Samir Kumar Paikray, Khurda V. ITO, Khurda Ward, Khurda

ITA 53/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7240 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S D NAYAKK K BAL
• Keywords: Unexplained investment
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 53 /CTK/2016 ASSESSMENT YEAR : 2011 - 12 SAMIR KUMAR PAIKRAY, AT: SRIRAM NAGAR, KHURDA, VS. ITO, KHURDA WARD, KHURDA PAN/GIR NO. AHCPP 4275 D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.D.NAYAK/K.K.BAL, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 03 /01/ 2017 DATE OF PRONOUNCEMENT : 0 3 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 9.11.2015 , FOR THE ASSESSMENT YEAR 2011 - 12 ON THE FOLLOWING GROUNDS: 1. FOR THAT THE ORDER OF THE FORUM BELOW IS ARBITRARY AND UNJUST IN THE FACTS AND CIRCUMSTANCES OF THE CASE HENCE LIABLE TO BE QUASHED. 2. FOR THAT WHEN THERE IS NO INVESTMENT AND THE NATURE AND SOURCE OF DEPOSIT AND WITHDRAWALS HAS BEEN EXPLAINED THE ADDITION ON THE GROUND OF UNEXPLAINED INVESTMENT IS ARBITRARY AND LIABLE TO BE QUASHED. 2 ITA NO. 53/CTK/2016 ASSESSMENT YEAR :2011 - 12 3. FOR THAT THE LD CIT(A) RIGHTLY NOT DISALLOWED THE ADDITION MADE BY LD AO ON THE GROUND THAT THE ADDITION CANNOT BE MADE AS UNEXPLAINED INVESTMENT. THIS FACT EXPLAINS THE ASSESSMENT IS NON - APPLICATION OF MIND AND LIABLE TO BE QUASHED. 4. FOR THAT THE LD CIT(A) ERRED IN ENHANCING THE ASSESSMENT ON THE GRO UND OF BOGUS EXPENDITURE WITHOUT ISSUING SHOW CAUSE AGAINST SUCH ENHANCEMENT AND WITHOUT GRANTING OPPORTUNITY. THEREFORE, THE ENHANCEMENT IS ILLEGAL AND LIABLE TO BE REDUCED. 2. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE DERIVES INCOME FROM RETAIL TRADING IN PETROL, DIESEL & LUBRICANTS. THE ASSESSEE FILED HIS RETURN OF INCOME ON 3 0.9.2011 SHOWING TOTAL INCOME OF RS.6,51,880/ - . THE ASSESSING OFFICER FOUND FROM THE AIR INFORMATION THAT THE ASSESSEE HAD MADE CASH DEPOSIT S OF RS.43,83,920/ - ON DIFFERENT DATES IN HIS SB ACCOUNT NO.046401503027 WITH ICICI BANK, KHURDA DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER ASKE D THE ASSESSEE TO EXPLAIN THE SOURCES OF CASH DEPOSIT S IN THE BANK ACCOUNT AND AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND EXAMINING THE RELEVANT FACTS/DETAILS , CONCLUDED THAT THE CASH DEPOSITS ARE OUT OF SALE PROCEEDS OF THE ASSESSEE. HOWEVER, HE OBSERVED THAT THERE WERE WITHDRAWALS ON FOUR DATES AMOUNTING TO RS.10,00,719/ - , THE UTILIZATION OF WHICH COULD NOT BE EXPLAINED SATISFACTORILY BY THE ASSESSEE. THE ASSESSEE CLAIMED THAT ALL THE WITHDRAWALS WERE THROUGH RTGS AND THE TRANSFER S WERE BY WA Y OF PAYMENT TO INDIAN OIL CORPORATION (IOC) . FROM THE DETAILS FURNISHED BY THE I O C , THE ASSESSING OFFICER FOUND THAT 3 ITA NO. 53/CTK/2016 ASSESSMENT YEAR :2011 - 12 THE WITHDRAWALS WERE NOT REFLECTED IN THE LEDGER ACCOUNT OF IOC AS PAYMENTS RECEIVED FROM THE ASSESSEE. FOR THIS REASON, HE MADE AN ADDI TION OF RS.10,00,719/ - AS UNEXPLAINED INVESTMENT S . 3. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. BEFORE ME, LD A.R. OF THE ASSESSEE ARGUED THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS.10,00,719/ - AS UNEXPLAINED INVESTMENT S ONLY BECAUSE THE DESTINATION/UTILIZATION OF CERTAIN WITHDRAWALS FROM THE SB ACCOUNT COULD NOT BE SATISFACTORILY EXPLAINED AND ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT S CAN BE MADE ONLY WHEN THE SOURCE OF SUCH INVESTMENT IS NOT EXPLAINED SATISFACTORIL Y. IN THE CASE OF THE ASSESSEE, THE SOURCE OF THE IMPUGNED WITHDRAWALS IS THE SB ACCOUNT WITH ICICI BANK ITSELF AND ALL THE DEPOSITS IN THAT ACCOUNT HAVE BEEN ACCEPTED AS OUT OF THE DISCLOSED SALE PROCEEDS BY THE ASSESSING OFFICER. THIS BEING SO, THE ADD ITION CA N NOT BE MADE AS UNEXPLAINED INVESTMENT S . 5. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 6. I FIND FORCE IN THE ARGUMENTS OF LD A.R. OF THE ASSESSEE. AS PER THE PROVISIONS OF SECTION 69 OF THE INCOME TAX ACT, 1961, WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT 4 ITA NO. 53/CTK/2016 ASSESSMENT YEAR :2011 - 12 THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY , THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. IN THE INSTANT CA SE, THE ASSESSING OFFICER HIMSELF AFTER VERIFICATION AND INVESTIGATION WAS SATISFIED ABOUT THE SOURCE OF DEPOSITS IN THE SB ACCOUNT NO. 046401503027 OF THE ASSESSEE WITH ICICI BANK BEING OUT OF THE SALE PROCEEDS OF THE ASSESSEE. FROM THESE EXPLAINED DEPOS ITS, THE ASSESSEE MADE PAYMENT TO IOC, WHICH WAS FOUND TO BE NOT REFLECTED IN THE LEDGER ACCOUNT OF IOC. THEREFORE, THE ADDITION WAS MADE FOR RS.10,00,719/ - AS UNEXPLAINED INVESTMENTS BY THE ASSESSING OFFICER AND CONFIRMED IN APPEAL BY THE LD CIT(A). 7. I FIND THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED IN LAW. THE REASON BEING THAT THE SOURCE OF DEPOSIT IN SB ACCOUNT NO. 046401503027 OF THE ASSESSEE WITH ICICI BANK HAS BEEN EXPLAINED SATISFACTORILY BY THE ASSESSEE TO THE ASSE SSING OFFICER, WHICH IS ACCEPTED AS THE SALE PROCEEDS OF THE ASSESSEE. THUS, THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WAS DULY EXPLAINED BY THE ASSESSEE AND ACCEPTED BY THE ASSESSING OFFICER. THEREAFTER, THE PAYMENTS MADE TO IOC OF RS.10,00,719/ - WHICH WAS NOT FOUND TO BE REFLECTED IN THE LEDGER ACCOUNT OF IOC, THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED INVESTMENTS. THE UTILIZATION OF THE FUNDS FROM THE EXPLAINED FUNDS OF THE ASSESSEE IN HIS SB ACCOUNT NO. 046401503027 WIT H ICICI BANK CANNOT BE TREATED AS UNEXPLAINED 5 ITA NO. 53/CTK/2016 ASSESSMENT YEAR :2011 - 12 DEPOSITS OR INVESTMENTS OF THE ASSESSEE. THE SOURCE IS EXPLAINED BY THE ASSESSEE AND ACCEPTED BY THE ASSESSING OFFICER BEING THE SALE PROCEEDS OF THE ASSESSEE. THEREFORE, I SET ASIDE THE ORDERS OF LOWER AUTH ORITIES AND DELETED THE DISALLOWANCE OF RS.10,00,719/ - AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 03 /01/2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 03 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : SAMIR KUMAR PAIKRAY, AT: SRIRAM NAGAR, KHURDA, 2. THE RESPONDENT. ITO, KHURDA WARD, KHURDA 3. THE CIT(A) - 1, BHUBANESWAR 4. CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//