Bijay Kumar De, Kolkata V. Assessing Officer, Circle 23, Kolkata, Kolkata

ITA 1678/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9298 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 22-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DULAL CHANDRA MONDAL J
• Assessee Lawyers: ASIM CHOUD HURY
• Section: 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1678/KOL/2016 ASSESSMENT YEAR:2007-08 BIJAY KUMAR DE 2F TRINAYANI 6,4, LAKE EAST,4 TH ROAD, KOLKATA-75 [ PAN NO.ADSPD 4924 D ] / V/S . DCIT, CIRCLE-23, BAMBOO VILLA, 169, ACHARYA J.C. BOSE ROAD, KOLKATA14 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI ASIM CHOUDHURY, AR /BY RESPONDENT SHRI DULAL CHANDRA MONDAL, JCIT-DR /DATE OF HEARING 10-01-2017 /DATE OF PRONOUNCEMENT 03-03-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKATA DATED 29.06.2016. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-23, KOLKATA U/S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 31.12.2009 FOR A SSESSMENT YEAR 2007-08. SHRI ASIM CHOUDHURY, LD. AUTHORIZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE AND SHRI DULAL CHANDRA MONDAL LD DEPARTMENTAL REPRE SENTATIVE REPRESENTED ON BEHALF OF REVENUE. 2. FACTS IN BRIEF ARE THAT ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND DERIVES HIS INCOME FROM SOURCE OF SALARY. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS ITA NO.1678/KOL/2016 A.Y. 2 007-08 BIJAY KR. DE VS. DCIT, CIR;23 KOL PAGE 2 FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME O F 5,85,470/-. THEREAFTER CASE WAS SELECTED UNDER SCRUTINY ON THE BASIS OF AIR AND CON SEQUENTLY NOTICE U/S. 143(2) WAS SERVED UPON ASSESSEE. THE ASSESSMENT WAS FRAMED U/S . 144 OF THE ACT AT A TOTAL INCOME OF 13,60,430/- AFTER TREATING THE INVESTMENT WITH RURA L ELECTRIFICATION CORPORATION LTD. (RECL FOR SHORT) FOR 9 LAKH TO THE TOTAL INCOME OF ASSESSEE. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS OBSERVED THAT ASSESSEE HAS MADE INVESTMENT IN RECL FOR 9 LAKH. ON QUESTION BY ASSESSING OFFICER ABOUT THE SOURCE OF SUCH INVESTMENT, ASSESSEE FAILE D TO SUBMIT THE DOCUMENTARY EVIDENCE. THEREFORE, AO TREATED THE SAME AS INCOME FROM UNDISCLOSED SOURCE AND ADDED TO THE INCOME OF ASSESSEE. 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE LD . CIT(A) WHEREAS ASSESSEE SUBMITTED THAT HE HAS NOT MADE ANY INVESTMENT AS DI SCUSSED ABOVE. AS PER THE ASSESSEE INVESTMENT WAS MADE BY HIS RELATIVES AND T HEIR NAMES WERE REFLECTING AS SECOND OR THIRD HOLDER OF SUCH INVESTMENT. THE NAME OF ASSESSEES RELATIVES STANDS AS UNDER:- INVESTMENT MADE IN AMOUNT (RS) NAME OF FIRST HOLDER PAN OF THE FIRST HOLDER RELATIONSHIP WITH THE APPELLANT LOTUS INDIA MF 2,00,000 PARNA DE AEMPD2370N WIFE SUNDARAM MF 2,00,000 ANGURBALA DEY AHMPD4918M MOTHE R SUNDARAM MF 2,00,000 PURNIMA DE AHSPD0460J BROTHER S WIFE PRINCIPAL MF 3,00,000 SWAAN KR. DUTTA AGXPD0242Q FA THER-IN-LAW THE ASSESSEE FURTHER SUBMITTED THAT THE INVESTMENT WAS MADE BY THE RELATIVES AND FAMILY MEMBERS OUT OF THEIR OWN SOURCES OF FUND. TH E ASSESSEE IN SUPPORT OF HIS CLAIM HAS ALSO SUBMITTED THE COPIES OF AFFIDAVITS ALONG W ITH THEIR BANK STATEMENT. THE ASSESSEE FURTHER SUBMITTED THAT HIS PAN WAS USED FO R THE IMPUGNED INVESTMENT. IT IS BECAUSE NONE OF THE FIRST HOLDERS WAS ISSUED THE PA N ON THE DATE OF IMPUGNED INVESTMENT. HOWEVER, LD. CIT(A) OBSERVED THAT NONE OF THE PERSON WHO CLAIMED TO HAVE MADE THE INVESTMENT WAS THE MAN OF MEANS FOR S UCH HUGE INVESTMENT. ACCORDINGLY, AFTER CONSIDERING THE SUBMISSION OF AS SESSEE GRANTED PARTLY RELIEF TO ASSESSEE BY OBSERVING AS UNDER:- UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CREDITWORTHINESS OF SRI SWAPAN KUMAR DUTTA DND SMT. URNIMA DE ARE NOT ACCEP TABLE. CREDITWORTHINESS OF ITA NO.1678/KOL/2016 A.Y. 2 007-08 BIJAY KR. DE VS. DCIT, CIR;23 KOL PAGE 3 SMT. ANGUR BALA DE, TO THE EXTENT OF CASH DEPOSITED IN HER ACCOUNT, IS ALSO NOT ACCEPTABLE. AS THE APPELLANT HAS ACTIVELY FACILITATED THE INVES TMENTS MADE IN MUTUAL FUND UNITS BY GIVING HIS PAN AND ALSO PROVIDING LOGISTICAL SUPPOR T. IT IS POSSIBLE THAT HE HAS ROUTED HIS OWN UNDISCLOSED MONEY THROUGH HIS RELATIVES IN THE GARB OF INVESTMENT IN MUTUAL FUND. AGGRIEVED BY THIS, ASSESSEE HAS COME UP IN APPEAL B EFORE US ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN HOLDING THAT THE ASSESSEE HAS ROUTED HIS OWN UNDISCLOSED MONEY THROU GH HIS RELATIVES IN THE GARB OF INVESTMENT IN MUTUAL FUND AND CONFIRMING THE ADDITI ON MADE IN THE ORDER PASSED BY ASSESSING OFFICER UNDER SECTION 144 OF THE INCOME T AX ACT TO THE EXTENT OF RS.5,88,000/-. 2. FOR THAT IN FINDINGS OF THE COMMISSIONER OF INCO ME TAX (APPEAL) THAT IT IS POSSIBLE THAT THE ASSESSEE HAS ROUTED HIS OWN UNDISCLOSED MO NEY THROUGH HIS RELATIVES IS WITHOUT ANY BASIS, DISPUTED AND ARBITRARY. 3. FOR THAT THE CIT(A) HAS NOT APPRECIATED THE FACT THAT INVESTMENTS IN THE NAME OF THREE RELATIVES IN WHICH HE HAS UPHELD THE ADDITION S MADE BY THE ASSESSING OFFICER IN TWO OUT OF THE THREE THE ASSESSEE WAS THE THIRD HOL DER AND NOT EVEN THE SECOND HOLDER. 4. FOR THAT THE CIT(A) HAS ERRED ON FACTS THAT NONE OF THE INVESTORS HAD THEIR OWN PAN NOS AT THE TIME OF MAKING SUCH INVESTMENTS WHILE FA LLING TO CALL UPON ANY DETAILS FROM THE ASSESSEE IN RELATION TO THE SAME. 5. FOR THAT THE CIT(A) ERRED ON FACTS AND HAS NOT A PPRECIATED THE FACTS THAT THE INVESTMENTS WERE MADE FROM ACCUMULATED FUNDS WHICH WAS ACCUMULATED OVER THE PERIOD OF TIME AND WHICH WAS BEYOND THE MANDATORY R EQUIREMENTS EVEN UNDER THE RBI ACT FOR 8 YEARS AND HENCE IT WAS NOT POSSIBLE FOR T HE ASSESSEE TO PROVIDE ALL SUPPORTING SUCH DETAILS. IN ANY EVENT EVEN THOUGH I T HAS BEEN ACCEPTED BY THE CIT(A) THAT THE AMOUNT WAS ACCUMULATED OVER A PERIOD OF TI ME AND THE SAME COULD NOT BE THE FUND OF THE ASSESSEE. 6. FOR THAT THE ORDER OF THE CIT(A) IS PERVERSE AND ERRONEOUS IN AS SUCH AS NONE OF THE FACTS HAS BEEN APPRECIATED AND EVEN MAKING FALSE AS PERSIONS AS OF THE FACT THAT PAN NUMBERS WERE OBTAINED SUBSEQUENT TO THE INVESTMENT. 7. FOR THAT THE CIT(A) ERRED IN LAW AND ON FACTS TO HOLD THAT THE CREDITWORTHINESS OF THE ASSESSEE IN MAKING INVESTMENT WAS NOT PROVED AN D ALSO ERRED IN LAW NOT TO APPRECIATE THE FACT THAT SINCE THERE WAS NO AMOUNT CREDITED IN THE BOOKS F THE ASSESSEE CREDITWORTHINESS UNDER NO CIRCUMSTANCES, HAD TO BE PROVED BY THE ASSESSEE. THE ASSESSEE HAS GIVEN ALL THE RELEVANT DETAILS AND CRE DITWORTHINESS, IF ANY, WHICH HAS TO BE DETERMINED BY THE ASSESSING OFFICER OF THE PERSO NS MAKING THE INVESTMENT AND IT WAS NOT REQUIRED OF THE ASSESSEE WHO IS STANDING ON LY AS A NOMINEE I.E. SECOND OR THIRD HOLDER OF THE INVESTMENT TO PROVE CREDITWORTH INESS. 8. FOR THAT THE CIT(A) ERRED IN FACT THAT ONLY RS.5 00/- WAS IN THE ACCOUNT OF NANI GOPAL DEY WHEREAS DETAILS OF BANK ACCOUNT WAS PROVI DED TO CIT(A) AND NANI GOPAL DE BEING THE SMALL TIME BUSINESSMAN OF HARDWARE HAD A REGULAR SOURCE OF INCOME AND WAS ALSO REGULARLY FILING HIS INCOME TAX RETURN SIN CE 1987-1988. 9. FOR THAT THE ORDER OF THE CIT(A) IS PERVERSE AS THE BANK ACCOUNT STATEMENT PROVIDED WERE OLD AND NO EVIDENCE WHATSOEVER WAS BROUGHT BY EITHER THE AO OR THE CIT(A) TO REFUTE THE EVIDENCE PROVIDED BY THE ASSESSEE. THE E VIDENCE PROVIDED BY THE ASSESSEE ITA NO.1678/KOL/2016 A.Y. 2 007-08 BIJAY KR. DE VS. DCIT, CIR;23 KOL PAGE 4 HAS BEEN DISREGARDED. THIS IS AGAINST THE VERY BASI C TENANTS AND PROVISIONS OF THE INDIAN EVIDENCE ACT, 1872. 10. FOR THAT THE CIT(A) HAS IGNORED THE AFFIDAVITS FILED BY THE DIFFERENT INVESTORS (1 ST HOLDER OF THE INVESTMENT WITHOUT FINDING ANY CONTRA RY EVIDENCE AND ADDITIONS HAS BEEN MADE ERRONEOUSLY ON SURMISES AND CONJECTURES. 11. FOR THAT THE APE RESERVES ITS RIGHT TO ADD FURT HER TO THE ABOVE GROUNDS AND/OR AMEND ANY ONE OF THEM AT OR BEFORE THE TIME OF THE HEARING OF THE APPEAL. 4. GROUNDS NO.1 TO 9 ARE INTER-RELATED AND THEREFOR E BEING TAKEN UP TOGETHER. LD. AR FOR THE ASSESSEE BEFORE US SUBMITTED PAPER BOOK WHICH IS RUNNING PAGES 1 TO 51 AND STATED THAT IN ALL THE INVESTMENTS, HE IS JUST SECOND HOLDER OF INVESTMENTS. HIS NAME WAS GIVEN AS SECOND HOLDER SO THAT IN THE EVEN T OF ANY MISHAPPENING TO THE FIRST HOLDER THE MONEY CAN BE KEPT SAFE. LD. AR IN SUPPOR T OF HIS CLAIM SUBMITTED THE COPIES OF INVESTMENT WHERE HIS NAME WAS SHOWN AS SE COND HOLDER OF THE INVESTMENT. LD. AR FURTHER SUBMITTED THE COPIES OF BANK STATEME NTS WHICH ARE PLACED ON PAGES 37 TO 41 OF THE PAPER BOOK AND STATED THAT REASONABLE OPPORTUNITY WAS NOT PROVIDED BY AO AT THE TIME OF ASSESSMENT PROCEEDINGS. LD. AR AL SO SUBMITTED THAT ADDITION SUSTAINED IN THE HANDS OF ASSESSEE ON SURMISE AND C ONJECTURE BY LD. CIT(A) WHICH CANNOT HOLD IN THE EYES OF LAW. ON THE OTHER HAND, LD. DR SUBMITTED THAT INFORMATIO N WAS GATHERED THROUGH AIR AND THE NAME OF ASSESSEE WAS VERY MUCH REFLECTING IN MU TUAL FUND UNITS. HE VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRE SENT CASE RELATES TO DISALLOWANCE MADE BY AO BY TREATING THE IMPUGNED INVESTMENT AS F ROM UNDISCLOSED SOURCES. HOWEVER, LD. CIT(A) HAS GRANTED PARTLY RELIEF. NOW, THE ISSUE BEFORE US ARISE SO AS TO WHETHER THE INVESTMENT MADE BY ASSESSEE IS THE UNDI SCLOSED INCOME OF ASSESSEE IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE. ADMI TTEDLY, THERE IS NO DISPUTE THAT ASSESSEES NAME IN ALL THE INVESTMENTS IS REFLECTIN G AS SECOND OR THIRD HOLDER OF SUCH INVESTMENT. THERE ARE FOUR RELATIVES OF ASSESSEE WH O HAVE MADE INVESTMENT AND THEY HAVE GIVEN AFFIDAVITS IN SUPPORT OF SUCH INVESTMENT S. WE FIND THAT LD. CIT(A) IN THE INSTANT CASE HAS SUSTAINED THE ADDITION MADE BY AO ON SURMISE AND CONJECTURE. AT THIS ITA NO.1678/KOL/2016 A.Y. 2 007-08 BIJAY KR. DE VS. DCIT, CIR;23 KOL PAGE 5 JUNCTURE, IT IS IMPORTANT TO HIGHLIGHT THE OPERATIV E PORTION OF THE ORDER OF LD. CIT(A) AS UNDER:- AS THE APPELLANT HAS ACTIVELY FACILITATED THE INVE STMENTS MADE IN MUTUAL FUND UNITS BY GIVING HIS PAN AND ALSO PROVIDING LOGISTICAL SUP PORT. IT IS POSSIBLE THAT HE HAS ROUTED HIS OWN UNDISCLOSED MONEY THROUGH HIS RELATIVES IN THE GARB OF INVESTMENT IN MUTUAL FUND. FROM THE ABOVE FINDING OF LD. CIT(A), WE FIND THAT LD. CIT(A) HIMSELF IS NOT SURE ENOUGH TO HOLD WHETHER THE INVESTMENT IN THE INSTAN T CASE, WAS MADE BY ASSESSEE. THEREFORE, IN OUR CONSIDERED VIEW, THE ADDITION CAN NOT SUSTAIN ON THE BASIS OF HIS SURMISE AND CONJECTURE. MOREOVER, THE PARTIES HAVE GIVEN THEIR AFFIDAVITS AND BANK STATEMENTS TO JUSTIFY THE SOURCE OF INVESTMENT. IN THIS CONNECTION, WE RELY IN THE CASE OF ITO V. PRAVEEN RAMKRISHNA UPGANLAWAR (2005) 142 TAXMAN 76 (NAGPUR) (MAG) AND RELEVANT EXTRACT IS REPRODUCED BELOW: 7.UNDER SECTION 69, IF THE ASSESSEE HAS MADE ANY IN VESTMENT WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND NO EXPLANATION IS OFFER ED ABOUT THE NATURE AND SOURCE OF INVESTMENT, THE VALUE OF THE INVESTMENT MAY BE DEEM ED TO BE THE INCOME OF THE ASSESSEE. UNDER SECTION 69A, IF AN ASSESSEE IS FOUN D TO BE THE OWNER OF MONEY, BULLION, ETC. AND IF THE ASSESSEE OFFERS NO EXPLANA TION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF MONEY, THE MONEY MAY BE DEEMED TO BE INCOME OF THE ASSESSEE. ASSUMING THAT THE ASSESSING OFFICER HAD INVOKED THE PROVISIONS OF SECTION 69 OR SECTION 69A IN THE PRESENT CASE, THE FIRST CONDITIO N THAT WAS REQUIRED TO BE SATISFIED WAS THAT THE ASSESSEE HAD EITHER MADE THE INVESTMEN T OR THAT THE ASSESSEE IS FOUND TO BE THE OWNER OF THE MONEY LYING IN THE BANK ACCOUNT . IN THE LIGHT OF THE ASSERTION BY MRS. YOJANA THAT SHE WAS THE OWNER OF THE MONEYS LY ING IN THE JOINT ACCOUNT WHICH WAS NOT DENIED BUT AFFIRMED BY THE ASSESSEE, ANY FU RTHER ENQUIRY AGAINST THE ASSESSEE, IN OUR VIEW, WAS NOT WARRANTED. AS ALREADY STATED T HAT THERE IS NO PRESUMPTION THAT THE MONEYS LYING IN A JOINT ACCOUNT WITH A BANK, VI S-A-VIS THIRD PARTIES OTHER THAN THE BANK, BELONGS TO ONLY ONE OF THEM OR TO BOTH EQUALL Y. IN OUR VIEW, THEREFORE, THERE WAS NO CASE FOR MAKING ANY ENQUIRY IN THE ASSESSEE'S CA SE. ANY ENQUIRY ABOUT THE SOURCE OF MONEY LYING IN THE BANK ACCOUNT OUGHT TO HAVE BE EN DIRECTED ONLY AGAINST MRS. YOJANA AND NOT THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT THERE ARE SOME OTHER MATERIAL TO SHOW THAT THE ASSESSEE IS, IN FACT, THE OWNER OF THESE MONEYS OR IT IS THE ASSESSEE'S INVESTMENT EXCEPT THE FACT THAT THE MONE YS WERE LYING IN A JOINT ACCOUNT AND ONE OF THE ACCOUNT HOLDER WAS THE ASSESSEE. IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER HAS NOT MADE OUT ANY PRIMA FACIE CASE BY RE JECTING THE CLAIM OF MRS. YOJANA THAT THE MONEYS BELONGED TO HER. IN VIEW OF THE ABOVE CITED CASE LAWS, WE FIND THAT THE ADDITION MADE BY ASSESSING OFFICER AND SUBSEQUENTLY SUSTAINED BY LD. CIT(A) IS NOT SUSTAINABLE IN THE LIGHT OF AFORESAID FACTS AND CIRCUMSTANCES OF CASE LAW (SUPR A). THE LD. CIT-A IN THE INSTANT CASE HAS NOT FORMED ANY FIRMED OPINION THAT IT WAS THE ASSESSEE MONEY INVESTED IN THE ITA NO.1678/KOL/2016 A.Y. 2 007-08 BIJAY KR. DE VS. DCIT, CIR;23 KOL PAGE 6 MUTUAL FUND THROUGH HIS RELATIVES. THE LD. CIT-A HA S JUST SUSTAINED THE ADDITION ON THE POSSIBILITY OF ASSESSEE MONEY USED IN THE IMPUGNED INVESTMENT. IN OUR VIEW THE ADDITION CANNOT SUSTAIN ON THE BASIS OF SURMISE & C ONJECTURE. HENCE, WE REVERSE THE ORDER OF LD. CIT(A) AND THIS GROUND OF ASSESSEES A PPEAL IS ALLOWED. 6. REMAINING GROUNDS NO.10 & 11 ARE GENERAL IN NATU RE AND DO NOT REQUIRE ANY ADJUDICATION. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 03/03/2017 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S ! - 03/03/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BIJAY KR. DE, 2F TRINAYANI 6/4 LAKE EAST , 4 TH ROAD, KOL-75 2. /RESPONDENT-DCIT, CIRCLE-23, BAMBOO VILLA, 169, A.J .C.BOSE, RD., KOL-14 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ , /TRUE COPY/ / '#,