DCIT, CIR-2, Siliguri, Siliguri V. Shri Rupen Das, Siliguri

ITA 1393/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1759 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 16-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 19-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Capital asset; Additional evidence; Cost of acquisition; Bad and doubtful debts; Bogus loan
• Section: 80C; 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 1393/KOL/20 14 ASSESSMENT YEAR : 2010-1 1 DCIT, CIRCLE-2, SILIGURI -VS- RUP EN DAS [PAN: ACLPD 1053 B] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI DAVID Z. CHOWN GTHU, ADDL. CIT,SR. DR FOR THE RESPONDENT : SHRI SUBASH AGARWAL, ADV OCATE DATE OF HEARING : 14.08.2017 DATE OF PRONOUNCEMENT : .09.2017 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGURI [IN SHORT THE LD C ITA] IN APPEAL NO. 06/CIT(A)/SLG/2013-14 DATED 26.03.2011 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE-2, SILIGURI [ IN SHORT THE LD AO] UNDER SECT ION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 18.03.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION MADE IN THE SUM OF RS 15,0 0,000/- TOWARDS UNSECURED LOAN IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF PROTECTIVE GUARD SERVICES AND OTHER ALLIED SERVICES UNDER THE NAME AND STYLE OF NORTH BENGAL SECURITY SERVICE ( NBSS). THE RETURN OF INCOME FOR THE ASST YEAR 2010-11 WAS FILED ON 26.3.2011 DECLARING TOTAL INCOME OF RS 18,40,390/-.THE CASE WAS SELECTED 2 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 2 FOR SCRUTINY AND THE LD AO OBSERVED IN HIS ASSESSME NT ORDER THAT THE BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE WERE PERUSED AND THAT TEST CHECKS OF EXPENDITURE WERE CONDUCTED BY HIM, REPLIES FAND RECONCILIATION STATE MENTS WERE OBTAINED FROM THE ASSESSEE FROM TIME TO TIME. THE LD AO OBSERVED THA T THE ASSESSEE HAD RECEIVED UNSECURED LOANS OF RS 3,00,000/- FROM SRI ASHIT PAT RA (FRIEND OF ASSESSEE) ; RS 8,00,000/- FROM SMT RAKHI DAS (WIFE OF ASSESSEE) AN D RS 4,00,000/- FROM SMT USHA RANI DAS (MOTHER OF ASSESSEE) . THE LD AO DIRECTED THE ASSESSEE TO PRODUCE THESE PERSONS FROM WHOM LOANS WERE TAKEN DURING THE FINAN CIAL YEAR 2009-10 ALONG WITH THE FOLLOWING DOCUMENTS :- A) VOTERS IDENTITY CARD B) PAN CARD C) ORIGINAL PASS BOOK FROM WHICH LOAN WAS GIVEN D) COPY OF LAST THREE YEARS INCOME TAX RETURN WITH ALL DETAILS THE LD AO TREATED THE LOANS RECEIVED FROM AFORESAID THREE PARTIES AS BOGUS LOANS AND ADDED TO THE INCOME OF THE ASSESSEE BECAUSE THE ASS ESSEE DID NOT PRODUCE THESE PERSONS BEFORE THE LD AO. 2.2. BEFORE THE LD CITA, THE ASSESSEE PRODUCED THE ENTIRE DETAILS OF ALL THESE THREE PERSONS PROVING THE IDENTITY AND CREDITWORTHINESS O F THE PARTIES TOGETHER WITH THE GENUINENESS OF TRANSACTIONS. THE LD CITA CALLED FO R A REMAND REPORT FROM THE LD AO IN RESPECT OF WRITTEN SUBMISSIONS FILED BY THE ASSESSE E AND THE DOCUMENTARY EVIDENCES FILED IN THAT REGARD. 2.2.1. THE ASSESSEE SUBMITTED THAT HE HAD TAKEN AN UNSECURED LOAN OF RS 4,00,000/- FROM HIS MOTHER SMT USHA RANI DAS IN THE NAME OF HIS BUS INESS NBSS ON 19.3.2010 BY ACCOUNT PAYEE CHEQUE, WHICH HAD BEEN DULY REFLECTED IN THE BANK STATEMENT OF THE SAID LOAN CREDITOR AS WELL AS IN HER BALANCE SHEET AS AT 31.3.2010. IT WAS ALSO SUBMITTED THAT 3 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 3 SMT USHA RANI DAS IS AN ASSESSEE FOR LAST MANY YEAR S, ASSESSED UNDER PAN ADPPD5421N AT WARD 1(2), SILIGURI HAVING HER PERMAN ENT RESIDENCE AT RAMKRISHNA ROAD, ASHRAMPARA, SILIGURI AS PER HER BANK ACCOUNT AND INCOME TAX RETURN ACKNOWLEDGEMENTS. SHE HAD AN OPENING BALANCE OF RS 7,24,190/- AS ON 1.4.2009 IN HER HAND AS PER HER INCOME TAX RECORD AND SHE HAD EARNE D A SUM OF RS 2,16,000/- DURING THE YEAR FROM SALARY AND A SUM OF RS 41/- FROM INTEREST . OUT OF HER ACCUMULATED BALANCE OF RS 7,24,190/- AS ON 1.4.2009 AND ALSO OUT OF HER IN COMES FOR THE YEAR, SHE HAD PROVIDED A LOAN OF RS 4,00,000/- TO HER SON BY ACCOUNT PAYEE CHEQUE ISSUED FROM HER BANK ACCOUNT. HENCE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN WAS PROVED BEYOND DOUBT. 2.2.2. THE ASSESSEE SUBMITTED THAT HE HAD TAKEN AN UNSECURED LOAN OF RS 8,00,000/- FROM HIS WIFE SMT RAKHI DAS BY ACCOUNT PAYEE CHEQUE, WHI CH HAD BEEN DULY REFLECTED IN THE BANK STATEMENT OF THE SAID LOAN CREDITOR AS WELL AS IN HER BALANCE SHEET AS AT 31.3.2010. IT WAS ALSO SUBMITTED THAT SMT RAKHI DAS IS AN ASSE SSEE FOR LAST MANY YEARS, ASSESSED UNDER PAN ACLPD1052A AT WARD 2(2), SILIGURI HAVING HER PERMANENT RESIDENCE AT RAMKRISHNA ROAD, ASHRAMPARA, SILIGURI AS PER HER BA NK ACCOUNT AND INCOME TAX RETURN ACKNOWLEDGEMENTS. SHE HAD AN OPENING BALANCE OF RS 16,31,646/- AS ON 1.4.2009 IN HER HAND AS PER HER INCOME TAX RECORD AND SHE HAD E ARNED A SUM OF RS 1,60,000/- DURING THE YEAR FROM SALARY , INCOME FROM HOUSE PROPERTY O F RS 1,20,000/- , INCOME FROM HER BUSINESS (REAL SUPERVISORY) FOR RS 3,75,299/- AND A SUM OF RS 1,441/- FROM INTEREST ON SB A/C. AFTER STANDARD DEDUCTION OF RS 36,000/- FRO M HER RENTAL INCOME AS PER LAW, SHE HAD FILED A RETURN OF HER INCOME OF RS 6,20,740/- . IT IS PERTINENT TO MENTION HERE THAT ALL OF HER RECEIPTS FROM HER BUSINESS , REAL SUPERVISOR Y, WERE SUBJECT TO DEDUCTION OF TAX AT SOURCE. THERE WAS NO ABOUT HER IDENTITY, SOURCE OF INCOME AND PROVIDING A LOAN OF RS 8,00,000/- TO HER HUSBAND, THE ASSESSEE HEREIN, WHI CH WAS PAID BY HER THROUGH AN ACCOUNT PAYEE CHEQUE. HENCE THE IDENTITY, CREDITWOR THINESS AND GENUINENESS OF THE LOAN WAS PROVED BEYOND DOUBT. 4 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 4 2.2.3. THE ASSESSEE SUBMITTED THAT HE HAD TAKEN AN UNSECURED LOAN OF RS 3,00,000/- FROM HIS FRIEND SRI ASHIT PATRA BY ACCOUNT PAYEE CHEQUE, WHICH HAD BEEN DULY REFLECTED IN THE BANK STATEMENT OF THE SAID LOAN CREDITOR AS WELL AS IN HER BALANCE SHEET AS AT 31.3.2010. IT WAS ALSO SUBMITTED THAT SRI ASHIT PATRA IS AN AS SESSEE IN PAN AEOPP4343P AT WARD 1(1), SILIGURI HAVING HER PERMANENT RESIDENCE AT SA RODAMONI RAOD, ASHRAMPARA, SILIGURI AS PER HER BANK ACCOUNT WHICH WAS OPENED O N 25.7.1995 WITH CANARA BANK AND ALSO AS PER HER INCOME TAX RETURN ACKNOWLEDGEMENTS. SHE HAD AN OPENING BALANCE OF RS 5,52,384/- AS ON 1.4.2009 IN HIS HAND AS PER HER IN COME TAX RECORD AND SHE HAD EARNED A TOTAL INCOME OF RS 1,89,044/- DURING THE YEAR, INCL UDING BANK INTEREST OF RS 5,252/- , INCOME FROM PLYING OF VEHICLE OF RS 1,33,500/- , IN COME FROM SALARY FOR RS 45,292/-. OUT OF HIS ACCUMULATED BALANCE OF CAPITAL OF RS 5,5 2,384/- AND ALSO FROM HIS INCOME OF RS 1,89,044/- DURING THE YEAR, HE HAD GIVEN A LAON OF RS 3,00,000/- BY ACCOUNT PAYEE CHEQUE ISSUED FROM HIS BANK ACCOUNT. HENCE THE I DENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN WAS PROVED BEYOND DOUBT. 2.3. IT WAS ARGUED THAT BASED ON THE AFORESAID ARGU MENTS WHICH ARE SUPPORTED BY NECESSARY DOCUMENTARY EVIDENCES ENCLOSED IN THE PAP ER BOOK, THAT REQUIREMENT OF CASH CREDIT U/S 68 OF THE ACT WERE FULLY COMPLIED WITH B Y THE ASSESSEE. THE ASSESSEE ALSO STATED THAT HE IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE FOR WHICH HE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- A) NEMI CHAND KOTHARI VS CIT (2003) 264 ITR 254 (GA U) B) ARAVALI TRADING CO. VS ITO (2008) 220 CTR (RAJ) 622 C) KANHAIALAL JANGID VS ACIT (2008) 217 CTR (RAJ) 3 54 D) CIT VS LAUL TRANSPORT CORPORATION (2009) 180 TAX MAN 185 (P&H) E) CIT VS REAL TIME MARKETING (P) LTD (2008) 306 IT R 35 (DEL) F) LABH CHAND BOHRA VS ITO (2008) 8 DTR (RAJ) 44 G) DAULAT RAM RAWATMULL (1973) 87 ITR 349 (SC) H) ORIENT TRADING CO. LTD VS CIT (1963) 49 ITR 723 (BOM) 5 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 5 I) SAROGI CREDIT CORPORATION VS CIT (1976) 103 ITR 344 (PAT) J) ASHOK PAL DAGA VS CIT (1996) 220 ITR 452 (MP) K) TOLARAM DAGA VS CIT (1966) 59 ITR 622 L) S.HASTIMAL VS CIT (1963) 49 ITR 273 (MAD) M) CIT VS RAM NARAIN GOEL (1997) 224 ITR 180 (P& H) N) SUMERCHAND JAIN VS CIT (2007) 292 ITR 241 (MP) 2.4. THE ASSESSEE FURTHER STATED THAT MERELY BECAUS E CASH WAS DEPOSITED JUST BEFORE ISSUANCE OF CHEQUE TO THE ASSESSEE, THE LOAN CANNOT BE REJECTED AND ADDED TO THE INCOME OF THE ASSESSEE FOR WHICH RELIANCE WAS PLACED ON TH E FOLLOWING DECISIONS:- A) ITO VS BHATIA ENTERPRISES (2003) 81 TTJ (CHD) 50 3 B) BHAGAWANDAS SHARDA VS ACIT (2004) 82 TTJ (HYD) 9 82 C) SMT SHANTI DEVI VS ITO (2004) 90 TTJ (AGRA) 651 D) ITO VS M.S.ADVANCE (P) LTD (2005) 93 TTJ (ASR) 7 78 E) UMESH ELECTRICALS VS ACIT (2011) 141 TTJ (AGRA)( TM) 288 F) SMT ARUN DEVI BANSAL VS ITO IN ITA NO. 455/KOL/2 010 2.5. THE ASSESSEE FILED THE COPY OF INCOME TAX RETU RN OF LOAN CREDITORS FOR ASST YEAR 2010-11 TOGETHER WITH COMPUTATION OF THEIR TOTAL IN COME, BALANCE SHEET AS AT 31.3.2010 CLEARLY REFLECTING THE LOAN GIVEN TO ASSESSEE AND T HE RELEVANT PAGE OF BANK STATEMENT OF THE LOAN CREDITORS REFLECTING THE LOAN TRANSACTION GIVEN TO ASSESSEE AND CONFIRMATION OF BALANCE FROM THE LOAN CREDITORS. THE LD CITA PLACE D RELIANCE ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF DATAWARE PVT LTD VS CIT IN ITAT NO. 263 OF 2011 , GA NO. 2856 OF 2011 DATED 21.9.2011 AND D ELETED THE ADDITION. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 1. THAT THE LD. CIT(A) HAS ERRED IN FACT IN LAW, IN RELYING ON THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT, IN DATAWARE PVT. LTD VS. CIT (ITAT NO. 263 OF 2011; GA NO. 2856 OF 2011) WITHOUT APPRECIATING THE FACT THAT IN THE INSTANT 6 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 6 CASE, THE ASSESSEE HAD FAILED TO PRODUCE THE ALLEGE D LOAN CREDITORS DESPITE BEING REQUIRED BY THE ASSESSING OFFICER (AO) TO DO SO. 2.6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD DR VEHEMENTLY RELIED ON THE ORDER OF THE LD AO. WE FIND THAT THE LD CITA HAD DELETED TH E ADDITION AFTER DUE APPRECIATION OF VARIOUS DOCUMENTS AND EVIDENCES FILED ON RECORD AND HAD PLACED RELIANCE ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF DATAWARE PVT LTD SUPRA. MOREOVER, IT CANNOT BE DENIED THAT THE ASSESSEE IN THE INSTANT CASE HAD BORROWED LOAN FROM HIS WIFE, MOTHER AND HIS FRIEND. THE VARIOUS DOCUMENTARY EVIDENCES ALREADY PLACED ON RECORD BEFORE THE LOWER AUTHORITIES WHICH WERE HEAVILY RELIED UPON BY THE ASSESSEE HAD NOT BEEN CONTROVERTED BY THE LD DR BEF ORE US. THE LD DR WAS ALSO NOT ABLE TO BRING ANY OTHER CONTRARY DECISION TO THIS EFFECT . IN VIEW OF UNCONTROVERTED FACTS, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WIT H THE ORDER OF THE LD CITA IN THIS REGARD. ACCORDINGLY, THE GROUND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 3. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN DIRECTING THE LD AO TO GIVE DEDUCTION TOWARDS BA D DEBTS WRITTEN OFF IN THE SUM OF RS 4,31,162/- AFTER EXAMINATION OF THE BOOKS OF THE AS SESSEE WITH REGARD TO ACTUAL WRITE OFF, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. THE LD AO OBSERVED THAT THE ASSESSEE HAD CLAIM ED DEDUCTION TOWARDS SUNDRY BALANCES WRITTEN OFF IN THE SUM OF RS 4,31,162/- WH ICH WAS EXPLAINED THAT THE SAME REPRESENTS AMOUNTS DEDUCTED BY VARIOUS PARTIES INCL UDING BANKS FOR DEFECT IN CERTAIN SECURITY AND ALLIED SERVICES RENDERED BY THE ASSESS EE TO THE SAID PARTIES. THE DETAILS OF THE SAID SUNDRY BALANCES WRITTEN OFF WERE DULY FURN ISHED BY THE ASSESSEE BEFORE THE LD AO. THE LD AO HOWEVER OBSERVED THAT CLAIM OF BAD D EBTS FOR SERVICES RENDERED TO BANKS IS VERY UNLIKELY THAT THE BANKS ARE GENERALLY NOT KNOWN TO DENY PAYMENTS FOR ANY SERVICES. THE LD AO ACCORDINGLY DISALLOWED THE SUM OF RS 4,31,162/- TOWARDS SUNDRY BALANCES WRITTEN OFF IN THE ASSESSMENT. THE LD CIT A BY PLACING RELIANCE ON THE DECISION 7 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 7 OF THE HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD VS CIT REPORTED IN (2010) 323 ITR 397 (SC) DIRECTED THE LD AO TO GRANT RELIEF TO THE ASSESSEE IF IT IS PROVED AFTER EXAMINATION THAT THE ASSESSEE INDEED HAD ACTUALLY W RITTEN OFF THE SAID BALANCES IN THE BOOKS OF ACCOUNTS BY CREDITING TO THE PARTIES ACCOU NT. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A), JALPAIGURI, WAS JUSTIFIED IN LAW IN DIRECTING THE A O TO EXAMINE THE BOOKS OF THE ASSESSEE FOR THE RELEVANT PERIOD AND THE RETURN OF INCOME. AND IF THE BAD DEBTS TO THE TUNE OF RS. 4,31,162/- ARE WRITTEN OFF THEN ALL OW THE SAME, REGARDLESS OF THE FACT THAT SECTION 251(1)(A) OF THE I.T. ACT, 1961, DOES NOT GRANT POWERS TO THE CIT(A) TO DIRECT RE-ASSESSMENT. 3.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. THE LD DR ARGUED THAT THE LD CITA DOES NOT HAVE ANY POWER TO SET ASIDE AN ISSUE TO THE LD AO IN TERMS OF SECTION 251(1)(A) OF THE ACT AND ACCORDINGLY THE DIRECTION GIVEN BY THE LD CITA AND CONSEQUENTIAL RELIEF GIVEN TO THE A SSESSEE WAS BAD IN LAW. WE FIND THATAFTER THE AMENDMENT IN THE ACT W.E.F. 1.4.89, T HE DEDUCTION FOR BAD DEBTS WOULD BE ALLOWED IF THE DEBT OR PART THEREOF HAD BEEN WRITTE N OFF AS IRRECOVERABLE IN THE BOOKS OF THE ASSESSEE BY CREDITING THE PARTIES ACCOUNT AND T HERE IS NO REQUIREMENT TO ESTABLISH THAT THE DEBT HAD INDEED BECOME BAD AND IRRECOVERABLE. THIS IS THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF T.R.F LTD VS C IT REPORTED IN 323 ITR 397 (SC) WHICH WAS SUBSEQUENTLY FOLLOWED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS KRONE COMMUNICATIONS LTD REPORTED IN 333 ITR 497 (KAR) . SIMILAR VIEWS WERE EXPRESSED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS MORG AN SECURITIES (P) LTD REPORTED IN 292 ITR 339 (DEL) ; HONBLE HIMACHA L PRADESH HIGH COURT IN THE CASE OF SURESH GAGGAL VS ITO REPORTED IN 11 DTR (HP) 345 ; HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS STAR CHEMICALS (BOMBAY) PVT L TD REPORTED IN 313 ITR 126 (BOM) AND HONBLE PATNA HIGH COURT IN THE CASE OF LAWLYS ENTERPRISES (P) LTD VS CIT REPORTED IN 314 ITR 297 (PAT) . WE FIND FROM PAGES 35 TO 72 OF THE PAPER BOOK COMPRISING OF LEDGER ACCOUNTS THAT THE ENTIRE SUNDR Y BALANCES WRITTEN OFF WERE DULY 8 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 8 CREDITED TO THE CONCERNED PARTIES ACCOUNT AND PROOF OF INCOME BEING OFFERED THEREON IS ALSO REFLECTED IN THE SAID LEDGER ACCOUNTS OF THE P ARTIES. WE FIND THAT THE LD CITA HAD ONLY DIRECTED THE LD AO TO VERIFY WHETHER THE SAID WRITE OFF HAS BEEN MADE IN THE ACCOUNTS OF THE ASSESSEE AND IT DOES NOT TANTAMOUNT TO SETTING ASIDE OF AN ISSUE. THE LD DR BEFORE US COULD NOT CONTROVERT THE EVIDENCES ALR EADY PLACED ON RECORD WITH REGARD TO ACTUAL WRITE OFF THE DEBTS IN THE SUM OF RS 4,31,16 2/- BY DUE CREDIT TO THE CONCERNED PARTIES ACCOUNT. HENCE WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE LD CITA IN THIS REGARD. ACCORDINGLY THE GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. 4. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION MADE IN THE SUM OF RS 55,0 0,000/- AS UNEXPLAINED CASH CREDIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE ACQUIRED A PIECE OF LAND AT UTTORAYAN, MATIGARA, IN THE YEAR 2005, VIDE ALLOTME NT LETTER NO. MKT/UTT/E0116 DATED 15.11.2005 FOR RS 52,46,138/- WITH BANK LOAN OF RS 39,00,000/- FROM SBI. THE TOTAL COST OF LAND AS ON 31.3.2009 IN THE BOOKS OF THE AS SESSEE INCLUDING INTEREST ON LOAN DULY CAPITALIZED TO LAND ACCOUNT WAS RS 58,32,757/-. T HE LAND IN QUESTION WAS RELINQUISHED BY THE ASSESSEE BY HANDING OVER THE POSSESSION THER EOF AND ON RECEIPT OF A CONSIDERATION OF RS 55,00,000/- FROM ONE SAVITRI DEVI AGARWAL AND GANESH KUMAR AGARWAL OF UTTORAYAN, MATIGARA THROUGH DEMAND DRAFTS OF RS 18, 90,000/- AND RS 25,90,000/- , BOTH DATED 11.6.2009 AND BALANCE SUM OF RS 10,20,000/- I N CASH. THE ASSESSEE PLACED THE MONEY RECEIPTS IN THIS REGARD TOGETHER WITH THE COP Y OF LETTER OF RELINQUISHING RIGHT, TITLE, INTEREST IN FAVOUR OF THE SAID PURCHASERS , DULY NO TARIZED ON 13.6.2009 WAS FURNISHED. SINCE RIGHT TO HOLD A LAND WAS A CAPITAL ASSET , RE LINQUISHMENT OF THE SAID RIGHT WOULD AMOUNT TO TRANSFER WITHIN THE MEANING OF SECTION 2( 47) OF THE ACT AND ACCORDINGLY THE ASSESSEE DISCLOSED LONG TERM CAPITAL LOSS OF RS 18 ,62,186/- AFTER DULY INDEXING THE COST 9 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 9 OF ACQUISITION INCLUDING INTEREST ON LOAN CAPITALIZ ED THEREON. THE WORKINGS OF THE SAME ARE AS UNDER:- AMOUNT RECEIVED ON RELINQUISHMENT OF UTTORAYAN LAND 55,00,000 LESS: INDEXED COST OF ACQUISITION 66, 71,145 INDEXED COST OF INTEREST CAPITALISED 6 ,91,041 ----------------- 73,62,18 6 ----------------- LONG TERM CAPITAL LOSS 18,62,186 ---------------- THIS WAS DULY DISCLOSED IN THE RETURN OF INCOME BY THE ASSESSEE AND THIS LONG TERM CAPITAL LOSS WAS NOT SET OFF WITH ANY OTHER INCOME BY THE ASSESSEE IN THE RETURN OF INCOME. THE LD AO SOUGHT TO MAKE ENQUIRY WITH AD DL. SUB-REGISTRAR, BAGDOGRA WHICH REVEALED THAT NO SUCH SALE DEED FOR RS 55,00, 000/- WAS EXECUTED IN THE NAME OF THE ASSESSEE. THE LD AO FURTHER OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE HIS BOOKS OF ACCOUNTS AND RELEVANT DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE CREDIT OF RS 55,00,000/- AS SHOWN AS CONSIDERATION OF THE LAND A T UTTORAYAN AND ACCORDINGLY ADDED THE SAID AMOUNT AS UNEXPLAINED CASH CREDIT U/S 68 O F THE ACT IN THE ASSESSMENT. 4.2. IT WAS SUBMITTED BEFORE THE LD CITA THAT THE ASSESSEE HAD ONLY RELINQUISHED HIS RIGHT ON THE ALLOTMENT OF LAND IN FAVOUR OF SMT SAV ITRI DEVI AGARWAL AND GANESH KUMAR AGARWAL BY WAY OF A LETTER RELINQUISHING RIGHT, TIT LE, INTEREST IN FAVOUR OF THEM WHICH WAS DULY NOTARIZED ON 13.6.2009 AND HENCE THE SAME DOES NOT REQUIRE ANY REGISTRATION WITH THE SUB-REGISTRAR OFFICE. ACCORDINGLY THE BAS IC PREMISE OF VERIFICATION MADE BY THE LD AO IS BASELESS IN THIS REGARD AND ADVERSE CO NCLUSION DRAWN THEREON IS BAD IN LAW. THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION O F HONBLE DELHI HIGH COURT IN THE CASE OF SIMKA HOTELS & RESORTS VS DCIT & ANR REPORT ED IN (2013) 85 DTR (DEL) 249 WHEREIN IT WAS HELD THAT RELINQUISHMENT OF OWNERSHI P RIGHTS IN A PLOT OF LAND WHICH WAS ALLOTTED TO ASSESSEE, ON RECEIPT OF CONSIDERATION W AS RIGHTLY REPORTED AS CAPITAL GAIN. MOREOVER, IT WAS ARGUED THAT THE LD AO ERRONEOUSLY OBSERVED THAT THE ASSESSEE HAD NOT 10 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 10 PRODUCED THE BOOKS OF ACCOUNTS BEFORE HIM, WHERAS I N THE FIRST PAGE OF HIS ORDER, THE LD AO HIMSELF HAD STATED THAT THE BOOKS OF ACCOUNTS WE RE DULY PRODUCED AND THE SAME WERE VERIFIED BY HIM. IT WAS FURTHER SUBMITTED TH AT EVEN IF GOING BY THE VERSION OF THE LD AO THAT BOOKS WERE NOT PRODUCED BEFORE HIM, THEN HE OUGHT NOT TO HAVE INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT FOR MAKING THE SAID ADDITION IN THE SUM OF RS 55,00,000/-. THE ASSESSEE SUBMITTED THE FOLLOWIN G DOCUMENTS IN SUPPORT OF HIS CONTENTIONS WITH REGARD TO THIS ADDITION :- A) ITR ACKNOWLEDGEMENT TOGETHER WITH COMPUTATION OF INCOME AND BALANCE SHEET FOR ASST YEAR 2009-10. B) COPY OF LETTER DATED 5.11.2005 ISSUED BY UTTORAY AN FOR CONFIRMATION OF PROVISIONAL ALLOTMENT OF A PLOT TO THE ASSESSEE. C) COYP OF LETTER DATED 15.11.2005 ISSUED BY UTTORA YAN FOR PROVISIONAL ALLOTMENT OF PLOT NO. E0116 AT UTTORAYAN ALONG WITH PAYMENT SCHEDULE. D) COPY OF LOAN SANCTION LETTER DATED 1.2.2006 ISSU ED BY SBI E) LOAN STATEMENT F) COPY OF NOTARIZED LETTER DATED 13.6.2009 ISSUED BY THE ASSESSEE IN RESPECT OF RELINQUISHING RIGHT IN FAVOUR OF SRI GANESH KUMAR A GARWAL AND SMT SAVITRI DEVI AGARWAL ALONG WITH MONEY RECEIPT AND TYPED COPY G) COPY OF LETTER DATED 25.6.2009 ISSUED BY UTTORAY AN FOR TRANSFER OF PROVISIONAL ALLOTMENT OF PLOT NO. E0116 AT UTTORAYAN ALONGWITH PAYMENT SCHEDULE AND MONEY RECEIPT. H) COPY OF BANK STATEMENT REFLECTING THE TRANSACTIO NS 4.3. THE LD CITA DELETED THE ADDITION BY MAKING THE FOLLOWING OBSERVATIONS :- 5. THE ASSESSEE HAS SHOWN A CAPITAL LOSS ON THE SA LE OF LAND. THE AO ENQUIRED FROM THE ADDITIONAL SUB-REGISTRAR, BAGDOGRA ABOUT T HE REGISTRATION OF SALE DEED. THE ADDITIONAL SUB-REGISTRAR INFORMED THAT NO SUCH SALE DEED WAS REGISTERED BY HIM. ACCORDINGLY, THE AO CONCLUDED THAT THIS TRANSA CTION OF SALE IS BOGUS AND 11 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 11 ADDED RS. 55,00,000/- AS UNEXPLAINED CASH CREDIT U/ S 68. THE ASSESSEE HAS SUBMITTED THAT HE WAS ALLOTTED A PLOT NO. E0116 AT UTTORAYON BY THE DEVELOPER NAMELY, M/S LAXMI TOWNSHIP LTD. IN 2005. THE ASSESS EE HAD PAID RS. 52,46,138/- TO THE DEVELOPER FOR ALLOTMENT OF THIS PLOT. THE AS SESSEE RELINQUISHED HIS RIGHT TITLE, INTEREST IN FAVOUR OF SHRI GANESH KUMAR AGAR WAL AND SMT. SABITRI DEVI ON 13/06.2009 FOR A CONSIDERATION OF RS. 55,00,000. TH E ASSESSEE FILED COPY OF THE LETTER OF THE DEVELOPER FOR TRANSFER OF THE PROVISI ONAL ALLOTMENT OF PLOT NO. E0116 FROM ASSESSEE TO SHRI GANESH KUMAR AGARWAL AND SMT. SABITRI DEVI. THE REGISTRATION OF THE SALE DEED WITH THE REGISTRAR OF PROPERTY IS NOT A RELEVANT FACT FOR CHANGE OF CAPITAL GAIN. THE TRANSFER OF CAPITAL ASSET IS THE ONLY REQUIREMENT FOR THE CHARGE OF CAPITAL GAIN TAX. THE AO IS DIREC TED TO DELETE THIS ADDITION U/S 68 AND TAX THE AMOUNT AS CAPITAL GAIN, IF ANY, AS P RESCRIBED IN THE INCOME TAX ACT. 4.4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 3. THAT THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW IN DELETING THE ADDITION OF RS. 55,00,000/- MADE BY THE AO DESPITE THE FACT THAT TH E ASSESSEE HAD FAILED TO PRODUCE BOOKS OF ACCOUNTS AND RELEVANT DOCUMENTS TO ESTABLISH THE GENUINENESS OF CREDIT OF RS. 55,00,000/- AS HAS BEEN CATEGORICA LLY STATED IN THE ASSESSMENT ORDER. 4.5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK COMPRISING OF THE AFORESAI D DOCUMENTS FILED BEFORE THE LOWER AUTHORITIES. THE LD DR COULD NOT CONTROVERT THE DO CUMENTS PLACED BEFORE THE AUTHORITIES AND WHICH ARE ENCLOSED IN THE PAPER BOOK. THE LD D R COULD NOT CONTROVERT THE FINDINGS OF THE LD CITA WITH REGARD TO THIS ADDITION AND THE FACTS STATED THEREIN WITH REGARD TO THE SUBJECT MENTIONED TRANSACTION OF TRANSFER OF RELINQ UISHMENT RIGHTS OVER PLOT OF LAND. IN VIEW OF UNCONTROVERTED FACTS, WE DO NOT FIND ANY JU STIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD CITA IN THIS REGARD. ACCORDINGLY, T HE GROUND NO. 3 RAISED BY THE REVENUE IS DISMISSED. 5. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN GIVING DIRECTION TO THE LD AO FOR GRANT OF DEDUC TION TOWARDS TUITION FEES PAID BY THE 12 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 12 ASSESSEE FOR HIS DAUGHTER AFTER DUE VERIFICATION OF EVIDENCES, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.1. THE ASSESSEE CLAIMED DEDUCTION U/S 80C OF THE ACT FOR RS 40,000/-TOWARDS TUITION FEES PAID FOR HIS DAUGHTER AND THE SAME WAS DISALLO WED IN THE ABSENCE OF EVIDENCE. THE LD CITA DIRECTED THE LD AO TO CALL FOR THE RECEIPT OF PAYMENT AND ALLOW THE DEDUCTION AS PER LAW. AGGRIEVED, THE REVENUE IS IN APPEAL BEFOR E US ON THE FOLLOWING GROUND:- 4. THAT THE LD. CIT(A) HAS ERRED IN LAW IN DIRECTIN G THE AO TO CALL FOR THE RECEIPT OF PAYMENT AND ALLOW THE DEDUCTION AS PER L AW REGARDLESS OF THE FACT THAT SECTION 251(1)(A) OF THE INCOME TAX ACT, 1961, DOES NOT EMPOWER THE CIT(A) TO SETTING ASIDE OR ORDER RE-ASSESSMENT. 5.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE WITH REGARD TO PAYMENT OF TUITION FEES OF HIS DAUGHTER BEFORE THE LOWER AUTHORITIES AND HAD PRODUCED THE SAME BEFORE US FOR THE FIRST TIME. THE SAME IS ADMITTED AS AN ADDITIONAL EVIDENCE AND IN THE INTEREST OF JU STICE AND FAIRPLAY, WE DEEM IT FIT AND APPROPRIATE, TO REMAND THIS ISSUE TO THE FILE OF TH E LD AO , TO EXAMINE THE RECEIPT AND IF NEED BE, MAKE NECESSARY CROSS VERIFICATION FROM THE SCHOOL AND ALLOW THE DEDUCTION U/S 80C OF THE ACT AS PER LAW. ACCORDINGLY, THE GROUN D NO. 4 RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON . 09.2017 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06.09.2017 SB, SR. PS 13 ITA NO.1393/KOL/2014 RUPEN DAS A.YR.2010-11 13 COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-2, SILIGURI AAYAKAR BHAWAN, PARIB AHAN NAGAR, MATIGARA, SILIGURI, PIN-734010. 2. SHRI RUPEN DAS, RAM KRISHNA ROAD, ASHRAMPARA, SI LIGURI. 3..C.I.T.(A), JALPAIGURI 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S