Sidheswar Panigrahi, Bhubaneswar V. ITO, Ward-2(4), Bhubaneswar

ITA 168/CTK/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7561 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 02-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DUTTA
• Assessee Lawyers: SIDHESWAR PANIGRAHI
• Keywords: Income from undisclosed sources; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 168 /CTK/2016 ASSESSMENT YEAR : 2011 - 2012 SIDHESWAR PANAIGRAHI, PLOT NO.2169, KEDARGAURI LANE, NEAR OLD POST OFFICE, POST: SAMANTRAIPUR, BHUBANESWAR. VS. ITO, WARD 2(4), BHUBANESWAR. PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SIDHESWAR PANIGRAHI REVENUE BY : SHRI SUVENDU DUTTA , DR DATE OF HEARING : 24 /11 / 2016 DATE OF PRONOUNCEMENT : 24 /11 / 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR , DATED 29.1.2016 , FOR THE ASSESSMENT YEAR 2011 - 2012 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT (A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION OF RS.5,74,126/ - TO THE INCOME OF THE ASSESSEE. 2 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS LEADING TO THIS APPEAL IS THAT THE ASSESSING OFFICER O BSERVED THAT FROM THE AIR INFORMATION RECEIVED, IT WAS FOUND THAT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS.28,50,040/ - IN HIS SAVING BANK ACCOUNT S WITH IDBI BANK, JANAPATH, BHUBANESWAR AND ICICI BANK, JANPATH, BHUBANESWAR, THE DETAILS OF WHICH ARE AS UNDER : SR.NO. NAME OF THE BANK A/C NO. TOTAL AMOUNT OF CASH DEPOSIT DURING F.Y. 2010 - 2011 1. IDBI BANK LTD., BBSR 042104000217262 RS.17,12,130/ - 2. ICICI BANK, BBSR 006101501999 RS.11,37,910/ - TOTAL: RS.28,50,040/ - 4. ON A QUERY BY THE ASSESSING OFFICER, THE ASSESSEE EXPLAINED THAT THE AMOUNTS WERE COLLECTED FROM THE STUDENTS FOR SUPPLY OF PMT FORMS TO STUDENTS AND TO AVAIL THE ALL INDIA MEDICAL COACHING IN THE IBOOK INSTITUTE. THE AMOUNTS COLLECTED FROM THE STUDENTS WERE DEPOSITED BY THE ASSESS EE IN THE BANK ACCOUNT, WHO W AS AN EMPLOYEE OF I BOOK INSTITUTE PRIVATE LIMITED IN THE CAPACITY OF SR. CHIEF MANAGER (STUDIES). THEREAFTER, THE ASSESSEE PAID THESE AMOUNTS TO I BOOK INSTITUTE PRIVATE LIMITED BY WAY OF A/C PAYEE 3 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 CHEQUE/TRANSFER OF FUNDS. T HE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND ADDED RS.28,50,040/ - TO THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. 5. BEFORE THE LD CIT(A), THE ASSESSEE HAD FURNISHED AFFIDAVITS FROM FOUR STUDENTS, WH O HAD CATEGORICALLY STATED THAT THEY HAD MADE TH E PAYMENTS OF FEES DUE TO M/S. I BOOK INSTITUTES PVT LTD., IN CA S H THROUGH SHRI SIDHESWAR PANIGRAHI, WHICH PAYMENTS WERE STATED TO BE DEPOSITED IN THE BANK ACCOUNT OF SHRI SIDHESWAR PANIGRAHI. THE ASSESSEE H AD ALSO PREFERRED THE ADDITIONAL GROUNDS AGAINST THE ABOVE FUNDS. IN VIEW OF ABOVE, LD CIT (A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER FURNISHED THE REMAND REPORT DATED 28.12.2015, THE RELEVANT PORTION OF WHICH IS REP RODUCED HEREUNDER: IN THIS CASE, THE REGULAR A SSESSMENT WAS COMPLETED U/S.143( 3) ON 21.2.2014 AND THE TOTAL INCOME WAS DETERMINED AT RS.35,05,670/ - AGAINST THE RETURNED INCOME AT RS.6,55,630/ - . WHIL E COMPLETING THE ASSESSMENT AN ADDITION OF RS.28,50,040/ - WAS MADE AS INCOME FROM UNDISCLOSED SOURCES. BY VIRTUE OF THE DIRECTION OF THE LD CIT (A), THE CASE WAS POSTED FOR HEARING ON SEVERAL DATES TO EXAMINE THE ADDITIONAL INFORMATION FURNISHED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEE DINGS. THE ADDITIONS, IN QUESTION, WAS MADE, WHILE PASSING THE ASSESSMENT ORDER, FOR THE REASONS DISCUSSED IN THE BODY OF THE ORDER THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITS IN BOTH ICIC1 AND 1DBI BANKS AMOUNTING TO RS.28,50,040/ - . TH E ASSESSEE THROUGH, HIS AR VIDE HIS EXPLANATION DATED 31.07.2015 STATED AS UNDER: ' THAT IT IS RESPECTFULLY SUBMITTED THAT PRESENT ASSESSEE / APPELLANT ALSO SEEK KIND PERMISSION O PRODUCE THE EVIDENCE THE 4 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 SOURCES OF CASH DEPOSITS RECEIVED ON BEHALF OF THE STUDENTS TO FACILITATE THE ADMISSION AND THE SAME HAS BEEN REMITTED TO THE IBOOKS INSTITUTE BY WAY OF CHEQUE OR TRANSFER AND THEREFORE AS EVIDENCE THROUGH THE AFFIDAVITS GIVEN BY SOME OF STUDENTS AND THEIR PARENTS WHO WERE TAKING ADMISSION FOR MEDICAL AND ENGINEERING COACHING DURING THE A.Y 2011 - 12, ARE ANNEXED THE SAME FOR YOUR HONOUR KIND PERUSAL AND FURTHER PRAYS THAT YOUR HONOUR MAY KINDLY BE ACCEPT THE SAID AFFIDAVITS AS DOCUMENTARY EVIDENCE - CUM - EXPLANATION WHICH HAS NOT BEEN PRODUCED BEFORE THE A.O D URING THE SAID ASSESSMENT PROCEEDING IN THE END OF JUSTICE '. IN VIEW OF THE ABOVE FACTS, A LETTER WAS ISSUED TO THE IBOOKS INSTITUTE PVT. LTD TO EXAMINE THE FACTS STATED BY THE ASSESSEE. IN COMPLIANCE THE AR OF THE INSTITUTE APPEARED TIME TO TIME AND FUR NISHED THE DETAILS OF CHEQUES RECEIVED BY IBOOKS INSTITUTE PVT. LTD FROM THE ACCOUNTS OF THE ASSESSEE MAINTAINED WITH 1CIC1 AND IDBI BANKS. HE FURTHER STATED THAT SRI SIDHESWAR PANIGRAHI IS THE SENIOR CHIEF MANAGER (STUDIES) OF THE INSTITUTE. SINCE THE DIR ECTORS REMAIN AWAY FROM BHUBANESWAR, SRI PANIGRAHI LOOKS AFTER THE INSTITUTE IN BHUBANESWAR. HE FURTHER STATED THAT THE INSTITUTE DOES NOT RECEIVE / PAY ANY CASH FROM / TO THE STUDENTS. THEREFORE, THE STUDENTS CARRYING THE CASH FOR ADMISSION IN THE INSTITU TE IS RECEIVED BY SRI PANIGRAHI AND DEPOSIT IN HIS ABOVE TWO BANKS. THE FEES OF THE STUDENTS SO DEPOSITED IN THE SHAPE OF CASH IN THE ACCOUNTS OF THE ASSESSEE ARE FINALLY REMITTED TO THE INSTITUTE IN THE SHAPE OF CHEQUES, AS EVIDENT FROM THE BANK ACCOUNTS. THE AR OF THE INSTITUTE ALSO FURNISHED THE LEDGER COPIES OF BANK ACCOUNTS WHICH SHOWS AS UNDER: DETAILS OF PAYMENTS RECEIVED FROM STUDENTS THROUGH CHEQUES OF SIDHESWAR PANIGRAHI NAME OF THE COMPANY FROM BANK ACCOUNT OF SRI SIDHESWAR PANIGRAHI ICICI BANK IDBI BANK IBOOKS INSSTITUTE PVT 8,26,347 7,37,424 IBOOKS COLLEGE PVT. LTD 22,750 6,43,313 BOOKS INFOBOWLS PVT.LTD - 48,080 TOTAL 8,49,097 14,26,817 GRAND TOTAL - 22,75,914 5 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 AGAI NST THE DEPOSIT OF CASH TO THE TUNE OF RS.28,50,040/ - , AS DESCRIBED IN THE ASSESSMENT ORDER, THE IBOOKS CONFIRMS THE RECEIPT CF.RS.22,75,914/ - RECEIVED FROM THE ASSESSEE SRI SIDHESWAR PANIGRAHI THROUGH CHEQUES OF ABOVE MENTIONED TWO BANKS. THEREFORE, THERE IS A DIFFERENCE OF RS.5,74,126/ - ( RS. RS.28,50,040 - RS. 22,75,914 ) DEPOSITED IN THE SHAPE OF CASH FOR WHICH THE ASSESSEE COULD NOT EXPLAIN THE SOURCE WITH SUPPORTED AND PROPER EVIDENCES.' 6. THE LD CIT(A) PROVIDED A REMAND REPORT TO THE ASSESSEE FOR COMMENTS. IN REPLY, THE ASSESSEE OBJECTED TO THE REPORT OF THE ASSESS ING OFFICER DENYING RELIEF ON BALANCE AMOUNT OF RS.5,74,126/ - AND FURNISHED COPY OF DETAILS OF TRANSACTION WITH IDBI BANK, DETAILS OF MAJOR CASH TRANSACTIONS WITH IDBI BANK TO SUBSTANTIATE THE SOURCE OF DEPOSITS OF THE ALLEGED BALANCE AMOUNT. 7. AFTER C ONSIDERING THE REPORT OF THE ASSESSING OFFICER AND ADDITIONAL EVIDENCES OF THE ASSESSEE, THE LD CIT(A) HELD AS UNDER: ON CAREFUL CONSIDERATION OF ADDITIONAL EVIDENCES AND THE REPORT OF THE A.O. , I FIND THAT THE APPELLANT CAN DEMONSTRATE THE SOURCE OF CASH DEPOSIT TO THE EXTENT OF RS.22,75,914/ - OUT OF RS.28,50,040/ - . THE SUBMISSION MADE ALONG WITH THE REJOINDER TO REMAND REPORT HAS ALREADY BEEN CONSIDERED BY THE A.O. AND THE A.O. REJECTED THE SUBMISSION ON THE BASIS OF ALL MATERIAL EVIDENCE ADDUCED BEF ORE HIM AND ON THE BASIS OF CONFIRMATION RECEIVED FROM THE EMPLOYER. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND PLACING RELIANCE IN THE REMAND REPORT OF THE A.O., THE ADDITION MADE ON THIS COUNT IS RESTRICTED TO RS.5,74,126/ - . 8. BEING AGGRIE VED AGAINST THE SAID ORDER OF THE LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE ME. 6 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 9. THE ASSESSEE APPEARED IN PERSON AND REFERRING TO PAGE NOS.3 & 4 OF PAPER BOOK SUBMITTED THAT RS.5,74,126/ - SUSTAINED AS ADDITION BY LD CIT(A) AS UNDISCLOSED INCOME OF THE ASSESSEE IS NOT JUSTIFIED. AS IT WILL BE OBSERVED THAT THE ASSESSEE HAS WITHDRAWN THESE AMOUNTS FROM THE BANK AND PURCHASED PMT FORMS FOR STUDENTS AND HANDED OVER TO THEM. HE SUBMITTED THAT THE DETAILS OF WHICH ARE AS UNDER: DETAILS OF MAJOR CASH TRANSAC TIONS IN IDIBI BANK DATE AMOUNT NAME PARTICULARS AMOUNT 7.10.10 55,710 ALL INDIA MEDICAL PURCHASE OF PMT FORMS 55,710 13.10.10 16,000 - DO - - DO - 16,000 18.10.10 6,000 - DO - - DO - 6,000 23.11.10 23,200 - DO - - DO - 23,000 29.12.10 2,000 - DO - - DO - 2,000 24.1.11 11,000 - DO - - DO - 11,000 1.3.11 71,180 - DO - - DO - 71,160 17.3.11 32,560 - DO - - DO - 32,560 24.3.11 50,000 - DO - - DO - 50,000 7 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 DETAILS OF MAJOR CASH TRANSACTIONS IN ICICI BANK DATE AMOUNT DATE NAME PARTICULARS AMOUNT 5.10.10 32,500 5.10.10 ALL INDIA MEDICAL PURCHASE OF PMT FORMS FOR STUDENTS 32,500 11.10.10 30,000 11.10.10 - DO - - DO - 30,000 6.12.10 45,000 6.12.10 - DO - - DO - 45,000 15.12.10 35,000 15.12.10 - DO - - DO - 35,000 3.1.2011 35,000 3.1.11 - DO - - DO - 35,000 13.1.11 30,000 13.1.11 - DO - - DO - 30,000 21.3.11 85,000 21.3.11 SANTOSH SAHOO BAMBRA - DO - - DO - 85,000 10 . HENCE, HE SUBMITTED THAT HE WAS WORKING FOR IBOOK INSTITUTE PVT LTD., AND THE MONIES WERE THE COST OF PMT FORMS COLLECTED FOR STUDENTS, OUT OF WHICH PMT FORMS WERE PURCHASED AND SUPPLIED TO THE STUDENTS. HE SUBMITTED THAT WHEN THE INSTITUTE COULD NOT SUPPLY THE FORMS IT HAD ASKE D THE ASSESSEE TO PURCHASE THE SAME AND GIVE IT TO THE STUDENTS. HE COMPLIED WITH THE SAME. HENCE, NO ADDITION WAS CALLED FOR IN HIS HANDS AS UNDISCLOSED INCOME. 11. LD D.R. RE LIED ON THE ORDER OF THE LD CIT (A). 12. I FIND THAT OUT OF TOTAL DEPOSIT OF RS.28,50,040/ - IN THE BANK ACCOUNT OF THE ASSESSEE, LD CIT(A) ON THE BASIS OF REMAND REPORT ACCEPTED 8 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 RS.22,75,914/ - TRANSFERRED BY THE ASSESSEE BY CHEQUE/FUNDS TRANSFER TO IBOOK INSTITUTE PVT LTD., WHICH WERE COLLECTED B Y HIM FROM STUDENTS FOR PURCHASE OF PMT FORMS AND FOR ALL INDIA MEDICAL COACHING. THE BALANCE AMOUNT OF RS.5,74,126/ - WERE NOT ACCEPTED. THE ASSESSEE HAS FILED DETAILS, AS QUOTED ABOVE, ON VARIOUS DATES WHEN THE FUNDS WERE RECEIVED FROM STUDENTS AND WERE DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE AND WHEN THEY WERE WITHDRAWN FOR PURCHASE OF PMT FORMS TO BE GIVEN TO THE STUDENTS AS THE I BOOK INSTITUTE PVT LTD., COULD NOT SUPPLY THE FORMS AND REQUESTED SHRI PANIGRAHI, THE ASSESSEE AN EMPLOYEE OF THE INST ITUTE TO PURCHASE THE SAME AND SUPPLY TO THE STUDENTS. THUS, IN VIEW OF ABOVE EVIDENCE PRODUCED BY THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT NO ADDITION ON ACCOUNT OF UNDISCLOSED INCOME CAN BE MADE IN THE HANDS OF THE ASSESSEE. I, THEREFORE, SET ASI DE THE ORDER OF LD CIT(A) AND DELETE THE ADDITION OF RS.5,74,126/ - SUSTAINED AS UNDISCLOSED INCOME AND ALLOW GROUND OF APPEAL OF THE ASSESSEE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 24 / 11 /20 16 IN THE PRESENCE OF PARTIES. S D / - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 24 /11 /2016 B.K.PARIDA, SPS 9 ITA NO. 168/CTK/2016 ASSESSMENT YEAR :2011 - 2012 COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : SIDHESWAR PANAIGRAHI, PLOT NO.2169, KEDARGAURI LANE, NEAR OLD POST OFFICE, POST: SAMANTRAIPUR, BHUBANESWAR. 2. THE RESPONDENT. ITO, WARD 2(4), BHUBANESWAR. 3. THE CIT(A) , BHUBANESWAR 4. CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//