Smt. Kusum Bhura, Kolkata V. ITO, Ward - 35(3), Kolkata, Kolkata

ITA 1967/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1890 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SNEHANGSHU BISWAS
• Assessee Lawyers: K L BOTHRA
• Keywords: Unexplained investment; Search and seizure; Source of fund; Accommodation entries
• Section: 147; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM] I.T.A NO. 1967 /KOL/2 017 ASSESSMENT YEAR : 2010-1 1 SMT. KUSUM BHURA -VS.- I.T.O., WARD-35(3 ) KOLKATA KOLKATA [PAN : ADBPB 1751 F] (APPELLANT) (RESPONDENT) I.T.A NO. 1968 /KOL /2017 ASSESSMENT YEAR : 2010-1 1 SHRI SHRENIK BHURA -VS.- I.T.O., WARD-36 (2) KOLKATA KOLKATA [PAN : AEBPB 4829 B] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI K.L.BOTHR A, ADVOCATE FOR THE RESPONDENT : SHRI SNEHANGSHU BISWAS, ADDL. CIT DATE OF HEARING : 12.12.2017. DATE OF PRONOUNCEMENT : 03.01.2018. ORDER THESE ARE APPEALS BY TWO ASSESSEES AGAINST TWO ORD ERS BOTH DATED 19.07.2017 OF C.I.T.(A)-10, KOLKATA RELATING TO A.Y.2010-11. 2. THE FACTS OF THE CASE ARE THAT SMT. KUSUM BHURA PURCHASED JEWELLERY WORTH RS.4,53,354/- FROM MINAL GEMS, MUMBAI. THE ASSESSEE SHRI SHRENIK BHURA ALSO PURCHASED JEWELLERY WORTH RS.8,07,620/- FROM MINAL GEMS, MUMBAI. AS FAR AS SMT. KUSUM BHURA IS CONCERNED SHE HAD PAID MINAL GEMS TH ROUGH A CHEQUE WHICH WAS DULY ENCASHED BY MINAL GEMS. COPY OF THE BANK STATEMENT OF BANK OF BARODA OF A/C NO.003202000004111 EVIDENCING ENCASHMENT OF CHEQUE BY MINAL GEMS ON 20.11.2009 2 ITA NOS.1967 & 1968/KOL/2017 SMT. KUSUM BHURA & SHRI SHRENIK BHURA A.YR.2010-11 2 WAS FILED BY THE ASSESSEE. THE INVOICE OF MIAL GEMS DATED 09.09.2009 WAS ALSO FILED BY THE ASSESSEE. THE ASSESSEE IN THE COURSE OF ASSESSM ENT PROCEEDINGS ALSO FILED CONFIRMATION FROM MINAL GEMS THAT THEY HAVE SOLD PO LISHED DIAMOND TO THE ASSESSEE. IN THE CASE OF SHRENIK BHURA SIMILAR INVOICE AND BANK STATEMENT EVIDENCING PAYMENT TO MINAL GEMS WAS ALSO PLACED ON RECORD. BY THE ASSESS EE. 3. IT APPEARS THAT THERE WAS INFORMATION RECEIVED B Y THE AO OF BOTH THE AFORESAID ASSESSES FROM D.I.T. (INVESTIGATION)-II, MUMBAI. TH E INFORMATION RECEIVED WAS THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED IN THE CASE OF BHAWARLAL JAIN GROUP OF CASES ON 03.10.2013. CONSEQUENT TO THE SAID SEAR CH AND INVESTIGATION CONDUCTED, IT CAME TO LIGHT THAT BHAWARLAL JAIN GROUP WAS PROVIDI NG BOGUS/ACCOMMODATION ENTRIES TO SEVERAL PERSONS AND ENTITIES AND THESE ENTRIES WERE BOGUS ENTRIES. MINAL GEMS IS ONE OF THE ENTITIES BELONGING TO BHAWARLAL JAIN GROUP OF CASES. SINCE THE ASSESSEE CLAIMED TO HAVE MADE PURCHASES FROM MINAL GEMS, THE ASSESSMENT S IN THE CASE OF BOTH THE ASSESSES WERE REOPENED U/S 147 OF THE INCOME TAX ACT, 1961 ( ACT.). 4. IN THE ASSESSMENTS CONCLUDED, THE AO AFTER MAKI NG REFERENCE TO ALL THE EVIDENCES FILED BY THE ASSESSEE TO PROVE THE SOURCE OF FUNDS AS WELL AS EVIDENCE OF PAYMENTS AND CAME TO THE CONCLUSION THAT THE PURCHASES IN QUESTI ON WERE NOT GENUINE. ULTIMATELY THE AO MADE AN ADDITION IN THE CASE OF SMT. KUSUM BHURA BY MAKING THE FOLLOWING OBSERVATIONS : HOWEVER, SINCE THE ASSESSEE IN THE BALANCE SHEET HAS SHOWN INCREASE IN JEWELRY BY RS.4,53,354/- THERE IS NO EVIDENCE ON RECORD TO DOUBT THAT SHE DIDN'T MAKE ANY PURCHASE IN THE FY-2009-10 EXCEPT MAKING CHEQUE ENT RY. IN FACT, SHE MADE THE PURCHASE FROM SOME OTHER PARTY IN EARLIER YEAR BUT HAS NOT FURNISHED THE DETAILS OF THE SAME. ACCORDINGLY, EXPENDITURE OF ~ 4,53 354/- INCURRED TOWARDS PURCHASE OF DIAMONDS SHOWN AS JEWELERY IN THE BALANCE SHEET IS CONSIDERED AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AND DEEMED TO BE THE I NCOME OF THE ASSESSEE FOR THE FINANCIAL YEAR 2009-10. 3 ITA NOS.1967 & 1968/KOL/2017 SMT. KUSUM BHURA & SHRI SHRENIK BHURA A.YR.2010-11 3 5. IN THE CASE OF SHRI SHRENIK BHURA THE AO MADE AN ADDITION BY OBSERVING AS FOLLOWS :- IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, , T HE PURCHASE SHOWN TO HAVE BEEN. MADE FROM M/S. MINAL GEMS CANNOT BE CONSIDERED GENU INE. HOWEVER, SINCE THE ASSESSEE, IN THE BALANCE SHEET HAS DECLARED INVESTM ENT IN DIAMONDS AT RS.8,07,620/- THERE IS NO EVIDENCE ON RECORD TO DOUBT THAT HE DID N'T MAKE ANY PURCHASE. IN FACT, HE MADE THE PURCHASE FROM SOME OTHER PARTY BUT HAS NOT FURNISHED THE DETAILS OF THE SAME. ACCORDINGLY, INVESTMENT OF RS.8,07,620/- INC URRED TOWARDS PURCHASE OF DIAMONDS SHOWN AS INVESTMENT IN THE BALANCE SHEET I S CONSIDERED AS BEING MADE FROM UNEXPLAINED SOURCE AND DEEMED TO BE THE INCOME OF THE ASSESSEE FOR THE FINANCIAL YEAR 2009-10. [ ADDITION: RS',8,07,620/- 6. ON APPEAL BY THE ASSESSEE THE CIT(A) CONFIRMED T HE ORDERS OF THE AO. HENCE THESE APPEALS BY THE ASSESSES BEFORE THE TRIBUNAL. 7. I HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESEE POINTED OUT THAT TH E JEWELLERY IN QUESTION HAS BEEN PURCHASED BY THE ASSESEE WHICH WAS CONFIRMED BY MIN AL GEMS AND THE PAYMENT HAS BEEN MADE BY CHEQUES TO MINAL GEMS. MORE IMPORTANT IT WAS POINTED OUT THAT THE INVESTMENTS HAS BEEN SHOWN IN THE BOOKS OF ACCOUNTS AND THE SOURCE HAD BEEN DULY EXPLAINED AS FROM THE DISCLOSED BANK ACCOUNTS OF TH E ASSESSEE. IT WAS SUBMITTED THAT IN THE CIRCUMSTANCES THE ADDITION MADE U/S 69 OF THE A CT CANNOT BE SUSTAINED. THE LD. DR RELIED ON THE ORDERS OF CIT(A). 8. I HAVE GIVEN A VERY CAREFUL CONSIDERATION TO TH E RIVAL SUBMISSIONS. IT IS AN UNDISPUTED POSITION THAT ADDITION IN CASE OF BOTH T HE ASSESSES HAVE BEE MADE U/S 69 OF THE ACT. SECTION 69 OF THE ACT READS AS FOLLOWS :- UNEXPLAINED INVESTMENTS 69 . WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDE D IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AN D THE ASSESSEE OFFERS NO 4 ITA NOS.1967 & 1968/KOL/2017 SMT. KUSUM BHURA & SHRI SHRENIK BHURA A.YR.2010-11 4 EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVE STMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE IN COME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. 9. IN THE PRESENT CASE INVESTMENTS OF JEWELLERY IS DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSES. THEREFORE THERE IS NO SCO PE OF APPLYING THE PROVISION OF SECTION 69 OF THE ACT. APART FROM THE ABOVE SOURCE OF FUNDS IS EVIDENCED BY THE PAYMENTS FROM DISCLOSED BANK ACCOUNTS. THEREFORE TH E SOURCE OF INVESTMENTS IS ALSO PROPERLY AND SATISFACTORILY EXPLAINED BY THE ASSESS ES. IN THE CIRCUMSTANCES, I AM OF THE VIEW THAT THE ADDITIONS MADE BY THE AO AND CONFIRME D BY CIT(A) CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE DELETED. 10. IN THE RESULT BOTH THE APPEALS BY THE ASSESSES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 03.01.2018. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 03.01.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1. SMT. KUSUM BHURA,37, ARMENIAN STREET, C/O S.N.FA BRICS PVT. LTD., KOLKATA-700001. 2. SHRI SHRENIK BHURA, 37, ARMENIAN STREET, C/O S.N .FABRICS PVT. LTD., KOLKATA-700001. 3. I.T.O., WARD-35/3, KOLKATA 4. ITO- WARD-36(2), KOLKTATA. 5. CIT(A)-10, KOLKATA 6. C.I.T.-5, KOLKA TA. 7. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECR ETARY HEAD OF OFFICE/ D.D.O., ITAT KOLKATA BENCHES 5 ITA NOS.1967 & 1968/KOL/2017 SMT. KUSUM BHURA & SHRI SHRENIK BHURA A.YR.2010-11 5