Mihir Kanti Hazra., Burdwan V. I.T.O Wd - 1(4),Burdwan, Burdwan

ITA 19/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83131 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: SOUMITR A CHOUDHURY
• Keywords: Unexplained cash credit
• Section: 131; 68; 234B

Judgement Text

I.T.A. NO. 19/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 19/KOL/ 2013 ASSESSMENT YEAR : 2006-2007 MIHIR KANTI HAZRA,................................. ..........................APPELLANT VILL. + P.O. BHANDARDIHI, DIST. BURDWAN-713 426 [PAN : AASPH 8613 A] -VS.- INCOME TAX OFFICER,................................ ...................RESPONDENT WARD-1(4), BURDWAN, AAYAKAR BHAWAN, COURT COMPOUND, P.O. + DIST. : BURDWAN-713 101 APPEARANCES BY: SHRI SOUMITRA CHOUDHURY, ADVOCATE, FOR THE ASSESSEE SMT. RANU BISWAS, JCIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : AUGUST 28, 2014 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 10, 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), ASANSOL IN AP PEAL NO. 102/CIT(A)/ASL/W-1(4)/ERST. BWN/08-09 DATED 10.10.2 012 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI SOUMITRA CHOUDHURY, ADVOCATE, REPRESENTED O N BEHALF OF THE ASSESSEE AND SMT. RANU BISWAS, JCIT, D.R., REPRESEN TED ON BEHALF OF THE REVENUE. I.T.A. NO. 19/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 5 3. IN THE ASSESSEES APPEAL, ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS:- (1) FOR THAT ON THE FACTS OF THE CASE, THE ORDER PA SSED BY THE LD. CIT(A) IS COMPLETELY ARBITRARY, UNJUSTIFIED NAND ILLEGAL. (2) FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT( A) HAS DITTOED THE ORDER OF THE AO WHICH IS COMPLETELY ARB ITRARY, UNJUSTIFIED AND ILLEGAL. (3) FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT( A) WAS WRONG IN DITTOING THE ORDER OF THE AO AND CONFIRMIN G THE ADDITION AS UNEXPLAINED CASH CREDIT U/S 68 AMOUNTIN G TO RS.41,15,000/- WHICH IS COMPLETELY ARBITRARY, UNJUS TIFIED AND ILLEGAL. (4)FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG BY CONFIRMING THE CHARGING OF INTEREST UNDER SECTION 234A, 234B & 234D AMOUNTING TO RS.1,02,312/ -, RS.4,22,037/- & RS.1,359/- RESPECTIVELY WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 4. IT WAS SUBMITTED BY THE LD. A.R. ON BEHALF OF TH E ASSESSEE THAT IN THE COURSE OF ASSESSMENT, IT WAS NOTICED THAT THE ASSES SEE HAD RECEIVED UNSECURED LOANS FROM 39 PERSONS TO AN EXTENT OF RS. 41,15,000/-. NOTICES UNDER SECTION 131 HAD BEEN ISSUED TO THE PERSONS BU T ONLY 8 PERSONS APPEARED. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER ON THE GROUND THAT THE PERSONS TO WHOM THE NOTICES HAD BEEN ISSUE D FAILED TO APPEAR AND ALSO ON THE GROUND THAT THE PERSONS WHO HAD APP EARED WERE NOT CREDITWORTHY AND AS THE ASSESSING OFFICER DOUBTED T HE GENUINENESS OF THE TRANSACTIONS, HE TREATED THE ENTIRE UNSECURED LOANS AS UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE. IT WAS THE SUB MISSION THAT ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE ORDER OF THE ASS ESSING OFFICER. LD. A.R. DREW OUR ATTENTION TO PAGE 7 OF THE PAPER BOOK, WHI CH WAS THE COPY OF THE REMAND REPORT OBTAINED BY THE LD. CIT(APPEALS) FROM THE ASSESSING OFFICER DATED 25.05.2011. IT WAS THE SUBMISSION THA T IN ALL THE CASES, PERMANENT ACCOUNT NOS., BANK ACCOUNT NUMBERS WERE A VAILABLE WITH THE ASSESSING OFFICER. FURTHER IT WAS THE SUBMISSION TH AT THE REMAND REPORT HAD BEEN OBTAINED DATED 18.02.2011 WHEREIN THE DETA ILS OF THE BANK A/CS, I.T.A. NO. 19/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 5 DATE OF OPENING OF BANK A/CS. AND THE NATURE OF THE INTRODUCERS WERE ALSO AVAILABLE. IT WAS THE SUBMISSION THAT IN NONE OF TH E CASES THE ASSESSEE WAS INTRODUCER. IT WAS THE SUBMISSION THAT THOUGH S OME HAD ALSO APPEARED BEFORE THE ASSESSING OFFICER AND HAD ALSO CONFIRMED THE TRANSACTIONS OF GIVING THE UNSECURED LOANS TO THE A SSESSEE. IT WAS THE SUBMISSION THAT ALL THE PERSONS WHO HAD GIVEN THE U NSECURED LOANS WERE DEALERS OF PADDY AND WERE ALSO AGRICULTURISTS AND T HE ASSESSEE WAS THE PARTNER OF THE FIRM WHICH WAS RUNNING A RICE MILL. IT WAS THE SUBMISSION THAT THE ASSESSEES CASE WAS COVERED BY THE DECISIO N DATED 21.09.2011 OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT, KOLKATA-III VS.- DATAWARE PRIVATE LIMITED IN ITAT NO. 263 OF 2011 (O RIGINAL SIDE) (G.A. NO. 2856 OF 2011), WHEREIN IT HAD BEEN HELD AS FOLL OWS:- IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROF IT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER GETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMITTE D BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING O FFICER OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE GENUINENESS OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQ UE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX(AP PEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQUIRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. THE APPEAL IS THUS DEVOID OF ANY SUBSTANCE AND IS SUMMAR ILY DISMISSED. THE ADDITION AS MADE BY THE ASSESSING OFFICER AND A S CONFIRMED BY THE LD. CIT(APPEALS) WAS LIABLE TO BE DELETED. LD. A.R. FUR THER PLACED BEFORE US A COPY OF THE ORDER OF COORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF JYOTI SARAF VS.- ITO, WARD-35(2), KOLKATA IN ITA NO. 267 7/KOL/2013, ORDER DATED 15.07.2014, WHEREIN ON IDENTICAL CIRCUMSTANCE S THE ADDITION HAD BEEN DELETED. I.T.A. NO. 19/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 5 5. IN REPLY, LD. JCIT, D.R. VEHEMENTLY SUPPORTED TH E ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE PAPER BOOK AS FILED BY THE ASSESSEE SHOWS THAT THE ASSESS EE HAS PROVIDED PERMANENT ACCOUNT NUMBERS AND THE CONFIRMATION OF T HE LOANS BY ALL THE LOAN CREDITORS. FURTHER A PERUSAL OF THE PAPER BOOK CLEARLY SHOWS THAT ALL THE CREDITORS ARE ASSESSED TO INCOME TAX AND THEY H AVE FILED THEIR RETURNS OF INCOME FOR THE ASSESSMENT YEAR 2006-07 IN MARCH, 2007. THE ASSESSMENT IN THE CASE OF THE ASSESESE HAS BEEN INI TIATED ONLY AFTER MARCH, 2007, SO OBVIOUSLY IT CANNOT BE ASSUMED THAT THE RETURNS HAD BEEN FILED BY THE CREDITORS AFTER THE INITIATION OF THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE. FURTHER A PERUSAL OF THE PAPER BOOK CLEARLY SHOWS THAT THE RETURN ACKNOWLEDGMENT, COMPUTATION O F INCOME ALONGWITH THE CAPITAL A/C. AND THE AFFIDAVITS OF THE CREDITOR S WERE BEFORE THE ASSESSING OFFICER. THIS FACT BEING UNDISPUTED CLEAR LY THE DECISION DATED 21.09.2011 OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DATAWARE PRIVATE LIMITED IS SQUARELY APPLICABLE ON THE FACTS OF THE ASSESSEES CASE. CONSEQUENTLY RESPECTFULLY FOLLOWIN G THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DA TAWARE PRIVATE LIMITED REFERRED TO SUPRA AS ALSO THE DECISION DATED 15.07. 2014 OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JYOTI SARAF R EFERRED TO SUPRA, THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS CO NFIRMED BY THE LD. CIT(APPEALS) STANDS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 10 TH DAY OF SEPTEMBER, 2014 I.T.A. NO. 19/KOL./2013 ASSESSMENT YEAR: 2006-2007 PAGE 5 OF 5 COPIES TO : (1) MIHIR KANTI HAZRA, VILL. + P.O. BHANDARDIHI, DIST. BURDWAN-713 426 (2) INCOME TAX OFFICER, WARD-1(4), BURDWAN, AAYAKAR BHAWAN, COURT COMPOUND, P.O. + DIST. : BURDWAN-713 101 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.