Saikat Ganguli, Kolkata V. DCIT, Circle-10(2), Kolkata, Kolkata

ITA 1726/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0513 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 29-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Salary income
• Section: 68

Judgement Text

1 ITA NO . 172 6 /KOL/201 6 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, KOLKATA BEFORE: SHRI P.M. JAGTAP , ACCOUNTANT MEMBER , AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO . 172 6 /KOL/201 6 A.Y 20 1 2 - 13 SAIKAT GANGULI VS. D.C.I.T, CIR - 10(2), PA N: ADWPG0654K KOLKATA (APPELLANT) (RESPONDENT) APPEARANCES BY : SHRI S.K. SONI, CA, LD.AR SHRI SALLONG YADEN,ADDL. CIT, LD.DR DATE OF HEARING : 18 - 06 - 2018 DATE OF PRONOUNCEMENT : 12 - 0 9 - 2018 O R D E R SHRI S.S. VISWANETHRA RAVI, JM : - THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), 4 , KOLKATA DATED 06 - 06 - 2016 FOR THE ASSESSMENT YEAR 20 1 2 - 13 . 2. THE ONLY EFFECTIVE ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT - A IS JUSTIFIED IN CONFIRMING THE IMPUGNED ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE AS SESSE IS AN INDIVIDUAL AND DIRECTOR OF A COMPANY DERIVES HIS INCOME FROM SALARY AND FROM OTHER SOURCES. THE ASSESSE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.32,35,337/ - . THE AO DETERMINED THE TOTAL INCOME OF ASSESSE AT 2 ITA NO . 172 6 /KOL/201 6 RS.63,91,340/ - BY MAK ING ADDITIONS ON ACCOUNT OF CASH DEPOSITS AND FIXED DEPOSIT VIDE HIS ORDER DT. 31 - 03 - 2015. 4. ACCORDING TO AO, THE ASSESSE DEPOSITED CASH OF RS.24,35,000/ - IN HIS BANK OF ACCOUNT OF STANDARD & CHARTERED BANK AND RS.3,60,000/ - IN OTHER BANK ACCOUNT. THE A O ASKED THE ASSESSE TO EXPLAIN THE SOURCES OF SAID CASH DEPOSITS. IN RESPONSE TO WHICH, THE ASSESSE SUBMITTED THAT THE CASH IN HAND AS ON 31 - 03 - 2012 WAS OF RS.28,71,603/ - AND IN SUPPORT OF HIS CONTENTION FILED INCOME - TAX RETURNS OF EARLIER YEARS AND BALANC E SHEET AS ON 31 - 03 - 2011. THE AO EXAMINED THE SUBMISSIONS TOGETHER WITH EVIDENCE S AS PRODUCED BY ASSESSE E AND OPINED THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION DERIVED INCOME FROM SALARY , REDEMPTION/ SALE / MUTUAL FUND/SHARES , DIVIDEND , INTEREST O N FIXED DEPOSITS ETC AND THERE WAS NO WITHDRAWALS FROM THE BANK ACCOUNT N OR CASH RECEIPTS. T HE SUBMISSIONS OF ASSESSE HAVING OPENING CASH IN HAND AS ON 1 - 4 - 2011 HAS BEEN REJECTED FOR NOT FURNISHING ANY EVIDENCE . FURTHER, CASH DEPOSIT OF RS.3,60,000/ - A S FOUND IN OTHER BANK TOTALING TO RS.28,00,000 ( RS. 24,40,000 + RS. 3,60,000 ) AND ADDED TO THE TOTAL INCOME OF ASSESSE E . 5 . AGGRIEVED, THE ASSESSE PREFERRED AN APPEAL BEFORE THE CIT - A. AND IT WAS CONTENDED THAT THE ASSESSE E HAS SUFFICIENT CASH - IN - HA ND AND THE SAME CARRIED FORWARD AND D EPOSITED IN THE BANK , BESIDES MINOR DAUGHTERS DEPOSITS ALSO, SUPPORTING WHICH BALANCE SHEET AND IT RETURN ACKNOWLEDGEMENT WERE FILED. FURTHER, IT WAS ALSO CONTENDED THAT THE ADDITION U/S. 68 OF THE ACT IS NOT MAINTAI NABLE AND PLACED RELIANCE ON VARIOUS DECISION S OF THE HONBLE S UPREME C OURT/HIGH COURTS IN THE CASE S OF LAKHMANI MEWAL DAS REPORTED IN 103 ITR 437, 448(SC), SR VENKATA RATNAM REPORTED IN 127 ITR 207 (KAR), DHAKESWAR COTTON MILLS 3 ITA NO . 172 6 /KOL/201 6 REPORTED IN 26 ITR 779(SC ), DHIRAJLAL GIRDHARILAL REPORTED IN 26 ITR 736(SC) AND UMA CHARAN SHAW & BROS REPORTED IN 371 ITR 271 (SC) . THE CIT - A CONFIRMED THE ORDER OF AO. RELEVANT PORTION OF CIT - AS ORDER IS REPRODUCED HEREIN BELOW: - 4.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR OF THE APPELLANT ALONG WITH CASE LAWS RELIED UPON BY HIM. I HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER. I FIND THAT APPELLANT IS A SALARIED PERSONS AND INCOME CONSISTS OF SALARY AND INCOME FROM OTHER SOURCES. I FIND THAT BASED ON THE AIR INFORMATION A VAILABLE WITH AO, THE APPELLANT WAS ASKED TO EXPLAIN THE CASH DEPOSIT OF RS.28,00,000/ - IN HIS BANK ACCOUNTS. IN RESPONSE TO THIS THE APPELLANT HAS EXPLAINED THAT HE HAS DEPOSITED CASH OF RS.24.35 LACS IN HIS BANK ACCOUNT WITH STANDARD CHARTERED BANK AND H E HAS ALSO DEPOSITED CASH OF RS. 36.60 LACS IN OTHER BANK ACCOUNTS OUT OF HIS PAST SAVINGS AND ACCUMULATION. THE APPELLANT EXPLAINED THAT HE HAD MADE CASH DEPOSIT OUT OF CASH BALANCE IN HAND OF RS.28,71,603/ - AS ON 01.04.2011 AND HE HAS ALSO FILED COPIES O F THE BALANCE SHEET AS ON 31.03.2011. I FIND THAT THE AO HAS OBSERVED THAT THERE WAS NO CREDIT ENTRY IN THE BOOKS EXCEPT CASH DEPOSITED IN BANK OUT OF THE ALLEGED BROUGHT FORWARD CASH BALANCE FROM EARLIER YEARS FOR WHICH BALANCE SHEET AS ON 31.03.2011 WAS SUBMITTED BEFORE AO. THUS THE APPELLANT HAS CONTENDED THAT HE HAS DISCHARGED THE ONUS PLACED UPON HIM IN EXPLAINING THE CASH DEPOSITS IN HIS BANK ACCOUNTS. I FIND THAT THE APPELLANT IS A SALARIED EMPLOYEE AND IN THE BALANCE S HEET FILED BY THE APPELLANT HI MSELF. I FIND THAT THERE IS AN OUTSTANDING PERSONAL LOAN OF RS.21,75,811/ - , HOUSING LOAN OF RS.5,24,265/ - , UNSECURED LOAN FROM TWO PARTIES AMOUNTING TO RS.12,00,000/ - AND CURRENT LIABILITIES IN THE NATURE OF ADVANCE AGAINST FLAT AMOUNTING TO RS.15,59,945/ - . THUS THE APPELLANT HAS A TOTAL OUTSTANDING LOAN OF RS.29,35,756/ - AS ON 31.03.2011. I FIND THAT NO PRUDENT PERSON WILL CARRY CASH IN HAND OF RS.28,71,603/ - AND ALSO CARRY HUGE INTEREST BEARING LIABILITIES IN TH NATURE OF LOAN INSTEAD OF REPAYING THE DEBT S DUE FROM HIM. I FAIL TO FIND ANY REASON FOR NOT DEPOSITING THE ALLEGED CASH OF RS.28,71,603/ - INTO ANY OF THE FIVE BANK ACCOUNTS MAINTAINED BY THE APPELLANT. THUS THE APPELLANTS VERSION IS HELD TO BE UNTENABLE AND THE ACTION OF AO IN TREATING THIS CASH DEPOSIT AS UNEXPLAINED MONEY OF THE APPELLANT IS HELD TO BE JUSTIFIED. THIS GROUND OF APPEAL IS DISMISSED. 6 . BEFORE US THE LD.AR REITERATED HIS SAME SUBMISSIONS MADE BEFORE THE CIT - A AS WELL AS BEFORE THE AO. HE SUBMITS THAT THE ASSESSE HAS TWO MINOR DAUGHTERS, NAMELY SONAKSHI GANGULY & SUDEKSHA GANGULY, WHOSE INCOME HAVE BEEN INCLUDED IN COMPUTING THE INCOME OF ASSESSE AND THE MONEY BELONGING TO MINOR DAUGHTERS HAVE BEEN SHOWN AS UNSECURED LOAN BEARING NO INTEREST IN THE BALANCE SHEET OF ASSESSE E. FU RTHER, HE REFERRED THE INCOME DECLARED BY ASSESSEE FOR THE LAST 3 YEARS AS UNDER: - A.Y INCOME DECLARED (RS.) 2009 - 10 20,15,040 2010 - 11 20,86,554 2011 - 12 25,94,958 2012 - 13 32,35,537 7 . H E ARGUED THAT THE ASSESSE HAD SUFFICIENT CASH IN HAND AND DEPO SITED THE SAME IN THE TWO BANK ACCOUNTS , WHICH WERE THE ACCUMULATION OF CARR IED 4 ITA NO . 172 6 /KOL/201 6 FORWARD OF EARLIER YEARS. HE SUBMITS THAT THE ASSESSEE PROVED HIS CASE BEFORE THE AUTHORITIES BELOW AND URGED TO ALLOW THE APPEAL OF ASSESSEE. 8 . ON THE OTHER HAND, THE LD. DR SUBMITS THAT HAVING ACCUMULATION OF CASH IN HAND, NOT PROVED BY ASSESSEE BEFORE THE BOTH THE AUTHORITIES BELOW. THE LD. DR REFERRED TO THE ORDER OF AO AND ARGUED THE AO FOUND NO CASH WITHDRAWALS/RECEIPTS. FURTHER, IT IS AN AFTERTHOUGHT TO SUBMIT THAT THE CASH DEPOSITS CONSISTS MINOR DAUGHTERS DEPOSITS AND REFERRED TO PARA 4.2 OF THE CIT - A ORDER AND SUPPORTED THE VIEW TAKEN BY THE CIT - A. 9 . HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD INCLUDING THE CASE LAWS AS RELIED ON BY THE LD.AR OF ASSESSEE. IT IS NOTED FROM THE RECORD THAT THE ASSESSE E FILED CASH FLOW STATEMENT FOR A.Y 2011 - 12, WHEREIN IT SHOWS BROUGHT FORWARD BALANCE OF RS.19,44,603/ - , RS.12,00,000/ - ON BEHALF OF MINOR DAUGHTERS AND OTHER DEPOSITS TO AN EXTENT OF RS. 4,00,000/ - . IT IS NOTICED FRO M SUMMARY OF CASH FLOW STATEMENT FOR THE A.Y UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN CASH IN HAND OF RS.28,71,603/ AND DEPOSITED CASH TO AN EXTENT OF RS.24,40,000/ - IN STANDARD & CHARTERED BANK & OTHER BANK ACCOUNT OF RS. 3,60, 000/ - . ON PERUSAL OF BALAN CE SHEET AS ON 31 - 03 - 2011, AT PAGE - 16 OF THE PAPER BOOK, SHOWS THAT CASH IN HAND IS OF RS.28,71,603 / - AND ALSO BROUGHT FORWARD UNDER THE HEAD CAPITAL ACCOUNT OF RS.2,02,89,602/ - . AS ON 31 - 03 - 2012 THE BALANCE SHEET AT PAGE - 17 SHOWS CASH IN HAND OF RS.31,2 54/ - . IT IS ALSO NOTED FROM BALANCE SHEET AS ON 31 - 03 - 201 2 UNSECURED LOANS OF MS. SONAKSHI GANGULY AND MS. SUDEKSHA GANGULY TO AN EXTENT OF RS. 14,00,000/ - . BUT , NO EVIDENCE OR WHATSOEVER HAS BEEN PRODUCED EITHER BEFORE THE AUTHORITIES BELOW OR BEFORE US T O SHOW THE BASIS OF SHOWING THE UNSECURED LOAN IN RESPECT OF SAID TWO MINOR DAUGHTERS AND ACCUMULATED OPENING CASH IN HAND AVAILABLE AS ON 1 - 4 - 2011 RELEVANT TO A.Y UNDER CONSIDERATION . IT IS OBSERVED FROM THE ORDERS OF BOTH 5 ITA NO . 172 6 /KOL/201 6 THE AUTHORITIES BELOW THAT T HE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN RESPECT OF SOURCE OF CASH DEPOSITS IN THE ABOVE SAID TWO BANK ACCOUNTS EXCEPT MAKING BALD STATEMENTS THAT THOSE WERE THE CASH ACCUMULATED AND BROUGHT FORWARD FROM EARLIER YEARS. IN THIS REGARD, WE AGREE WITH TH E FINDING OF CIT - A THAT NO PRUDENT PERSON WILL CARRY CASH IN HAND AND ALSO CARRY HUGE INTEREST BEARING LIABILITIES IN THE NATURE OF LOAN INSTEAD OF REPAYING DEBTS DUE FROM HIM. THEREFORE, IN OUR OPINION THAT THE ASSESSEE FAILED TO PROVE THE SOURCE OF CASH DEPOSITS AND THE SUBMISSIONS MADE IN THIS REGARD BY THE LD. AR AS DISCUSSED IN THE AFOREMENTIONED PARAGRAPHS ARE REJECTED. THUS, GROUND NOS. 1 TO 3 INVOLVING THE IMPUGNED ADDITION AS CONFIRMED BY THE CIT - A IS DISMISSED. 10 . IN THE RESULT, THE APPEAL FIL ED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 - 0 9 - 2018 SD/ - SD/ - P.M. JAGTAP S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12 - 0 9 - 2018 1. THE APPELLANT/ ASSESSEE: SHRI SAIKAT GANGULI C /O CA, S.K. SONI, 36 STRAND ROAD, 3 RD FLOOR, R. NO. 11, KOLKATA - 700 001. 2 . THE RESPONDENT/ DEPARTMENT : THE D.C.I.T, CIRCLE 10(2), AAYKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069. 3. CIT 4. CIT(A) 5. THE DEPARTMENTAL RE PRESENTATIVE 6. GUARD FILE TRUE COPY BY ORDER SR.PS/H.O.O ITAT KOLKATA * PRADIP SPS COPY OF THE ORDER FORWARDED TO: -