Abinash Sharma, Howrah V. ITO, Ward-46(1), Kolkata, Kolkata

ITA 2279/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1426 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Capital expenditure
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 2279 / KOL / 2014 ASSESSMENT YEAR :2010-11 ABINASH SHARMA 113, SRI ARVIND ROAD, GANGA JAMUNA APARTMENT, 2 ND FLOOR, HOWRAH-711 106 [ PAN NO.BPWPS 5495 F ] V/S . INCOME TAX OFFICER, WARD-46(1), 3 GOVT. PLACE (WEST), 2 ND , FLOOR, KOLKATA-001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI RAJEEVA KUMAR, ADVOCATE /BY RESPONDENT SHRI SAURABH KUMAR, ADDL. CIT-DR /DATE OF HEARING 13-09-2017 !' /DATE OF PRONOUNCEMENT 22-09-2017 / 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)-XXX, KOLKATA D ATED 27.10.2014. ASSESSMENT WAS FRAMED BY ITO WARD-46(1), KOLKATA U/ S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS ORDER DATED 26.03.2013 FOR ASSESSMENT YEAR 2010-11. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER:- THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE THE LD. CIT(A) HAS FAILED TO EXAMINE THE RECORD AND TO DERIVE REQUISIT E SATISFACTION AS TO NATURE OF EARNING OF INCOME BY THE APPELLANT FROM ENTRY OPERA TION. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE APPELLANT HAS DISCLOS ED ALL THE MATERIAL FACTS AS TO HIS ITA NO.2279/KOL/2014 A.Y. 2010-11 ABINASH SHARMA VS. ITO WD-46(1) KOL. PAGE 2 ACTIVITIES AS AN ENTRY OPERATOR AND EARNING OF INCO ME IN THE NATURE OF COMMISSION @ 0.25 PAISA PER HUNDRED RUPEES BY PROVIDING ACCOMMOD ATION ENTRIES TO THE PARTIES, IT IS HIS TRADING ACTIVITY. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) HAS ACTED ARBITRARILY IGNORING THE VITA POINTS REGARDIN G ENTRY OPERATION FURNISHED BY THE APPELLANT OR PLACING RELIANCE UPON GUESS WORK. IT I S NOT THE CASE THAT THE APPELLANT HAD NOT COMPLIED WITH THE REQUIREMENTS OF THE AO IT IS ONLY THE CASE THAT THE DETAILS OF BENEFICIARIES COULD NOT BE FURNISHED. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) HAS FAILED TO CONSIDER THE FACT THAT THE DETAILS OF BEN EFICIARIES ARE ALSO NOT KNOWN TO THE APPELLANT, THIS IS THE TYPE OF BUSINESS CALLED ENTR Y OPERATION. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) IS NOT CORRECT IN CONFIRMING THE ORDER OF THE AO TREATING THE ENTIRE DEPOSIT TO BANK AS UNDISCLOSED INCOME OF THE APPELLANT WITHOUT CONSIDE RING THE FACT THAT EVERY DEPOSIT WAS FOLLOWED BY A WITHDRAWAL SUBSEQUENTLY. MAKING T HE ADDITION OF AGGREGATE DEPOSIT IN THE BANK ACCOUNT WITHOUT GIVING THE BENEFIT OF W ITHDRAWALS MADE BY THE APPELLANT FROM TIME TO TIME IS NOT JUSTIFIED. 6. THE ASSESSEE CRAVES LEAVE TO ADD/ALTER ANY OF TH E GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. SHRI RAJEEVA KUMAR LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE AND SHRI SAURABH KUMAR, LD. DEPARTMENTAL REPRESENTATIVE REPR ESENTED ON BEHALF OF REVENUE. 2. GROUND NO. 1 TO 5 ARE INTER-RELATED AND THEREFOR E THESE ARE BEING TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE. THE ISSUE RAISED IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY TREATING THE ENTIRE AMOUNT OF DEPOSIT FOR 4,31,67,103/- AS INCOME OF ASSESSEE. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL HAD DERIVED INCOME FROM OTHER SOURCE. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AND ON THE BASIS OF AIR INFORMATION AO OBSERVED THAT AS SESSEE HAS DEPOSITED CASH IN ITS BANK ACCOUNT MAINTAINED WITH AXIS BANK DURING THE YEAR UNDER CONSIDERATION FOR 3,23,61,000/-. THE AO ACCORDINGLY SOUGHT CLARIFICAT ION FROM THE ASSESSEE ABOUT THE SOURCE OF CASH DEPOSITED IN HIS BANK. THE ASSESSEE IN COMPLIANCE THERETO SUBMITTED THAT H E IS ENGAGED IN THE ACTIVITY OF MONEY LAUNDERING BY WAY OF ACCEPTING CA SH AND ISSUING CHEQUE TO THE CONCERNED PARTIES. ASSESSEE FURTHER SUBMITTED T HAT DURING THE YEAR UNDER CONSIDERATION HE HAS ACCEPTED CHEQUES AS WELL AS CA SH AMOUNTING TO 4,31,67,103/- IN AGGREGATED FROM VARIOUS PARTIES. T HE ASSESSEE ALSO SUBMITTED THAT HE HAS EARNED INCOME FROM SUCH ACTIV ITY @ 0.25% OF THE CASH / ITA NO.2279/KOL/2014 A.Y. 2010-11 ABINASH SHARMA VS. ITO WD-46(1) KOL. PAGE 3 CHEQUES DEPOSITED IN BANK. THUS, ASSESSEE HAS EARNE D INCOME FROM THE MONEY LAUNDERING ACTIVITY FOR 1,07,917/- ONLY. HOWEVER, ASSESSEE FAILED TO FURNISH DETAILS OF THE PARTIES ON WHOSE BEHALF CASH / CHEQUES WERE DEPOSITED IN HIS BANK ACCOUNT AND SUBSEQUENTLY CASH/ CHEQUE I SSUED TO THEM AS DESIRED BY AO. ACCORDINGLY, AO IN THE ABSENCE OF INFORMATIO N ABOUT THE PARTIES HAS TREATED THE ENTIRE DEPOSITS OF 4,31,61,103/- AS INCOME AND ADDED IT TO THE TOTAL INCOME OF ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHO CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER:- 2.3 IN MY VIEW THE SUMS REPRESENTED BY SAID CASH/CH EQUE DEPOSITS ARE UNDISCLOSED INCOMES AND THE APPELLANT HAS TRIED TO FULLY AVOID THE TAX ON THE GROSS TRANSACTION BY CLAIMING HIMSELF AS ENTRY OPERATOR. MERE CLAIMS MAD E BY THE APPELLANT CANNOT SUBSTITUTE FOR TRUE FACTS. WITHOUT VERIFICATION AT THE BENEFICIARIES ENDS, CLAIMS ARE MERE WORDS WITHOUT BASIS AND CAN BE TREATED AS CONV ENIENT EXCUSES. 2.4 THE ASSESSING OFFICER'S ACTION OF ABRUPT ADDITI ON WITHOUT MAKING ATTEMPTS TO LOGICALLY PURSUE THE MATTER AT BENEFICIARIES ENDS, APPEARS HARMFUL TO THE INTEREST OF REVENUE. THOUGH TECHNICALLY AO IS RIGHT IN MAKING T HE ADDITION, HE ENDS UP HARMING THE REVENUE BY CHOOSING NOT TO PURSUE THE BENEFICIA RIES THROUGH HIS OWN ENQUIRIES AS LIABILITY OR COLLECTION MAY NOT BE REALIZED IF MATC HING ASSETS ARE NOT FOUND WITH THE APPELLANTS. SUCH SHORT-SIGHTED ACTIONS OF NOT LOGIC ALLY FOLLOWING UP TOWARDS THE BENEFICIARIES, PROMOTES THE ACTIVITIES OF ENTRY OPE RATORS WHO THUS FACILITATE LARGE SCALE TAX EVASION AT HUGE COST TO THE REVENUE. 2.5 THE SAID DEPOSITS OF CASH AND CHEAUE REPRESENT UNDISCLOSED MONEY. WITHDRAWALS FROM THE SAID BANK A/C. IN CHEUES OR OT HERWISE MAY BE FOR INVESTMENT OR CAPITAL EXPENDITUREES. THE APPELLANT HAS FAILED TO DEMONSTRATE THAT DEPOSITS DO NOT REPRESENT UNDISCLOSED INCOME OF THE APPELLANT. THE CLAIM THAT HE ONLY EARNED COMMISSION OF 0.25% ARE NOT BASED ON EVIDENCE OR ON MATERIALS WHICH CAN BE VERIFIED. I, THEREFORE, SEE NO REASON TO ALTER THE ADDITIONS MADE BY THE AO. THE GROUNDS IS NOT ALLOWED.: BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 5. AT THE OUTSET, LD. AR FOR THE ASSESSEE SUBMITTED THAT LD. CIT(A) HAS PASSED EX PARTE ORDER THOUGH ASSESSEE ATTENDED THE HEARING BEFORE HIM. ACCORDINGLY, LD. AR PRAYED BEFORE US TO REMIT THE M ATTER BACK BEFORE LD. CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LA W. LD. DR PRESENT WAS DULY HEARD. HE FAIRLY SUBMITTED THAT THE MATTERS NEEDS TO BE RESTORED TO THE LD. CIT(A) FOR FRESH CONSIDERATI ON. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET, IT WAS OBSERVED THAT THE ORDER ITA NO.2279/KOL/2014 A.Y. 2010-11 ABINASH SHARMA VS. ITO WD-46(1) KOL. PAGE 4 PASSED BY LD. CIT(A) WAS EX PARTE THOUGH LD. AR FOR THE ASSESSEE CLAIMED TO HAVE ATTENDED THE HEARING BEFORE LD. CIT(A). HOWEVE R, LD. AR FOR THE ASSESSEE BEFORE US FAILED TO SUBSTANTIATE ITS CLAIM THAT HEARING BEFORE LD. CIT(A) WAS ATTENDED BY ASSESSEE OR HIS AUTHORIZED R EPRESENTATIVE. HOWEVER, IN THE INTEREST AND FAIR PLAY WE ARE INCLINED TO GI VE ONE MORE OPPORTUNITY TO ASSESSEE TO APPEAR BEFORE LD. CIT(A). WHILE DOING S O, THE LD. CIT(A) SHOULD GIVE A DUE AND FAIR OPPORTUNITY OF HEARING TO THE A SSESSEE AND SHALL DECIDE THE MATTER BY WAY OF A SPEAKING ORDER IN ACCORDANCE WIT H LAW. HENCE, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PUR POSE. 7. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 22/ 09/2017 SD/- SD/- ($%&) ( %&) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (%)*- 22 / 09 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ABINASH SHARMA 113, SRI ARVIND ROAD, GAN GA JAMUNA APARTMENT 2 ND FLOOR, HOWRAH-711 106 2. /RESPONDENT-ITO WARD-46(1), 3 GOVT. PLACE (WEST) 2 ND FLOOR, KOLKATA-01 3.)2)3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5.789$$3 , 3 , / DR, ITAT, KOLKATA 6.9;<=> / GUARD FILE. BY ORDER/ %, /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3 ,