ITO, Ward - 51 (4), Kolkata, Kolkata V. Shri Deb Kumar Jana, Kolkata

ITA 263/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3131 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 05-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2012
• Court: TRIBUNAL
• Department Lawyers: AMITABHA ROY
• Keywords: Unexplained investment; Business expenditure; Peak credit
• Section: 69C; 69

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , ! ' #!' ' #!' ' #!' ' #!', ,, , ] ]] ] [BEFORE HONBLE SRI N.S.SAINI AM & HONBLE SRI M AHAVIR SINGH, JM] !% !% !% !% /ITA NO.263/KOL/2012 #& '(/ ASSESSMENT YEAR : 2008-09 (*+ / APPELLANT ) - - ( -.*+ /RESPONDENT) I.T.O., WARD-51(4) DEB KUMAR JANA KOLKATA -VERSUS- KOLKATA (PAN:AHCPJ 5974 D) *+ / 0 / FOR THE APPELLANT: SHRI AMITABHA ROY, SR.DR -.*+ / 0 / FOR THE RESPONDENT: SHRI SUBASH AGARWAL, ADVOCATE 1 2 / 3 /DATE OF HEARING : 12.06.2013 4' / 3 /DATE OF PRONOUNCEMENT : 18.06.2013. 5 / ORDER PER SHRI N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-XXXII, KOLKATA DATED 28.09.2011. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.24,44,772/- MADE BY THE AO ON ACCOUN T OF UNEXPLAINED MONEY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE AO FOUN D THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DEPOSITED CASH OF RS.2 9,26,000/ IN THE BANK ACCOUNT MAINTAINED WITH STANDARD CHARTERED BANK, HOWRAH. ON EXAMINATION OF THE BANK STATEMENT HE FOUND THAT THE ASSESSEE HAD DEPOSITED CASH TOTALING TO RS.29,26,000/- DURING THE PERIOD 01.04.2007 TO 31.03.2008. ON A SH OW CAUSE NOTICE FROM THE AO THE ASSESSEE FILED AN EXPLANATION ON 21.12.2010 WHICH R EADS FOLLOWS :- THE AMOUNT WAS WITHDRAWN FROM BANK FOR PURCHASE OF GOODS & FOR BUSINESS EXPENSES. IF THE WITHDRAWAL WAS NOT FULLY USED THE N THE SAME WAS DEPOSITED AGAIN WITH THE BANK. IT A NO.263/KOL/2012 ITO. WARD-51(4),KOL VS DEB KUMAR JANA A.YR.2008-09 2 THE AO REJECTED THE EXPLANATION OF THE ASSESSEE HOL DING THAT THE WITHDRAWAL FROM THE BANK ACCOUNT DID NOT TALLY WITH THE DEPOSIT AND PUR CHASES MADE BY THE ASSESSEE AND MADE ADDITION OF THE ENTIRE DEPOSIT OF RS.29,26,000 /- TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 3.1. THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A ) AND REITERATED THE SUBMISSIONS MADE BEFORE THE AO. IN THE ALTERNATIVE IT WAS ALSO SUBMITTED THAT THE ADDITION OF ENTIRE CASH DEPOSITS BY THE AO WAS AGAINST THE PRINCIPLES LAID BY THE COURTS AND THE TRIBUNAL. IT WAS SUBMITTED THAT IF THE ENTRIES IN THE BANK AC COUNT ARE NOT PROPERLY EXPLAINED TO THE SATISFACTION OF THE REVENUE AUTHORITIES THE AO CAN, AT THE MOST, MAKE ADDITION OF THE PEAK AMOUNT ONLY. THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- I) ITO VS MD ASRAF ALI, ITA NO.169/K/2009 THE C BENCH OF ITAT KOLKATA DATED 02/07/2010 II) TANMOY CHATTERJEE VS ITO, ITA NO.1434/K/2009 THE A BENCH OF ITAT KOLKATA DATED 30/07/2010 III) ASIT BARAN UTTASANEE VS ITO, ITA NO.1327/K/2008 THE C BENCH OF ITAT KOLKATA DATED 30/04/2010 IV) UDAY SHANKAR MAHAWAR VS ITO, ITA NO.1903/K/2008 THE C BENCH OF ITAT KOLKATA DATED 16/06/2010 V) BIJAN SAHA VS ITO, ITA NO.1319/K/2010 THE A BENCH OF ITAT KOLKATA DATED 18/08/2011 3.2. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSES EE THE LD.CIT(A) OBSERVED THAT ON GOING THROUGH THE ASSESSMENT ORDER PASSED BY THE AO AND MATERIAL ON RECORD HE WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE DEPOSITS IN THE UNDISCLOSED BANK ACCOUNT. THEREFORE, THE AO WAS JUS TIFIED IN TREATING THE DEPOSITS IN THE BANK ACCOUNT AS UNEXPLAINED. HOWEVER, HE ALSO O BSERVED THAT THERE WAS ENOUGH MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE EN TIRE DEPOSITS CANNOT BE ADDED BACK. HE RELIED ON THE DECISION OF THE KOLKATA BENCH OF T HE TRIBUNAL IN THE CASE OF ITO VS MD.ASRAF ALI (SUPRA) WHEREIN IT WAS HELD AS UNDER : - WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. THE SAID AMOUNT AGGREGATING TO RS.26,57,618/- DEPOSITED IN THE STAN DARD CHARTERED BANK, SALT LAKE BRANCH, KOLKATA WAS ADMITTEDLY NOT DISCLOSED IN THE BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO ADMITTEDLY FAILED TO DISCLOSE THE SOURCE OF TH E DEPOSITS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) IS NOT JUST IFIED IN TREATING THE ENTIRE DEPOSITS IN THE SAID BANK ACCOUNT AS TRADING RECEIPTS IN ABSENC E OF ANY CORROBORATIVE MATERIALS IT A NO.263/KOL/2012 ITO. WARD-51(4),KOL VS DEB KUMAR JANA A.YR.2008-09 3 FURNISHED BY THE ASSESSEE. IN SUCH VIEW OF THE MATT ER, WE FIND SUBSTANCE IN THE CONTENTION OF THE LEARNED DR THAT NET PROFIT OF 5% OF THE SAID CASH DEPOSITS AND CHEQUES DEPOSITS COULD NOT BE CONSIDERED FOR ESTIMATING THE UNDISCLOSED INCOME OF THE ASSESSEE. HOWEVER, WE FIND THAT THE FACTS UNDISPUTED ARE THAT THERE WERE DEPOSITS AS WELL AS WITHDRAWALS FROM TIME TO TIME FROM THE SAID BANK AC COUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE PEAK OF THE AMOUNT DEPOSIT ED IN THE SAID UNDISCLOSED BANK ACCOUNT IN THE FINANCIAL YEAR RELEVANT TO THE ASSES SMENT YEAR UNDER CONSIDERATION SHOULD BE CONSIDERED AS UNDISCLOSED INCOME OF THE A SSESSEE. ACCORDINGLY, WE MODIFY THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO ASSESS THE UNDISCLOSED INCOME OF THE ASSESSEE BY CONSIDERING T HE PEAK AMOUNT OF DEPOSIT IN THE SAID UNDISCLOSED BANK ACCOUNT. WE ORDER ACCORDINGLY . 3.3. THE LD.CIT(A) FURTHER OBSERVED THAT IN THE CAS E OF TANMOY CHATTERJEE VS ITO(SUPRA) THERE WERE HUGE AMOUNTS DEPOSITED AND/OR WITHDRAWN FROM THE BANK ACCOUNT. THE AO CONSIDERING THE TOTAL WITHDRAWALS F ORM THE BANK ACCOUNT AS EXPENDITURE AND TREATED THE SAME AS UNEXPLAINED EXP ENDITURE U/S 69C OF THE ACT. THE TRIBUNAL OBSERVED THAT THE BANK ACCOUNT WAS UNDISCL OSED AND THE ENTRIES IN THE SAID BANK ACCOUNT WERE NOT ENTERED IN THE BOOKS OF ACCOU NTS OF THE ASSESSEE AND THE TRIBUNAL ALSO CONSIDERED THE FACT THAT ASSESSEE HAS MADE CASH DEPOSITS AS WELL AS CASH WITHDRAWALS FROM TIME TO TIME FROM THE BANK ACCOUNT . THE ASSESSE HAD ALSO NOT BEEN ABLE TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT. THE TRIBUNAL THEREAFTER WAS OF THE VIEW THAT ONLY THE PEAK OF THE BALANCE IN TH E BANK ACCOUNT SHOULD BE CONSIDERED AS UNEXPLAINED INVESTMENT U/S 69 OF THE IT ACT. THE REFORE THE LD. CIT(A) FOLLOWING THE ABOVE ORDERS OF THE TRIBUNAL DIRECTED THE AO TO RESTRICT THE ADDITION TO THE PEAK BALANCE OF RS.4,81,228/- AND DELETE THE BALANCE ADD ITION OF RS.24,44,772/-. 3.4. BEING AGGRIEVED BY THE SAID ORDER OF THE LD. C IT(A) THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DR FOR THE REVENUE SIMPLY RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESEE HAS DEPOSITED RS.29,26,000/- IN STANDARD CHARTERED BANK , HOWRAH BRANCH DURING THE YEAR UNDER CONSIDERATION WHICH WAS AN UNDISCLOSED BANK A CCOUNT OF THE ASSESSEE. THE AO THEREFORE MADE ADDITION OF THE ENTIRE DEPOSITS OF R S.29,26,000/- TO THE INCOME OF THE ASSESSEE U/S 69 OF THE ACT. ON APPEAL THE LD. CIT(A ) FOLLOWING THE ORDERS OF THE IT A NO.263/KOL/2012 ITO. WARD-51(4),KOL VS DEB KUMAR JANA A.YR.2008-09 4 KOLKATA BENCH OF THE TRIBUNAL HELD THAT THE ENTIRE DEPOSITS IN THE BANK ACCOUNT CANNOT BE TREATED AS UNEXPLAINED INVESTMENT OF THE ASSESSE E. HE HELD THAT THE ONLY PEAK BALANCE CAN BE TREATED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. ACCORDINGLY HE DIRECTED THE AO TO RESTRICT THE ADDITION TO THE PEA K BALANCE OF RS.4,81,228/- AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS.24,44, 772/-. THE LD.DR BEFORE US HAS RELIED ON THE ORDER OF THE AO. HE COULD NOT POINT O UT ANY SPECIFIC ERROR IN THE ORDER OF THE LD. CIT(A). HE ALSO COULD NOT BRING ANY MATERIA L TO SHOW THAT THE PEAK BALANCE DETERMINED BY THE LD. CIT(A) OF RS.4,81,228/- WAS N OT CORRECT. IN ABSENCE OF ANY SUCH MATERIAL BEING BROUGHT ON RECORD WE FIND NO GOOD AN D JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHICH IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.06.2013. SD/- SD/- [ .' #!' , ] [ .., ,, , ] [MAHAVIR SINGH ] [N.S.SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (3 3 3 3) )) ) DATE: 18.06.2013. R.G.(.P.S.) 5 / -##6 76'8- COPY OF THE ORDER FORWARDED TO: 1. DEB KUMAR JANA, 42, NETAJI COLONY (HIGH LAND), TOBI N ROAD, BARANAGAR, KOLKATA-700101 2 I.T.O., WARD-51(4), KOLKATA 3 . CIT KOLKATA 4. CIT (A)-XXXII, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. .6 -#/ TRUE COPY, 51/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES IT A NO.263/KOL/2012 ITO. WARD-51(4),KOL VS DEB KUMAR JANA A.YR.2008-09 5