Shri Bimal Singh Kothari, Kolkata V. ITO, Ward - 43(1), Kolkata, Kolkata

ITA 1342/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5853 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Keywords: Unexplained investment; Salary income
• Section: 143(3); 142(1); 69

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI, M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 1342 / KOL / 20 17 ASSESSMENT YEAR :2013-14 SHRI BIMAL SINGH KOTHARI MAHALCHAND MOTILAL KOTHARI & CO. 207, M.D. ROAD, KOLKATA-700007 [ PAN NO.AILPK 8939 P ] V/S . INCOME TAX OFFICER, WARD-43(1), 3 GOVERNMENT PLACE, KOLKATA-001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SUNIL SURANA, FCA /BY RESPONDENT SHRI S. DASGUPTA, ADDL. CIT-DR /DATE OF HEARING 28-06-2018 /DATE OF PRONOUNCEMENT 20-07-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKATAS ORDER DATED 28.02.2017 PASSED IN CASE NO.32/CIT(A)-13/KOL/2015-16, UPHOLDI NG ASSESSING OFFICERS ACTION ADDING UNEXPLAINED CASH DEPOSITS OF 16,21,000/- AND 34,75,000/- TOTALING TO 50,96,000/-, IN PROCEEDINGS U/S 143(3) OF THE INCOM E TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO THE ASSESSMENT ORDER DATED 03.03.20 16. THERE IS NO DISPUTE THAT THE ASSESSEE HAD INDEED MADE CASH DEPO SITS OF 16,21,000/- AND ITA NO.1342/KOL/2017 A.Y.2013- 14 SH BIMAL SINGH KOTHARI VS. ITO WD-43(1), KOL. PAG E 2 34,75,000/- IN HIS SAVING BANK ACCOUNT MAINTAINED W ITH BANK OF BARODA AND HDFC BANK LTD; RESPECTIVELY. THE ASSESSING OFFICER ISSUED SECTION 142(1) NOTICE SEEKING TO KNOW ABOUT THE SOURCE OF THE SAID DEPOSITS. HE RECORDS IN PARA-4 IN HIS ORDER THAT THE ASSESSEE FAILED TO FIL E HIS REPLY TO THE SAID SHOW- CAUSE NOTICE. THIS MADE THAT THE ASSESSING OFFICER TO TREAT THE ABOVE DEPOSITS AS UNDISCLOSED CASH INCOME TO THE TUNE OF 50,96,000/- INVITING ADDITION U/S. 69 OF THE ACT AS UNDISCLOSED INVESTMENTS. 3. THE CIT(A) AFFIRMS ASSESSING OFFICERS ACTION AS UNDER:- 5. I HAVE GONE THROUGH THE CONTENTION OF THE ASSESS EE, THE ORDER PASSED BY THE AO AND THE SUBMISSIONS MADE BY THE APPELLANT. T HE DECISION OF THIS APPEAL IS GIVEN AS UNDER:- IN THIS CASE THE APPELLANT HAS RAISED VARIOUS GROUN DS OF APPEAL WHICH AROSE ON ACCOUNT OF ADDITION OF RS.16,21,000/- & RS.34,75 ,000/- AS UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT WHICH WERE NOT EXP LAINED BEFORE THE AO. WHILE MAKING THE ADDITION IT WAS OBSERVED BY THE AO THAT FROM THE AIR INFORMATION THAT THE ASSESSEE HAS DEPOSITED RS.50,9 6,000/- IN CASH IN THE FOLLOWING BANK ACCOUNT MAINTAINED BY THE APPELLANT DURING THE YEAR. SL NO. NAME OF BANK AND BRANCH ADDRESS TYPE OF ACCOUNT DETAILS OF CASH DEPOSITS TOTAL