Sri Ajit Kumar Surana, Kolkata V. DCIT, CC-3(3), kOLKATA, Kolkata

ITA 1839/KOL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2374 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 20-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Search and seizure; Corroborative evidences; Revised return; Set aside
• Section: 143(3); 153A

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH. P.M.JAGTAP, VICE PRESIDENT & SH.S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 08.01.2016 PASSED BY CIT(A)-21, KOLKATA FOR AY 2011-12 U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 2. THE PRESENT APPEAL WAS FILED WITH A DELAY OF 171 DAYS. THE LD.AR REFERRED TO AFFIDAVIT DATED 19.09.2016 BY MR. RAHUL SURANA, SON OF THE ASSESSEE. IT IS NOTED THAT THE APPEAL HAS BEEN DISPOSED OFF BY THE CIT(A) ON 08.01.2016 AND ASSESSEE EXPIRED ON 16.05.2016. IT WAS ARGUED BY THE LD.AR SINCE FEBRUARY 2016, THE ASSESSEE WAS NOT WELL AND HE WAS HOSPITALIZED AND AFTER TREATMENT, HE EXPIRED IN THE MONTH OF MAY, 2016. THE LEGAL HEIR WHO FILED THIS APPEAL BEFORE THIS TRIBUNAL WAS LOOKING AFTER HIS FATHERS HEALTH DURING HIS HOSPITALIZATION CAUSED DELAY IN FILING THE PRESENT APPEAL. ON HEARING BOTH THE PARTIES AND HAVING VERIFIED ABOVE SAID AFFIDAVIT, WE FIND THE REASONS STATED IN THE SAID AFFIDAVIT ARE BONAFIDE WHICH REALLY PREVENTED THE ASSESSEE IN FILING SRI AJIT KUMAR SURANA THROUGH LEGAL HEIR RAHUL SURANA, 29, SHAKESPEARE SARANI, 1 ST FLOOR, KOLKATA-700016. PAN-ALBPS1149Q VS DCIT, CENTRAL CIRCLE-3(3), KOLKATA-700107. (APPELLANT) (RESPONDENT) APPELLANT BY SH. S.M.SURANA, ADV. RESPONDENT BY SH. C.J.SINGH, JCIT, SR.DR DATE OF HEARING 25.03.2019 DATE OF PRONOUNCEMENT 21.06.2019 ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) PAGE | 2 THE PRESENT APPEAL IN TIME. THEREFORE, THE DELAY OF 171 DAYS ARE CONDONED. 3. ON MERITS, THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOSED CASH DEPOSIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. BRIEF FACTS OF THE CASE ARE RELEVANT TO THE ISSUE ON HAND ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF PRODUCTION OF T.V. SERIALS AS WELL AS MARKETING AGENT OF ENTERTAINMENT SOFTWARE. HE CONDUCTS HIS BUSINESS UNDER THE NAME AND STYLE OF M/S SPELL BINDERS AND IS A PROPRIETOR CONCERN. A SEARCH AND SEIZURE OPERATION CONDUCTED AT OFFICE PREMISES OF THE ASSESSEE ON 23.02.2010 AND ON SUBSEQUENT DATES. IN THE COURSE OF SAID OPERATION, DOCUMENTS, BOOKS OF ACCOUNTS, COMPUTERS, CASH, JEWELLERIES, BANK ACCOUNTS ETC. WERE FOUND AND SOME OF THE DOCUMENTS WERE SEIZED. THE ASSESSEE IN EXPLANATION REGARDING THE ALLEGED UNDISCLOSED CASH DEPOSITS SAID THAT HE WAS THE SOLE BENEFICIARY OF FIVE BANK ACCOUNTS HAVING IN THE NAME OF FIVE PERSONS AND DEPLOYED UNDISCLOSED INCOME IN THE UNDISCLOSED BANK ACCOUNTS TO THE TUNE OF RS.5,16,32,207/- AND THE BALANCE AMOUNT RECEIVABLE BY THE ASSESSEE WHICH HE SHALL DEPOSIT IN THE REGULAR BANK ACCOUNTS ON RECEIPT OF SALE. 5. ACCORDING TO AO, ON PERUSAL OF THE STATEMENT SHOWING BREAK-UP OF UNDISCLOSED INCOME AS SUBMITTED BY THE ASSESSEE WHICH IS REFLECTED AT PAGE NO.5 OF THE ASSESSMENT ORDER, THE AO WAS OF THE OPINION THAT THE ASSESSEE WAS UNABLE TO FURNISH THE DETAILS OF TRADE RECEIVABLE OF AN AMOUNT OF RS.1,52,56,500/- AND TREATING THE SAME AS UNDISCLOSED CASH DEPOSIT OUT OF UNDISCLOSED INCOME ADDED TO THE TOTAL INCOME OF THE ASSESSEE VIDE HIS ORDER DATED 19.03.2014. ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) PAGE | 3 6. BEFORE CIT(A) IN THE FIRST APPELLATE PROCEEDINGS, IT WAS CONTENDED THAT THE ASSESSEE DECLARED AN AMOUNT OF RS.8 CRORES FOR TAXATION AND OUT OF THE SAID AMOUNT OF RS.8 CRORES, RS.5,16,32,206/- WAS DEPLOYED IN FIVE BENAMI BANK ACCOUNTS AND THE BALANCE WAS RECEIVABLE FROM THE DIFFERENT PARTIES. THE RETURNS WERE FILED U/S 153A OF THE ACT AND ALONGWITH BALANCE SHEET. IN THE BALANCE SHEET ON THE ASSETS SIDE, THE ADVANCES GIVEN TO VARIOUS PERSONS WERE SHOWN AS RECEIVABLE. THE ASSESSMENTS WERE COMPLETED U/S 153A/143A OF THE ACT AND BALANCE SHEET FILED ALONGWTIH RETURN WERE ACCEPTED BY THE AO WITHOUT ANY QUESTION. FURTHER, WE NOTE THAT IT WAS ARGUED BEFORE THE CIT(A) THAT THE ASSESSEE HAD ALREADY PAID TAX ON THE UNDISCLOSED INCOME WHICH WAS APPEARED IN THE BALANCE SHEET AS OTHER RECEIVABLES/OTHER BALANCES. PART OF RECEIVABLES WERE RECOVERED IN CASH IN THE YEAR UNDER CONSIDERATION AND THE SAME WERE DEPOSITED IN THE BANK. IT IS NOTED THAT THE ASSESSEE CONTENDED WHEN THE TAX HAD ALREADY BEEN PAID ON RECEIVABLE AGAIN TAXING THE SAME ON ALLEGED CASH DEPOSITS REFLECTED OUT OF RECEIVABLE WOULD TANTAMOUNT ON THE DOUBLE TAXATION ON THE SAME AMOUNT. 7. THE CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SOUGHT REMAND REPORT FROM THE AO. ACCORDING TO CIT(A), THE SAID REMAND REPORT WAS CONFRONTED TO THE ASSESSEE FOR HIS RE-JOINDER AND THERE WAS NO APPEARANCE ON BEHALF OF THE ASSESSEE IN REPLYING COMMENTS AGAINST THE REMAND REPORT. IT IS NOTED FOR NON-COMPLIANCE, THE CIT(A) CONFIRMED THE ORDER OF AO FOR THE REASONS AS UNDER:- ..IN VIEW OF ASSESSEE'S ARGUMENTS, THE COPIES OF SUBMISSIONS AND DOCUMENTS FILED BY THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER, VIDE LETTER NO.CIT(A)C-II/KOL/REMAND REPORT/AKS/14-15/374 DATED 31.10.14, TO VERIFY THE BALANCE SHEET FILED WITH THE ORIGINAL RETURN OF INCOME AND THE BALANCE SHEET FILED WITH THE RETURN FILED U/S.153A OF THE ACT TO ASCERTAIN AS TO WHETHER THE RESULTANT INCOME AFTER TAXATION OF UNDISCLOSED INCOME HAD GONE INTO THE BALANCE SHEET AS 'OTHER RECEIVABLES/OTHER BALANCES' ON THE ASSET SIDE OF THE BALANCE SHEET. SUBSEQUENTLY, THE ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) PAGE | 4 ASSESSING OFFICER SUBMITTED HIS REPORT, VIDE LETTER NO. DCIT, CC- 3(3)/KOL/REMAND REPORT/2014-15 DATED 05.12.14, WHEREIN IT IS REPORTED THAT, 'DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AR WAS SEVERAL TIMES REQUESTED TO FURNISH THE DETAILS OF TRADE RECEIVABLE/OTHER RECEIVABLES INCLUDING THE NAME AND COMPLETE ADDRESS OF THE DEBTORS TO CO-RELATE THE CASH DEPOSIT OF RS.L,52,56,000/- INTO THE BANK ACCOUNT NON FURNISHING OF THE DETAILS OF TRADE RECEIVABLES/OTHER RECEIVABLES AS SHOWN IN THE BALANCE SHEET. THE ONUS LIES ON THE ASSESSEE TO PROVE THAT THE CASH OF RS.L,52,56,000/- DEPOSITED IN THE BANK ACCOUNT WAS MADE OUT OF TRADE RECEIVABLES/OTHER RECEIVABLES OF RS.2,78,61,000/-. BUT THE ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM BY PROVIDING THE SUPPORTING DETAILS AND EVIDENCES. UNTIL & UNLESS THE ASSESSEE FURNISHED THE NAMES AND ADDRESSES OF THE PERSONS/CONCERNS FROM WHOM CASH/TRADE RECEIVABLE RECEIVED ALONG WITH SUPPORTING EVIDENCES. EVEN THE SAME CAN NEVER BE FILE THE DETAILS OF SOURCE OF SUCH DEPOSITS AND DETAILS OF PERSONS/CONCERNS FROM WHOM CASH/TRADE RECEIVABLE RECEIVED ALONG WITH SUPPORTING EVIDENCES. EVEN THE SAME CAN NOT BE PRODUCED BY THE ASSESSEE BEFORE YOUR HONOUR TO SUBSTANTIATE HIS CLAIM. HENCE THE SUBMISSION MADE BY THE ASSESSEE BEFORE YOU, DOES NOT HAVE ANY MERITS. THE ADDITION OF RS.L,52,56,000/- AS UNDISCLOSED CASH DEPOSITS MADE BY THE AO IS QUITE JUSTIFIED AND IN THE INTEREST OF REVENUE. ' THE ABOVE REMAND REPORT WAS DULY DISCUSSED WITH THE LD. AR OF THE APPELLANT AND A COPY OF THE SAID REPORT WAS DULY PROVIDED TO HIM, IN COURSE OF HEARING ON 03.05.2015, SO THAT THE APPELLANT CAN SUBMIT REJOINDER, IF ANY. LATER ON THE LD. AR OF THE APPELLANT APPEARED ON DIFFERENT DATES AND DISCUSSED THE FINDINGS OF THE ASSESSING OFFICER AS COMMUNICATED VIDE THE REMAND REPORT. THE HEARING TOOK PLACE ON 27.07.15, 21.12.15 AND 07.01.16 BUT NEITHER THE APPELLANT NOR HIS LD. AUTHORIZED REPRESENTATIVE COULD EXPLAIN THE MATTER OR PROVIDE THE CORRECT DETAILS AS REQUIRED BY THE ASSESSING OFFICER FOR THE VERIFICATION OF THE GENUINENESS OF THE CLAIM, IN RESPECT OF UNDISCLOSED CASH DEPOSIT IN THE BANK ACCOUNTS AS REFERRED EARLIER, AND THEREFORE IN MY OPINION, THE ADDITION OF RS.L,52,56,000/- AS UNDISCLOSED CASH DEPOSITS MADE BY THE AO IS JUSTIFIED AND THEREFORE CONFIRMED. IN VIEW OF THIS THE APPEAL ON THIS GROUND IS REJECTED. 8. BEFORE US, THE LD.AR REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE LOWER AUTHORITIES. FURTHER, HE REFERRED TO THE ASSESSMENT ORDER FOR AY 2009-10 WHICH IS AT PAGE NO.1 OF PAPER BOOK AND SUBMITTED THAT THE ASSESSEE VIDE ITS LETTER DATED 17.08.2011, AN AMOUNT OF RS.2,91,87,380/- WAS FURTHER DISCLOSED FOR AY 2009-10 AND THE SAID INCOME WAS ROUTED THROUGH BANKING ACCOUNT IN THE NAME OF MRS. RINA SAHA. ACCORDING TO AO, THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE FOR AY 2009-10 IS RS.7,91,88,956/-. FURTHER, HE REFERRED TO ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) PAGE | 5 ASSESSMENT ORDER FOR AY 2010-11 AND SUBMITTED THAT AN AMOUNT OF RS.1,70,31,000/- WAS CONSIDERED AS THE INCOME OF THE ASSESSEE BEING A QUANTUM OF DEPOSIT IN MRS. RINA SAHAS BANK ACCOUNT AND ANOTHER RS.16,18,244/- BEING DEPOSITED IN THE OTHER FIVE ACCOUNTS DURING FY 2009-10 (AY 2010-11). THE LD.AR ARGUED THAT TOTAL OF THESE TWO FIGURES ARE COMING TO RS.1,86,49,244/- AND THE ASSESSEE FILED REVISED RETURN SHOWING THE TOTAL INCOME AS RS.1,86,51,094/-. ACCORDING TO THE LD.AR, THIS AMOUNT WAS NOT DISPUTED BY THE REVENUE. FURTHER, HE REFERRED TO PAGE NO.23 OF THE PAPER BOOK TO SHOW THAT AN AMOUNT OF RS.7,91,88,279/- UNDER THE MISCELLANEOUS INCOME AND AN AMOUNT OF RS.2,89,01,000/- HAS BEEN SHOWN AS OTHER RECEIVABLES AND ARGUED THAT THE CASH DEPOSITS IN ALL THE ASSESSMENTS FOR AYS 2009-10 & 2010- 11 WERE EXPLAINED EITHER BY WAY OF CASH WITHDRAWALS DURING THE YEAR AND THE ADDITIONAL INCOME ASSESSED IN THE EARLIER YEARS AND PRAYED FOR TELESCOPING OF IMPUGNED AMOUNT WITH THAT OF ASSESSMENT YEARS 2009- 10 & 2010-11. 9. IN REPLY, THE LD. DR BY REFERRING TO REMAND REPORT SUBMITTED THAT THE AO WAS NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE THAT THE IMPUGNED AMOUNT IS PART OTHER RECEIVABLE. THE ASSESSEE DID NOT GIVE ANY DETAILS TO FIND OUT WHETHER THEY ARE TRADE RECEIVABLE OR NOT BEFORE THE AO. THE ASSESSEE MADE NO COMPLIANCE IN THE FIRST APPELLATE PROCEEDINGS BEFORE THE CIT(A) IN TERMS OF REMAND REPORT AND PRAYED TO DISMISS THE GROUNDS RAISED BY THE ASSESSEE. 10. HEARD BOTH PARTIES AND PERUSED MATERIAL AVAILABLE ON RECORD. ACCORDING TO AO, THERE WERE NO DETAILS IN RESPECT OF CONTENTION, THE IMPUGNED AMOUNT IS THE TRADE RECEIVABLE BY THE ASSESSEE. BUT, HOWEVER, P&L A/C FOR AY 2009-10 CLEARLY SHOWS THAT THE AMOUNT OF RS.2,89,01,000/- HAS BEEN SHOWN AS OTHER RECEIVABLE. IT IS ALSO NOTED FROM THE INCOME AND EXPENDITURE ACCOUNT FOR AY 2010-11, AN AMOUNT ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) PAGE | 6 OF RS.3,21,31,500/- HAS BEEN SHOWN AS OTHER BALANCES. FURTHER, WE NOTE THAT THE ASSESSEE HAS DECLARED UNDISCLOSED INCOME FOR AY 2009- 10 IS RS.7,91,88,956/- WHICH IS INCLUSIVE OF THE OTHER RECEIVABLES AS DISCUSSED ABOVE TO AN EXTENT OF RS.2,89,01,000/-. THEREFORE, IT IS CLEAR THAT THE AO CONSIDERED THE OTHER RECEIVABLE AS DISCUSSED ABOVE IN THE AY 2009-10 AND IT IS VERY MUCH PART OF TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD UNDISCLOSED INCOME. THERE IS NO DISPUTE IN RESPECT OF THIS ASPECT AND ALSO THE PAYMENT OF TAX BY THE ASSESSEE. FURTHER, AN AMOUNT OF RS.1,86,49,244/- AS CONSIDERED AS INCOME OF THE ASSESSEE VIDE REVISED RETURN FOR AY 2010-11. IN OUR OPINION, THE IMPUGNED AMOUNT IS MUCH LESS THAN THE UNDISCLOSED INCOME ASSESSED DURING THE TWO ASSESSMENT YEARS I.E. 2009-10 & 2-10-11 IN THE HANDS OF THE ASSESSEE AND NO SEPARATE ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS REQUIRES TO BE MADE IN THE YEAR UNDER CONSIDERATION. THEREFORE, WE FIND FORCE IN THE ARGUMENTS OF THE LD.AR THAT TELESCOPING OF THE IMPUGNED AMOUNT SHOULD BE TELESCOPED WITH THE TOTAL INCOME COMPUTED FOR AYS 2009-10 & 2010-11. THUS, IN VIEW OF THE ABOVE OBSERVATIONS, NO SEPARATE ADDITION IS MAINTAINABLE AND THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) IS DELETED AND THE ORDER OF CIT(A) IS SET ASIDE. THEREFORE, GROUND RAISED IN THIS APPEAL BY THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2019. SD/- SD/- (P.M.JAGTAP) (S.S.VISWANETHRA RAVI) VICE PRESIDENT JUDICIAL MEMBER DATE:- 21.06.2019 *AMIT KUMAR* ITA NO.1839/KOL/2016 (ASSESSMENT YEAR-2011-12) PAGE | 7 COPY FORWARDED TO: 1. APPELLANT- SRI AJIT KUMAR SURANA THROUGH LEGAL HEIR RAHUL SURANA, 29, SHAKESPEARE SARANI, 1 ST FLOOR, KOLKATA-700016. 2. RESPONDENT- DCIT, CENTRAL CIRCLE-3(3), KOLKATA-700107. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA 5. DR: ITAT -KOLKATA BENCHES BY ORDER AR/H.O.O ITAT, KOLKATA