Shri Ramashankar Shaw, Hooghly V. ITO, Ward 23(3), Kolkata, Hooghly

ITA 298/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1740 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 14-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE CIT RE
• Keywords: Unexplained investment; Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE HONBLE SHRI P.M. JAGTAP, AM] I.T.A. NO. 298/KOL/2017 ASSESSMENT YEAR: 2011-12 SHRI RAMASHANKAR SHAW.............................APPELLANT VILL. BHISHNUBATI, P.O. BHATIA, P.S. TARAKESHWAR HOOGHLY - 712410 [PAN : AUBPS6259C] ITO, WARD 23(3), HOOGHLY.......................RESPONDENT AAYAKAR BHAWAN, KHADINA MORE, G.T. ROAD, CHINSURAH, HOOGHLY - 712101 APPEARANCES BY: SHRI SUNIL SURANA, AR APPEARING ON BEHALF OF THE ASSESSEE. SHRI ARINDAM BHATTACHARJEE, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 14, 2017 DATE OF PRONOUNCING THE ORDER : AUGUST 04, 2017 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-6, KOLKATA DATED 08.11.2016. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF OLD POWER TILLERS USED FOR AGRICULTURAL PURPOSE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 16.05.2011 DECLARING A TOTAL INCOME OF RS. 1,64,160/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT CASH DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE WITH BANK OF INDIA, KANRARIA BRANCH AGGREGATING TO RS. 21,48,000/- WERE MORE THAN THE GROSS TURNOVER OF RS. 19,61,162/- SHOWN BY THE ASSESSEE. SINCE THE EXPLANATION OFFERED 2 I.T.A. NO. 298/KOL/2017 ASSESSMENT YEAR: 2011-12 RAMASHANKAR SHAW BY THE ASSESSEE AS REGARDS THE SAID DIFFERENCE OF RS. 1,86,838/- WAS NOT FOUND SATISFACTORY, THE AO TREATED THE SAID AMOUNT AS UNDISCLOSED SALE OF THE ASSESSEE AND ADDED THE SAME TO HIS TOTAL INCOME. SIMILARLY THE CASH DEPOSITS OF RS. 3,13,000/- FOUND TO BE MADE IN ANOTHER BANK ACCOUNT OF THE ASSESSEE WITH BANK OF INDIA, KANRARIA BRANCH WERE TREATED BY THE AO AS UNDISCLOSED SALE OF THE ASSESSEE AND THE SAID AMOUNT WAS ALSO ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. THE AO FURTHER FOUND THAT THERE WERE TWO MORE BANK ACCOUNTS MAINTAINED BY THE ASSESSEE WITH AXIS BANK WHICH HAD NOT BEEN DISCLOSED BY HIM. SINCE THE EXPLANATION OFFERED BY THE ASSESSEE AS REGARDS THE CASH DEPOSITS OF RS. 8,56,900/- AND RS. 13,48,100/- MADE IN THE SAID ACCOUNTS WAS NOT FOUND ACCEPTABLE BY HIM, THE AO TREATED THE SAID DEPOSITS AS UNDISCLOSED INCOME OF THE ASSESSEE AND ADDITIONS OF RS. 8,56,900/- AND RS. 13,48,100/- WERE MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE AO AT RS. 28,70,558/- IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 06.03.2014. 3. AGAINST THE ORDER PASSED UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT (A) DISPUTING OF THE AFORESAID FOUR ADDITIONS MADE BY THE AO TO HIS TOTAL INCOME. THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF HIS CASE ON THE ISSUES RELATING TO THE SAID FOUR ADDITIONS HOWEVER WERE NOT FOUND TO BE ACCEPTABLE BY THE LD. CIT (A) AND BE PROCEEDED TO CONFIRM OF THESE ADDITIONS MADE BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE FOR ALMOST THE SAME REASONS AS GIVEN BY THE AO. AGGRIEVED BY THE ORDER OF 3 I.T.A. NO. 298/KOL/2017 ASSESSMENT YEAR: 2011-12 RAMASHANKAR SHAW THE LD. CIT (A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. IT IS OBSERVED THAT TWO BANK ACCOUNTS WERE MAINTAINED BY THE ASSESSEE, ONE CURRENT ACCOUNT AND ONE SAVINGS ACCOUNT, WITH BANK OF INDIA AND SINCE THE CASH DEPOSITS FOUND TO BE MADE IN THE SAID ACCOUNTS IN EXCESS OF HIS TURNOVER COULD NOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, SUCH EXCESS AMOUNTING TO RS. 1,86,838/- AND RS. 3,13,000/- WAS TREATED BY THE AO AS THE UNDISCLOSED SALES OF THE ASSESSEE. AT THE TIME OF HEARING BEFORE US, THE LIMITED CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT EVEN IF THE EXCESS DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNTS OF THE ASSESSEE MAINTAINED IN THE BANK OF INDIA ARE TO BE TREATED AS UNDISCLOSED SALES, THE ENTIRE AMOUNT OF SUCH SALES CANNOT BE ADDED AS INCOME OF THE ASSESSEE AND ONLY THE PROFIT ELEMENT OF SUCH SALES CAN BE ADDED. I FIND MERIT IN THIS CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE AND SINCE THE LEARNED DR HAS ALSO NOT RAISED ANY MATERIAL CONTENTION IN THIS REGARD, I DIRECT THE AO TO RESTRICT THE ADDITION OF RS. 4,99,838/- MADE ON ACCOUNT OF THE UNDISCLOSED SALES TO THE EXTENT OF 20% OF THE GROSS PROFIT AS DECLARED BY THE ASSESSEE. THE IMPUGNED ORDER OF THE LD. CIT (A) ON THIS ISSUE IS ACCORDINGLY MODIFIED AND GROUND NO 2 AND 3 OF THE ASSESSEES APPEAL ARE PARTLY ALLOWED. 5. AS REGARDS THE OTHER ISSUES RAISED IN GROUND NO 4 RELATING TO THE ADDITIONS OF RS. 8,56,900/- AND RS. 13,48,100/- MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS FOUND 4 I.T.A. NO. 298/KOL/2017 ASSESSMENT YEAR: 2011-12 RAMASHANKAR SHAW TO BE MADE IN HIS TWO UNDISCLOSED BANK ACCOUNTS MAINTAINED WITH AXIS BANK, IT IS OBSERVED THAT THE SAID CASH DEPOSITS FOUND TO BE MADE IN HIS UNDISCLOSED BANK ACCOUNT COULD NOT BE EXPLAINED BY THE ASSESSEE SATISFACTORILY EITHER BEFORE THE AO OR BEFORE THE LD. CIT (A). AT THE TIME OF HEARING BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE COPIES OF THE STATEMENTS OF THESE TWO BANK ACCOUNTS PLACED AT PAGE NO 6 12 OF HIS PAPER BOOK TO POINT OUT THAT ALL THE WITHDRAWALS AND DEPOSITS IN THE SAID BANK ACCOUNTS WERE MAINLY IN CASH. HE HAS CONTENDED THAT SINCE THE WITHDRAWALS MADE IN CASH AT THE EARLIER DATES ARE AVAILABLE TO THE ASSESSEE TO EXPLAIN THE CASH DEPOSITS MADE ON THE SUBSEQUENT DATES, THE ENTIRE DEPOSITS CANNOT BE TREATED AS INCOME OF THE ASSESSEE AND ONLY THE PEAK CREDIT OF THE SAID ACCOUNTS CAN BE ADDED IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED. I FIND MERIT IN THIS CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. IN MY OPINION, WHEN THE DEPOSITS AS WELL AS WITHDRAWALS IN THE CONCERNED TWO UNDISCLOSED BANK ACCOUNTS OF THE ASSESSEE WERE MAINLY MADE IN CASH, WHAT CAN BE REASONABLY AND JUSTIFIABLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IS THE PEAK CREDIT APPEARING IN THE SAID ACCOUNTS AND NOT THE ENTIRE CASH DEPOSITS AS THE WITHDRAWALS MADE FROM THE SAID BANK ACCOUNTS IN CASH ARE REQUIRED TO THE TAKEN INTO ACCOUNT TO EXPLAIN THE DEPOSITS MADE IN CASH SUBSEQUENTLY. AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THIS REGARD, THE PEAK CREDITS OF THE SAID TWO BANK ACCOUNTS DURING THE YEAR UNDER CONSIDERATION WERE RS. 1,71,471/- AND RS. 3,71,340/-. WE ACCORDINGLY DIRECT THE AO TO RESTRICT THE ADDITIONS ON THIS ISSUE TO THAT EXTENT AFTER NECESSARY VERIFICATION. GROUND NO. 3 IS ACCORDINGLY TREATED AS ALLOWED. 5 I.T.A. NO. 298/KOL/2017 ASSESSMENT YEAR: 2011-12 RAMASHANKAR SHAW 6. AS REGARDS THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL, IT IS OBSERVED THAT THE SAME ARE EITHER GENERAL OR REPETATIVE IN NATURE AND THEREFORE, DO NOT CALL FOR SEPARATE ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH AUGUST, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 04/08/2017 BISWAJIT, SR. P.S. COPY OF ORDER FORWARDED TO: 1. SHRI RAMASHANKAR SHAW, VILL. BHISHNUBATI, P.O. BHATIA, P.S. TARAKESHWAR, HOOGHLY 712410. 2. ITO, WARD 23(2), HOOGHLY, AAYAKAR BHAWAN, KHADINA MORE, G.T. ROAD, CHINSURAH, HOOGHLY 712101. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA