Shri Sumit Saha, Kolkata V. CIT(A)-6, Kolkata, Kolkata

ITA 1569/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9540 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-08-2016
• Court: TRIBUNAL
• Assessee Lawyers: K M ROYFCA
• Keywords: Unexplained expenditure; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.1569/KOL/2016 ( / ASSESSMENT YEAR:2011-2012) SUMIT SAHA, 48/1, OLD NIMTA ROAD, KOLKATA-700058 VS. ITO-1(4) HOOGHLY, PRESENTLY ITO23(4), CHINSURAH, GT ROAD, HOOGHLY-712101 ./ ./PAN/GIR NO. : AYYPS 5395 Q ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI K.M.ROY,FCA REVENUE BY : NONE / DATE OF HEARING : 28/12/2016 /DATE OF PRONOUNCEMENT 13/01/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2011-2012, IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-6, KOLKATA, IN APPEAL NO.254/CIT(A)-6/KOL/2014-15, DATED 29.06.2016, WHIC H IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UN DER SECTION 143(3) OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT), DATE D 28.03.2014. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME ON 24.07.2011 DECLARING NET IN COME OF RS.9,99,740/-. THE ASSESSEE ALSO CLAIMED DEDUCTION U/S.24(B) OF TH E ACT AT RS.1.50 LAKHS IN RESPECT OF INTEREST PAID ON HOUSING LOAN. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S.143(3) AND THE AO HAS COMPLETED THE ASSESSMENT BY MAKING THE ADDITION OF RS.1.50 LAKHS ON ACCOUNT OF INTEREST ON HOUSE BUILDING LOAN, RS.9,52,347/- AS U NDISCLOSED INCOME AND RS.7918/- AS UNDISCLOSED BANK INTEREST. ITA NO.1569/K/2016 SRI SUMIT SAHA A.Y.2011-12 2 3. AGGRIEVED FROM THE ORDER OF THE AO, ASSESSEE FIL ED AN APPEAL BEFORE THE CIT(A), WHO HAS CONFIRMED THE ADDITION M ADE BY THE AO BY OBSERVING THE FOLLOWINGS :- 4.3. I HAVE CONSIDERED THE APPELLANTS SUBMISSIONS . HE HAS ARGUED, IN DETAIL, IN THE SUBMISSION AND THE GROUNDS OF APP EAL IN GENERAL TERMS AS TO WHY THE ADDITION WAS INCORRECT BUT HE H AS NOT RECONCILED THE BASIC FACTUAL DISCREPANCY AT ALL. THE AO HAD LO GICALLY ANALYZED THE DEPOSITS AND WITHDRAWALS OF THE APPELLANT AND A CCEPTED HIS CLAIM REGARDING REIMBURSEMENT OF EXPENSES WORTH RS.19,39, 856(ABOUT WHICH THE APPELLANT ARGUED, IN VAIN, IN HIS WRITTEN SUBMISSIONS AND GROUNDS OF APPEAL). THE APPELLANT HAS ALSO MISUNDER STOOD THE AO'S INFERENCE OF THE BASIS OF AN AMOUNT OF RS.4,00,000 TRANSFERRED TO THE SECOND BANK ACCOUNT THAT IT WAS NOT AVAILABLE FOR E XPENSES. THE APPELLANT HAS ONLY STATED THAT TRANSFER FROM ONE BA NK ACCOUNT TO ANOTHER BANK ACCOUNT CANNOT BE TREATED AS INCOME. T HE AO'S ESTIMATE OF HOUSEHOLD EXPENSES OF RS.1,80,000 ALSO CANNOT BE CONSIDERED UNREASONABLE. THUS, THE UNEXPLAINED DIFF ERENCE OF RS.9,52,347 BETWEEN THE EXPECTED EXPENSES OUT OF TH E BANK ACCOUNT AND THE ACTUAL EXPENSES EVIDENT FROM THE BANK ACCOU NT. THE DIFFERENCE REPRESENTING AMOUNTS RECEIVED BY THE APP ELLANT FROM HIS EMPLOYER OR SOME OTHER PERSON WRONGLY CLAIMED AS RE IMBURSEMENT OF EXPENSES AND/ OR UNEXPLAINED EXPENDITURE COMPUTE D BY THE AO IS VERY REASONABLE FOR WHICH THE APPELLANT HAS NO SPEC IFIC EXPLANATION. HENCE, THE APPELLANT'S GROUNDS OF APPEAL ON THIS IS SUE AND ARGUMENTS ARE REJECTED AND THE ADDITION OF RS.9,52, 347 IS CONFIRMED. 5.1. THE APPELLANT HAD NOT TAKEN ANY SPECIFIC GROUN D OF APPEAL AGAINST AN ADDITION OF RS.7918 ON ACCOUNT OF INTERE ST ON SAVINGS BANK ACCOUNT NOT DECLARED BY HIM BUT HE STATED AS U NDER DURING THE APPELLATE PROCEEDINGS: 'DISALLOWANCE OF RS. 7918/ - BEING THE INTEREST NOT DISCLOSED IN THE RETURN MAY NOT BE CONSIDERED AS SIGNIFICANT CONSIDE RING THE AMOUNT INVOLVED. SINCE THE AMOUNT IS VERY MEAGER, THE SAME MAY BE CONSIDERED AS INSIGNIFICANT' 5.2 THE APPELLANT'S ARGUMENTS THAT TAXABLE INCOME B E IGNORED BECAUSE IT IS INSIGNIFICANT IS NOT CORRECT. THE ADD ITION OF RS. 7918 IS CONFIRMED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US, AND HAS TAKEN THE FOLLOWI NG GROUNDS OF APPEAL :- ITA NO.1569/K/2016 SRI SUMIT SAHA A.Y.2011-12 3 REVISED GROUNDS OF APPEAL 1. THAT ID CIT(A) HAS ERRED IN SUSTAINING DISALLOWA NCE OF RS.1,50,000/- (RS. ONE LAKH FIFTY THOUSAND ONLY) TO WARDS INTEREST U/S 24(B) OF IT ACT., 1961. 2. THAT ID CIT(A) HAS ERRED IN CONFIRMING DIFFERENC E OF RS. 9,52,347/- (RUPEES NINE LAKH FIFTY TWO THOUSAND THR EE HUNDRED FORTY SEVEN ONLY) TOWARDS ALLOWANCES EXEMPT FROM TAX. 3. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D ANY OF THE GROUND DURING HEARING. 5. GROUND NO.1 RELATES TO DISALLOWANCE OF RS.1.50 L AKHS TOWARDS INTEREST U/S.24(B) OF THE I.T.ACT, 1961. 5.1 LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THE CERTIFICATE FROM IDBI BANK AND POSSESSION CERTIFICATE FROM WEST BENGAL HOUSING BOARD AND EXPLAINED BEFORE US THAT ASSESSEE HAS PAI D INTEREST OF RS.1.50 LAKHS ON HOUSING LOAN AND, THEREFORE, HE IS ENTITLE D TO CLAIM DEDUCTION U/S.24(B) OF THE ACT. THE LD. AR ALSO POINTED OUT T HAT THE ASSESSEE DID NOT SUBMIT THE CERTIFICATE FROM IDBI BANK AND THE POSSE SSION CERTIFICATE FROM WEST BENGAL HOUSING BOARD, NEITHER TO THE AO NOR TO THE LD CIT(A). BASED ON THE IDBI BANK CERTIFICATE AND THE POSSESSI ON CERTIFICATE FROM THE WEST BENGAL HOUSING BOARD LD. AR FOR THE ASSESSEE H AS REQUESTED US TO GIVE THE BENEFIT OF RS.1.50 LAKHS U/S 24(B). 5.2. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS STATED THAT THE CERTIFICATE FROM IDBI BANK AND POSSESSION CERTIFICA TE FROM WEST BENGAL HOUSING BOARD WERE NOT SUBMITTED BY ASSESSEE NEITHE R TO THE AO NOR TO THE LD. CIT(A). THEREFORE, THESE TWO DOCUMENTS ARE ADDITIONAL EVIDENCE AND OPPORTUNITY SHOULD BE GIVEN TO AO TO EXAMINE TH ESE DOCUMENTS, ITA NO.1569/K/2016 SRI SUMIT SAHA A.Y.2011-12 4 THEREFORE, THE ISSUE SHOULD BE REMANDED BACK TO THE LD AO TO EXAMINE THESE DOCUMENTS AFRESH. 7. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF LD. DR FOR THE REVENUE. AS THE LD. DR HAS POINTED OUT THAT THE ASS ESSEE HAS SUBMITTED FRESH EVIDENCE BEFORE THE BENCH AND THESE FRESH EVI DENCE I.E. CERTIFICATE FROM IDBI BANK AND POSSESSION CERTIFICATE FROM WEST BENGAL HOUSING BOARD SHOULD BE EXAMINED BY THE AO. CONSIDERING THE FACTUAL POSITION, WE ARE OF THE VIEW THAT THE ADDITIONAL EVIDENCE SUB MITTED BY THE ASSESSEE SHOULD BE EXAMINED BY THE AO, THEREFORE, WE DIRECT THE LD. AO TO EXAMINE THE FRESH EVIDENCE AND MAY ALLOW BENEFIT TO THE ASS ESSEE. 8. GROUND NO.2 RELATES DIFFERENCE OF RS.9,52,347/- TOWARDS ALLOWANCE EXEMPT FROM TAX. 9. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THE CALCULATION OF THE DIFFERENCE AMOUNT OF RS.9,52,347/- AS FOLLOWS : - AS PER ORDER AMOUNT (RUPEES IN LAC) REIMBURSEMENT OF EXPENSES(A) 19.40 WITHDRAWAL FROM BANK (B) 15.68 LESS TRANSFER TO JOINT ACCOUNT(C) 4.00 LESS DRAWINGS (D) 1.80 WITHDRAWALS FOR EXPENSES(E)-{(B)-(C)-(D)} 9.88 MISMATCH IN WITHDRAWAL (F) (A-E) 9.52 THE LD AR SUBMITTED THAT THERE IS NO VARIATION IN THE RETURN OF INCOME AND FORM NO. 16 ENCLOSED WHICH IS RS.9,99,740/- FURTHER THIS EXPENSES ARE INCURRED FOR THE PURPOSE OF EMPLOYMENT AND IS EXEMP T UNDER SECTION 10(14). MOREOVER, THERE IS NO EVIDENCE TO SUPPORT T HE FACT THAT EXPENSES ARE INFLATED. THESE EXPENSES WERE PAID BY CREDIT CA RDS, SUBSEQUENT ITA NO.1569/K/2016 SRI SUMIT SAHA A.Y.2011-12 5 PAYMENT BY CHEQUE AND ALSO FROM HIS PERSONAL CASH B ALANCE. FURTHER THE TRANSFER TO JOINT ACCOUNT MAINTAINED WITH HIS FATHE R ONLY REPRESENTS REIMBURSEMENT MADE TO HIM TOWARDS SUM UTILIZED FROM THIS ACCOUNT EARLIER. FURTHER DEPARTMENT WIDE ORDER DATED 22.01. 2016 U/S. 147/143(3) OF THE IT ACT, 1961 FOR A.Y. 2010-11 HAD NOT MADE A NY ADDITION UNDER SAME FACTS. THE LD AR FOR THE ASSESSEE ALSO RELIED ON THE JUDGM ENT IN THE CASE OF DHAKESWARI COTTON MILLS V. CLT 26 ITR 775 (SC) WHER EIN IT HAS BEEN HELD THAT AO IS NOT ENTITLED TO MAKE A PURE GUESS. ACCOR DINGLY, THE ADDITION MAY BE KINDLY DELETED. 10. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS P RIMARILY REITERATED THE STAND TAKEN BY THE AO, WHICH WE HAVE ALREADY NO TED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREV ITY. 11. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. THE LD. AR FOR THE ASSESSEE HAS EXPLAINED THAT THE SAME REIMBURSEMENT AMOUNT IN ASS ESSMENT YEAR 2010-11 HAS NOT BEEN ADDED BY THE AO AS A PART OF S ALARY. IT WAS CONSIDERED BY THE AO AS A PART OF REIMBURSEMENT AND THE LD. AR ALSO POINTED OUT THAT THE AO SHOULD FOLLOW THE CONSISTEN T APPROACH IN MAKING THE DISALLOWANCE OF EXPENDITURE. IF THE AO HAD NOT DISALLOWED THE SAME KIND OF EXPENDITURE IN A.Y 2010-11 THEN THE SAID RE IMBURSEMENT EXPENDITURE ALSO BE NOT DISALLOWED IN THE SUBSEQUEN T ASSESSMENT YEAR ITA NO.1569/K/2016 SRI SUMIT SAHA A.Y.2011-12 6 2011-12. CONSIDERING THE FACTUAL POSITION, WE ARE O F THE VIEW THAT THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CI T(A) NEEDS TO BE DELETED. ACCORDINGLY, WE DELETE THE ADDITION. 12.IN THE RESULT, APPEAL FILED BY THE ASSESSEE ON T HIS GROUND, IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13/ 01/2017. S D/ - (A.T.VARKEY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 13/01/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT- SUMIT SAHA 2. / THE RESPONDENT.-ITO WARD-1(4), HOOGHLY 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//