Md Samsuddin, Malda V. ITO, WD-3, Malda, Malda

ITA 473/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4198 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 07-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 22-04-2015
• Court: TRIBUNAL
• Department Lawyers: DEBASIS BANERJEEJCIT
• Keywords: Peak credit; Additional evidence
• Section: 143(3); 133(6)

Judgement Text

ITA NO. 473/KOL/15 MD. SAMSUDDIN 1 IN THE INCOME TAX APPELLATE TRIBUNAL,D BENCH KOLKATA BEFORE : SHRI M.BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 473/KOL/2015 A.Y: 2011-12 MD. SAMSUDDIN VS. I.T.O., WARD 3, M ALDA PAN: BKBPS2842A (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI SUBASH AGARWAL, AR FOR THE ASSESSEE SHRI DEBASIS BANERJEE,JCIT, SR.DR FOR THE REVENUE DATE OF HEARING : 07-11-2016 DATE OF PRONOUNCEMENT : 25-11-2016 O R D E R SHRI S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27-02-2015 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS), JALPAIGURI FOR THE ASSESSMENT YEAR 20 11-12. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL:- 1.(A) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN MAKING AN ENHAN CEMENT OF RS.55,05,355/-BY GIVING A DIRECTION TO THE AO TO AD D THE ENTIRE CASH DEPOSITS OF RS.28,07,000/- AND RS.44,98,355/- INTO THE AXIS BANK AND UNION BANK OF INDIA RESPECTIVELY BY W RONGLY TREATING THE SAME AS UNDISCLOSED INCOME. (B) FOR THAT THE DIRECTION OF ENHANCEMENT BY THE LD . CIT(A) IS INVALID IN THE EYE OF LAW AS THE DUE PROCESS OF LAW WAS NOT FOLLOWED BY HIM BEFORE GIVING SUCH DIRECTIONS. ITA NO. 473/KOL/15 MD. SAMSUDDIN 2 2. (A) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE DELETED THE ENTI RE ADDITION OF RS.18,00,000/- MADE BY THE AO BY APPLYING THE PE AK CREDIT THEORY IN RESPECT OF CASH DEPOSITS INTO THE AXIS BA NK AND UNION BANK OF INDIA. (B) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACTS T HAT THE ENTIRE CASH DEPOSITS INTO THE AXIS BANK AND UNION B ANK OF INDIA WERE MADE BY THE APPELLANT'S EMPLOYER FOR THE PURPO SE OF PAYMENTS TO THE LABOURERS. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 3. THE ONLY QUESTION IN THIS APPEAL IS TO BE DECIDE D AS TO WHETHER THE CIT-A JUSTIFIED IN ENHANCING THE ADDITI ON IN TERMS OF JURISDICTION AS PROVIDED TO HIM U/S. 251 OF THE ACT. 4. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES HIS IN COME FROM SALARY WORKING AS SR. ENGINEER UNDER KALPATARU POWE R TRANSMISSION LTD IN ITS UNIT AT DEHRADUN. THE ASSES SEE FILED HIS RETURN OF INCOME DISCLOSING TOTAL INCOME OF RS.1,95 ,098/-. UNDER SCRUTINY NOTICE U/S. 143(2) OF THE ACT WAS IS SUED. IN RESPONSE TO SUCH NOTICE THE ASSESSEE ALONG WITH HIS ADVOCATE APPEARED. 5. ACCORDING TO AO, THE ASSESSEE WAS MAINTAINING TW O SAVINGS BANK ACCOUNTS, ONE IN AXIS BANK, MALDA BRAN CH HAVING ACCOUNT NO. 389010100060996 AND ANOTHER IN UNION BA NK OF INDIA, RISHIKESH BRANCH HAVING ACCOUNT NO. 30690201 0051240 AND FOUND THAT DEPOSITS WERE IN SUCH TWO ACCOUNTS O F RS.28,07,000/- AND RS.44,98,355/- RESPECTIVELY FOR THE FY 2010-11 RELEVANT TO AY UNDER CONSIDERATION. IN EXPL ANATION, THE ASSESSEE SUBMITTED A WRITTEN SUBMISSION AS UNDER:- ITA NO. 473/KOL/15 MD. SAMSUDDIN 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE SUBMITTED A WRITTEN EXPLANATION AND STATED THAT:- 'I BEG TO LAY BEFORE YOU THE FOLLOWING FACTS FOR FA VOUR OF YOUR KIND AND SYMPATHETIC CONSIDERATION:- 1. THAT, I MD. SAMSUDDIN (PAN-BKBPS2842A) OF VILL- MAHISHBATHANI, POST-BARKOL, DIST:MALDA,732128, WEST BENGAL, WORKING AS A SALARIED EMPLOYEE (SR. ENGINEER) FOR T HE ASSESSMENT YEAR 2011-12 OF M/S KALPATARU POWER TRAN SMISSION LIMITED, 101, PART-III,G.I.D.C., ESTATE, SECTOR-28, GANDHINAGAR- 382028. 2. THAT, AS A SALARIED, EMPLOYEE, I HAVE SUBMITTED MY INCOME- TAX RETURN IN FORM ITR-1, ON 12.07.2011, VIDE NO. 0 1092 BEFORE THE I. T.O., WARD-1, RISHIKESH FOR THE A. Y. 2011-1 2. 3. THAT, DURING THE A.Y. 2011-12, MY COMPANY I.E. M /S KALPATARU POWER TRANSMISSION LIMITED, HAD MADE' A C ASH PAYMENT IN SEVERAL TIMES TO MY COMPANY SALARY/SAVIN GS BANK ACCOUNT FOR DISTRIBUTION OF COMPANY'S LABOUR ON BEH ALF OF THE COMPANY. IN THIS CONNECTION, I ALSO BEG TO INFORM Y OU THAT, I HAVE A JOINT ACCOUNT WITH MY WIFE (LAILY BEGUM) IN SBI- ARAPUR, MALDA AND THE FEW AMOUNT OF DEPOSITS IN THAT ACCOUN T DONE MY WIFE AND FAMILY. 4. THAT, AT THE TIME HEARING (SCRUTINY ASSESSMENT P ROCEEDINGS FOR THE, A. Y. 2011-12 BEFORE ITO/WARD-3, MALDA YOU ASKED ME TO PRODUCE SOURCES OF CASH DEPOSITS IN MY SAVINGS B ANK ACCOUNT (WHICH WAS PAID BY MY COMPANY M/S KALPATARU POWER TRANSMISSION LTD.). AND WITH REFERENCE TO YOUR QUER IES, THE COMPANY DID NOT YET, PROVIDE ME TILL NOW THE INFORM ATION REGARDING PAYMENT FOR WHICH I ASKED FOR. 5. THAT, AS WORKING AS A SALARIED EMPLOYEE(SR. ENGI NEER) THE COMPANY CANNOT PROVIDE ME ANY SUCH AMOUNT OTHER THA N MY SALARY, INTO MY SALARY/SAVINGS BANK ACCOUNT BUT COM PANY TRANSFERRED SUCH AMOUNT INTO MY ACCOUNT TO DO THE P AYMENTS TO THE COMPANY'S LABOUR/CONCERNED PERSONS ON BEHALF OF COMPANY AND FOR THAT REASONS THE COMPANY DID NOT DEDUCT ANY TDS. 6. THAT, THE COMPANY KEPT ME COMPLETELY IN DARK WHI LE THESE ALL THINGS HAD BEEN GOING ON AND I WANT TO CONFESS THAT I HAVE NO PROPER AND SUFFICIENT KNOWLEDGE REGARDING THESE THI NGS AND ALL THE WORKS DONE DUE TO MY IGNORANCE OF RULES AND LAW S. UNDER THE ABOVE CIRCUMSTANCES, I WOULD REQUEST YOU TO BE KIND ENOUGH TO EXCUSE ME FOR THIS UNINTENTIONAL ACTIVITY AND EX EMPT ME FROM ANY PENAL PROCEEDINGS, FOR WHICH I SHALL BE THANKFU L TO YOU AND MAY GET A CHANCE OF RECTIFYING MYSELF. EXPECTING YO UR KIND FAVOUR AND CO-OPERATION IN THIS MATTER. 6. CONSIDERING THE ABOVE THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT TO EMPLOYER OF ASSESSEE, M/S. KALPATARU POW ER TRANSMISSION LIMITED. ACCORDINGLY, THE AO ADOPTED T HE PEAK CREDIT ON ABOVE SAID TWO BANK ACCOUNTS AND ADDED TH E AMOUNT OF RS.13,00,000/- RS.5,00,000/- AS PEAK CREDIT OF U NION BANK ITA NO. 473/KOL/15 MD. SAMSUDDIN 4 ACCOUNT AND AXIS BANK RESPECTIVELY AS UNEXPLAINED M ONEY U/S. 69A OF THE ACT. 7. QUESTIONING THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT THE ASSESSEE SUBMITTED BEFORE THE CIT-A THAT ALL TH E AMOUNTS WERE DEPOSITED IN HIS BANK ACCOUNTS BY HIS EMPLOYER FOR THE PURPOSE OF PAYMENT TO LABOURERS, WHO WERE FROM MALD A. THE CIT-A OBSERVED THAT THE ASSESSEE COULD NOT ABLE TO PRODUCE THE EVIDENCE OR CONFIRMATION WHATSOEVER FROM HIS EMPLOY ER IN SUPPORT OF HIS CONTENTION. THE CIT-A DIRECTED THE A O TO ADD THE ENTIRE DEPOSITS AS FOUND BY HIM IN THE SAID TWO BAN K ACCOUNTS. THEREBY, THE CIT-A ENHANCED THE INCOME OF THE ASSES SEE. 8. AGGRIEVED BY SUCH ORDER OF THE CIT-A, NOW THE AS SESSEE IS IN APPEAL BEFORE US BY RAISING THE AFOREMENTIONED G ROUNDS OF APPEAL. 9. BEFORE US THE LD.AR SUBMITS THAT THE CIT-A HAS F AILED TO FOLLOW THE PROCEDURES AS CONTEMPLATED U/S. 251 OF T HE ACT IN ISSUANCE OF NOTICE. HE FURTHER SUBMITS THAT THE ASS ESSEE WAS PAYING THE PAYMENTS TO LABOURERS ON RECEIVING THE S AID PAYMENTS FROM HIS EMPLOYER, M/S. KALPATARU POWER TRANSMISSION LTD THROUGH HIS BANK ACCOUNTS. THE SAI D BANK ACCOUNTS ARE JOINTLY MAINTAINED BY THE ASSESSEE AND HIS WIFE. IN HIS ABSENCE, SHE WAS PAYING THE PAYMENT TO LABOURER S, WHO WERE WORKING WITH THIS EMPLOYER, DEHRADUN, BUT THEY ACTUALLY HAIL FROM MALDA, WEST BENGAL. IN SUPPORT OF HIS CO NTENTION, THE LD.AR FIELD DETAILS OF ADDITIONAL EVIDENCES PAGE NO .1 TO 15 AND DREW OUR ATTENTION TO PAGE NOS.7 TO 13, WHEREIN DET AILS OF ATTENDANCE SHEET OF EMPLOYEES/WORKERS OF THE EMPLOY ER ARE DISCLOSED. HE ALSO REFERRED TO PAGE NOS. 14 & 15 RE GARDING EPF ITA NO. 473/KOL/15 MD. SAMSUDDIN 5 DEPOSITS FOR THE YEARS 2009-10 & 2010-11 OF MD. SAH IDULA ISLAM, AN EMPLOYEE OF THE SAID EMPLOYER, PAGE NOS. 2 TO 5 TO SHOW THE CORRELATION WITH DEPOSITS AND WITHDRAWALS THEREON FROM ASSESSEES ACCOUNT. 10. WITHOUT PREJUDICE, HE URGED BEFORE US TO TREAT THE SAME AS PEAK CREDIT. IN SUPPORT OF HIS CONTENTIONS, RELYING ON THE ORDER OF THE C BENCH, KOLKATA DATED 16-7-2010 IN THE CA SE OF UDAY SHANKAR MAHAWAR IN ITA NO. 1903/KOL/2009 AND DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SMT. P .K NOORJAHAN REPORTED IN (1999) 103 TAXMAN 382(SC) ARG UED THAT THE AO CANNOT TREAT THE SOURCE OF INVESTMENT AS INC OME OF THE ASSESSEE WHEN THE EXPLANATION OFFERED BY THE ASSESS EE IS NOT FOUND SATISFACTORY. THE LD. AR FURTHER ARGUED THAT THE ASSESSEE HAS OFFERED EXPLANATION TO THE RESPONDENT REVENUE A ND REFERRED TO PAGE NO-31 OF THE PAPER BOOK, WHEREIN THE ASSESS EE HAS WROTE A LETTER TO HIS EMPLOYER SEEKING CLARIFICATIO N/CERTIFICATE OF PAYMENTS MADE TO HIM IN HIS BANK ACCOUNTS. 11. ON THE CONTRARY, THE LD. DR RAISED HIS DOUBT AB OUT THE PROBABILITY OF EXISTENCE OF BUSINESS AND ABNORMALIT Y IN DEPOSITS AS FOUND IN SAVING BANK ACCOUNT OF THE ASSESSEE. H E ALSO RAISED HIS SUSPICION WITH REGARD TO PAYMENTS MADE T O LABOURERS FOR MALDA, WHEREAS IN THE ASSESSMENT ORDER MENTIONE D AS RISHIKESH. THE LD. DR ALSO ARGUED HOW THE BIG CORPO RATE PAYING THE SALARIES IN CHEQUE AND THEREAFTER PAYING THE PA YMENTS TO LABOURERS THROUGH CASH DISBURSEMENTS. HE SUBMITTED THAT IN PRESENT DAY BIG CORPORATE ARE DISBURSING THE SALARY THROUGH BANK TO BANK AND NOT BY CHEQUE. HE SUBMITTED BEFORE US THAT THE ISSUE MAY BE SENT BACK TO THE AO FOR VERIFICATI ON OF THE ADDITIONAL EVIDENCE AS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. ITA NO. 473/KOL/15 MD. SAMSUDDIN 6 12. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD INCLUDING THE DETAILS OF ADDITIONAL EVIDE NCE AS AVAILABLE IN THE PAPER BOOK BEFORE US. WE FIND THAT THE LD.AR OF THE ASSESSEE SUBMITTED BEFORE US FOUR FOLD ARGUMENT S. ONE IS WITH REGARD TO ADOPTION OF PEAK CREDIT TO THAT EFFE CT HE FILED THE DOCUMENTS BY WAY OF ADDITIONAL EVIDENCE TO SHOW THE PEAK CREDIT ON THE BASIS OF DEPOSITS AND WITHDRAWALS MAD E IN THE SAID TWO BANK ACCOUNTS. HE WORKED OUT THE PEAK CREDIT AT RS.8,12,500/-. ANOTHER ARGUMENT IS ON RELIANCE OF T HE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SMT. P. K NOORJAHAN SUPRA TO SHOW THAT THE AO CANNOT DIRECTLY MAKE THE ADDITI ON WITHOUT FINDING/CONSIDERING THE EXPLANATION OFFERED BY THE ASSESSEE NOT SATISFACTORY. THIRD ARGUMENT IS WITH R EGARD TO CORRESPONDING OF DEPOSITS AND WITHDRAWALS. LASTLY, THE CIT-A DID NOT FOLLOW THE PROCEDURE AS CONTEMPLATED IN SEC TION 251 OF THE ACT IN ISSUANCE OF NOTICE IN VIEW OF THE ENHANC EMENT OF ASSESSED INCOME. CONSIDERING ALL THE CONTENTIONS OF THE LD.AR AND IN THE FACTS AND CIRCUMSTANCES, WE FIND THE ASS ESSEE HAS ALSO FILED A LIST OF WORKMEN FOR THE MONTH OF JAN1 1 AND ALSO FILED THE COPY OF EPF DEPOSITS OF MD. SAHIDUL ISLAM FROM 2009- 2011. ADMITTEDLY, ALL THESE DOCUMENTS WERE NOT FILE D BEFORE THE AO DURING ASSESSMENT PROCEEDINGS. TAKING INTO CONSI DERATION THE ARGUMENTS AND SUBMISSIONS AS MADE BEFORE US BY THE LD. AR AND LD. DR, WE ARE OF THE VIEW THAT THE ISSUE RE QUIRES FRESH VERIFICATION BY THE AO. ACCORDINGLY, WE REMAND THE ISSUE TO THE FILE OF THE AO TO CONSIDER ALL THE DOCUMENTS AS FIL ED BY THE ASSESSEE BEFORE US AND TO PASS AN ORDER IN ACCORDAN CE WITH LAW. THE ASSESSEE SHALL BE AT LIBERTY TO FILE NECESSARY EVIDENCES, IF ANY, TO SUBSTANTIATE HIS CLAIM. HE IS ALSO DIRECTED TO CO-OPERATE WITH THE AO IN FURTHER ASSESSMENT PROCEEDINGS. ITA NO. 473/KOL/15 MD. SAMSUDDIN 7 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSE ORDER PRONOUNCED IN OPEN COURT ON 25 TH NOVEMBER,2016 SD/- SD/- M.BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 25-11-2016 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ ASSESSEE: MD. SAMSUDDIN, MAHISHBATHANI, BARKOL, MALDA PIN 732128. 2 THE RESPONDENT/ DEPARTMENT: INCOME TAX OFFICER, WARD 3, 1 ST FLOOR, NETAJI MARKET, MALDA-732101 (WB). 3 4. / THE CIT(A) THE CIT 5 . DR, KOLKATA BENCH 6 . GUARD FILE . **PP/SPS TRUE COPY, BY ORDER, AS STT REGISTRAR ITA NO. 473/KOL/15 MD. SAMSUDDIN 8