Sri Ramesh Kumar Baheti, Kolkata V. ITO, WD-38(3), KOLKATA, Kolkata

ITA 47/KOL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5047 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 21-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2016
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN ADD L
• Assessee Lawyers: S M SURANA
• Keywords: Peak credit; Source of fund
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I.T.A NO. 47/KOL/2016 ASSESSMENT YEAR : 2011-1 2 SRI RAMESH KR.BAHETI -VS.- I.T.O., WARD- 38(3), KOLKATA KOLKATA [PAN : AEUPB2143K) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI S.M.SURANA, A DVOCATE FOR THE RESPONDENT : SHRI SALLONG YADEN, ADD L.CIT DATE OF HEARING : 21.03.2016. DATE OF PRONOUNCEMENT : 6.4.2016. PER N.V.VASUDEVAN, JM ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 26.11.2015 OF CIT(A)- 11, KOLKATA, RELATING TO AY 2011-12. 2. THE ASSESSEE IS AN INDIVIDUAL. HE DERIVES INC OME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES BEING INTEREST RECEIVED FROM ADV ANCING OF LOANS AND ON DEPOSITS FROM BANK. FOR A.Y.2011-12 THE ASSESSEE FILED RETUR N OF INCOME DECLARING TOTAL INCOME OF RS.1,58,969/-.THE ASSESSEE HAD ONE BANK ACCOUNT IN HIS NAME WITH ICICI BANK LTD., WHEREIN CASH DEPOSIT TOTALING RS.22,53,262/- WERE M ADE DURING THE PREVIOUS YEAR. THERE WAS ANOTHER ACCOUNT WITH ICICI BANK LTD IN THE NAME OF THE ASSESSEE AND NAME OF HIS MINOR SON ASWIN BAHETI, WHEREIN CASH DEPOSIT TOTALI NG RS.12,26,500/- HAD BEEN MADE DURING THE PREVIOUS YEAR. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS AO CALL ED UPON THE ASSESSEE TO EXPLAIN THE SOURCE OF FUNDS OUT OF WHICH CASH DEPOSITS REFERRED TO ABOVE WERE MADE IN ICICI BANK 2 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 2 LTD. THE ASSEESSEE SUBMITTED BEFORE AO THAT SUMS TH AT HAD BEEN WITHDRAWN FROM THE VERY SAME ICICI BANK ACCOUNT HAD BEEN RE-DEPOSITED IN THE VERY SAME ACCOUNT. THE ASSESSEE ALSO EXPLAINED THAT IT HAD SOLD GOLD ON 02 .04.2010 FOR A SUM OF RS.3,00,000/- TO MAXPRO INDIA AND RECEIVED CASH OF RS.3,00,000/- ON SUCH SALE. SIMILARLY, GOLD WAS SOLD ON 31.01.2011 TO MAXPRO INDIA AND CASH OF RS.1 ,50,000/- WAS RECEIVED ON SUCH SALE. AFTER TAKING INTO ACCOUNT THE CASH DEPOSIT OF RS.3,00,000/- ON SALE OF GOLD ON 02.04.2010 AND CASH DEPOSIT OF RS.1,50,000/- ON SAL E OF GOLD ON 31.01.2011, THE ASSESSEE HAD SUFFICIENT CASH AS PER THE CASH BOOK. AFTER TAKING INTO CONSIDERATION THE WITHDRAWALS AND DEPOSIT OF MONEY IN THE VERY SAME A CCOUNT AND SALE PROCEEDS OF GOLD, THE SOURCE OF DEPOSIT OF MONIES IN THE BANK ACCOUNT ON EACH DAY PRIOR TO THE DEPOSIT IN THE BANK ACCOUNT STANDS DULY EXPLAINED. A COPY OF T HE CASH BOOK FILED BY THE ASSESSEE BEFORE AO IS GIVEN AS ANNEXURE TO THIS ORDER. IT IS NOT IN DISPUTE THAT IF THE SALE OF GOLD AND RECEIPT OF CASH ON SUCH SALE OF GOLD AND IF TH E WITHDRAWALS OF THE BANK ACCOUNT ARE CONSIDERED THEN THERE WOULD BE AVAILABILITY OF CASH WITH THE ASSESSEE AND THEREFORE THE SOURCE OF FUNDS OUT OF WHICH CASH WAS DEPOSITED IN THE BANK WOULD STAND EXPLAINED. 4. THE AO DID NOT BELIEVE THE PLEA OF THE ASSESSEE THAT ON SALE OF GOLD CASH OF RS.3,00,000/- AND RS.1,50,000/- WAS RECEIVED BY ASS ESSEE ON 02.04.2010 AND 31.01.2011 RESPECTIVELY. IN THIS REGARD AO REFERRED TO THE FACT THAT AN INSPECTOR WAS DEPUTED TO VERIFY WHETHER THE CONCERN MAXPRO INDIA WAS EXISTING AT THE ADDRESS GIVEN IN THE PURCHASE BILL BY THE ASSESSEE AS EVIDENCE FO R SALE OF GOLD. THE INSPECTOR REPORTED TO THE AO THAT SUCH A CONCERN WAS NOT AVAILABLE AT THE GIVEN ADDRESS. THIS FACT WAS CONFRONTED TO THE ASSESSEE BY THE AO. NOTICE U/S 13 1 OF THE ACT WAS ALSO ISSUED TO MAXPRO INDIA BY THE AO. THIS WAS OUGHT TO BE SERVE D ON MAXPRO INDIA AT THE ADDRESS GIVEN IN THE BILL NAMELY 89, BURTOLLA STREET, KOLKA TA-700007. INSPECTOR OF INCOME TAX DEPARTMENT WHO WENT TO SERVE NOTICE U/S 131 OF THE ACT REPORTED THAT MAXPRO INDIA COULD NOT BE FOUND AT THE ADDRESS GIVEN. HE HAD DET AILED THE EFFORTS MADE BY HIM IN THIS REGARD. IN THE GIVEN CIRCUMSTANCES AO WAS OF THE VI EW THAT SALE OF GOLD AND RECEIPT OF 3 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 3 CASH ON SUCH SALE COULD NOT BE VERIFIED. THE ASSESS EE SUBMITTED BEFORE AO THAT IT HAD SOLD GOLD TO MAXPRO INDIA AND WAS UNABLE TO EXPLAIN AS TO WHY NOTICE COULD NOT BE SERVED ON THEM. THE AO HOWEVER CONCLUDED THAT SALE OF GOLD BY THE ASSESSEE REMAINED UNEXPLAINED AND THE SOURCE OF CASH TO THE EXTENT RE MAINED UNEXPLAINED. 5. ANOTHER ANOMALY WHICH WAS NOTED BY THE AO WAS TH AT CASH WAS WITHDRAWN AT KOLKATA AND ON THE VERY SAME DAY CASH WAS DEPOSITED IN THE ASSESSEES BANK ACCOUNT AT BIKANER. SUCH AN INSTANCE HAPPENED ON 19.04.2010 AN D A SUM OF RS.3,00,000/- HAD BEEN WITHDRAWN AT KOLKATA FROM THE BANK ACCOUNT OF THE ASSESSEE AND ON THAT VERY SAME DAY A SUM OF RS.49,000/- WAS DEPOSITED AT BIKANER I N THE ACCOUNT OF THE ASSESSEE WITH HIS MINOR SON. SIMILAR INSTANCE OF WITHDRAWAL OF CA SH AT KOLKATA ICICI BANK AND DEPOSIT AT SHILLONG ON 17.08.2010 WAS ALSO NOTED BY THE AO. 6. ON THE ABOVE ANOMALY NOTICED BY THE AO, AO OBSE RVED AS FOLLOWS :- IN THE LETTER DATED 17.03.2014 THE ASSESSEE HAS AL SO STATED, ' ..... 1) AS I TOLD YOU THAT I AM FACING FINANCIAL PROBLEM FROM LAST THREE YEARS AND IN A BIG TENSION FOR THE TREATMENT OF MY MOTHER SHANTI DEVI BAHETI, KAMALA DEVI HARSH(SISTER ), AND RADHA KISHAN DAMANI(FATHER IN LAW) . . .... AS I TOLD YOU THAT I AM ONLY ELDER MALE MEMBER IN MY FAMILY, IT IS MY SOCIAL RESPONSIBILITY TO MEET ANY URGENCY COMES, BUT DUE T O THE HELP OF SRI MOHAN LAL DUJARI(MANTRI OF NAGARIK SWASTHA SANGHA, NGO) IF SO VARAM BYSAK STREET, KOLKATA7. I HAD NEVER ABLE TO USE MY FUND JUST BECAUSE OF MR. M OHAN LAL DUJARI HAS ARRANGED IT FREE IN DELHI, RAJASTHAN (FOR MY MOTHER SISTER) AND IN A SSAM FOR (RADHA KISHAN DAMANI). MR. DUJARI HAS ALSO EXPIRED IN THE MONTH OF JANUARY 201 4 ' ASSESSEE'S ABOVE SUBMISSION IS PERUSED CAREFULLY. A T THIS STAGE THE SAME CANNOT BE VERIFIED SINCE AS PER ASSESSEE'S STATEMENT THE PERS ON SRI MOHANLAL DUJARI HAS EXPIRED IN JANUARY 2014. MOREOVER, DURING THE COURSE OF THE PR OCEEDING NEVER HE HAD GIVEN SUCH STATEMENT BEFORE THE EXPIRY OF MOHANLAL DUJARI. SO, THE STATEMENT OF THE ASSESSEE CLEARLY SEEMS TO BE AN AFTERTHOUGHT. HENCE, THE CONTENTION OF THE ASSESSEE CANNOT BE SUSTAINED. AS SUCH THE NATURE AND SOURCE OF AGGREGATE CASH DEPOSI T IN ASSESSEE'S BANK ACCOUNTS IS TREATED AS UNEXPLAINED. ON THE BASIS OF ABOVE OBSERVATION, THE CASH DEPOSIT OF RS. 22,53,262 IN AGGREGATE TO THE A/C NO 627601512043 AND RS. 12,26,500 IN AGGREG ATE TO A/C NO. 627601149954 WITH 4 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 4 ICICI BANK LTD ARE TREATED UNDISCLOSED INCOME OF TH E ASSESSEE FROM UNDISCLOSED SOURCES AND ADDED TO RETURNED INCOME OF THE ASSESSEE. 7. ACCORDINGLY THE CASH DEPOSITS IN THE BANK ACCOU NT WAS TREATED AS UNEXPLAINED AND A SUM OF RS.34,79,762/- (RS.22,53,262 + RS.12,26,500/ -) WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 8. ON APPEAL BY THE ASSSESSEE CIT(A) CONFIRMED THE ORDER OF AO. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED COU NSEL FOR THE ASSESSEE, WHO SUBMITTED THAT THE AO SHOULD HAVE ACCEPTED THE SAL E OF THE GOLD JEWELLERY FOR WHICH THE ASSESSEE DULY FILED TWO PURCHASE BILLS ISSUED B Y MAXPRO INDIA. ACCORDING TO THE AO THE PURCHASER WAS NOT FOUND TRACEABLE BY THE INSPEC TOR AT THE GIVEN ADDRESS EVEN AFTER MAKING LOCAL ENQUIRY. HE SUBMITTED THAT THE PURCHAS ER WAS DOING BUSINESS AT THE SAME ADDRESS WHICH IS PROVED FROM THE FACT THAT THEY WER E ISSUED TRADE LICENCE AT THE GIVEN ADDRESS DURING THE PERIOD, WHEN THE INSPECTOR MADE ENQUIRY. THE ASSESSEE HAS BEEN ABLE TO GET HOLD OF THE TRADE LICENCE ISSUED TO THE PURC HASER BY CALCUTTA MUNICIPALITY CORPN. A COPY OF THE SAID TRADE LICENCE WAS ALSO FILED BEF ORE US, WHICH WAS ALSO FILED BEFORE CIT(A). HE FURTHER SUBMITTED THAT THE ASSESSEE HA S ALSO BEEN ABLE TO GET THE COPY OF THE BANK STATEMENT OF THE SAID PARTY FOR THE BANK A CCOUNT MAINTAINED BY THEM WITH ICICI BANK AND COPY OF THE SAID BANK ACCOUNT WAS AL SO FILED BEFORE US. THE SAME HAD ALSO BEEN FILED BEFORE CIT(A). IT WAS SUBMITTED TH AT IT WOULD BE EVIDENT FROM THE SAID BANK ACCOUNT THAT EVEN AT THE TIME WHEN THE AO MADE THE ENQUIRY, THE SAID PARTY WAS IN EXISTENCE AND DOING BUSINESS FROM THE SAME ADDRESS AS MENTIONED IN THE SAID BANK STATEMENT. THEREFORE, IT CANNOT BE SAID THAT THE SA ID PARTY WAS NOT IN EXISTENCE AT THE GIVEN ADDRESS AND THE INSPECTORS REPORT CANNOT BE R ELIED ON. IT WAS SUBMITTED THAT THERE WAS NO JUSTIFICATION TO TREAT THE SALE OF THE SAID GOLD ORNAMENTS AS NOT GENUINE. 5 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 5 10. IN THE ALTERNATIVE HE SUBMITTED THAT THE ADDITI ON OF THE ENTIRE GROSS DEPOSITS MADE IN THE DISCLOSED BANK ACCOUNT IN THE NAME OF THE AS SESSEE HIS MINOR SON WAS NOT PROPER. IN THIS REGARD IT WAS SUBMITTED THAT THERE WAS NO B ASIS TO REJECT THE CASH BOOK NOR SUCH CASH BOOK HAVE BEEN REJECTED. THE CREDITS IN THE SA ID BOOK HAVE NOT BEEN DISPUTED EXCEPT THE SALE OF GOLD ORNAMENTS. IT WAS SUBMITTED THAT OUT OF TOTAL DEPOSITS OF RS. 34,79,762/- IN THE NAME OF THE ASSESSEE AND HIS MIN OR SON BEING THE CASH DEPOSITS ON VARIOUS DATES WERE EXPLAINED FROM THE CASH WITHDRAW ALS FROM THE SAME BANK EXCEPT THAT THE SUM OF RS. 4,50,000/ - RECEIVED BY WAY OF SALE OF GOLD ORNAMENTS. IT WAS POINTED OUT THAT THE SAID CASH BOOK WILL EXPLAIN THE ENTIRE DEPOSITS ARE REFERABLE TO THE EARLIER WITHDRAWALS MADE FROM THE SAME BANKS BY THE ASSESSE E. A PEAK STATEMENT OF THE DEPOSITS AND WITHDRAWALS FROM THE BANK WHICH WAS FI LED BEFORE CIT(A) WAS ALSO FILED BEFORE US AND IT WAS POINTED OUT THAT THE PEAK OF T HE DEPOSITS IS RS. 314850/- AND IF CREDIT OF RS. 4,50,000/- IS ALLOWED FOR THE AMOUNT RECEIVED ON ACCOUNT OF SALE OF GOLD THERE IS NO NEGATIVE PEAK. THE WITHDRAWALS WERE IN FACT MORE THAN THE DEPOSITS MADE DURING THE YEAR, THEREFORE IT SHOULD BE REDUCED FRO M THE TOTAL AMOUNT OF DEPOSITS WHICH HAS BEEN TREATED AS INCOME OF THE ASSESSEE AS THEY WERE REUSED FOR MAKING FURTHER DEPOSITS ON LATER DATES AND THEREFORE SHOULD BE NET TED OFF FROM TOTAL DEPOSITS MADE. 11. FOR THE PROPOSITION ONLY CONSOLIDATED PEAK OF T HE BANK ACCOUNTS COULD BE CONSIDERED FOR MAKING ADDITION OF UNDISCLOSED INCOM E. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS OF ITAT, KOLKATA :- I)ITA NO.141/KOL/2012 IN THE CASE OF DILIP KUMAR NA HATA ORDER DATED 09.05.2012. II)ITA NO.1903/KOL/2009 IN THE CASE OF UDAY SHANKAR MAHAWAR. 12. THE LEARNED DR PLACED RELIANCE ON THE ORDER OF CIT(A). 13. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. WE HAVE ALREADY OBSERVED THAT IF THE RECEIPT OF SALE OF GOLD IS ACC EPTED AND VARIOUS WITHDRAWALS OF THE 6 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 6 BANK ACCOUNTS ARE CONSIDERED THEN THAT WOULD SUFFIC IENTLY EXPLAIN THE SOURCES OF FUNDS OUT OF WHICH CASH DEPOSITS WERE MADE IN THE BANK AC COUNTS. IT HAS BEEN THE PLEA OF THE ASSESSEE THAT HE HAD FINANCIAL PROBLEM AND WAS IN N EED OF FUNDS FOR TREATMENT OF HIS MOTHER SHANTI DEVI BAHETI AND HIS SISTER KAMALA DEV I HARSH AND HIS FATHER IN LAW RADHA KISHAN DAMANI. IT WAS ALSO THE PLEA OF THE AS SESSEE THAT SHRI RADHA KISHAN DAMANI DIED OF CANCER ON 10.02.2013 AND HE WAS A PE RSON, WHO WAS TAKING CARE OF THE AFFAIRS OF THE ASSESSEE. THE ASSESSEE ALSO PLEADED THAT HE WAS A HANDICAPPED PERSON AND COULD NOT MOVE ABOUT FREELY. TO MEET THE MEDICAL EX PENDITURE CASH USED TO BE WITHDRAWN AND KEPT WITH THE ASSESSEE AND RE-DEPOSIT ED IN THE BANK ACCOUNT. AS FAR AS SALE OF GOLD BY THE ASSESSEE TO MAXPRO INDIA IS CON CERNED THE EVIDENCE ON RECORD SHOWS THAT MAXPRO INDIA HAD ISSUED PURCHASE VOUCHERS FOR HAVING PURCHASED GOLD FROM THE ASSESSEE AND HAVING MADE PAYMENTS IN CASH FOR SUCH PURCHASE OF GOLD. COPY OF THE PURCHASE VOUCHERS HAVE BEEN FILED BEFORE US. A PER USAL OF THE SAME SHOWS THAT MAXPRO INDIA TO WHOM GOLD WAS SOLD ON 02.04.2010 AND 31.10 .2011 IS ASSESSED TO TAX HAVING PAN NO.ABCPA 3898 M. BEFORE CIT(A) ASSESSEE ALSO FI LED A COPY OF THE BANK STATEMENT OF MAXPRO INDIA WITH ICICIC BANK FROM THE PERIOD 10.12.2011 TO 05.12.2013. THE ADDRESS IN THE BANK STATEMENT IS 8 9, BURTOLLA STREET, KOLKATA-700007. THE ASSESSEE HAS FILED A COPY OF THE LICENCE ISSUED BY KOLKATA MUNICIPAL CORPORATION WHICH SHOWS THAT MAXPRO INDIA HAVING ADDRESS AT 89. , BURTOLLA STREET, KOLKATA-700007 WAS LICENCED TO USE THE AFORESAID TERMS FOR OFFICE AS WELL AS RETAIL SALE OF NON FOOD ITEMS. IN THE LIGHT OF THE ABOVE DOCUMENTARY EVIDEN CE THE FAILURE OF THE DEPARTMENT TO PROCURE THE PRESENCE OF MAXPRO INDIA FOR VERIFICATI ON OF THE CLAIM MADE BY THE ASSESSEE REMAINS UNEXPLAINED. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE DOCUMENTARY EVIDENCE ON RECORD THE ASSESSEE HAS SUCCESSFULLY EXPLAINED T HE SALE OF GOLD THROUGH MAXPRO INDIA AND THE CONCLUSIONS TO THE CONTRARY BY THE REVENUE AUTHORITIES CANNOT BE SUSTAINED. SINCE THE SALE OF GOLD IS HELD TO BE PROPERLY EXPLA INED THE SALE PROCEEDINGS OF THE GOLD AND WITHDRAWALS FROM THE BANK ACCOUNT WAS SUFFICIEN TLY EXPLAINED THE CASH DEPOSITS IN THE BANK ACCOUNT. 7 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 7 14. THE ANOMALY POINTED OUT BY CIT(A) IS THAT ON 19 .04.2010 CASH OF RS.3,00,000/- WAS WITHDRAWN FROM ICICI BANK AND ON THE VERY SAME DAY DEPOSIT OF RS.49,000/- IS MADE IN ICICI BANK AT BIKANER. AS ALREADY STATED I T CAN BE SEEN FROM THE CASH BOOK OF THE ASSESSEE THAT AS ON 19.04.2010 THERE WAS THE AV AILABILITY OF CASH AS ON 19.04.2010 EVEN AFTER WITHDRAWAL OF RS.3,00,000/- TO THE EXTEN T OF RS.73,000/-. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT THERE CANNOT BE ANY ADVERSE INFERENCE DRAWN FROM THESE CIRCUMSTANCES. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE ADDITION MADE BY T HE AO AND SUSTAINED BY CIT(A) DESERVES TO BE DELETED. ACCORDINGLY THE SAME IS DEL ETED. 15. WE MAY ALSO ADD THAT THE QUESTION OF ADDING THE PEAK CREDIT DOES NOT ARISE IN VIEW OF THE SOURCE HAVING BEEN FULLY EXPLAINED BY T HE ASSESSEE. 16. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 6.4.2016. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6.4.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.SRI RAMESH KUMAR BAHETI, 2/1A, NANDA MULLICK LANE , KOLKATA-700006. 2. ITO, WARD-38(3), KOLKATA. 3. CIT(A)-11, KOLKATA 4. CIT-13, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 8 ITA NO.47/KOL/2016 SRI RAMESH KUMAR BAHETI A.YR.2011-12 8