Gargi Ganguly , Kolkata V. DCIT(IT), Circle - 1(1), , Kolkata

ITA 2146/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8496 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-01-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 11-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI ROY
• Assessee Lawyers: I BAN ERJEE
• Keywords: Double taxation relief; Assessment record; Onus to prove; TDS; FORM 26AS
• Section: 143(3); 142(1); 13; 147; 131; 68; 148; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM & DR. A. L. SAINI, AM /I.T.A NOS.2146&2147/KOL/2018 ( [ [ / ASSESSMENT YEARS: 2010-11 & 2011-12) GARGI GANGULY C/P GUHA & MATILAL GILLANDER HOUSE, MEZZANINE FLOOR, BLOCK-E, 8, N.S. ROAD, KOLKATA-1. VS. DCIT(IT), CIRCLE-1(1), KOLKATA. ./ ./PAN/GIR NO.: ALSPG8198C (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI I. BANERJEE, CA RESPONDENT BY : SHRI DHRUBAJYOTI ROY, JCIT / DATE OF HEARING : 15/01/2020 /DATE OF PRONOUNCEMENT : 10/07/2020 / O R D E R PER SHRI S. S. GODARA: THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEARS 2010-11 & 2011-12 ARISE AGAINST THE COMMISSIONER OF INCOME TAX(APPEALS) - 22, KOLKATAS SEPARATE ORDERS BOTH DATED 29.03.2017 IN CASE NO.15/CIT(A)-22/KOL/10-11/15-16 & 14/CIT(A)-22/KOL/11-12/15-16 INVOLVING PROCEEDINGS U/S 147 R.W.S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT); RESPECTIVELY. HEARD BOTH THE PARTIES. CASE FILES PERSUED. 2. THE ASSESSEES IDENTICAL SUBSTANTIVE GROUND RAISED IN BOTH THE INSTANT APPEALS CHALLENGES THE LOWER AUTHORITIES ACTION TREATING THE SUMS IN ISSUE OF RS.60,34,310/- AND RS.44,61,160/-(ASSESSMENT YEAR WISE RESPECTIVELY) AS INCOME I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 2 FROM OTHER SOURCES. BOTH THE LEARNED REPRESENTATIVES TAKE US TO THE CIT(A)S DETAILED DISCUSSION READING AS UNDER: 04. GROUND NO. 1 TO 4, THE SUBSTANTIAL GROUNDS, ALL CONTEND THAT THE LD. AO WAS INCORRECT IN FACTS AND IN LAW IN ASSESSING AN AMOUNT OF RS.60,34,310/- AS INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION. IT WAS CONTENDED THAT WHEREAS THE SOLD AMOUNT HAS BEEN REPAYMENT OF LOANS, THE SAID AMOUNT HAS BEEN TREATED AS INCOME, AS THE SAME HAD BEEN SUBJECT TO TDS. THE MATTER HAS BEEN DEALT WITH BY THE LD. AO AS UNDER: 'MRS. GARGI GANGULY DID NOT FILE ANY RETURN OF INCOME FOR THE AY 2010-11 AND LATER ON FROM THE FORM 26AS IN ITD IT IS FOUND THAT DURING THE AY 2010-11 ASSESSEE RECEIVED A SUM OF RS.60,34,310/- FROM SHRI SNEHASISH CHAKRABORTY. IN VIEW OF THE SAME THE REASON FOR REOPENING THE ASSESSMENT U/S 148 WAS RECORDED AS FOLLOWS FOR THE INCOME ESCAPED ASSESSMENT: IT IS SEEN FROM THE COMPUTER DATA (TD) IN 26AS AS REPORTED BY DEDUCTOR SHOWS THAT THE ASSESSEE DURING THE FINANCIAL YEAR 2009-10 (RELEVANT TO AY 2010-11) RECEIVED IN AGGREGATE OF RS.60,34,310/-. BUT ON EXAMINATION OF RECORDS NO RETURN FOUND FILED BY HER FOR THE AY 2010-11. WHEREAS IT IS THE APPARENT FROM THAT THE ABOVE AGGREGATE RECEIPT WELL ABOVE THE BELOW LIMIT FOR WHICH ASSESSEE IS LIABLE TO FILE A RETURN IN THE PRESCRIBED MANNER AS PER PROVISION OF THE I.T. ACT, 1961 FOR THE ABOVE ASSESSMENT YEAR. 2. NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 15.10.2013 BY ITO WARD 55(4), KOLKATA, LATER ON, ORDER U/S 127 WAS PASSED BY LD. CIT-XX, KOLKATA ON 17.07.2014 AND THE CASE WAS TRANSFERRED TO DCIT (IT)-1(1) AS ASSESSEE IS NON- RESIDENT. IN RESPONSE TO NOTICE ISSUED U/S 148 SMT. MANFU GANGULY MOTHER OF SHRI GARGI GANGULY APPEARED ON 19.11.2013 AND SUBMITTED THAT ASSESSEE IS AUSTRALIAN CITIZEN SINCE JUNE 28, 1999. SHE FURTHER SUBMITTED THAT SMT GARGI GANGULY STAYED A TOTAL OF 47 DAYS IN INDLA IN AY 2010-11. ACCORDING TO HER SUBMISSION SMT. GARGI GANGULY INVESTED IN INDIA THROUGH NRO ACCOUNT AND WITHHELD TAX HAS BEEN DEDUCTED FROM INTEREST INCOME. 3. LATER ON, ITO, WARD- 55(4) ISSUED NOTICE U/S 131 TO SHRI SNEHASISH CHAKRABORTY ENQUIRING THE DETAILS OF TRANSACTION. SHRI SNEHASISH CHAKRABORTY APPEARED AND HIS STATEMENT WAS RECORDED, ON 29.11.2013 WHEREIN HE STATED THAT 'I PAY HER FOR HER INVOLVEMENT IN PREPRODUCTION, PRODUCTION AND POST-PRODUCTION AND MUTUALLY NEGOTIATED PAYMENT MODE. 'FURTHER ON PERUSAL OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SUBMITTED BY SHRI SNAHASISH CHAKRABORTY IT IS FOUND THAT THERE ARE NO DETAILS OF PAYMENT OF SHRI GARGI GANGULY IN HIS BOOKS OF ACCOUNTS. FURTHER SHRI SNEHASISH CHAKRABORTY DID NOT SUBMIT ANY BILL/INVOICES, AGREEMENT OR TDS CERTIFICATE SUBSTANTIATING THE GENUINENESS OF THE TRANSACTION. 4. FURTHER NOTICE U/S 142(1) OF THE ACT WAS ISSUED BY DCIT (IT), CIR-1(1) INTIMATING THE TRANSFER OF JURISDICTION AND ASKING FOR DETAILS. ASSESSEE DID NOT I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 3 APPEAR AND LATER ON SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 13.02.2015 GIVING HER FINAL OPPORTUNITY TO PRESENT HIS CASE. SHRI KAUSHIK DUTTA SHARMA, HUSBAND OF SMT. GARGI GANGULY APPEARED IN RESPONSE AND SUBMITTED THAT THE AMOUNT RECEIVED OF RS.60,34,310/- IS LOAN REPAYMENT FROM SHRI SNEHASISH CHAKRABORTY THAT WAS GIVEN TO HIM IN EARLIER YEARS. THE SUBMISSION MADE BY HUSBAND OF ASSESSEE WAS CONTRARY TO THE STAND TAKEN BY MOTHER OF ASSESSEE ON 19.11.2013. THEREFORE, ASSESSEE WAS ASKED TO SUBMIT FOLLOWING DETAILS: 1. LOAN AGREEMENT WITH SHRI SNEHASISH CHAKRABORTY OR HIS PROPRIETORSHIP CONCERN. 2. WHY THE LOAN WAS REFUNDED TO GARGI GANGULY WHEN SHRI SNEHASISH CHAKRABORTY IN HIS BOOKS SHOWN THE NAME OF MANJU GANGULY. 3. WHY TDS WAS DEDUCTED ON LOAN REFUND. 4. WHAT INTEREST WAS ACCRUED TO THE ASSESSEE FOR THE LOAN ADVANCED AND WHY ASSESSEE HAS NOT SHOWN THIS IN HIS RETURN OF INCOME IF INTEREST WAS ACCRUED? 5. WHY SHRI SNEHASISH CHAKRABORTY IS CLAIMING THAT THE PAYMENT MADE IS PROFESSIONAL FEE AND NOT REPAYMENT OF LOAN. 5. SHRI KAUSHIK DUTTA SHARMA, HUSBAND OF ASSESSEE FILED HIS SUBMISSION IN RESPONSE ON 16.03.2015 AND SUBMITTED THAT 'THE ASSESSEE IS AN AUSTRALIAN CITIZEN AND AN NRI. STARTING FROM THE YEAR 2006 SHE, AFTER BEING APPROACHED BY THE SAID SNEHASIS CHAKRABORTY (PROP. OF BLUES) A FREE-LANCE TELEVISION FILM PRODUCER FOR SOME FINANCIAL ACCOMMODATION AND ASSISTANCE HE HAD BEEN LOOKING FOR, STARTED REMITTING FROM AUSTRALIA, SO AS TO ENABLE HIM TO PROCEED HIM TO PROCEED AND CONSUMMATE THE PRODUCTION OF SOME TELEVISION SERIALS. INITIALLY IN THE YEAR OF 2006 ALL SUCH REMITTANCES HAD TAKEN PLACE BY MEANS OF NRE A/C, UBI, PARK STREET BRANCH KOLKATA (A/C NO : SB-79952), ON THE PERUSAL OF THE SAME ANNEXURE YOU COULD APPRECIATE AND NOTICE HOUR HOW ALL THE REMITTANCE MADE FOR AUSTRALIA HAD BEEN WITHDRAWN TO MAKE PAYMENT TO THE SAID CONCERNS AND ITS BISWAJIT CHAKRABORTY. 6. IT IS FOUND FROM THE FINAL SUBMISSION MADE ON BEHALF OF THE ASSESSEE ON 16.03.2015. THAT ASSESSEE DID NOT SPEAK UP ANYTHING ABOUT THE PAYMENT RECEIVED OF RS. 60,34,310/- DURING AY: 2010-11. FURTHER HE DID NOT PRODUCE ANY LOAN AGREEMENT OR THE DETAILS OF INTEREST ACCRUED ON THE SAID LOAN TO SUBSTANTIATE THE LOAN TRANSACTION. ASSESSEE WAS NOT HAVING SUBMISSION OF WHY TD5 WAS DEDUCTED ON LOAN REPAYMENT. FURTHER SHE WAS NOT ABLE TO CLARIFY WHY THE FUND DEBITED INTO ACCOUNT OF SHRI BISWAJIT CHAKRABORTY WHEN SHE IS CLAIMING THAT LOAN WAS OFFERED TO SHRI SNEHASISH CHAKRABORTY. 7. ON THE BASIS OF DISCUSSION MADE ABOVE IT IS CLEAR THAT ASSESSEE RECEIVED THE SUM OF RS.60,34,310/- WITHOUT ANY CONSIDERATION AND DID NOT FILE RETURN OF INCOME FOR THAT. IN RELATION TO NATURE OF INCOME RECEIVED ASSESSEE HAS SUBMITTED CONTRADICTORY VIEW IN HER TWO SUBMISSIONS MADE ON 19.11.2013 AND 16.03.2015. FURTHER A THIRD VIEW WAS SUBMITTED BY SHRI SNEHASISH CHAKRABORTY THAT THE I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 4 PAYMENT MADE WAS PROFESSIONAL PAYMENT. SINCE THERE ARE CONTRADICTORY VIEWS SUBMITTED BY ASSESSEE AND THE PERSON WITH WHOM SHE HAD TRANSACTION, IS NOT CLEAR AND APPEARS TO BE UNACCOUNTED AD-HOC PAYMENT MADE BY SHRI SNEHASISH CHAKRABORY TO SMT. GARGI GANGULY WITHOUT ANY CONSIDERATION. 8. IN VIEW OF THE ABOVE SUBMISSION INCOME RECEIVED BY ASSESSEE IS CONSIDERED NEITHER PROFESSIONAL INCOME NOR LOAN REPAYMENT BUT INCOME RECEIVED WITHOUT ANY CONSIDERATION. SECTION 56 STATES 'WHERE AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON OR PERSONS ON OR AFTER THE 1ST DAY OF OCTOBER, 2009, ANY SUM OF MONEY, WITHOUT CONSIDERATION, THE AGGREGATE VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE WHOLE OF THE AGGREGATE VALUE OF SUCH SUM WILL BE TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES'. IT CAN BE CONCLUDED THAT SUM RECEIVED IS INCOME FROM OTHER SOURCES. THEREFORE RS.60,34,310/- IS TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES AT APPLICABLE RATE. 05. DURING THE COURSE OF THE APPEAL, THE APPELLANT/ LD. A.R FOR THE APPELLANT - INDIVIDUAL HAVE SUBMITTED AS FOLLOWS: 'FACTS IN BRIEF : THE PRESENT APPEAL ARISES BECAUSE OF THE ARBITRARY ADDITION OF RS.60,34,310/-, IN AN ASSESSMENT MADE UNDER SECTION 143(3), READ WITH SEC.147. IN THE PRESENT APPEAL, BOTH THE VERY JURISDICTION OF SEC. 147 PROCEEDING AND WITHOUT PREJUDICE TO SUCH BASIC GROUND, THE MERIT OR THE ADDITION, MADE IN PURSUANCE THEREOF, HAVE BEEN DISPUTED, BY MEANS OF APPROPRIATE AND RESPECTIVE GROUNDS. THE APPELLANT IS A CITIZEN OF AUSTRALIA AND A NON-RESIDENT UNDER THE INDIAN INCOME TAX LAW. SHE DOES NOT HAVE ANY INCOME OR CORRESPONDING SOURCE, IN INDIA. THE ONLY INCOME THAT THE APPELLANT HAD DURING THE YEAR UNDER APPEAL WAS INTEREST ON NRO DEPOSITS, DULY SUBJECTED TO TAX DEDUCTION AT SOURCE AT THE FULL RATE. AS A RESULT, SHE DID HAVE NO OBLIGATION EITHER TO FILE THE RETURN OF INCOME NOR PAY ANY ADDITIONAL TAX, IN INDIA. IN THE CURRENT YEAR, THE LD. RESPONDENT, AFTER NOTICING A SUM OF RS.60,34,310/- APPEARING AGAINST APPELLANT'S NAME, IN FORM 26AS, AS INCOME SUBJECTED TO TDS UNDER SEC. 194) (PROFESSIONAL PAYMENTS), INSTANTLY ARRIVED AT THE CONCLUSION THAT THE SAID SUM HAD REPRESENTED INCOME, CHARGEABLE IN THE HANDS OF THE APPELLANT, AND, THUS, THE APPELLANT NRI NOT HAVING FILED ANY RETURN FOR THE CONCERNED ASSESSMENT YEAR, THE SAME HAD CONSTITUTED INCOME ESCAPING ASSESSMENT. HE ACCORDINGLY, ISSUED SEC.148 NOTICE. OUTCOME OF THE ASSESSMENT PROCEEDING. 1. APPELLANT'S MOTHER SMT. MANTU GANGULY, APPEARED AND WITH THE HELP OF APPELLANT'S NRO ACCOUNT, SUBMITTED THAT HER DAUGHTER'S INDIAN INCOME HAD CONSISTED OF INTEREST INCOME ONLY FROM SUCH NRO ACCOUNT ONLY. THE SAID INTEREST I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 5 INCOME HAVING BEEN SUBJECTED TO WITHHOLDING TAX AT THE END OF THE BANK, NO ADDITIONAL TAX LIABILITY HAD REMAINED. 2. THE PAYER OF THE ALLEGED INCOME, VIZ. MR. SNEHASIS CHAKRABORTY (PROP. OF M/S BLUES) HAD APPEARED, BEFORE THE LD. RESPONDENT, IN RESPONSE OF SEC. 131 NOTICE, AND SUBMITTED THAT THE APPELLANT HAD BEEN PAID FOR HER PROFESSIONAL ASSISTANCE AND ADVICE IN THE FIELDS OF PRODUCTION OF FILMS AND SERIALS, BEING PRODUCTION BY BLUES. HOWEVER, MR. CHAKRABORTY, COULD PROVIDE NEITHER THE DETAILS NOT THE PURPOSES OF SUCH PAYMENTS OF RS.44,61,160/-, SO SUBJECTED TO TDS IN THE NAME OF THE APPELLANT. NO BILL/VOUCHERS/AGREEMENTS HAD BEEN PRODUCED BY MR. CHAKRABORTY (BLUES), IN THIS REGARD, EITHER. 3. THEN IN RESPONSE TO SEC.142(1) NOTICE, THE HUSBAND OF THE APPELLANT HAD APPEARED AND SUBMITTED THAT THE RECEIPT OF THE ABOVE SUM HAD NEVER CONSTITUTED AN RECEIPT OF INCOME, INCLUDING UNDER THE HEAD 'PROFESSIONAL FEES, PROVIDED UNDER SEC. 194J' AND THE SAME HAD, INSTEAD, REPRESENTED REFUND OF LOAN BY THE SAID SNEHASIS CHAKRABORTY (BLUES), PREVIOUSLY GRANTED BY THE APPELLANT, IN FOREIGN CURRENCY, TO THE LATTER. AS SUCH, NEITHER ANY INCOME HAD BEEN RECEIVED NOR ANY TDS, SO MADE, SHOULD HAVE BEEN ATTRACTED TO SUCH LOAN REPAYMENT. 4. THE LD. RESPONDENT HAD NOT AGREED WITH THE SUBMISSION, SO MADE BY THE HUSBAND OF THE APPELLANT. HE HAD RAISED THE FOLLOWING QUERIES IN THIS REGARD: A) LOAN AGREEMENT WITH SNEHASIS CHAKRABORTY (BLUES). B) WHY LOAN HAD BEEN REFUNDED TO GARGI GANGULY WHEN SNEHASIS HAD SHOWN IN HIS BOOKS THE NAME OF MANJU GANGULY (APPELLANT'S MOTHER). C) WHY TDS HAD BEEN MADE ON LOAN REFUND. D) WHY NO INTEREST HAD BEEN DISCLOSED BY APPELLANT. E) WHY SNEHASIS CHAKRABORTY HAD CLAIMED THAT AMOUNT, PAID TO THE APPELLANT HAD REPRESENTED PROFESSIONAL CHARGE, AND NOT REPAYMENT OF LOAN. 5. IN REPLY THE APPELANT'S HUSBAND HAD MADE A SUBMISSION, DATED 16/03/2015 (COPY ENCLOSED ANNEX-1), ENCLOSING THE FOLLOWING VITAL DOCUMENTS: A) BANK STATEMENT - BANK OF BARODA/SBI AND CORRESPONDING BANK SUMMARIES. B) WITH THE HELP OF ABOVE BANK STATEMENTS (FORMING PART OF ASSESSMENT FOLDER), IT HAD KR ENDEAVORED TO SUBSTANTIATE THAT AIL THE PAYMENTS FROM SNEHASIS CHAKRABORTY (BLUES), DESIGNATED BY THE LATTER AS PROFESSIONAL FEES AND THEREFORE, SUBJECTED TO TDS, HAD, IN FACT, REPRESENTED LOAN REPAYMENTS, BY THE LATTER IN FAVOUR OF THE APPELLANT AND AS SUCH, THERE HAD EXISTED NO SUBSTANCE OR ELEMENT OF INCOME IN SUCH PAYMENT. I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 6 6. HOWEVER, THE LD. RESPONDENT, DESPITE THE AVAILABILTY OF THE BASIS DOCUMENTS, AS REFERRED TO IN ABOVE LATTER, FURNISHED, CHOSE TO BE GUIDED BY THE FIGURES AND DESCRIPTION IN THE FORM 26AS AND THEREFORE, CONSIDERED THE SAME AS INCOME. THE GROUND ADVOCATED FOR SUCH TREATMENT HAD BEEN AS UNDER: A) NO LOAN AGREEMENT HAD BEEN PRODUCED. B) NO INTEREST HAD BEEN CHARGED, C) APPELLANT COULD NOT EXPLAIN WHY TDS HAD BEEN DEDUCTED ON SUCH RECEIPT, DESIGNATED AS LOAN REPAYMENT. D) WHATEVER SNEHASIS CHAKRABORTY HAD SUBMITTED COULD NOT BE SUBSTANTIATED AT HIS END. E) AS SUCH, THE AMOUNT HAD REPRESENTED NEITHER PROFESSIONAL FEES NOR LOAN REPAYMENT, BUT AMOUNT TAXABLE UNDER SEC. 56 PROVIDING FOR THE TAXABILITY OF AMOUNT RECEIVED WITHOUT ADEQUATE CONSIDERATION. ARGUMENT: A) THE LD. RESPONDENT HAD NEVER BOTHER TO TAKE A COMPREHENSIVE VIEW AND THE ANTECEDENTS OF SUCH AMOUNT, RECEIVED. HE SHOULD HAVE CALLED FOR THE RECORDS FORM THE CONCERNED BANKS AND AFTER PROCURING ALL THE PARTICULARS AND SOURCE/PURPOSE THEREOF, PROBED INTO THE SAME AND ASCERTAINED THE SUBSTANCE THEREOF, FORM INCOME TAX PERSPECTIVES. INSTEAD AND TO THE COUNTRY, HE HAD DEALT WITH IN THE MOST SUPERFICIAL, ARBITRARY AND PREJUDICED MANNER, JUST FOR THE SAKE OF TAX PAYMENT. B) FURTHER, WHEN HE HAD FOUND THAT M/S. BLUES OF MR. SNEHASIS CHAKRABORTY, COULD NOT PROPERLY ACCOUNT FOR OR SUBSTANTIATE THE NATURE OF REPAYMENT, HE HAD NEVER BOTHER TO GIVE HIS FINDING ON THE BASIS OF VERIFICATION OF THEIR BOOKS OF ACCOUNT AND BANK STATEMENTS, THOUGH HE HAD BY ENFORCING THE FORMER'S ATTENDANCE, UNDER SEC.131, INTERROGATED HIM. SUCH, INTERROGATION, IT IS SUBMITTED AND EMPHASIZED, HAD YIELDED NO USEFUL AND CONCRETE EVIDENCE, SO AS TO ROPE IN THE APPELLANT AND MAKE HER LIABLE UNDER THE IT ACT. C) ON THE VERIFICATION OF THE BANK ACCOUNTS, HE COULD HAVE NOTICED THAT MONEY HAD BEEN PROVIDED TO THE SALD SNEHASIS CHAKROBORTY, BY MEANS OF REMITTANCE FROM ABROAD (AUSTRALIA), FROM NATIONAL AUSTRALIAN BANK LIMITED (NEW SOUTH WALES), ACCOUNT NO.46-292-2106, BSB NO.082-564, STANDING IN THE SOLE NAME OF APPELLANT. IN FACT, THE APPELLANT IS AN EMPLOYEE IN AUSTRALIA, WHO HAD OUT OF HER OWN INCOME AND SAVINGS, GENERATED IN AUSTRALIA, FINANCIALLY ACCOMMODATED THE SNEHASIS CHAKRABORTY, BY MAKING REMITTANCE FORM TIME TO TIME. SUCH LOANS HAD BEEN ADVANCED EITHER MAKING DIRECT PAYMENT TO HIM OR BY MEANS OF HER INDIAN BANK ACCOUNTS (AS ABOVE), IN WHICH THE SAID REPATRIATION HAD FIRST BEEN DEPOSITED. A LITTER ENQUIRY FROM THE LD. RESPONDENT WOULD HAVE UNRAVELLED THE ENTIRE FACT AND ITS TRANSPARENCY. THE SAID PAYER HAD JUST MIS-DESCRIBED THE REPAYMENT AS INCOME PAYMENT. THE APPELLANT HAD NEVER RENDERED ANY SERVICE TO THE PAYER OF I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 7 ANY KIND. IT WAS A LOAN SIMPLICITER. THE CHARGING OF INTEREST HAD NEITHER BEEN ADMITTED BY THE SAID PAYER, NOR COULD IT BE ESTABLISHED BY THE LD. RESPONDENT. INTEREST FACTOR WAS JUST THE CONJECTURED VIEW OF THE LD. RESPONDENT. D) AGAIN, WHEN THE LD. RESPONDENT HAD INVOKED SEC. 56 TO THE SAID RECEIPT/ REPAYMENT, HE HAD SIMPLY KEPT HIS EYES CLOSED TO THE PRIOR LOANS, SO GRANTED. HAD HE BEEN FAIR AND REASONABLE, HE COULD HAVE NOTICED THAT THE REPAYMENT AMOUNT (TAKEN AS INCOME) HAD BEEN FAR LESS THAN THE PRIOR DUES. UNFORTUNATELY, THE SAID PERSON, HAD NEVER BEEN INTERROGATED IN THIS DIRECTION, THOUGH LEAVING ITS TRAIL IN THE CURRENT YEAR. E) LASTLY, IN THE SUBMISSION, DATED 13/03/2015, IT HAD ALSO BEEN CONTENDED THAT, EVEN OTHERWISE, UNDER THE DTAA (DETAILS GIVEN IN THAT LETTER), NO PROFESSIONAL INCOME (INDEPENDENT PERSONAL SERVICES) COULD BE TAXED IN INDIA, THOUGH THE SERVICE IS RENDERED IN INDIA (WITHOUT PREJUDICE). THUS, THE SUPERFICIAL TREATMENT, MADE BY THE LD. RESPONDENT DID HAVE NO MERIT AND SUBSTANCE AND THUS THE ADDITION IS LIABLE TO BE DELETED IN FULL. AS A COROLLARY OF THE SAME, IT IS ALSO SUBMITTED THAT THE TDS SO MADE HAVING REPRESENTED A PART OF THE LOAN AMOUNT AND NO INCOME HAVING ACCRUED OR RECEIVED, THE SAME IS LIABLE TO BE REFUNDED. FOR THE SAKE OF JUSTICE, FAIRNESS AND AVAILABILITY OF ALL RELEVANT INFORMATION AND EVIDENCE, A FRESH VERIFICATION AND PROCUREMENT OF REMAND REPORT IN REGARD TO THE ENTIRE EPISODE IS EARNESTLY SOLICITED. 06. DECISION: 1. I HAVE CAREFULLY EXAMINED THE ACTION OF THE LD AO IN TREATING AN AMOUNT OF RS.60,34,310/- AS INCOME FROM OTHER SOURCES, AND TAXING THE SAME AT THE APPLICABLE RATES. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT HAS NOT FILED HER RETURN OF INCOME FOR THE SUBJECT A.Y 2010-11, AND THE SAME WAS NOTICED BY THE LD. AO. THE LD. AO ALSO NOTICED FROM THE DETAILS AVAILABLE IN FORM 26AS THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.60,34,310/- IN AGGREGATE FROM ONE SHRI SNEHASIS CHAKRABORTY DURING THE SUBJECT ASSESSMENT YEAR. AS NO RETURN OF INCOME HAD BEEN FILED, THE APPELLANT HAD BEEN ISSUED NOTICE U/S 148, REQUIRING HER TO FILE THE NECESSARY RETURN. IT HAS BEEN RECORDED BY THE LD. AO THAT IN RESPONSE, THE MOTHER OF THE APPELLANT-INDIVIDUAL SMT. MANJU GANGULY HAD APPEARED AND SUBMITTED THAT THE ASSESSEE IS AN AUSTRALIAN CITIZEN SINCE JUNE 28, 1999, AND THAT SHE HAD STAYED A TOTAL OF 47 DAYS IN INDIA IN AY 2010-11. IT WAS ALSO SUBMITTED BY THE APPELLANT'S MOTHER THAT THE ASSESSEE SMT. GARGI GANGULY INVESTED IN INDIA THROUGH NRO ACCOUNT AND WITHHELD TAX HAS BEEN DEDUCTED FROM INTEREST INCOME. 2. AS IT WAS NOTICED THAT THE TDS HAD BEEN MADE BY ONE SHRI SNEHASIS GANGULY, THE LD. AO ISSUED A NOTICE TO THAT PERSON U/S 131 TO BRING FORTH THE DETAILS OF TRANSACTION BETWEEN HIM AND THE ASSESSEE. IT HAS BEEN RECORDED BY THE LD.AO THAT THE SAID SHRI SNEHASISH CHAKRABORTY APPEARED AND HIS STATEMENT WAS RECORDED, ON 29.11.2013. IN SUCH STATEMENT, UNDER OATH HE HAD STATED THAT 'I PAY HER FOR HER INVOLVEMENT IN PREPRODUCTION, PRODUCTION AND POST-PRODUCTION AND MUTUALLY NEGOTIATED PAYMENT MODE.' THE LD. AO HAS ALSO RECORDED THAT FURTHER ON PERUSAL I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 8 OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SUBMITTED BY SHRI SNAHASISH CHAKRABORTY IT IS FOUND THAT THERE ARE NO DETAILS OF PAYMENT OF SHRI GARGI GANGULY IN HIS BOOKS OF ACCOUNTS. ALSO, IT WAS NOTED THAT THE SAID PAYER, SHRI SNEHASISH CHAKRABORTY DID NOT SUBMIT ANY BILL/INVOICES, AGREEMENT OR TDS CERTIFICATE SUBSTANTIATING THE GENUINENESS OF THE TRANSACTION. THE LD. AO HAS ALSO RECORDED THAT NOTICE U/S 142(1) OF THE ACT WAS ISSUED BY DCIT (IT), CIRCLE-1(1) INTIMATING THE TRANSFER OF JURISDICTION AND ASKING FOR DETAILS. ASSESSEE DID NOT APPEAR AND LATER ON SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 13.02.2015 GIVING HER FINAL OPPORTUNITY TO PRESENT HER CASE. IT HAS BEEN RECORDED BY THE LD. AO, THAT IN RESPONSE TO SUCH NOTICE, SHRI KAUSHIK DUTTA SHARMA, HUSBAND OF SMT. GARGI GANGULY APPEARED AND SUBMITTED THAT THE AMOUNT RECEIVED OF RS.60,34,310/- IS LOAN REPAYMENT FROM SHRI SNEHASISH CHAKRABORTY THAT WAS GIVEN TO HIM IN EARLIER YEARS. THEREFORE, THE LD. AO HAS OBSERVED THAT THE SUBMISSION MADE BY HUSBAND OF ASSESSEE WAS CONTRARY TO THE STAND TAKEN BY MOTHER OF ASSESSEE ON 19.11.2013, WHEREIN IT HAD BEEN STATED THAT THE AMOUNTS WERE INTEREST INCOME, AND TDS HAD BEEN MADE ACCORDINGLY. 3. ACCORDINGLY, THE APPELLANT WAS REQUIRED BY THE LD. AO TO SUBMIT FURTHER DETAILS AS UNDER: A. LOAN AGREEMENT WITH SHRI SNEHASISH CHAKRABORTY OR HIS PROPRIETORSHIP CONCERN. B. WHY THE LOAN WAS REFUNDED TO GARGI GANGULY WHEN SHRI SNEHASISH CHAKRABORTY IN HIS BOOKS SHOWN THE NAME OF MANJU GANGULY. C. WHY TDS WAS DEDUCTED ON LOAN REFUND. D. WHAT INTEREST WAS ACCRUED TO THE ASSESSEE FOR THE LOAN ADVANCED AND WHY ASSESSEE HAS NOT SHOWN THIS IN HIS RETURN OF INCOME IF INTEREST WAS ACCRUED? E. WHY SHRI SNEHASISH CHAKRABORTY IS CLAIMING THAT THE PAYMENT MADE IS PROFESSIONAL FEE AND NOT REPAYMENT OF LOAN. 4. THEREAFTER, THE LD.AO HAS RECORDED THAT SHRI KAUSHIK DUTTA SHARMA, HUSBAND OF ASSESSEE FILED HIS SUBMISSION IN RESPONSE ON 16.03.2015 AND SUBMITTED THAT 'THE ASSESSEE IS AN AUSTRALIAN CITIZEN AND AN NRI. STARTING FROM THE YEAR 2006 SHE, AFTER BEING APPROACHED BY THE SAID SNEHASIS CHAKRABORTY (PROP. OF BLUES) A FREE-LANCE TELEVISION FILM PRODUCER FOR SOME FINANCIAL ACCOMMODATION AND ASSISTANCE HE HAD BEEN LOOKING FOR, STARTED REMITTING FROM AUSTRALIA, SO AS TO ENABLE HIM TO PROCEED HIM TO PROCEED AND CONSUMMATE THE PRODUCTION OF SOME TELEVISION SERIALS. INITIALLY IN THE YEAR OF 2006 ALL SUCH REMITTANCES HAD TAKEN PLACE BY MEANS OF NRE A/C UBI, PARK STREET BRANCH KOLKATA (A/C NO : SB- 79952), ON THE PERUSAL OF THE SAME ANNEXURE YOU COULD APPRECIATE AND NOTICE HOUR HOW ALL THE REMITTANCE MADE FOR AUSTRALIA HAD BEEN WITHDRAWN TO MAKE PAYMENT TO THE SAID CONCERNS AND ITS BISWAJIT CHAKRABORTY.' THE LD. AO HOWEVER AFTER CONSIDERING THE ISSUE RECORDED THAT NO EXPLANATION WAS GIVEN TO HIS SPECIFIC AND RELEVANT QUERIES, AND THAT THE ASSESSEE HAD NOT SAID ANYTHING ABOUT THE I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 9 PAYMENT RECEIVED OF RS.60,34,310/- DURING A.Y. 2010-11. FURTHER HE DID NOT PRODUCE ANY LOAN AGREEMENT OR THE DETAIL OF INTEREST ACCRUED ON THE SAID LOAN TO SUBSTANTIATE THE LOAN TRANSACTION. ASSESSEE WAS NOT HAVING SUBMISSION OF WHY TDS WAS DEDUCTED ON LOAN REPAYMENT. THE LD. AO ALSO RECORDED THAT THE ASSESSEE WAS NOT ABLE TO CLARIFY WHY THE FUND DEBITED INTO ACCOUNT OF SHRI BISWAJIT CHAKRABORTY WHEN SHE IS CLAIMING THAT LOAN WAS OFFERED TO SHRI SNEHASISH CHAKRABORTY. THEREAFTER, THE LD. AO RECKONED THAT THE ASSESSEE RECEIVED THE SUM OF RS.60,34,310/- WITHOUT ANY CONSIDERATION AND DID NOT FILE RETURN OF INCOME FOR THAT. IN RELATION TO NATURE OF INCOME RECEIVED ASSESSEE HAS SUBMITTED CONTRADICTORY VIEW IN HER TWO SUBMISSIONS MADE ON 19.11.2013 AND 16.03.2015. FURTHER A THIRD VIEW WAS SUBMITTED BY SHRI SNEHASISH CHAKRABORTY THAT THE PAYMENT MADE WAS PROFESSIONAL PAYMENT. SINCE THERE ARE CONTRADICTORY VIEWS SUBMITTED BY ASSESSEE AND THE PERSON WITH WHOM SHE HAD TRANSACTION HAD SUBMITTED YET ANOTHER VIEW, THE LD. AO RECKONED THAT THE RECEIPTS ( FOR WHICH TDS HAD BEEN EFFECTED ) APPEARED TO BE UNACCOUNTED AD- HOC PAYMENT MADE BY SHRI SNHASISH CHAKRABORY TO SMT. GARGI GANGULY WITHOUT ANY CONSIDERATION. THEREAFTER, THE LD. AO WAS OF THE VIEW THAT THE RECEIPTS CREDITED TO THE ASSESSEE WERE TO BE CONSIDERED AS NEITHER PROFESSIONAL INCOME NOR LOAN REPAYMENT BUT INCOME RECEIVED WITHOUT ANY CONSIDERATION. THE LD. AO INVOKED SECTION 56 OF THE INCOME TAX ACT, 1961, I.E., 'WHERE AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON OR PERSONS ON OR AFTER THE 1 ST DAY OF OCTOBER, 2009, ANY SUM OF MONEY, WITHOUT CONSIDERATION, THE AGGREGATE VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE WHOLE OF THE AGGREGATE VALUE OF SUCH SUM WILL BE TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES'. THE LD. ASSESSING OFFICER CONCLUDED THAT THE SAID SUM WAS A RECEIPT FROM 'OTHER SOURCES', AND TAXED IT ACCORDINGLY. 5. IN APPEAL, THE MAIN ARGUMENTS ADVANCED BY THE LD. A.R FOR THE APPELLANT- ASSESSEE, IN SUMMARY, ARE AS UNDER: A. THE PAYMENTS RECEIVED BY THE ASSESSEE WERE ON ACCOUNT OF LOANS EXTENDED BY HER TO SHRI SNEHASIS CHAKRABORTY ( OF M/S' BLUES') IN EARLIER YEARS. B. THE LD. AO OUGHT TO HAVE TAKEN A COMPREHENSIVE VIEW OF THE MATTERS WHILE ADJUDICATING THE ISSUE. C. THE MONEY HAD BEEN PROVIDED TO SHRI SNEHASIS CHAKRABORTY BY MEANS OF REMITTANCES FROM ABROAD FROM BANK ACCOUNT IN THE NAME OF THE APPELLANT IN AUSTRALIA, FROM HER SAVINGS. D. SHRI SNEHASIS CHAKRABORTY HAD INCORRECTLY DESCRIBED THE REPAYMENT OF LOAN AS CONTRACTUAL PAYMENTS. THERE WAS NO AGREEMENT BETWEEN THE PARTIES ABOUT THE SO CALLED PROFESSIONAL SERVICES TO BE RENDERED BY THE APPELLANT TO M/S BLUES. E. ENQUIRY INTO THE BANK ACCOUNTS WOULD HAVE REVEALED THAT THE PAYMENTS WERE LESS THAN WHAT HAD BEEN 'LOANED' IN EARLIER YEARS. I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 10 F. EVEN IF SERVICES WERE RENDERED IN INDIA, THE SAID AMOUNT COULD NOT BE SUBJECT TO TAX AS PROFESSIONAL INCOME ON ACCOUNT OF THE PREVAILING DTAA. G. THE TDS MADE BY SHRI SNEHASIS CHAKRABORTY REPRESENTED PARTS OF THE LOAN REPAYMENT. H. A FRESH VERIFICATION WAS REQUESTED SO THAT THE GENUINENESS OF THE TRANSACTIONS COULD BE ESTABLISHED. 6. I HAVE EXAMINED THE ACTION OF THE LD. AO AND THE SUBMISSIONS OF THE APPELLANT BEFORE THE LD. AO AS WELL AS IN THIS FORUM. THE ASSESSMENT RECORD HAS ALSO BEEN EXAMINED. IT IS QUITE PERTINENT TO OBSERVE THAT THE ASSESSEE IS A NON-FILER AND THE LD. AO HAS NOTICED THE MATTER ON ACCOUNT OF THE INFORMATION AVAILABLE IN THE FORM 26AS. AS REGARDS THE EXPLANATION GIVEN BY THE APPELLANT, THERE HAVE BEEN CONTRADICTORY SUBMISSIONS GIVEN BY THE APPELLANT / HER REPRESENTATIVES ON DIFFERENT OCCASIONS BEFORE THE LD. AO: A. IT HAS BEEN PLEADED [ BY THE MOTHER, SMT. MANJU GANGULY] THAT AS THE AMOUNTS HAD BEEN INVESTED IN INDIA THROUGH AN NRO ACCOUNT, THE TDS WAS ON ACCOUNT OF INTEREST INCOME. B. IT HAS ALSO BEEN SUBMITTED [ BY THE HUSBAND, SHRI KUASHIK DUTTA SHARMA] THAT THE AMOUNTS WERE LOAN REPAYMENTS BY SHRI SNEHASIS CHAKROBORTY ON ACCOUNT OF MONIES HAVING BEEN LOANED BY THE APPELLANT TO THE SAID PERSON. C. HOWEVER, AND THIS IS SIGNIFICANT, IT HAS BEEN PLEADED BY SHRI SNEHASIS CHAKROBORTY, THE PAYER THAT THE PAYMENTS WERE ON ACCOUNT OF PROFESSIONAL SERVICES RENDERED BY THE APPELLANT TO HIM FOR FILM PRODUCTION. 7. THIS, IT IS OBSERVED THAT THERE HAVE BEEN CONTRADICTORY AND SHIFTING STANCES ADOPTED BY THE ASSESSEE TO TRY AND EXPLAIN THE IMPUGNED TRANSACTIONS. HOWEVER, IT IS SIGNIFICANT THAT WHEN THE AMOUNTS WERE TRANSACTED SHRI SNEHASIS CHAKROBORTY HAS STATED UNDER OATH THAT THESE WERE ON ACCOUNT OF PROFESSIONAL SERVICES RENDERED BY THE ASSESSEE, AND THEREFORE TDS HAD ALSO BEEN EFFECTED. IN THE STATEMENT RECORDED U/S 131 OF THE INCOME TAX ACT, 1961 BEFORE THE LD. AO, SHRI SNEHASIS CHAKRABORTY HAS STATED THAT 'I AM A SCRIPT WRITER FOR FILM AND TELEVISION AND PRODUCER OF T.V SERIALS. I CAME IN CONTACT WITH SMT. MANJU GANGULY AT FILM AND TV PERSONALITY GATHERINGS. SHE GUIDED ME TO GET WORK FROM TV SERIALS IN TV. SHE TIME TO TIME GAVE ME ADVISE TO MAKE SUCCESSFUL TV SERIALS PRODUCTION.' UNDER THESE CIRCUMSTANCES, THE STATEMENT OF THE PAYER WHO HAS NARRATED THE REASONS TO PAY AND PAID BY CHEQUE AND MADE THE NECESSARY TDS AS WELL AS FILED QUARTERLY RETURNS CANNOT BE WISHED AWAY. IN FACT, IN HER SUBMISSIONS DURING APPEAL, THE APPELLANT HAS NOT STATED ANYTHING ABOUT SUCH PAYMENTS AND TDS EXCEPT THAT THE PAYMENTS WERE ACTUALLY REPAYMENTS OF LOAN. NO DOCUMENTS / AGREEMENT RELATING TO LOAN BETWEEN THE TRANSACTING PARTIES, AND THE RATE OF INTEREST TO BE PAID ETC. HAVE BEEN FURNISHED EITHER BEFORE THE LD. AO OR IN THIS FORUM. IT HAS BEEN VERY GENERALLY OBSERVED AND PLEADED THAT THE AMOUNTS HAD BEEN LOANED BY THE ASSESSEE IN EARLIER YEARS, AND THAT THE LD. AO OUGHT TO HAVE EXAMINED THE MATTER I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 11 COMPREHENSIVELY. HOWEVER, AS THE PAYMENTS WERE RECEIVED BY THE APPELLANT IN THE SUBJECT ASSESSMENT YEAR THE ONUS WAS CLEARLY CAST UPON THE APPELLANT TO DEMONSTRATE AS TO HOW THEY WERE RELATED TO EARLIER LOANS EXTENDED BY THE APPELLANT TO SHRI SNEHASIS CHAKROBORTY. 8. I FIND THAT THERE ARE CERTAIN ABNORMALITIES ATTACHED WITH THE TRANSACTIONS BETWEEN THE PARTIES WHICH DO NOT FALL WITHIN THE REALM OF THE NORMAL. IN THIS CASE, VERY STRANGELY, WHEN THE PAYER IS STATING UNDER OATH THAT PAYMENTS WERE MADE FOR SERVICES RENDERED, THE SAME IS BEING DENIED BY THE APPELLANT. OVERALL, I FIND THAT THE TRANSACTIONS WERE NOT NORMAL, AS IF THE CONTENTION OF THE ASSESSEE THAT THE RECEIPTS WERE ON ACCOUNT OF LOANS ADVANCED EARLIER WERE TRUE, THERE WOULD BE SOME AGREEMENT TO THE MATTER, AND THE INTEREST RATES WOULD BE SPECIFIED. NOT A SINGLE SUPPORTING DOCUMENT HAS BEEN SUBMITTED BY THE APPELLANT TO SUPPORT HER ARGUMENTA ABOUT LOAN REPAYMENT, WHILE THE PAYMENT OF PROFESSIONAL FEES HAS BEEN THROUGH A/C PAYEE CHEQUES AND NECESSARY TDS EFFECTED. IN THE CASE OF 184 ITR 308, CASE OF UNION OF INDIA & ORS VS PLAYWORLD ELECTRONICS PVT. LTD, IT HAS BEEN HELD THAT IN DEALINGS INVOLVING FUND TRANSFERS BETWEEN KNOWN CLOSE PARTIES, THESE ARE TO BE LOOKED INTO WITH CARE AND CAUTION AND NECESSARY INFERENCES DRAW IF THERE ANY ABNORMALITIES ATTACHED WITH SUCH TRANSACTIONS. THE CASE AT HAND SUFFERS FROM INHERENT CONTRADICTIONS AND ABNORMALITIES, AND MOST DEFINITELY THE TRANSACTIONS (AND THE EXPLANATIONS GIVEN BY DIFFERENT PARTIES TO THE TRANSACTIONS) DO NOT FALL WITHIN NORMAL TRANSACTIONS. EVEN THE APPELLANT HAS BEEN SHIFTING HER STAND STATING THAT THE SAME ARE INTEREST PAYMENTS AND THEN LOAN PAYMENTS, BUT DENYING ANY PROFESSIONAL SERVICES. IN MY CONSIDERED VIEW OF THE MATTER, THE ENTIRE TRANSACTIONS APPEAR TO BE DUBIOUS AND SUSPICIOUS, AND THEREFORE THE SAME OUGHT TO BE VIEWED IN THAT LIGHT. IN THE CASE OF WIN CHADHA VS CIT (INTERNATIONAL TAXATION) IN ITA NO.3088& 3107/DEL/2005, THE HON'BLE DELHI ITAT 'B'-BENCH HAS OBSERVED, ON 31.12.2010 AS UNDER: 'SUSPICIOUS AND DUBIOUS TRASANCTION HOW TO BE DEALT WITH: 6.11. THE TAX LIABILITY IN THE CASES OF SUSPICIOUS TRANSACTIONS, IS TO BE ASSESSED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD, SURROUNDING CIRCUMSTANCES, HUMAN CONDUCT, PREPONDERANCE OF PROBABILITIES AND NATURE OF INCRIMINATING INFORMATION/EVIDENCE AVAILABLE WITH AO. 6.12. IN THE CASE OF SUMATI DAYAL V. CIT (1995) 80 TAXMAN 89 (SC), THE HON'BLE SUPREME COURT HAS DEALT WITH THE RELEVANCE OF HUMAN CONDUCT, PREPONDERANCE OF PROBABILITIES AND SURROUNDING CIRCUMSTANCE, BURDEN OF PROOF AND ITS SHIFTING ON THE DEPARTMENT IN CASES OF SUSPICIOUS CIRCUMSTANCES, BY FOLLOWING OBSERVATIONS: ..... IT IS, NO DOUBT, TRUE THAT IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVIDED BY THE ACT LIES UPON THE ASSESSEE. BUT IN VIEW OF SECTION 68, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR, THE SAME MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 12 ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACTORY. IN SUCH CASE THERE IS PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, AND IF HE FALLS TO REBUT THE SAME, THE SAID EVIDENCE BEING UNREBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT IT IS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE DEPARTMENT CANNOT, HOWEVER, ACT UNREASONABLY. ... HAVING REGARD TO THE CONDUCT OF THE APPELLANT AS DISCLOSED IN HER SWORN STATEMENT AS WELL AS OTHER MATERIAL ON THE RECORD, AN INFERENCE COULD REASONABLY BE DRAWN THAT THE WINNING TICKETS WERE PURCHASED BY THE APPELLANT AFTER THE EVENT. THE MAJORITY OPINION AFTER CONSIDERING SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES HAD RIGHTLY CONCLUDED THAT THE APPELLANT'S CLAIM ABOUT THE AMOUNT BEING HER WINNING FROM RACES, WAS NOT GENUINE. IT COULD NOT BE SAID THAT THE EXPLANATION OFFERED BY THE APPELLANT IN RESPECT OF THE SAID AMOUNTS HAD BEEN REJECTED UNREASONABLY AND THAT THE FINDING THAT THE SAID AMOUNTS WERE INCOME OF THE APPELLANT FROM OTHER SOURCES WAS NOT BASED ON EVIDENCE.' CIRCUMSTANTIAL EVIDENCE HOW TO BE USED 6.13. IT WOULD, AT THIS STAGE, BE RELEVANT TO CONSIDER THE ADMISSIBILITY AND USE OF CIRCUMSTANTIAL EVIDENCE IN INCOME TAX PROCEEDINGS. CIRCUMSTANTIAL EVIDENCE IS EVIDENCE OF THE CIRCUMSTANCES, AS OPPOSED TO DIRECT EVIDENCE. IT MAY CONSIST OF EVIDENCE AFFORDED BY THE BEARING ON THE FACT TO BE PROVED, OF OTHER AND SUBSIDIARY FACTS, WHICH ARE RELIED ON AS INCONSISTENT WITH ANY RESULT OTHER THAN THE TRUTH OF THE PRINCIPAL FACT. IT IS EVIDENCE OF VARIOUS FACTS, OTHER THAN THE FACT IN ISSUE WHICH ARE SO ASSOCIATED WITH THE FACT IN ISSUE, THAT TAKEN TOGETHER, THEY FORM A CHAIN OF CIRCUMSTANCES LEADING TO AN INFERENCE OR PRESUMPTION OF THE EXISTENCE OF THE PRINCIPAL FACT. IN THE APPRECIATION OF CIRCUMSTANTIAL EVIDENCE, THE RELEVANT ASPECTS, AS LAID DOWN FROM TIME TO TIME ARE - (1) THE CIRCUMSTANCES ALLEGED MUST BE ESTABLISHED BY SUCH EVIDENCE, AS IN THE CASE OF OTHER EVIDENCE (2) THE CIRCUMSTANCES PROVED MUST BE OF A CONCLUSIVE NATURE AND NOT TOTALLY INCONSISTENT WITH THE CIRCUMSTANCES OR CONTRADICTORY TO OTHER EVIDENCE. (3) ALTHOUGH THERE SHOULD BE NO MISSING LINKS IN THE CASE, YET IT IS NOT ESSENTIAL THAT EVERY ONE OF THE LINKS MUST APPEAR ON THE SURFACE OF THE EVIDENCE ADDUCED; SOME OF THESE LINKS MAY HAVE TO BE INFERRED FROM THE PROVED FACTS; (4) IN DRAWING THOSE INFERENCES OR PRESUMPTIONS, THE AUTHORITIES MUST HAVE REGARD TO THE COMMON COURSE OF NATURAL EVENTS, TO HUMAN CONDUCT AND THEIR RELATION TO THE FACTS OF THE PARTICULAR CASE. (5) THE CIRCUMSTANTIAL EVIDENCE CAN, WITH EQUAL FACILITY, BE RESORTED TO IN PROOF OF A FACT IN ISSUE WHICH ARISES IN PROCEEDINGS FOR THE ASSESSMENT OF TAXES BOTH DIRECT AND INDIRECT, CIRCUMSTANTIAL EVIDENCE CAN BE MADE USE OF IN ORDER TO PROVE OR I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 13 DISPROVE A FACT ALLEGED OR IN ISSUE. IN FACT, IN WHATEVER PROCEEDINGS OR CONTEXT INFERENCES ARE REQUIRED TO BE DRAWN FROM THE EVIDENCE OR MATERIALS AVAILABLE OR LACKING, CIRCUMSTANTIAL EVIDENCE HAS ITS PLACE TO ASSIST THE PROCESS OF ARRIVING AT THE TRUTH. 6.14. IT WILL ALSO BE WORTHWHILE TO CONSIDER THE NATURE OF BURDEN OF PROOF ON THE ASSESSING OFFICER FOR PROVING A FACT OR CIRCUMSTANCE IN THE INCOME TAX PROCEEDINGS. THE QUESTIONS RAISED ABOUT THE TAX LIABILITY BY THE AO ARE TO BE ANSWERED BY THE ASSESSEE BY FURNISHING REASONABLE AND PLAUSIBLE EXPLANATIONS. IF ASSESSEE IS NOT FORTHCOMING WITH PROPER OR COMPLETE FACTS OR HIS STATEMENT OR EXPLANATION IS CONTRADICTORY, DRAWING OF SUITABLE INFERENCES AND ESTIMATION OF FACTS IS INEVITABLE. COURTS GENERALLY WILL NOT INTERFERE WITH SUCH ESTIMATE OF FACTS, UNLESS THE INFERENCES OR ESTIMATES ARE PERVERSE OR CAPRICIOUS. 6.15. THE ASSESSEE'S TECHNICAL CONTENTIONS ABOUT ADMISSIBILITY AND RELIANCE ON MATERIAL AVAILABLE ON THE AO'S RECORD ARE IN THE NATURE OF CONTENTIONS CHALLENGING CRIMINAL OR CIVIL LIABILITIES IN A COURT OF LAW. WE ARE DEALING WITH A PROCESS OF ADJUDICATION OF ASSESSES TAX LIABILITY I.E. ASSESSMENT UNDER INCOME TAX ACT RATHER THAN CONDUCTING CRIMINAL OR CIVIL COURT PROCEEDINGS. AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF S.S. GADGIL (SUPRA) NO 'LIS' IS INVOLVED IN ADJUDICATION OF TAX LIABILITY. THE ASSESSEE'S CONTENTION THAT THERE WAS NO NEW MATERIAL BEFORE THE ASSESSING OFFICER AFTER THE CIT(A)'S SETTING ASIDE ORDER CANNOT BE ACCEPTED. NEW INFORMATION AND MATERIAL DID INDEED COME ON RECORD. IN OUR VIEW, IN A SENSITIVE MATTER LIKE THIS, EVEN A SINGLE CLUE OR REVELATION CAN BE OF GREAT IMPORTANCE. TO REVERSE THE ORDER OF THE AO ON THIS TECHNICAL PLEA WILL AMOUNT TO TAKING A LOPSIDED VIEW OF THE PROCEEDINGS. BESIDES, THE JPC HAS UNDERLINED THE IMPORTANCE OF REPORTS OF INVESTIGATION AGENCIES LIKE CBI, DRI, ED WHOSE WERE IN THE OFFING, AS THE RELEVANT INVESTIGATIONS WERE IN PROCESS. IN VIEW OF THESE OBSERVATIONS, WE DO NOT ACCEDE TO THE ASSESSEE'S PLEAS IN THIS BEHALF. THE ASSESSEE'S CONTENTIONS AND OBJECTIONS IN THIS BEHALF THAT THE MATERIAL AVAILABLE ON RECORD WAS NOT ADMISSIBLE AS EVIDENCE AND THAT IT CANNOT BE RELIED ON BY THE AO, ARE DEVOID OF ANY MERIT AND ARE REJECTED OUTRIGHT. IN THE CIRCUMSTANCES, I FIND MYSELF IN AGREEMENT WITH THE OBSERVATIONS OF THE LD. ASSESSING OFFICER THAT THE ASSESSEE RECEIVED THE SUM OF RS.60,34,310/- WITHOUT ANY CONSIDERATION AND DID NOT FILE RETURN OF INCOME FOR THE SAME. I AM ALSO AGREEABLE WITH THE VIEW OF THE LD. ASSESSING OFFICER THAT IT CAN ONLY BE CONCLUDED THAT THAT SUMS RECEIVED ARE INCOME FROM OTHER SOURCES. THEREFORE RS.60,34,310/- IS TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES AT APPLICABLE RATE. IN VIEW OF THE ABOVE DISCUSSION, I FIND NO INFIRMITY IN THE ORDERS OF THE LD. AO, AND I CONFIRM THE SAME. GROUNDS 1 TO 3 TAKEN BY THE APPELLANT STAND DISMISSED. 07. GROUND NO.5 RELATES TO THE APPELLANT CRAVES LEAVE TO ADD, MODIFY OR OTHERWISE DELETE ALL OR ANY OF THE GROUNDS STATED HEREINABOVE. IT IS TO BE SAID THAT AS THERE WERE NO SUCH CLAIMS MADE BY THE APPELLANT/ LD. A.RS DURING THE HEARING, THERE IS NO OCCASION TO ADJUDICATE ON THIS GROUND. I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 14 3. THE ASSESSEES HAS FILED A DETAILED PAPER-BOOK COMPRISING OF THE FOLLOWING CASE RECORDS: SL. NO DESCRIPTION PAGE NO. 1 COVERING LETTER FROM HUSBAND, KAUSHIK DUTLA SHARMA 1,2 2 EMPLOYMENT CERTIFICATE OF APPELLANT (AUSTRALIAN GOVERNMENT)/HER TAX RESIDENCY CERTIFICATE (AUSTRALIA) /PAN 3-5 3 DECLARATION OF MOTHER OF THE APPELLANT AS TO EXISTENCE OF NRO A/C IN INDIA 6 5 DECLARATION FROM TAXATION OFICE OF AUSTRALIA GOVT. AS TO THE APPELLANT'S BEING A TAX RESIDENT OF AUSTRALIA 6 BANK SUMMARY SBI, SALT LAKE AND BANK OF BARODA, DISCLOSING TRANSACTION WITH M/S. BLUES BELONGING TO MR. SNEHASISH CHAKRABORTY FOR AY 2010-11 (FY 2009-10) FOR AY 2011-12 (FY 2010-11) 7-8 9-10 7 SUBMISSION MADE ON BEHALF OF APPELLANT IN RESPONSE TO SEC. 147 PROCEEDING, ENCLOSING THE BANK STATEMENTS EVIDENCING LOAN TRANSACTIONS WITH M/S. BLUES SINCE 2006. AY 2010-11 SUBMISSION CORRESPONDING BANK STATEMENTS AY 2011-12 SUBMISSION CORRESPONDING BANK STATEMENTS AUSTRALIAN BANK ACCOUNT EVIDENCING DIRECT REMITTANCE TO SNEHASISH CHAKRABORTY AND HIS TINKU PROJECT 11-14 15-26 27-30 31-43 44-46 8 VARIOUS E-MAILS SENT BY SNEHASISH CHAKRABORTY, PROP OF BLUES, ALIAS TINKU TO THE APPELLANT PLEADING FOR MONEY/FINANCIAL HELP FOR HIS TV SERIALS /PRODUCTIONS, INCLUDING PROVIDING HIS BANK ACCOUNT NO, TO FACILITATE DIRECT REMITTANCE. 47-49 9 CONFIRMATION BY THE FOREIGN BANK (JP MORGAN CHASE BANK) AS REGARDS REMITTANCE OF MONEY TO AXIS BANK, TOLLYGUNJE, ACCOUNT NO. 045010200017374 50-52 I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 15 (THIS AXIS BANK ACCOUNT REPRESENTS HIS REGULAR BANK ACCOUNT, VIDE BALANCE SHEET OF SNEHASISH CHAKRABORTY /BLUES /TINKU, VIDE HIS AUDITED STATEMENT OF ACCOUNT, PAGE 66 OF PAPER BOOK) 10 SUMMON TO SNEHASISH CHAKRABORTY, UNDER SECTION 131 53-54 11 SNEHASISH CHAKRABORTY'S. C/O M/S BLUES, COPY OF RETURN AND AUDITED STATEMENT OF ACCOUNT AY 2010-11 AY 2011-12 55-61 62-68 12 COPY OF DEPOSITION , MADE BY SNCHASISH CHAKRABORTY AS RECORDED TYPED VERSION 69-70 71-72 13 SUBMISSION BEFORE THE LD. CIT(A) AY 2010-11 AY 2011-12 73-75 76-78 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS AGAINST AND IN SUPPORT OF IMPUGNED INCOME FROM OTHER SOURCES ADDITION. KEEPING IN VIEW THE CRUCIAL ASPECT THAT THE ISSUE INVOLVED HEREIN IS IDENTICAL IN BOTH CASES, WE TREAT ASSESSEES FORMER APPEAL ITA NO.2146/KOL/2018 AS THE LEAD CASE. 5. CASE FILE SUGGESTS THAT THIS ASSESSEE IS AN NRI BASED IN AUSTRALIA. SHE HAD INDEED RECEIVED THE IMPUGNED SUM OF RS.60,34,310/- FROM SHRI SNEHASISH CHAKRABORTY, FORMING SUBJECT MATTER OF THE ADDITION IN DISPUTE. IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER HAS INVOKED SECTION 68 OF THE ACT TO CONCLUDE THAT SINCE SHRI SNEHASISH CHAKRABORTYS FINAL PAYMENT AFTER DEDUCTING TDS DOES NOT PROVE THE EXACT NATURE OF TRANSACTION. HE ALSO OBSERVED HE HAD ALSO SHOWN THE NAME OF SMT. MANJU GANGULY (THE ASSESSEES MOTHER) QUA THE IMPUGNED SUM. THE CIT(A)S ABOVE EXTRACTED FINDINGS HAVE AFFIRMED THE IMPUGNED ADDITION. 6. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE ABOVE NARRATED FACTS AND CIRCUMSTANCES, WE FIND NO REASON TO SUSTAIN THE IMPUGNED ADDITION. LEARNED I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 16 DEPARTMENTAL REPRESENTATIVE FAILS TO REBUT THE CLINCHING FACT THAT THE ASSESSEE (NRI) HAD VERY WELL PROVED DURING THE COURSE OF SCRUTINY ITSELF TO HAVE REMITTED THE IMPUGNED SUM FROM AUSTRALIA THROUGH HER NRI A/C NO.79952 MAINTAINED WITH UBI, PARK STREET BRANCH, KOLKATA TO THIS EFFECT IN THE YEAR 2006 AND THEREAFTER. THE PAYEE MR. CHAKRABORTY ADMITTEDLY RECEIVED THIS MONEY AFTER RECORDING IT AS PROFESSIONAL FEE AND DEDUCTED TDS. THERE IS NO MATERIAL ON RECORD AT ALL THAT THE ASSESSEE HAD RENDERED ANY SUCH PROFESSIONAL SERVICE SINCE SHE RECEIVED ONLY THE ORIGINAL REMITTANCE AMOUNT. 7. COMING TO THE REVENUES OBJECTION THAT SMT. MANJU GANGULY (SUPRA) IS ALSO INVOLVED IN THIS ENTIRE EPISODE, WE FIND THAT HER NAME HAS COME IN PICTURE ONLY BECAUSE THE ASSESSEE AND HER MOTHER HAD MAINTAINED A JOINT ACCOUNT. CASE FILE DOES NOT INDICATE ANY MATERIAL THAT THE ASSESSEES MOTHER HAD EITHER RENDERED ANY PROFESSIONAL SERVICES OR REMITTED ANY AMOUNT IN FAVOUR OF MR. CHAKRABORTY. SHE HAS NO ROLE TO PLAY IN THE REMITTANCE AND REPAYMENT TRANSACTION THEREFORE. WE ARE OF THE VIEW IN THESE FACTS AND CIRCUMSTANCES THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE ERRED IN TREATING THE SAME AS AN INSTANCE OF PAYMENT OF PROFESSIONAL SERVICES. WE TAKE NOTE OF THE CORRESPONDING EXCHANGES BETWEEN THE PARTIES IN SUPPORT OF OUR FOREGOING CONCLUSION. WE ALSO HOLD THAT THE MERE FACT OF THE PAYER HAVING MADE TDS OUGHT NOT TO BE TAKEN AS THE SOLE DECISIVE FACTOR TO TREAT THE CORRESPONDING AMOUNT AS ASSESSEES TAXABLE INCOME AS PER HONBLE APEX COURTS DECISION IN CIT VS. PANBARI TEA COMPANY LTD. (1965) 57 ITR 422(SC). WE ACCORDINGLY ACCEPT THE ASSESSEES SUBSTANTIVE GRIEVANCE AND DELETE THE IMPUGNED ADDITION OF RS.60,34,310/-. LEAD CASE APPEAL ITA NO.2146/KOL/2018 IS ACCEPTED. [SAME ORDER TO BE FOLLOWED IN ASSESSEES LATTER APPEAL ITA NO.2147/KOL/2018 IN ABSENCE OF ANY DISTINCTION ON FACTS QUA THE SOLE ISSUE (SUPRA)]. 8. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BEING PRONOUNCED AFTER NINETY (90) DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKDOWN DAYS NEED I.T.A NOS.2146&2147/KOL/2018 GARGI GANGULY PAGE | 17 TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF DCIT VS. JSW LIMITED IN ITA NO. 6264/MUM/2018 & 6103/MUM/2018, ASSESSMENT YEAR 2013-14, ORDER DT. 14 TH MAY, 2020. 9. THESE ASSESSEES APPEALS ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10.07.2020. SD/- ( A. L. SAINI ) SD/- (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER /KOLKATA; / DATE: 10/07/2020 RS / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. THE APPELLANT - GARGI GANGULY 2. THE RESPONDENT- DCIT(IT), CIRCLE-1(1), KOLKATA. 3. ( ) / THE CIT(A), KOLKATA [SENT THROUGH EMAIL] 4. / CIT 5. , , / DR, ITAT, KOLKATA [SENT THROUGH EMAIL] 6. [ / GUARD FILE.