Income Tax Officer Ward-32(4), Kolkata, Kolkata V. Aly Rajan, Kolkata

ITA 2449/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1565 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOWDHURY ADD L CIT LD
• Keywords: Income from undisclosed sources
• Section: 144

Judgement Text

1 ITA NO2449/KOL/13 ALY RAJAN IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 2449/KOL/2013 A.Y: 2009-10 I.T.O., WARD 32(4), VS. ALY RAJAN KOLKATA P AN:AIMPR 3545F [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI ROBIN CHOWDHURY, ADD L.CIT, LD.SR.DR FOR THE RESPONDENT : NONE APPEARED DATE OF HEARING : 25-07-2017 DATE OF PRONOUNCEMENT : 30-08-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DT . 06-08-2013 PASSED BY THE CIT-A, XIX, KOLKATA FOR THE ASSESSMEN T YEAR 2009-10. 2. NONE APPEARED FOR RESPONDENT ASSESSEE NOR FILED ANY APPLICATION SEEKING ADJOURNMENT. THEREFORE, WE PROC EED TO HEAR LD.DR AND DISPOSE OF THE APPEAL ON MERITS AFTER HEA RING THE LD.DR AND PERUSING MATERIAL AVAILABLE ON RECORD. 3. THE ONLY ISSUE TO BE DECIDED AS TO WHETHER THE CIT-A IS JUSTIFIED IN DELETING THE ADDITION OF RS.1,05,61,355/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LD.DR SUBMITS THAT THE ASSESSEE DID NOT PROD UCE ANY EVIDENCE SHOWING SOURCE OF CASH DEPOSITS MADE IN STANDARD CH ARTERED BANK AND DEVELOPMENT CREDIT BANK LIMITED OF RS.84,49,740/- A ND RS.21,11,615/- RESPECTIVELY TOTALING TO RS.1,05,61,355/-. FOR NON EXPLANATION AS REQUIRED BY THE AO, THE AO COMPLETED THE ASSESSMEN T EX PARTE U/S 144 OF THE ACT BY MAKING THE ADDITION OF RS.1,05,61 ,355/- BEING INCOME FROM UNDISCLOSED SOURCES. 2 ITA NO2449/KOL/13 ALY RAJAN 5. THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT- A, WHO DELETED THE SAID ADDITION. 6. HEARD LD. DR AND PERUSED THE MATERIAL ON RECORD . WE FIND THAT THE CIT-A HELD THAT THE ASSESSEE IS A PARTNER IN M/ S. CHOLE CONSULTANT AND INVOLVED IN SETTLING DISPUTES IN OVERDUE LOAN A CCOUNTS BY WAY OF NEGOTIATION WITH BANK ON BEHALF OF DEFAULTING CLIEN TS AND DEPOSITS MADE IN ASSESSEES SAVING BANK ACCOUNT BELONGED TO HIS C LIENTS MONEY, DEPOSITED FOR SETTLING LOAN ACCOUNTS. WE FIND THAT THE CIT-A HAS DISCUSSED THE ISSUE THOROUGHLY BY ACCEPTING THE SUB MISSIONS OF ASSESSEE AND CONSIDERING THE REMAND REPORT OF THE AO. THE FACTS REMAIN ADMITTED THAT THE ASSESSEE DID NOT PRODUCE A NYTHING/ANY EVIDENCE SHOWING THE SOURCE OF SAID CASH DEPOSITS AS FOUND IN ASSESSEES SAVING BANK ACCOUNTS BY THE AO. IT IS NO TICED THAT THE ASSESSEE BEFORE THE CIT-A CONTENDED THAT HE WAS MED ICALLY INCAPACITATED TO MAKE ANY MEANINGFUL REPRESENTATION BEFORE THE AO. THEREBY CONSIDERING THE SUBMISSIONS OF ASSESSEE THE CIT-A SOUGHT REMAND REPORT AND CONSIDERING THE SAME ALONG WITH S UBMISSIONS AND DOCUMENTARY EVIDENCES AS FILED BY THE ASSESSEE BEFO RE HIM DELETED THE IMPUGNED ADDITION BY OBSERVING AS UNDER:- 4.3 FROM THE ABOVE OBSERVATION OF THE AO, IT CAN B E GLEANED FROM IT THAT THE CONCLUSION HE ARRIVED AT WAS DUE TO UNAVAILABILITY OF ANY EXPL ANATION FROM THE APPELLANT TO ENABLE HIM TO ARRIVE AT A JUDICIOUS DECISION. THE APPELLAN T'S APPEAL IS CONSIDERED AT THIS STAGE WITH ALL THE EXPLANATIONS AND MATERIALS PRODUCED BE FORE ME TO DECIDE THE MATTER ON MERITS AND FACTS AND ALSO CONSIDERING THE REMAND RE PORT RECEIVED FROM THE AO. 4.4. IT MAY BE PERTINENT TO NOTE THAT THE APPELLANT , AT THE TIME OF THE ASSESSMENT PROCEEDING, WAS MEDICALLY INCAPACITATED TO MAKE ANY MEANINGFUL REPRESENTATION 'BEFORE THE AO, MORE SO SINCE AS PERSONALLY MANAGING HIS OW N AFFAIRS, IT WAS NOT POSSIBLE ON HIS PART TO ENGAGE A REPRESENTATIVE TO HANDLE HIS CASE. IT IS IN THE LIGHT OF THIS BACKGROUND THAT THE APPEAL PROCEEDING IS TAKEN UP NOW. 5. IT MAY BE NOTED THAT THE APPELLANT WAS GIVEN A FRESH INNING TO EXPLAIN HIS CASE BEFORE THE AO AND WHO HAS SENT THE REMAND REPORT RE GARDING THE OUTCOME OF THAT PROCEEDING. THIS PROCEEDING HAS NOW TAKEN A DIFFERE NT TURN, WHERE THE APPELLANT HAS SUBSTANTIATED MOST OF HIS CLAIMS. THE AO HAS ANALYS ED THE SUBMISSIONS OF THE APPELLANT WITH RESPECT TO THE CASH DEPOSITS MADE IN HIS BANK ACCOUNTS AND FOUND THEM TO BE FAIRLY EXPLAINED. THE RELEVANT EXTRACTS OF THE AO'S REPORT IS GIVEN BELOW: IT MAY BE NOTED, THAT, AS CLAIMED, RS.55,26,400 WA S RECEIVED FROM LOAN CREDITORS AGAINST SETTLEMENT OF LOANS AND PROOF OF CHEQUE PAYMENTS TO BANKS ON BEHALF OF CLIENTS OF UNDERSAID AMOUNTS WAS SUBMITTE D. PAYMENTS MADE TO DCB BY CHEQUE ON LOAN SETTLEMENT W AS RS.5,42,550/- PAYMENTS MADE TO STANDARD CHARTERED BY CHEQUE ON LO AN SETTLEMENT WAS RS.26,43,782/-. 3 ITA NO2449/KOL/13 ALY RAJAN BALANCE AMOUNT OR RS.23,40,038/- WAS PAID IN CASH. THE CASH BOOK SUBMITTED IN THE COURSE OF HEARING RE VEALED THAT IN MANY CASES THE DEPOSITS OR CASH HAS BEEN SHOWN IN CASH BOOK ON ACC OUNT OF LOAN SETTLEMENT ACCOUNT, DETAILS OF WHICH WERE FURNISHED TO A GREAT EXTENT B UT NOT EXHAUSTIVELY. IN VIEW OF THE ABOVE IT WOULD NOT BE POSSIBLE TO GIVE AN EXACT EST IMATE OF THE ASSESSEES' STATE OF AFFAIRS BUT ONLY ESTIMATION CAN BE MADE.' 5.1 FROM THE FRESH FINDINGS OF THE AO, IT IS APPARE NT THAT SUBSTANTIAL AMOUNTS OF DEPOSITS APPEARING IN THE SAVING BANK ACCOUNTS OF T HE APPELLANT BELONG TO HIS CLIENTS MONEY, DEPOSITED FOR SETTLING LOAN ACCOUNTS, AND IN NO WAY CAN BE CONSTRUED TO FORM HIS INCOME. THE ONLY AREA WHERE THE AO HAS EXPRESSED HI S DOUBT IS WITH REGARD TO THE APPELLANTS DRAWINGS. THE DISCREPANCY ARRIVED AT BY THE AO AND THE EXERCISE FOR OBTAINING AN EXPLANATION IN THIS REGARD FROM THE AS SESSEE WAS THRUST UPON ME, INSTEAD OF HIM DOING THE NEEDFUL DURING THE REMAND REPORT PROC EEDING. IN ANY CASE, THIS ASPECT BEING OUTSIDE THE SCOPE OF THIS APPEAL IS NOT BEING ATTENDED TO. 6. HAVING EXAMINED THE ISSUE AND CONSIDERING THE RE MAND REPORT OF THE AO, THE APPELLANTS SUBMISSION WITH DOCUMENTARY EVIDENCES, THE DISCUSSIONS HAD WITH THE APPELLANTS REPRESENTATIVES, I AM OF THE OPINION TH AT FACTUALLY THERE EXIST NO CASE IN TREATING THE DEPOSITS MADE IN THE APPELLANTS SAVIN G BANK ACCOUNTS AS HIS INCOME, WHICH ARE ALL PROVEN TO BE MONIES BELONGING TO HIS CLIENT S TOWARDS SETTLING DEFAULTED LOAN AMOUNTS AS DISCUSSED SUPRA. THE ADDITION MADE ON TH IS COUNT IS HEREBY DELETED. 7. IN VIEW OF ABOVE, WE FIND THAT THE CIT-A WAS JUS TIFIED IN DELETING THE SAME AS HE EXAMINED THE ISSUE THOROUGHLY CONSID ERING THE SUBMISSIONS OF ASSESSEE ALONG WITH THE REMAND REPOR T OF THE AO. WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT- A AND UPHOLD THE SAME. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 -08-2017 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 -08-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/REVENUE: INCOME TAX OFFICER, WARD 32(4), 10B, MIDDLETON ROW, 2 ND FLOOR, KOLKATA-71. 2 RESPONDENT/ASSESSEE ALY RAJAN, AKASH DEEP BUILDING , 5, LOWER RAWDON STREET, FLAT NO. 5, 5 TH FLOOR, KOLKATA-17. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA 4 ITA NO2449/KOL/13 ALY RAJAN