ITO, Ward - 22(2), Kolkata, Kolkata V. Shri Sunil Gupta, Kolkata

ITA 1628/KOL/2010

• Counselvise Citation: 162823514 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 17-08-2010
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: SUBASH AGARWAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Source of fund
• Section: 131; 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 1628/KOL/2010 %& '(/ ASSESSMENT YEAR : 2007-08 (*+ / APPELLANT ) I.T.O., WARD-22(2), KOLKATA (,-*+/ RESPONDENT ) SRI SUNIL GUPTA, KOLKATA (PAN: AEAPG 0176 P) *+ . / '/ FOR THE APPELLANT: SHRI P.S. DUTTA ,-*+ . / '/ FOR THE RESPONDENT: SHRI SUBASH AGARWAL 0%1 . !# /DATE OF HEARING : 25.04.2012. 2' . !# /DATE OF PRONOUNCEMENT : '3 / ORDER . .. . ! ! ! !. .. . , '# PER SHRI C.D.RAO, AM THE ABOVE APPEAL IS FILED BY REVENUE AGAINST ORDER DATED 31.05.2010 OF THE LD. CIT-(A)-XIV, KOLKATA PERTAINING TO A.YR. 2007-08. 2. THE ONLY GROUND RAISED BY THE REVENUE IN THIS A PPEAL IS AS UNDER :- THAT THE LD. CIT(A)-XIV, KOLKATA ERRED IN ACCEPTIN G THE CONTENTION OF ASSESSEE WITHOUT EXAMINING THE SOURCE OF FUNDS IN THE HANDS OF EMPLO YER-WIFE AND ULTIMATE UTILIZATION OF THE HUGE CASH FUNDS BY THE A/C HOLDER OR BY ALLEGED EMPLOYER-WIFE THROUGH DOCUMENTARY EVIDENCES, WHICH NEVER PRODUCED BEFORE THE AO AT TH E TIME OF ASSESSMENT U/S 143(3). 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING THE SCRUTINY ASSESSMENT ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS.88,84,5 00/- AS UNEXPLAINED CASH CREDIT APPEARING IN THE BANK ACCOUNT OF ASSESSEE WHICH ARE AS UNDER :- 2 SL.NO. NAME OF THE BANK NATURE OF A/C TYPE OF A/C ACCOUNT NO. AMOUNT OF CASH DEPOSITED RS. 1. CORPORATION BANK JOINT SAVINGS 01/00288 4,37,5 00/- 2. INDUSIND BANK, PARK STREET BRANCH, KOLKATA -- SAVINGS 0015- 614480-001 72,41,000/- 3. INDUSIND BANK, BARBIL, ORISSA -- CURRENT 0191- 614480-051 15,06,000/- 3.1. THE A.O. NOTED THAT DURING THE RELEVANT PREVIO US YEAR THE ASSESSEE DEPOSITED CASH OF RS. 4,37,500/- IN THE BANK ACCOUNT IN CORPO RATION BANK. SIMILARLY, IN THE INDUSIND BANK, KOLKATA BANK ACCOUNT HE DEPOSITED CA SH OF RS. 72,41,000/- AND IN INDUSIND BANK, BARBIL, ORISSA, CASH OF RS. 15,06,00 0/- WAS DEPOSITED. THE A.O. ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE ABOVE MEN TIONED CASH DEPOSITED IN THESE THREE BANK ACCOUNTS. THE ASSESSEE EXPLAINED THAT THE CASH WERE WITHDRAWN BY HIS EMPLOYER M/S PRAGATI PARIVAHAN FROM THEIR BANK ACCOUNT WITH CORPORATION BANK, KANKURGACHI BRANCH. AS THE CORPORATION BANK WAS NOT HAVING ANY BRANCH AT BARBIL, THE AMOUNT WAS DEPOSITED IN HIS INDUSIND BANK ACCOUNT WHO ARE HAVING A BRANCH AT BARBIL WITH CBS FACILITY TO MEET UP THE BUSINESS REQUIREMENT AT BARBIL OF M/S PRAGATI PARIVAHAN. IN SUPPORT OF HIS CONTENTION A CERTIFICATE FROM EMP LOYER WAS ALSO FURNISHED BY THE ASSESSEE. THE A.O. DID NOT FIND THE EXPLANATION GIV EN BY THE ASSESSEE BELIEVABLE ON ACCOUNT OF THE FOLLOWING OBSERVATIONS NARRATED BY H IM IN THE ASSESSMENT ORDER. A) HOW AND WHY AN EMPLOYEE SHOULD DEPOSIT SUCH HEF TY CASH DEPOSIT IN THE ACCOUNT OF AN MERE EMPLOYEE OF RS. 90,000/- PER ANNUM. B) AS AND WHEN SOME CASH IS DEPOSITED BY ANYBODY IN ANY OTHER S SAVINGS ACCOUNT OR CURRENT ACCOUNT, THEN, THAT MONEY AUTOMATICALLY TRA NSFORMS INTO A MONEY OF ACCOUNT HOLDER. THE DEPOSITOR HAS NO CONTROL OR EVIDENCE TO RECLAIM THE SAME. C) THE EMPLOYER WITHDRAWN THE CASH AT KANKURGACHI, CARRIED THE ENTIRE SUM TO PARK STREET AND DEPOSITED IN CASH AT THE SAVINGS BANK AC COUNT OF THE EMPLOYEE OF A MERE SALARIED EMPLOYEE OF RS. 90,000/-PER ANNUM. D) AS PER BUSINESS REGULATIONS THERE IS NO BAR ON T HE PART OF THE EMPLOYER TO OPEN A CURRENT ACCOUNT WITH INDUSIND BANK, BANK AT KOLKATA AND TO TRANSFER THE AMOUNT FROM CORPORATION BANK CASH CREDIT ACCOUNT TO CURRENT ACC OUNT WITH INDUSIND BANK. SINCE INDUSIND BANK HAVING CBS FACILITY AND BRANCH AT BAR BIL, THE EMPLOYEE COULD HAVE EASILY MADE UP THE DAY TO DAY REQUIREMENT OF EMPLOYER S B USINESS AT BARBIL. IN THIS WAY THE EMPLOYER COULD HAVE THE CONTROL OVER HIS FUNDS AND EVIDENCE OF WITHDRAWAL BY AN EMPLOYEE REMAINS WITH THE EMPLOYER TO PREVENT ONLY DEFECATION OF FUND. 3 3.2. DURING THE ASSESSMENT PROCEEDINGS THE A.O. REC ORDED PERSONAL STATEMENTS OF THE ASSESSEE AND HIS EMPLOYER SMT. SUNITA GUPTA, PR OPRIETOR OF M/S PRAGATI PARIVAHAN FOR WHICH THE ASSESSEE WORKS AS AN EMPLOYEE. THE A. O. WAS OF THE VIEW THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCES TO SUBSTAN TIATE THE NATURE OF EXPENSES INCURRED BY HIS EMPLOYER OUT OF THE AMOUNTS WITHDRA WN FROM HIS ACCOUNT. HE FELT THAT A MERE STATEMENT THAT AMOUNTS WERE GIVEN BY EMPLOYE R, SPENT AS PER VERBAL INSTRUCTIONS OF EMPLOYER AND EVIDENCES ARE LYING WI TH EMPLOYER DO NOT ESTABLISH OR EXPLAIN THE MONEY IN ONES OWN ACCOUNT. ONUS LIES W ITH THE ACCOUNT HOLDER TO EXPLAIN THE SOURCE OF EACH FUND WITH DOCUMENTARY EVIDENCES AND ITS SUBSEQUENT OUTGOINGS WITH EVIDENCES. 3.3. IN VIEW OF THE ABOVE DISCUSSION THE A.O. HELD THAT THE ASSESSEE FAILED TO LAIN THE SOURCE OFRS.88;84,500/- DEPOSITED IN HIS ABOVE MENT IONED THREE BANK ACCOUNTS. HE ADDED THIS AMOUNT IN THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT. 3.4. ON APPEAL THE LD.CIT(A) AFTER TAKING INTO CONS IDERATION OF ASSESSEES SUBMISSIONS HAS DELETED THE SAME BY OBSERVING AS UN DER :- 4. I HAVE CAREFULLY CONSIDERED ALL THE FACTS AND C IRCUMSTANCES OF THIS CASE, ARGUMENTS GIVEN BY THE A.O. AND THE SUBMISSIONS MADE BY THE A /R OF THE ASSESSEE. IT IS SEEN THAT THE ASSESSEE IS WORKING AS AN EMPLOYEE IN A TRANSPO RT CONCERN NAMED, M/S PRAGATI PARIVAHAN . THE PROPRIETOR OF THIS CONCERN IS SMT. SUNITA GUPTA WHO IS WIFE OF THE ASSESSEE. DURING THE PREVIOUS YEAR UNDER CONSIDERAT ION THREE BANK ACCOUNTS OF THE ASSESSEE HAVE BEEN OPERATED OUT OF WHICH TWO ARE IN KOLKATA IN CORPORATION BANK AND INDUSIND BANK AND THE THIRD ONE IS IN BARBIL, ORISS A IN INDUSIND BANK. IN THESE BANK ACCOUNTS CASH HAS BEEN DEPOSITED ON DIFFERENT DATES . THE TOTAL CASH DEPOSITS IN THESE ACCOUNTS DURING THE PREVIOUS YEAR ARE RS. 4,47,500/ -, RS.72,41,000/- AND RS. 15,06,000/- RESPECTIVELY. DURING THE ASSESSMENT AS WELL AS APPE LLATE PROCEEDINGS THE A/R OF THE ASSESSEE HAS EXPLAINED THAT MAJORITY OF THIS CASH H AS BEEN WITHDRAWN FROM THE BANK ACCOUNTS OF SMT. SUNITA GUPTA AND M/S PRAGATI PARIV AHAN AND DEPOSITED IN THE BANK ACCOUNTS OF THE ASSESSEE. IT IS EXPLAINED THAT THE PURPOSE OF THIS ARRANGEMENT WAS TO FACILITATE TRANSFER OF FUNDS FROM THE BANK ACCOUNT OF M/S PRAGATI PARIVAHAN IN KOLKATA TO BARBIL, WHERE EXPENSES WERE TO BE PAID ON BEHALF OF M/S PRAGATI PARIVAHAN. FOR EXPLAINING THE SOURCE OF CASH IN THESE THREE BANK A CCOUNTS THE A/R OF THE ASSESSEE HAS PREPARED A STATEMENT IN WHICH FOR EACH CASH DEPOSIT IN THE THREE BANK ACCOUNTS IN THE NAME OF THE ASSESSEE, THE CORRESPONDING SOURCE FROM WHERE THE CASH HAS COME IS EXPLAINED. IN SUPPORT OF THIS STATEMENT THE COPIES OF BANK STATEMENTS OF SMT. SUNITA GUPTA AND M/S PRAGATI PARIVAHAN HAVE ALSO BEEN ENCL OSED. THIS STATEMENT AND THE COPIES OF BANK STATEMENTS WERE SUBMITTED BEFORE THE A.O. D URING THE ASSESSMENT PROCEEDINGS ALSO. IT IS SEEN THAT FOR EACH OF THE CASH DEPOSIT IN THESE THREE BANK ACCOUNTS THE CORRESPONDING ENTRY IN THE BANK ACCOUNTS OF SMT. SU NITA GUPTA AND M/S PRAGATI PARIVAHAN IS GETTING REFLECTED. IN RESPECT OF SOME OF THE ENTRIES THE SOURCE IS SHOWN AS 4 CASH WITHDRAWN FROM THE CORPORATION BANK ACCOUNT OF THE ASSESSEE HIMSELF WHICH IS ALSO GETTING REFLECTED IN HIS BANK STATEMENTS. IN R ESPECT OF THE SOURCE OF CASH THE CONFIRMATION LETTER FROM SMT. SUNITA GUPTA PROPRIET OR OF M/S PRAGATI PARIVAHAN HAS ALSO BEEN SUBMITTED ALONG WITH HER PAN NUMBER, COPY OF R ETURN AND BALANCE SHEET AND P & L A/C. THE COPY OF THE LEDGER ACCOUNT IN THE NAME O F THE ASSESSEE SHRI SUNIL GUPTA IN THE BOOKS OF M/S PRAGATI PARIVAHAN FOR THE TRANSACT IONS IN HIS INDUSIND BANK ACCOUNTS IN KOLKATA AND BARBIL HAVE ALSO BEEN SUBMITTED ALON G WITH A GENERAL CONTROL ACCOUNT IN THE BOOKS OF M/S PRAGATI PARIVAHAN IN THE NAME OF S HRI SUNIL GUPTA. ON EXAMINATION OF THESE LEDGER ACCOUNTS IT IS SEEN THAT THE ENTRIES F OR THE CASH DEPOSITED IN THE BANK ACCOUNTS IN THE NAME OF SHRI SUNIL GUPTA ARE SUITAB LY REFLECTED IN THESE LEDGER ACCOUNTS. THUS IT CAN BE SEEN THAT SMT. SUNITA GUPTA PROPRIET OR OF M/S PRAGATI PARIVAHAN HAS ACCEPTED THAT CASH DEPOSITED IN THE BANK ACCOUNT OF SHRI SUNIL GUPTA BELONGS TO HER AND HER PROPRIETORY CONCERN. IN SUPPORT OF THIS CLAIM S HE HAS GIVEN DOCUMENTARY EVIDENCES IN THE FORM OF BANK STATEMENT AND LEDGER ACCOUNTS I N HER OWN BOOKS OF ACCOUNTS. SHE IS HERSELF ASSESSED TO TAX AND HAS FILED COPIES OF HER RETURN, P & L A/C AND BALANCE SHEET. IN VIEW OF THESE EVIDENCES IT CANNOT BE DENIED THAT THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNTS OF THE ASSESSEE IS GETTING EXPLAINED. THEREFORE, THIS CASH CANNOT BE ADDED IN THE INCOME OF THE ASSESSEE. WHILE REJECTING THE EXPLANATION FURNISHED BY TH E ASSESSEE THE AO HAS MADE CERTAIN OBSERVATIONS ABOUT THE ARRANGEMENT MADE BY THE ASSE SSEE AND M/S PRAGATI PARIVAHAN ABOUT OPENING THE BANK A/CS IN THE NAME OF THE ASSE SSEE AND TRANSFERRING THE CASH IN THE MANNER DONE BY THEM. THESE OBSERVATIONS HAVE BEEN R EPRODUCED ON PAGE 2 AND 3 OF THIS ORDER. THESE OBSERVATIONS HAVE BEEN COMMENTED UPON BY THE AR OF THE ASSESSEE IN PARA 6 OF HIS SUBMISSION REPRODUCED IN PARA 3 ABOVE. I A GREE WITH THE COMMENTS MADE BY THE AR AND FEEL THAT SUCH OBSERVATIONS CANNOT BECOME TH E GROUND FOR REJECTING THE EXPLANATION OF THE ASSESSEE OVERLOOKING OTHER DOCUM ENTARY EVIDENCES (DISCUSSED ABOVE) FURNISHED BY THE ASSESSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITED IN HIS BANK A/CS. SIMILARLY THE AO CANNOT REJECT THE EXPLANATION OF T HE ASSESSEE ON THE GROUND THAT THE EVIDENCES REGARDING THE USE OF MONEY WITHDRAWN ON B EHALF OF PRAGATI PARIVAHAN FROM THE BANK A/CS OF THE ASSESSEE WERE NOT PRODUCED. WH EN THE PROPRIETOR OF M/S PRAGATI PARIVAHAN HAS OWNED UP THAT MONEY AND HAS EXPLAINED ITS SOURCE THE UTILIZATION OF THAT MONEY IS A MATTER RELATED TO THE BUSINESS OF THAT C ONCERN AND AN ADVERSE VIEW CANNOT BE TAKEN AGAINST THE ASSESSEE ON THIS GROUND. 3.5. AGGRIEVED BY THIS NOW THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD.DR APPEARING ON BE HALF OF REVENUE BY REFERRING TO THE GROUND RAISED BY THE REVENUE STATING THAT THE D OCUMENTARY EVIDENCES WHICH WERE NEVER PRODUCED BEFORE THE AO AT THE TIME OF ASSESSM ENT U/S 143(3) OF THE IT ACT ARGUED THAT THE BANK ACCOUNT OF SMT.SUNITA GUPTA AN D M/S PRAGATI PARIVAHAN HAVE NOT BEEN AVAILABLE BEFORE AO AT THE TIME OF ASSESSMENT AND COPY OF THE LEDGER ACCOUNT IN THE NAME OF ASSESSEE IN THE BOOKS OF ACCOUNTS OF M/ S.PRAGATI PARIVAHAN FOR THE TRANSACTIONS IS DISPUTED BY THE REVENUE. HE FURTHER CONTENDED THAT THE LD. CIT(A) WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO ASS ESSEE NOR CALLED FOR REMAND 5 REPORT HAS DECIDED THE ISSUE WHICH IS NOT IN ACCORD ANCE WITH LAW. THEREFORE HE REQUESTED TO SET ASIDE THE MATTER TO THE FILE OF AO FOR ADJUDICATION OF THE SAME AFRESH. 5. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE HAS SUPPORTED THE ORDER OF LD. CIT(A) AND FURTHER BY RE FERRING TO THE COPIES OF REPLY MADE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS WHI CH WERE PLACED AT PAGE NOS.100 TO 103 OF THE PAPER BOOK AND CERTIFIED COPIES OF ST ATEMENTS PURSUANT OF NOTICE U/S 131 FOR PERSONAL HEARING OF SUNITA GUPTA AND SUNIL GUPT A WHICH WERE PLACED AT PAGE NOS.108 TO 113 OF THE PAPER BOOK CONTENDED THAT THE RELEVANT MATERIALS ARE VERY MUCH THERE BEFORE THE AO ALSO. THEREFORE IT IS NOT FAIR ON THE PART OF THE REVENUE TO ASK FOR SETTING ASIDE THE MATTER TO AO. THEREFORE HE REQUES TED TO UPHELD THE ACTION OF LD. CIT(A). 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD INCLUDING THE COPIES OF REPLY M ADE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS WHICH WERE PLACED AT PAGE NO S.100 TO 103 AND THE CERTIFIED COPIES OF STATEMENT PURSUANT OF NOTICE U/S 131 FOR PERSONAL HEARING OF SUNITA GUPTA & SUNIL GUPTA WHICH WERE PLACED AT PAGE NOS.108 TO 11 3 OF THE PAPER BOOK, WE ARE OF THE VIEW THAT IN THE DOCUMENTS REFERRED BY THE LD. COUNSEL FOR ASSESSEE NOWHERE IT IS MENTIONED THAT THE BANK ACCOUNT OF SMT.SUNITA GUPTA AND M/S.PRAGATI PARIVAHAN AND THE LEDGER ACCOUNTS OF ASSESSEE IN THE BOOKS OF EMP LOYER M/S.PRAGATI PARIVAHAN ARE NOT ESTABLISHED THAT THEY ARE PLACED BEFORE THE AO. THE AO IN THE GROUNDS OF APPEAL HAS ALSO STATED THAT THE LD. CIT(A) HAS ACCEPTED TH E CONTENTION OF ASSESSEE WITHOUT EXAMINING THE SOURCE OF FUNDS IN THE HANDS OF EMPLO YER-WIFE AND ULTIMATE UTILISATION OF HUGE CASH FUNDS BY THE A/C HOLDER OR BY ALLEGED EMPLOYER-WIFE THROUGH DOCUMENTARY EVIDENCES, WHICH NEVER PRODUCED BEFORE THE AO AT THE TIME OF ASSESSMENT U/S. 143(3) OF THE IT ACT. THE AO HAS RA ISED THIS ISSUE IN GROUNDS OF APPEAL ITSELF. WE ARE OF THE VIEW THAT THE LD. CIT( A) SHOULD HAVE CALLED FOR THE REMAND REPORT IN THE SAID FACTS AND CIRCUMSTANCES O F THE CASE. SINCE HE HAS NOT CALLED FOR THE REMAND REPORT WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE TO THE FILE OF AO TO DECIDE THE SAME AFRESH AS PER LAW AFTER TAKING INTO CONSIDERATION OF 6 THE SUBMISSIONS AND AFTER SCRUTINY OF THE BANK ACCO UNTS OF SMT.SUNITA GUPTA AND M/S.PRAGATI PARIVAHAN AND THE LEDGER ACCOUNTS OF SH RI SUNIL GUPTA IN THE BOOKS OF THE EMPLOYER. WE ORDER ACCORDINGLY. 7. IN THE RESULT THE APPEAL OF REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. . ORDER PRONOUNCED IN THE COURT ON 04.05.2012. SD/- SD/- , ,, , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( ( !# !#!# !#) )) ) DATE: 04.05.2012. R.G.(P.S.) '3 . ,4 5'4'6- COPY OF THE ORDER FORWARDED TO: 1. SRI SUNIL GUPTA, 20-L, MOTILAL BASAK LANE, 3 RD FLOOR, KOLKATA-700054. 2 I.T.O., WARD-22(2), KOLKATA. 3. THE C.I.T. 4. CIT(A)-XIV, KOLKATA. 5. THE CIT(DR), KOLKATA BENCHES, KOLKATA -4 ,/ TRUE COPY, '3%0/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES