Binodini Pradhan, Khurda V. ITO, Khurda

ITA 138/CTK/2012

• Counselvise Citation: 13822114 RSA 2012
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 13-02-2012
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: P K MISHRA
• Keywords: Unexplained investment; Condonation of delay
• Section: 68

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, ACCOUNTANT MEMBER ITA NO. 138/CTK/2012 (ASSESSMENT YEAR 2006 - 07) SMT.BINODINI PRADHAN, AT: SUNAKERA, BANAPUR, DIST.KHURDA PAN: ALWPP 3044 J VERSUS INCOME - TAX OFFICER , KHURDA WARD, KHURDA. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.K.MISHRA, AR FOR THE RESPONDENT SHRI A.BHATTACHARJEE, DR DATE OF HEARING : 12.03.2012 DATE OF PRONOUNCEMENT : 14.03.2012 ORDER SHRI K.K.GUPTA, AM : THE ASSESSEE HAS F ILED THIS APPEAL BELATED BY 26 DAYS. CONSIDERING THE FACTS STATED IN THE PETITION SEEKING CONDONATION OF DELAY THAT THE ASSESSEE DURING THE RELEVANT TIME WAS UNDER MEDICAL TREATMENT (MEDICAL CERTIFICATE ATTACHED) DUE TO SUFFERING FROM HYPERTENSION AND OTHE R NEUROLOGICAL DECEASES AND WAS ADVISED FOR COMPLETE BED REST FOR A PERIOD OF 3 TO 4 MONTHS, WHICH IN MY VIEW IS REASONABLE, THE DELAY OF 26 DAYS IS CONDONED AND THE APPEAL IS ADMITTED FOR HEARING. 2 . THE ASSESSEE HAS RAISED THE SOLITARY ISSUE THAT THE AUT HORITIES BELOW OUGHT NOT TO HAVE CONSIDERED TAXATION OF THE AMOUNT SHOWN AS OPENING BALANCE ON THE FACTS AND CIRCUMSTANCES OF THE CASE BEING THE BROUGHT FORWARD BALANCE OF INCOMES FROM EARLIER YEARS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE PUT FORTH BRIEF FACTS OF THE CASE OF THE ASSESSEE THAT THE ASSESSEE DERIVES INCOME FROM COMMISSION AND FILED ITS RETURN OF INCOME OF 1,34,982 WHEN THE ASSESSING OFFICER OBTAINING INFORMATION FROM OSCSC LTD BEING COMMISSION RECEIVED FROM THEM AMOUNTING TO 3,74,743 WHEN THE NET INCOME HAS BEEN SHOWN AT 1,34,982. THE ASSESSEE HAD CLAIMED EXPENSES BEING HOUSE RENT, SALARY TO STAFF, TE LEPHONE CHARGES, LOADING AND UNLOADING CHARGES AND OTHER MISC. EXPENSES ITA NO.138/CTK/2012 2 WHEN HE DISALLOWED 10% THEREOF. SIMILARLY, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEES CAPITAL BALANCE AS O N 1.4.2005 WAS 1,28,400. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO JUSTIFY THE CAPITAL BROUGHT FORWARD WHEN HE ESTIMATED AVAILABILITY OF CAPITAL AT 60,000 ONLY. A SUM OFRS.68,400 WAS BROUGHT TO TAX AS UNEXPLAINED INVESTMENT. THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHEN HE DELETED THE ADDITION OF 10% DISALLOWANCE OF EXPENSES. HOWEVER, HE CONFIRMED THE ADDITION OFRS.68,400 BY HOLDING A VIEW THAT THE INCOME HAS BEEN TAXED U/S.68 AGAINST WHICH THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH ANY EXPLANATION. 4. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE INCOME, IF ANY, CANNOT BE TAXED U/S.68 IN THIS YEAR AS BOTH THE AUTHORITIES ACCEPTS THAT IT IS THE BROUGHT FORWARD CAPITAL BALANCE OF THE EARLIER YEAR. THE ASSESSING OFFICER ASSUMED THAT THE ASSESSEE OUGHT TO HAVE CONDUCTED HIS BUSINESS FR O M 60,000 ONLY WHEN THE ASSESSEE WAS HOLDING ASSETS BEING PLACED IN BANK BALANCE AND CASH BALANCE ALONG WITH OTHER ASSETS AGAINST THAT CAPITAL. THEREFORE, IT WAS NOT THE CASE OF THE LEARNED CIT(A) ALSO TO HOLD THAT THE ADDITION WAS MADE U/S.68 WHEN THE AS SESSING OFFICER HAS CATEGORICALLY GIVEN A FINDING THAT 60,000 IS EXPLAINED. MERE ASSUMPTION AND SURMISES CANNOT BE DISCHARGED BY THE ASSESSEE WHICH ONUS LAY UPON HIM UNDER THE PROVISIONS OF SECTION 68. A SUM OF 1,28,400 IS A MERE AMOUNT WHEN THE ASSESS EE IS RENDERING INCOME FOR THE PAST SEVERAL YEARS AND HAVE GENERATED SUFFICIENT FUNDS OF INCOME AND WAS ABLE TO HOLD ASSETS AGAINST THE SAID CAPITAL CANNOT BE SET BACK ON ASSUMPTION OF THE ASSESSING OFFICER THAT 68,500 REMAINED UNEXPLAINED. PARTLY ACCEPT ING THE CONTENTION OF THE ASSESSEE, THEREFORE, SHOULD NOT HAVE BEEN CONFIRMED BY THE LEARNED CIT(A) U/S.68. HE PRAYED THAT THE SAID ADDITION MAY BE DELETED AS IT CAN, BY NO STRETCH OF IMAGINATION, BE TAXED IN THE IMPUGNED ASSESSMENT YEAR. ITA NO.138/CTK/2012 3 5. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM INCLINED TO UPHOLD THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE INSOFAR AS THE ASSESSMENT U/S.147 WAS MADE ON THE SPECIFIC FINDING BY THE ASSESSING OFFICER THAT THE ASSESSEE WHO HAS BEEN EARNING COMMISSION HAD INCURRED EXPENDITURE FOR RENDERING INCOME WHICH WAS ACCEPTABLE TO THE ASSESSI NG OFFICER AS WAS IN THE ORIGINAL ASSESSMENT. THEREORE, IT WAS NOT THE CASE FOR THE ASSESSING OFFICER TO DOUBT FOR ASSUMING THAT THE ASSESSEE COULD NOT HAVE THE OPENING CAPITAL BALANCE OF 1,28,400. HAVING RAISED A DOUBT, THE ASSESSING OFFICER THEREFORE O UGHT NOT TO HAVE ALLOWED 60,000 AS EXPLAINABLE UNDER THE PROVISIONS OF SECTION 68 OF THE I.T.ACT. IT WAS NOT THE CASE OF THE ASSESSING OFFICER TO PASS THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR HOLDING A VIEW THAT 68,400 BEING THE AMOUNT AVAILABLE TO THE ASSESSEE WAS BELOW TAXABLE LIMIT FOR THE EARLIER YEARS COULD NOT HAVE BEEN REMAINED UNEXPLAINED BEFORE THE ASSESSING AUTHORITIES. THE LAW PROVIDES TO TAX INCOME UNDER THE SPECIFIC PROVISIONS WHICH THE LEARNED CIT(A) AND THE ASSESSING OFFICER HAVE F AILED TO ESTABLISH INSOFAR AS IT WAS NOT AN ADDITION TO THE CAPITAL IN THE IMPUGNED ASSESSMENT YEAR TO BE TAXED U/S.68. IN VIEW OF ABOVE, I DO NOT FIND ANY MERIT IN THE ADDITION MADE BY THE AUTHORITIES BELOW AND AS SUCH, THE SAME IS DELETED BY ALLOWING THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 14.03.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. ITA NO.138/CTK/2012 4 COPY OF THE ORDER FORWARDED TO : 1. THE A PPELLANT: SMT.BINODINI PRADHAN, AT: SUNAKERA, BANAPUR, DIST.KHURDA 2. THE RESPONDENT: INCOME - TAX OFFICER , KHURDA WARD, KHURDA. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.