Samarendra Nath Das(Advocate), Balasore V. ACIT, Bhubaneswar

ITA 423/CTK/2010

• Counselvise Citation: 42322114 RSA 2010
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 10-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 29-11-2010
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: B PANDA

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 423/CTK/2010 (ASSESSMENT YEAR 2006 - 07) SAMARENDRA NATH DAS,ADVOCATE, AMBIKA BHAWAN, AZIMABAD, BALASORE. PAN: ABXPD 2711 P VE RSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(2, BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI B.PANDA, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 10.08.2011 DATE OF PRONOUNCEMENT : 12.08.2011 OR DER SHRI K.K.GUPTA, AM : THIS AN APPEAL FILED BY THE ASSESSEE AGAINST ORDER DT.23.9.2010 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE, AN ADVOCATE FILED HIS RETURN ON 30.3.2007 S HOWING TOTAL INCOME OF 1,02,544. THE RETURN WAS PROCESSED U/S.143(1). IN THE IMPUGNED ASSESSMENT U/S.143(3), THE ASSESSING OFFICER ESTIMATED THE INCOME FROM LEGAL PROFESSION AT 3,00,000 AND MADE ADDITION OF 1,56,933 SINCE THE ASSESSEE HAD DISCLOSED NET INCOME UNDER THIS HEAD AT 1,43,067 . ON THE GROUND THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE AND NATURE OF ALL DEPOSITS AND WITHDRAWALS REFLECTED IN THE BANK ACCOUNTS, THE ASSESSING OFFICER HELD THE ENTIRE DEPOSITS OF 5,44,564 AS UNDISCLOSED INCOME OF THE ASSESSEE AND ADD ED THE SAME TO THE TOTAL INCOME U/S.69. THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND BEING UNSUCCESSFUL HAS COME UP IN THE PRESENT APPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED AR OF THE ASSESSEE CONTENDED THAT THERE WAS NO MATERIALS OR BASIS TO ENHANC E THE PROFESSIONAL INCOME TO 3,00,000 AS AGAINST 1,43,067 DISCLOSED BY THE ASSESSEE, IN VIEW OF THE FACT THAT THE ASSESSEE HAVING LIMITED TAX PRACTICE BEING AN ADVOCATE, THERE CANNOT BE INCOME AS ITA NO.423/CTK/2010 2 ESTIMATED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A). AS REGARDS THE DEPOSITS IN BANK ACCOUNTS, THE LEARNED AR OF THE ASSESSEE CONTENDED THAT THE DEPOSITS OF 5,44,000 WERE MADE OUT OF WITHDRAWAL FROM THE FATHERS RETIREMENT BENEFIT FROM DIFFERENT SOURCES. THE FATHER OF THE ASSESSEE SHRI AKHILENDRA NATH DAS WAS A RAILWAY EM PLOYEE AS SR. PHARMACIST AND THE ASSESSE IS HIS ONLY SON INHERITS ALL THE PROPERTIES AND DEPOSITS. IN SUPPORT OF THIS, THE LEARNED AR OF THE ASSESSEE FILED A CONFIRMATION LETTE R OF THE FATHER OF THE ASSESSEE. THEREFORE, THE ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) IS NOT AT ALL JUSTIFIED AND ARE LIABLE TO BE DELETED. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 4. HAVING HEARD BOTH THE PARTIES AND PERUSING THE IMPUGNED ORDERS O F THE AUTHORITIES BELOW AND CONSIDERING THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL, WE FIND THAT IN ABSENCE OF BOOKS OF ACCOUNTS IN RESPECT OF INCOME FROM LEGAL PROFESSION , THE ASSESSING OFFICER HAS ESTIMATED THE INCOME UNDER THIS HEAD AT 3,00,000 AS AGA INST 1,43,067 DECLARED BY THE ASSESSEE IN HIS RETURN. MAY IT BE TRUE THAT THE ASSESSEE HAS NOT MAINTAINED ACCOUNTS IN RESPECT OF INCOME FROM LEGAL PROFESSION AND THEREFORE, THE RETURNED INCOME WHICH IS ON ESTIMATE BASIS CANNOT BE ACCEPTED IN TOTO AND THE INCOME OF THE ASSESSEE HAS TO BE ESTIMATED. BUT AT THE SAME TIME, IT IS WELL SETTLED LAW THAT THE ASSESSING OFFICER WHILE MAKING THE BEST JUDGMENT ASSESSMENT IS TO CONSIDER COMPARABLE CASE AND/OR THE PAST RECORDS OF THE ASSESSEE. HONBLE APEX COURT IN THE CASE OF BRIJ BHUSHAN LAL PARDUMAN KUMAR, ETC. V. COMMISSIONER OF INCOME TAX (115 ITR 524) HAS HELD THAT EVEN IN CASE OF BEST JUDGMENT ASSESSMENT, THE SAME HAS TO BE DONE ON A REASONABLE BASIS AND NOT DISHONESTLY OR VINDICTIVELY. THE APEX COURT ALSO HELD I N THE CASE OF STATE OF ORISSA V. MAHARAJA SHRI B. P. SINGH DEO. (76 ITR 690) THAT THE MATERIAL ITA NO.423/CTK/2010 3 PLACED BY THE ASSESSEE WERE UNRELIABLE DOES NOT EMPOWER THE ASSESSING OFFICER TO MAKE AN ARBITRARY ORDER OF ENHANCEMENT. THE HONBLE CALCUTTA HIGH COURT, IN THE CASE OF V. GOPAL V.. ASSISTANT COMMISSIONER OF INCOME TAX (207 ITR 971) , HAS HELD THAT ALTHOUGH THE ASSESSING OFFICER IS NOT BOUND BY STRICT JUDICIAL PRINCIPLES IN MAKING THE BEST JUDGMENT , HE DOES NOT POSSES ABSOLUTE AUTHORITY TO ASSESS ANY FIGURE HE LI KES. IN THE INSTANT CASE THE ASSESSING OFFICER HAS ESTIMATED THE INCOME FROM LEGAL PROFESSION AT 3,00,000 WITHOUT ANY MATERIAL BASIS. WHILE DOING SO, IN OUR CONSIDERED VIEW, HE WOULD HAVE DONE JUSTICE TO THE ASSESSEE, HAD HE CONSIDERED THE INCOME UNDER TH IS HEAD DECLARED IN EARLIER ASSESSMENT YEARS. THE LEARNED CIT(A) CONFIRMED THE SAME SIMPLY STATING THAT THE SAID ESTIMATION OF INCOME IS QUITE REASONABLE AND FAIR, WHICH IS AGAIN WHIMSICAL AND WITHOUT ANY MATERIAL BASIS. WE FIND THAT BOTH THE AUTHORITIES B ELOW HAVE FAILED TO TAKE INTO CONSIDERATION THE INCOME DECLARED BY THE ASSESSEE IN THE PREVIOUS ASSESSMENT YEARS. THEREFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN THIS REGARD AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE DE NOVO AND ARRIVE AT A FAIR AND REASONABLE ESTIMATE BY CONSIDERING THE INCOME DECLARED BY THE ASSESSEE IN THE PREVIOUS ASSESSMENT YEARS. AS REGARDS THE SUSTENANCE OF ADDITION OF 5,44,564, WE ARE OF THE CONSIDERED VIEW THAT HOLDING THE ENTIRE D EPOSITS IN THE BANK ACCOUNTS AS UNDISCLOSED INCOME U/S.69 IS NOT PROPER ON THE FACE OF THE CONFIRMATION LETTER OF THE FATHER OF THE ASSESSEE AS REFERRED TO EARLIER. WE FIND THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE AND NATURE OF THE DEPOSITS, AS NOW E XPLAINED BEFORE THE TRIBUNAL, BECAUSE OF INADEQUACY OF OPPORTUNITY TO THE ASSESSEE AND PASSING OF ORDER EX PARTE BY THE LEARNED CIT(A). THEREFORE, FOR THE ENDS OF JUSTICE AND FAIR PLAY, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) IN THIS REGARD AND RESTOR E THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE SAME AFRESH IN ITA NO.423/CTK/2010 4 THE LIGHT OF THE EVIDENCE PRODUCED BY THE ASSESSEE AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE ASSESSING OFFICER FO R EARLY DISPOSAL OF THE DE NOVO ASSESSMENT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/ - SD/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 12.08.20 11 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SAMARENDRA NATH DAS,ADVOCATE, AMBIKA BHAWAN, AZIMABAD, BALASORE. 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(2, BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.