Indrajit Roy , Kolkata V. ITO, Ward - 35(3), Kolkata , Kolkata

ITA 1807/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8105 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-08-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 21-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: A K TIBREWAL
• Keywords: Unexplained cash credit
• Section: 143(3); 234B; 143(1); 208; 64; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH VIRTUAL COURT A KOLKATA BEFORE SHRI P.M.JAGTAP, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1807/KOL/2018 ASSESSMENT YEAR:2014-15 INDRAJIT ROY 50, GORAKHA BASI ROAD, NAGERBAZAR, DUM DUM, KOLKATA-700 028 [ PAN NO.ACXPR 9706 K ] / V/S . INCOME TAX OFFICER, WARD-35(3), AAYAKAR BHAWAN, 110, SANTIPALLY (POORVA), KOLKATA-107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI A.K.TIBREWAL, FCA /BY RESPONDENT SHRI SUPRIYO PAL, ADDL.CIT-DR /DATE OF HEARING 04-08-2020 /DATE OF PRONOUNCEMENT 19-08-2020 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATAS ORDER DATED 22.06.2018, PASSED IN CASE NO. 198/CIT(A)-485/CIT(A)-10/W-35(3)/2014-1 5/2016-17KOL, INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISE D IN THE INSTANT LIS CHALLENGES CORRECTNESS OF THE ASSESSING OFFICERS ACTION TREAT ING BANK DEPOSITS OF 60,50,000/- AS UNEXPLAINED CASH CREDITS IN HIS REGULAR ASSESSMENT FRAMED ON 22.12.2016 AND RESTRICTED TO THE EXTENT OF 42,02,365/- IN THE CIT(A)S ORDER UNDER CHALLENGE. ITA NO.1807/KOL/18 A.Y.2014-15 INDRAJIT ROY. VS. ITO WD-35(3), KOL PAGE 2 3. WITH THE ABLE ASSISTANCE OF BOTH THE LEARNED REP RESENTATIVE(S), WE NOTICE THAT IT IS NOT HIS DISPUTE ABOUT THE ASSESSEE HAVING MADE C ASH DEPOSITS OF 60.55 LAKHS IN ISSUE IN TWO ACCOUNTS TO THE TUNE OF 56,18,500/- AND 4,31,500/- ON MAINTAINED WITH STATE BANK OF INDIA AND ORIENTAL BANK OF COMMERCE; RESPECTIVELY. CASE RECORDS AND MORE PARTICULARLY THE CASH BOOK FOR THE PERIOD FROM 01.04.2013 TO 31.03.2014, CORRESPONDING CASH BOOK OF M/S AATREYEE NIRMAN PVT. LTD. ANPL READ WITH BANK STATEMENT, LEDGER ACCOUNT, THE FOREGOING NOTICE ITR ACKNOWLEDGEMENT , AUDITED BALANCE-SHEET, PROFIT AND LOSS ACCOUNT AS WELL AS R EGULAR ASSESSMENT DATED 24.10.2016 FORMING PARTS OF THE CASE FILE ON FORMING ASSESSEE S EXPLANATION TENDERED BEFORE THE ASSESSING OFFICER; REVEAL THAT HIS STAND FROM THE D ATE ONE WAS THAT THE IMPUGNED CASH DEPOSITS CAME FROM HIS M/.S ANPL ONLY. HE FURTHER STATED THAT HE WAS THAT MANAGING DIRECTOR OF THE COMPANY REQUIRED TO MAKE A LL DAY-TO-DAY EXPENSES INCURRED AT THE COMPANYS SITE. ALL THESE FAILED TO EVOKE TH E ASSESSING OFFICERS ACCEPTANCE WHO WAS OF THE VIEW THAT THE COMPANY HAD SUFFICIENT CASH-IN-HAND IN HIS OWN BOOKS AND THEREFORE, IT DID NOT REQUIRE THE ASSESSEE TO I NCUR THE EXPENSES AT ITS BEHEST. AND ALSO THAT ASSESSEES FOREGOING EXPLANATION WAS NOT VERIFIABLE. ALL THIS MADE HIM TO TREAT THE ASSESSEES CASH DEPOSITS AS UNEXPLAINED R ESULTING IN THE IMPUGNED ADDITION. 4. THE CIT(A) HAS PARTLY AFFIRMED THE ASSESSING OFF ICERS ACTION AS UNDER:- 06. FINDING AND DECISION : 1. I HAVE CAREFULLY CONSIDERED THE ACTION OF THE LD. AO IN MAKING AN ADDITION OF RS.60,50,000/- AS UNEXPLAINED CASH CREDIT U/S. 6 8 OF THE ACT. AFTER AN EXHAUSTIVE DISCUSSION AND ELABORATING THE FACTUAL M ATRIX, I FIND THAT THE LD. AO HAS HELD THE CASH DEPOSIT OF RS.56,18,500/- AND RS.4,31,500/- IN THE BANK ACCOUNT WITH STATE BANK OF INDIA A/C NO 322724 42259 AND ORIENTAL BANK OF COMMERCE A/C NO 0492151001896 RESPECTIVELY AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 2. THE LD. AO HAS CAREFULLY ANALYSED THE DOCUMENTS FU RNISHED AND HAS RECORDED REASONABLE FINDING THAT THERE WAS NO ATM W ITHDRAWAL FROM ORIENTAL BANK OF COMMERCE AND ATM WITHDRAWAL FROM S BI WAS OF RS.12,47,635/-. THE AO WAS FOUND FROM THE CASH BOO K PRODUCED THAT THERE IS NO INDEPENDENT VERIFIABILITY OF THE CASH BOOK OF M/S AATRAYEE NIRMAN PVT LTD FROM WHOM THE APPELLANT ASSESSEE ASSERT TO HAVE RECEIVED THE CASH. THE AO HAS CORRECTLY FOUND THAT THE COMPANY M/S AATRAY EE NIRMAN PRIVATE LIMITED NEED NOT ADOPT CUMBERSOME PROCESS OF HANDIN G OVER THE CASH TO THE ITA NO.1807/KOL/18 A.Y.2014-15 INDRAJIT ROY. VS. ITO WD-35(3), KOL PAGE 3 APPELLANT ASSESSEE AND GET IT DEPOSITED ONLY FOR GE TTING WITHDRAWAL WHICH IS MEAGRE. 3. I ALSO FIND THAT THE SUBMISSION MADE BY THE APPELLA NT DURING THE COURSE OF THE APPEAL POINT TOWARDS THAT FACT THAT THE ADDITIO N WAS MADE BY THE LD. AO ON THE BASIS OF SUSPICION. THE APPELLANT HAD TRIED TO EXPLAIN THAT FOR BUSINESS EXPEDIENCY SUCH DEPOSITS AND WITHDRAWALS A RE NORMAL. THE APPELLANT HAS CATEGORICALLY SUBMITTED THAT HE HAS R ECEIVED REMUNERATION IN CASH FROM AATRAYEE NRIMAN PVT LTD OF RS.6,00,000/- WHICH IS DULY SHOWN IN RESPECT TO THE BOOKS OF APPELLANT AS WELL AS AATRAY EE NIRMAN PVT LTD. THE APPELLANT HAS ALSO PROVIDED DURING THE APPELLATE PR OCEEDING THE ORDER PASSED IN RESPECT OF THE COMPANY AATRAYEE NIRMAN PV T LTD FOR THE AY 2014-15 WHEREIN THE RESPECTIVE AO HAS NOT MADE ANY ADDITION IN THE INCOME OF THE SAID COMPANY FOR THE CASH GIVEN TO TH E APPELLANT. 4. IN MY CONSIDERED VIEW OF THE SITUATION, THE LD AO H AS ACCEPTED IN THE ASSESSMENT ORDER THAT THE CASH WITHDRAWAL MADE FROM THE APPELLANT FROM ATM IS OF RS.12,47,635/- WHICH IS NOT DISPUTED. ON CONSIDERATION OF THE APPELLANTS SUBMISSION I CAME TO THE CONCLUSION THA T THE REMUNERATION OF RS.6,00,000/- WAS PAID TO THE APPELLANT FOR THE IN STANT YEAR IN CASH. THEREFORE IN MY CONSIDERED VIEW IT IS APPROPRIATE T O ALLOW THE AMOUNT OF RS.18,47,635/- AS THE CASH RECEIVED FROM M/S AATRAY EE NIRMAN PVT. LTD., THE GROUNDS THEREFORE STAND PARTLY ALLOWED . 07. GROUND NO 6 RELATES TO THE ACTION OF LD. AO IN CH ARGING INTEREST U/S.234B OF I.T. ACT, 1961. IN THIS MATTER THE LD. A.R FOR T HE APPELLANT HAS SUBMITTED AS UNDER:- GROUND NO.6 IN THIS GROUND OF APPEAL THE ASSESSEE HAD CHALLENGE D THE LEVY OF INTEREST OF RS.12,33,837/- UNDER SECTION 234B OF THE INCOME TAX ACT, 1961 EVEN WHEN THERE WAS NO DEFAULT OF THE ASSESSEE IN PAYMENT OF ADVANCE TAX ON THE BASIS OF THE INCOME DECLARED IN THE RETURN OF INCOME FILED O N 07.07.2014. ADMITTEDLY, THE ASSESSEE DID NOT PAY ANY ADVANCE TA X IN ACCORDANCE WITH SECTION 210 OF THE ACT INASMUCH AS THERE WAS NO LIA BILITY TO PAY ADVANCE TAX ON THE BASIS OF THIS ESTIMATED INCOME DECLARED IN THE RETURN. THEREFORE THE CASE OF THE APPELLANT DOES NOT FALL UNDER (II) ABOVE. THE A PPELLANTS CASE IS NOT COVERED UNDER (I) ABOVE, AS WELL, INASMUCH AS THERE WAS NO LIABILITY TO PAY ADVANCE TAX UNDER SECTION 208 OF THE ACT. HAD THERE BEEN ANY LIABILITY OF THE ASSESSEE TO PAY ADVANCE TAX UNDER SECTION 208 OF TH E ACT, INTEREST WOULD HAVE BEEN CHARGED WHILE PROCESSING THE RETURN OF INCOME UNDER SECTION 143(1) OF THE ACT. ADDITION OF THE SUM OF RS.60,50,000/- IN THE I MPUGNED AS COULD NOT BE SAID TO BE CURRENT INCOME OF THE APPELLANT WITHIN THE MEANING OF SECTION 20 8 OF THE INCOME TAX ACT, 1061. IN J.K. SYNTHETICS V. CTO (1994) 4 HON'BLE SUPREME COURT 276 , IT WAS HELD THAT WHERE CLAIM FOR EXEMPTION WAS B ONA FIDE BUT DISALLOWED, TAX CAN BE LEVIED BUT NO INTER EST CAN BE CHARGED. IT WAS NOT ITA NO.1807/KOL/18 A.Y.2014-15 INDRAJIT ROY. VS. ITO WD-35(3), KOL PAGE 4 POSSIBLE FOR THE APPELLANT, AT ANY TIME DURING THE RELEVANT FINANCIAL YEAR, TO FORESEE THAT THE PROCEEDS OF SALE OF SHARES RECEIVE D BY IT WOULD BECOME INCOME OF THE ASSESSEE CHARGEABLE TO TAX. LEX NON GO CO GIT AD IMPOSSIBLE ( LAW CANNOT COMPEL YOU TO DO IMPOSSIBLE ). BEFORE INVOKING 234B OF THE ACT, IT IS ESSENTIAL TO SEE WHETHER THE ASSESSEE COMES WITHIN THE SWEEP OF SECTION 234(1) OF THE ACT. THE ADDITION OF RS.60,50,000/.- COULD N OT HAVE BEEN FORESEEN BY THE APPELLANT THAT THE SAME WOULD BE CHARGEABLE TO TAX AND THEREFORE WAS NOT CURRENT INCOME WITHIN THE MEANING OF SECTION 208 OF THE INCOME T AX ACT, 1061. THE HON'BLE BOMBAY HIGH COURT, IN THE CASE OF PRIME SECURITIES LTD. VS. ACIT [22012] 333 ITR 464 (BOM) HAS ALSO TAKEN SIMILAR VIEW, EVEN AFTER CONSIDERING THE JUDGMENT OF APEX COURT IN THE CASE OF CIT V. ANJUM M.H. GHASWALA [2001] 252 IT 1 (SC) THE APPELLANT SUBMITS THAT THE ADDITION OF THE SUM OF RS.60,50,000/- IS ADDITION OF DEEM INCOME UNDER SECTION 68 OF THE ACT AND THAT COULD NOT BE SAID TO BE CURRENT INCOME FOR THE PURPOSES OF SECTION 208 OF THE ACT. ON TH E FACTS OF THIS CASE THE ASSESSEE WAS NOT LIABLE TO PAY ANY IN TEREST UNDER SECTION 234B OF THE ACT. THIS PROPOSITION OF LAW IS WELL SETTLED BY JURISDICTIONAL HIGH COURT IN THE CASE OF EMAMI LTD. VS. CIT [2011] 12 TAXMANNN.COM 64 (CAL) AND THAT OF KARNATAKA HIGH COURT IN THE CASE OF T.P.INDRA KUMAR VS. ITO [2010] 322 ITR 454 (KAR.) IN THE LIGHT OF THE SUBMISSIONS MADE HEREINABOVE AT PARAGRAPHS 1 TO 16, THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING O FFICER IS PERVERSE, ILLEGAL AND INVALID. 08. DECISION : IN THIS SMATTER IT IS TO BE ONLY OBSERVED THAT TH E LEVY OF INTEREST U/S 234A/B/C/D IS MANDATORY AND CONSEQUENTIAL, AND THE LD. AO WILL UNDOUBTEDLY IMPOSE THE SAME WHEN GIVING EFFECT TO T HIS APPELLATE ORDER. THIS LEAVES THE ASSESSEE AGGRIEVED. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED ADDITION. WE MAKE IT CLEAR THAT ALTHOUGH BOTH THE LEARNED LOWER AUTHORITIES HAVE HELD THE ASSESSEES IMPUGNED CASH DEPOSITS TO THE TUNE OF VARYING SUMS (SUPRA) AS UNEXPLAINED; THE FACT REMAI NS THAT HIS EXPLANATION SUPPORTED BY THE FOREGOING DOCUMENTARY EVIDENCE OF BOOKS OF A CCOUNT, AUDITED BALANCE-SHEET, COUPLED WITH CASH BOOKS MAINTAINED AT BOTH INDIVIDU AL AS WELL AS THE COMPANYS LEVEL AND SEC. 143(3) ASSESSMENT FRAMED IN LATTER CASE FO R THE VERY ASSESSMENT YEAR HAVE NOWHERE HAS BEEN DISPUTED IN EITHER OF THE LOWER PR OCEEDINGS. ALL THIS VOLUMINOUS EVIDENCE; INCLUDING THE CASH IN ISSUE FROM M/S ANPL CREDIENCIAL TO ASSESSEES ITA NO.1807/KOL/18 A.Y.2014-15 INDRAJIT ROY. VS. ITO WD-35(3), KOL PAGE 5 EXPLANATION OF SOURCE OF DEPOSITS. THERE IS NOT AN IOTA OF DOUBT COMING FROM THE LOWER AUTHORITIES SIDE DISPUTING THE ASSESSEES STAND ADO PTED THROUGHOUT THAT THE CASH DEPOSIT HAD IN FACT, COME FROM THE COMPANYS CASH-IN-HAND F OR MEETING THE DAY-TO-DAY REQUIREMENTS AT THE SITE LEVEL. WE WISH TO REITERAT E HERE THAT BOTH THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE NOT GONE BY THE SOURCE EXP LAINED TO EXAMINE IDENTITY, GENUINENESS AND CREDITWORTHINESS THEREOF IN LIGHT O F ALL THE EVIDENCE AVAILABLE ON RECORD BUT THEY HAVE VENTURED ON APPLICATION ASPE CT OF THE CASH DEPOSITS ONLY. WE THEREFORE ARE OF THE VIEW THAT THE IMPUGNED ADDITIO N IN LIGHT OF ALL THE SUPPORTIVE EVIDENCE COMING FROM THE ASSESSEES SIDE CANNOT BE SUSTAINED SINCE BASED ON THE CONJECTURES AND SURMISE ONLY. THE SAME IS DIRECTED TO BE DELETED THEREFORE. 7. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19/08/2020 SD/- SD /- ( !) (#$ ') (P.M.JAGTAP) (S.S.GODARA) VICE PRESIDENT JUDICIAL MEMBER *DKP-SR.PS ( - 19/08/2020 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-INDRAJIT ROY, 50, GORAKHA BASI ROAD, NAG ARBAZAR, DUM DUM KOLKATA-700 02 8 2. /RESPONDENT-ITO WD-35(3), 110, SANTIPALLY, AAYAKAR BHAWAN (POORVA) KOLKATA-107 3. + . / CONCERNED CIT 4. . - / CIT (A) 5. / $$+ , + / DR, ITAT, KOLKATA 6. 3 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ +,