ACIT, CIR-50, KOLKATA, Kolkata V. Sri Dilip Kundu, Kolkata

ITA 361/KOL/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8896 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHURY CITSRDR
• Keywords: Unexplained investment; Peak credit; Additional evidence
• Section: 69; 144

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 361 / KOL / 20 16 ASSESSMENT YEAR :2009-10 DC/ACIT, CIRCLE-50, DS-II, 2 ND FLOOR, UTTARAPAN SHOPPING COMPLEX, MANICKTOLA CIVIC CENTRE, ULTADANGA, KOLKATA-54 V/S . SHRI DILIP KUNDU 1, PANNAJHIL, NOAPARA, BARRACKPORE ROAD, BARASAT, KOLKATA-125 [ PAN NO.AGXPK 0593 K ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI ROBIN CHOUDHURY, ADDL. CIT-SR-DR /BY RESPONDENT SHRI SOUMITRA CHOUDHURY, ADVOCATE /DATE OF HEARING 28-11-2018 /DATE OF PRONOUNCEMENT 26-12-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2009-10 A RISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-15, KOLKATAS ORDER DATED 23.12.2015, PASSED IN CASE NO.09/CIT(A)-15/14-15/CIR-50/KOL, IN PROCEEDINGS U/S. 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUES FORMER SUBSTANTIVE GRIEVANCE CHALL ENGES CORRECTNESS OF THE CIT(A)S ORDER DELETING UNEXPLAINED CASH DEPOSI TS ADDITION OF 3,56,87,112/- OUT OF 3,73,65,381/- MADE BY THE ASSESSING OFFICER IN THE COURSE OF IMPUGNED REGULAR ASSESSMENT FRAMED ON 30. 12.2011 AS UNDER:- GROUND NO.5 PERTAINS TO THE ADDITION OF RS.7,50,00 0/- AS UNDISCLOSED INCOME IN THE HDFC MUTUAL FUND. THE AO HAS NOTED IN THE ASSESSMENT ORDER THAT AS PER THE AIR INFORMATION, THE ASSESSEE HAD INVESTED ITA NO.361/KOL/2016 A.Y. 2009-10 DC/ACIT, CIR-50, KOL. VS. SHRI DILIP KUNDU PAGE 2 RS.7,50,000/- IN HDFC MUTUAL FUND. IN ABSENCE OF AN Y REPLY, THE ENTIRE AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. GROUND NO.6 PERTAINS TO ADDITION OF RS.17,00,000/- CONSISTING OF FDSS OF RS.15,00,000/- IN PUNJAB NATIONAL BANK AND RS.2, 00,000/- IN THE SAVING BANK ACCOUNT OF THE SAME BANK. BOTH THE GROUNDS ARE TAKEN TOGETHER AS THE REPLY OF THE ASSESSEE IS COMMON ON BOTH THE GROUNDS. INITIALLY, THE ASSESSEE STATED THAT BOTH THESE INVESTMENTS BELONG TO HIS WIFE SMT BULU KUNDU AND ARE DISCLOSED IN HER RETURN. IN THE REMAND REPORT PROCEEDINGS, TH E AO REPORTED AFTER VERIFICATION THAT THESE INVESTMENTS ARE NOT DISCLOS ED IN HER RETURN. THEN THE ASSESSEE CHANGED HIS STAND AND SUBMITTED DURING THE APPELLATE PROCEEDINGS THAT, HE HAD CONCEDED THE ADDITION OF R S.18,78,269/- AS UNDISCLOSED INCOME FROM PETROL PUMP AND PEAK CREDIT BALANCE OF RS.20,67,518/- OF ACCOUNT NO 1439 OF CANARA BANK, T HIS WOULD COVER THE UNDISCLOSED INVESTMENT OF RS.7,50,000/- OF MFS AND TERM DEPOSITS IN PUNJAB NATIONAL BANK OF RS.17,00,000/-, OTHERWIS E IT WOULD AMOUNT TO DOUBLE ADDITION. THE FDRS WERE MADE ON 10.02.2009. THUS, HE REQUESTED FOR TELESCOPING OF THE UNDISCLOSED INCOME EARNED OVER THE UNDISCLOSED INVESTMENTS. THE CONTENTION OF THE ASSE SSEE IS FACTUALLY AND LEGALLY CORRECT. BESIDES, THE ABOVE UNDISCLOSED INCOME OFFERED BY THE ASSESSEE, HE WAS ALSO HAVING CASH OF RS.7,40,00 0/- (MINUS) RS.4,22,171/- = RS.3,17,829/- WITHDRAWN FROM ACCOUN T NO 4899 AND OF RS.2,82,000/- WITHDRAWN FROM ACCOUNT NO 2734 OF CEN TRAL BANK OF INDIA FOR WHICH SEPARATE ADDITIONS HAVE BEEN CONFIRMED EA RLIER. THUS, BOTH THE ADDITIONS OF RS.7,50,000/- AND RS.15,00,000/- A RE DELETED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. MR. CHOUDHURY VEHEMENTLY ARGUES DURING THE COURSE OF HE ARING THAT THE ASSESSING OFFICER HAD RIGHTLY MADE THE IMPUGNED ADD ITION ON ACCOUNT OF ASSESSEES FAILURE IN FILING COGENT EVIDENCE IN SUP PORT OF HIS CASH DEPOSITS MADE IN BANK. HE FURTHER ALLEGES RULE 46A VIOLATION AT CIT(A)S BEHEST WHILST ADMITTING ADDITIONAL EVIDENCE WITHOUT REASONING OR FOLLOWING FOR ASSESSING OFFICERS COMMENTS. WE FIND NO MERIT IN EITHER OF T HE TWIN ARGUMENTS. THERE IS NO DISPUTE ABOUT THE ASSESSEE HAVING MADE THE IMPUG NED CASH DEPOSITS IN HIS BANK ACCOUNT. WE DO NOT SEE ANY SUCH ADDITIONAL EVIDENCE BEFORE THE CIT(A). IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE ASSESSEE FILED HIS BANK STATEMENT ETC. WHICH ALREADY FORMED PART OF AS SESSMENT RECORDS. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUT E THE FACT THAT ASSESSEES INCOME FROM PETROL PUMP DEALERSHIP STANDS ACCEPTED AS CORRECT. WE OBSERVE ITA NO.361/KOL/2016 A.Y. 2009-10 DC/ACIT, CIR-50, KOL. VS. SHRI DILIP KUNDU PAGE 3 HIS PECULIAR FACTS AND CIRCUMSTANCES THAT THE CIT(A ) HAS RIGHTLY TREATED THE ASSESSEES CASH SALES TO BE SOURCE OF HIS IMPUGNED CASH DEPOSITS MADE IN BANK. THE ASSESSEE HAS MADE ALL OF HIS PAYMENTS TO M/S HPCL THROUGH THIS BANK ACCOUNT ONLY. WE CONCLUDE IN THESE FACTS AND C IRCUMSTANCES THAT THE CIT(A) HAS CORRECTLY ASSESSED ONLY THE INCOME COMPO NENT IN ASSESSEES CASH DEPOSITS RATHER THAN THE ENTIRE SUM U/S 69 OF THE A CT. WE DECLINE REVENUES FIRST SUBSTANTIVE GROUND ACCORDINGLY. 4. THE REVENUES LATTER TWO SUBSTANTIVE GROUNDS SEE K TO REVIVE THE ASSESSING OFFICERS ACTION ADDING ASSESSEES INVEST MENTS OF 7.05 LAC IN HDFC MUTUAL FUND AND PARTLY DELETING THE ADDITION O F 17 LAC. CONSISTING OF 15 LAC TAKEN AS UNACCOUNTED INVESTMENTS IN PUNJAB N ATIONAL BANK AND 2 LAC DEPOSITED BY ADOPTED TELESCOPING METHOD. RELEVA NT CIT(A)S DISCUSSION TO THIS EFFECT READS AS UNDER:- 5. GROUND NO. 2 PERTAINS TO ADDITION OF RS.3,73,65 ,381/- AS UNEXPLAINED DEPOSITS IN AXIS BANK ACCOUNT. THE AO HAS STATED IN THE ASSESSMENT ORDER THAT THE ASSESSEE MAINTAINS CA-BUSINESS CLASS IC BANK ACCOUNT NO. 548010200007258 WITH AXIS BANK AND TOTAL CREDIT S DURING THE PERIOD 01.04.2009 TO 31.03.2010 WAS RS.3,75,65,381. SINCE, THE ASSESSEE DID NOT SUBMIT ANY DETAILS REGARDING THE NATURE OF THE DEPOSITS, THE AO ADDED THE ENTIRE AMOUNT AS UNDISCLOSED INCOME. DURING THE APPELLANT PROCEEDINGS, THE ASSESSEE STAT ED THAT THE CORRECT ACCOUNT NO IS 021010200005885 AND THE SAME IS IN T HE NAME OF RATHALA SERVICES STATION, 28, JESSORE ROAD, RATHTAL A, BARASAT. THE BANK ACCOUNT WAS OPENED ON 12.11.2008. IT WAS FURTH ER CONTENDED THAT THE ASSESSEE WAS GIVEN POWER OF ATTORNEY BY SRI SAM ARENDRA NATH PAL ON 22.09.2008 TO RUN THIS PETROL PUMP. IT WAS FURTH ER ADMITTED THAT THE ASSESSEE HAD DEPOSITED THE PROCEEDS OF THE PETROL P UMP IN THIS BANK ACCOUNT AND AT THE SAME TIME HAD PAID TO HPCL FROM THIS BANK ACCOUNT TOWARDS PURCHASE OF THE PETROL AND DIESEL. HE ACCEP TED THAT TOTAL DEPOSITS ARE RS.375.65 LACS AND THE CORRESPONDING P AYMENTS ARE RS.358.20 LACS, THUS THE NET PROFIT OUT OF THIS UND ISCLOSED BUSINESS WOULD BE THE DIFFERENCE OF THE TWO WHICH COMES TO R S.17.45 LACS. HOWEVER, THE ASSESSEE ACCEPTED THAT 5% OF THE TURNO VER OF RS.3,75,65,381/- AMOUNTING TO RS.18,78,269/- BE CON FIRMED. ALL THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE AO FOR COMMENTS DURING THE REMAND REPORT PROCEEDINGS. IN F ACT, DESPITE BEING GIVEN MANY OPPORTUNITIES, THE ASSESSEE WAS NOT ABLE TO PROCURE THE DETAILS OF THE PAY ORDERS ISSUED FROM THIS BANK ACC OUNT. IT WAS ONLY AFTER THE EFFORTS OF THE AO THAT THE DETAILS OF THE PAY O RDERS WERE PROCURED FROM THE BANK AND IT WAS FOUND THAT ACTUALLY ALL TH E PAY ORDERS WERE ITA NO.361/KOL/2016 A.Y. 2009-10 DC/ACIT, CIR-50, KOL. VS. SHRI DILIP KUNDU PAGE 4 ISSUED TO HPCL TOWARDS PURCHASE OF THE PETROL AND D IESEL. THUS, THE CONTENTION OF THE ASSESSEE IS FOUND TO BE CORRECT A ND IT IS HELD THAT THE COST OF THE PETROLEUM PRODUCTS SHOULD BE ALLOWED TO BE SET-OFF AGAINST THE UNDISCLOSED SALES OF PETROL AND DIESEL. THE NET -PROFIT @ 5% ON THIS UNACCOUNTED BUSINESS, AS OFFERED BY THE ASSESSEE IS ACCEPTED AS THE REAL INCOME. HENCE, THE ADDITION IS RESTRICTED TO R S.17,78,269/- AND THE BALANCE AMOUNT OF RS.3,56,87,112/- IS DELETED. 5. WE HAVE HEARD RIVAL CONTENTIONS. WE DO NOT SEE ANY REASON TO DISAGREE WITH CIT(A)S CLINCHING FINDINGS ADOPTING TELESCOPING METHOD OF HIS CASH AVAILABLE TO BE FORMING SOURCE OF THE IMPUGNED INVESTMENTS. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THE CO RRESPONDING RECONCILIATION BETWEEN THE TWO HEADS. WE ACCORDINGLY AFFIRM THE CI T(A)S FINDINGS QUA THIS LATTER ISSUE AS WELL. 6. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 26/12/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 26 / 12 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DC/ACIT, CIR-50, DS-II, 2 ND FLOOR, UTTARAPAN SHOPPOING COMPLEX MANICKTOLA CIVI C CENTRE, ULTADANGA KOLKATA-54 2. /RESPONDENT-SHRI DILIP KUNDU, 1, PANNAJHIL, NOAPARA , BARRACKPORE ROAD, BARASAT,KOLKATA- 700125 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 3,