Sri Biswajit Saha., Kolkata V. I.T.O Wd - 49(4),kolkata., Kolkata

ITA 293/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4611 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL JCIT SRDR
• Keywords: Income from undisclosed sources; Question of law; Corroborative evidences
• Section: 40A(3); 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.293/KOL/2013 ASSESSMENT YEAR:2008-09 SRI BISWAJIT SAHA C-12, PURBACHAL CO- OPERATIVE SOCIETY, BAGUIHATI, KOLKTA-700 059 [ PAN NO.ATQPS 0847 J ] / V/S . ITO WARD-49(4), MANIKTALA CIVIC CENTER, UTTARAPAN COMPLEX, 2 ND FLOOR, KOLKATA-54 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SOUMITRA CHOUDHURY, ADVOCATE /BY RESPONDENT SHRI RAJAT KR. KUREEL, JCIT-SR-DR /DATE OF HEARING 22-06-2016 /DATE OF PRONOUNCEMENT 24-08-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 03.12.2012. ASSE SSMENT WAS FRAMED BY ITO WARD-49(4), KOLKATA U/S 143(3) OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2010 FOR A SSESSMENT YEAR 2008-09. IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN RAISED OUT OF WHIC H GROUND NO.1 AND 10 ARE OF GENERAL NATURE AND DO NOT REQUIRE SEPARATE ADJUDICA TIONS. THE OTHER GROUNDS RAISED ARE AS UNDER:- 2. FOR THAT THE CLOSING BALANCE WITH BANK OF INDIA RS.102,699/- HAS BEEN FULLY EXPLAINED IN WRITTEN SUBMISSION, AS IT CONSIST OF O PENING BALANCE RS.90,127/- ITA NO.293/KOL/2013 A.Y. 20 08-09 SH BISWAJIT SAHA VS. ITO WD-49(4), KOL. PAGE 2 AND DEPOSIT IN CASH RS.20,000/- OUT OF WITHDRAWAL F ROM DISCLOSED BANK ACCOUNT WITH UBI, AS SUCH THE LD. CIT(A) WAS WRONG IN UPHOL DING HE SAID ADDITION. 3. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) HAS FAILED TO CONSIDER THE WRITTEN SUBMISSION EXPLAINING DEPOSITS WITH AXIS BA NK TALLIED WITH UBI ACCOUNT AND OPENING BALANCE REQUIRED CONSIDERATION RS.253,287/- AS SUCH THE FINDING IN APPELLATE ORDER CONFIRMING THE ADDITION OF RS.2,76,150/- IS WRONG, ARBITRARY, AND ILLEGAL. 4. FOR THAT ON THE FACTS OF THE 275000/-CASE, THE S OURCE OF INVESTMENT IN F.DS WITH AXIS BANK RS.27,500/- WERE DEPOSITS OUT OF WIT HDRAWAL FROM SAME BANK, AS SUCH THE LD. CIT(A)S ACTION IN CONFIRMING THE S AID ADDITION IS ERRONEOUS, PERVERSE AND ILLEGAL. 5. FOR THAT ON THE FACTS OF THE CASE, THE ADDITIONS , RS.276,150/- AND RS.275,000/- HAVE WRONGLY BEEN UPHELD BY THE LD. CI T, ALTHOUGH THE SOURCE OF DEPOSITS ARE EXPLAINED, THEREFORE, HIS FINDING IS A RBITRARY, UNWARRANTED, AND ILLEGAL. 6. FOR THAT ON THE FACTS OF THE CASE, THE EVIDENCE PRODUCED, THE LD. CIT(A) SHOULD NOT CONFIRM THE DISALLOWANCE U/S. 40A(3) RS. 19,62,575/-, ALTHOUGH THE APPELLANT CLAIMED IMMUNITY UNDER RULE 6DD(K) THE I. T RULE, 1962 AND ALL THE RELEVANT EVIDENCES WERE PRODUCED TO JUSTIFY THE CLA IM. 7. FOR THAT ON THE FACTS OF THE CASE, PAYEE IS RAIS ING SERVICE TAX ON BILLS, THEREFORE, SERVICES WERE RENDERED SERVICES AGENT M/ S ACTIVE ADVERTISING & MARKETING WHO IN TURN, MAKING CASH PAYMENT EXCEEDIN G RS.20,000/- TO NEWSPAPERS AND SUPPORTING EVIDENCES WERE SUBMITTED IN APPEAL. 8. FOR THAT PROVISO TO SEC. 40A(3) ALTHOUGH FIND PL ACE IN WRITTEN SUBMISSION BUT IGNORED IN APPELLATE ORDER, SO THE LD. CIT(A)S FINDING IN CONFIRMING THE DISALLOWANCE IN APPEAL IS TOTALLY UNJUSTIFIED AND I LLEGAL. 9. FOR THAT THE INTEREST CHARGES MECHANICALLY U/S. 234A & 234B RS.25,557/- AND R.281,127/- IS WRONG AND ILLEGAL. SHRI SAUMITRA CHOUDHURY, LD. AUTHORIZED REPRESENTAT IVE APPEARED ON BEHALF OF ASSESSEE AND SHRI RAJAT KUMAR KUREEL, LD. DEPARTMEN TAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE. 2. THE FACTS IN BRIEF AS HAVE BEEN BROUGHT ON RECO RD ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF ADVERTISING A GENCY. THE RETURN OF INCOME WAS ITA NO.293/KOL/2013 A.Y. 20 08-09 SH BISWAJIT SAHA VS. ITO WD-49(4), KOL. PAGE 3 FILED DECLARING INCOME FROM BUSINESS AND INTEREST FOR RS.1,35,762/-. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT THROUGH C ASS MODULE AND ASSESSMENT WAS FRAMED U/S 143(1) OF THE ACT AT RS. 27,81,470/-. 3. THE ISSUES RAISED IN GROUND NO. 2 TO 5 ARE INTER CONNECTED SO THEY ARE BEING CLUBBED TOGETHER AND DISPOSED BY PASSING CONSOLIDAT E ORDER. THE ISSUES RELATE TO THE MONEY DEPOSITED IN THE BANK ACCOUNTS WHICH WERE NOT DISCLOSED IN THE RETURN OF INCOME. THE ASSESSEE WAS MAINTAINING ITS BANK ACCOU NTS AS DETAILED UNDER:- S.NO. BANK NAME BANK BRANCH ACCOUNT NO. REMARKS 1. AXIS BANK LAKE TOWN 19010100024143 NOT DISCLOSED 2. BANK OF INDIA MISSION ROW 401410100021954 NOT DISCLOSED 3. UBI KESTOPUR 3249 DISCLOSED 4. HDFC RAGHUNAHPUR 5151000009168 DISC LOSED THERE WAS DEBIT BALANCE OF RS.1,02,699/- IN THE BAN K OF INDIA ACCOUNT AS ON 31.03.2008 AND THIS ACCOUNT WAS NOT DISCLOSED BY TH E ASSESSEE IN HIS RETURN OF INCOME. ACCORDINGLY, THE ASSESSING OFFICER PROPOSED TO ADD THE SAME TO THE TOTAL INCOME AS FROM THE UNDISCLOSED SOURCE. IN REBUTTAL, THE ASSES SEE SUBMITTED THAT ALL THE TRANSACTIONS OF THIS BANK ACCOUNT ARE OF PERSONAL N ATURE AND THEREFORE IT WAS NOT DISCLOSED. HOWEVER, THE AO DISREGARDED THE PLEA OF THE ASSESSEE BY TREATING THE SAME AS UNDISCLOSED INCOME FOR RS. 1,02,699/- AND ACCORD INGLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. SIMILARLY, THE ASSESSEE MADE INVESTMENT OF RS. 2.75 LAKHS DURING THE YEAR IN TERM DEPOSIT AND BIRLA SUNLIFE FROM THE AXIS BANK BUT TH E SAME WAS NOT DISCLOSED. ACCORDINGLY, THE AO TREATED THE SAME AS INVESTMENT FROM UNDISCLOSED SOURCES FOR RS. 2.75 LAKHS AND ACCORDINGLY ADDED TO THE TOTAL INCOM E OF THE ASSESSEE. SIMILARLY, THERE WAS DEBIT BALANCE OF RS. 2,76,150/ - IN THE BANK ACCOUNT OF AXIS BANK AS ON 31.03.2008 AND THIS ACCOUNT WAS NOT DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME. ACCORDINGLY, THE AO PROPOSED TO ADD THE SAM E TO THE TOTAL INCOME AS FROM THE UNDISCLOSED SOURCE. IN REBUTTAL, ASSESSEE SUBMI TTED THAT ALL THE TRANSACTIONS OF THIS ITA NO.293/KOL/2013 A.Y. 20 08-09 SH BISWAJIT SAHA VS. ITO WD-49(4), KOL. PAGE 4 BANK ACCOUNT ARE OF PERSONAL NATURE AND THEREFORE I T WAS NOT DISCLOSED. HOWEVER THE AO DISREGARDED THE PLEA OF THE ASSESSEE BY TREATING THE SAME AS UNDISCLOSED INCOME FOR RS. 2,76,150/- AND ACCORDINGLY ADDED TO THE TOT AL INCOME OF THE ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. C IT(A) WHO HAS UPHELD THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE CAME IN SECOND APPEAL BEFORE US. 5. THE LD. AR BEFORE US FILED A PAPER BOOK COMPRISI NG OF PAGES FROM 1 TO 71 AND SUBMITTED THAT ALL THE CREDIT ENTRIES REFLECTING IN THE BANK STATEMENT OF THE UNDISCLOSED BANK ACCOUNTS ARE COMING FROM THE DISCLOSED BANK AC COUNT. THEREFORE THERE IS NO UNDISCLOSED INCOME REFLECTING IN THE BANK ACCOUNT. THE LD. AR IN SUPPORT OF ITS CLAIM HAS SUBMITTED THE BANK STATEMENT OF ALL THE UNDISCL OSED BANK ACCOUNT WHICH ARE PLACED ON PAGES FROM 5 TO 18 OF THE PAPER BOOK. ON THE OTHER HAND, LD. DR SUBMITTED THAT IT IS DIFF ICULT TO ASCERTAIN WHETHER THE CREDIT ENTRIES REFLECTING IN THE UNDISCLOSED BANK ACCOUNT ARE INCOME FROM UNDISCLOSED SOURCES. THESE UNDISCLOSED BANK ACCOUNTS WERE FOUND BY THE AO ON THE BASIS OF ANNUAL INFORMATION REPORT. THE ASSESSEE HAS NOT DIS CLOSED THE SAME TO ESCAPE FROM THE TAX LIABILITY FROM THE UNDISCLOSED SOURCES. LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT IT IS B EYOND DOUBT THAT THE AFORESAID BANK STATEMENTS WERE NOT DISCLOSED AT THE TIME OF FILING OF ASSESSEES RETURN. THESE BANK STATEMENTS WERE DISCOVERED BY AO ON THE BASIS OF AI R. THE AO ACCORDINGLY TREATED THE OPENING BALANCES AND THE CREDIT ENTRIES REFLECT ING IN THE BANK STATEMENT AS INCOME / INVESTMENT FROM THE UNDISCLOSED SOURCES. NOW THE QU ESTION BEFORE US ARISES WHETHER THE CREDIT ENTRIES REFLECTING IN THE BANK STATEMENT S REPRESENT THE UNDISCLOSED INCOME / INVESTMENT. AT THE OUTSET, WE DISAGREE WITH THE VIE W TAKEN BY THE LOWER AUTHORITIES ITA NO.293/KOL/2013 A.Y. 20 08-09 SH BISWAJIT SAHA VS. ITO WD-49(4), KOL. PAGE 5 THAT THE CREDIT ENTRIES REFLECTING IN THE UNDISCLOS ED BANK STATEMENT ARE REPRESENTING THE INCOME FROM UNDISCLOSED SOURCES. IT IS BECAUSE THAT IT IS THE DUTY OF THE LOWER AUTHORITIES TO ESTABLISH THE EXACT NATURE AND CHARA CTER OF SUCH RECEIPTS. THE ARGUMENT PLACED BY LD AR THAT THESE CREDIT ENTRIES ARE REFLE CTING FROM THE DISCLOSED BANK ACCOUNT HAS NOT BEEN CONSIDERED BY THE LOWER AUTHOR ITIES. LD. AR BEFORE US HAS FILED THE RECONCILIATION STATEMENT OF ALL THE ENTRIES REF LECTING IN THE DISCLOSED AND UNDISCLOSED BANK ACCOUNT. WE FIND THAT ALL THE CRED IT ENTRIES REFLECTING IN THE UNDISCLOSED BANK ACCOUNT ARE COMING FROM THE DISCLO SED BANK ACCOUNT OF ASSESSEE. IN SUPPORT OF THIS, LD. AR HAS FILED BANK STATEMENT AL ONG WITH RECONCILIATION WHICH ARE PLACED ON RECORD. LD. DR HAS NOT BROUGHT ANY DEFECT IN THE DETAILS FILED BY ASSESSEE. IN VIEW OF ABOVE, WE FIND NO UNDISCLOSED INCOME / INVE STMENT HAS ESCAPED ASSESSMENT. THEREFORE, WE REVERSE THE ORDER OF AUTHORITIES BELO W. AO IS DIRECTED ACCORDINGLY. HENCE, INTER-CONNECTED GROUND OF ASSESSEE IS ALLOWE D. 7. NEXT INTER-CONNECTED ISSUE RAISED BY THE ASSESSE E IN GROUND NO. 6 TO 8 IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE O RDER OF THE AO BY SUSTAINING THE DISALLOWANCE OF RS. 19,62,575/- U/S 40A(3) READ WIT H RULE 6DD(K) OF INCOME TAX RULES 1962. 8. THE ASSESSEE DURING THE YEAR HAS MADE PAYMENT OF RS.19,62,575/- THROUGH CASH TO M/S ACTIVE ADVERTISING AND MARKETING. ACCORDINGL Y, AO INVOKED THE PROVISION OF SEC.40A(3) OF THE ACT AND DISALLOWED THE SAME. 9. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO CONFIRMED THE ACTION OF AO. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESS EE CAME IN SECOND APPEAL BEFORE US. 10. BEFORE US LD. AR SUBMITTED THAT ALL THE TRANSAC TIONS ARE GENUINE AND IT WAS PAID THROUGH DISCLOSED BANK ACCOUNT. THE AO HAS NOT DOUBTED THE TRANSACTION AS WELL ITA NO.293/KOL/2013 A.Y. 20 08-09 SH BISWAJIT SAHA VS. ITO WD-49(4), KOL. PAGE 6 AS THE PARTY TO WHOM THE PAYMENT WAS MADE. THE PAYM ENT WAS MADE TO PAYEE IN CASH AS THE PARTY DENIED TO RECEIVE THE SAME IN CHEQUE. AS SUCH, ASSESSEE WOULD NOT HAVE BEEN ABLE TO CARRY ON THE BUSINESS WITHOUT MAKING T HE CASH PAYMENT TO THE PARTY CONCERN. LD. AR PLEADED THAT EXPENDITURE SHOULD BE ALLOWED ON ACCOUNT OF BUSINESS EXPEDIENCY. ON THE OTHER HAND, LD. DR SUBMITTED THAT PAYMENT MA DE BY ASSESSEE IS AGAINST THE PROVISION OF SEC. 40A(3) OF THE ACT. THE PAYMENT MA DE BY ASSESSEE ALSO DOES NOT FALL IN ANY OF THE EXCEPTION AS SPECIFIED UNDER RULE 6DD (K) OF THE IT RULES. LD. DR ALSO VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW . 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE AFORESAID D ISCUSSION, WE FIND THAT THE GENUINENESS OF THE TRANSACTION AND IDENTIFICATION O F THE PARTIES HAVE NOT BEEN DOUBTED BY THE LOWER AUTHORITIES. IN THE IDENTICAL CASE HAV ING AFORESAID FACTS AND CIRCUMSTANCES THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. CRESCENT EXPORT SYNDICATE IN ITA NO. 202 OF 2008 DATED 30.07.2008 HAS GRANTE D RELIEF TO ASSESSEE. THE RELEVANT EXTRACTED IS REPRODUCED BELOW:- THEREFORE, THE GENUINENESS OF THE PURCHASE HAS BEE N ACCEPTED BY THE LD. CIT (APPEAL) WHICH HAS ALSO NOT BEEN DISPUTED BY THE DE PARTMENT AS IT APPEARS FORM THE ORDER SO PASSED BY THE LEARNED TRIBUNAL. I T FURTHER APPEARS FROM THE ASSESSMENT ORDER THAT NEITHER THE ASSESSING OFFICER NOR THE CIT ((APPEAL) HAS DISBELIEVED THE GENUINENESS OF THE TRANSACTION. THE REFORE WAS NO DISPUTE THAT THE PURCHASE WERE GENUINE. ACCORDINGLY, IN OUR OPINION, THE LEARNED TRIBUNAL H AS CORRECTLY CAME TO THE CONCLUSION BY DELETING THE ADDITION OF RS.15,69,116 /- UNDER SECTION 40A(3) OF THE ACT. ON THE OTHER GROUND AS IT APPEARS THAT THE CIT (APPEAL) HAS BEEN DIRECTED TO RECONSIDER THE MATTER. IN VIEW OF THAT WE DO NOT THINK THAT ANY SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS MAT TER. HENCE, THE APPEAL BEING ITA NO. 202 OF 2008 IS DISMISSED. RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF CRESCENT EXPORT SYNDICATE (SUPRA) WE REVERSE THE ORDER OF AUTHORITIES BELOW AND THE GROUND RAISED BY ASSESSEE IS ALLOWED. AO IS DIRECTE D ACCORDINGLY. ITA NO.293/KOL/2013 A.Y. 20 08-09 SH BISWAJIT SAHA VS. ITO WD-49(4), KOL. PAGE 7 12. LAST ISSUE RAISED BY ASSESSEE IN GROUND NO.9 IS THAT CHARGES MECHANICALLY FRAMED U/S. 234A/2324B WHICH IS CONSEQUENTIAL IN NA TURE AND DOES NOT REQUIRE ANY ADJUDICATION. 13. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 24 /08/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 24/08/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SRI BISWAJIT SAHA, C-12, PURBACHAL CO-OP ERATIVE SOCIETY, BA GUIHATI, KOLKATA-700 059 2. /RESPONDENT-ITO WARD-49(4), MANIKTALA CIVIC CENTER, UTTARAPAN COMPLEX 2 ND FLOOR, KOLKATA-700 054 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ , /TRUE COPY/ / '#,