Shri Bijoy Saha, North 24 Parganas V. ITO, Ward - 50(2), Kolkata, Kolkata

ITA 1319/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54458 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 18-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2010
• Court: TRIBUNAL
• Department Lawyers: S K MALAKAR
• Keywords: Unexplained investment; Unexplained expenditure; Peak credit

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () , , . .. . ! ! ! !. .. . , , , , '# ] ]] ] [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE S RI C. D. RAO, AM] % % % % /ITA NO.1319/KOL/2010 &' ()/ ASSESSMENT YEAR : 2006-07 (+, / APPELLANT ) - & - ( ./+, /RESPONDENT) BIJAN SAHA I.T.O.,WARD-50(2), KOLKATA (PAN:ANMPS 1995 F) -VERSUS- KOLKATA +, 0 1 '/ FOR THE APPELLANT: SHRI SUBHAS AGARWAL ./+, 0 1 '/ FOR THE RESPONDENT: SHRI S.K.MALAKAR '2 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST ORD ER DATED 18.02.2010 OF THE CIT(A)-XXXII, KOLKATA PERTAINING TO A.YR. 2006-07. 2. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L APPEARING ON BEHALF OF ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND IN ADDITION TO THE SUBSTANTIAL GROUNDS RAISED BY THE ASSESSEE IN THE MEMORANDUM OF APPEAL:- 1. FOR THAT THE LD. CIT(A) OUGHT TO HAVE CONSIDER ED THE PEAK BALANCE IN THE UNDISCLOSED BANK ACCOUNT WITH THE STANDARD CHARTERE D BANK FOR THE PURPOSE OF ADDITION/ENHANCEMENT INSTEAD OF ADDING THE ENTIRE D EPOSITS IN THE SAID BANK ACCOUNT. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING THE SCRUTINY ASSESSMENT AO HAS ADDED AN AMOUNT OF RS.13,86,844/- ON ACCOUNT OF INCOME FROM UNDISCLOSED BUSINESS OF RS.5,47,935/- BY OBSERVING AS UNDER :- IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSES SEE WAS GIVEN OPPORTUNITY TO EXPLAIN THE SOURCE OF MONEY OF RS.81,72,811/- AS APPEARED IN THE UNDISCLOSED BANK ACCOUNT NO.32410129511 WITH STANDA RD CHARTERED BANK, 2 CHOWRINGHEE BRANCH, KOLKATA-700016. BUT THE ASSESSE E FAILED TO OFFER ANY SATISFACTORY EXPLANATION AGAINST THE SOURCE OF DEPO SITS FROM WHICH HE MADE THE SUBSEQUENT WITHDRAWALS FROM TIME TO TIME DURING THE YEAR. THEREFORE IT WAS NO HARM TO CONCLUDE THAT ALL THE DEPOSITS WHICH WERE R EFLECTED IN THE BANK ACCOUNT WERE NOTHING BUT THE INCOME OF THE ASSESSEE COMING FROM HIS ANY UNDISCLOSED SOURCE. THE ASSESSEE ALSO AS PER THE ORDER SHEET NO TING DATED 30.12.2008 STATED THAT ALL THE ABOVE DEPOSITS AND WITHDRAWALS WERE UN DISCLOSED. IN VIEW OF THE ABOVE DISCUSSION IN COMBINATION WITH THE ASSSESSEES FAILURE TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT, THE RATE OF G.P. AS DECLARED BY THE ASSESSEE IN HIS BUSINESS OF EXPORT, IS APPLI ED ON THE TOTAL DEPOSIT OF RS.34,57,000/- WITH UNDISCLOSED BANK ACCOUNT NO.324 10129511 TO ARRIVE AT THE TOTAL INCOME FROM HIS ANY UNDISCLOSED BUSINESS DURI NG THE YEAR. AS PER THE RETURN, THE RATE OF GP WAS DECLARED BY THE ASSESSEE IN RESPECT OF HIS BUSINESS OF EXPORT AT 15.85%. THEREFORE THE TOTAL AMOUNT OF GRO SS PROFIT FOR THE ASSESSEES UNDISCLOSED BUSINESS COMES TO RS.5,47,935/- [RS.34, 57,000/- @ 15.85%]. AN AMOUNT OF RS.8,32,433/- ON ACCOUNT OF UNEXPLAIN ED EXPENDITURE BY OBSERVING AS UNDER :- IT WAS ALSO SEEN FROM THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE ON 30.12.2008 REGARDING WITHDRAWAL FROM THE ABOVE UNDI SCLOSED BANK ACCOUNT THAT THE ASSESSEE PAID RS.5,50,000/- TO ONE SRI UTTAM KU MAR SAHA, RS.2,39,28/- PAID TO VENDOR, RS.1,500/- PAID TO THE STAR AS DONATION, RS.1,123/- PAID TO DP CHARGES DEBITED BY THE ABOVE BANK, RS.8,644/- PAID FOR REFRESHMENT, RS.6,986/- PAID TO ICICI LAMBARD, RS.24,900/- MADE FOR DRAWING . AS ALL THE ABOVE PAYMENTS WERE MADE FROM HIS UNDISCLOSED BANK ACCOUN T WITH STANDARD CHARTERED BANK, CHOWRINGHEE BRANCH, KOLKATA-700016 ACCOUNT NO.32410129511, THE SAME OF RS.8,32,433/- [RS.5,50, 000/- PAID TO SRI UTTAM KUMAR SAHA PLUS RS.2,39,280/- PAID TO VENDOR PLUS R S.1,500/- PAID TO STAR AS DONATION PLUS RS.1,123/- PAID TO DP CHARGES TO BANK PLUS RS.8,644/- PAID AS REFRESHMENT PLUS RS.6,986/- PAID TO ICICI BANK PLUS RS.24,900/- FOR PERSONAL DRAWING] ARE ADDED TO THE TOTAL INCOME OF THE ASSES SEE AS UNDISCLOSED AND UNEXPLAINED EXPENDITURES. AND AN AMOUNT OF RS.6,476/- ON ACCOUNT OF UNEXPLAIN ED INTEREST INCOME BY OBSERVING AS UNDER :- IT WAS ALSO SEEN FROM THE DETAILS OF DEPOSIT MADE WITH UNDISCLOSED BANK ACCOUNT WITH STANDARD CHARTERED BANK, CHOWRINGHEE B RANCH, KOLKATA-700016 ACCOUNT NO.32410129511 THAT THE ASSESSEE RECEIVED O F RS.6476/- AS INTEREST FROM HIS ABOVE UNDISCLOSED BANK ACCOUNT AND THE SAM E OF RS.6,476/- WAS NOT SHOWN BY THE ASSESSEE IN HIS RETURN FOR THE YEAR. 3 3.1. ON APPEAL LD. CIT(A) AFTER TAKING INTO CONSIDE RATION OF THE SUBMISSIONS OF ASSESSEE HAS ENHANCED THE ADDITION OF RS.13,86,844/ - BY AN AMOUNT OF RS.67,86,967/- BY OBSERVING AS UNDER :- BEFORE ME ALSO THE EXPLANATION OFFERED BY THE ASSE SSEE REGARDING THE SOURCES OF DEPOSITS ON THAT ACCOUNT IS NOT SUPPORTE D BY ANY COGENT EVIDENCE. WHATEVER EXPLANATION THE ASSESEE AND HIS A.R. HAVE OFFERED IS NOTHING BUT ONLY UNILATERAL STATEMENT NOT SUPPORTED BY ANY EVIDENCE, THEREFORE, DEVOID OF ANY MERIT. THERE ARE NO CONFIRMATIONS PRODUCED EITHER F ROM SKP SECURITIES LIMITED OR FROM UTTAM SAHA, SUBROTO SAHA, TRADE WING AND HI MANI. THERE ARE NO DETAILS OF SHARES/SECURITIES TRANSACTED BY THE ASSE SSEE ARE PRODUCED, THEREFORE, THE A.R.S CLAIM THAT NO PROFIT WAS EARNED BY THE AS SESSEE FORM THE CLAIMED SHARE TRANSACTIONS REMAINS ONLY UNSUBSTANTIATED. TH ERE IS NO EVIDENCE PRODUCED CONFIRMING ANY SHARE TRANSACTION CARRIED OUT BY THE ASSESSEE. THE ASSESSEE HAD SUBMITTED BEFORE THE AO AN AFFIDAVIT SWORN IN JOINT LY BY 38 PERSONS WHO HAVE CONFIRMED THEREIN TO HAVE CONTRIBUTED A SUM OF RS.1 9,475/- EACH TOTALING TO RS.6,40,050 TOWARDS SHARE TRADING BUSINESS. ANOTHER CHART MARKED AS ANNEXURE D WAS ALSO PRODUCED BY THE A.R. DURING THE APPELL ATE PROCEEDINGS SHOWING THAT THE TOTAL CONTRIBUTION MADE BY THOSE PERSONS D URING THE RELEVANT YEAR WAS TO THE TUNE OF RS.34,57,560/-. THERE ARE NO CONFIRM ATIONS PRODUCED IN RESPECT OF THE BALANCE AMOUNT OF FUNDS CLAIMED TO HAVE BEEN CONTRIBUTED BY THOSE PERSONS. THOUGH NAMES AND ADDRESSES OF THOSE PERSON ARE MENTIONED IN THE SAID AFFIDAVIT THE ASSESSEE HAS NOT BEEN ABLE TO PROVIDE THE CREDITWORTHINESS OF SUCH PERSONS TO MAKE CONTRIBUTION TO THE TUNE OF RS.34,5 7,560/. THUS, THE ASSESSEE HAS NOT BEEN SATISFACTORILY ABLE TO EXPLAIN THE SOU RCES OF THE FUNDS FOUND DEPOSITED IN THE SAID BANK ACCOUNT WITH STANDARD CH ARTERED BANK, CHOWRINGHEE BRANCH. THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING TH E SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE IS ON HIM. 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 OPE N TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCES HAS BEEN HELD IN ROSHAN DI HATTI V. CIT [1977] 107 ITR 938 (SC) AND KALE KHAN MOHAMMAD HANIF V. CIT [1963] 50 ITR 1 (SC). IN THE LIGHT OF THE ABOVE DISCUSSION, SINCE THE ASS ESSEE HAS NOT BEEN SATISFACTORILY ABLE TO EXPLAIN THE SOURCES OF THE F UNDS FOUND DEPOSITED IN THE SAID BANK ACCOUNT WITH STANDARD CHARTERED BANK, CHO WRINGHEE BRANCH, SUCH DEPOSITS ARE HELD TO BE INCOME OF THE ASSESSEE. SIN CE THE TOTAL DEPOSITS FOUND DEPOSITED DURING THE RELEVANT YEAR IN THE SAID BANK ACCOUNT WERE TO THE TUNE OF RS.81,72,811/-, THEREFORE, THIS AMOUNT IS TREATED A S UNEXPLAINED INCOME OF THE ASSESSEE. HOWEVER, AS MENTIONED IN THE ENHANCEMENT NOTICE ISSUED BY ME, WHICH HAS BEEN REPRODUCED ABOVE, SINCE ADDITION TO THE TUNE OF RS.13,86,844/- HAS ALREADY BEEN MADE BY THE A.O. IN THE ASSESSMENT ORDER, THAT ADDITION IS TREATED TO BE INCLUDED IN THE ADDITION OF RS.81,72, 811/-. AS A RESULT THE INCOME 4 OF THE ASSESSEE IS ENHANCED BY AN AMOUNT OF RS.67,8 6,967/-, OVER AND ABOVE THE ADDITION OF RS.13,86,844/- MADE BY THE AO IN THE AS SESSMENT ORDER. AGGRIEVED BY THIS ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE HAS SUBMITTED THAT LD. CIT(A) IS NOT JUSTIFIED IN MAKIN G THE ADDITION OF THE WHOLE DEPOSITS MADE IN THE BANK ACCOUNT AS UNEXPLAINED INCOME IF A T ALL ANY ADDITION IS REQUIRED ON ACCOUNT OF UNEXPLAINED BANK ACCOUNT. THE PEAK CREDI T TO THE SAID ACCOUNT IS SAID TO BE ADDED IN ORDER TO ASCERTAIN THE PEAK CREDIT. HE FIL ED A COPY OF THE BANK STATEMENT WHICH WAS PLACED AT PAGES 6 AND 14 OF THE PAPER BOO K AND COMPUTATION OF PEAK BALANCE WHICH WAS PLACED AT PAGES 22 AND 23 OF THE PAPER BOOK. HE CONTENDED THAT IN THE ABSENCE OF EXPLANATION FROM ASSESEE ONLY THE PE AK CREDIT IN THE UNDISCLOSED BANK ACCOUNT IS TO BE ADDED. 5. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHAL F OF THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES, HOWEVER HAS RAIS ED NO OBJECTION IN ACCEPTING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, WE ACCEPT THE SUBMISSIONS OF T HE LD. COUNSEL FOR THE ASSESSEE THAT ANY BANK ACCOUNT WHICH IS NOT DISCLOSED BY THE ASSE SSEE IN REGULAR BOOKS OF ACCOUNT AND THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPTAB LE TO THE REVENUE AUTHORITIES WE ARE OF THE VIEW THAT THE ONLY PEAK CREDIT APPEARED IN T HE SAID BANK ACCOUNT IS TO BE TREATED AS UNEXPLAINED INVESTMENT. IN THIS CASE, THE PEAK C REDIT AS PER BANK STATEMENT APPEARING AT PAGE NO.9 OF THE PAPER BOOK ON 2 ND SEPTEMBER, 2005 IS RS.9,53,147.35 WHEREAS IN THE COMPUTATION OF PEAK BALANCE WHICH WA S PLACED AT PAGE 22 OF THE PAPER BOOK ASSESSEE HAS SHOWN PEAK BALANCE OF RS.9,15,00 0/-ON 12 TH MAY, 2005. THEREFORE, WE SET ASIDE THIS ISSUE TO THE FILE OF AO TO VERIFY THE SAME FROM THE ORIGINAL BANK STATEMENT AND ADD THE PEAK CREDIT APPEARING IN THE SAID UNDISCLOSED BANK ACCOUNT. 5 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.08.2011. SD/- SD/- [ , ] [ . !., '# ] [ MAHAVIR SINGH ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (!# !# !# !#) )) ) DATE: 18.08.2011. R.G.(.P.S.) '2 0 .3 4'3(5- COPY OF THE ORDER FORWARDED TO: 1. BIJAN SAHA, AMRIT BHABAN, RADHARANI PARK, SREEPUR, HABRA, 24- PARGANAS(N)-743 263. 2 THE I.T.O., WARD-50(2), KOLKATA 3. THE CIT, 4. THE CIT(A)-XXXII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, '2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES