Baladeb Mohapatra, Jagatsinghpur V. ITO, Ward-1, Paradeep

ITA 344/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5421 (ITAT-CUTTACK)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 14-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Keywords: Unexplained cash credit; Additional evidence
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.344 /CTK/2016 ASSESSMENT YEAR : 2011 - 2012 BALADEB MOHAPATRA, PAHANA, PANKAPAL, JAGATSINGHPUR VS. ITO, WARD - 1, PARADEEP. PAN/GIR NO. AKHPM 1731 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SUNIL MISHRA, AR REVE NUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 30 /08/ 2017 DATE OF PRONOUNCEMENT : 31 /08/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - CUTTACK DATED 20.6.2016 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT, THE ORDERS OF THE FORUMS BELOW ARE ILLEGAL, ARBITRARY AND MISREPRESENTATION OF THE FACTS AS WELL AS LAW AND AS SUCH LIABLE TO BE QUASHED IN ITS ENTIRETY AND THE RETURN FIGURE MAY KINDLY BE ACCEPTED. 2. FOR THAT, THE ADDITION OF RS.5,08,757/ - U/S.68 BY ALLEGING THAT 'T HE CLOSING BALANCE OF THE BANK HAS NOT BEEN DISCLOSED IN THE RETURN' IS ARBITRARY AND MISREPRESENTATION OF FACT, SINCE THE APPELLANT IS A COMMISSION AGENT OF INSURANCE COMPANIES AND FILED ITS RETURN BY DISCLOSING THE INCOME ON ESTIMATE BASIS, THEREBY THERE IS NO SCOPE TO DISCLOSE THE CLOSING BALANCE OF THE BANK AND MORE OVER THE TRANSACTION MADE IN THE BANK ACCOUNT OF THE APPELLANT IS THE MONEY OF THE CUSTOMERS AND THE ALLEGED CLOSING BALANCE HAS BEEN TRANSFERRED IN THE SUBSEQUENT YEAR OF ASSESSMENT, THEREB Y THE ADDITION IS LIABLE TO BE DELETED FOR THE INTEREST OF JUSTICE. 3. FOR THAT, THE ENHANCEMENT MADE BY THE LEARNED CIT (APPEAL) BY ADDING THE ENTIRE DEPOSITS IN THE BANK ACCOUNT AMOUNTING TO 2 ITA NO.344/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 RS.1,30,57,900/ - IS ILLEGAL, ARBITRARY AND EXCESSIVE EXER CISE OF JURISDICTION SINCE THE LEARNED CIT (APPEAL) IN ONE HAND ACCEPTED THAT THE DEPOSITS IN THE BANK ACCOUNT WERE REMITTED TO M/S. ATIIL THROUGH DD, BEING CONFIRMED BY THE LEARNED ASSESSING OFFICER THROUGH REMAND REPORT AND ON THE OTHER HAND DIRECTED THE ASSESSING OFFICER TO ADD BACK THE ENTIRE DEPOSITS ON PRESUMPTION AND ASSUMPTION BY ALLEGING UNSATISFACTORY EXPLANATION REGARDING THE SOURCE OF CASH DEPOSITS, EVEN THOUGH, THE APPEL LANT SUBMITTED THE DETAILS OF NAME AND ADDRESS OF THE PERSONS WHOSE MONEY HAS BEEN DEPOSITED IN THE ACCOUNT OF THE APPELLANT AND THE MONEY HAS BEEN TRANSFERRED TO THE INSURANCE COMPANY IN THE NAME OF THOSE PERSONS. HENCE THE ENHANCEMENT IS LIABLE TO BE DEL ETED FOR THE INTEREST OF JUSTICE. 4. FOR THAT, ANY OTHER GROUND IS INCIDENTAL TO THE GROUNDS OF THIS CASE MAY KINDLY BE PERMITTED TO URGE AT THE TIME OF HEARING OF THIS CASE.. 3. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE AND HENCE, REQUIRES NO SEPARATE AD JUDICATION BY US. 4. IN GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,08,757/ - U/S.68 OF THE ACT ON THE GROUND THAT THE CLOSING BALANCE OF THE BANK HAS NOT BEEN DISCLOSED IN THE RETURN. 5. IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN ADDING THE ENTIRE DEPOSITS IN THE BANK ACCOUNT OF RS.1,30,57,900/ - . 6. AS BOTH THE ISSUE AND FACTS ARE INTER - CONNECTED, THEY ARE DISPOSED OF TOGETHER FOR THE SAKE OF CONVENIENCE. 7. WE FIND THAT THE CIT(A) HAS DISPOSED OF THE ISSUES AS UNDER: THE AO DURING SCRUTINY FOUND THAT THE APPELLANT HAS TWO BANK ACCOUNTS IN 1DBI, BANK, PARADEEP, THE CLOSING BALANCE OF WHICH TOTAL TO RS.5,08,757/ - . HOWEVER, THE ASSESSEE HAS NOT DISCLOSED SUCH BANK ACCOUNTS AND CLOSING BALANCE OF SUCH BANK ACCOUNTS IN HIS RETURN OF INCOME. TO THE SHOW CAUSE NOTICE OF THE AO, THE ASSESSEE SUBMITTED THAT: 3 ITA NO.344/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 'THE ASSESSEE ALREADY SUBMITTED SAVING BANK A/C. NO.30145992676, SBI RAHAMA, JAGATSINGHPUR . BUT UNFORTUNATELY I HAVE NOT MENTIONED OF IDBI SAVING ACCOUNT NO. - 254104000042176 AND CURRENT A/C NO.0254102000001496, PARADEEP. AND ALSO THE ASSESSEE HAS ADMITTED OVER LIMIT CASH TRANSACTION RS.82,86,084/ - AND CLOSING BALANCE OF RS. 14,3 72/ - IN SAVING BANK ACCOUNT AND CURRENT ACCOUNT OPENED EFFECT FROM 04/02/2011 RS.51,97,750/ - IN CURRENT ACCOUNT TRANSACTION AND CURRENT ACCOUNT CLOSING BALANCE IS RS.4,94,385/ - . AND ALSO THIS CURRENT ACCOUNT OF CLOSING AMOUNT DD IN FAVOUR OF ATIIL IN THE NEXT ASST. YEAR 2012 - 13.' 6. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE THE ASSESSEE HAS ONLY MENTIONED ONE BANK ACCOUNT WHEREAS HAS NOT DISCLOSED TWO BANK ACCOUNTS WHERE CLOSING BALANCE OF RS.5,08,757/ - WERE THERE. THE AO ADDED THE AMOUNT TO THE TO TAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. WHILE GOING THROUGH THE DETAILS SUBMITTED BY THE APPELLANT DURING APPEAL HEARING, IT IS FOUND IN THE TWO UNDISCLOSED ACCOUNTS AS FOUND OUT BY THE AO IN THE SCRUTINY PROCEEDINGS, THE APPELLANT HAD MADE CASH DEPOSITS OF RS.79,86,200/ - AND RS.50,71,700/ - RESPECTIVELY. THE AO HAD ONLY TAKEN THE CLOSING BALANCE OF THESE UNDISCLOSED BANK ACCOUNTS AS UNEXPLAINED CASH CREDITS WHEREAS HE HAD NOT CALLED FOR ANY EXPLANATION REGARDING THE CASH DE POSITS TOTALING TO RS.1,30,57,900/ - MADE IN THOSE UNDISCLOSED ACCOUNTS. A LETTER WAS ISSUED TO THE APPELLANT FOR ENHANCEMENT OF HIS INCOME TO THE EXTENT OF SUCH CASH DEPOSITS IN CASE SUCH CASH DEPOSITS WERE NOT EXPLAINED BY THE APPELLANT. 7. THE APPELLANT IN RESPONSE TO THE LETTER AS ABOVE SUBMITTED THAT: 'IN THIS REGARD IT IS RESPECTFULLY SUBMITTED THAT IN COURSE OF ASSESSMENT, THE LEARNED ASSESSING OFFICER ISSUED THE QUESTIONNAIRE ABOUT THE DETAILS OF CASH DEPOSIT AND NON - DISCLOSER OF CLOSING BALANCE OF THE BANK ACCOUNT IN THE RETURN FORM. THE APPELLANT SUBMITTED BEFORE LEARNED ASSESSING OFFICER THAT THE ENTIRE CASH DEPOSIT WERE OF THE CUSTOMERS I.E. POLICY HOLDERS AND THE APPELLANT SUBMITTED THE BANK RECONCILIATION STATEMENT WHEREIN IT IS EVIDENCED THAT THE DEPOSITED CASH HAS BEEN TRANSFERRED TO DIFFERENT INSURANCE COMPANIES ON. THE SAME DAY OR WITHIN ONE OR TWO DAYS OF SUCH DEPOSITS THROUGH DEMAND DRAFT. IT IS ALSO A MATTER A FACT THE CLOSING BALANCE IN THE SAID ACCOUNTS HAS BEEN TRANSFERRED IN THE SUBS EQUENT YEAR THROUGH DD. AFTER DUE VERIFICATION OF THE EVIDENCES AND SOURCE OF SUCH DEPOSIT, THE LEARNED ASSESSING OFFICER ALLOWED THE CASH 4 ITA NO.344/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 DEPOSITS AND ONLY ADDED THE CLOSING BALANCE OF THE SAID BANK ACCOUNTS. THAT IN COURSE OF HEARING OF THIS APPEAL PROC EEDING ON DTD.10/02/2016, THE APPELLANT FILED WRITTEN NOTES OF SUBMISSION, WHEREIN THE APPELLANT ENCLOSED THE COPIES BANK STATEMENT ALONG WITH RECONCILIATION OF THE SAID BANK STATEMENT, FROM WHERE IT IS EVIDENCED THAT THE CASH DEPOSITED IN THE BANK ARE OF THE DIFFERENT CUSTOMERS AND THE SAME CASH HAS BEEN TRANSFERRED TO DIFFERENT INSURANCE COMPANIES THROUGH DD ON THE SAME DAY OR WITHIN ONE OR TWO DAYS OF SUCH DEPOSITS. EVEN THE APPELLANT SUBMITTED ALL THE NAMES OF THE CUSTOMERS ON WHOSE NAME THE CASH HAS BE EN TRANSFERRED. HENCE, THERE IS NO IOTA OF DOUBT THAT THE CASH DEPOSITED IN THE BANK ARE OF THE DIFFERENT CUSTOMERS AND IN NO CIRCUMSTANCES THE SAID CASH DEPOSIT CAN BE CONSIDERED AS UNEXPLAINED CASH CREDIT.' 8. THE APPELLANT REPLIED THAT HE COULD NOT DISCLOSE THE ABOVE TWO ACCOUNTS IN THE RETURN FORM SINCE THERE IS NO SCOPE TO DISCLOSE MORE THAN ONE ACCOUNT ON RETURN FORM AND SINCE THE ASSESSEE HAS FILED THE RETURN OF INCOME ON ESTIMATE BASIS, THERE IS NO SCOP E TO DISCLOSE THE ACCOUNTS. THE CLOSING BALANCE IN THE BANK HAS BEEN PAID THROUGH DD TO ATILL IN THE SUBSEQUENT YEAR. THE REPLY ALONGWITH THE DETAILS SUBMITTED BY THE APPELLANT WERE FORWARDED TO THE AO FOR FURTHER VERIFICATION AND REPORT U/S. 250(4) OF THE ACT. THE RELEVANT PORTION OF THE REPORT OF THE AO IS AS UNDER : 'THE ASSESSEE WAS GIVEN FRESH OPPORTUNITY FOR HEARING. THE AIR OF THE ASSESSEE APPEARED AND REITERATED THE EARLIER SUBMISSIONS. IT IS SEEN THAT DURING THE FINANCIAL YEAR 2010 - 11, CASH DEPOSI TS OF RS.79,86,2001/ - AND RS.50,71,7001/ - HAVE BEEN RESPECTIVELY MADE IN THE ACCOUNTS MAINTAINED IN THE IOBI BANK, PARADEEP BRANCH. SUCH MONIES HAVE BEEN CLAIMED BY THE ASSESSEE TO BE TRANSACTED IN HIS BANK ACCOUNT ON BEHALF OF DIFFERENT CLIENT INVESTORS(L IST OF INVESTORS FILED) FOR INVESTMENT IN THE ARTHA TATWA INFRA INDIA LTD. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FURNISHED THE COPIES OF THE DEPOSIT RECEIPTS ISSUED TO THE INVESTORS IN 31 CASES OUT OF THE ABOVE INVESTORS. NOW, THE ASSESSEE EXP RESSED INABILITY TO PROVIDE ANY ADDITIONAL EVIDENCE IN THIS REGARD. HOWEVER INFORMATION WAS SOUGHT FROM THE IDBI BANK, PARADEEP U/S. 133(6) TO ASCERTAIN THE DESTINATIONS OF THE WITHDRAWALS IN THE SHAPE OF DDS MADE IN THE SAID BANK ACCOUNTS. IT IS SEEN THAT ALL THE DO 5 ITA NO.344/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 PAYOUTS HAVE BEEN MADE TO THE AT GROUP AS CLAIMED BY THE ASSESSEE.' 9. THE REMAND REPORT OF THE AO WAS FORWARDED TO THE APPELLANT FOR FURTHER RESPONSE. THE APPELLANT SUBMITTED THAT HE WAS A SALARIED EMPLOYEE OF M/S. ATI1L AND THE CASH DEPOSITED BY HIM IN HIS BANK ACCOUNTS WERE INVESTMENTS BY THE 'INDIVIDUALS' THE LIST OF WHOSE WAS SUBMITTED BY HIM. AS STATED BY THE A O, SUCH CASH DEPOSITS WERE REMITTED TO M/S. ATILL THROUGH BANK DRAFT. 10. FROM THE ABOVE, IT IS COMPREHENDED THAT ALL THE AMOUNTS DEPOSITED BY THE APPELLANT IN CASH IN HIS BANK ACCOUNTS WERE REMITTED TO M/S. ATIIL AS DD BUT THE APPELLANT HAD FAILED TO PROV IDE SATISFACTORY EXPLANATION REGARDING THE SOURCE OF SUCH CASH DEPOSITS. DURING ASSESSMENT PROCEEDINGS AND REMAND PROCEEDINGS, THE APPELLANT HAD SUBMITTED DEPOSIT RECEIPT ISSUED TO INVESTORS BY M/S. ATLLL LIMITED IN 31 CASES. WHEREAS FOR THE BALANCE OF T HE CASH DEPOSITS, HE DOES NOT HAVE ANY EXPLANATION REGARDING THEIR SOURCES EXCEPT FOR A LIST OF NAMES PROVIDED BY THE APPELLANT. UNDER THESE CIRCUMSTANCES, IT IS NOT POSSIBLE TO ACCEPT THE CONTENTION OF THE APPELLANT THAT THE CASH DEPOSITS BELONG TO DIFFER ENT 'INDIVIDUALS'. THE AO IS DIRECTED TO MAKE ADDITION TO THE TOTAL INCOME OF THE APPELLANT THE CASH DEPOSITS AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT EXCLUDING THE CASH DEPOSITS TO HAVE BEEN MADE FOR 31 CASES FOR WHICH DEPOSITS CERTIFICATES WERE SUBM ITTED BY THE APPELLANT. THE INCOME OF THE APPELLANT IS ENHANCED BY THAT AMOUNT. 8. LD A.R. REITERATED THE SUBMISSION MADE BEFORE THE CIT (A) AND LD D.R. FULLY JUSTIFIED THE ORDER OF THE CIT(A). 9. WE FIND THAT LD A.R. COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE CIT(A). LD A.R. ALSO COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A) THAT THE ASSESSEE FAILED TO SATISFACTORILY EXPLAIN REGARDING THE SOURCE OF SUCH CASH DEPOSITS IN THE BANK WITH IDBI BANK. FURTHER, THE FINDINGS OF THE CIT(A) THAT DURING THE REMAND PROCEEDINGS, THE ASSESSEE SUBMITTED DEPOSIT RECEIPT ISSUED TO INVESTORS BY M/S. ARTHA TATWA INFRA INDIA LTD., IN 31 CASES AND FOR THE BALANCE CASH DEPOSIT, THE ASSESSEE HAD NO EXPLANATION REGARDI NG THEIR SOURCES EXCEPT FOR A LIST OF NAMES PROVIDED 6 ITA NO.344/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 BY THE ASSESSEE , COULD NOT BE CONTROVERTED BY LD A.R. OF THE ASSESSEE. THEREFORE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 31 /08/2017. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 31 /08/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : BALADEB MOHAPATRA, PAHANA, PANKAPAL, JAGATSINGHPUR 2. THE RESPONDENT. ITO, WARD - 1, PARADEEP 3. THE CIT(A) - CUTTACK 4. PR.CIT - CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//