ITO, Ward-52(1), Kolkata, Kolkata V. Shri Shankar Sarkar, Kolkata

ITA 510/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91946 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [ BEFORE SHRI P.K.BANSAL , A . M . & SHRI MAHAVIR SINGH , J.M. ] I.T. A . NO. 510 /KOL/20 1 2 : ASSESSMENT YEAR : 2006 - 07 ITO, WA RD - 52(1 ), KOLKATA - VS - SHRI SANKAR SARKAR ( APPELLANT ) ( RESPONDENT ) (PAN: AADCS 7858N) DATE OF CONCLUDING THE HEA RING : 21 . 05 .201 5 DATE OF PRONOUNCING THE ORDER : 21 . 05 .201 5 APPEARANCES : F OR THE APPELLANT : SHRI KANHIYA LAL KANAK, SR.DR : FOR THE RESPONDENT : NONE O R D E R PER SHRI P.K.BANSAL, A .M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27 . 01 .20 12 OF LD. CIT(A) - XXX III, KOLKATA FOR THE ASS ESSMENT YEAR 2006 - 07. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO REDUCING THE ADDITION OF RS.21,05,500/ - MADE BY THE AO IN THE INCOME OF THE ASSESSEE. 3. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE AO NOTED FROM THE AIR INFORMATION THAT THE ASSESSEE HAS DEPOSITED A CASH OF RS.21,05,500/ - IN HIS SAVINGS ACCOUNT WITH HDFC BAN K, GOLPARK BRANCH. THE SAID ACCOUNT WAS NOT DISCLOSED IN THE RETURN. THE AO TREATED THE SAME AS AN UNEXPLAINED CREDIT AND ADDED THE SAME IN THE INCOME OF THE ASSESSEE. WHEN THE MATTER WENT BEFORE THE CIT(A), 2 IT A NO. 510/KOL/2012 SHRI SANKAR SARKAR : A. Y R: 20 06 - 07 THE CIT(A) DIRECTED THE AO TO ESTIMATE THE NET P ROFIT ON THIS AMOUNT @8% TREATING IT TO BE THE UNDISCLOSED TURNOVER AND ACCORDINGLY REDUCED THE ADDITION TO RS.2,68,440/ - BUT BY MISTAKE IN PARA NO.3 IN THE CONCLUSION THE AMOUNT IS MENTIONED AT RS.2,68,440/ - BY OBSERVING AS UNDER: 3.4 NEXT, THE QUESTIO N ARISES AS TO WHAT SHOULD BE QUANTUM OF ADDITION. THE FACTS DISCUSSED EARLIER CLEARLY INDICATE THAT SOME SORT OF BUSINESS RELATING TO MONEY - LENDING OR TRANSPORTATION OF GOODS WAS BEING CARRIED OUT AT GUWAHATI AND THE AMOUNT DEPOSITED IN THE BANK ACCOUNT R ELATED TO THAT BUSINESS, WHICH EXPLAINS WHY THE AMOUNT WAS IMMEDIATELY TRANSFERRED, THROUGH ACCOUNT OF SRI PANKAJ SARKAR, TO GUWAHATI. THEREFORE, THE AMOUNT OF RS.21,05,500/ - REPRESENTS NOT THE INCOME PER SE, BUT THE TURNOVER OF SUCH UNDISCLOSED BUSINESS. THOUGH THE APPELLANT HAS CLAIMED THE BUSINESS BELONGS TO HIS BROTHER AND HIS BROTHER HAS ALSO ACCEPTED THIS, SUCH SELF SERVING STATEMENTS CANNOT BE ACCEPTED IN TOTO BECAUSE OF THE REASONS DISCUSSED EARLIER. SINCE THE MONEY WAS INITIALLY DEPOSITED IN THE AP PELLANT S ACCOUNT, IN ABSENCE OF ANY COGENT EVIDENCE TO THE CONTRARY, IT HAS TO BE HELD THAT THE SAID BUSINESS BELONGED TO HIM ONLY. AT MOST, IT COULD BE A BENAMI BUSINESS IN THE NAME OF HIS BROTHER. IN ANY CASE, INCOME OF SUCH BUSINESS, WHETHER BENAMI O R NOT, IS REQUIRED TO BE ASSESSED IN HIS HANDS ONLY. AS NO ACCOUNTS OF THE SAID BUSINESS HAVE BEEN FURNISHED AND EVEN THE TRUE NATURE OF BUSINESS ACTIVITY IS ALSO NOT CLEAR, IN MY OPINION IT WOULD BE APPROPRIATE TO ESTIMATE NET PROFIT AT THE RATE OF 8% OF TURNOVER, WHICH WOULD COME TO RS.1,68,440/ - . FURTHER, SOME INVESTMENT IN CAPITAL WOULD HAVE BEEN REQUIRED TO BE MADE IN ORDER TO CARRY OUT SUCH UNDISCLOSED BUSINESS. NEEDLESS TO SAY THAT SOURCE OF SUCH INVESTMENT IS ALSO UNEXPLAINED. THEREFORE, THE ADDITIO N FOR NET PROFIT WORKED OUT AS ABOVE IS TO BE INCREASED BY SUCH INVESTMENT. AFTER CONSIDERING FACTS AND CIRCUMSTANCES OF THE CASE, INCLUDING THE FREQUENCY OF TRANSACTIONS IN THE BANK ACCOUNT AND AMOUNT OF INDIVIDUAL DEPOSITS MADE, I AM OF THE VIEW THAT ADD ITION OF RS.1 LAKH WOULD BE ADEQUATE TO 3 IT A NO. 510/KOL/2012 SHRI SANKAR SARKAR : A. Y R: 20 06 - 07 COVER INVESTMENT IN CAPITAL. THE ADDITION OF RS.21,05,500/ - IS ACCORDINGLY REDUCED TO RS.2,68,440/ - . 4. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN THOUGH THE NOTICE WAS DULY SENT TO THE ASSESSEE. WE , THEREFORE, DECIDED TO DISPOSE OF THE APPEAL, AFTER HEARING THE LD. DR. NOBODY APPEARED ON BEHALF OF THE ASSESSEE, EVEN ON THE EARLIER OCCASIONS, WHEN THE APPEAL WAS FIXED FOR HEARING ON 12.02.2015. WE HEARD THE LD. D.R AND CAREFULLY CONSIDERED THE ORDER OF THE TAX A UTHORITIES BELOW . IN OUR OPINION, THE CIT(A) WAS NOT CORRECT IN LAW IN TREATING THE CASH DEPOSITED IN THE BANK ACCOUNT TO BE THE PART OF THE PROCEEDS FROM THE BUSINESS. IT IS A CASE WHERE THE ASSESSEE HA S DEPOSITED THE CASH IN THE S AVINGS ACCOUNT WITH HDFC BA NK. THEREFORE, ONUS IS ON THE ASSESSEE TO PROVE THE SOURCE FROM WHERE THE MONEY HAS COME TO THE ASSESSEE. WHETHER THE ASSESSEE HAS WITHDRAWN OR HAS LIQUIDATED SOME INVESTMENT SO THAT IT CAN BE SAID THAT THE MONEY HAS BEEN DEPOSITED BY THE ASSESSEE FROM THA T PARTICULAR SOURCE. THE MONEY COULD HAVE BEEN, HAD THE MONEY PERTAINED TO THE BUSINESS OF THE BROTHER OF THE ASSESSEE. IT COULD NOT HAVE BEEN DEPOSITED INTO THE SAVINGS ACCOUNT OF THE ASSESSEE OR THE ASSESSEE COULD HAVE CREDITED BACK TO HIS BROTHER SUBSEQ UENTLY. EVEN, THERE IS NO EVIDENCE ON RECORD THAT ON THE BASIS OF THE INCOME EARNED BY THE BROTHER OF THE ASSESSEE , THERE HAD BEEN GENERATION OF THE CASH IN HIS BUSINESS WHICH WOULD HAVE ADDED TO ITS INCOME. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FA IR PLAY TO BOTH THE PARTIES, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION THAT THE AO SHALL REJECT THIS ISSUE, IN ACCORDANCE WITH LAW, AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE 4 IT A NO. 510/KOL/2012 SHRI SANKAR SARKAR : A. Y R: 20 06 - 07 TO PR OVE THE SOURCE AND NATURE OF THE CASH DEPOSITED INTO THE BANK. THUS, THIS GROUND TAKEN BY THE REVENUE IS STATISTICALLY ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED STATISTICALLY . ORDE R PRONOUNCED IN THE OPEN C OURT ON 21 ST MA Y , 2015 . SD/ - SD/ - ( MAHAVIR SINGH ) (P.K.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST MAY , 2015 TALUKDAR(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . SHRI SANKAR SARKAR, 203, PRIYAM APARTMENT, 9C, BOSE PUKUR ROAD, KOLKATA 700 042. 2 ITO, WARD - 52(1 ) , KOLKATA 3 . THE CIT(A), 4. CIT, 5 . DR, TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA