Tarakanta Sahoo, Nayagarh V. ITO, Khurda Ward, Khurda

ITA 458/CTK/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5439 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 21-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: B R PANDA
• Keywords: Unexplained cash credit; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 458/CTK/2015 ASSESSMENT YEAR :2011 - 12 SRI TARAKANTA SAHOO, AT/PO: SATPATNA, PS: DASAPALA, DIST: NAYAGARH. VS. ITO, KHURDA WARD, KHURDA PAN/GIR NO. AXMPS 0891 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.R.PANDA, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 08 /08 / 2017 DATE OF PRONOUNCEMENT : 09 /08 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 21.9.2015 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE SOLE ISSUE GRIEVANCE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.14,14,000/ - BEING UNDISCLOSED CLOSING BALANCE IN BANK ACCOUNT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE CLOSING BALANCE IN ASSESSEES CURRENT ACCOUNT NO.04000210000014 WITH U.CO BANK, DASAPALLA AS PER STATEMENT OBTAINED FROM THE BANK WAS RS.20,07,490/ - WHEREAS IN THE AUDITED BA LANCE SHEET, THE CLOSING BALANCE WAS RS.5,93,490/ - . HENCE, THERE WAS 2 ITA NO.458/CTK/2015 ASSESSMENT YEAR :2011 - 12 A DIFFERENCE OF RS.14,14,000/ - . THEREFORE, HE MADE ADDITION OF RS.14,14,000/ - U/S.69 OF THE ACT. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER OBSERVING THAT HO NBLE A.P. HIGH COURT IN THE CASE OF CIT VS. M.R.KISTAIAH, 220 ITR 294 (AP) HAS HELD THAT THE ASSESSING OFFICER IS ENTITLED TO TREAT THE UNEXPLAINED CASH CREDIT AS INCOME FROM UNDISCLOSED SOURCES. 5. BEFORE US, IT WAS ARGUED BY LD A.R. OF THE ASSESSEE THAT THE ENTIRE EXCESS DEPOSIT IN THE BANK ACCOUNT CANNOT BE TREATED AS INCOME OF THE ASSESSEE. HE ARGUED THAT THE ONLY INCOME EMBEDDED IN THE BANK DEPOSIT OF RS.14,14,000/ - CAN BE ASSESSED AS INCOME OF THE ASSESSEE. HE RELIED ON TH E DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF R.R.CARRYING CORPORATION, 30 DTR 569 IN SUPPORT OF HIS CONTENTION. 6. LD D.R. SUPPORTED THE ORDER OF THE CIT(A). 7. AFTER CONSIDERING THE RIVAL SUBMISSION AND PERUSING THE ORDERS OF LOWER AUTHORITIE S , I FIND THAT THE ASSESSING OFFICER FOUND THAT THE CLOSING BALANCE AT THE END OF THE YEAR IN THE CURRENT ACCOUNT N O.04000210000014 WITH U.CO BANK, DASAPALLA AS PER STATEMENT OBTAINED FROM THE BANK WAS RS.20,07,490/ - WHEREAS IN THE AUDITED BALANCE SHEET, THE CLOSING BALANCE WAS RS.5,93,490/ - . HENCE, THERE WAS A DIFFERENCE OF RS.14,14,000/ - . THE ASSESSING OFFICER TREATED THIS DIFFERENCE AS UNDISCLOSED INVESTMENT OF THE ASSESSEE IN THE BANK ACCOUNT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE U/S.69 OF THE ACT. THE 3 ITA NO.458/CTK/2015 ASSESSMENT YEAR :2011 - 12 CONTENTION OF THE ASSESSEE IS THAT THE ENTIRE DEPOSIT CANNOT BE TREATED AS INCOME OF THE ASSESSEE AND THE INCOME EMBEDDED IN THE RECEIPT OF RS.14,14,000/ - CAN ONLY BE ASSESSED AS INCOME OF THE ASSESSEE. HE RELIED ON THE DECISION OF THIS BEN CH OF THE TRIBUNAL IN THE CASE OF R.R.CARRYING CORPORATION (SUPRA). I FIND FORCE IN THE ABOVE ARGUMENTS OF LD A.R. OF THE ASSESSEE. I FIND THAT THE ASSESSEE HAS DISCLOSED THE TURNOVER OF RS.3,94,24,798/ - ON WHICH IT HAS SHOWN NET PROFIT OF RS.7,88,496/ - , WHICH WORKS OUT TO 2% OF THE TOTAL TURNOVER. THE CLAIM OF THE ASSESSEE IS THAT THE RECEIPT IS FOUND TO BE SALE OF IMFL AND BEER, WHICH IS THE BUSINESS OF THE ASSESSEE, WHICH FACT IS NOT IN DISPUTE. HENCE, I AM OF THE CONSIDERED VIEW THAT IT WILL MEET T HE ENDS OF JUSTICE IF THE INCOME OF THE ASSESSEE IS ESTIMATED AT 5% OF THE DIFFERENTIAL AMOUNT OF RS.14,14,000/ - DEPOSITED IN THE BANK ACCOUNT BY THE ASSESSEE. I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE NET PROFIT AT 5% OF RS.14,14,000/ - AND MAKE ADDITION ACCORDINGLY. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNC ED IN THE OPEN COURT ON 09 /08 /2017. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 09 /08 /2017 4 ITA NO.458/CTK/2015 ASSESSMENT YEAR :2011 - 12 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SRI TARAKANTA SAHOO, AT/PO: SATPATNA, PS: DASAPALA, DIST: NAYAGARH. 2. THE RESPONDENT. ITO, KHURDA WARD, KHURDA 3. THE CIT(A) BHUBANESWAR - 1 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//