I.T.O Wd - 9(4),kolkata, Kolkata V. Shri Manas Moitra, Kolkata

ITA 448/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5002 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 09-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2013
• Court: TRIBUNAL
• Department Lawyers: KALYAN NATH
• Keywords: Unexplained cash credit; Salary income; Opportunity of being heard; Additional evidence; Onus to prove
• Section: 143(3); 68

Judgement Text

I.T.A. NO 4 48/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 448/KOL/ 2013 ASSESSMENT YEAR: 2009-2010 INCOME TAX OFFICER,................................ .............................APPELLANT WARD-9(4), KOLKATA, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- SHRI MANAS MOITRA,................................. .........................RESPONDENT 173, EAST SINTHEE ROAD, DUMDUM, KOLKATA-700 030 [PAN : AEKPM 8558 H] APPEARANCES BY: SHRI KALYAN NATH, JCIT, D.R., FOR THE DEPARTMENT SHRI RIP DAS, FCA, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : MARCH 09, 2016 DATE OF PRONOUNCING THE ORDER : MARCH 11, 2016 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL IS PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-V III, KOLKATA DATED 12.12.2012, WHEREBY HE DELETED THE ADDITIONS OF RS. 27,49,417/- AND RS.10,95,056/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF UNEXPLAINED CREDIT CARD PAYMENTS AND UNEXPLAINED CAPITAL INTROD UCTION RESPECTIVELY. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO DERIVES INCOME FROM SALARY, BUSINESS AND OTHER SOURCES. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 30 .07.2009 DECLARING TOTAL INCOME OF RS.3,71,139/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS MADE CREDIT CARD PAYMENTS TO THREE BANKS AGGREGATIN G TO RS.27,49,417/-. I.T.A. NO 4 48/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 6 HE ALSO FOUND THAT THE ASSESSEE HAS ALSO INTRODUCED A CAPITAL OF RS.10,95,056/- IN M/S. PEOPLES TANNERY. IN THIS REG ARD, THE ASSESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO ESTABLISH O N EVIDENCE THE SOURCE OF CREDIT CARD PAYMENTS AS WELL AS THE CAPITAL INTR ODUCED IN M/S. PEOPLES TANNERY DURING THE YEAR UNDER CONSIDERATION. THE AS SESSEE, HOWEVER, FAILED TO OFFER ANY EXPLANATION TO THE SATISFACTION OF THE ASSESSING OFFICER DESPITE SEVERAL OPPORTUNITIES GIVEN IN THIS REGARD. THE ASSESSING OFFICER, THEREFORE, WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND IN THE AS SESSMENT SO COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 28.11.2011 ADDITIONS OF RS.27,49,417/- AND RS.10,95,056/- WERE MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEX PLAINED CREDIT CARD PAYMENTS AND UNEXPLAINED CAPITAL INTRODUCTION RESPE CTIVELY. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) CHALLENGING BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CREDIT CARD PAYME NTS AND UNEXPLAINED CAPITAL INTRODUCTION. DURING THE COURSE OF APPELLAT E PROCEEDINGS, DETAILED WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE ALON G WITH DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CASE AND AFTER TAKING IN TO CONSIDERATION THE SAME, THE LD. CIT(APPEALS) DELETED BOTH THE ADDITIO NS MADE BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS GIVEN I N HIS IMPUGNED ORDER :- 5.1.3. I HAVE CAREFULLY CONSIDERED THE MATERIAL BR OUGHT ON RECORD, THE FINDINGS RECORDED BY THE ASSESSING OFFI CER AS WELL AS THE ARGUMENTS AND SUBMISSION PUT FORTH ON BEHALF OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE RATIO LAID DOWN IN THE JUDGEMENTS CITED ON BEHALF OF THE APPELLANT. IN THI S CASE, THE ASSESSING OFFICER HAS SOUGHT TO TAX THE SOURCE OF E XPENDITURE INCURRED THROUGH CREDIT CARDS. SECTION 68 REQUIRES THAT THERE IS A CREDIT IN THE B OOKS MAINTAINED BY AN ASSESSEE; SUCH CREDIT IS OF A SUM DURING THE PREVIOUS YEAR; AND THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE OF SUCH CREDIT; OR THE EXPLANATIO N OFFERED BY THE ASSESSEE IS NOT IN THE OPINION OF THE ASSESSING AUTHORITY, SATISFACTORY. THEN THE SUM SO CREDITED MAY BE CHARG ED TO TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. SECTI ON 2(12A) OF I.T.A. NO 4 48/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 6 THE IT ACT COINS A DEFINITION OF THE EXPRESSION 'BO OKS OR BOOKS OF ACCOUNT' SO AS TO INCLUDE - -LEDGERS -DAY-BOOKS; -ACCOUNT BOOKS, AND -OTHER BOOKS WHETHER KEPT- (A) IN THE WRITTEN FORM OR (B) AS PRINT OUTS OF DATA STORED IN A FLOPPY, DISC, TAP E OR ANY OTHER FORM OF ELECTRO-MAGNETIC DATA STORAGE DEVICE. BOOKS MUST BE THOSE OF THE ASSESSEE AND THAT A PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE CANNOT BE REGA RDED AS A BOOK OF THE ASSESSEE, THAT IS, A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS. ON THE SAME ANALOGY, THE ENTRIES IN THE CREDIT CARDS MANAGED BY A FINANCIAL INSTITUTION OR A BANK COULD NOT BY ITSELF BE CONSIDERED AS A BOOK OF ACCOUNT RE GULARLY MAINTAINED FOR THE PURPOSES OF SECTION 68 OF THE IN COME-TAX ACT. MAY IT AS MAY BE, IN THE INSTANT CASE, IT IS NOT TH E CASE OF THE ASSESSING OFFICER THAT THE CREDIT IN THE CREDIT CAR DS AGGREGATING TO RS. 27,49,417/- ON A PARTICULAR DATE THROUGH ONL Y A SINGLE ENTRY. THE CREDITS IN THE ACCOUNTS ARE THROUGH NUME ROUS TRANSACTIONS THROUGHOUT THE YEAR AND THE SOURCES OF WHICH WOULD DIFFER. FROM THE RECORD, IT WOULD APPEAR THAT THE A PPELLANT HAS EXPLAIN THE DIFFERENT SOURCES, WHEREAS THE ASSESSIN G OFFICER HAS NOT POINTED OUT A SINGLE ITEM OF CREDIT WHICH COULD BE SAID TO BE CASH CREDIT INTRODUCED FROM UNEXPLAINED SOURCES DUR ING THE RELEVANT FINANCIAL YEAR UNDER CONSIDERATION. ON THE OTHER HAND, HE SHOULD HAVE PROVED THAT EACH AND EVERY ITEM OF E XPENDITURE INCURRED THROUGH THE CREDIT CARD WAS FROM UNEXPLAIN ED SOURCES. BY REJECTING THE EXPLANATION OFFERED AND BY INSISTI NG THAT THE APPELLANT DID NOT FURNISH CASH FLOW CHART, IT COULD NOT BE SAID THAT THE ASSESSING OFFICER HAS DISCHARGED THE BURDE N OF PROOF. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.27,49,417/- AS MADE BY THE ASSESS ING OFFICER UNDER SEC. 68 OF THE INCOME-TAX ACT IS UNJUSTIFIED. THEREFORE, THE ADDITION MADE BY HIM UNDER SEC. 68 OF THE ACT AT RS .27,49,417/- IS HEREBY DELETED AND THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED. I HAVE CAREFULLY CONSIDERED THE MATERIAL PLACED ON RECORD AND THE SUBMISSIONS PUT FORTH ON BEHALF OF THE APPE LLANT. FROM THE MATERIAL PLACED ON RECORD, IT IS AMPLY CLEAR TH AT IT IS NOT A FRESH CREDIT INTRODUCED IN THE BOOKS DURING THE YEA R UNDER CONSIDERATION, BUT A DEBIT BALANCE IN THE NAME OF T HE APPELLANT IN THE BOOKS OF M/S. S.G. INTERNATIONAL PVT. LTD. T AKEN OVER BY I.T.A. NO 4 48/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 6 PEOPLES TANNERY. IT IS WELL SETTLED THAT THE IF THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACT ORY, THERE IS PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE, VIZ., TH E RECEIPT OF MONEY, AND IF HE FAILS TO REBUT THE SAME, THE SAID EVIDENCE BEING UNREBUTTED CAN BE USED AGAINST HIM BY HOLDING THAT IT IS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE DEPARTMENT, HOWEVER, CANNOT AC T UNREASONABLY - SUMATI DAYAL V. CIT [1995} 80 TAXMAN 89/214 ITR 801 (SC). IT IS NOT THE CASE OF THE ASSESSING O FFICER THAT THE CASH CREDIT OF RS.10,95,056/- APPEARING IN THE BOOK S OF THE APPELLANT REMAINED UNEXPLAINED. THE ASSESSING OFFIC ER HAS NOT BROUGHT ON RECORD ANY SORT OF MATERIAL EVIDENCE TO ESTABLISH THAT THE APPELLANT HAS NOT DISCHARGED HIS BURDEN OF PROO F OR THAT THE EXPLANATION OFFERED BY THE APPELLANT WAS NOT SATISF ACTORY. THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. P MOHANAKALA [2007} 291 ITR 278(SC) THAT THE OPI NION OF THE ASSESSING OFFICER IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATERIAL AND OTHER ATTENDING CIRCUMSTANCES AVAIL ABLE ON RECORD IS SQUARELY APPLICABLE TO THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE. THE ASSESSING OFFICER HAS NOT BRO UGHT ANY MATERIAL ON RECORD TO REACH TO THE CONCLUSION THAT THE EXPLANATION OFFERED BY THE APPELLANT IS NOT SATISFA CTORY. IN VIEW OF THE FACTS, I AM OF THE OPINION, THIS IS A CASE W HERE THE ASSESSING OFFICER FAILED TO DISCHARGE HIS BURDEN OF PROOF. THEREFORE, IN THE LIGHT OF THE RATIO LAID DOWN BY T HE HON'BLE SUPREME COURT IN THE CASES CITED SUPRA, THE ADDITIO N OF RS.10,95,056/- ON ACCOUNT OF UNEXPLAINED CASH CREDI T UNDER SEC. 68 OF THE ACT IS UNJUSTIFIED. THE ADDITION IS ACCOR DINGLY DELETED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN GROUND NO . 1 OF ITS APPEAL, THE REVENUE HAS RAISED A PRELIMINARY ISSUE THAT BOTH TH E ADDITIONS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE AS SESSEE HAVE BEEN DELETED BY THE LD. CIT(APPEALS) BY RELYING ON CERTA IN DOCUMENTS FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE HIM WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE SAME AND THE RE IS THUS A CLEAR VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962 . WHILE SUPPORTING THE REVENUES CASE ON THIS ISSUE, THE LD. D.R. HAS INVI TED OUR ATTENTION TO THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UN DER SECTION 143(3) AS I.T.A. NO 4 48/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 6 WELL AS THE COPY OF THE RELEVANT ORDER-SHEET ENTRIE S RECORDED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND THE COPY OF ASR SUBMITTED BY THE ASSESSING OFFICER TO T HE CONCERNED ADDITIONAL CIT DATED 25.02.2013 TO POINT OUT THAT T HE VARIOUS DOCUMENTS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(APPEAL S) WERE NOT FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF A SSESSMENT PROCEEDINGS AND THE SAME CONSTITUTING ADDITIONAL EVIDENCE WAS R ELIED UPON BY THE LD. CIT(APPEALS) TO GIVE RELIEF TO THE ASSESSEE ON BOTH THE ISSUES WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE SAME. WHEN THIS POSITION CLEARLY EVIDENT FROM THE RELEVANT DOC UMENTS PLACED ON RECORD WAS CONFRONTED TO THE LD. COUNSEL FOR THE AS SESSEE, HE HAS NOT BEEN ABLE TO DISPUTE THE SAME. IT IS THUS CLEAR THAT THE LD. CIT(APPEALS) VIDE HIS IMPUGNED ORDER HAS DELETED BOTH THE ADDITIONS IN QU ESTION MADE BY THE ASSESSING OFFICER BY RELYING ON THE ADDITIONAL EVID ENCE FILED BY THE ASSESESE FOR THE FIRST TIME BEFORE HIM WITHOUT GIVI NG ANY OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE SAME AND THERE IS A CLEAR VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962. WE, THEREFO RE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON BOTH THE ISSUES INVOLVED IN THIS CASE AND RESTORE THE MATTER BACK TO THE ASSESSING O FFICER FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE ENTIRE EVIDENCE BRO UGHT ON RECORD BY THE ASSESSEE. NEEDLESS TO OBSERVE THAT THE ASSESSING OF FICER SHALL GIVE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 11, 201 6. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 11 TH DAY OF MARCH, 2016 COPIES TO : (1) INCOME TAX OFFICER, WARD-9(4), KOLKATA, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 I.T.A. NO 4 48/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 6 OF 6 (2) SHRI MANAS MOITRA, 173, EAST SINTHEE ROAD, DUMDUM, KOLKATA-700 030 (3) COMMISSIONER OF INCOME-TAX-VIII, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.