Raman Kumar Malhotra, Kolkata V. ITO, Ward-36(1), Kolkata, Kolkata

ITA 1609/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4302 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 09-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2014
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income
• Section: 143(3); 147; 68

Judgement Text

I.T.A. NO. 1609/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1609/KOL/ 2014 ASSESSMENT YEAR: 2007-2008 RAMAN KUMAR MALHOTRA,.............................. ...................APPELLANT 3A, MANGOE LANE, KOLKATA-700 001 [PAN: AFGPM 7356 E] -VS.- INCOME TAX OFFICER,................................ ...........................RESPONDENT WARD-36(1), KOLKATA, AAYAKAR BHAWAN, POORVA, 110, SHANTI PALLI, E.M. BY-PASS, KOLKATA-700 107 APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE & SHRI N.C. SAHA, ADVOCA TE, FOR THE ASSESSEE SHRI M.K. CHANDA, JCIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : AUGUST 09, 2016 DATE OF PRONOUNCING THE ORDER : OCTOBER 21, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XX, KOLKATA DA TED 04.03.2014. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING UNDER THE NAME AND STYLE OF HIS PROPRIETARY CONCERN M/S. INDIAN CORK INDUSTRY. AS PER THE INFOR MATION RECEIVED BY THE ASSESSING OFFICER, THE ASSESSEE HAD DEPOSITED S UBSTANTIAL CASH IN HIS BANK ACCOUNT MAINTAINED WITH AXIS BANK LIMITED DURI NG THE FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT YEAR 2007-08. S INCE NO RETURN OF INCOME FOR THE SAID YEAR WAS FILED BY THE ASSESSEE, A NOTICE UNDER SECTION I.T.A. NO. 1609/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 4 148 WAS ISSUED BY THE ASSESSING OFFICER ON 12.07.20 11. IN RESPONSE TO THE SAID NOTICE, THE RETURN OF INCOME FOR THE YEAR UNDE R CONSIDERATION WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME OF RS. 99,929/-. IN THE SAID RETURN, THE TURNOVER OF HIS PROPRIETARY CONCERN WAS SHOWN BY THE ASSESSEE AT RS.12,11,312/- ON WHICH GROSS PROFIT AN D NOT NET PROFIT WAS DECLARED BY THE ASSESSEE AT RS.1,60,571/- AND RS.5, 223/- RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE COULD NOT PRODUCE EITHER THE BOOKS OF ACCOUNT OR THE RELEVANT DOCUMENTARY EVIDENCE IN THE FORM OF BILLS, VOUCHERS, ETC. FOR T HE VERIFICATION OF THE ASSESSING OFFICER. IT WAS ALSO NOTICED BY THE ASSES SING OFFICER THAT THE ASSESSEE HAD DEPOSITED A TOTAL SUM OF RS.57,47,567/ - IN THE BANK ACCOUNT MAINTAINED IN THE NAME OF HIS PROPRIETARY CONCERN W ITH JAMMU & KASHMIR BANK, KOLKATA BRANCH. THE ASSESSING OFFICER, THEREF ORE, TOOK THE SAID AMOUNT OF DEPOSITS AS TURNOVER OF THE PROPRIETARY C ONCERN OF THE ASSESSEE AND ESTIMATED THE BUSINESS INCOME OF THE ASSESSEE B Y APPLYING THE NET PROFIT RATE OF 5% AT RS.2,87,378/-. HE ALSO MADE FU RTHER ADDITIONS OF RS.1,92,320/- UNDER SECTION 41(1), RS.2,31,000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS FOUND TO BE MADE BY THE ASSESS EE IN HIS BANK ACCOUNT, RS.44,500/- ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS AND RS.16,400/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ACCORDINGLY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT RS.8,66,310/- IN THE ASSESSMENT COMPLETED UNDER SEC TION 143(3) READ WITH SECTION 147 VIDE AN ORDER DATED 16.12.2011. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 147, AN APPEAL WAS PREFERR ED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND SINCE THE LD. CIT(A PPEALS) DID NOT FIND ANY MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE I N SUPPORT OF HIS CASE, HE PROCEEDED TO UPHOLD THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME OF THE ASSESSEE FROM BUSINESS BY APPLYIN G A NET PROFIT RATE OF 5% AND ALSO CONFIRMED THE OTHER ADDITIONS MADE BY T HE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY, T HE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LD. CIT(APPEALS) BY H IS APPELLATE ORDER I.T.A. NO. 1609/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 4 DATED 04.03.2014, WHICH IS IMPUGNED BY THE ASSESSEE IN THE PRESENT APPEAL FILED BEFORE THE LD. CIT(APPEALS). 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT NEITHER THE RELEVANT BOOKS OF ACCOUNT NOR ANY SUPPORTING DOCUME NTS WERE PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN SUP PORT OF THE TRADING RESULTS SHOWN TO HIS PROPRIETARY CONCERN M/S. INDIA N CORK INDUSTRY. IN TRADING RESULTS SO DECLARED, THE TURNOVER OF HIS PR OPRIETARY CONCERN WAS SHOWN BY THE ASSESSEE AT RS.12,11,312/- WHILE IN TH E BANK ACCOUNT OF THE SAID CONCERN MAINTAINED WITH JAMMU & KASHMIR BANK, DEPOSITS AGGREGATING RS.57,47,567/- WERE MADE BY THE ASSESSE E AS FOUND BY THE ASSESSING OFFICER. SINCE NO SATISFACTORY EXPLANATI ON COULD BE OFFERED BY THE ASSESSEE IN THIS REGARD, THE ASSESSING OFFICER TOOK THE AMOUNT OF SUCH DEPOSITS AS THE GROSS TURNOVER OF THE PROPRIETARY C ONCERN OF THE ASSESSEE AND DETERMINED THE BUSINESS INCOME OF THE ASSESSEE ON ESTIMATED BASIS BY APPLYING THE NET PROFIT RATE OF 5%. BEFORE THE L D. CIT(APPEALS) AS WELL AS BEFORE THE TRIBUNAL, NOTHING HAS BEEN BROUGHT ON RECORD ON BEHALF OF THE ASSESSEE TO SHOW THAT THE ESTIMATE MADE BY THE ASSESSING OFFICER IS EXCESSIVE OR UNREASONABLE. IT IS ALSO OBSERVED THAT THE TURNOVER OF THE PROPRIETARY CONCERN OF THE ASSESSEE HAS BEEN TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF TOTAL DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE SAID CONCERN DURING THE YEAR UNDER C ONSIDERATION AND EVEN THE NET PROFIT RATE OF 5% HAS BEEN APPLIED BY HIM B Y PLACING RELIANCE ON THE PROVISIONS OF SECTION 44A OF THE ACT. THE ESTIM ATE OF BUSINESS INCOME OF THE ASSESSEE AS MADE BY THE ASSESSING OFFICER TH US IS WELL FOUNDED AND EVEN THE LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO DISPUTE THIS POSITION. HE, HOWEVER, HAS CONTENDED THAT ONCE THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE REJECTED AND THE INCOME OF THE ASS ESSEE IS DETERMINED ON ESTIMATED BASIS BY APPLYING SOME PERCENTAGE OF PROF IT, THERE IS NO JUSTIFICATION ON THE PART OF THE REVENUE AUTHORITIE S TO MAKE FURTHER ADDITIONS SEPARATELY ON ACCOUNT OF SUNDRY CREDITORS WRITTEN BACK UNDER SECTION 41(1), UNEXPLAINED CASH CREDIT UNDER SECTIO N 68 ETC. BY RELYING ON I.T.A. NO. 1609/KOL./2014 ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 4 THE BOOKS OF ACCOUNT OF THE ASSESSEE, WHICH HAVE BE EN REJECTED. I FIND MERIT IN THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. IN MY OPINION, ONCE THE INCOME OF THE ASSESSEE IS DETERMINED ON ES TIMATED BASIS AFTER REJECTING THE BOOKS OF ACCOUNT, THE ENTRIES IN THE SAID BOOKS OF ACCOUNT AGAIN CANNOT BE RELIED UPON TO MAKE ADDITIONS ON AC COUNT OF SUNDRY CREDITORS WRITTEN BACK UNDER SECTION 41(1), UNEXPLA INED CASH CREDIT UNDER SECTION 68 AS WELL AS OTHER ADDITIONS AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS). I, T HEREFORE, DELETE THE SAID ADDITIONS AND ALLOW PARTLY THIS APPEAL FILED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 21, 2 016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 21 ST DAY OF OCTOBER, 2016 COPIES TO : (1) SHRI RAMAN KUMAR MALHOTRA, 3A, MANGOE LANE, KOLKATA-700 001 (2) INCOME TAX OFFICER, WARD-36(1), KOLKATA, AAYAKAR BHAWAN, POORVA, 110, SHANTI PALLI, E.M. BY-PASS, KOLKATA-700 107 (3) COMMISSIONER OF INCOME TAX(APPEALS)-XX, KOLKAT A; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.