ITO, Ward-2(4), Bhubaneswar V. Sri Dhusasan Routray, Bhubaneswar

ITA 455/CTK/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7758 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K AGARWA L LA
• Keywords: Unexplained investment; Business income; Source of fund; Tax effect; TDS; Set aside
• Section: 201

Judgement Text

P A G E 1 | 17 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 455 /CTK/201 7 ASSESSMEN T YEAR : 2011 - 12 ITO, WARD 2(4), BHUBANESWAR. VS. SRI DHUSASAN ROUTRAY, PLOT NO.485/1989, DUMDUMA, AIGINIA, BHUBANESWAR. PAN/GIR NO. AEBPR 5955 G (APPELLANT ) .. ( RESPONDENT ) ITA NO.489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 SRI DHUSASAN ROUTRAY, PLOT NO.485/1989, DUMDUMA, AIGINIA, BHUBANESWAR. VS. ITO, WARD 2(4), BHUBANESWAR. PAN/GIR NO.AEBPR 5955 G (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K. AGARWALLA , AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 6 / 0 9 / 201 9 DATE OF PRONOUNCEMENT : 14 / 10 / 201 9 O R D E R PER C.M.GARG,JM THE CAPTIONED CROSS APPEALS HAVE BEEN FILED AGAINST THE ORDER OF THE CIT(A), 2 , BHUBANESWAR DATED 23.8.2017 FOR THE ASSESSMENT YEAR 2011 - 12 . ITA NO.455/CTK/2017 - REVENUES APPEAL. 2. GROUND NOS.1 & 4 ARE GENERAL IN NATURE. 3. GROUND NOS.2 & 3 OF APPEAL READ AS UNDER: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) IS NOT JUSTIFIED IN DELETING ADDITION TO THE EXTENT OF S.86,00,000/ - AS AGAINST AMOUNT OF RS.30,00,000/ - SUGGESTED ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 2 | 17 BY THE AO IN HIS REMAND REPORT FURNISHED BEFORE T HE LD. C1T(A) DURING THE APPELLATE PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND HAVING REGARD TO THE DETAILED REMAND REPORT FURNISHED BY THE AO DURING THE APPELLATE PROCEEDINGS REFERRED TO IN PARA - 8.1 (PAGER - 13) OF THE APPELLATE ORDER, THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING EXCESS RELIEF OF RS. 56,00,000/ - TO THE ASSESSEE OUT OF THE ADDITION TOWARDS 'UNEXPLAINED INVESTMENT IN FIXED DEPOSITS' MADE BY THE AO IN THE ASSESSMENT. 4. APROPOS THESE GROUNDS, WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND RELEVANT MATERIALS PLACED ON THE RECORD OF THE TRIBUNAL. 5. LD DR SUBMITTED THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION TO THE EXTENT OF RS.86 LAKHS AS AGAINST RS. 30 LAKHS SUGGESTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT FURNISHED BEFORE HIM DURING THE APPELLATE PROCEEDINGS. LD DR ALSO SUBMIT TED THAT THE CIT(A) HAS GROSSLY ERRED AND WAS NOT CORRECT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAVING REGARD TO THE DETAILED REMAND REPORT FURNISHED BY THE AO DURING APPELLATE PROCEEDINGS, REFERRED TO IN PARA 8.1 (PAGE 13) OF THE CIT(A)S ORDER, WHEREIN, THE CIT(A) HAS ALLOWED EXCESS RELIEF OF RS.56 LAKHS TO THE ASSESSEE OUT OF ADDITION TOWARDS UNEXPLAINED INVESTMENT IN FIXED DEPOSITS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT. LD DR SUBMITTED THAT BOTH THE CIT(A) AND THE AO WAS RIGHT IN CONFIRMING THE REMAINING PART OF AMOUNTS ON FD R S MADE BY THE ASSESSEE DURING THE RELEVANT PERIOD BUT FOR GRANTING THE SAID RELIEF TO THE ASSESSEE, HE HAS ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 3 | 17 IGNORED SOME MATERIAL FACTS, WHICH WERE SUPPORTING TO THE SUSTENANCE OF DISALLOWANCE OF RS.56 LAKHS. LD D.R. PRAYED THAT THE IMPUGNED ORDER OF THE CIT(A) MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE ASSESSING OFFICER. 6. REPLYING TO ABOVE, LD A.R, FIRST OF ALL, SUBMITTED THAT IN THE GROUNDS RAISED BY THE REVENUE, THE TAX EFFECT IS LESS THAN RS.50 LAK HS, THEREFORE, IN VIEW OF THE RECENT CBDT CIRCULAR NO.17/2019 DATED 8 TH AUGUST, 2019, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE AND DESERVES TO BE DISMISSED. LD A.R. FURTHER CONTENDED THAT EVEN ON MERITS, IF THE OBSERVATIONS OF THE LD CIT(A) ARE LOGIC ALLY EVALUATED THEN ALSO IN PARA 8.3, THE CIT (A) AFTER CAREFULLY EXAMINING THE REMAND REPORT AS WELL AS THE REJOINDER OF THE ASSESSEE FOUND THAT THE ASSESSING OFFICER HAS ACCEPTED THE INVESTMENTS IN FIXED DEPOSIT OF RS.30 LAKHS MADE BY THE ASSESSEE ON 11.2 .2011 AND ALSO FOUND THAT THE FIXED DEPOSIT AT SL. NO.1 TO 5, AS NOTED IN PARAGRAPH IN PARA 8.2 OF THE IMPUGNED ORDER HAVE BEEN THOROUGHLY EXPLAINED BY THE ASSESSEE IN HIS SUBMISSION DATED 4.1.2017. THEREFORE, THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.86 LAKHS. 7. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS, FIRST OF ALL, WE MAY POINT OUT THAT THE REVENUE IN ITS APPEAL HAS CHALLENGED THE CIT(A)S ORDER REGARDING DELETION OF ADDITION OF RS.86 LAKHS AND THUS, ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 4 | 17 THE TAX EFFECT PERTAINING TO THE SOLE ISSUE IS LESS THAN RS.50 LAKHS. THEREFORE, IN VIEW OF CBDT CIRCULAR NO.17/2019 DATED 8.8.2019, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. 8. FURTHER, WHEN WE LOGICALLY ANALYSE THE FINDINGS RECORDED BY THE CIT(A) WHILE DELETING THE ADDITION OF RS.86 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INVESTMENTS IN FIXED DEPOSITS DURING THE RELEVANT PERIOD AND FIND THAT THE CIT(A) HAS MADE OBSERVATIONS IN PARA 8.2 AND 8.3 OF HIS ORDER, WHICH READ AS FOLLOWS: 8.2 THE REMAND REPORT OF THE ASSE SSING OFFICER WAS FORWARDED TO THE APPELLANT TO SUBMISSION OF REMAND REPORT. THE RELEVANT PORTION IS REPRODUCED BELOW NO./NAME OF BANK DATE FACE VALUE OF FDR NAME OF ACCOUNT HOLDER CASH DEPOSIT SECURITY DEPOSIT OPENING BALANCE INTEREST APPLIED LIC OTHER RECEIPTS (TDS ETC) TOTAL REMARKS 1. PUNJAB NATIONAL BANK (SB A/C 0553000100139823 27/09/10 800,000 DHUSASAN ROUTRAY 400,000 0 400,000 0 0 0 800,000 OPENING BALANCE 4,01,320.10 2. ANDHRA BANK S B A/C. 148010100001033 10/08/10 1,000,000 DIKSHA ROUTRAY 0 0 1,000,000 0 0 0 1,000,000 OPENING BALANCE 21,84,153/ - 3. ANDHRA BANK 148010100001033 10/08/10 1,000,000 DEEPAK ROUTRAY 0 0 1,000,000 0 0 0 1,000,000 OPENING BALANCE 21,84,153/ - (BALANCE OP LEFT 1,84,153/ - ) 4. ANDHRA BANK (SB A/C. 148010100001033 12/08/10 1,200,000 DHUSASAN ROUTRAY 0 1,031,910 168,090 0 0 0 1,200,000 SECURITY DEPOSIT RS. 536231+RS.495679. REMAINING OP BALANCE RS.16,063/ - 5. ANDHRA BANK 148010100001033 27/10/10 1,550,000 KUNAL ROUTRAY 0 1,454,650 15,557 53,527 25,000 1,266 1,550,000 SECURITY DEPOSIT RS. 1,26,462+ RS.13,28,188 REMAINING OP BALANCE RS.16,063/ - 6. ANDHRA BANK (SB A/C. 148010100001033 21/12/10 885,000 KUNI ROUTRAY 885,000 0 0 0 0 0 885,000 CASH DEPOSIT BY KUNIROUTRAY OUT OF HIS BUSINESS INCOME & PAST SAVINGS 7. ANDHRA BANK 148010100001033 21/12/10 890,000 DHUSASAN R OUTRAY 890,000 0 0 0 0 0 890,000 CASH DEPOSIT BY DHUSASANROUTRAY OUT OF HER BUSINESS INCOME, AGRICULTURAL INCOME & PAST SAVINGS 8. ANDHRA BANK (SB A/C. 148010100001033 21/12/10 3,000,000 DHUSASAN ROUTRAY 2,550,000 449,933 67 0 0 0 3,000,000 OUT OF PAST SAVINGS & AGRICULTURAL INCOME 9. ANDHRA BANK (SB A/C. 148010100001033 11/02/11 700,000 DHUSASAN ROUTRAY 700,000 0 0 0 0 0 700,000 OUT OF PAST SAVINGS & AGRICULTURAL INCOME OF KUNIROUTRAY GRAND TOTAL 11,010,000 54,10,000 2,936,49 2,583,714 53,527 25,000 1,266 11,010,000 ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 5 | 17 .'8.3 I HAVE CAREFULLY EXAMINED THE REMAND REPORT AS WELL AS THE REJOINDER OF THE APPELLANT. I FIND THAT THE ASSESSING OFFICER HAS ACCEPTED INVESTMENT IN FIXED DEPOSIT OF RS 30,00,000/ - MADE BY THE APPELLANT ON 11.02.2011 (SEE S.N.5 OF AO'S SUBMISSION IN PARAGRAPH 8.1 ABOVE). FURTHER, I FIND THAT THE SOURCE OF FIXED DEPOSITS AT S.N. 1 TO 5 IN PARAGRAPH '8.2 ABOVE HAS BEEN THOROUGHLY EXPLAINED BY THE APPELLANT IN HIS SUBMISSIONS DATED 4.1.2017, WHICH WAS REMANDED TO THE AO VIDE T HIS OFFICE LETTER DATED 14.4.2017. THEREFORE, ADDITION OF RS 85,50,000/ - IS ORDERED TO BE DELETED. REGARDING CASH DEPOSIT OF RS 54,10,000/ - WHICH WERE USED FOR THE PURPOSE OF INVESTMENT IN FIXED DEPOSIT, THE APPELLANT HAS STATED THAT THE CASH DEPOSIT IS BY HIM AND HIS WIFE OUT OF THEIR BUSINESS INCOME, AGRICULTURAL INCOME AND PAST SAVINGS. HOWEVER, NO EVIDENCE IN THIS REGARD HAS BEEN FILED BY THE APPELLANT. THEREFORE, THE ADDITION OF RS 54,10,000/ - IS CONFIRMED. THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS 1,40,10,000/ - . CONSIDERING THE AMOUNT OF ADDITION CONFIRMED, THE ADDITION OF RS .86,00,000/ - IS DIRECTED TO BE DELETED. THE GROUNDS OF APPEAL ARE PARTLY ALLOWED. 9. IN VIEW OF ABOVE, WE HAVE NO HESITATION TO HOLD THAT THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AFTER CAREFULLY EXAMINING THE REMAND REPORT AS WELL AS THE REJOINDER OF THE ASSESSEE - APPELLANT AND, THEREAFTER FOUND THAT THE SOURCE OF FIXED DEPOSIT S AT SL.NO.1 TO 5 IN PARA 8.2(SUPRA) HAS BEEN THOROUGHLY EXPLAINED BY THE ASSESSEE IN HIS SUBM ISSION DATED 4.1.2017. WE ALSO OBSERVE THAT THE RENEWAL OF FDRS OF RS.30 LAKHS HAS BEEN CLARIFIED BY THE AO IN THE REMAND PROCEEDINGS AND THE AO IN THE REMAND REPORT STATED THAT THE CONTENTION OF THE ASSESSEE IS ACCEPTABLE IN VIEW OF LETTER DATED 30.11.20 14 ISSUED BY THE MANAGER, ANDHRA BANK, KHANDAGIRI BRANCH, BHUBANESWAR. FURTHER, IN THE SAME REMAND REPORT AS PER TABLE GIVEN IN ASSESSMENT ORDER, PLACED AT PARA 6 PAGE 4, THERE WAS OPENING BALANCE OF RS.42,01,273/ - OUT OF WHICH OPENING BALANCE OF RS.15,65 ,800/ - WAS BELONGING TO THE WIFE OF THE ASSESSEE MRS KUNI ROUTRAY IN CENTRAL BANK OF ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 6 | 17 INDIA, ACCOUNT NO.1219026413, AS SUBMITTED BY THE ASSESSEE. WE ARE IN AGREEMENT WITH THE CONTENTION OF LD A.R. THAT THE AMOUNT OF RS.26,35,473/ - (RS.42,01,273 RS.15,65 ,800) AS PER SAID TABLE MENTIONED IN THE ASSESSMENT ORDER PAGE 4, THE OPENING BALANCE OF INVESTMENT CANNOT BE TREATED AS UNEXPLAINED INVESTMENT. FURTHERMORE , IN PARA 8.2 OF THE IMPUGNED ORDER, THE CIT(A) HAS NOTED RELEVANT PORTION OF THE REMAND REPORT SUB MITTED BY THE ASSESSING OFFICER, WHEREIN, THE FACT OF SECURITY DEPOSITS GIVEN TO THE DIFFERENT DEPARTMENTS OF GOVERNMENT IN EARLIER YEARS WAS REFUNDED DURING THE YEAR AMOUNTING TO RS.29,36,493/ - , WHICH GETS SUPPORT FROM THE CONFIRMATION LETTERS ISSUED BY T HE RESPECTIVE DEPARTMENTS PLACED AT PAPER BOOK PAGES 32,33 & 34 AND SAID PAYMENTS HAVE BEEN REFUNDED BY THE RESPECTIVE DEPARTMENT TO THE ASSESSEE DURING THE YEAR CANNOT BE TREATED AS UNEXPLAINED INVESTMENT IN FDRS. FURTHER, AMOUNT OF INTEREST ON SB OF RS. 1768/ - . SURVIVAL BENEFITS RECEIVED FROM LIC OF RS.25,000/ - , INCOME TAX REFUND OF RS.1266/ - AS PER TABLE GIVEN IN THE FIRST APPELLA T E ORDER AT PAGE 14 AND ASSESSEES PAPER BOOK PAGE 13 CANNOT BE IGNORED. THESE FACTS HAVE BEEN CONSIDERED BY THE CIT(A) IN RIGHT PERSPECTIVE WHILE DELETING THE ADDITION OF RS.86 LAKHS ON ACCOUNT OF INVESTMENT MADE BY THE ASSESSEE IN FD R S. THEREFORE, NOT ONLY IN VIEW OF THE CBDT CIRCULAR NO.17/19 (SUPRA) BUT ALSO ON MERITS, THE DELETION OF ADDITION BY THE CIT(A) IS S USTAINABLE. WE HAVE NO REASON TO INTERFERE WITH ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 7 | 17 THE ORDER OF THE CIT(A) ON THIS COUNT. ACCORDINGLY, WE DISMISS THE GROUNDS OF THE REVENUE. 10. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO. 4 89/CTK/2017 - ASSESSEES APPEAL. 11. IN THIS AP PEAL, THE ASSESSEE HAS RAISED AS MANY AS EIGHT GROUNDS. 12. LD A.R. OF THE ASSESSEE SUBMITTED THAT HE DOES NOT PRESS GROUND NOS.1,2,3,7 & 8 OF APPEAL. THUS, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 13. THE REMAINING GROUNDS I.E. NOS.4,5 & 6 ARE AS UNDE R: 4. FOR THAT, THE LEARNED ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) 2, BHUBANESWAR HAS ERRED BOTH IN LAW AND IN FACT BY MAKING ADDITION OF RS. 67,23,682/ - BEING A DIFFERENTIAL AMOUNT IN CLOSING BALANCE AND FOR WHICH SAME IS LIABLE T O BE DELETED. 5. FOR THAT, THE COMMISSIONER OF INCOME TAX (APPEALS) 2, BHUBANESWAR HAS ERRED BOTH IN LAW AND IN FACT BY NOT DELETING THE FIXED DEPOSIT AMOUNT OF RS. 54,10,000/ - OUT OF ADDITION MADE BY THE LEARNED ASSESSING OFFICER FOR RS. 1,40,10,000/ - WITHOUT CONSIDERING THE FACTS SUBMITTED AND TREATING IT AS UNDISCLOSED INVESTMENT FOR WHICH SAME IS LIABLE TO BE DELETED. 6. FOR THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2, BHUBANESWAR IS ILLEGAL, ARBITRARY, UNJUST AS H E HAS UPHOLD THE ADDITION OF RS. 67,23,682/ - FOR DIFFERENCE IS SAVINGS BANK ACCOUNT OPENING AND CLOSING BALANCE AND ALSO UPHOLDING THE ADDITION OF RS. 54,10 ,00 0 / - ON ACCOUNT OF FIXED DEPOSIT AS UNDISCLOSED INCOME CONTRARY TO FACTS SUBMITTED AND EXPLAINING EACH AND EVERY ENTRY BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS 2) BHUBANESWAR. ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 8 | 17 14. APROPOS GROUND NO.4 OF APPEAL, WE HAVE HEARD THE RIVAL SUBMISSIONS ANDPERUSED THE RECORD OF THE CASE, INTER ALIA, IMPUGNED ASSESSMENT AND CIT(A)S ORDER ALONGWITH PAPER BOOK FILED SPREAD OVER 44 PAGES. LD A.R. SUBMITTED THAT THEASSESSEE IS AN INDIVIDUAL EARNING INCOME UNDER THE HEAD BUSINESS INCOME AND OTHER SOURCES BY CARRYING ON THE BUSINESS OF CONTRACT WORKS WITH GOVERNMENT OF ODISHA. LD A.R. ALSO POINTED OU T THAT MRS KUNI ROUTRAY, WIFE OF THE ASSESSEE IS AN INCOME TAX ASSESSEE EARNING INCOME FROM CONTRACT WORKS PERFORMING DIFFERENT CONTRACT WITH GOVERNMENT OF ODISHA. LD A.R. ALSO SUBMITTED THAT THE ASSESSEE ANDHIS WIFE ARE CONTINUOUSLY FILING RETURN OF INCOM E SINCE LAST 20 YEARS AND PAYING TAX TO THE DEPARTMENT AS PER THE BOOK RESULTS OF THE RESPECTIVE ASSESSEES. LD A.R. FURTHER SUBMITTED THAT BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED EACH AND EVERY DOUBT RAISED IN THE MIND OF THE ASSESSING OFFICERAND EVERY POINT OF ADDITION WITH SOURCE OF INCOME, BALANCE SHEET AND BANK STATEMENT OF THE ASSESSEES WIFE MRS KUNI ROUTRAY. LD A.R. VEHEMENTLY POINTED OUTTHAT THE ASSESSING OFFICER DID NOT ACCEPT THE PERSONAL BALANCE SHEET AS THESE WERE NOT FILED ALONGWITH RETURN OF INCOME BUT AS PER THE PROVISIONS OF THE ACT, FILING OFPERSONAL BALANCE SHEET IS COMPULSORY IF RETURN OF INCOME EXCEEDS RS.25 LAKHS. LD A.R. SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.67,23,682/ - ON ACC OUNT OF DIFFERENCE IN OPENING BALANCE AND CLOSING BALANCE IN THE SAVING BANK ACCOUNT, WHICH IS NOT CORRECT AND SUSTAINABLE. LD A.R. SUBMITTED THAT ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 9 | 17 A/CNO.1219026413 PICKED UP BY THE AO IS NOT OF THE ASSESSEE BUT THE SAME I S BELONGING TO HIS WIFE MRS KUNI RO UTRAY AND SAME HAS BEEN SHOWN BY HER IN THE BALANCE SHEET FILED WITH THE DEPARTMENT FOR ASSESSMENT YEARS 2010 - 11 & 2011 - 12.THEREFORE, THE DIFFERENTIAL AMOUNT OF RS.20,04,179/ - CANNOT BE TAXED IN THE HANDS OFTHE ASSESSEE. LD A.R. FURTHER SUBMITTED THAT REGA RDING REMAINING AMOUNT, IT HAS BEEN EXPLAINED BY LD A.R. THAT OUT OF OPENING BALANCE OF CASH IN HAND OF RS.49,95,716.83, THE AMOUNT UTILISED FOR FDR WAS RS.45,10,000/ - AND THUS, THERE WAS BALANCE OF RS.4,85,717/ - . LD A.R. FURTHER CONTENDED THAT THERE WAS A N INCREASEOF CURRENT LIABILITIES AS PER PERSONAL BALANCE SHEET FOR FINANCIAL YEARS 2009 - 10 AND 2010 - 11 SUBMITTED AT THE TIME OF HEARING OF RS.41,25,177 (RS.41,88,409 - RS.63,232) RESULTING INTO CASH INFLOW AND IF INTEREST ON SB ACCOUNT OF RS.3,16,849/ - IS T AKEN INTO CONSIDERATION THEN THE TOTAL COMES TO RS.69,01,922/ - WHICH PROPERLY EXPLAINS THE DIFFERENTIAL BALANCE OF RS.47,21,503/ - . 15. LD A.R. STRENUOUSLY CONTENDED THAT THE ASSESSING OFFICER HAS ADDED THE DIFFERENTIAL BALANCE OF RS.67,23,682/ - INCLUDING AMOUNT OF RS.2 0 ,04,179/ - PERTAINING TO WIFE OF THE ASSESSEE MRS KUNI ROUTRAY AND BALANCE AMOUNT OF RS.47,21,503/ - HASBEEN PROPERLY EXPLAINED BY WAY OF PERSONAL BALANCE SHEET AFTER UTILIZING FOR FDRS OF RS.4,55,717/ - , CASH INFLOW OF RS.41,25,177/ - AND INTEREST ON SB ACCOUNT OF RS.3,16,849/ - , WHICH PROPERLY EXPLAIN THE CASH DEPOSIT AND DIFFERENT AMOUNT IN FOUR BANK ACCOUNTS INCLUDING ONE ACCOUNT PERTAINING TO ASSESSEES WIFE KUNI ROUTRAY. ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 10 | 17 LD A.R. SUBMITTED THAT THE AUTHORITIES BELOW H AVE IGNORED THIS GLARING FACTS AND MADE ADDITION WITHOUT ANY BASIS. THEREFORE, SAME MAY KINDLY BE ORDERED TO BEDELETED. 16. REPLYING TO ABOVE, LD D.R. SUBMITTED THAT THE AFORESAID BANK STATEMENTS WERE NOT DISCLOSED IN THE RETURN OF INCOME, THEREFORE, THE AO WAS RIGHT IN DEEMING THE DIFFERENTIAL AMOUNT OF BANK BALANCE IN SB ACCOUNTS TO CONSIDER THE SAME FOR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. LD D.R. SUBMITTED THAT THE ASSESSEECOULD NOT EXPLAIN THE DIFFERENTIAL AMOUNT AND AMOUNT DEP OSITED TO THE BANK ACCOUNTS, THEREFORE, THE AO WAS RIGHT IN MAKING THE ADDITION AND THE CIT(A) WAS RIGHT IN CONFIRMING THE SAME. 17. PLACING REJOINDER TO ABOVE, LD A.R. SUBMITTED THAT THE ASSESSEE HAS SUBMITTED COPIES OF RETURN OF THE ASSESSEE AS WELL AS HIS WIFE MRS KUNI ROUTRAY FOR ASSESSMENT YEAR 2010 - 11 AND 2011 - 12, WHICH WERE PART OF THE RECORD OF THE AUTHORITIES BELOW. LD A.R. FURTHER CONTENDED THAT FDRS AND BANK ACCOUNTS HAVE BEEN DISCLOSED IN THE RETURN OF INCOME. LD A.R. DREW OUR ATTENTION TOWARDS BALANCE SHEET OF THE ASSESSEE ATTACHED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR2010 - 11 AND 2011 - 12 AND SUBMITTED THAT THERE WAS OPENING BALANCE OFRS.49,95,716.93 AS ON 31.3.2010 I.E. AT THE END OF THE PREVIOUS ASSESSMENT YEAR 2010 - 2011 WHICH WAS BROUGHT FORWARD TO PRESENT ASSESSMENT YEAR 2011 - 12 AND THECASH BALANCE AT THE OF THE ASSESSMENT YEAR AS ON 31.3.2011 WAS SUBSTANTIALLY ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 11 | 17 REDUCED TO RS.1,17,816.48 AND REMAINING BALANCE AMOUNT WAS UTILIZED FOR DEPOSITING INTO BANK ACCOUNTS OR FOR MAKING FDRS AND THIS FACT HAS BEEN IGNORED BY THE AUTHORITIES BELOW, WHICH IS SELF SPEAKING ABOUT THE EXPLANATION OF THE ASSESSEE. LD A.R. SUBMITTED THAT THE ASSESSING OFFICER WAS NOT RIGHT IN IGNORING THE ABOVE GLARING FACTS AND MAKING THE ADDITION OF DIFFERENTIAL AM OUNT DEPOSITED INTO FOUR BANK ACCOUNTS INCLUDING ONE BANK ACCOUNT PERTAINING TO MRS KUNI ROUTRAY, WIFE OF THE ASSESSEE. THEREFORE, THE ADDITION IS NOT SUSTAINABLE. 18. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED VIEW THAT ON BEING ASKED BY THE BENCH, LD D.R. COULD NOT CONTROVERT THE FACT THAT THE SB ACCOUNT NO.1219026413 WITH CENTRAL BANK OF INDIA BELONGS TO ASSESSEES WIFE MRS KUNI ROUTRAY AND FROM THE BALANCE SHEET AS ON 31.3.2010 FILED WITH THE DEPARTMENT ALONGWITH RETURN OF INCOME OF KUNI ROUTRAY FOR ASSESSMENT YEAR 2010 - 2011, IT IS CLEARLY DISCERNIBLE THAT THIS BANK ACCOUNT HAS BEEN SHOWN IN THE BALANCE SHEET HAVING BALANCE OF RS.35,69,978.85, WHICH WAS CONSIDERED BY THE AO IN PARA 6 OF THE ASSESSMENT ORDER IS BELO NGING TO THE ASSESSEE. THIS IS A PERVERSE AND MISDIRECTED ACTION OF THE ASSESSING OFFICER. HENCE, THE DIFFERENTIAL AMOUNT OF RS.20,04,179/ - CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE BEING DIFFERENTIAL AMOUNT OF BANK ACCOUNT BELONGING TO THE WIFE OF THE ASSESSEE MRS KUNI ROUTRAY. ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 12 | 17 19. SO FAR AS THE REMAINING DIFFERENTIAL AMOUNT OF RS.47,21,503 IS CONCERNED,NEITHER THE AO NOR LD DR BEFORE US HAVE DEMOLISHED THE EXPLANATION OF THE ASSESSEE BY WAY OF COGENT EVIDENCE OR ADVERSE MATERIAL AS PER BALANCE SHEET FOR THE FINANCIAL YEAR 2009 - 10 AND 2010 - 2011 OF THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2010 - 2011 AND 2011 - 12, THE CASH INFLOW OF RS.41,21,177 HAS BEEN SHOWN, IS TO BE TAKEN INTO CONSIDERATION BY THE AO. 20. AS WE HAVE ALREADY NOTED THAT THERE WAS OPEN ING CASH BALANCE OFRS.49,95,717/ - OUT OF WHICH AN AMOUNT OF RS.45,40,000/ - WAS UTILIZED FOR INVESTMENT IN FDRS AND THERE WAS BALANCE OF RS.4,51,717/ - WHICH CANNOT BE IGNORED WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE. FURTHERMORE, UNDISPUTEDLY, THE INTEREST ON SB ACCOUNT OF RS.3,16,849/ - WAS ALSO CREDITED TO THE BANK ACCOUNT OF THE ASSESSEE RESULTING INTO ENHANCEMENT OF CLOSING BALANCE AND ALSO LEAVING POSITIVE IMPACT ON THE DIFFERENTIAL AMOUNT OF OPENING AND CLOSING BALANCE IN ALLEGED BANK ACCOUNT P ICKED UP BY THE AO . OBVIOUSLY, WHEN INTEREST IS CREDITED, THE CLOSING BALANCE HAS TO BE INCREASED, THEREFORE, INTEREST CREDITED BY THE BANK TO THE BANK ACCOUNT OF RESPECTIVE ASSESSEES CANNOT BE IGNORED WHILE CONSIDERING THE ISSUE OF DIFFERENTIAL AMOUNT IN THE OPENING AND CLOSING BALANCE OF THE ASSESSEE. TO SUM UP, AFTER LOGICALLY ANALYSE THE SUBMISSION OF THE ASSESSEE ALONGWITH DOCUMENTARY EVIDENCE, WE ARE INCLINED TO HOLD THAT THE AO WAS NOT RIGHT IN TAKING INTO CONSIDERATION THE DIF FERENTIAL AMOUNT OF RS.20,04,179/ - ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 13 | 17 PERTAINING TO BANK ACCOUNT BELONGING TO THE WIFE OF THE ASSESSEE KUNI ROUTRAY. WE ALSO NOTE THAT THE ASSESSINGOFFICER AS WELL AS THE CIT(A) HAS ALSO IGNORED THE CASH BALANCE LEFT WITH THE ASSESSEEOF RS.4,55,717/ - , CASH IN FLOW OF RS.41,25,177/ - FOR THE FINANCIAL YEAR 2009 - 10 & 2010 - 02011 AND INTEREST CREDITED IN SB ACCOUNT BY THE ASSESSEE BANK ACCOUNT DURING THE RELEVANT PERIOD OF RS.3,16,849/ - . THE TOTAL OF THIS COMES TO RS.69,01,922/ - (RS.20,04,179 + RS.4,55,717 + RS.41,2 5,177 + RS.3,16,849) AS AGAINST ALLEGED DIFFERENTIAL AMOUNT OF RS.67,23,682/ - . THEREFORE, NO ADDITION IN THIS REGARD IS CALLED FOR AND HELD TO BE SUSTAINABLE. 21. IN THIS REGARD, WE MAY ALSO POINT OUT THAT THE ASSESSEE HAS EARNED INTERESTINCOME FROM SAVIN G BANK ACCOUNTS OF RS.3,16,849/ - , WHICH HAS TO BE TAXED IN THE HANDS OF THE ASSESSEE. HENCE, WE DIRECT THE AO TO TAX ON THE INTEREST INCOME OFRS.3,16,849/ - ACCORDINGLY, GROUND NO.4 OF THE APPEAL IS PARTLY ALLOWED. 22. APROPOS GROUND NOS.5 & 6, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE CIT(A) WAS NOT CORRECT AND JUSTIFIED IN UPHOLDING THE ADDITION OF RS.54,10,000/ - WITHOUT CONSIDERING THE RELEVANT FACT SUBMITTED BY THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) IS LIABLE T O BE DELETED. ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 14 | 17 23. LD A.R. FURTHER SUBMITTED THAT THE CIT(A) WAS NOT REASONABLE AND JUSTIFIED INUPHOLDING THE ADDITION OF RS.54,10,000/ - ON ACCOUNT OF INVESTMENT IN FIXED DEPOSITSAS UNDISCLOSED INCOME CONTRARY TO THE FACT AND EXPLANATION SUBMITTED BY THEASSESSEE BEFORE THE AUTHORITIES BELOW. LD A.R. THEREFORE, SUBMITTED THAT THE IMPUGNED ADDITION PARTLY CONFIRMED BY THE CIT(A) OF RS.54,10,000/ - MAY KINDLY BE DELETED. 24. LD A.R. SUBMITTED THAT DURING THE REMAND PROCEEDINGS, THE ASSESSEE SUBMITTED SELF - SPEAKING EXPLANATION REGARDING THE SOURCE OF FUNDS OF EACH AND EVERY FDR INCLUDING IMPUGNED FDR OF RS.54,10,000/ - . LD A.R. SUBMITTED THAT THE FDR NO.148020100013700 AMOUNTING TO RS.8,85,000/ - HAS BEEN MADE OUT OF CASH DEPOSITED BY MRS KUNI ROUTRAY OUT OF HER PERSONAL INCOME AND PAST SAVINGS ANDSAME HAS BEEN DISCLOSED IN HER BALANCE SHEET FILED WITH THE DEPARTMENT AS ON 31.3.2011. THEREFORE, THE ADDITION OF RS.8,85,000/ - ON THIS COUNT CANNOT BE HELD AS SUSTAINABLE. 25. LD A.R. FURTHER SUBMITTED THAT REGARDI NG OTHER FDRS NO.148020100013719 OFRS.8,90,000/ - , NO. 148020100015549, NO. 148020100015559, AND NO.148020100015568 OF RS.10 LAKHS EACH TOTALING TO RS.30,00,000/ - , THE AMOUNT OF RS.8,90,000/ - AND RS.25,50,000/ - WAS DEPOSITED OUT OF CASH BALANCE WITH THEASSE SSEE AT THE BEGINNING OF THE YEAR, WHICH WAS BROUGHT FORWARD FROM EARLIER ASSESSMENT YEAR 2010 - 2011 OF RS.49,95,716.93. THEREFORE, THESE FDRS CANNOT BETAGGED OR NAMED AS UNDISCLOSED INVESTMENTS OF THE ASSESSEE. LD A.R. SUBMITTED THAT REGARDING ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 15 | 17 FDR NO. NO. 148020100016929 OF RS.7,00,000/ - , THE ASSESSEE HAS DEPOSITED RS.7 LAKHS OUT OF SAME CASH BALANCE IN THE BEGINNING OF THE YEAR AT RS.49,95,716.93, WHICH COVERS THE TOTAL CASH DEPOSIT OF RS.45,40,000/ - TAKEN BY THE ASSESSING OFFICER FOR MAKING THE ADDITION. LD A.R. STRENUOUSLY CONTENDED THAT THETOTAL AMOUNT OF RS.8,85,000/ - AND RS.45,40,000/ - COMES TO RS.54,25,000/ - , WHICH ISMORE THAN THE IMPUGNED ADDITION OF RS.54,10,000/ - MADE BY THE AO AND CONFIRMED BY THE CIT(A). LD A.R. FINALLY PRAYED THAT KEEPING IN VIE W THE OPENING CASH BALANCE OF RS.49,95,716.93 AND AMOUNT DEPOSITED BY THE WIFE OF ASSESSEE MRS KUNI ROUTRAY REGARDING FDR OF RS.8,85,000/ - , WHICH HAS BEEN SHOWN BY HER IN HER BALANCE SHEET FILED WITH THE DEPARTMENT FOR FINANCIAL YEAR 2010 - 2011, THE PART AD DITION CONFIRMED BY THE CIT(A) IS ALSO NOT SUSTAINABLE AND HENCE BE DELETED. 26. REPLYING TO ABOVE, LD D.R. SUBMITTED THAT THE ASSESSEE COULD NOT EXPLAIN THESOURCE OF INVESTMENTS IN FDR, THEREFORE, THE CIT(A) WAS RIGHT IN CONFIRMING PART ADDITION IN THIS REGARD TREATING THE SAME AS UNDISCLOSED INVESTMENT OF THE ASSESSEE DURING THE RELEVANT PERIOD. 27. IN REJOINDER, LD A.R. SUBMITTED THE FACTUM OF FDRS IN THE NAME OF KUNI ROUTRAY OF RS.8,85,000/ - AND OPENING BALANCE IN THE HANDS OF THE ASSESSEE IN THE BEGINNING OF THE YEAR AT RS.49,95,716.93 HAVE NOT BEEN CONTROVERTED BY THE LD D.R. DURING THE ARGUMENTS. THEREFORE, THE EXPLANATION OF THE ASSESSEE BE ACCEPTED AND ISSUE DECIDED ACCORDINGLY. ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 16 | 17 28. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, FROM THE BALANCE SHEET OF MRS KUNI ROUTRAY FOR FINANCIAL YEAR 2010 - 2011, WE CLEARLY NOTE THAT FDR NO.13700 OFRS.8,85,000/ - HAS BEEN SHOWN IN THE PERSONAL BALANCE SHEET IN THE NAME OF MRS KUNI ROUTRAY AND THIS FACT HAS NOT BEEN CONTROVERTED THAT THE CASH DEPOSIT BY HER WAS OUT OF HER SAVING AND THAT SHE IS ALSO AN ENTREPRENEUR AND INCOME TAX ASSESSEE. 29. SO FAR AS THE EXPLANATION OF THE ASSESSEE REGARDING AMOUNT OF RS.45,40,000/ - , WE ARE SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THAT IN THE BALANCE SHEET F OR THE ASSESSMENT YEAR 2010 - 2011, THE ASSESSEE HAS SHOWN CASH BALANCE OF RS.49,95,716.93 AND IT WAS REDUCED TO RS.1,17,816.48 AT THE END OF THE PRECEDING ASSESSMENT YEAR AS ON 31.3.2011 AND THUS, THE BALANCE AMOUNT OF RS.45,40,000/ - INVESTED BY THE ASSESSEE FOR PURCHASE OF FDRS ALSO GETS EXPLAINED. THESE FACTS WERE SUBMITTED BY THE ASSESSEE DURING REMAND PROCEEDINGS. THE ASSESSING OFFICER AND THE CIT(A) DID NOT CONSIDER THE SAME IN RIGHT PERSPECTIVE TAKING INTO CONSIDERATION THE DECLARATION BY THE ASSESSEE I N ANY MANNER AND FDR BY HER WIFE IN THEIR RESPECTIVE BALANCE SHEET S . 30. IN VIEW FOREGOING DISCUSSION, WE REACHED TO A LOGICAL CONCLUSION THAT THEASSESSEE HAS PROPERLY EXPLAINED THE SOURCE OF INVESTMENT IN FDRS OF RS.54,10,000/ - AND, THEREFORE, NO ADDITION IN THIS REGARD IS CALLED FOR. HENCE, ITA NO.455 & 489/CTK/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 17 | 17 THE ASSESSING OFFICER IS DIRECTED TO DELETE THE IMPUGNED ADDITION OF RS.54,10,000/ - . 3 1 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 14 / 10 /201 9 . SD/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 14 / 10 /20 1 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE REVENUE: ITO, WARD 2(4), BHUBANESWAR. 2. THE ASSESSEE: SRI DHUSASAN ROUTRAY, PLOT NO.485/1989, DUMDUMA, AIGINIA, BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//