ITO, Ward - 48(4), Kolkata, Kolkata V. Md. Ashraf Ali, Howrah

ITA 169/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2483 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 30-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 10-02-2009
• Court: TRIBUNAL

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - C , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . , , SHRI C.D. RAO, ACCOUNTANT ME MBER . / I.T.A.NO. 169/KOL/2009 AND / CROSS OBJECTION NO.13/KOL/2009 (FILED BY THE ASSESSEE) / ASSESSMENT YEAR 2004 - 05 INCOME - TAX OFFICER, WARD 48(4), KOLKATA. - - - VERSUS - . MD.ASRAF ALI , 19, JOLAPARA MASZ ID LANE, HOW RAH 711 101. ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI PIYUSH KOLHE, DR / FOR THE RESPONDENT : / SHRI MANISH TIWARI, AR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE REVENUE HAS FILED THIS APPEAL AGAINST ORDER DT.23.10.2008 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) XXX, KOLKATA FOR THE ASSESSMENT YEAR 2004 - 05. THE ASSESSEE HAS FILED THE CROSS OBJECTION. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT THE ESTIMATION OF APPELLANTS INCOME ON THE BASIS OF NET PROFIT @5% ON ADDITION OF RS.26,55,618 BY LD. CIT(A) XXX, KOLKATA IS NOT JUSTIFIED. 2. THAT THE ASSUMPTION OF SOURCE OF CASH DEPOSITS FOR RS.10,53,00 0 FROM TRADING RECEIPTS BY LD. CIT(A) XXX, KOLKATA IS NOT CORRECT WHEN ASSESSEE HAS FAILED TO PROVE THE SOURCE OF DEPOSIT OF MONEY. 3. THAT THE CHEQUES DEPOSITS OF RS.16,02,618 STATED TO TRADING RECEIPTS OF ASSESSEE AND INCOME COMPUTED @5% OF THE DEPOSIT MADE IS NOT CORRECT WHERE ASSESSEE FAILED TO PRESENT THE PERSONS WHO ISSUED THE CHEQUES . 3. THE ASSESSEE IS A MANUFACTURER AND TRADER OF ALUMINIUM UTENSILS. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE HAD DEPOSITED CASH / I.T.A.NO. 169/KOL/2009 / CROSS OBJECTION NO.13/KOL/2009 2 RS.10,53,000 IN HI S SAVINGS BANK ACCOUNT WITH STANDARD CHARTERED BANK, SALT LAKE BRANCH, KOLKATA. THE ASSESSING OFFICER OBSERVED THAT THIS SAVINGS BANK ACCOUNT IS PURELY UNDISCLOSED ACCOUNT AND THE SAME HAS BEEN ACCEPTED BY THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER MA DE THE ADDITION OF RS.10,53,000 TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD A CHEQUE DEPOSITS OF RS.16,02,618 IN THE SAID ACCOUNT BUT THE SAME IS NOT REFLECTED IN THE BOOKS OF ACCOUNT. THEREFORE, THE AS SESSING OFFICER ADDED THE SAID CHEQUE DEPOSITS AMOUNTING TO RS.16,02,618 TO THE TOTAL INCOME OF THE ASSESSEE. AGAINST THE ADDITION AGGREGATING TO RS. 26,57,618 (I.E., RS.10,53,000 + RS. 16,02,618), THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). 4. THE LEARNE D CIT(A) HELD THE ABOVE AMOUNT OF RS.26,57,618 AS TRADING RECEIPT AND DIRECTED THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE @5% OF THE DEPOSITS OF RS.26,57,618 IN THE BANK ACCOUNT. AGGRIEVED, THE REVENUE IS IN APPEAL HERE BEFORE THE TRIBUNAL . 5. THE LEARNED DR SUBMITTED THAT THE SAID BANK ACCOUNT OF THE ASSESSEE WITH STANDARD CHARTERED BANK, SALT LAKE BRANCH, KOLKATA WAS NOT DISCLOSED IN THE ACCOUNTS. HE SUBMITTED THAT THE ASSESSEE DEPOSITED IN THE SAID BANK ACCOUNT CASH DEPOSIT OF RS.10,53, 000 AND ALSO CHEQUES DEPOSIT OF RS.16,02,.618 AGGREGATING TO RS.26,57,618. HE SUBMITTED THAT THE ASSESSEE IS A MANUFACTURER AND TRADER AND THEREFORE, THE ENTIRE DEPOSIT AGGREGATING TO RS.26,57,618 IN THE SAID BANK ACCOUNT COULD NOT BE CONSIDERED AS TRADING RECEIPT AND THEREFORE, THE NET PROFIT @5% APPLIED BY THE CIT(A) AS INCOME OF THE ASSESSEE IS NOT JUSTIFIED. HOWEVER, THE LEARNED DR SUBMITTED THAT IN RESPECT OF CASH DEPOSITS OF RS.10,53,000 THERE WAS CERTAIN WITHDRAWALS FROM TIME TO TIME APART FROM DEPOS ITS FROM TIME TO TIME. HE FURTHER SUBMITTED THAT IN RESPECT OF CHEQUE DEPOSITS THE ASSESSEE INSPITE OF GIVING OPPORTUNITY COULD NOT GIVE DETAILS OF THE PARTIES FROM WHOM THE SAID CHEQUES WERE RECEIVED AND DEPOSITED IN THE SAID UNDISCLOSED BANK ACCOUNT. HE FURTHER SUBMITTED THAT THE ENTIRE AMOUNT OF CHEQUES DEPOSITS OF RS.16,02,618 HAS RIGHTLY BEEN CONSIDERED BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME OF THE ASSESSEE. ON THE OTHER HAND, SUPPORTING THE CROSS OBJECTION, THE LEARNED AR OF THE ASSESSEE SUBMI TTED THAT THE WHOLE AMOUNT OF RS.10,53,000 DEPOSITED IN CASH CANNOT BE / I.T.A.NO. 169/KOL/2009 / CROSS OBJECTION NO.13/KOL/2009 3 CONSIDERED AS TRADING RECEIPTS AND THE WITHDRAWALS MADE FROM TIME TO TIME BY THE ASSESSEE SHOULD BE SET OFF. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS OF THE LEARNED REPRESE NTATIVES OF THE PARTIES AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. THE SAID AMOUNT AGGREGATING TO RS.26,57,618 DEPOSITED IN THE STANDARD CHARTERED BANK, SALT LAKE BRANCH, KOLKATA WAS ADMITTEDLY NOT DISCLOSED IN THE BOOKS OF ACCOUNT. THE ASS ESSEE HAS ALSO ADMITTEDLY FAILED TO DISCLOSE THE SOURCE OF THE DEPOSITS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN TREATING THE ENTIRE DEPOSITS IN THE SAID BANK ACCOUNT AS TRADING RECEIPTS IN ABSENCE OF ANY CORROB ORATIVE MATERIALS FURNISHED BY THE ASSESSEE . IN SUCH VIEW OF THE MATTER, WE FIND SUBSTANCE IN THE CONTENTION OF THE LEARNED DR THAT NET PROFIT OF 5% OF THE SAID CASH DEPOSITS AND CHEQUES DEPOSITS COULD NOT BE CONSIDERED FOR ESTIMAT ING THE UNDISCLOSED INCOM E OF THE ASSESSEE. HOWEVER, WE FIND THAT THE FACTS UNDISPUTED ARE THAT THERE WERE DEPOSITS AS WELL AS WITHDRAWALS FROM TIME TO TIME FROM THE SAID BANK ACCOUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE PEAK OF THE AMOUNT DEPOSITED IN THE SAID UNDIS CLOSED BANK ACCOUNT IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION SHOULD BE CONSIDERED AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, WE MODIFY THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER T O ASSESS THE UNDISCLOSED INCOME OF THE ASSESSEE BY CONSIDERING THE PEAK AMOUNT OF DEPOSIT IN THE SAID UNDISCLOSED BANK ACCOUNT. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED IN THE MANNER AS INDICATED IN THE FOREGOIN G PARAGRAPH. THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 02.07.2010 SD/ - SD/ - ( . . ) (C.D. RAO), ACCOUNTANT MEMBER ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE :02.07.2010 ( / ) H.K.PADHEE / SNR.PRIVATE SECRETARY. / I.T.A.NO. 169/KOL/2009 / CROSS OBJECTION NO.13/KOL/2009 4 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : INCOME - TAX OFFICER, WARD 48(4), KOLKATA. 2 / THE RESPONDENT - MD.ASRAF A LI, 19, JOLAPARA MASZID LANE, HOWRAH 711 101. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , / DEPUTY REGISTRAR .