CASH DEPOSITS 1 BANK OF BARODA, FORT UNIVER BRANCH, C-26, 2, BARODA CORPORATE CENTRE, BKC, MUMBAI-400051 SAVING BANK RS.16,21,000/- DT. 31.03.13 RS.16,21,000/- 2 HDFC BANK LIMITED TULSIANI CHAMBER, NARIMAN POIT 101104, FREE PRESS JOURNAL MARG, MUMBAI-400 013 SAVING BANK RS.34,75,000/- DT.31.03.13 RS.34,75,000/- THE AO ISSUED SHOW CAUSE NOTICE FOR EXPLAINING THE AFORESAID CASH DEPOSIT IN SPITE OF SEVERAL OPPORTUNITIES PROVIDED TO THE APPE LLANT. THE APPELLANT DID NOT COME FORWARD TO EXPLAIN THE AFORESAID CASH DEPOSIT. THEREFORE, THE AO ADDED THE AFORESAID AMOUNT. AT APPELLATE STAGE ALSO THE A PPELLANT DID NOT ESTABLISHED ITS BUSINESS ACTIVITY. NO PROOF OF SALE PURCHASE SUBMITTED. ONLY BANK ACCOUNT WAS SUBMITTED. PERUSAL OF BANK ACCOUNT SUBMITTED BEFORE THE AO AND UNDER SIGNED SHOWS THAT CASH HAS BEEN DEPOSITED AND CHEQUE HAS BEEN IS SUED THE APPELLANT CANNOT CLAIM THAT CASH DEPOSITS WAS MADE OUT OF CAS H WITHDRAWAL BECAUSE ALL THE MONEY HAS BEEN UTILIZED BY THE CHEQUE TRANSFER. DURING THE COURSE OF APPELLATE PROCEEDING THE APPELLANT CLAIMED THAT THE APPELLANT WAS HAVING OPENING BALANCES AND THEREFORE RS.30.51 LAC WAS HIS OPENING BALANCE AND TO THAT EXTENT THE APPELLANT ASKED FOR THE CREDIT. PERUSAL OF ITR OF SRI BIMAL SINGH RAICHAND KOTHARI SHOWS THAT HE HAS EARNED INCOME OF RS.2,97,000/- FOR ASSESSMENT YEAR 2013-14 . THE APPELLANT HAS SHOWN TWO HEAD FOR THE AFORESAID INCOME ONE IS INCO ME FROM SALARY OF ITA NO.1342/KOL/2017 A.Y.2013- 14 SH BIMAL SINGH KOTHARI VS. ITO WD-43(1), KOL. PAG E 3 RS.1,20,00/- AND ANOTHER ONE IS INCOME FROM HOUSE P ROPERTY OF RS.1,77,208/-. DURING THE APPELLATE PROCEEDING THE CLIME OF THE AP PELLANT WAS NOT FOUND SUPPORTED BY THE EARLIER WITHDRAWALS. THE APPELLANT HAS SUBMITTED THAT MONEY WAS OUT OF HIS BUSINESS BUT HIS RETURN OF INCOME WH ICH HAS BEEN FILLED NEVER SPEAKS ABOUT ANY KIND OF BUSINESS. THE APPELLANT HA S FAILED TO ESTABLISH THE BUSINESS ACTIVITY OF HIMSELF. HAD IT BEEN GENUINE B USINESS THE APPELLANT SHOULD HAVE SHOWN SALE AND PURCHASE OF THE BUSINESS . NO DETAILS WERE FILED BEFORE THE AO NOR IT WAS DURING THE APPELLATE PROCE EDING. THE APPEAL WAS FILLED ONLY FOR THE SAKE OF ARGUMENT WITHOUT ANY SU BSISTENCE EVIDENCES. AT APPELLATE PROCEEDING KEEPING IN VIEW OF HIS SALA RY INCOME AND HOUSE PROPERTY IT WAS ASKED AS HOW THE APPELLANT HAS WITH DRAWN RS.30,51,000/- IN PREVIOUS YEAR AND WHAT WAS THE SOURCE OF IT WHEREAS HIS SALARY INCOME WAS OF RS.2,97,000/- ONLY. THE APPELLANT KEPT QUIET OVER T HIS ISSUE. IN VIEW OF ABOVE THE ACT THAT THE APPELLANT DID NOT ESTABLISH THAT I T WAS HIS BUSINESS ACTIVITY AND CASH DEPOSIT WAS OUT OF HIS SALE. THE APPELLANT, ON THE CONTRARY, IS A SALARY EMPLOYEE WHO HAS A MEAGER INCOME AND THE SOURCE OF THE SO-CALLED CLAIM WITHDRAWAL AS OPENING BALANCE OF EARLIER YEAR HAS N OT BEEN PROVED AND NEITHER IT WAS THE CAPACITY OF THE APPELLANT WHO HA VE SUCH HUGE CASH IN HAND WITHOUT ANY PURPOSE OR SOURCE. KEEPING IN VIEW OF T HE AFORESAID FACTS AND THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SARWANKUMAR SHARMA, APPEAL NO. 252 O F 2014 DATED 15.07.2014M 49 TAXMAN 101 WHERE IT HAS HELD THAT AS SESSEE DECLARING INCOME FROM SALARY AND INTEREST, WAS FOUND IN POSSE SSION OF CERTAIN CASH, IN VIEW OF FACT THAT ASSESSEE FAILED TO BRING ANY EVID ENCE ON RECORD IN SUPPORT OF HIS EXPLANATION THAT SAID AMOUNT BELONGED TO HIS BU SINESS TRANSACTIONS, AO WAS JUSTIFIED IN ADDING SAME TO ASSESSEES TAXABLE INCOME AS UNEXPLAINED MONEY SECTION 69A OF THE INCOME TAX ACT, 1961. IN T HIS CASE THE APPELLANT WAS SHOWING INCOME FROM SALARY AND INTEREST IN CO URSE OF ASSESSMENT, ASSESSING OFFICER FOUND THAT ASSESSEE HAD A BANK AC COUNT IN WHICH A SUM OF RS.45 LAKH WAS DEPOSITED ASSESSEE EXPLAINED THAT SAID MOUNT BELONGED TO ITS BUSINESS TRANSACTIONS RELATING TO SALE OF CLOTH ASSESSING OFFICER HAVING REJECTED ASSESSEES EXPLANATION, ADDED AMOUNT DEPOS ITED IN BANK TO ASSESSEES INCOME UNDER SECTION 69A WHETHER SINCE ASSESSEE HAD NOT PRODUCED A SINGLE DOCUMENT TO SUBSTANTIATE HIS CASE THAT HE WAS ALSO ENGAGED IN BUSINESS OF TRADING ACTIVITIES OF ART SI LK, CLOTH, IMPUGNED ADDITION WAS TO BE CONFIRMED. THE HON'BLE HIGH COURT HELD THAT: IT WAS FOR THE ASSESSEE TO ESTABLISH AND PROVE BY LEADING EVIDENCES AND PRODUCING RELEVANT MATERIAL AND DOCUMENTARY EVI DENCES THAT THE AFORESAID CASH DEPOSITS IN THE BANK ACCOUNT WAS HIS UNDISCLOSED INCOME WITH RESPECT TO THE UNDISCLOSED BUSINESS OF TRADING IN ART SILK CLOTH IN THE CASE OF MODI STONE LTD. (SUPRA), THE DELHI HIGH COURT HAS OBSERVED AND HELD THAT THE ONUS IS UPON THE ASSESSE E TO PROVE THE ALLEGED PAYMENT. IN THE SAID CASE THE ASSESSEE CLAI MED DEDUCTION OF COMMISSION PAYMENTS UNDER HEAD COMMISSION/DISCOUNT . A SIMILAR VIEW HAS BEEN TAKEN BY THE PUNJAB & HARYANA HIGH CO URT IN THE CASES OF DAYAL SINGH AND SONS (SUPRA) AND SANJAY CHHABRA (SUPRA). IN THE AFORESAID TWO DECISIONS THE PUNJAB & HARYANA HIGH C URT HAS HELD THAT ITA NO.1342/KOL/2017 A.Y.2013- 14 SH BIMAL SINGH KOTHARI VS. ITO WD-43(1), KOL. PAG E 4 WHEN UNEXPLAINED INVESTMENT / UNACCOUNTED SALES ARE NOT SUBSTANTIATED, THE ENTIRE INVESTMENT IS TO BE ADDED UNDER SECTION 69A OF THE IT ACT AND NOT MERELY SALES COMMISSION. KEEPING IN VIEW OF THE AFORESAID FACTS THE DECISION OF THE HONOURABLE GUJARAT HIGH COURT IT I FOUND THAT THE ARGUMENT OF ASSESSEE IS WITHOUT ANY BASIS THEREFORE THE ADDITION MADE BY THE AO IS HEREBY UPH ELD AND THE GROUND OF APPEAL IS HEREBY DISMISSED. ALL THE GROUNDS OF THIS APPEAL ARE HEREBY DISMISSED. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS AGAINST AND IN FAVOUR OF THE IMPUGNED ADDITION. THE QUESTIO N THAT ARISES FOR OUR APT ADJUDICATION IS AS WHETHER ASSESSEE HAS BEEN ABLE T O EXPLAIN SOURCE OF ABOVE STATED CASH DEPOSITS OR NOT. WE COME TO ASSESSEES PAPER BOOK COMPRISING OF HIS CASH ACCOUNT FROM 1.4.12 TO 31.03.2013, HDFC BA NKS STATEMENT FOR THE RELEVANT ACCOUNTING PERIOD, THE SAID BANKS LEDGER ACCOUNT, BANK STATEMENT AS WELL AS LEDGER ACCOUNT OF THE OTHER BANK I.E. BANK OF BARODA AND HIS ACKNOWLEDGEMENT OF FILING OF INCOME TAX RETURN, PRO FIT AND LOSS ACCOUNT AND BALANCE-SHEET FOR AY 2012-13; RESPECTIVELY. IT EMER GES THEREFROM THAT ASSESSEES CASH-IN-HAND AT THE END OF RELEVANT ACCO UNTING PERIOD OF 80,24,699.63. HIS CASH BOOK AT PAGE 8 REVEALS DEBIT WITHDRAWALS OF 54.66,819.02 UP TO 21.04.2012. COUPLED WITH THIS, H IS OPENING CASH BALANCE AS ON 01.04.2012 AS PER BALANCE-SHEET FOR THE ACCOU NTING PERIOD ENDING 31.03.2012 IS 31,01,142.55. ALL THIS SUFFICIENTLY INDICATES THE A SSESSEE TO BE HAVING CASH-IN-HAND EXCEEDING TWO SUMS OF 16,21,000/- AND 34,75,000/- (SUPRA). 5. LEARNED. DEPARTMENTAL REPRESENTATIVE AT THIS STA GE INVITES OUR ATTENTION TO CIT(A)S DETAILED FINDINGS EXTRACTED HEREINABOVE . HIS CASE IS THAT ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS IN THE RELEVANT PR EVIOUS YEAR AS HE HAS DERIVED ONLY SALARY AND HOUSE PROPERTY INCOME. WE F IND NO MERIT IN REVENUES INSTANT ARGUMENT AS THE SOLE ISSUE BEFORE US IS THA T OF EXPLANATION OF THE IMPUGNED CASH DEPOSITS OF 50,96,000/- WHICH HAVE BEEN SUFFICIENTLY EXPLAINED AS PER ABOVE STATED INCOME TAX RETURN, BA LANCE-SHEET, PROFIT AND ITA NO.1342/KOL/2017 A.Y.2013- 14 SH BIMAL SINGH KOTHARI VS. ITO WD-43(1), KOL. PAG E 5 LOSS ACCOUNT, CASH BOOK AND BANK STATEMENTS VIS--V IS THE CORRESPONDING LEDGER BOOKS. WE THEREFORE HOLD THAT THE ASSESSEE H AS BEEN ABLE TO EXPLAIN SOURCE OF HIS IMPUGNED CASH DEPOSITS. THE IMPUGNED ADDITION FORMING SUBJECT MATTER OF CHALLENGE IS DELETED. 6. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 20 /07/2018 SD/- SD/- ( %) (' %) (M.BALAGANESH) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 20 / 07 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI BIMAL SINGH KOTHARI, C/O MAHALCHAND MOTILAL KOTHARI & CO. 207, M.D. ROAD, K OLKATA-007 2. /RESPONDENT-ITO, WARD-43(1), 3, GOVT. PLACE, KOLKAT A-001 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,