Shri Shreyans Jain, Kolkata V. ITO, Ward-45(2), Kolkata, Kolkata

ITA 1458/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9542 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 30-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-07-2016
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SRI ABY T.VARKEY , JM & DR. A.L. SAINI , AM ] I.T.A NO. 1458 /KOL/20 16 ASSESSMENT YEAR : 2007 - 08 SRI SHREYANS JAIN - V S . - ITO, WD - 4 5 (2) [PAN : ACFPJ0728D ] KOLKATA. (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHITAL KHEMKA , C.A FOR THE RESPONDENT : RAJAT KR. KUREEL, JCIT DATE OF HEARING 30.12.2016 DATE OF PRONOUNCEMENT 13.01.2017 ORDER PER ABY T.VARKEY , JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2 1 , KOLKATA DATED 02.06 .2016 FOR AY 200 7 - 08 . 2. THE ASSESSEE HAS RAISED TWO EFFECTIVE GROUNDS. THE FIRST GROUND IS REGARDING CONFIRMATION OF ADDITION OF RS. 1,90,000/ - AS UNDISCLOSED INCOME ON ACCOUNT CAPITAL INTRODUCTION IN THE PROPRIETORSHIP CONC ERN (M/S JAIN ISPAT) . 3. THE BRIEF FACTS OF THE CASE IS THAT THE AO NOTED THAT THE ASSESSEE HAS SHOWN CAPITAL INTRODUCTION OF RS. 3,11,568 IN THE BALANCE SHEET AS ON 31.03.2007 OF M/S JAIN ISPAT. THE AO ASKED THE ASSESSEE TO FILE THE DETAILS OF SOURCE OF CAPITAL INTRODUCTION. HOWEVER, THE AO NOTES THAT THE ASSESSEE FAILED TO FURNISH THE SAME. HOWEVER, THE AO AFTER PERUSAL OF THE PERSONAL BANK DETAILS OF THE ASSESSEE HAS FOUND THAT RS. 1,90,000 HAS BEEN TRANSFERRED FROM HIS PERSONAL BANK ACCOUNT TO THE PROP RIETORSHIP CONCERNED . THE 2 ITA NO. 1458 /KOL/2016 SRI SHREYANS JAIN A.YR. 2007 - 08 2 AO ALSO NOTES THAT AN AMOUNT OF RS. 1,90,000 / - IN THE SAID BANK ACCOUN T WAS DEPOSITED BY THE TRANSFER INTO IT. THE AO NOTES THAT THE ASSESSEE HAS CLAIMED THAT THE SAID AMOUNT WAS RECEIVED FROM M/S QUALITY ENGINEERING WORKS. HOWEVE R, THE AO ASKED FOR VERIFICATION LETTER FROM M/S QUALITY ENGINEERING WORKS WHICH ACCORDING TO THE AO DID NOT CONFIRM OF ANY SUCH PAYMENT TO THE ASSESSEE ON THE GIVEN DATE. SINCE THE ASSESSEE FAILED TO EXPLAIN IN THE SOURCE OF CAPITAL INTRODUCTION TO THE TU NE OF RS. 1,90,000/ - IT WAS ADDED AS HIS UNDISCLOSED SOURCE OF INCOME. AGGRIEVED THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DISMISS THE SAME. AGGRIEVED THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE TAKE NOTE THAT THE CONFIRMATION OF M/S QUALITY ENGINEERING WORKS HAS BEEN PLACED ON RECORD BY THE ASSESSEE WHICH IS FOUND AT PAGE - 18 OF THE PAPER BOOK FROM WHERE WE NOTE THAT THE M/S QUALITY ENGINEERING WORKS PROPRIETOR HAS SIGNED THE CONF IRMATION OF THE FACT THAT A CHEQUE ON 17.08.2006 WAS ISSUED FOR AN AMOUNT OF RS. 1,90,000/ - TO THE ASSESSEE. THE CONFIRMATION OF ACCOUNT HAS BEEN SIGNED BY BOTH THE ASSESSEE AND FOR M/S QUALITY ENGINEERING WORKS , THE PROPRIETOR HAS DULY SIGNED WHOSE PAN NO . IS ALSO GIVEN IN IT . WE NOTE THAT THIS EVIDENCE WAS PRODUCED B EFORE THE LD. CIT(A), WHO SENT IT TO THE AO CALLING FOR THE REMAND ORDER WHEREIN THE AO HAS STATED AS UNDER WHICH IS EVIDENT FROM PERUSAL OF THE PAPER BOOK : IN RESPECT OF CAPITAL INTRODUCTI ON IN THE PROPRIETORSHIP CONCERN : IN THIS REGARD THE ASSESSEE SUBMITTED LOAN CONFIRMATION ALONG WITH BANK DETAILS. AS PER PERSONAL BANK STATEMENT THE ASSESSEE RECEIVED RS. 1,90,000/ - VIDE CHEQUE NO. 342648 ON 17.08.2006 AND THE SAME WAS TRANSFERRED TO HIS PROPRIETORSHIP FIRM [M/S. JAIN ISPAT] ON 18.08.2006 VIDE CHEQUE NO. 506985 WHICH WAS REFLECTED IN THE BANK OF STATEMENT OF M/S. JAIN ISPAT. BOTH THE PHOTOCOPIES OF THE BANK STATEMENT IS ENCLOSED FOR YOUR READY REFERENCE. 3 ITA NO. 1458 /KOL/2016 SRI SHREYANS JAIN A.YR. 2007 - 08 3 5. THE LD. CIT(A) AFTER PERUSAL O F THE REMAND REPORT AS REPRODUCED ABOVE HOWEVER, CONFIRMED THE ADDITION BY HOLDING AS UNDER: IT IS SEEN THAT THE AO HAS NOT MENTIONED AS TO THE LOAN CONFIRMATION PERTAINS TO WHOM? THE NAME OF M/S QUALITY ENGINEERING WO RKS IS NOT REFERRED. BESIDES, NO CERTIFICATE IS PRODUCED . IT IS ALSO CONVEYED BY THE AO IN THE REMAND REPORT THAT THE AMOUNT OF RS. 1,90,000/ - HAS BEEN INTRODUCED IN M/S. JAIN ISPAT FROM THE PERSONAL ACCOUNT OF THE ASSESSEE. IN VIEW OF THIS IT IS APPARENT THAT THE MONEY WAS INTRODUCED BY THE ASSESSEE FROM OWN ACCOUNT AND THAT IS WHY M/S QUALITY ENGINEERING WO RKS DID NOT CONFIRM HAVING MADE ANY LOAN TO M.S JAIN ISPAT. THE LD. A/R ARGUED THAT THE MATTER IS EXPLAINED BUT WHEN ASKED WHETHER/S. QUALITY ENGINEERING WORKS WILL APPEAR BEFORE THE DEPARTMENT WITH THE DETAILS TO EXPLAIN, THERE WAS NO ASSURANCES. IN VIEW OF THIS IT IS APPARENT THAT THE AO WAS JUSTIFIED IN ADDING THE AMOUNT OF RS. 1,90,000/ - IN THE TOTAL INCOME OF THE ASSESSEE . A PPEAL ON THIS GROUND IS NOT ALLOWED . 6. AS STATED EARLIER WE HAVE PERUSED THE CONFIRMATION OF THE ACCOUNT FROM M/S QUALITY ENGINEERING WORKS TO THE ASSESSEE FROM WHERE IT IS CLEAR THAT A CHEQUE VIDE NO. 3 42648 DT. 17.08.2006 FOR RS.1,90 ,000/ - WAS ISSUED TO THE ASSESSEE AND WHICH WAS CREDITED IN THE PERSONAL BANK ACCOUNT OF THE ASSESSEE AND THEREAFTER THE ASSESSEE HAS TRANSFERRED THE SAME TO HIS PROPRIETORSHIP FIRM M/S JAIN ISPAT ON 18 .08.2006 VIDE CHEQUE NO. 506985. T HUS THE LOAN CONFIRMATION M/S QUALITY ENGINEERING WORKS HAS BEEN CLEARLY SUPPORT ED BY EVIDENCE. IN THE LIGHT OF THE SAME WE FIND THE LD. CIT(A) E RRED IN CONFIRMING THE ADDITION BY MISDIRECTING HIMSELF THAT M/S QUALITY ENGINEERING WORKS HAVE NOT CONFIRMED TO HAVE MADE ANY LOAN TO M/S JAIN ISPAT. THE CASE OF THE ASSESSEE IS THAT THE LOA N AMOUNT HAS COME TO THE ASSESSEE, WHICH HAS BEEN CONFIRMED. THEREAFTER, IF THAT MONEY IS INTRODUCED BY THE ASSESSEE TO 4 ITA NO. 1458 /KOL/2016 SRI SHREYANS JAIN A.YR. 2007 - 08 4 HIS PROPRIETORY CONCERN, HOW CAN CIT(A) SAY IT AS BEING FROM UNDISCLOSED SOURCE. THUS THE FINDING OF THE AUTHORITIES BELOW IS CLEARLY ER RONEOUS AND SO WE ARE INCLINED TO DIRECT DELETION OF THE ADDITION MADE ON THIS ISSUE. 7. THE SECOND GROUND IS AGAINST THE ADDITION OF RS. 96,000/ - ON ACCOUNT OF LOWER DRAWINGS. 8. BRIEF FACTS OF THE CASE IS THAT DURING THE ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS SHOWN DRAWING OF RS. 24,000/ - ONLY AND THE AO NOTED THAT IN THE EARLIER YEAR ALSO HE ONLY DREW THE SAME DRAWINGS ONLY. AO AFTER CONSIDERING THE STATUS OF THE ASSESSEE WAS OF THE OPINION THAT AT LEAST RS. 10,000/ - NEEDS TO BE SPE ND FOR A MONTH AFTER TAKING INTO CONSIDERATION THE OTHER FAMILY MEMBERS ALSO AND THUS HE WAS OF THE OPINION THAT RS. 1,20,000/ - NEEDS TO HAVE BEEN DRAWN BY THE ASSE SSEE INSTEAD OF RS. 24,000/ - AS CLAIMED BY THE ASSESSEE. THUS HE COMPUTED THE DIFFERENCE AT RS. 96,000/ - [1,00,000/ - ( - ) RS. 24,000/ - ] WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. . AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DISMISS THE SAME. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. THE CASE OF THE ASSESSEE IS THAT THE OTHER FAMILY MEMBERS ARE ALSO EARNING AND DRAWING F OR THEIR EXPENDITURE SEPARATELY , SO THE AUTHORITIES BELOW DID NOT APPRECIATE THE SAID FACT, SO SEPARATE ADDITION IS NOT NEEDED FOR LESS DRAWINGS IN THE HANDS O F THE ASSESSE. THE LD. AR TOOK OUR ATTENTION TO THE IMPUGNED ORDER WHEREIN IT HAS BEEN CLEARLY STATED ABOUT THE FACT THAT THERE ARE THREE MEMBERS OF THE FAMILY WHO ARE DRAWING RS. 2500/ - , RS. 6000/ - RS. 2000/ - PER MONTH FOR RUNNING THE HOUSEHOLD EXPENSES . S O, THEREFORE, THE THREE MEMBERS ALTOGETHER SPEND RS. 10,500/ - THUS T HE TOTAL AMOUNT AFTER ADDING THE AMOUNT ASSESSEES DRAWING OF RS. 2000/ - WHICH COMES TO A TOTAL OF RS. 12,500/ - PER MONTH . TAKING INTO CONSIDERATION THE FACTS OF THE CASE WE NOTE THAT TH E CASE OF THE AO IS THAT RS. 10,000/ - IS NECESSARY FOR RUNNING THE HOUSEHOLD EXPENSES AND SO DRAWING OF RS. 1,20,000/ - WAS ESTIMA TED BY HIM TO MAKE THE 5 ITA NO. 1458 /KOL/2016 SRI SHREYANS JAIN A.YR. 2007 - 08 5 ADDITION AND THE LD. CIT(A) ALSO AGREED TO THAT ESTIMATE. T HE ASSESSEES CASE IS THAT TOTAL DRAWING OF T HE OTHER FAMILY MEMBERS INCLUDING HIS IS CROSSING MORE THAN RS. 1,20,000/ - . THEREFORE, WE ARE OF THE OPINION THAT NO ADDITION IS REQUIRED IN THE HANDS OF THE ASSESEE AND, THEREFORE WE DIRECT DELETION OF THE ADDITION MADE ON THIS ACCOUNT. 8 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS THUS ALLOWED. ORDER PRONOUNCED IN THE C OURT ON 13 .01.2017 SD/ - SD/ - [ DR. A.L. SAINI ] [ A.T.VARKEY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 .01.2017 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. SHRI SHREYANS JAIN, P - 4, KALAKAR STREET, 2 ND FLOOR, KOLKATA - 700007 2. I.T.O., WARD - 45 (2 ) , KOLKATA. 3. CIT(A) - 21 , KOLKATA 4. CIT XV , KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 6 ITA NO. 1458 /KOL/2016 SRI SHREYANS JAIN A.YR. 2007 - 08 6