Dr. Tapan Krishna Biswas, Asansol V. ACIT, Circle - 2, Asansol, Asansol

ITA 235/KOL/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8104 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 23-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P LAHIRI
• Assessee Lawyers: S K TULSIYAN; R N RAM
• Keywords: Unexplained investment; Gift; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI C.D.RAO, A.M. & SHRI GEORGE MATHAN, J. M. ] I.T.A. NO.235/KOL/2009 ASSESSMENT YEAR : 2005-2006 DR. TAPAN KRISHNA BISWAS VS- ACIT, CIRCLE-2, ASANSOL BISWAS X-RAY & SCAN CENTRE, WEST APCARGARDEN, G.T.ROAD (WEST) ASANSOL 713304, DIST-BURDWAN (PAN: ADAPB 4834G) ( APPELLANT ) ( RESPONDENT ) I.T.A. NO.236/KOL/2009 ASSESSMENT YEAR : 2005-2006 SMT. RATNA BISWAS VS- I.T.O., WARD-1(2), ASANSOL BISWAS X-RAY & SCAN CENTRE, WEST APCARGARDEN, G.T.ROAD (WEST) ASANSOL 713304, DIST-BURDWAN (PAN: ADDPB 4295Q) ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 16.10.2012 DATE OF PRONOUNCING THE ORDER : 16.10.2012 APPEARANCES : FOR THE APPELLANT : S/SHRI R.N .RAM & S.K.TULSIYAN : FOR THE RESPONDENT : SHRI S.P.LAHIRI, J CIT, SR.(DR) O R D E R PER SHRI GEORGE MATHAN,J.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEES I.E. B OTH HUSBAND AND WIFE AGAINST THE ORDERS OF THE LD. CIT(A), ASANSOL IN AP PEAL NOS.146/CIT(A)/ASL/CIRCLE-2/2007-08 & 142/CIT(A)/AS L/WARD-1(2)/2007-08 BOTH DATED 31 ST DECEMBER, 2008 FOR THE SAME ASSESSMENT YEAR 2005-2 006 RESPECTIVELY. 2 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 2. S/SHRI R.N.RAM & S.K.TULSIYAN REPRESENTED ON BEH ALF OF THE ASSESSEES AND SHRI S.P.LAHIRI, JCIT REPRESENTED ON BEHALF OF THE REVENUE. ITA NO.235/KOL/2009 DR. TAPAN KRISHNA BISWAS (ASSESSEE) 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS: 1. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.26,70,000/- BEING TH E DIFFERENCE OF GROSS RECEIPT OF RS.150,000/- AS ESTIMATED BY THE A.O. A ND THE ACTUAL GROSS RECEIPT DISCLOSED BY THE APPELLANT AT RS.123,30,000/- WHER E AS ALL THE BOOKS OF ACCOUNTS RELEVANT PAPERS AND DOCUMENTS WERE PRODUC ED. 2. THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE LD. CIT (A) ERRED IN CONFIRMING THE ESTIMATE OF THE GROSS RECEIPT MADE BY THE AD. ON THE GROUND THAT THERE WAS SUBSTANTIAL FALL IN NET PROFIT IN T HE YEAR UNDER CONSIDERATION IN COMPARISON WITH THE IMMEDIATELY PRECEDING YEAR WITHOUT CONSIDERING THE FACTUAL POSITION THAT THERE WAS CLAIM OF DEPRECIAT ION ON MRI FOR TWELVE MONTHS WHERE AS THE CLAIM OF DEPRECIATION IN THE I MMEDIATELY PRECEDING YEAR WAS ONLY FOR THREE MONTHS AND WHERE AS INTERE ST BURDEN ON FINANCE AND COST OF QUALITY FILM WAS SUBSTANTIALLY HIGHER DURI NG THE YEAR AND WHERE AS THERE WAS ONLY A MARGINAL FALL IN THE GROSS RECEIP T IN COMPARISON WITH THE LAST YEAR ON ACCOUNT OF COMPETITIVE MARKET. 3. THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.4,40,000/- ON ACCOUN T OF UNDISCLOSED FRESH F.D. WITH S.B.I. RANGAPARA BRANCH WHERE AS FRESH F .D. OF RS.4,40,000/- WAS MADE OUT OF MATURITY OF F.D. WITH S.B.I. JAMURIA B RANCH ON 25/09/2004 AND PARTLY OUT OF CASH WITHDRAWN FROM THE CASH BOOK. 4. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE LD. CIT (A) CONFUSED ABOUT THE DATE OF NEW F.D. AS ON 01/04/2004 WHERE AS THE RELEVANT DATES OF NEW F.D. IS FROM 12/10/2004 TO 24/11/2004 (20 SMAL L F.D.S ON DIFFERENT DATES) WHERE AS ALL THE RELEVANT DETAILS WERE FURN ISHED BEFORE THE AO. & ALSO BEFORE THE CIT(A). 5. THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.80,000/- BEING K.V.P . MADE OUT OF WITHDRAWAL OF CASH FROM THE CASH BOOK. 6. THAT ON THE FACT AND CIRCUMSTANCES OF THE CAS E LD. CIT (A) ERRED IN CONFIRMING THE CLUBBING OF INCOME OF HIS WIFE AMOU NTING TO RS.3,31 000/- IN THE HANDS OF DR. BISWAS U/S 64 WHERE AS APPELLANT S WIFE SMT. RATNA BISWAS IS SEPARATELY ASSESSED TO INCOME TAX SINCE THE A.Y . 1989-90. 3 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 7. THAT ON THE FACT AND CIRCUMSTANCES OF THE C ASE LD. CIT (A) ERRED IN ENHANCING RS.4,00,000/- IN HANDS OF DR. BISWAS BEI NG THE CASH GIFT MADE BY HIS WIFE SMT. RATNA BISWAS WHERE AS THE SAME WAS D ULY ACCEPTED BY THE AC. AND NO ADVERSE INFERENCE WAS DRAWN IN THE ASSESSME NT ORDER AND DID NOT FORM PART OF THE ASSESSED INCOME IN THE ORDER COMM UNICATED TO HIS WIFE AND WHERE AS THE SOURCE OF CASH GIFT WAS DULY EXPLAINE D TO THE A.O. AND TO THE CIT (A). 8. THAT THE APPELLANT CRAVES LEAVE TO ALTER, AMEND , OR SUBSTITUTE ANY GROUND OR GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4. AT THE TIME OF HEARING, IN REGARD TO GROUND NOS. 1 AND 2, IT WAS SUBMITTED BY THE LD. A.R. THAT IN THE COURSE OF ASSESSMENT PROCE EDINGS, THE AO HAD DIRECTED THAT THE ASSESSEE WAS TO PRODUCE COPY OF THE MRI & SCAN REGISTERS. IT WAS A SUBMISSION THAT THE ASSESSEE HAD PRODUCED THE SAID REGISTERS. HOWEVER, IN THE ASSESSMENT ORDER, THE AO HAD MENTIONED THAT THE SAID REGISTERS WERE NOT PRODUCED. IT WAS A SUBMISSION THAT CONSEQUENT TO THE FINDING THAT THE ASSESSEE HAD NOT PRODUCED THE MRI & SCAN REGISTERS, THE AO HAD ESTIMATED THE GROS S RECEIPTS OF THE ASSESSEE AT RS.1,50,00,000/- AS AGAINST RS.1,23,30,000/- SHOWN BY THE ASSESSEE IN THE P&L ACCOUNT. IT WAS A SUBMISSION THAT THE TRIBUNAL HAD, VIDE ORDER DATED 10.12.2009, DIRECTED THE AO TO FURNISH A REMAND REPORT IN RESPE CT OF GROSS RECEIPTS OF THE ASSESSEE, AFTER GIVING OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE MRI & SCAN REGISTERS. IT WAS A SUBMISSION THAT CONSEQUENT TO T HE DIRECTION OF THE BENCH, A REMAND REPORT HAD BEEN SENT BY THE AO DATED 20.01.2 010 WHEREIN THE AO HAS ACCEPTED THAT THE ASSESSEE HAD PRODUCED THE MRI & S CAN REGISTER, ULTRASOUND REGISTER AND OTHER RELATED PAPERS ON 22.01.2010. HO WEVER, IN THE REMAND REPORT, THE AO HAD TAKEN A COMPARISON WITH THE GROSS RECEIP TS FOR THE EARLIER ASSESSMENT YEAR. IT WAS A SUBMISSION BY THE LD. A.R. THAT THE AO WAS OF THE VIEW THAT THE GROSS RECEIPTS SHOWN DURING THE RELEVANT ASSESSMENT YEAR WAS LOWER THAN THE EARLIER ASSESSMENT YEAR AS ALSO THE PROFITS. IT WAS A SUBMI SSION THAT THE REASON FOR THE LOWER GROSS RECEIPTS AND PROFITS WAS ON ACCOUNT OF THE FACT THAT NUMBER OF NEW CLINICS HAD COME UP AT ASANSOL, WHICH IS VERY COMPE TITIVE AND THE ASSESSEE HAD TO 4 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 PURCHASE NEW MACHINERIES ALSO ON LOAN ON ACCOUNT OF WHICH THE INTEREST BURDEN ON THE ASSESSEE ALSO WENT UP AS ALSO THE DEPRECIATION, THUS, RESULTING IN THE LESSER MARGIN. IT WAS ALSO A SUBMISSION THAT NO DEFECTS IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE HAD BEEN POINTED OUT. IT WAS A FURTHER SUBMISSION THAT THE REGISTERS, WHICH WERE CALLED FOR, HAVE ALSO BEE N EXAMINED BY THE AO AND NO DEFECTS IN THEM HAVE ALSO BEEN POINTED OUT. IT WAS A SUBMISSION THAT IN THE ABSENCE OF DEFECTS BEING POINTED OUT AS ALSO IN THE ABSENCE OF THE REJECTION OF THE ASSESSEES BOOKS OF ACCOUNTS, THE GROSS RECEIPTS NOR INCOME OF THE ASSESSEE COULD BE ESTIMATED. FOR THIS PROPOSITION, HE RELIED UPON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. USHA TRIPA THI REPORTED IN 249 ITR 4 (ALL) AS ALSO THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF SARGAM CINEMA REPORTED IN 328 ITR 513. IT WAS A SUBMISSION THAT THE ADDITION AS MADE BY THE AO AND AS CONFIRMED BY THE LD. CIT(A) WAS LIABL E TO BE DELETED. 5. IN REPLY, THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDERS OF THE LD. CIT(A) AND THE AO. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS NOT REJECTED THE ASSESS EES BOOKS OF ACCOUNTS. HOWEVER, THE AO HAS ESTIMATED THE GROSS RECEIPTS OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAD NOT PRODUCED THE REGISTERS AS CALL ED FOR. IN THE REMAND PROCEEDINGS, THE REGISTERS ARE SEEN TO HAVE BEEN PR ODUCED. IN THE REMAND ORDER, THE AO MENTIONS THAT THERE IS A SUBSTANTIAL DECREASE IN THE INCOME WHEN COMPARED TO THE EARLIER YEARS. A PERUSAL OF THE SCHEDULE TO THE BALANCE-SHEET IN RESPECT OF FIXED ASSETS FOR THE YEAR ENDED 31 ST MARCH, 2005 SHOWS THAT THERE HAS BEEN AN ADDITION ON ACCOUNT OF THE CT SCAN MACHINE WHICH HAS RESULTE D IN A HIGHER DEPRECIATION. FURTHER, A PERUSAL OF THE P&L ACCOUNT OF THE ASSESS EE FOR THE YEAR ENDED 31.03.2005 SHOWS THAT THE COST OF PURCHASE OF THE F ILM, CASSETTES AND CHEMICALS HAVE NEARLY DOUBLED FROM THE YEAR ENDED 31.03.2004 . DEPRECIATION HAS GONE UP BY NEARLY 13 LAKHS AND INTEREST ON THE LOAN AGAINST MACHINERY HAS GONE UP 5 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 BY NEARLY 9 LAKHS WHEREAS THE GROSS RECEIPTS HAVE C OME DOWN. ADMITTEDLY, THE REGISTERS OF THE ASSESSEE HAVE BEEN VERIFIED AND NO DEFECTS IN THE GROSS RECEIPTS HAS BEEN POINTED OUT. ONCE THE GROSS RECEIPTS ARE ACCEP TED BY ACCEPTING THE VERACITY OF THE REGISTERS PRODUCED, THEN THE CLAIM OF THE ASSES SEE THAT THE INCOME OF THE ASSESSEE HAS REDUCED DUE TO THE INCREASE IN THE EXP ENDITURE ON ACCOUNT OF DEPRECIATION AND INTEREST AS ALSO OTHER EXPENDITURE IS EVIDENT FROM THE P&L ACCOUNT FILED. THIS BEING SO, AS WE HAVE ALREADY NO TICED THAT IN THE REMAND PROCEEDINGS, THE ASSESSEE HAS PRODUCED THE REGISTER S AS CALLED FOR BY THE AO AND NO DEFECTS IN SUCH REGISTERS, WHICH HAVE BEEN PRODU CED, HAVE BEEN POINTED OUT BY THE AO, WE ARE OF THE VIEW THAT IN VIEW OF THE DECI SION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. USHA TRIPATHI, REFE RRED TO SUPRA , AS ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SARGAM CINEMA, REFERRED TO SUPRA, NO ADDITION ON THIS ACCOUNT CAN BE MADE IN THE HAND S OF THE ASSESSEE. IN THE CIRCUMSTANCES, THE ADDITION OF RS.26,70,000/- MADE BY THE AO AND AS CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF THE ESTIMATED INCRE ASE IN THE GROSS RECEIPTS OF THE ASSESSEE STANDS DELETED. CONSEQUENTLY, GROUND NOS.1 AND 2 OF THE ASSESSEES APPEAL STAND ALLOWED. 7. IN REGARD TO GROUND NOS. 3 AND 4 OF THE ASSESSEE S APPEAL, IT WAS SUBMITTED BY THE LD. A.R. THAT THE AO HAD, IN THE COURSE OF A SSESSMENT PROCEEDINGS, TREATED THE INVESTMENT OF THE ASSESSEE IN FIXED DEPOSITS WI TH S.B.I., RANGAPARA BRANCH TO THE EXTENT OF RS.4,40,000/- AS UNEXPLAINED. IT WAS A SUBMISSION THAT THE ASSESSEE HAD FILED THE DETAILS OF THE FIXED DEPOSITS WHICH W ERE SHOWN AT PAGE 116 OF THE PAPER BOOK. IT WAS A SUBMISSION THAT THE AO, ON THE GROUND THAT THE LEDGER ACCOUNT SHOWED THE DATE AS 01.04.2004, TREATED THE TOTAL OF RS.4,40,000/- AS THE INVESTMENT IN THE FIXED DEPOSITS ON 01.04.2004. IT WAS A SUBMI SSION THAT THE ASSESSEE HAD MADE THE INVESTMENTS IN THE FIXED DEPOSITS IN OCTOB ER AND NOVEMBER OF 2004. IT WAS A SUBMISSION THAT THE AO HAD NOT ACCEPTED THE C ONTENTION OF THE ASSESSEE. IT WAS A FURTHER SUBMISSION THAT IN THE COURSE OF APPE LLATE PROCEEDINGS, THE ASSESSEE HAD PRODUCED A CERTIFICATE FROM STATE BANK OF INDIA DATED 14.03.2008 WHEREIN THE 6 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 STATE BANK OF INDIA HAD CERTIFIED THE DATES OF THE FIXED DEPOSITS AS 12.10.2004, 18.10.2004 AND 24.11.2004. IT WAS A SUBMISSION THAT THESE WERE DEPOSITS MADE BY REDEPOSITING THE MATURED AMOUNT OF FIXED DEPOSITS T O AN EXTENT OF RS.4,28,700/- FROM S.B.I., JAMURIA, WHICH WAS RECEIVED ON 25.09.2 004. IT WAS A SUBMISSION THAT THE ADDITION AS MADE BY THE AO AND AS CONFIRMED BY THE CIT(A) WAS LIABLE TO BE REVERSED. 8. IN REPLY, THE LD. D.R. SUBMITTED THAT THE LETTER DATED 14.03.2008 WAS NOT BEFORE THE AO. IT WAS A SUBMISSION THAT HE HAD NO O BJECTION IF THIS ISSUE WAS RESTORED TO THE FILE OF THE AO FOR VERIFICATION OF THE LETTER DATED 14.03.2008. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER SHOWS THAT THE SAME WAS PASSED ON 28.12.2007. THE LETTER FROM S.B.I. IS DATED 14.03.2008. ADMITTEDLY, THIS LETTER DATED 14. 03.2008 WAS BEFORE THE LD. CIT(A). HOWEVER, THERE IS NO DISCUSSION IN THE ORDE R OF THE LD. CIT(A) OF THE SAID LETTER. IN THE CIRCUMSTANCES, THIS ISSUE IS RESTORE D TO THE FILE OF THE AO TO VERIFY THE VERACITY OF THE LETTER DATED 14.03.2008 ISSUED BY S TATE BANK OF INDIA. IF THE SAID LETTER IS FOUND TO BE CORRECT, THEN, NO ADDITION ON THIS ACCOUNT WOULD REMAIN. IN THE CIRCUMSTANCES, GROUND NOS.3 AND 4 OF THE ASSESSEES APPEAL STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. WITH REGARD TO GROUND NO.5, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRM ING AND ADDITION OF RS.80,000/- BEING INVESTED IN KVPS MADE OUT OF WITHDRAWAL OF CA SH FROM THE CASH BOOK. THE LD. A.R. DREW OUR ATTENTION TO THE ASSESSMENT ORDER WHEREIN THE AO HAS MENTIONED THAT THE ASSESSEE HAD STATED THAT THE KVPS OF RS.80 ,000/- WAS MADE ON 14.06.2004 OUT OF CASH. IT WAS SUBMISSION THAT THE AO HAD HELD THAT THERE WAS CONTRADICTORY STATEMENT BY THE A.R. OF THE ASSESSEE AND CONSEQUEN TLY HAD MADE THE ADDITION OF RS.80,000/-. THE LD. A.R. DREW OUR ATTENTION TO PAG E 107 OF THE PAPER BOOK, WHICH IS A LEDGER ACCOUNT IN RESPECT OF PURCHASE OF KVP O F RS.80,000/- ON 14.06.2004. 7 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 HE ALSO DREW OUR ATTENTION TO PAGE 40 OF THE PAPER BOOK, WHICH IS A COPY OF THE LETTER OF THE A.R. OF THE ASSESSEE DATED 09.10.2007 WHEREIN THIS INVESTMENT HAS BEEN EXPLAINED ALONG WITH THE DETAILS OF THE CASH B OOK FOLIO. IT WAS A SUBMISSION THAT NO DISCREPANCY IN THE CASH BOOK HAD ALSO BEEN POINTED OUT. IT WAS A SUBMISSION THAT AS THE PURCHASE HAD BEEN MADE OUT O F THE CASH AS RECORDED IN THE CASH BOOK, THE SAME COULD NOT BE TREATED AS UNEXPLA INED INVESTMENT OF THE ASSESSEE. 11. IN REPLY, THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE LETTER OF THE A.R. AS ALSO THE LEDGER FOLIO AS ALSO THE CASH BOOK HAS BEEN EXPLAINED BY THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE HAD ADEQUA TE CASH TO MAKE THE INVESTMENT OF RS.80,000/- FOR THE PURCHASE OF THE KVPS AND THE SAME IS OUT OF THE ACCOUNTED INCOME OF THE ASSESSEE. CONSEQUENTLY, THE SAME CANN OT BE TREATED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. IN THE CIRCUMSTANCES, T HE ADDITION MADE BY THE AO AND AS CONFIRMED BY THE LD. CIT(A) STANDS DELETED. IN T HE RESULT, GROUND NO.5 OF THE ASSESSEES APPEAL STANDS ALLOWED. 13. IN REGARD TO GROUND NO.6 OF THE ASSESSEES APPE AL, IT WAS THE SUBMISSION BY THE LD. A.R. THAT THE ISSUE WAS AGAINST THE ACTION OF THE AO IN INVOKING THE PROVISIONS OF SECTION 64(1) OF THE ACT TO CLUB THE INCOME OF THE ASSESSEES WIFE, SMT. RATNA BISWAS, IN THE HANDS OF THE ASSESSEE. IT WAS A SUBMISSION THAT FROM THE ASSESSMENT YEAR 1992-93 ONWARDS, SMT. RATNA BISWAS HAD BEEN FILING HER RETURNS OF INCOME. THE LD. A.R. DREW OUR ATTENTION TO THE R ETURNS AS ALSO THE INTIMATION UNDER SECTION 143(1) AT PAGES 146 TO 166 OF THE PAP ER BOOK. IT WAS A SUBMISSION THAT THE AO HAD ALSO NOT EXPLAINED AS TO WHY HE WAS INVOKING THE PROVISIONS OF SECTION 64 TO CLUB THE INCOME OF THE ASSESSEES WIF E IN THE HANDS OF THE ASSESSEE. IT WAS A SUBMISSION THAT IN THE ABSENCE OF SPECIFIC FI NDING FOR THE PURPOSE OF INVOKING PROVISIONS OF SECTION 64 OF THE ACT, THE I NCOME OF THE ASSESSEES WIFE 8 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 CANNOT BE CLUBBED IN THE HANDS OF THE ASSESSEE ALL ON A SUDDEN FOR THE ASSESSMENT YEAR 2005-06 WHEN FOR THE EARLIER AND SUBSEQUENT AS SESSMENT YEARS, SMT. RATNA BISWAS WAS SEPARATELY ASSESSED. IT WAS A FURTHER SU BMISSION THAT IN THE ASSESSMENT ORDER, THOUGH THE AO HAS GIVEN A FINDING THAT SMT. RATNA BISWAS WAS REGULARLY ASSESSED BY THE ITO, WARD-1(2), ASANSOL, NECESSARY APPROVAL FROM THE CHIEF COMMISSIONER, DURGAPUR HAD BEEN TAKEN BY THE AO. WH AT WAS THE NECESSARY APPROVAL AND ON WHAT BASIS WAS THE APPROVAL SOUGHT, WAS ALSO NOT PUT TO THE ASSESSEE. IT WAS A SUBMISSION THAT THE INCOME OF SM T. RATNA BISWAS CONSISTED OF RENTAL AND INTEREST INCOME WHICH, UNDER NO CIRCUMST ANCES, COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE BY INVOKING THE PROVIS IONS OF SECTION 64 OF THE ACT. IT WAS A SUBMISSION THAT THE ACTION OF THE AO IN INVOK ING THE PROVISIONS OF SECTION 64 AND ASSESSING THE INCOME OF SMT. RATNA BISWAS IN THE HANDS OF THE ASSESSEE WAS LIABLE TO BE DELETED. 14. IN REPLY, THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDERS OF THE AO AND THE LD. CIT(A). 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE M AIN CONDITIONS FOR INVOKING THE PROVISIONS OF SECTION 64 OF THE ACT IS TO SHOW HOW THE SOURCE OF HER INCOME AROSE FROM ANY INVESTMENT MADE OUT OF SOURCE WHICH BELONGED TO OR WAS SOURCED FROM THE ASSESSEE. A PERUSAL OF THE ASSESSM ENT ORDER SHOWS THAT THE AO HAS GIVEN A FINDING THAT SMT. RATNA BIWAS DID NOT I NVEST ANY AMOUNTS IN THE PROPERTY. HOWEVER, ON PERUSAL OF THE BALANCE-SHEET OF SMT. RATNA BISWAS RIGHT FROM THE ASSESSMENT YEAR 1992-93 SHOWS THAT SHE WAS HOLDING HALF SHARE IN THE LAND AT WEST APCARGARDEN, ASANSOL. SHE WAS ALSO HAV ING INCOME FROM HOUSE PROPERTY RIGHT FROM THE ASSESSMENT YEAR 1992-93. TH IS HAS ALSO BEEN ACCEPTED. RETURNS FILED BY SMT. RATNA BISWAS HAVE ALSO BEEN A CCEPTED BY ISSUANCE OF INTIMATION UNDER SECTION 143(1)(A) OF THE ACT. SMT. RATNA BISWAS HAS ALSO BEEN PAYING SUBSTANTIAL INCOME-TAX, WHICH HAS ALSO BEEN ACCEPTED. THE AO, IN THE ASSESSMENT ORDER, MENTIONS THAT SHE HAS NOT INVESTE D ANY AMOUNT IN THE HOUSE 9 I.T.A. NOS.235 & 236/ KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 PROPERTY AND HAS NO RIGHT TO RECEIVE THE RENTAL INC OME. HOW THE AO COMES TO SUCH A CONCLUSION, IS NOT COMING OUT OF THE ASSESSMENT O RDER. EVEN IN THE REMAND REPORT FILED BY THE AO, IT IS NOTICED THAT THE ISSUES AS D ISCUSSED THEREIN ARE SUBSTANTIALLY COPIES FROM THE ASSESSMENT ORDERS. IN ANY CASE, THE CLUBBING OF ASSESSEES INCOME WITH AN OTHER ASSESSEE CANNOT BE MADE ON MERE CONJE CTURES AND SURMISES. THERE MUST BE SOME CONCRETE EVIDENCE ON THE BASIS OF WHIC H, IT CAN BE HELD THAT ONE ASSESSEES INCOME IS, IN FACT, LIABLE TO BE CLUBBED IN THE HANDS OF THE RELATED ASSESSEE AS PROVIDED UNDER SECTION 64 ONLY WHEN THE SOURCE OF SUCH AN INCOME CAN BE LINKED TO THE OTHER ASSESSEE. HERE, SUCH LINK HA S NOT BEEN SHOWN AND AS SMT. RATNA BISWAS HAS BEEN FILING HER RETURNS AND HAS AL SO BEEN ASSESSED AS A SEPARATE ASSESSEE BEFORE 2005-06 AS ALSO AFTER 2005-06, WE A RE OF THE VIEW THAT THE CLUBBING OF INCOME OF SMT. RATNA BISWAS IN THE HANDS OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 64 OF THE ACT IS NOT CALLED F OR. IN THE CIRCUMSTANCES, THE AO IS DIRECTED TO DELETE THE ADDITION REPRESENTING THE INCOME OF SMT. RATNA BISWAS FROM THE TOTAL INCOME OF THE ASSESSEE AS ASSESSED. IN THE CIRCUMSTANCES, THE GROUND NO.6 OF THE ASSESSEES APPEAL STANDS ALLOWED. 16. IN REGARD TO GROUND NO.7, IT WAS SUBMITTED BY T HE LD. AR THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(A) IN ENHANCING T HE ASSESSMENT BY AN AMOUNT OF RS.4 LAKHS BEING THE CASH GIFT BY THE ASSESSEES WI FE SMT. RATNA BISWAS. IT WAS A SUBMISSION BY THE LD. AR THAT SMT. RATNA BISWAS HAD CASH IN HAND OF RS.4,13,000/- FOR THE YEAR ENDED 31.03.2004. THE LD . A.R. DREW OUR ATTENTION TO PAGE 156C OF THE PAPER BOOK WHICH WAS STATEMENT OF AFFAIRS OF SMT. RATNA BISWAS AS ON 31.03.2004. THE LD. A.R. ALSO DREW OUR ATTENT ION TO PAGE 157 OF THE PAPER BOOK, WHICH WAS A COPY OF THE GIFT DEED BY WHICH SM T. RATNA BISWAS HAD GIFTED THE AMOUNT OF RS.4 LAKHS TO THE ASSESSEE. THE LD. A .R. FURTHER DREW OUR ATTENTION TO PAGE 158 OF THE PAPER BOOK, WHICH WAS A COPY OF THE CASH FLOW STATEMENT FOR THE ASSESSMENT YEAR 2005-06 OF SMT. RATNA BISWAS WHEREI N THE GIFT TO THE ASSESSEE HAD BEEN SPECIFICALLY MENTIONED. IT WAS A SUBMISSION TH AT LD. CIT(A) HAD MADE THE 10 I.T.A. NOS.235 & 236 /KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 ADDITION BY HOLDING THAT AS UNEXPLAINED. IT WAS A S UBMISSION THAT THE SOURCE OF THE GIFT IN THE HANDS OF THE ASSESSEES WIFE WAS CLEARL Y BORNE OUT BY THE BALANCE-SHEET OF THE ASSESSEES WIFE, SMT. RATNA BISWASS STATEME NT OF AFFAIRS AS ALSO THE CASH FLOW STATEMENT. IT WAS A SUBMISSION THAT THE SOURCE OF THE GIFT AS ALSO THE IDENTITY OF THE DONOR HAVING BEEN SHOWN, NO ADDITION WAS LIA BLE TO BE MADE IN THE HANDS OF THE ASSESSEE. 17. IN REPLY, THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). IT WAS A SUBMISSION BY THE LD. DR THAT NO EVIDENCE OF HOLDING OF CASH OF RS.4 LAKHS WAS PRODUCED BY THE ASSESSEE. 18. WE HAVE CONSIDERED RIVAL SUBMISSIONS. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT THE LD. CIT(A) HAS DISCUSSED HIS POWERS TO GO INTO THE ISSUE AND INVESTIGATE THE MATTER OF THE CASH GIFT. HOWEVER, A PERUSAL OF THE ORDER OF THE LD. CIT(A) DOES NOT GIVE THE SPECIFIC REASON AS TO WHY HE TREATS THE GIFT GIVEN BY THE ASSESSEES WIFE TO THE ASSESSEE AS UNEXPLAINED. THE LD. CIT(A) IS NOT QUESTIONING THE SOURCE OF INCOME OR THE CAPACITY OF SMT. RATNA BISWAS TO GIVE THE GIFT. ONCE THE SOURCE OF THE GIFT IS EXPLAINED AND THE CAPACIT Y OF THE PERSON GIVING THE GIFT IS NOT DISPUTED AND THE GIFTS ARE ALSO RECORDED IN THE BOOKS OF BOTH THE DONOR AND THE DONEE, SUCH GIFTS CANNOT BE TREATED AS THE UNEXPLAI NED INVESTMENT OR AN UNEXPLAINED INCOME OF THE ASSESSEE. IN THE CIRCUMST ANCES, WE ARE OF THE VIEW THAT THE ADDITION AS MADE BY THE LD. CIT(A) OF THE GIFT RECEIVED BY THE ASSESSEE FROM HIS WIFE SMT. RATNA BISWAS STANDS DELETED. IN THE CIRCU MSTANCES, THE GROUND NO.7 OF THE ASSESSEES APPEAL STANDS ALLOWED. 19. GROUND NO.8 OF THE ASSESSEES APPEAL IS GENERAL IN NATURE AND IS DISMISSED. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.236/KOL/2009 - SMT. RATNA BISWAS (ASSESSEE) 21. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS: 11 I.T.A. NOS.235 & 236 /KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 1. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WHO COMPLETED THE ASSESSMENT IN THE HANDS OF THE APPELLANT ON PROTECTIVE BASIS WHERE AS THE APPELLANT IS REGULARLY ASSESSED TO INCOME TAX SINCE THE A.Y. 19 89-90 AND HER RETURN OF INCOME & SOURCE OF INCOME HAVE ALL ALONG BEEN ACCE PTED BY THE DEPARTMENT. 2. THAT ON THE FACT AND CIRCUMSTANCES OF THE CAS E THE LD. CIT (A) ERRED IN MAKING THE PROTECTIVE ENHANCEMENT OF INCOME IN THE HANDS OF APPELLANT AMOUNTING TO RS.4,00,000/- BEING CASH GIFT MADE BY THE APPELLANT TO HER HUSBAND WHERE AS THE SOURCE OF SUCH CASH GIFT WAS DULY EXPLAINED IN COURSE OF ASSESSMENT PROCEEDING BEFORE THE ASSESSING OFFI CER AND ALSO BEFORE THE CIT (APPEALS) AND WHERE AS THE STATUTE DOES NOT CO NFER ANY POWER TO THE APPELLATE AUTHORITY TO MAKE A PROTECTIVE ENHANCEME NT. 3. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN MAKING PROTECTIVE ENHANCEMENT RS.400,000/- IN HAND S OF APPELLANT BEING THE CASH GIFT MADE TO DR. T.K. BISWAS WHERE AS THE SAME WAS DULY ACCEPTED BY THE A.O. AND NO ADVERSE INFERENCE WAS DRAWN IN THE ASSESSMENT ORDER AND DID NOT FORM PART OF THE ASSESSED ORDER COMMUN ICATED TO THE APPELLANT AND WHERE AS THE SOURCE OF CASH GIFT WAS DULY EXPL AINED TO THE A.O. AND ALSO TO THE CIT (A). 4. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR SUBSTITUTE ANY GROUND OR GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE AP PEAL. 22. REGARDING GROUND NO.1, AS WE HAVE ALREADY ADJUD ICATED THE ISSUE OF CLUBBING OF ASSESSEES INCOME BEING SMT. RATNA BISW ASS INCOME IN THE HANDS OF DR. TAPAN KRISHNA BISWAS IN GROUND NO.6 OF THE APPE AL OF DR. TAPAN KRISHNA BISWAS IN ITA NO.235/KOL/2009 WHEREIN WE HAVE HELD THAT THE INVOKING OF PROVISIONS OF SECTION 64(1) OF THE ACT AND CLUBBING OF THE INCOME OF SMT. RATNA BISWAS IN THE HANDS OF DR. TAPAN KRISHNA BISWAS IS NOT PERMISSIBLE. GROUND NO.1 OF THE ASSESSEES APPEAL STANDS ALLOWED. 23. IN RESPECT OF GROUND NOS. 2 AND 3, AS WE HAVE A LREADY DELETED THE ADDITION REPRESENTING THE GIFT RECEIVED BY DR. TAPAN KRISHNA BISWAS FROM HIS WIFE SMT. RATNA BISWAS AN AMOUNT OF RS.4 LAKHS IN GROUND NO.7 IN ITA NO.235/KOL/2009 IN THE CASE OF DR. TAPAN KRISHNA BISWAS, GROUND NOS.2 AND 3 OF THE ASSESSEES APPEAL 12 I.T.A. NOS.235 & 236 /KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006 IN ITA NO.236/KOL/2009 STAND ALLOWED. IN THE RESULT , THIS APPEAL OF THE ASSESSEE IS ALLOWED. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.235/KOL/2009 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES WHEREAS THE APPEAL OF THE ASSESSEE IN ITA NO.236/KOL/2009 IS ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2012 I.E. ON THE DATE OF HEARING ITSELF IN PRESENCE OF BOTH THE PART IES. SD/- SD/- (C.D.RAO) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 TH OCTOBER, 2012 COPY OF THE ORDER FORWARDED TO: 1. DR. TAPAN KRISHNA BISWAS & SMT. RATNA BISWAS, B ISWAS X-RAY & SCAN CENTRE, WEST APCARGARDEN, G.T.ROAD (WEST), A SANSOL 713304, DIST-BURDWAN 2 ACIT, CIRCLE-2, ASANSOL / I.T.O., WARD-1(2), KOLKATA 3. THE CIT(A), 4. CIT, 5. DR, KOLKATA BENCHES, TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.) 13 I.T.A. NOS.235 & 236 /KOL/2009 DR.T.K.BISWAS & SMT.RATNA BISWAS ASSESSMENT YEAR: 200 5-2006