Shri Sujay Kumar Shah, Kolkata V. ITO, Ward -44(4), Kolkata, Kolkata

ITA 1719/KOL/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8166 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHURY CITSRDR
• Assessee Lawyers: A K TULSYAN
• Keywords: Gift
• Section: 68; 144

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI, M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 1719 / KOL / 20 1 6 ASSESSMENT YEAR :2008-09 SHRI SUJAY KUMAR SHAH 231, M.D. ROAD, KOKATA-700 007 [ PAN NO.ALRPS 1195 G ] V/S . INCOME TAX OFFICER, WARD-44(4), 3, GOVT. PLACE, 2 ND FLOOR, KOLKATA-700001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI A.K. TULSYAN, FCA /BY RESPONDENT SHRI ROBIN CHOUDHURY, ADDL. CIT-SR-DR /DATE OF HEARING 05-12-2018 /DATE OF PRONOUNCEMENT 28-12-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-13 KOLKATAS O RDER DATED 21.03.2016 IN CASE NO.517/CIT(A)-13/KOL/W-44(4)/2014-15 INVOLV ING PROCEEDINGS U/S 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE NOTICE AT THE OUTSET THAT THIS ASSESSEES APP EAL SUFFERS FROM 55 DAYS DELAY IN FILING. HE HAS FILED HIS CONDONATION PETIT ION DATED 17.04.2018 ATTRIBUTING REASONS THEREOF TO HIS AUDITORS FAILUR E IN FOLLOWING ALL DUE PROCEDURES. THE REVENUES FAIR ENOUGH IN NOT DISPUT ING CORRECTNESS OF ASSESSEES SOLEMN AVERMENTS THEREIN. WE THEREFORE C ONDONE THE IMPUGNED DELAY OF 55 DAYS IN FILING BEING NEITHER INTENTIONA L NOR DELIBERATE. THE CASE IS TAKEN UP ADJUDICATION ON MERITS. ITA NO.1719/KOL/2016 A.Y. 2008-09 SH. SUJAY KR.SHAH VS. ITO W D-44(4),KOL. PAGE 2 3. THE ASSESSEES FIRST SUBSTANTIVE GRIEVANCE CHALL ENGES BOTH THE LOWER AUTHORITIES ACTION ADDING HIS FRESH CAPITAL OF 6.50 LAC IN HIS PROPRIETORY CONCERN M/S SAIBABA TRADING HIS COMMISSION AGENT BU SINESS. THE CIT(A)S DETAILED DISCUSSION ON THIS FIRST ISSUE READS AS UN DER:- GROUND NUMBER 2 RELATES TO THE ADDITION OF RS.65000 0/- MADE BY THE AO ON ACCOUNT OF INTRODUCTION OF CAPITAL BY THE APPELLANT WHICH S OURCE COULD NOT BE PROVED, THEREFORE, AO ADDED THE SAME UNDER SECTION 68 OF TH E IT. ACT AND THE ORDER WAS PASSED UNDER SECTION144 OF THE IT. ACT. THE DETAIL SUBMITTED BY THE APPELLANT AT APPELLATE STAGE WAS SENT FOR REMAND REPORT, TO THE AO. THE AO VIDE HIS REMAND REPORT DATED 23-12-2015 HAD SATED AS UNDER:- AN ADDITION OF RS.6,50,000/- WAS MADE IN REGARD TO THE CAPITAL INTRODUCTION BY THE ASSESSEE IN HIS PROPRIETARY CONCERN NAMED MI5 S AIBABA TRADING. ACCORDING TO THE ASSESSEE, THIS SUM WAS RECEIVED BY THE ASSESSEE AS A GIFT FROM HIS FATHER LT. KANTI LAL SHAH THROUGH A NOTARI ZED DECLARATION. THE ASSESSEE WAS ASKED TO PROVE THE CREDIT WORTHINESS O F HIS FATHER LT KANTI LAL SHAH. THE ASSESSEE COULD FILE THE DETAILS FOR THE A .Y. 2006-07 & A.Y.2007-08 ONLY BUT COULD NOT PRODUCE THE ACCOUNTS FOR THE REL EVANT ASSESSMENT YEAR I.E. 2008-09. THEREFORE IN THE ABSENCE OF ITR, BALANCE S HEET AND PROFIT & LOSS ACCOUNT OF THE RELEVANT ASSESSMENT YEAR I.E. 2008-0 9, THE ACTUAL CREDIT WORTHINESS OF THE DONOR COULD NOT BE ASCERTAINED. THE APPELLANT WAS CONFRONTED WITH THE FINDINGS OF T HE AO. THE APPELLANT HAS SUBMITTED THAT THE APPELLANT HAD TAKEN GIFT THROUGH NOTARISED DECLARATION FROM HIS OLD FATHER SRI KANTILAL SAH IN THE ASSESSMENT YEAR 2006 -07 AND 2007-08 ONLY. THE APPELLANT FURTHER SUBMITTED THAT SRI KANTILAL SAH H AD HIS OWN INTEREST FREE CAPITAL AS OF RS.1490703/- AS ON 31-03-2007 OUT OF WHICH HE GIFTE D THE APPELLANT. THOUGH THE APPELLANT HAS STATED THAT THE SAME WERE GIFT RECEIVED FROM HIS FATHER AND ALSO CLAIMED' THAT THE BALANCE SHEET OF SRI KANTFLA L SAH WAS SUBMITTED BEFORE THE AO, BUT IT IS PERTINENT TO MENTION HERE THAT THE APPELL ANT COULD FILED THE DETAIL OF ASSESSMENT YEAR 2006-07 AND 2007-08 ONLY AND COULD NOT PRODUCE ACCOUNT FOR THE RELEVANT ASSESSMENT YEAR I.E.2008-09. THEREFORE, IN ABSENCE OF ITR, COPY OF ACCOUNT, BALANCE SHEET OF RELEVANT ASSESSMENT YEAR 2008-09, THE CREDITWORTHINESS OF THE DONOR COULD NOT BE PROVED. PERUSAL OF ASSESSMEN T ORDER AND SUBMISSION OF THE APPELLANT SHOWS THAT NOWHERE THE APPELLANT HAS STAT ED TO RECEIVE GIFT IN CHEQUE. EVEN THE DECLARATION DEED DOES NOT SHOW THAT THE AF ORESAID CAPITAL OF RS.650000/- WERE RECEIVED THROUGH CHEQUE. THE DECLARATION PRODU CED BY THE APPELLANT IS NOT SELF SPEAKING AND THE APPELLANT HAS SUBMITTED BALANCE SH EET AS ON 31-03-2007 ONLY WHERE AS THE BALANCE SHEET OF 31-03-2008 WAS RELEVA NT BECAUSE THE SO CALLED DECLARATION MADE IS OF 26-03-2008. THEREFORE IN ABS ENCE OF BALANCE SHEET, COPY OF BANK ACCOUNT OF THE SAME THE GIFT: CANNOT BE ACCEPT ED AS GENUINE SHOWING OF INTEREST FREE CAPITAL, IN THE BALANCE SHEET OF F.Y 2006-07, HAS ALSO CORRESPONDING LIABILITY, DOES NOT DEPOSITS THE CASH FLOW STATUS O F THE APPELLANT. THE DECLARATION MADE BY THE APPELLANT IS NOT SUPPORTED WITH DOCUMEN TARY EVIDENCES. IT IS ALSO NOT SELF SPEAKING. THEREFORE KEEPING IN VIEW THAT THE A PPELLANT DID NOT DISCHARGE ITS ONUS OF PROVING THE GIFT AT REMAND STAGE AND AT APPELLAT E STAGE TOO, THE ADDITION MADE BY THE AO IS HERE BY UPHELD AND THE GROUND OF THE APPE AL IS DISMISSED. 4. WE HAVE HEARD RIVAL CONTENTIONS REITERATING BOTH PARTIES RESPECTIVE STAND AGAINST AND IN FAVOUR OF IMPUGNED ADDITION. T HE ASSESSEES ONLY PLEA ITA NO.1719/KOL/2016 A.Y. 2008-09 SH. SUJAY KR.SHAH VS. ITO W D-44(4),KOL. PAGE 3 EXPLANATION TENDERED THROUGHOUT IS THAT HE HAD RECE IVED THE AMOUNT IN QUESTION OF 6.50 LAC FROM HIS FATHER LATE. SHRI KANTILAL SAH. H E HAS PLACED ON RECORD HIS FATHER / DONORS DULY NOTORISED GIFT DEE D, INCOME-TAX RETURNS, BALANCE-SHEET ETC., OF ASSESSMENT YEARS 2006-07 & 2 007-08. BOTH THE LOWER AUTHORITIES ARE OF THE VIEW THAT ASSESSEE HAD FAILE D TO PRODUCE THE DONORS NECESSARY DETAILS FOR THE IMPUGNED ASSESSMENT YEAR I.E.,2008-09. WE SEE NO MERIT IN REVENUES STAND UNDER CHALLENGE. THE FACT REMAINS THAT THE ASSESSEES FATHER, LATE. SHRI KANTILAL SAH NEVER FI LED ANY RETURN FOR THE IMPUGNED ASSESSMENT YEAR. A PERUSAL OF EARLIER YEAR S BALANCE-SHEET MAKES IT CLEAR THAT HE HAD SUFFICIENT CASH IN HIS HAND EXCEE DING MUCH MORE THAN ASSESSEES CASH GIFT SUM. WE THEREFORE TAKE INTO AC COUNT TOTALITY ALL THESE FACTS AND CIRCUMSTANCES TO CONCLUDE THAT ASSESSEE H AS SUCCESSFULLY PROVED HIS GIFT CLAIM IN ISSUE. WE THEREFORE DELETE THE IM PUGNED ADDITION OF 6.50 LAC FORMING THE SUBJECT-MATTER OF THIS ASSESSEES FIRST SUBSTANTIVE GROUND. 5. THE ASSESSEES SECOND SUBSTANTIVE GRIEVANCE CHAL LENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION MAKING CASH D EPOSITS ADDITION OF 17,32,450/- IN ASSESSMENT AS AFFIRMED IN LOWR APPEL LATE PROCEEDINGS AS UNDER:- NEXT GROUND NUMBER 04 RELATES TO THE ADDITION OF RS .1732450/- ON ACCOUNT OF CASH DEPOSIT MADE ON SEVERAL DATES TO HIS SAVING BANK AC COUNT WITH ICICI BANK WHICH WAS NOT DISCLOSED. IN THIS REGARD HIS EXPLANATION A LONGWITH CASH FLOW STATEMENT WAS SUBMITTED BEFORE THE AO AND THE AO HAS OBSERVED AS UNDER:- 'ADDITION OF RS.17,32450/- WAS MADE BEING CASH DEPO SITS ON SEVERAL DATES IN S.B. A/C WITH ICCI BANK. THE ASSESSEE FILED SUBMISS ION CLARIFYING THAT THE DEPOSITS IN THE BANK ACCOUNTS DURING THE F.Y. 2007- 08 RELEVANT TO A.Y.2008- 09 INCLUDES THE AMOUNT WITHDRAWN FROM THE BANK OF R S.10,75,000/- AND ALSO OUT OF THE AMOUNT RECEIVED FROM SMT. SANGITA SHAH, WIFE OF THE ASSESSEE OF RS.2,25,000/-. THE ASSESSEE ALSO FILED THE DETAILS OF WITHDRAWALS FROM BANK AND DETAILS OF CASH DEPOSITS DATE WISE. FROM THE DE TAILS, IT WAS NOTED THAT, LAST DAY OF CASH DEPOSITS WAS ON 17.03.2008 AND UP TO THAT DATE TOTAL WITHDRAWALS WAS RS.3,25,000/- AND THE REMAINING RS. 7,50,000/- [10,75,000- 3,25,000] WAS WITHDRAWN AFTER 17.03.2008. OTHER THA N A MERE STATEMENT, THE ASSESSES COULD NOT PRODUCE ANY EVIDENCE THAT THE WI THDRAWAL AMOUNT OF RS.3,25,000/- WAS DEPOSITED IN THE BANK. FURTHER, F ROM THE GIFT DEED, IT WAS NOTED THAT THE ASSESSEE HAD RECEIVED GIFT OF RS.2,2 5,000/ FROM WIFE ON 26.03.2015 WHICH IS AFTER THE DATE OF LAST CASH DEP OSIT. THEREFORE, RS.14,07,450/-[17,32,450-3,25,000] IS STILL REMAIN UNEXPLAINED'. ON THE CONTRARY THE APPELLANT HAS SUBMITTED AGAINST THE REMAND REPORT ON THIS ISSUE AND STATED THAT FROM THE REMAND REPORT IT IS DEAR T HAT FROM SAID ICICI BANK OF THE ASSESSEE, CASH WITHDRAWAL OF RS.1025000/- WERE THER E ON, VARIOUS DATES DURING THE ITA NO.1719/KOL/2016 A.Y. 2008-09 SH. SUJAY KR.SHAH VS. ITO W D-44(4),KOL. PAGE 4 FINANCIAL YEAR 2007-08. THE APPELLANT FURTHER SUBMI TTED THAT THE APPELLANT DEAL IN POTATO AND ONION. THE ASSESSEE PURCHASES GOODS IN C ASH AND SALES ARE MADE ALSO IN CASH AND THE RESULTED IN DEPOSIT IN BANK. IN THI S REGARD IT IS PERTINENT TO MENTION HERE THAT THE APPELLANT COULD NOT ESTABLISH THAT DE POSITS WERE MADE FROM ITS WITHDRAWAL. IT HAS BEEN OBSERVED IN THE SAID REPORT THAT AFORESAID WITHDRAWAL OF RS.1025000/- & RS.75000/- WERE WITHDRAWN AFTER 17-0 3-2008 I.E. AFTER LAST DATE OF CASH DEPOSIT, WHILE RS.325000/- ONLY WAS WITHDRAWN BEFORE 17-03-2008. AS THE AO HAS VERY CATEGORICALLY FIND OUT THAT WITHDRAWALS WE RE MADE TO THE EXTENT OF RS.1075000/- AFTER THE DATE OF CASH DEPOSIT MADE IN THE BANK. THE LAST DATE OF DEPOSIT IN THE BANK WAS 17-03-2008 WHERE AS THE DAT E OF WITHDRAWALS WAS AFTER 17- 03-2008. THE AO FURTHER FOUND THAT TOTAL WITHDRAWAL S OF RS.325000/- WAS MADE PRIOR TO 17-03-2008. THE AO HAS OBSERVED THAT THE APPELLA NT COULD NOT PROVE NEXUS BETWEEN DEPOSITS AND WITHDRAWALS. AT APPELLATE STAG E ALSO THE PURPOSE OF WITHDRAWALS AND REDEPOSIT OF THE SAME HAS NOT BEEN ESTABLISHED. THE APPELLANT HAS FURTHER SUBMITTED THAT IT WAS DEALING IN POTATO AND ONION WHICH LEAD HIM TO DEPOSIT CASH HAS NOT BEEN PROVED WITH THE SALE & PURCHASE B ILLS OF THE ONION AND POTATO ALONG WITH CONFIRMATION OF THE PARTIES FROM WHOM SA LES & PURCHASE WERE MADE AND ITS TRANSPORTATION DETAIL. ONCE THE SALE IS NET PRO VED, DEPOSIT IN CASH CLAIMED TO BE MADE FROM SALE CANNOT BE ACCEPTED. THE APPELLANT HA S FAILED TO PROVE ITS SALE BEFORE THE AO AND DURING THE APPELLATE PROCEEDING. EVEN PU RCHASES WERE ALSO NOT ESTABLISHED HENCE DEPOSIT MADE IN THE ACCOUNT CANNO T SAID TO BE MADE FROM BUSINESS. IT WAS FURTHER OBSERVED THAT OUT OF TOTAL DEPOSIT O F RS.1732450/- THE AO HAS ADVISED TO GIVE BENEFIT OF RS.325000/- WITHOUT ANY BASIS, M ERELY ON THE BASIS OF WITHDRAWAL. THE AO HIMSELF HAS STATED IN HIS REMAND REPORT THAT NO CONNECTION BETWEEN DEPOSIT AND WITHDRAWAL ARE ESTABLISHED. IT IS NOT UNDERSTOO D HOW HE HAS TREATED IT AS EXPLAINED. THEREFORE HIS OBSERVATION IS CONTRADICTO RY OF HIS OWN FINDINGS THEREFORE ENTIRE RS.1732450/- IS TREATED AS UNEXPLAINED. AS REGARD NON-GIVING CREDIT AGAINST GIFT RECEIVED O F RS.225000/- FROM HIS WIFE IS CONCERNED, THE AO HAS NOT GIVEN ANY BENEFIT FROM RE DUCING OF CASH DEPOSIT OF RS.1732400/- BECAUSE RS.225000/- WAS DEPOSITED AFTE R THE DATE OF LAST CASH DEPOSIT, KEEPING IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO IS CONFIRMED THE CASE LAW RELIED BY THE APPELLANT NAMELY RAMESH KUMA R AGARWAL(HUF) VS ITO W- 54(4)/KOL IN LTAT NO-1493/KOL/2012 DATED 05-11-2015 IS NOT APPLICABLE BECAUSE IN THAT CASE APPELLANT WAS ABLE TO SUBSTANTIATE HIS PU RCHASE OF POTATO WHICH WERE KEPT IN COLD STORAGE WHICH WAS AGAIN RECONFIRMED FROM TH IRD PARTY THEREFORE IN THAT CASE TRADING IN ONION WAS ESTABLISHED BUT IN THIS CASE N EITHER THE APPELLANT HAS TRIED TO PROVE ITS PURCHASE NOR HE HAS TRIED TO ESTABLISHED HIS SALE. THEREFORE, HIS DEPOSITS ARE FROM BUSINESS ACTIVITY COULD NOT BE PROVED. THE APPELLANT HAS TAKEN GROUND FOR SAKE OF ARGUMENT WITHOUT ANY SUBSTANCE. IN VIEW OF ABOVE THE ADDITION MADE BY AO IS UPHELD AND THE ADDITION IS CONFIRMED. THE GROUND OF THIS APPEAL IS DISMISSED. 6. HEARD RIVAL CONTENTIONS. THERE IS NO DISPUTE THA T THIS ASSESSEE IS IN TRADING AND COMMISSION AGENT BUSINESS IN AGRICULTUR AL CROPS. HIS PROFIT ON PURCHASE AND SALE IN POTATO AND ONION TRADING AMOUN TING TO 20,02,229/- STANDS ACCEPTED IN ASSESSMENT. IT THUS TRANSPIRES T HAT HE IS ENGAGED AS COMMISSION AGENT / PROPRIETOR IN AGRICULTURAL PRODU CE. HE HAS PLACED ON RECORD ALL DETAIL OF WITHDRAWAL FROM BANK, PARTNERS HIP FIRM, CASH BOOK ITA NO.1719/KOL/2016 A.Y. 2008-09 SH. SUJAY KR.SHAH VS. ITO W D-44(4),KOL. PAGE 5 PARTICULARS BEFORE THE LOWER AUTHORITIES WHICH HAVE NOWHERE BEEN TAKEN INTO CONSIDERATION WHILST MAKING THE IMPUGNED ADDITION. WE THEREFORE CONCLUDE IN THESE PECULIAR FACTS AND CIRCUMSTANCES THAT ASSESSE ES IMPUGNED CASH DEPOSITS ARE HIS TRADING RECEIPTS FROM HIS DAY-TO-D AY BUSINESS ONLY. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION. 7. THIS LEAVES US WITH LAST ADDITION OF SUNDRY CRED ITORS AMOUNTING TO 6,74,081/- IN CASE OF ONE SHRI RANJIT PRASAD. THE R EVENUE FAILS TO DISPUTE THAT ASSESSEE HAS SUCCESSFULLY PROVED TO HAVE REPAI D THE AMOUNT IN SUCCEEDING ASSESSMENT YEAR AS PER HIS LEDGER. THERE IS NO SUCH CREDITOR IN FROM SUCCEEDING ASSESSMENT YEAR ONWARDS THEREFORE. THE REVENUES CONTENTION IS THAT ASSESSEE COULD NOT PROVE THE SAI D SUNDRY CREDITOR DURING REMAND PROCEEDINGS. WE OBSERVE THAT SUCH A MERE NON -PRODUCTION OF THE CREDITOR PARTY AFTER A LONG TIME CANNOT BE TAKEN AS AN ADVERSE CIRCUMSTANCES AGAINST THE ASSESSEE WHEN HE HAS PROVED HIS CASE BY WAY OF ALL LEDGER ENTRIES. WE ACCORDINGLY DIRECT THE ASSESSING OFFICE R TO DELETE THIS THIRD ADDITION AS WELL. 8. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 28/ 12/2018 SD/- SD/- ( %) (' %) (M.BALAGANESH) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 28 / 12 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI SUJAY KR. SHAH, 231, M.D. ROAD, KOLKATA-7 00 007 2. /RESPONDENT-ITO WARD-44(4), 3, GOVT. PLACE, 2 ND FLOOR, KOLKATA-001 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 3,