Sulekha Chowdhury, Kolkata V. I.T.O Wd - 49(1),kolkata, Kolkata

ITA 394/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5147 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 27-02-2013
• Court: TRIBUNAL
• Department Lawyers: MONGOTH UNG JUNGIO JCIT LD
• Assessee Lawyers: MIRAJ D SHAH LD
• Keywords: Unexplained cash credit; Business income
• Section: 143(3); 131; 68; 69

Judgement Text

ITA NO. 394/KOL/2013-C-AM SMT. SULEKHA CHOWDHURY 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI M.BALAGANESH, ACCOUNTANT MEMBER, AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 394/KOL/2013 A.Y: 2007-08 SMT. SULEKHA CHOWDHURY VS. I.T.O WARD 49(1) , KOLKATA PAN: AHQPC 8712J (APPELLANT) (RES PONDENT) FOR THE APPELLANT: SHRI MIRAJ D.SHAH, ADVOCA TE, LD.AR FOR THE RESPONDENT: SHRI MONGOTH UNG JUNGIO, JCIT, LD.DR DATE OF HEARING: 06-01-2016 DATE OF PRONOUNCEMENT: 13-01 -2016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED CIT (A),XXXII, KOLKATA IN APPEAL NO. 213/XXXII/09-10/49(1)/KOL DA TED 18-10-2012 FOR THE ASSESSMENT YEAR 2007-08 AGAINST THE ORDER OF ASSESSMENT PASSE D BY THE LD.AO U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL IS AS TO WHETHER A SUM OF RS.14,76,000/- BEING CASH DEPOSITS MADE IN THE BAN K COULD BE TREATED AS INCOME OF THE ASSESSEE IN THE FACTS OF THE CASE. 2.1 THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASS ESSEE IS A RETAIL TRADER ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF FISH AND FISH PROD UCTS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED BY THE ASSESSEE HEREIN IN TERMS OF SECTION 44AF OF THE ACT. THE LD.AO FOUND THAT THERE WERE CASH DEPOSITS BETWEEN 14-03-2007 TO 28-03-2007 TO THE TUNE OF RS. 14,76,000/- IN THE BANK ACCOUNT OF THE ASSESSEE. IN RESPONSE TO THE SHOW-CAUSE NOTICE, THE ASSESSEE REPLIED THAT THE SOURCE OF CAS H DEPOSITS WERE FROM SALE PROCEEDS RECEIVED IN CASH FROM M/S. ATTA EXPORTS AND ALSO STATED THAT THE ENTIRE SALES MADE ARE ALSO DULY ITA NO. 394/KOL/2013-C-AM SMT. SULEKHA CHOWDHURY 2 DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASS ESSEE. THE LD.AO ALSO ISSUED SUMMONS TO M/S. ATTA EXPORTS U/S. 131 OF THE I.T ACT, 1961 CA LLING FOR SUBMISSION OF VARIOUS DETAILS BY THE ASSESSEE. THE SAID PARTY, M/S. ATTA EXPORTS, FA ILED TO APPEAR IN PERSON BEFORE THE LD.AO, BUT GAVE ITS REPLIES IN WRITING DIRECTLY TO THE LD. AO, WHEREIN HE HAD CATEGORICALLY STATED THAT HE HAD PAID A SUM OF RS.14,76,000/- IN CASH TO THE ASS ESSEE FOR PURCHASE OF FISH AND FISH PRODUCTS FROM THE ASSESSEE. THE LD.AO ALSO OBSERVED THAT TH E ASSESSEE DOES NOT HAVE ANY INFRASTRUCTURAL FACILITY IN THE FORM OF COLD STORA GE PLANT OR FREEZER FOR STORING THE FISH BOUGHT BY THE ASSESSEE. HENCE, HE DISBELIEVED THE VERSION OF THE ASSESSEE AS WELL AS THE REPLY LETTER OF M/S. ATTA EXPORTS THAT THE SOURCE OF CASH DEPOSITS EMANATE OUT OF SALE PROCEEDS OF FISH. THE LD. AO ACCORDINGLY BROUGHT THE TOTAL CASH DEPOSITS OF RS.14,76,000/- TO TAX AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. THIS A CTION OF THE LD.AO WAS ALSO UPHELD BY THE LD.CIT(A) ON 1 ST APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFO RE US ON THE FOLLOWING GROUNDS:- 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ASSESSMENT ORDER PASSED WAS IN VIOLATION OF PRINCIPALS' OF NATURAL J USTICE HENCE IS BAD IN LAW AND BE QUASHED. 2. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE CIT (A) ERRED IN ADDING RS.14,76,000/- AS INCOME OF THE ASSESSEE. TH E ADDITION BEING UNCALLED FOR, THE SAME BE DELETED. 3. THE APPELLANT CRAVES LEAVE TO PRESS NEW, ADDITIO NAL GROUNDS OF APPEAL OR MODIFY, WITHDRAW ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF THE APPEAL. BEFORE US THE LD.AR ARGUED THAT M/S. ATTA EXPORTS H AS SPECIFICALLY REPLIED BEFORE THE LD.AO THAT IT HAD ALLOWED THE ASSESSEE TO USE ITS COLD S TORAGE FACILITY FOR STORING THE FISH BEFORE IT IS EXPORTED BY M/S. ATTA EXPORTS. M/S. ATTA EXPORTS H AD ALSO SPECIFICALLY STATED THAT NO RENT IS BEING COLLECTED BY IT FROM THE ASSESSEE FOR STORAG E FACILITY. HE FURTHER STATED THAT THE ASSESSEE HAD ALREADY DISCLOSED THE SUM OF RS.14,76,000/- AS SALES IN ITS P & L ACCOUNT, WHICH IS ALSO CONFIRMED BY M/S. ATTA EXPORTS. BY ADDING THE SAME I.E RS. 14,76,000/- AGAIN AS CASH CREDIT WOULD ONLY RESULT IN DOUBLE ADDITION. IN RESPONSE TO THIS THE LD.SR.DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. ITA NO. 394/KOL/2013-C-AM SMT. SULEKHA CHOWDHURY 3 2.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE BEFO RE US. WE FIND THAT THE ASSESSEE HAD EXPLAINED THE SOURCES OF CASH DEPOSITS TO BE EMANAT ING OUT OF SALE PROCEEDS OF FISH TO M/S. ATTA EXPORTS. WE ALSO FIND FROM CONFIRMATION GIVEN BY M/S. ATTA EXPORTS BEFORE THE LD.AO, WHICH IS ALSO PART OF THE PAPER BOOK AS FILED BY TH E ASSESSEE BEFORE US THAT M/S. ATTA EXPORTS HAD INDEED DULY CONFIRMED THE PAYMENT OF RS.14,76, 000/- IN CASH TO THE ASSESSEE FOR PURCHASES MADE BY IT FROM THE ASSESSEE. WE ALSO FIN D THAT M/S. ATTA EXPORTS HAD DULY STATED IN ITS RESPONSE TO SUMMON PROCEEDINGS U/S. 131 OF T HE ACT BEFORE THE LD.AO THAT IT HAD ALLOWED ITS COLD STORAGE FACILITY TO BE USED BY TH E ASSESSEE FREE OF RENT BEFORE IT IS EXPORTED BY M/S. ATTA EXPORTS. WE ALSO FIND THAT THE FINDING GIVEN BY THE LOWER AUTHORITIES THAT SALE IS MADE BY THE ASSESSEE TO A SINGLE PARTY TO THE TUNE OF RS.14,76,000/- IS FACTUALLY INCORRECT AS TOTAL SALES RECORDED IN THE P & L ACCOUNT OF THE AS SESSEE IS OF RS.28,40,600/-. FROM THE DETAILS FILED BY THE ASSESSEE IN THE PAPER BOOK, WE ARE THO ROUGHLY SATISFIED THAT THE SOURCE FOR CASH DEPOSITS HAD EMANATED ONLY OUT OF SALE PROCEEDS OF THE ASSESSEE, WHICH HAS BEEN DULY OFFERED TO TAX BY THE ASSESSEE IN HER RETURN AND ADDING THE SAME AGAIN AS UNEXPLAINED CASH CREDIT WOULD ONLY RESULT IN DOUBLE ADDITION. WE ALSO FIND LOT OF FORCE IN THE ALTERNATIVE ARGUMENTS OF THE LD.AR THAT FROM THE CONFIRMATION FILED BY M/S. ATTA EXPORTS, IT CLEARLY EMANATED THAT SOURCE OF CASH DEPOSIT IS ONLY OUT OF SALE PROCEED S OF FISH AND THE INCOME OF THE ASSESSEE IS DETERMINED U/S. 44AF OF THE ACT, AND HENCE THERE IS NO SCOPE FOR MAKING ANY FURTHER ADDITION TOWARDS BUSINESS RECEIPTS BY INVOKING THE PROVISION S OF SECTION 68 OR 69 OF THE ACT. THE RELIANCE PLACED BY THE ASSESSEE ON THE FOLLOWING JU DGMENTS IN THIS REGARD:- ITA NO.292/KOL/2012 A.Y 2008-09 DTD. 30-03-2012 IN THE CASE OF SRI SUBIR KUMAR SINHA VS. ADDL. COMMISSIONER OF INCOME TAX, R ANGE-2, DURGAPUR ITA NOS. 854 TO 856/KOL/2010 A.YS 2003-04 TO 2006-0 7 DTD. 25-11-2011 IN THE CASE OF KAPIL DEY, KOLKATA VS. INCOME TAX OFFI CER, W 49(2), KOLKATA PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SURINDER PAL ANAND DTD. JUNE 29,2010 REPORTED IN (2010) 6 TAXMANN.COM 7 (P&H) 2.4. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTAN CES AND RESPECTFULLY FOLLOWING JUDICIAL PRECEDENTS, WHICH ARE DIRECTLY APPLICABLE ON THE PO INT, WE HAVE NO HESITATION IN DIRECTING THE LD.AO TO DELETE THE IMPUGNED ADDITION SO MADE IN T HE SUM OF RS.14,76,000/- BY THE LD.AO AND CONFIRMED BY THE LD.CIT(A). ACCORDINGLY, THE GR OUNDS RAISED BY THE ASSESSEE ARE ALLOWED. ITA NO. 394/KOL/2013-C-AM SMT. SULEKHA CHOWDHURY 4 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 1.. THE APPELLANT: SMT. SULEKHA CHOWDHURY C/O D.J SHAH & CO. KALYAN BHAVAN 2 ELGIN ROAD, KOL-20. 2 THE RESPONDENT: INCOME TAX OFFICER W 49(1), UTTA RAPAN BUILDING, ULTADANGA, KOL 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS THIS ORDER IS PRONOUNCED IN OPEN COURT ON 13 -01-2016 SD/- ( S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 13 -01/2016 COPY OF THE ORDER FORWARDED TO:-