Bibhuti Bhusan Sahu, Koraput V. ITO, Jeypore

ITA 388/CTK/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65121 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 13-06-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: A K PADHY
• Keywords: Unexplained cash credit
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 388/CTK/2012 / ASSESSMENT YEAR 2005 - 06 BIBHUTI BHUSAN SAHU, LATE NIRODHKANTA SAHU, SURYA MAHAL, RA JSHREE BEAUTY PARLOUR, JEPORE, K ORAPUT, ODISHA PAN: AHWPS 4178 E - - - V ERSUS - INCOME - TAX OFFICER, WARD 1, JEY PORE, KORAPUT, ODISHA. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI A.K.PADHY, AR / FOR THE RESPONDENT: / SHRI S.C.MOHANTY, DR / DATE OF HEARING: 13.09.2012 / DATE OF PRONOUNCEMENT: 28.09.2012 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THE APPEAL BY THE ASSESSEE RAISES THE FOLLOWING GROUNDS. 1. THAT THE ADDITIONS ON ACCOU NT OF LONG TERM CAPITAL GAIN OF 85,010 IN NAME OF WIFE IS ILLEGAL, ARBITRARY AND UNJUSTIFIED IN LAW TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT ADDITION IN RESPECT OF UNEXPLAINED CASH CREDIT BEING DIFFERENCE BETWEEN THE AVAILABLE SOUR CES AND AMOUNT OF DEPOSIT IN THE SB ACCOUNT TO THE EXTENT OF .2,89,617 OUT OF THE TOTAL ADDITION AMOUNT OF 4,12,247 BY THE CIT(APPEALS) IS UNJUSTIFIED AND UNCALLED FOR TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL AND PUT FORTH EVIDENCE AND URGE OTHER GROUNDS DURING THE COURSE OF HEARING. 4. PRAYED: - THAT THE APPELLANT PRAYS THAT THE ADDITIONS ON ACCOUNT OF LONG TERM CAPITAL GAIN OF 85.010 AND IN RESPECT OF UNEXPLAINED C ASH CREDIT OF 2,89,617 MAY KINDLY BE DELETED IN THE INTEREST OF JUSTICE FOR WHICH THE APPELLANT SHALL AS IN DUTY BOUND EVER PRAY . I.T.A.NO. 388/CTK/2012 2 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A RETIRED STATE GOVT. EMPLOYE E. DURING THE PREVIOUS YEAR 2004 - 05 THE ASSESSEE DERIVED INCOME FROM PENSION, INTEREST ON DEPOSITS ETC. FOR THE ASSESSMENT YEAR 2005 - 06, THE ASSESSEE FILED HIS RETURN OF INCO ME DECLARING TOTAL INCOME OF 1,L5,030/ - ON 24/12/2007 . AS PER THE ASSESSING OFFI CER THE ASSESSEE ALONG WITH WIFE DEPOSITED CASH AMOUNTING TO 11.63,212 IN THE SB ACCOUNT . THE SAID INFORMATION WAS OBTAINED FROM AIR - II. AS THE ASSESSEE HAS NOT FILLED ANY INCOME TAX RETURN FOR SAID ASSESSMENT YEAR, A NOTICE U/S 148 WAS ISSUED. IN RESPONS E TO SAID NOTICE THE ASSESSEE FILED THE INCOME TAX RETURN RETURNING TOTAL INCOME OF 1,15,030 FROM SALARY AND INTEREST INCOME. BUT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/ S S. 143(3)/L47 DETERMINING TOTAL INCOME OF 6,12,287 MAKING THE FOLLOWING ADD ITION VIDE ORDER DATED 31/12/2008 1. ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN OF 85,010 ON SALE OF HOUSE PROPERTY AT BALA N GIR IN THE NAME OF WIFE. 2. ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF 4,12,247 BEING THE DIFFERENCE BETWEEN THE AVAIL ABLE SOURCES AND AMOUNT OF DEPOSIT IN THE SB ACCOUNT, 3. AGGRIEVED THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY, AND THE LEARNED CIT(A) AFTER CONSIDERING THE MATERIALS ON RECORD AND SUBMISSIONS OF THE ASSESSEE, PARTLY ALLOWED AND UPHELD TO EX TENT OF 2.89.6L7 ON ISSUE N O.2 AND CONFIRMED ISSUE NO. 1 ABOVE WITHOUT APPRECIATING THE FACTS OF THE CASE. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITI ES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING I.T.A.NO. 388/CTK/2012 3 OFFICER HAS CONSIDERED TH E CASE OF THE ASSESSEE BY INCORPORATING THE FUND FLOW STATEMENT OF THE ASSESSEE AS FOLLOWS. ON VERIFICATION OF THIS STATEMENT, THE NEED AROSE TO EXAMINE THE RECEIPTS W HEN THE LAND WAS SOLD ALONG WITH THE BUILDING BUT BY WAY OF SEPARATE NOTIFICATIONS INSOFAR AS THE ASSESSEES WIFE COULD NOT HAVE PARTICIPATED IN THE CONSTRUCTION OF SUPER STRUCTURE. THEREFORE, THE ONLY DISCREPANCY THE ASSESSING OFFICER OBSERVED WAS INCREAS E IN WORKING CAPITAL AMOUNTING TO 89,396 WHEN HE CHOSE TO BRING TO TAX THE CREDIT BEING THE SALE PROCEEDS AMOUNTING TO 4,12,247 TO BE TAXED IN THE HANDS OF THE ASSESSEE. IT WAS NOT THE CASE OF THE ASSESSEE TO BE ASSESSED FOR THE EARLIER YEARS INSOFAR AS THE INVESTMENTS HAVING BEEN ACCEPT ED ON THE BASIS OF SOURCE ALSO ACCEPTED BY THE ASSESSING OFFICER WAS TO EXPLAIN AS INCOMES WHEN THEY ARE NOT TAXABLE. THE LEARNED CIT(A) PARTLY REDUCED THE ADDITION BY ACCEPTING THAT THE ASSESSEE HAD SUFFICIENT FUNDS TO THE EXTENT THAT OUT OF 4,12,247 THE ONLY I.T.A.NO. 388/CTK/2012 4 ADDITION COULD BE MADE WAS 2,89,617. WE ARE UNABLE TO SATISFY OURSELVES TO THIS FINDING OF THE LEARNED CIT(A) INSOFAR AS THE ASSESSEE WAS TO EXPLAIN THE SOURCES AND APPLICATION OF THE FUNDS AVAILABLE TO IT AND NOT TO DISLODGE HIS OWN CLAIM OF SALE P ROCEEDS OF THE LAND AND BUILDING WHEN THE PURPORTED CAPITAL GAINS IN THE HANDS OF THE LADY WAS BELOW TAXABLE LIMIT. THE LEARNED COUNSEL FOR THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE INDEXATION AVAILABLE TO THE ASSESSEE WAS NOT TO BE EXPLAINED BY THE ASSESS EE. THE LEARNED CIT(A) THEREFORE ERRED IN BRINGING TO TAX THE INDEXATION AVAILABLE WHICH WAS THE MODE OF COMPUTATION FOR THE PURPOSE OF CAPITAL GAINS TAXATION AND NOT FOR THE PURPOSE OF EXPLAINING THE SOURCES AS PROMULGATED BY THE DIRECT TAXES ACT. THE ASS ESSING OFFICER BEGAN HIS ASSESSMENT BY FINDING THE SOURCE OF 4,12,247 WHICH WAS TELESCOPED BY THE LEARNED CIT(A) AT 2,89,617 WHICH WAS NEVER TO BE EXPLAINED BY THE ASSESSEE AS PER THE FIDING OF THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS NOT TO QUES TION THE SALE PROCEEDS WHICH SOURCE HAD BEEN RENDERED TO TAX BY THE RESPECTIVE ASSESSEES IN THE EARLIER YEARS CANNOT BE TAXED IN THE MPUGNED ASSESSMENT YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE HAS BEEN ABLE TO SUBMIT DETAILS OF SALE PROCEEDS ALONG WITH T HE DEPOSITS IN THE BANKS WITH THE CASH FLOWS RECONCILING TO THE FACT THAT THE CASH FLOW AS OBSERVED BY THE ASSESSING OFFICER IN HIS ORDER DID NOT REQUIRE FURTHER VERIFICATION FOR BRINGING TO TAX AMOUNTS EITHER U/S.68 OR U/S.69 BEING BELOW RETURNED INCOME . IN THIS VIEW OF THE MATTER, THE ADDITION SUSTAINED BY THE LEARNED CIT AMOUNTING TO 2,89,617 IS DIRECTED TO BE DELETED AND INSOFAR AS THE LONG TERM CAPITAL GAINS SUSTAINED BY THE LEARNED CIT(A) WAS IN THE HANDS OF THE LADY COULD NOT BE TAXED IN THE HANDS O F THE ASSESSEE WAS BELOW TAXABLE LIMIT THE LADY NEED NOT FILE RETURN DECLARING THE SAID INCOME AND THEREFORE, THE ADDITION OF 85,010 IS ALSO HEREBY DELETED BECAUSE IT WAS NOT THE CASE OF THE ASSESSING AUTHORITIES TO ISOLATE THE I.T.A.NO. 388/CTK/2012 5 HUSBAND WIFE FOR TAXATION O F CAPITAL GAINS ON LAND ALONG WITH SUPER STRUCTURE IN THE HANDS OF THE ASSESSEE ALONE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. SD/ - SD/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: 28.09.2012 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : BIBHUTI BHUSAN SAHU, LATE NIRODHKANTA SAHU, SURYA MAHAL, RAJSHREE BEAUTY PARLOUR, JEPORE, KORAPUT, ODISHA 2 / THE RESPONDENT: INCOME - TAX OFFICER, WARD 1, JEYPORE, KORAPUT, ODISHA. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 24.09.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25.09.201 2 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR O RDER COMES BACK TO THE SR. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER .. ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY.