Sri Ramkrishna Ghosh, Medinipur V. ITO, Ward-27(1), Haldia, Haldia

ITA 267/KOL/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9340 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-08-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 13-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift
• Section: 68; 143(3); 54F; 133(6); 250; 143(2)

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA डॉ. मनीष बोरड, ल े खा सदस्य एवं श्री संजय शमा ा , न्याधयक सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh............................................Appellant [PAN: ADAPG 7699 C] Vs. ITO, Ward-27(1), Haldia........................................Respondent Appearances by: None appeared on behalf of the Assessee. Smt. Ranu Biswas, Addl. CIT (D/R), appeared on behalf of the Revenue. Date of concluding the hearing : August 3 rd , 2022 Date of pronouncing the order : October 31 st , 2022 आद े श ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2014-15 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-7, Kolkata [in I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh. Page 2 of 7 short ld. “CIT(A)”] dated 16.01.2019 which is arising out of the assessment order framed u/s 143(3) of the Act dated 29.12.2019. 2. The assessee is in appeal before this Tribunal raising the following grounds: “1a. That, the Ld. A.O. erred and the C.I.T.(A) wrongly confirmed the addition of Rs.42,10,000/- as unexplained cash credit u/s 68. of the Act in respect of unsecured loan taken by the appellant alleging the appellant’s failure to prove the identity and creditworthiness of the creditors in spite of the fact that as per evidence on record the identity of the loanees and their creditworthiness are well established. 1b. That the Ld. A.O. erred and the C.I.T.(A) wrongly upheld the treatment of unsecured loans of Rs.30,00,000/- and Rs. 12,10,000/- respectively taken from Bandana Bera Bhowmik and Arun Kumar Bhowmik as unexplained cash credit u/s 68 of the Act on suspicion and surmises only inasmuch as the said transactions were through proper banking channel, loanees are assessed to tax since past and the said loans were duly reflected in their respective balance sheets. 1c. That, the Ld. CIT(A) further erred in upholding the addition of 42,10,000/- u/s.68 without considering that the loanees had appeared in person before the A.O. and submitted their details of source of such loans out of the gifts received from their parents, bank statements showing deposits of the said gifted amounts and confirmations of loans given to the appellant, thus establishing their identities, creditworthiness and genuineness of the transactions. 1d. That, despite providing all requisite details and supporting evidences in support of the unsecured loan, the action of the Ld. revenue authorities in having treated the genuine loan of Rs.42,10,000/- as unexplained cash credit in the hands of the appellant is not sustainable in law as the burden in view of the above facts to prove that the money actually belonged to the appellant has not been discharged by bringing any evidence on record. 2a. That, the Ld. C.I.T.(A) erred in not having considered that the A.O. without conducting any spot enquiry disallowed deduction u/s.54F of the Act on the alleged ground that the appellant could not prove any construction of a residential house, whereas physical existence of the residential building establishes beyond any doubt that a residential I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh. Page 3 of 7 house has been constructed and is supported by various related documents. 2b. That, the ld. revenue authorities further erred in law in disallowing deduction of Rs.43,36,221/- u/s.54F when sale of immovable properties for Rs.45 lakhs has not been disputed and necessary details of investment for construction of a new residential house, bills/ vouchers etc. have been filed fulfilling the criteria of sec.54F of the Act. 2c. That, the ld. revenue authorities erred in not considering that the subsequent denial of any transaction by two of the parties in response to notice u/s. 133(6) was for extraneous reasons, i.e. either they have not accounted for their sales or have some mala fide intention more so when the newly constructed residential building was in existence and hence disallowance of lawful deduction u/s.54F on that ground is without any valid reason and bad in law. 2d. That, the Id. revenue authorities further erred in disallowing deduction u/s. 54F solely on the irrelevant consideration that purchases of building materials were made from far distant place when the same were locally available at Haldia itself without mentioning any legal bar for such purchase at a cheaper rate. 3. That, as the order of Ld. C.I.T.(A) on the above issues suffer from illegality and is devoid of any merit, the same should be quashed and your appellant be given such relief(s) as prayed for. 4. That, the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds.” 3. From perusal of the grounds it is found that two issues are involved in the instant appeal 1) Addition for unexplained cash credit u/s 68 of the Act at Rs. 42,10,000/- & 2) Disallowance of deduction u/s 54F of the Act at Rs. 43,36,221/- 4. When case was called for, none appeared on behalf of the assessee nor any adjournment application has been filed. In the past also on multiple occasions assessee refrain from appearing. We, therefore decide to adjudicate the appeal on merits with the assistance of ld. D/R and available records. I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh. Page 4 of 7 5. Brief facts of the case are that the assessee is an individual and NIL income declared in the e-return filed on 30.11.2014. Case selected for scrutiny followed by serving of notices u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings, ld. AO confronted the assessee to explain the unexplained loan of Rs. 42,10,000/- which was received from Arun Kumar Bhowmik – Rs. 12,10,000/- and Bandana Bera Bhowmik – Rs. 30,00,000/-. Certain details were filed but they were not sufficient to satisfy ld. AO as the alleged cash creditors has meagre source of income. Ld. AO has denied the claim u/s 54F of the Act for want of necessary evidence to prove that the assessee had incurred the expenditure for building construction. Income assessed at Rs. 81,54,470/-. 6. Aggrieved, the assessee preferred appeal before ld. CIT(A) but failed to succeed. 7. Now, the assessee is in appeal before the Tribunal. 8. Ld. D/R vehemently argued supporting the order of ld. CIT(A). 9. We have considered the materials placed before us and also carefully gone through the submissions made by ld. D/R. As regards the 1 st issue, for addition for unexplained cash credit u/s 68 of the Act at Rs. 42,10,000/-, we find that the alleged loan comprises of two amount of which Rs. 12,10,000/- is received from Arun Kumar Bhowmik and Rs. 30,00,000/- from Bandana Bera Bhowmik. Identity of the cash creditors is not in dispute as both the alleged cash creditors acknowledged to have given the loan to the assessee. However, the other two limbs of Section 68 of the Act i.e. genuineness and creditworthiness of the transaction remained I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh. Page 5 of 7 in doubt. Though, considerable efforts were made by ld. AO by making enquiry on many occasions which further helped to prove the genuineness of the transaction. As far as the creditworthiness of the cash creditors is concerned, it was observed that both the cash creditors are assessed to tax but they have not filed their return consistently and on & off they don’t file the return. The same is discernible from the following chart which is available in the impugned order: Return for the Assessment year Return income [Rs.] of Arun Kumar Bhowmik (AHNPB6939K) Return Income [Rs.] of Bandana Bera Bhowmik 2007-08 No return filed No return filed 2008-09 99320/- No return filed 2009-10 135550/- 165110/- 2010-11 156380/- 178500/- 2011-12 No return filed No return filed 2012-13 136094/- No return filed 2013-14 No return filed No return filed 2014-15 No return filed 256500/- 2015-16 No return filed No return filed Total income declared till A.Y.14-15 391250/- 600110/- 10. The above details of income tax return clearly shows that the cash creditors did not have sufficient source of income to give the loan of the size of 42,10,000/- to the assessee. Ld. CIT(A) has also given finding that Mr. Arun Kumar Bhowmik deposited the cash amount of Rs. 10,10,000/- immediately before issuing the cheque of Rs. 12,10,000/- to the assessee which certainly create suspicion and before ld. AO, Mr. Arun Kumar Bhowmik could not explain the source of the said cash deposit in his bank account. Therefore, looking into the facts and circumstances of the case, we are of the considered view that the assessee failed to prove the I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh. Page 6 of 7 creditworthiness of the cash creditors advancing loan of Rs. 42,10,000/- to the assessee. We, thus, fail to find any infirmity in the finding of ld. CIT(A) and dismiss ground no. 1a, 1b, 1c & 1d of the assessee’s appeal. 11. As regards the second issue of deduction claimed u/s 54F of the Act for the expenditure incurred on construction of residential building, we find that ld. CIT(A) confirmed the action of ld. AO observing as follow: “I have considered the submission of the AR of the appellant in the backdrop of the assessment order. In the remand report submitted by the AO it is observed that even after considerable opportunities were provided by the AO the appellant could not prove the genuineness of the expenses incurred for construction of the residential building. Out of the three parties from whom the appellant purchased materials two parties namely Sumit Marble and Madan Trading Co. have denied any transaction with the appellant. The inspector deputed by the AO to make enquiry also found that the bills drawn were not genuine. It was also found that the materials purchased by the appellant such as pipes, cement, metal primer, were from far off places for which fabrication of bills cannot be ruled out. The AO further observed that such materials were available at Haldia at competitive rates due to the presence of Haldia Port, Indian Oil Corp, Exide Industries and others. As the appellant could not fully discharge his onus to prove that there was construction of a residential house and the expenses claimed to have been incurred for such purposes were not supported by proper documentary evidences I do not find any infirmity on the part of the AO in disallowing the claim of the appellant made u/s 54F of the Act. This ground stands dismissed.” 12. On perusal of the above finding of ld. CIT(A) which remained uncontroverted from the assessee’s side by placing any material on record and also under the given facts and circumstances of the case where two of the parties from whom the assessee purchased the material have denied to have made any such transaction with the assessee and the inspector deputed by ld. AO on enquiry found I.T.A. No.: 267/Kol/2019 Assessment Year: 2014-15 Sri Ramkrishna Ghosh. Page 7 of 7 that the bills drawn were not genuine, therefore, under these given facts and circumstances of the case we fail to find any merit in the grounds raised by the assessee and the same deserves to be dismissed. Thus, no interference is called for in the finding of ld. CIT(A). Hence, grounds raised by the assessee in ground nos. 2a, 2b, 2c & 2d are dismissed. 13. Other grounds are general in nature which need no adjudication. 14. In the result, the appeal filed by the assessee is dismissed. Kolkata, the 31 st October, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 31.10.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. Sri Ramkrishna Ghosh, B-2, Jibananandadasnagar, New Town, Brajanathchak, Haldia Port- 721 605, Purba Medinipur. 2. ITO, Ward-27(1), Haldia. 3. CIT(A)-7, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata