ITO, Ward - 48(3)/Kol, Kolkata V. SHRI SAKTIPADA NANDY, Howrah

ITA 1900/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2552 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 13-11-2009
• Court: TRIBUNAL
• Department Lawyers: P KOLHE
• Assessee Lawyers: S NANDI
• Keywords: Unexplained investment; Opportunity of being heard; Set aside

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : C BENC H : KOLKATA [ BEFORE SHRI B.R.MITTAL, HONBLE J.M. & SHRI C. D. RAO, HONBLE A.M .] I.T.A.NO. 1900 (KOL) OF 2009 : ASSES SMENT YEAR 2006-07 I.T.O., WARD-48(3), KOLKATA -VS- SRI SAKTIPADA NANDY, HOWRAH [APPELLANT] (PAN: ABRPN 4738J) [RE SPONDENT] C.O. NO.14/KOL/10 : ASSESSMENT YEAR 2006-07 (ARISING OUT OF ITA NO.1900/K/09) SRI SAKTIPADA NANDY , HOWRAH -VS- I.T.O., WARD-48(3), KOLKATA (CROSS OBJECTOR) [RESPONDENT] DEPARTMENT BY : SHRI P. KOLHE ASSESSEE BY : SHRI S. NANDI O R D E R O R D E R O R D E R O R D E R PER SHRI C.D.RAO, A.M . THE APPEAL FILED BY THE REVENUE AND THE CROSS-OBJEC TION FILED BY THE ASSESSEE ARE AGAINST THE ORDER OF THE C.I.T.(A)-XXX, KOLKATA DATED 27.08.2009 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ONLY GROUND RAISED BY THE REVENUE IN THE APP EAL IS RELATING TO DELETION OF ADDITION OF RS.6,80,648/- MADE BY THE AO WHEREAS IN THE CROSS-OBJECTION FILED BY THE ASSESSEE, THE ONLY GROUND RAISED IS RELATING TO CON FIRMATION OF ADDITION MADE BY THE AO OF RS.1,11,100/- ON ACCOUNT OF PURCHASE. 3. BRIEF FACTS RELATING TO THE ISSUE RAISED BY THE REVENUE ARE THAT THE AO NOTICED THAT THE ASSESSEE MADE INVESTMENT IN HDFC MUTUAL FU ND AMOUNTING TO RS.6,80,648/-. THE AO HELD THAT THIS INVESTMENT IS NOT REFLECTED I N THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME. THE AO CALLED FOR ASSESSEES EXPLANATION. IN REPLY, THE ASSESSEE SUBMITTED THAT THE INVESTMENT IS INCLUDED IN THE TO TAL INVESTMENT OF RS.13,10,251/- BROUGHT FORWARD FROM EARLIER YEAR. THE AO OBSERVED THAT THE ASSESSEE HAS NOT 2 SATISFACTORILY EXPLAINED INVESTMENT OF RS.6,80,648/ - IN HDFC MUTUAL FUND. HENCE, BEING DISSATISFIED WITH THE REPLY, THE AO MADE ADDI TION OF RS.6,80,648/-. BEING AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE L D. CIT(A). 4. THE LD. CIT(A), AFTER TAKING INTO CONSIDERATION THE WRITTEN SUBMISSION OF THE LD. A.R., THE OBSERVATIONS MADE BY THE AO IN THE AS SESSMENT ORDER, DIRECTED THE AO TO DELETE THE ADDITION MADE BY HIM BY OBSERVING THA T THE A.O. IS NOT CORRECT IN TREATING THE INVESTMENT IN HDFC MUTUAL FUND OF RS.6,80,648/- AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. 5. AGGRIEVED BY THIS, NOW THE REVENUE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING BEFORE US, THE LD. D.R., APPEARING ON BEHALF OF THE REVENUE, HAS RELIED ON THE ORDERS OF THE A.O. AND S UBMITTED THAT THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED INVESTMENT OF RS.6,80,648/ - IN HDFC MUTUAL FUND. HENCE, THE LD. D.R. REQUESTED TO SET ASIDE THE ORDER OF THE LD . CIT(A) BY UPHOLDING THE ORDER OF THE AO ON THIS ISSUE. 7. ON THE OTHER HAND, THE LD. COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, HAS REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND SUBMITTED THAT INVESTMENT OF RS.6,80,648/- IS CONSISTING OF (1) RS .2,00,000/- IS SWITCHED TO HDFC LONG TERM EQUITY FUND FROM HDFC CAPITAL BUILDER FUN D. IT WAS SUBMITTED THAT INVESTMENT OF ASSESSEES WIFE MRS. BASANTI NANDY IN HDFC LONG TERM EQUITY FUND GROWTH OF RS.2,00,000/- WAS SWITCHED OUT FROM HDFC CAPITAL BUILDER FUND, (2) INVESTMENT IN CAPITAL BUILDER FUND OF RS.2,80,648/- IS REINVESTMENT OF THE DIVIDEND AND THAT THE INVESTMENTS DISCLOSED WERE REFLECTED IN TH E INCOME TAX ASSESSMENT AND IN THE BALANCE-SHEET WHICH INCLUDED THE SWITCHED AMOUNT OF RS.2,00,000/-. THE ASSESSEE FILED COPIES OF IT RETURN, PARTICULARS OF HIS WIFE AND ALSO SELF AND (3) THAT RS.2,00,000/- WAS TRANSFERRED FROM HDFC CAPITAL BUILDER FUND TO H DFC LONG TERM EQUITY FUND AND THAT THIS AMOUNT TRANSFERRED FROM ONE FUND TO THE O THER AND NOT A FRESH INVESTMENT BY THE ASSESSEE. THEREFORE, THE LD. COUNSEL REQUESTED TO UPHOLD THE ORDER OF THE LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE ON T HIS ISSUE. 3 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT THE LD. CI T(A) HAS GIVEN RELIEF TO THE ASSESSEE BY ACCEPTING THE EXPLANATION WHICH WAS NOT BEFORE T HE AO. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE BACK TO THE AO TO RE-DECIDE THE SAME, AFTER CONSIDERING THE EXPLANATION SUBMITTED BY THE ASSESSEE, AS PER LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. REGARDING THE CROSS- OBJECTION FILED BY THE ASSESSEE, THERE IS NO DISPUT E THAT THE PAYMENT WAS PAID BY A/C. PAYEE CHEQUES. THE CONTENTION OF THE REVENUE IS THA T THE PARTIES ARE NOT AVAILABLE AT THE GIVEN ADDRESS. ON THE OTHER HAND, THE CONTENTIO N OF THE ASSESSEE IS THAT SINCE THERE IS A LAPSE OF THREE YEARS, THE PERSONS, FROM WHOM H AVE MADE THE PURCHASES, ARE NOT IN THE SAID BUSINESS. THEREFORE, THEY ARE NOT IN A POS ITION TO CONTACT THEM. UNDER THESE CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF THE REVEN UE AUTHORITIES ON THIS ISSUE AND DIRECT THE AO TO VERIFY THE PURCHASES DISPUTED BY T HE REVENUE WHICH ARE TAKEN BY THE ASSESSEE IN THEIR STOCK ACCOUNT AND THE SALES ARE A LSO EFFECTED BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS. THEN, IN OUR CONSIDERED OPINION, THERE SHOULD NOT BE ANY ADDITION ON THESE PURCHASES FOR WANT OF CONFIRMATION BY THE SELLER. TO VERIFY THIS FACT, WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO AND DECIDE T HE SAME, AS PER OUR DIRECTIONS. 8 IN THE RESULT, BOTH THE REVENUES APPEAL AND THE ASSESSEES CROSS-OBJECTION ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE COURT ON 18.06.2010. SD/- SD/- [B.R.MITTAL] [C.D.RAO] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18-06-2010 COPY FORWARDED TO : 1) SRI SAKTIPADA NANDY, 6, SARAT DUTTA LANE, KADAMTALA , HOWRAH 711 101. 2) I.T.O., WARD-48(3), KOLKATA 3) CIT(APPEAL), 4) CIT, 5. D.R., ITAT, KOLKATA. TRUE COPY, BY OR DER DY. REGISTRAR, ITAT, KOLKATA MST 4