Baij Nath Shaw, Kolkata V. I.T.O Wd - 28(3),kolkata, Kolkata

ITA 2119/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1679 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL SRDR
• Assessee Lawyers: MRS SHIPRA SEN
• Keywords: Permanent establishment
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 2119 / KOL / 2013 ASSESSMENT YEAR :2008-09 BAIJ NATH SHAW 92/7, SATYEN ROY ROAD, KOLKATA-700 034 [ PAN NO.ATXPS 6383 E ] V/S . INCOME TAX OFFICER, WARD-28(3), 2, GARIAHAT ROAD, SOUTH KOLKATA-68 /APPELLANT .. / RESPONDENT /BY APPELLANT MRS. SHIPRA SEN, FCA /BY RESPONDENT SHRI RAJAT KR. KUREEL, SR-DR /DATE OF HEARING 18-04-2017 /DATE OF PRONOUNCEMENT 02-05-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA D ATED 25.02.2013. ASSESSMENT WAS FRAMED BY ITO WARD-28(3), KOLKATA U/ S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS ORDER DATED 23.12.2010 FOR ASSESSMENT YEAR 2008-09. MRS. SHIPRA SEN, LD. AUTHORIZED REPRESENTATIVE APPE ARED ON BEHALF OF ASSESSEE AND SHRI RAJAT KR. KUREEL, LD. DEPARTMENTA L REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE. ITA NO.2119/KOL/2013 A.Y. 2008-09 BAIJ NATH SHAW VS. ITO WD-28(3) KOL. PAGE 2 2. ONLY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF 19,85,008/- ON ACCOUNT OF CASH DEPOSITED IN BANK. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND ENGAGED IN THE BUSINESS OF READYMADE GARMENTS. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER OBSERVED THAT ON THE BASIS OF ITS DATA THAT ASSESSEE HAS DEPOSITED A SUM OF 30.53 LACS WHEREAS THE ASSESSEE HAS SHOWN HIS GROSS RECEIPT FROM THE BUSINESS FOR 20,35,960/- ONLY. THUS, AO OBSERVED THE MISMATCH BETWEEN THE AMOUNTS OF GROSS RECEIPT SHOWN BY ASSESSEE VIS-A-VIS TOTAL DEPOSITS MADE BY ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, AO CALLED UPON THE ASSE SSEE TO EXPLAIN THE AFORESAID DIFFERENCE BUT ASSESSEE FAILED TO PROVIDE NECESSARY DETAILS. THEREFORE, AO TREATED THE ENTIRE DEPOSIT OF MONEY A S CONCEALED INCOME U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF ASSE SSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT HE IS A SMALL ENTR EPRENEUR AND HAS NO FIXED PLACE OF BUSINESS. HE SELLS THE GOODS BY PARTICIPAT ING IN VARIOUS LOCAL FAIR IN THE DISTRICT/VILLAGES OF WEST BENGAL AND ODISHA. TH E ASSESSEE FURTHER SUBMITTED THAT TOTAL SUM OF 19,85,008/- WAS DEPOSITED IN THE YEAR UNDER CONSIDERATION AND SUCH DEPOSITS REPRESENTS THE TOTA L TURNOVER OF ASSESSEES BUSINESS WHICH HAS BEEN DULY INCORPORATED IN GROSS RECEIPT SHOWN IN HIS INCOME TAX RETURN FOR 20,25,960/-. THE ASSESSEE ALSO SUBMITTED THAT RETUR N WAS FILED BY DECLARING INCOME UNDER THE PROVISION O F SEC. 44AF OF THE ACT. HOWEVER, LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO N OF ASSESSEE HAS GRANTED RELIEF IN PART BY OBSERVING AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND SUBMISSION OF THE APPELLANT. I HAVE ALSO CONSIDERED THE REMAND RE PORT SUBMITTED BY THE ASSESSING OFFICER AND THE CONTRA SUBMISSION OF THE LD. A/R OF THE APPELLANT IN THE REJOINDER. THE FIRST GROUND OF APP EAL IS DIRECTED AGAINST THE ADDITION OF DEPOSIT OF RS.30,53,000/- IN THE BA NK ACCOUNT OF THE APPELLANT IN BANK OF INDIA, BHOWANIPUR BRANCH, KOLK ATA DURING THE F.YR 2007-08. THE AFORESAID ADDITION WAS MADE U/S. 68 OF THE IT ACT, 1961. THE LD. A/R OF THE APPELLANT SUBMITTED THAT THE TOT AL DEPOSITS IN THE SAID BANK ACCOUNT WAS ONLY RS.19,85,008/-. IT WAS ALSO C ONTENDED THAT THE ITA NO.2119/KOL/2013 A.Y. 2008-09 BAIJ NATH SHAW VS. ITO WD-28(3) KOL. PAGE 3 APPELLANT HAD SHOWN GROSS RECEIPT/GROSS TURNOVER OF RS.20,45,960/- WHICH COVERS CASH DEPOSITS OF RS.19,85,008/-. THE A RGUMENT OF THE LD. A/R OF THE APPELLANT THAT THE GROSS RECEIPT SHOWN B Y THE ASSESSEE INCLUDED CASH DEPOSITS OF RS.19,85,008/- MADE IN TH E BANK IS NOT ACCEPTABLE FOR WANT OF EVIDENCE. I AM OF THE CONSID ERED VIEW THAT THE APPELLANT HAS SQUARELY FAILED TO PRODUCE ANY EVIDEN CE TO SUBSTANTIATE HIS EXPLANATION. NEITHER BOOKS OF ACCOUNTS NOR ANY SUCH BILLS HAVE BEEN PRODUCED TO SUBSTANTIATE THE APPELLANTS CONTENTION . THE ASSESSING OFFICER HAS CLEARLY STATED IN THE REMAND REPORT THA T THE ASSESSEE HAS NEITHER MAINTAINED ANY BOOKS OF ACCOUNT NOR ANY BIL LS AND VOUCHERS TO SUBSTANTIATE HIS EXPLANATION. HENCE THIS EXPLANATIO N OF THE APPELLANT IS NOT ACCEPTABLE. IN LIGHT OF THE SUBMISSION MADE BY THE APPELLANT, A REMAND REPORT WAS CALLED FROM THE ASSESSING OFFICER . IN THE REMAND REPORT DATED 19.10.2011 SENT BY ASSESSING OFFICER T HROUGH JT. COMMISSIONER OF INCOME TAX, RANGE-28 KOLKATA, THE A SSESSING OFFICER HAS ADMITTED THE FACT THAT THE BANK HAS CLARIFIED T HAT THE TOTAL DEPOSITS IN THE BANK ACCOUNT WITH THE BANK OF INDIA, BHAWANIPUR BRANCH, KOLKATA WAS RS.19,85,008/-. HOWEVER, THE AO SUBMITTED THAT IT COULD NOT BE VERIFIED WHETHER THE GROSS RECEIPT/GROSS TURNOVER R S.20,45,960/- INCLUDES THE CASH DEPOSIT OF RS.19,85,008/- DEPOSIT ED IN THE BANK AS THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT AND DID NOT PRODUCE ANY EVIDENCE OF SALES ETC. HAVING CONSIDERE D ALL THE FACTS OF THE CASE I AM OF THE CONSIDERED VIEW THAT THE APPELLANT S SUBMISSION THAT THE TOTAL AMOUNT DEPOSITED IN THE IMPUGNED BANK ACC OUNT OF THE ASSESSEE WAS ONLY RS.19,85,008/- IS CORRECT. THIS F ACTUAL POSITION HAS BEEN CONFIRMED BY THE BRANCH MANAGER OF BANK OF IND IA, BHAWANIPUR BRANCH, KOLKATA AND THE ASSESSING OFFICER. THEREFOR E, IT IS HELD THAT THE ADDITION CAN BE CONFIRMED ONLY TO THE EXTENT OF RS. 19,85,008/-. HENCE, IT IS HELD THAT THE AO WAS NOT RIGHT IN LAW AND ON FAC TS IN MAKING ADDITION TO THE EXTENT OF (RS.30,53,000 19,85,008) = RS.10 ,67,992/-. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDIT ION TO THE EXTENT OF RS.10,67,992/-. HOWEVER THE BALANCE ADDITION OF RS. 19,85,008/- IS CONFIRMED. ACCORDINGLY, THE FIRST GROUND OF APPEAL IS PARTLY ALLOWED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) THE ASS ESSEE CAME IN SECOND APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- DURING THE FINANCIAL YEAR 2007-08 RELEVANT TO THE ASSESSMENT YEAR 2008-09 THE ASSESSEE DEPOSITED TOTAL AMOUNT OF RS.1 9,85,008/- IN HIS BANK ACCOUNT HELD WITH BANK OF INDIA, BHAWANIPORE BRANCH. DURING THE YEAR 2007-08, HE FILED HIS RETURN OF INCOME SHOWING SALES TURNOVER OF RS.20,45,960/-. AGAINST THAT HE HAS DECLARED NET PR OFIT OF RS.2,60,983/- WHICH IS ABOUT 13% ON GROSS SALES. THEREFORE, SEC. 44AF IS APPLICABLE IN THE INSTANT CASE. IN THE APPEAL LD. CIT APPEALS XIV, HAS CONFIRMED T HE ADDITION TO THE EXTENT OF RS.19,95,008/-, BEING THE TOTAL DEPOSIT I NTO BANK, WHICH IS ITA NO.2119/KOL/2013 A.Y. 2008-09 BAIJ NATH SHAW VS. ITO WD-28(3) KOL. PAGE 4 TOTALLY WRONG. BECAUSE, AS THE ASSESSEE HAS ALREADY TAKEN INTO CONSIDERATION THE DEPOSIT AMOUNT WHILE CALCULATING HIS TURNOVER, THEN, HOW COMES THE QUESTION ARISES, TO ALL FURTHER THE S AME AMOUNT AS UNDISCLOSED INCOME. SUCH TYPE OF ASSESSEE IS COMPLETELY UNJUSTIFIED, IL LEGAL AND BAD IN LAW. THEREFORE, YOUR HONOUR IS REQUESTED TO KINDLY WAIVE THE BASELESS ADDITION. THEREFORE THE ADDITION AND INITIATION OF PENAL PROV ISION IN SUPPORT OF THAT ADDITION IS NOT CORRECT AND TO BE WAIVED TOTALLY. THE PETITIONER CRAVES THE PERMISSION TO CLAIM AND D ISCUSS ANY OTHER POINTS, MAY ARISE DURING APPEAL PROCEEDINGS. 5. LD. AR FOR THE ASSESSEE FILED WRITTEN SUBMISSION AND PAPER BOOK WHICH IS RUNNING PAGES FROM 1 TO 47 WHICH ARE KEPT WITH T HE RECORD. HE REITERATE THE ARGUMENTS THAT WERE MADE BEFORE THE LD. CIT(A). ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND THE ORDER OF AUTH ORITIES BELOW. THE INSTANT ISSUE RELATES TO THE AMOUNT OF CASH DEPOSITED BY AS SESSEE IN HIS BANK ACCOUNT. THE ASSESSEE CLAIMED TO HAVE FILED HIS RET URN OF INCOME UNDER THE PROVISION OF SEC. 44AF OF THE ACT BY DECLARING TOTA L TURNOVER OF 20,45,954/- ONLY. AS PER LD. AR THE ENTIRE DEPOSIT MADE IN THE BANK ACCOUNT IS PART AND PARCEL OF THE TURNOVER DECLARED IN THE RETURN INCOM E OF ASSESSEE. HOWEVER, WE FIND THAT THE AUTHORITIES BELOW REJECTED THE CLAIM OF ASSESSEE BY OBSERVING THAT NECESSARY DOCUMENTS SUCH AS BOOKS OF ACCOUNT A ND OTHER DETAILS WERE NOT FURNISHED. ADMITTEDLY, THE ASSESSEE HAS FILED H IS RETURN OF INCOME DECLARING TOTAL GROSS RECEIPT OF 20,45,960/- U/S. 44AF OF THE ACT. THIS FACT HAS NOT BEEN DISPUTED BY AUTHORITIES BELOW. ONCE THE TU RNOVER HAS BEEN ACCEPTED THEN NO FURTHER ADDITION CAN BE MADE ON ACCOUNT OF MONEY DEPOSITED IN THE BANK ACCOUNT OF ASSESSEE. ON PERUSAL OF BANK ACCOUN T WHICH IS PLACED ON PAGES 39 TO 45 OF THE PAPER BOOK, WE FIND THAT THER E ARE REGULAR DEPOSITS AND WITHDRAWN OF MONEY. EVEN ASSUMING THAT ALL THE DEPO SITS ARE INCOME OF ASSESSEE THEN THE BENEFIT OF WITHDRAWAL SHOULD BE G IVEN BY THE AUTHORITIES BELOW. THE AO CANNOT ON ONE HAND TAKE ALL THE DEPOS ITS AS INCOME OF THE ITA NO.2119/KOL/2013 A.Y. 2008-09 BAIJ NATH SHAW VS. ITO WD-28(3) KOL. PAGE 5 ASSESSEE WITHOUT GIVING THE BENEFIT OF WITHDRAWAL. IT IS ALSO OBSERVED THAT THE TOTAL DEPOSIT MADE BY ASSESSEE WAS FOR 19,85,008/- WHEREAS THE TOTAL TURNOVER DECLARED BY ASSESSEE IS OF 20,45,960/-. THUS, IT IS CLEAR THAT THE TURNOVER SHOWN BY ASSESSEE IS EXCEEDING THE TOTAL A MOUNT OF DEPOSIT MADE IN HIS BANK ACCOUNT. BEFORE US LD. DR HAS ALSO BROUGHT ANYTHING ON RECORD CONTRARY TO THE ARGUMENT OF LD. AR FOR THE ASSESSEE . IN VIEW OF THE ABOVE, WE HAVE NO HESITATION TO REVERSE THE ORDER OF LD. CIT( A). THUS, THE AO IS DIRECTED ACCORDINGLY. THIS GROUND OF ASSESSEES APPEAL IS AL LOWED. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 02/ 06/2017 SD/- SD/- ( !') ( !') (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S $!% &- 02 / 06 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BAIJ NATH SHAW,92/7, SATYEN ROY ROAD, KO LKATA-34 2. /RESPONDENT-ITOWARD-28(3), 2 GARIAHAT ROAD, SOUTH, KOLKATA-68 3. %.%/0 1 1 2 / CONCERNED CIT KOLKATA 4. 1 1 2- / CIT (A) KOLKATA 5. 567 /0, 1 /0 , / DR, ITAT, KOLKATA 6. 7:; <= / GUARD FILE. BY ORDER/ 1! , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 1 /0 ,