Somnath Sircar, Kolkata V. I.T.O., Ward - 22(3), Kolkata, Kolkata

ITA 448/KOL/2022

AI Insights

The case involves Somnath Sircar, the appellant, who appealed against the order of the National Faceless Appeal Centre (CIT(A)), which had been passed under section 250 of the Income Tax Act. The primary issue was the addition of Rs.8,04,17,440 to the assessee's income under section 68 of the Act, attributed to unexplained credits in the balance sheet. The appellant argued that this was due to a clerical error by his accountant, who mistakenly recorded inherited assets at incorrect values. The Tribunal considered the explanations and the revised balance sheet provided by the appellant, leading to the decision to rectify the reported figures.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128325 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 03-05-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 07-08-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 250

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘सी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी मनीष बोरड, लेखा सदèय के सम¢ Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A No.448/Kol/2022 Assessment year: 2016-17 Somnath Sircar..........................................................................Appellant C/o S.N. Ghosh & Associates, Advocates “Sagar Mansion”, 2, Garstin Place, 2 nd Floor, Suite Nos.202&203, Hare Street, Kolkata-1. [PAN: BASPS3474D] vs. ITO, Ward-22(3), Kolkata..........................................................Respondent Appearances by: Shri Somnath Ghosh, Advocate, appeared on behalf of the appellant. Shri Abhijit Kundu, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 04, 2023 Date of pronouncing the order : June 27, 2023 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 26.07.2022 of the National Faceless Appeal Centre (hereinafter referred to as the ‘CIT(A)’) passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The sole issue raised in this appeal by the assessee is relating to the addition made by the Assessing Officer of Rs.8,04,17,440/- u/s 68 of the Act on account of unexplained credits shown in the balance sheet of the assessee. I.T.A No.448/Kol/2022 Assessment year: 2016-17 Somnath Sircar 2 3. At the outset, the ld. counsel for the assessee has invited our attention to the impugned assessment order to submit that it was explained to the Assessing Officer that the assessee had inherited certain moveable and immovable properties from his uncle Late Prabir Kr. Sircar. That among the said properties, there was a fixed bank deposit of Rs.96,00,000/- in the Bank of Maharashtra. However, the accountant who was a novice mistakenly mentioned the figure of the bank deposit at Rs.9,60,00,000/-. That the ld. counsel for the assessee inviting our attention to the revised balance sheet has submitted that the total bank balance inherited by the assessee by way of will from his uncle Late Prabir Kr. Sircar was Rs.2,66,46,349/-. However, the accountant wrongly mentioned the figure at Rs.10,54,31,188.45/- resulting into the increase in capital of the assessee to the extent of Rs.8.64 crore. The ld. counsel has further submitted that the accountant further committed some mistakes in respect of other bank balances and cash in hand and thereby wrongly mentioned the figures in capital of Rs.8,04,17,440/-. That the aforesaid facts were duly brought to the knowledge of the Assessing Officer. However, the Assessing Officer did not accept the aforesaid contention of the assessee observing that the assessee has repeated the aforesaid increase in capital in his income tax return for subsequent year for A.Y 2017-18. The Assessing Officer has observed that if the assessee’s return for the year under consideration would not have come under scrutiny, the assessee would have taken the benefit of the aforesaid mistake and would have shown his balances including the aforesaid figure of Rs.8,04,17,440/-. 4. We have considered the above submissions of the ld. counsel. Admittedly, the assessee by way of will has inherited moveable and immovable properties from his uncle Late Prabir Kr. Sircar. The assessee I.T.A No.448/Kol/2022 Assessment year: 2016-17 Somnath Sircar 3 has also duly explained the mistake in noting the figures by the accountant of the assessee. The assessee has duly submitted the revised balance sheet also. The contention of the assessee has been rejected on the ground that the assessee has repeated the same figures for subsequent A.Y 2017-18. However, the counsel for the assessee, in this respect, has submitted that the assessee is an individual and does not maintain books of account. That the accountant of the assessee had taken the figure from the last year resulting into the repetition of the said mistake. Considering the above contentions of the assessee, the matter is restored to the file of the Assessing Officer with a direction to adopt the correct figure of Rs.96,00,000/- on account of FDR deposits in Bank of Maharashtra instead of Rs.9,60,00,000/- as wrongly mentioned in the balance sheet by the accountant of the assessee. We further direct the Assessing Officer to consider the revised balance sheet of the assessee and assess the income of the assessee for A.Y 2016-17 accordingly, subject to the condition that the assessee has mentioned the correct figures in the subsequent assessment years i.e. A.Y 2018-19 and onwards and the assessee has not taken benefit of his own wrong. 5. With the above observation, the appeal of the assessee is treated as allowed for statistical purposes. Kolkata, the 27 th June, 2023. Sd/- Sd/- [डॉÈटर मनीष बोरड /Dr. Manish Borad] [संजय गग[ /Sanjay Garg] लेखा सदèय /Accountant Member ÛयाǓयक सदèय /Judicial Member Dated: 27.06.2023. RS I.T.A No.448/Kol/2022 Assessment year: 2016-17 Somnath Sircar 4 Copy of the order forwarded to: 1. Somnath Sircar 2. ITO, Ward-22(3), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches