESSEE STATED THAT I HAD GIVEN THAT EXPLANATION IN GOOD FAITH AND IT WAS STATED THAT THE BANK ACCOUNT WAS DISCLOSED IN THE F.Y 2006-07 UNDER THE UTI BANK AND SALES 16,55,582/- WE RE NOT REFLECTED IN ACCOUNTS DUE TO MISTAKE. 4. ASSESSING OFFICER WAS NOT SATISFIED WITH THE ABO VE. HE HELD THAT IT WAS A FIT CASE FOR IMPOSING PENALTY UNDER SECTION 2 71(1)(C) OF THE INCOME TAX ACT, 1961 ON UNDISCLOSED SALES AND UNDISCLOSED CAPITAL FUND FOR AN AMOUNT OF RS.4,47,368/-. ACCORDINGLY PENALTY OF RS. 1,38,236/- WAS IMPOSED. I.T.A. NO.: 1230/KOL./2012 AS SESSMENT YEAR : 2008-2009 PAGE 1 TO 5 3 5. BEFORE LD. CIT(APPEALS) ASSESSEE SUBMITTED THAT THE CONCERNED BANK ACCOUNT WAS DISCLOSED AT FINANCIAL YEAR 2006-07 UND ER THE HEAD UTI BANK IN HIS INDIVIDUAL ACCOUNT AND ALSO IN F.Y. 200 7-08 UNDER CURRENT ASSETS (UTI WAS LATER ON CONVERTED INTO AXIS BANK) . ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER AFTER ACCEPTIN G THE EXPLANATION OF THE ASSESSEE TREATED THE SALE PROCEEDS DEPOSITS AS ASSESSEES BUSINESS TURNOVER AND APPLIED THE GROSS PROFIT RATE OF 25% O N THE SAID SALE PROCEEDS AND ESTIMATED THE INCOME THEREON. ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS MADE AN ADDITION ON ESTIMATE BASIS AND IMPOSED PENALTY ON SUCH ESTIMATED PROFIT. IT WAS SUBMITTED THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- AERO TRADERS PV T. LTD. (2010) 322 ITR 316 (DELHI) HAD HELD THAT WHEN THE ADDITION IS MADE BY THE ASSESSING OFFICER ON ESTIMATED PROFIT, THE SAME COULD NOT BE SUBJECT MATTER OF PENALTY FOR CONCEALMENT OF INCOME. 6. AS REGARD PEAK CREDIT, IT WAS SUBMITTED THAT NO DETAILS HAS BEEN GIVEN IN THE ASSESSMENT ORDER AS TO HOW THE PEAK CR EDIT WAS CALCULATED. 7. LD. CIT(APPEALS) WAS NOT SATISFIED WITH THE ABOV E. HE HELD THAT THE ASSESSEE MISLED THE FACTS AND TRIED TO MAKE AN ESTI MATION CASE. THAT THE ASSESSEE DID NOT DISCLOSE ONE BANK ACCOUNT SO HE CL EARLY CONCEALED THE INCOME. HE HELD THAT ASSESSEE DID NOT SHOW THE INCO ME, WHICH HE EARNED THROUGH THE UNDISCLOSED BANK ACCOUNTS. HENCE HE HEL D THAT ASSESSEE COMMITTED OFFENCE UNDER SECTION 271(1)(C). SIMILARL Y LD. CIT(APPEALS) ALSO HELD THAT PENALTY ON ADDITION OF RS.33,473/- A S UNDISCLOSED CAPITAL FUND WAS ALSO JUSTIFIED. 8. AGAINST THE ABOVE ORDER OF THE LD. CIT(APPEALS), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFF ICER AND LD. I.T.A. NO.: 1230/KOL./2012 AS SESSMENT YEAR : 2008-2009 PAGE 1 TO 5 4 CIT(APPEALS) BOTH HAVE OBSERVED THAT AN UNDISCLOSED BANK ACCOUNT HAS BEEN DISCOVERED WHICH RELATES TO THE FINDINGS THAT THERE WERE UNDISCLOSED TURNOVER IN THE ASSESSEES AXIS BANK ACCOUNT. HOWEV ER, WE FIND THAT THE ASSESSEE HAS DULY DISCLOSED THAT THE CONCERNED BANK ACCOUNT. IT WAS UTI BANK, WHICH WAS LATER CONVERTED INTO AXIS BANK. THE SAID BANK ACCOUNT WAS DISCLOSED IN THE F.Y. 2006-07 UNDER THE HEAD U TI BANK IN HIS INDIVIDUAL ACCOUNT AND ALSO IN F.Y. 2007-08 UNDER CURRENT ASSETS. THUS THE FINDING THAT IT WAS AN UNDISCLOSED BANK ACCOUNT IS NOT CORRECT. FURTHERMORE, ASSESSEE HAS DULY EXPLAINED THAT THE D EPOSIT IN THE SAID BANK ACCOUNT WAS SALE PROCEEDS OF THE BUSINESS AND THE GROSS PROFIT THEREON WAS SUBMITTED AT 25%. IN THIS REGARD, ASSES SEE HAS ALSO FILED THE NAMES AND ADDRESS OF THE PARTIES FROM WHOM THE CHEQ UES WERE RECEIVED. ASSESSING OFFICER HAS DULY ACCEPTED THIS EXPLANATIO N. NOW WHEN THE ISSUE OF DEPOSITS IN THE BANK ACCOUNT HAS BEEN DULY EXPLA INED BY THE ASSESSEE AND THE SAME HAS BEEN ACCEPTED BY THE ASSESSING OFF ICER, IN OUR CONSIDERED OPINION, IMPOSITION OF PENALTY UNDER SEC TION 271(1)(C) IS NOT ATTRACTED. WE FURTHER NOTE THAT IN THE PENALTY ORDE R, ASSESSING OFFICER HAS NOT CLEARLY SPELT OUT AS TO WHETHER THE PENALTY WAS BEING IMPOSED FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. IN THESE CIRCUMSTANCES, WHEN THE BANK ACCOUNT WAS CONSIDERED ERRONEOUSLY AS UNDISCLOSED AND THE DEPOSITS THEREIN WERE ACCEPTED AS SALES TURNOVER AND PROFIT ESTIMATED THEREON, IN OUR CONSIDERED OPINION , PENALTY UNDER SECTION 271(1)(C) IS NOT EXIGIBLE. UNDER THESE CIRC UMSTANCES, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DAY OF JULY, 2014. SD/- SD/- MAHAVIR SINGH SHAMIM YAHYA (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 3 RD DAY OF JULY, 2014 I.T.A. NO.: 1230/KOL./2012 AS SESSMENT YEAR : 2008-2009 PAGE 1 TO 5 5 COPIES TO : (1) SANJIB KUMAR NAG, 123, GHOSHPARA ROAD, GHUSHIPARA, P.O. BARRACKPORE, KOLKATA-700 120 (2) INCOME TAX OFFICER, WARD-51(2), KOLKATA, UTTARAPAN, DS-2 & DS-3, MANICKTALLA CIVIC CENTRE, KOLKATA-700 054 (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.