Sujit Kumar Jaiswal, Howrah V. ITO, Ward 46(4), Kolkata, Kolkata

ITA 2056/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1171 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOWDHURY
• Assessee Lawyers: M K AGARWAL
• Keywords: Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE HONBLE SHRI P.M. JAGTAP] I.T.A. NO. 2056/KOL/2016 ASSESSMENT YEAR : 2011-12 SHRI SUJIT KUMAR JAISWAL.............................APPELLANT 14/21/2/1, 4 TH FLOOR SANATHAN MISTRY LANE, ORIYAPARA, SALKIA HOWRAH - 711106 [PAN : AGEPJ5654M] INCOME TAX OFFICER..........................RESPONDENT WARD 46(4) 3, GOVERNMENT PLACE (WEST) KOLKATA - 700001 APPEARANCES BY: SHRI M.K. AGARWAL, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI ROBIN CHOWDHURY, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : OCTOBER 05, 2017 DATE OF PRONOUNCING THE ORDER : OCTOBER 31, 2017 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) - 14 DATED 29.07.2016 AND THE GROUNDS RAISED BY THE ASSESSEE THEREIN READ AS UNDER: 1. THE ASSESSMENT AS WELL AS APPELLATE ORDER WAS UNJUSTIFIED AND NOT SUSTAINABLE IN LAW WHICH WILL BE REDUCED TO NIL. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED I.T.O.S ACTION IN COMPLETING THE ASSESSMENT IS ILLEGAL, ULTRAVIRES AND ALL CANNONS OF LAW. 3. THAT THE ASSESSMENT ORDER U/S 143(3) IS UNLAWFUL AS THE NOTICE OF HEARING U/S 143(2) DATED 28.09.2012WAS NOT SERVED TO APPELLANT UP TO 30 TH SEPTEMBER, 2012. BUT NOTICE IS RECEIVED BY APPELLANT AFTER 30 TH SEPTEMBER, 2012, IT IS NOT A VALID NOTICE. 2 I.T.A. NO. 2056/KOL/2016 A.Y. 2011-12 SUJIT KUMAR JAISWAL 4. THAT THE ASSESSMENT IS BASED ON ILLEGAL NOTICE AND HENCE ALL ACTIONS THEREAFTER ARE ILLEGAL. THE ASSESSMENT SHOULD BE CANCELLED. 5. THAT ARGUING AND NOT ADMITTING, EVEN IF THE ASSESSMENT IS LEGAL THE ADDITION OF THE CLOSING CASH BALANCE AS ON 31.03.2010 RS. 10,41,001/- TREATING AS UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 2011-12 AND ASSESSED TO TAX IN THE ASSESSMENT YEAR 2011-12 WHICH IS UNJUSTIFIED AND BAD IN LAW. 6. FOR THAT THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED WHILE TREATING THE OPENING CASH IN HAND AS ON 1.4.2010 RS. 10,41,001/- AS UNEXPLAINED CASH DEPOSIT AND TREATED AS INCOME AND ASSESSED TO TAX IN THE ASSESSMENT YEAR 2011-12 WHICH IS UNJUSTIFIED AND BAD IN LAW. 7. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION OF RS. 10,41,001/- BE DELETED. 8. FOR THAT THE LEARNED ASSESSING OFFICER HAS GROSSLY ERRED WHILE TREATING THE INTEREST ON S.B. ACCOUNT RS. 9,972/- AS UNDISCLOSED INCOME WHEREAS IT WAS ALREADY SHOWN IN THE RETURN FOR THE A.Y. 2011-12 FILED BY THE ASSESSEE. AS SUCH THE ADDITION OF RS. 9,972/- AS INTEREST ON S.B. ACCOUNT IS ERRONEOUS AND WRONG. 9. FOR THAT ON FACTS AND CIRCUMSTANCE OF THE CASE THE ADDITION OF RS. 9,972/- BE DELETED. 10. FOR THAT THE LEARNED ASSESSING OFFICER HAS ERRED WHILE ASSESSING THE TOTAL INCOME RS. 12,07,950/- BY MAKING ADDITION OF RS. 10,50,973/- WHICH IS WRONG AND UNJUSTIFIED AND UNLAWFUL. 11. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION IN TOTAL INCOME OF RS. 10,50,973/- BE DELETED. 12. THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. AT THE TIME HEARING BEFORE THE TRIBUNAL, THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRESSED GROUND NO 1 TO 4 RAISED IN THIS APPEAL. THE SAME ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 3 I.T.A. NO. 2056/KOL/2016 A.Y. 2011-12 SUJIT KUMAR JAISWAL 3. APROPOS THE COMMON ISSUE INVOLVED IN GROUND NO 5 TO 7 RELATING TO THE ADDITION OF RS. 10,41,001/- MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT (A) ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE, THE RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS DERIVING INCOME FROM TUITION FEES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 29.07.2011 DECLARING A TOTAL INCOME OF RS. 1,56,975/-. AS PER THE AIR INFORMATION RECEIVED BY THE A.O., THE ASSESSEE HAD DEPOSITED CASH OF RS. 10,54,500/- IN HIS SAVINGS BANK ACCOUNT AND MADE CREDIT CARD PAYMENTS TOTALLING TO RS. 8,21,400/- THROUGH THREE DIFFERENT CREDIT CARDS. WHILE EXPLAINING THIS CASH DEPOSITS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE A.O. THAT A CASH BALANCE OF RS. 10,41,001/- WAS AVAILABLE AT HIM AS ON 31.03.2010 AND THE SAME WAS UTILISED FOR MAKING THE DEPOSITS OF RS. 10,54,500/- IN THE BANK ACCOUNT. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE A.O. ACCORDING TO HIM, THERE WAS APPARENTLY NO REASON FOR THE ASSESSEE TO HOLD SO MUCH CASH IN HAND WHEN HE WAS MAINTAINING A BANK ACCOUNT. HE ALSO FOUND THAT CASH DEPOSITS IN HIS BANK ACCOUNT WERE MADE BY THE ASSESSEE IN DIFFERENT AMOUNTS ON DIFFERENT DATES THROUGHOUT THE YEAR. HE HELD THAT THE CASH DEPOSITS IN HIS BANK ACCOUNT THUS WERE NOT MADE BY THE ASSESSEE OUT OF HIS OPENING CASH BALANCE AND THE EXPLANATION OFFERED BY THE ASSESSEE BASED ON THE AVAILABILITY OF OPENING CASH BALANCE WAS AN AFTERTHOUGHT. HE, THEREFORE, TREATED THE CASH DEPOSITS OF RS. 10,41,001/- MADE IN HIS BANK ACCOUNT BY THE ASSESSEE AS UNEXPLAINED AND ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 4 I.T.A. NO. 2056/KOL/2016 A.Y. 2011-12 SUJIT KUMAR JAISWAL 4. THE ADDITION OF RS. 10,41,001/- WAS MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE ASSESSEE AND THE SUBMISSIONS MADE BEFORE THE A.O. ON THIS ISSUE WERE REITERATED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT (A). THE LD. CIT (A) HOWEVER DID NOT FIND THE SAME TO BE ACCEPTABLE IN THE ABSENCE OF ANY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE CLAIM OF THE ASSESSEE OF HAVING THE OPENING CASH BALANCE OF RS. 10,41,001/-. HE AGREED WITH THE A.O. THAT THE EXPLANATION OFFERED BY THE ASSESSEE ON THE BASIS OF AVAILABILITY OF OPENING CASH BALANCE WAS ONLY AN AFTERTHOUGHT WHICH WAS DIFFICULT TO ACCEPT. HE ALSO REJECTED THE NEW PLEA RAISED BY THE ASSESSEE BEFORE HIM FOR THE FIRST TIME THAT THE SUBSTANTIAL CASH BALANCE WAS MAINTAINED BY HIM AS HE WAS PLANNING TO BUY AGRICULTURAL LAND IN NATIVE BIHAR IN THE ABSENCE OF ANY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME. HE ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE A.O. ON THIS ISSUE. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RAISED AN ALTOGETHER NEW CONTENTION AT THE TIME OF HEARING BEFORE THE TRIBUNAL. HE HAS PLACED ON RECORD THE BALANCE SHEETS OF ASSESSEE AS ON 31.03.2009 AND 31.03.2010 AT PAGE NO 10 AND 13 OF HIS PAPER BOOK TO SHOW THAT AN ADVANCE OF RS. 13,00,000/- WAS PAID BY THE ASSESSEE AGAINST THE FLAT. HE HAS SUBMITTED THAT THE SAID ADVANCE WAS RECEIVED BACK BY THE ASSESSEE DURING THE YEAR ENDED ON 31.03.2010 IN CASH WHICH RESULTED IN THE CASH BALANCE OF RS. 10,41,001/- AS ON 31.03.2010. HOWEVER AS RIGHTLY CONTENDED BY THE 5 I.T.A. NO. 2056/KOL/2016 A.Y. 2011-12 SUJIT KUMAR JAISWAL LEARNED DR, THERE IS NO EVIDENCE WHATSOEVER PRODUCED BY THE ASSESSEE TO SUPPORT AND SUBSTANTIATE HIS CLAIM OF HAVING PAID AN ADVANCE OF RS. 13,00,000/- AGAINST FLAT IN THE YEAR ENDED 31.03.2008 AND REFUND OF THE SAME IN THE YEAR ENDED ON 31.03.2010. MOREOVER, IT IS OBSERVED THAT THE ASSESSEE HAS KEPT ON CHANGING HIS STAND ON THIS ISSUE BY OFFERING DIFFERENT EXPLANATION AT DIFFERENT LEVEL WHICH AGAIN SHOWS THAT HE HAS NO CONVENIENCE OR COGENT EXPLANATION TO OFFER AS REGARDS THE CASH DEPOSITS FOUND TO BE MADE IN HIS BANK ACCOUNT. THE ASSESSEE HAS ALSO FAILED TO ADDUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT HIS DIFFERENT EXPLANATIONS OFFERED AT DIFFERENT LEVEL. I, THEREFORE, FIND NO MERIT IN THE CASE OF THE ASSESSEE ON THIS ISSUE. 6. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO RAISED AN ALTERNATIVE CONTENTION THAT THE ADDITION ON ACCOUNT OF CASH DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE SHOULD BE RESTRICTED TO PEAK CREDIT. AS SUBMITTED BY THE LD. DR IN THIS REGARD, THE PEAK CREDIT THEORY CAN BE APPLIED ONLY WHEN ALL THE DEPOSITS IN AND WITHDRAWALS FROM THE BANK ACCOUNT ARE IN CASH. HE HAS CONTENDED THAT THIS MATTER THEREFORE REQUIRES VERIFICATION BY THE A.O. SINCE THE LEARNED DR HAS NOT RAISED ANY OBJECTION IN THIS REGARD, I SET ASIDE THE ISSUE TO THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF CONSIDERING THE CLAIM OF THE ASSESSEE OF PEAK CREDIT AFTER VERIFYING THE RELEVANT TRANSACTIONS REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. GROUND NO 5 TO 7 OF THE ASSESSEES APPEAL ARE ACCORDINGLY TREATED AS PARTLY ALLOWED. 7. AS REGARDS THE ISSUE INVOLVED IN GROUND NO 8 OF THE ASSESSEES APPEAL RELATING TO THE ADDITION OF RS. 9,972/- MADE BY THE A.O. AND 6 I.T.A. NO. 2056/KOL/2016 A.Y. 2011-12 SUJIT KUMAR JAISWAL CONFIRMED BY THE LD. CIT (A) ON ACCOUNT OF INTEREST ON SAVINGS BANK ACCOUNT, THE LEARNED COUNSEL FOR THE ASSESSEE HAS POINTED OUT FROM THE COMPUTATION OF TOTAL INCOME GIVEN BY THE ASSESSEE AT PAGE NO 19 OF THE PAPER BOOK THAT THE SAID AMOUNT WAS ALREADY OFFERED TO TAX BY THE ASSESSEE IN THE RETURN OF INCOME. SINCE THIS MATTER REQUIRES VERIFICATION, I DIRECT THE A.O. TO VERIFY THE SAME AND ALLOW APPROPRIATE RELIEF TO THE ASSESSEE. GROUND NO 8 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 31/10/2017 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. SHRI SUJIT KUMAR JAISWAL, 14/21/2/1, 4 TH FLOOR, SANATHAN MISTRY LANE, ORIYAPARA, SALKIA, HOWRAH-711106. 2. ITO, WARD 46(4), 3, GOVERNMENT PLACE (WEST), KOLKATA 700001. 3. THE CIT(A) 4. THE CIT 5. DR 7 I.T.A. NO. 2056/KOL/2016 A.Y. 2011-12 SUJIT KUMAR JAISWAL TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA