Gopal Prasad Gupta, Dakshin Dinajpur V. ITO, Ward-1, Balurghat, Dakshin Dinajpur

ITA 1232/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91956 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 24-08-2012
• Court: TRIBUNAL
• Department Lawyers: SANJAY
• Assessee Lawyers: S M SURANA; A K CHAKRABORTY
• Keywords: Unexplained cash credit
• Section: 131; 68; 69; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE HON BLE SRI P.K.BANSAL , A M & HON BLE SRI MAHAVIR SINGH , J M] ITA NO. 1232/KOL/2012 ASSESSMENT YEAR : 2007 - 08 ( A PPELLANT ) - (RESPONDENT) SRI GOPAL PR ASAD GUPTA, I.T.O., WARD - 1, DAKSHIN DINAJPUR - VERSUS - BALURGHAT. (PAN: ADUPG 4149 H) FOR THE APPELLANT : SHRI A.K.CHAKRABORTY, ADVOCATE & SHRI S.M.SURANA, ADVOCATE FOR THE RESPONDENT : SHRI SANJAY, ADDL. CIT, SR.DR DATE OF HE ARING : 19.05.2015. DATE OF PRONOUNCEMENT : 22.05.2015. ORDER PER SHRI P.K.BANSAL, AM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD . CIT(A) - JALPAIGURI DATED 01.05.2012 BY TAKING THE FOLLOWING GROUNDS OF APPEAL : 1. FOR THAT, ON THE FACTS, THE APPELLANT DID NOT GET PROPER OPPORTUNITIES TO EXPLAIN AND TO SUBSTANTIATE THE ALLEGED ADDITIONS MADE BY THE LD. A.O. 2. FOR THAT THE ADDITION OF RS.11,374/ - IN THE ALLEGED DIFFERENT IN STOCK A/C WAS UNTENABLE. THE ADDITION WAS THEREFORE UNLAWFUL WHICH MAY KINDLY BE DELETED. 3. FOR THAT FROM THE FACT, THE ITO/1 BALURGHAT ERRED BY ADDING BACK LOAN MONEY FROM MD.SADEK ALI AT RS.1,50,000 AND ANOTHER LOAN AMOUNTING TO RS.2,00,000 WHICH WAS RECEIVED FROM MOTHER, RAMDULARI DEVI. 4. FOR THAT, FROM THE LD CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS.3,85,000 ON ACCOUNT OF DIFFERENCE OF SALE PRICE. 5. FOR THAT, FROM THE FACTS, THE ADDITION U/S 69 OF RS.47,870/ - WAS NOT JUSTIFIED. THE ENTIRE AMOUNT MAY BE DELETED. 6. FOR THAT THE LD. AO ADDED INCOME U/S 44AE A T RS.14,850, BUT FROM THE FACTS, THE ADDITION OF RS.14,950 MUST BE CONSIDERED IN THE LIGHT OF THE CASE AS DISCUSSED AND DESERVED FURTHER MODIFICATION IN THIS MATTER UNDER THE APPEAL. 7. FOR THAT YOUR APPELLANT HANDED OVER AN OLD MAHINDRA PICK UP VAN UNDER CONTRACT WITH THE PURCHASER DATED 01.04.2006. HENCE THE ESTIMATED INCOME U/S 44AE FOR 11 MONTH AT RS.34,650 MAY KINDLY BE DELETED. 2. GROUND NO.1, BEING GENERAL IN NATURE, DOES NOT REQUIRE ANY ADJUDICATION. ITA NO. 1232/KOL/2012 GOPAL PRASAD GUPTA, DAKSHIN DINAJPUR A.YR. 2007 - 08 2 3. GROUND NO.2 RELATES TO THE SUSTENANCE OF ADDITION OF RS.11,374/ - DUE TO DIFFERENCE IN STOCK. THE FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSEE IS A TRADER OF SUGAR, FERTILIZER, PESTICIDE, SEEDS ETC. AND ALSO HAVING INCOME FROM TRANSPORT BUSINESS. ON EXAMINATION OF THE BALANCE SHEET THE AO FOUND THAT ON ACCOUNT OF SEED AS ON 31.03.2006 THERE WAS A CLOSING BALANCE SHOWN AT RS.60,990/ - WHEREAS AS ON 01.04.2006, THE OPENING BALANCE OF SEED WAS SHOWN AT RS.72,364/ - . THE AO, AFTER CALLING FOR AN EXPLANATION FROM THE ASSESSEE, ADDED THE DIFFERENC E IN THE INCOME OF ASSESSEE AMOUNTING TO RS.11,374/ - . WHEN THE MATTER WENT BEFORE LD. CIT(A), CIT(A) SUSTAINED THE ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AV AILABLE ON RECORD ALONG WITH ORDERS OF THE TAX AUTHO RITIES BELOW. THE LD. ,AR EVEN THOUGH VEHEMENTLY CONTENDED THAT THE ASSESSE HAS CHANGED THE METHOD OF ACCOUNTING AND DUE TO THE CHANGE IN THE METHOD OF VALUATION OF THE STOCK OF THE COST PRICE THERE HAD BEEN DIFFERENCE IN THE OPENING STOCK. BUT HE DID NOT FILE ANY COGENT MATERIAL OR EVIDENCE WHICH MAY PROVE THE CONTENTION TAKEN BY THE AR. WE, THEREFORE, DISMISS GROUND NO.2. 5. GROUND NO.3 RELATES TO THE ADDITION OF RS.1,50,000 / - AND RS.2,00,000 / - ON ACCOUNT OF CASH CREDIT. THE BRIEF FACTS RELATING TO THI S GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAS TAKEN LOAN OF RS.1,50,000 FROM ONE SADAK ALI AND RS.2,00,000 FROM SMT. RAMDULARI DEVI. THE ASSESSEE FILED AFFIDAVIT OF THE PARTIES BUT COULD NOT PRODUCE THE IDENTITY CAR D , BANK STATEMENT, COPY OF THEIR I T RETURNS. THEREFORE AO ISSUED SUMMONS U/S 131 OF THE ACT WHICH COULD BE SERVED ONLY ON SMT. RAMDULARI DEVI. BUT THE SUMMONS ISSUED TO SADEK ALI RETURNED UNSERVED. SMT. RAMDULARI DEVI APPEARED AND HER STATEMENT WAS RECORDED THAT THE LOAN WAS CONFIRMED THAT SHE HAD GIVEN THE LOAN TO THE ASSESSEE BY CHEQUE BUT COULD NOT REMEMBER THE YEAR WHEN THE LOAN WAS GIVEN. REGARDING THE SOURCE OF THE LOAN SHE EXPLAINED THAT A SUM OF RS.1,25,000/ - WAS GIVEN OUT OF HER HUSBAND S SAVING BUT THE BALANCE WAS ISSUED OUT OF HE R SAVINGS. THE AO MADE ENQUIRY IN RESPECT OF SADEK ALI BUT THE VILLAGERS TOLD THAT SUCH PERSON IS UNKNOWN. THEREFORE AO MADE THE ADDITION U/S 68 OF THE ACT FOR A SUM ITA NO. 1232/KOL/2012 GOPAL PRASAD GUPTA, DAKSHIN DINAJPUR A.YR. 2007 - 08 3 OF RS.2,00,000 AS WELL AS RS.1,50,000. THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A). CIT (A) SUSTAINED THE ADDITION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. SO FAR THE LOAN RECEIVED FROM SADEK ALI IS CONCERNED WE NOTED THAT THE ASSESSEE HAS FILED VOTER ID CARD, AFFIDAVIT, BANK PASS BOOK, BALANCE SHEET AS WELL AS COPY OF THE INCOME TAX RETURN OF SHRI SADEK ALI. THIS PROVES THE IDENTITY BUT FROM THE BANK STATEMENT IT IS APPARENT THAT ON 23.08.2006 HE HAS OPENED A BANK ACCOUNT WITH RS.1,000/ - AND ON 07.09.2006, HE HAS DEPOSITED RS.1,50,000/ - AND ON THE SAME DATE HE HAD TRANSFERRED THE SAID AMOUNT TO THE ASSESSEE. THIS ACCOUNT WAS ALSO CLOSED SUBSEQUENTLY ON 11.09.2006. FROM THE COPY OF THE RETURN IT IS APPARENT THAT THE RETURN DURING THE ASSE SSMENT YEAR 2006 - 07 WAS BELOW THE TAXABLE LIMIT AND DURING THE A.YR.2007 - 08 SADEK ALI PAID THE TAX OF RS.233/ - THAT PROVES THAT THE INCOME OF SADEK ALI WAS NOT MUCH SO THAT THE CREDITWORTHINESS CAN BE PROVED. AS PER THE PROVISION OF SECTION 68 OF THE ACT L AID DOWN A RULE OF EVIDENCE BY STATING THAT WHERE A SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR THIS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE OF THE SOURCE THEREOF OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT IN THE OPINION OF AO SATISFACTORY THE SUM SO CREDITED MAY BE CHARGEABLE TO INCOME TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THIS SECTION WILL LAID DOWN THE ONUS ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF THE AMOUNT RECEIVED BY THE ASSESSE E AS CASH CREDIT. IN THE INSTANT CASE, NO DOUBT THE ASSESSEE HAS PROVED THE IDENTITY OF SADEK ALI BUT FAILED TO PROVE, IN OUR OPINION , THE GENUINENESS OF THE TRANSACTION AS WELL AS CREDITWORTHINESS OF SADEK ALI. IT APPEARS THAT THE BANK ACCOUNT HAS BEEN O PENED BY SADEK ALI ONLY JUST TO ADVANCE THE MONEY TO THE ASSESSEE BUT NO EVIDENCE HAS BEEN PRODUCED BEFORE US WHICH MAY PROVE FROM WHERE THE CASH OF RS.1,50,000/ - WAS DEPOSITED BY SADEK ALI IN HIS BANK ACCOUNT. WE, THEREFORE SUSTAIN THE ADDITION OF RS.1,50 ,000/ - . 6.1. SO FAR AS THE ADDITION OF RS.2,00,000/ - IS CONCERNED WE NOTED THAT THIS AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CH EQUE FROM SMT. RAMDULARI ITA NO. 1232/KOL/2012 GOPAL PRASAD GUPTA, DAKSHIN DINAJPUR A.YR. 2007 - 08 4 DEVI, WHO IS THE MOTHER OF ASSESSEE. THE ASSESSEE HAS FILED COPY OF THE BANK PAS S BOOK OF SMT. RAMDULARI DEVI. SHE IS AN OLD PERSON ABOUT 72 YEARS. WHEN HER STATEMENT WAS RECORDED BY MAKING IT IN ENGLISH SHE IS A REGULAR ASSESSEE AND FILED HER INCOME TAX RETURN REGULARLY. THE INCOME HAS BEEN COMPUTED AS PER THE PROVISION OF SECTION 4 4A E OF THE ACT. THEREFORE SHE WAS NOT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT. THE AO RECORDED HER STATEMENT AND SHE CONFIRMED THAT SHE HAD ADVANCED TH E LOAN TO THE ASSESSEE AND EXPLAINED THE SOURCE OF THE LOAN. THE ONLY THING THAT CAME TO MIND OF THE AO THAT SHE FAILED TO EXPLAIN THE DATE WHEN EXACTLY THE LOAN WAS ADVANCED. IN OUR OPINION IT IS QUITE POSSIBLE FOR A PERSON OF A SENIOR CITIZEN NOT TO REMEMBER THE EXACT DATE AND TIME WHEN THE LOAN WAS ADVANCED BY HER. BUT SHE FILED ALL THE EVIDENCES AND DOC UMENTS WHICH PROVED THE NATURE AND SOURCE OF TRANSACTIONS, IN OUR OPINION, THIS IS A CASE WHERE THE ASSESSEE HAS DULY DISCHARGED HIS BURDEN. THE REVENUE HAS NOT BROUGHT OUT ANY CONTRARY EVIDENCE WHICH MAY PROVE THAT THE CONFESSION MADE BY SMT. RAMDULARI DE VI IN HER STATEMEN T IS INCORRECT. THUS GROUND NO.3 IS PARTLY ALLOWED. 7. GROUND NO.4 RELATES TO THE SUSTENANCE OF ADDITION OF R S.3,85,000/ - ON ACCOUNT OF DIFFERENCE IN SALE PRICE. THE FACTS RELATING TO THIS GROUND ARE THAT AO NOTED FROM THE CAPITAL ACCOUN T THAT THE ASSESSEE HAD DEBITED RS.70,000/ - ON ACCOUNT OF LOSS SUFFERED DUE TO SALE OF TWO CARS. ONE OF THE CASES WAS A MAHINDRA PICK - UP VAN AND THE OTHER WAS A TATA SUMO. THE ASSESSEE SUBMITTED MONEY RECEIPTS AS WELL AS SALES DEEDS OF THE TWO CARS FROM M S MANOARA BIBI AND SRI SAMARENDRA NATH SARKAR. THE AO ASKED THE ASSESSEE TO PRODUCE THE CAR PURCHASER WITH THE BANK PASS BOOK AND I.T. CARDS. THE ASSESSEE FAILED TO PRODUCE THE PURCHASERS. THEREFORE AO ISSUED SUMMON TO THE PURCHASERS. IN RESPONSE THERETO MS.MANOARA BIBI APPEARED AND STATED THAT SHE HAD PURCHASED A JEEP FOR RS.1,00,000/ - FROM THE ASSESSEE. WHEN SHE WAS ASKED TO ABOUT THE PURCHASE DEED OF THE CAR WHERE THE CONSIDERATION WAS MENTIONED AT RS.,4,00,000/ - SHE REPLIED THAT SHE WAS A POOR LADY AND HAS NO CAPACITY TO PURCHASE AN OLD CAR FOR RS.4,00,000. THE VALUE OF FIVE TO SIX YEARS OLD CAR CANNOT BE RS.4,00,000/ - . THE AO EXAMINED THE SALE DEED AND NOTED THAT THE SALE CONSIDERATION OF RS.4,00,000 WAS WRITTEN BY PEN ON THE PRINTED XEROX COPY OF THE SALE DEED. WHEN ASKED ABOUT THE ITA NO. 1232/KOL/2012 GOPAL PRASAD GUPTA, DAKSHIN DINAJPUR A.YR. 2007 - 08 5 DISCREPANCY THE ASSESSEE DID NOT OFFER ANY EXPLANATION ABOUT THIS HAND WRITTEN FIGURES. BASED ON THE STATEMENT OF THE CAR PURCHASER THE AO TREATED THE BALANCE AMOUNT AS UNEXPLAINED CASH CREDIT. IN RESPONSE TO THE SUMMON ISSU ED TO THE OTHER CAR PURCHASER SRI SAMARENDRA NATH SARKAR HE APPEARED AND CONFIRMED THAT HE HAD PURCHASED THE CAR FROM THE ASSESSEE FOR RS.75,000/ - AND THE CAR WAS FIVE TO SIX YEARS OLD AND HE HAS NOT PAID RS.1,60,000/ - TO THE ASSESSEE. THE FIGURE SHOWN IN THE SALE DEED IS FALSE. THEREFORE AO TREATED THE SUM OF RS.85,000/ - ALSO AS UNEXPLAINED CASH CREDIT. THUS ADDITION OF RS.3,85,000/ - WAS MADE BY AO. THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A). CIT(A) SUSTAINED THE ADDITION. 8. AFTER THE HEARING THE RIVA L SUBMISSIONS AND CAREFULLY PERUSED THE RECORDS ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THERE IS SUBSTANCE IN THE SUBMISSION OF THE LD. AR THAT THE AO HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PURCHASERS. THE LD. DR, EVEN THOUGH VEHEMENTLY CONTENDED THAT BUT COULD NOT SUBMIT ANY COGENT MATERIAL OR EVIDENCE BEFORE US WHICH MAY PROVE THAT AO HAS GIVEN OPPORTUNITY TO THE ASSESSEE TO EXAMINE THE PURCHASER. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PL AY OF BOTH THE AUTHORITIES SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT AO SHALL RE - DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PURCHASER. THUS GROUND NO.4 IS STATISTICALLY ALLOWED. 9. GROUND NO.5 RELATES TO THE SUSTENA NCE OF ADDITION OF RS.47,870/ - U/S 69 OF THE ACT. THE LD. AR EVEN THOUGH VEHEMENTLY CONTENDED THAT THE SAID INVESTMENT HAS BEEN MADE UNDER R IP OUT OF THE WITHDRAWAL FROM THE BANK ACCOUNT BUT HE COULD PRODUCE ANY EVIDENCE THE SOURCE OF THE INVESTMENT. WE, THEREFORE, SUSTAIN THE ADDITION. THUS GROUND NO.5 IS DISMISSED. 10. GROUND NO.6 RELATES TO THE SUSTENANCE OF ADD ITION OF INCOME U/S 44AE OF THE ACT AMOUNTING TO RS.14,850/ - . THE FACTS RELATING TO THE A DDITION IS THAT AO NOTED THAT ON VERIFICATION OF TRUCK PLYING ACCOUNT THE ASSESSEE HAS SHOWN TO HAVE RECEIVED GROSS ITA NO. 1232/KOL/2012 GOPAL PRASAD GUPTA, DAKSHIN DINAJPUR A.YR. 2007 - 08 6 TRUCK PLYING CHARGES AT RS.1,91,387/ - AND THE NET PROFIT AT RS.27,050/ - . BUT T HE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE. THEREFORE AO ESTIMATED THE INCOME AS PER THE PROVISION OF SECTION 44AE OF THE ACT @ RS.3,500/ - P.M. WHICH CAME TO RS.42,000/ - . AFTER DEDUCTION OF NET PROFIT OF RS.27,050/ - A SUM OF RS.14,950/ - WAS ADDED TO THE I NCOME OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A). CIT(A) CONFIRMED THE ADDITION. 11. THE LD. AR BEFORE US EVEN THOUGH VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS SHOWN THE NET PROFIT AT RS.27,050/ - WHICH WAS VERY MUCH HIGHER . AS THE ASS ESSEE HAD PARTLY USED THE TRUCK FOR HIS OWN TRADING BUSINESS, HE COULD NOT CONVINCE US HOW THE PROVISION OF SECTION 44AE OF THE ACT WILL NOT APPLY IN THE CASE OF THE ASSESSEE AS THE ASSESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT. WE, THEREFORE, SUSTAIN T HE ORDER OF LD. CIT(A) WHO HAS SUSTAINED THE ADDITION OF RS.14,850/ - . THUS GROUND NO.6 IS DISMISSED. 12. THE LAST GROUND RELATES TO THE SUSTENANCE OF ADDITION OF RS.34,650/ - US/ 44AE OF THE ACT. THE FACTS RELATING TO THIS ADDITION ARE THAT AO NOTED THAT THE ASSESSEE WAS HAVING MAHINDRA PICK - UP VAN WHICH WAS SOLD BY THE ASSESSEE IN THE EARLIER PART OF THE FINANCIAL YEAR. AO, THEREFORE, ESTIMATED THE INCOME @ RS.3,150/ - PER MONTH AND ADDED AN AMOUNT OF RS.37,800/ - AS INCOME FROM THE CAR. WHEN THE MATTER CAM E BEFORE LD. CIT(A), CIT(A) RESTORED THE ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT AO SHALL CONSIDER THE INCOME OF THE EARLIER MONTHS INSTEAD OF 12 MONTHS AS THE ASSESSEE HAS ALREADY SOLD THE CAR. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL AVAILABLE ON RECORD ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. BEFORE US THE LD. AR EVEN THOUGH VEHEMENTLY CONTENDED THAT THE ASSESSEE COULD NOT HAVE DERIVED THE INCOME FROM THE CAR FOR THE WHOLE OF THE YEAR. THE CAR WAS PUR CHASED AND OVERHAULING HAD TAKEN CONSIDERABLE TIME. THEREFORE THE INCOME FOR ELEVEN MONTHS CANNOT BE TAKEN. WE FIND SUBSTANCE IN THE SUBMISSIONS OF THE LD. AR. WE, THEREFORE, DIRECT THE AO TO ITA NO. 1232/KOL/2012 GOPAL PRASAD GUPTA, DAKSHIN DINAJPUR A.YR. 2007 - 08 7 CONSIDER THE INCOME OF EIGHT MONTHS AS THE INCOME AS AGAINST THE DIRECTION BY THE LD. CIT(A). THUS GROUND NO.7 IS PARTLY ALLOWED. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. O RDE R PRONOUNCE D IN THE COURT ON 2 2.05.2015. SD/ - SD/ - [MAHAVIR SINGH ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 22.05.2015. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . GOPAL PRASAD GUPTA, VILL. & PO HARIRAMPUR, DAKSHIN DINAJPUR, PIN - 733125, WEST BENGAL. 2 ITO, WARD - 1, BALURGHAT. 3 . C IT KO LKATA 4. CIT(A) - JALPAIGURI 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES