Atul Bazaz, Kolkata V. ITO, Wd-43(3), Kolkata, Kolkata

ITA 538/KOL/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7919 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 12-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2014
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Keywords: Source of fund
• Section: 143(3); 69

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.538/KOL/2014 #$ %&/ ASSESSMENT YEAR: 2009-10 ATUL BAZAZ VS. INCOME-TAX OFFICER, WD-43(3), KOLKATA. (PAN: AEBPB2329C) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 04.09.2014 DATE OF PRONOUNCEMENT: 14.10.2014 FOR THE ASSESSEE: SHRI SUBHAS AGARWAL, ADVOCATE FOR THE REVENUE : SHRI RAVI JAIN, CIT, DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NO. 238/CIT(A)-XXX/WD-43(3)/11-12 DATED 01.01.2014. ASS ESSMENT WAS FRAMED BY ITO, WD- 43(3), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2009-10 VIDE HIS ORDER DATED 27.12. 2011. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF UNEXPLAINED LOAN TAKEN FROM BIMAL KUMAR BAJAJ, HUF AMOUNTING TO RS.11.40 LAC AS UNEXPLAINED CASH CREDI T. THE SECOND ISSUE, WHICH IS INTER- CONNECTED TO THE FACTS OF THE FIRST ISSUE IS AS REG ARDS TO THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF UNEXPLAINED INVES TMENT IN LAND AND SHED PURCHASED BY ASSESSEE AT COSSIPUR AMOUNTING TO RS.6,62,573/-. 3. BRIEFLY STATED FACTS RELATING TO THESE TWO ISSUE S ARE THAT THE ASSESSEE HAS INVESTED A SUM OF RS.53,79,694/- TOWARDS PURCHASE OF LAND AND SHED AT COSSIPUR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSE E TO EXPLAIN THE SOURCE OF INVESTMENT IN THE ABOVE PURCHASE OF LAND AND SHED. THE ASSESSEE EXPL AINED THAT HE HAS TAKEN LOANS AND ADVANCES EITHER FROM FAMILY MEMBERS OR KNOWN PERSONS DURING THE RELEVANT YEAR AND UTILISED THIS AMOUNT 2 ITA 538/K/2014 ATUL BAJAJ AY 2009-10 FOR THE PURPOSE OF MAKING INVESTMENT IN PURCHASE OF THIS LAND AND SHED. THE ASSESSEE SUBMITTED FOLLOWING DETAILS BEFORE THE AO: 1. AMOUNT ADJUSTED OUT OF PURCHASE VALUE SINCE TH E PREVIOUS LANDLORD HAD RECEIVED ADVANCE AGAINST REN T BEFORE THE PURCHASE DATE RS. 47,694/- 2. BORROWED FUNDS RS.47,00,000/- 3. OWN FUNDS RS. 6,32,000/- RS.53,79,694/- THE AO WITHOUT CONSIDERING THE EXPLANATION OF THE A SSESSEE MADE ADDITION OF RS.18,02,573/- BY OBSERVING AS UNDER: ON EXAMINATION OF SUCH LOAN CONFIRMATION, IT IS RE VEALED THAT THE ASSESSEE HAS TAKEN LOAN FROM ONE BIMAL KUMAR BAJAJ H.U.F FOR RS.11,40,000/- ON 16.03.2008 I.E. F.Y. 2007-08 RELEVANT TO THE A.Y. 2008-09. BUT ON VERIFICATION OF RESPECTIVE BALANCE SHEET FOR THE AY 2008-09 IT IS SEEN THAT NO SUCH LOAN CREDITORS ARE ON RECORD. MOREOVER, THE TOTAL LOAN AS PER BALANCE SHEET ENDED ON 31.03.2009 SHOWN RS.47,17,122/-. BUT, THE ASSESSEE HAS EXPRESSED THE VIEWS THAT HE H AS PURCHASED THE LAND SHED AT COSSIPORE AMOUNTING TO RS.53,79,694/- BY UTILIZING THE SAID LOANS & ADVANCES. THEREFORE, THE ASSESSEE HAS FAILED TO ESTABLISHED THE ENTIRE I NVESTMENT OF RS.53,79,694/- FOR PURCHASE OF LAND SHED AT COSSIPORE. HENCE, IT IS CONCLUDED THAT RS.6,62,573/- (53,79,69 4/- - 47,17,122/-) & RS.11,40,000/- TOTALLING RS.18,02,573/- IS THE UNEXPLAINED MONEY A ND ADDED TO THE TOTAL INCOME OF THE ASSESSEE DURING THE YEAR U/S. 69 OF THE I. T. ACT, 1961. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT( A), WHO ALSO CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER: 1.2 DECISION: REGARDING THE LOAN FROM BIMAL BAJAJ (HUF), A.0. WRITES THE SAID LOAN WAS CLAIMED TO HAVE BEEN TAKEN ON 16.03.2008 BUT IN THE BALANCE SHEET OF THE HUF FRM FOR THE YEAR ENDED 31.03.08 (A.Y.2008-09), NO SUCH SUM APPEARS AGANST THE APPELLANT. THE APPELLANT IS SILENT ABOUT IT BUT HAS SUPPLIED THE B ALANCE SHEET FOR THE FINANCIAL YEAR ENDED 31.03.2009 WITHOUT EXPLAINING AS TO HOW/WHY T HE CORRESPONDING AMOUNT DOES NOT APPEAR IN THE BALANCE SHEET OF HUF [FINANCIAL YEAR- 2007-08] AS NOTED BY THE A.O. AS THE LOAN CONFRMATION IS NOT ACCORDING TO THE BALAN CE SHEET FOR THE FINANCIAL YEAR 2007- 08 AND THE APPELLANT HAS NOT EXPLAINED THE REASON F OR THE OMISSION EVEN IN THE APPEAL STAGE, IT IS DIFFICULT TO ACCEPT THE CLAIM OF THE A PPELLANT THAT THE SAID LOAN WAS UTILIZED IN PAYMENT OF THE CONSIDERATION OF THE PROPERTY ACQUIR ED. THE APPELLANT HAS NOT DISCLOSED IN THE APPEAL STAGE ALSO SPECIFIC DATES OF PAYMENTS, S PECIFC AMOUNTS AND IMMEDIATE SOURCE OF SUCH PAYMENTS. HE IS TRYING TO MATCH OVERALL PAY MENTS WITH THE SOURCES OF MONEY TAPPED BY THE APPELLANT. IN VIEW OF THE DEFICIENCY NOTED ABOVE THE APPELLANT OUGHT TO HAVE SUBMITTED DATE-WISE CASH FLOW FOR PURCHASE OF PROPE RTY. AS REGARDS RS.6,62,573/-, THE APPELLANT AGAIN FAILS TO SHOW MATCHING SUMS OF RECEIPTS WITH THE PAYMENTS CHRONOLOGICALLY. HE MERELY CLAIMS THAT RS.6,62,573/- IS OUT OF SAVINGS, FOR WHICH A BREAK-UP IS GIVEN. WHEN A.O. HAS ADDED THIS AMOUNT THE APPELLANT SHOULD HAVE BEEN MORE SPECFC AS TO HOW TIMELINES OF PAYMENT F OR PROPERTY PURCHASE HAS BEEN MET WITH THE PROCEEDS OF VARIOUS COMPONENTS OF SAVINGS. STATEMENT SHOWING THE SOURCE OF FUND AND UTILIZATION SUBMITTED VIDE THE LETTER DATED 13. 12.13 DOES NOT MATCH WITH PAGE 127 OF 3 ITA 538/K/2014 ATUL BAJAJ AY 2009-10 P/B, TO WHICH THE SAD STATEMENT REFERS. MANY OF TH E DETAILS FILED AT THE APPEAL STAGE DOES NOT FIND MENTION IN THE ASSESSMENT ORDER. MOREOVER, VOLUME OF DATA BEING SUBMITTED AT APPEAL STAGE IS YERY LARGE AND THUS REQUIRES SOME ENQUIRIES/VERIFICATION WHICH WILL TAKE TIME TO COMPLETE. THE APPELLANT SEEMS TO HAVE NO CASE AS TO WHY THESE DETAILS WERE NOT SUPPLIED T O A.O. AT ASSESSMENT STAGE AND WHY THESE WERE NOT EXPLAINED TO AO, WHO SEEMS TO HAVE F OUND THE APPELLANT WANTING IN COMPLIANCE AS EVIDENCED BY THE FIRST PARA OF THE AP PELLANTS LETTER DATED 23.12.2011 IN RESPONSE TO A.OS LETTER DATED 05.12.2011. AS THE LOAN OF RS.11,40,000/- (FROM HUF ON 16.03.2008) FINDS NO SUPPORT FROM BALANCE SHEET FOR THE FINANCIAL YEAR ENDED 31.03.2008 AND BECAUSE OF INADEQUATE EXPLANATION OF CASH FLOW AS NOTED ABOVE, THE GROUND OF THE APPELLANT IN RESPECT OF LOAN OF RS.11,40,000/- IS N OT ALLOWED. THE GROUND IN RESPECT OF RS.6,62,573/- IS ALSO NO ALLOWED. AGGRIEVED, ASSESSEE CAME IN SECOND APPEAL BEFORE US . 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US ASSESSEE FILED PAPER BOOK CONSISTS OF PAG ES 1 TO 48, WHEREIN COMPLETE DETAILS WERE FILED. THE ASSESSEE ALSO CONTENDED THAT THESE DETAI LS WERE FILED BEFORE AO AS WELL AS BEFORE CIT(A) EXCEPT THE WRITTEN SUBMISSIONS FILED BEFORE CIT(A) AND FURTHER SUBMISSIONS BEFORE CIT(A), WHICH ARE ENCLOSED AT PAGES 131 TO 140 OF T HE ASSESSEES PAPER BOOK. THE ASSESSEE BEFORE AO FILED SOURCE OF FUNDS FOR STATEMENT IN RE SPECT OF PURCHASE OF LAND AND SHED AT COSSIPUR FOR THE SUM OF RS.53,79,694/-. THE ASSESS EE OUT OF THE BORROWED FUND OF RS.47 LACS GAVE DETAILS IN RESPECT OF BIMAL KR. BAJAJ, HUF AT PAGE 12 OF ASSESSEES PAPER BOOK AND THE RELEVANT READS AS UNDER: 2. BIMAL KUMAR BAZAZ HUF 310,000 CHQ NO 225835 DT. 16.3.09 STATE BANK OF IND IA 830,000 CHQ NO. 000013 DT. 16.3.09 KOTAK MAHINDRA BANK 1140,000 6. LD. COUNSEL FOR THE ASSESSEE BEFORE US EXPLAINED THAT THE AO HAS MISUNDERSTOOD THE ENTIRE FACTS AND ACCORDING TO HIM, THE AO HAS NOTED THE DATE OF LOAN AS ON 16.03.2008 WHEREAS THE ASSESSEE EXPLAINED THIS FACT BEFORE THE AO THAT THE LOAN WAS TAKEN ON 16.03.2009 BY ACCOUNT PAYEE CHEQUES DRAWN ON STATE BANK OF INDORE FOR AN AMOUNT OF RS.3,10,000/- AND THROUGH KOTAK MAHINDRA BANK FOR AN AMOUNT OF RS.8.30 LAC. LD. COUNSEL FOR THE ASSESSEE FILED THE COPIES OF ACCOUNT OF STATE BANK OF INDORE, WHICH AR E ENCLOSED IN ASSESSEES PAPER BOOK AT PAGES 120 AND 121 WHEREBY THIS ENTRY OF RS.3,10,000/- IS CLEARLY MENTIONED TO HAVE RECEIVED THIS AMOUNT FROM B. K. BAJAJ (HUF). FURTHER, THE COPY O F ACCOUNT OF KOTAK MAHINDRA BANK, WHEREIN THE AMOUNT OF RS.8.3 LAC WAS TAKEN AS LOAN FROM B. K. BAJAJ (HUF) IS DEPOSITED IS ENCLOSED AT PAGES 123 OF ASSESSEES PAPER BOOK. TH E ASSESSEE HAS ALSO ENCLOSED THE COPY OF 4 ITA 538/K/2014 ATUL BAJAJ AY 2009-10 CERTIFICATE OF STATE BANK OF INDORE IN B. K. BAJAJ (HUF) WHEREBY THE AMOUNT OF RS. 3.10 LACS WAS WITHDRAWN BY ACCOUNT PAYEE CHEQUE ON 16.03.2009 FOR THE PURPOSE OF LOAN TO THE ASSESSEE. THE COPY OF BANK ACCOUNT OF SHRI B. K. BAJAJ (HUF) MAINTAINED WITH KOTAK MAHINDRA BANK FROM WHERE CHEQUE OF RS.8.30 LAC WAS ISSUED IN FAVO UR OF ASSESSEE ON 16.03.2009 IS ENCLOSED AT PAGE 19 OF THE ASSESSEES PAPER BOOK. THE SOURCE W AS EXPLAINED BY THE ASSESSEE THAT THIS LOAN OF RS.8.30 LACS IS OUT OF THE PREMATURE WITHDRAWAL OF FDR BY SHRI B. K. BAJAJ, HUF ON 09.03.2009 FOR AN AMOUNT OF RS.7,67,513/- AND BALAN CE OUT OF SAVINGS ACCOUNT. THE ASSESSEE ALSO FILED COPY OF CONFIRMATION, ITR DETAILS, COPY OF CAPITAL ACCOUNT OF B. K. BAJAJ, HUF FOR AY 200-10 IN SUPPORT OF THE LOANS. THE ASSESSEE HA S FILED SIMILAR EXPLANATION BEFORE THE CIT(A) ALSO IN RESPECT TO THESE LOANS. THE CIT(A) HAS REPRODUCED THE ENTIRE EXPLANATION AT PAGES 6 AND 7 OF THE APPELLATE ORDER BUT NOT CONSID ERED ON MERITS. SIMPLY CIT(A) HAS BRUSHED ASIDE WITH THE SPECIFIC STATEMENT THAT MOREOVER, VOLUME OF DATA BEING SUBMITTED AT APPEAL STAGE IS YERY LARGE AND THUS REQUIRES SOME ENQUIRIE S/VERIFICATION WHICH WILL TAKE TIME TO COMPLETE. THE APPELLANT SEEMS TO HAVE NO CASE AS TO WHY THESE DETAILS WERE NOT SUPPLIED TO A.O. AT ASSESSMENT STAGE AND WHY THESE WERE NOT EXP LAINED TO AO, WHO SEEMS TO HAVE FOUND THE APPELLANT WANTING IN COMPLIANCE AS EVIDENCED BY THE FIRST PARA OF THE APPELLANTS LETTER DATED 23.12.2011 IN RESPONSE TO A.OS LETTER DATED 05.12. 2011. THIS IS NO REASON THAT THE DATA IS VOLUMINOUS OR IT REQUIRES ENQUIRIES/VERIFICATION, T HE CIT(A) IS COMPETENT TO ASK FOR THE REMAND REPORT FROM THE AO ON THESE ISSUES. BUT THE CIT(A) FAILED IN HIS DUTIES. WE FIND THAT IN VIEW OF THE DETAILS SUBMITTED BEFORE US THAT THE ASSESSE E HAS MORE OR LESS EXPLAINED THE LOAN CREDITOR IN VIEW OF THE EVIDENCE PRODUCED BEFORE US (WHICH W ERE AVAILABLE BEFORE THE AO AS WELL AS BEFORE CIT(A). FROM THE ABOVE EVIDENCES CONSIDERED BY US, WHICH WERE AVAILABLE BEFORE AO AS WELL AS BEFORE CIT(A), AND THE FACTS DISCUSSED ABO VE, WE ARE OF THE CONSIDERED VIEW THAT THE LOAN CREDITORS ARE FULLY EXPLAINED BY THE ASSESSEE AND THESE ARE GENUINE LOAN CREDITORS. HENCE, WE DELETE THE ADDITION MADE BY AO AND CONFIRMED BY CIT(A). THE ORDERS OF THE LOWER AUTHORITIES ARE REVERSED AND THESE TWO ISSUES OF AS SESSEES APPEAL ARE ALLOWED. 7. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY AO IN REGARD TO UNEXPLAINED INVEST MENT MADE IN FLAT AT ALIPORE AMOUNTING TO RS.2,52,304/-. 8. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE PERUSED THE EVIDENCES PRODUCED BEFORE US. WE FIND THAT THE AO HAS MADE ADDITION OF 5 ITA 538/K/2014 ATUL BAJAJ AY 2009-10 RS.2,52,304/- BEING THE DIFFERENCE IN THE AMOUNT EX PLAINED BY THE ASSESSEE AND ACTUAL INVESTMENT MADE AS UNEXPLAINED BY OBSERVING AS UNDE R ON THE OTHER HAND, REGARDING THE INVESTMENT MADE F OR RS.25,53,607/- (1/2 SHARE OF THE FLAT AT ALIPORE), ON PERUSAL OF BALANCE SHEET FOR T HE AY 2008-09, IT IS NOTICED THAT THE ASSESSEE HAS SHOWN AN ADVANCE FOR FLAT FOR RS.23,01 ,300/- DURING THE FY 2007-08 I.E. AY 2008.09. THEREFORE, IT IS NOTICED THAT THE ASSESSE E HAS MADE INVESTMENT FOR RS.2,52,304/- (RS.25,53,607 23,01,300) DURING THE YEAR UNDER AS SESSMENT. AS THE ASSESSEE HAS FAILED TO EXPLAIN THE SAME AND ADDED TO THE TOTAL INCOME O F THE ASSESSEE THE SAID AMOUNT IS TREATED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE. THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AL SO CONFIRMED THE ADDITION BY STATING THAT THE CASH FLOW STATEMENT IS CLEAR WHICH PROVES THAT THE ASSESSEE FAILED TO EXPLAIN SOURCE OF REGISTRATION COST OF THE PROPERTY, AS THE CHEQUE NO . 000047 DATED 21.01.2009 IS ISSUED BEFORE ENCASHMENT OF FDR OF RS.1,48,951/- AND RS.1,98,309/ -, WHICH ARE ENCASHED ON 27.01.2009. AGGRIEVED, ASSESSEE CAME IN APPEAL BEFORE TRIBUNAL. 9. WE FIND FROM THE EVIDENCES PRODUCED BEFORE US TH AT THE ASSESSEE HAS ONLY ISSUED CHEQUE NO. 000047 ON 21.01.2009, NO DOUBT BEFORE ENCASHMEN T OF FDR OF RS.1,48,951/- AND RS.1,98,309/- I.E. ON 27.01.2009, BUT THE CHEQUE WA S ENCASHED AFTER 27.01.2009 FROM THE VERY ACCOUNT WHERE ENCASHMENT PROCEEDS WERE DEPOSITED BY THE ASSESSEE AND THE RELEVANT AMOUNT OF RS.2,45,615/- WAS WITHDRAWN ON VERY 27.01.2009 BY C LEARING IN THE NAME OF S. JALAN. THIS CLEARLY PROVES THAT THIS ENTRY IS EXPLAINED. ONCE THIS IS THE POSITION, WE FIND NO REASON TO SUSTAIN THIS ADDITION. HENCE, THIS ADDITION IS DEL ETED. THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 11. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14.10. 2014 SD/- SD/- , ! , (SHAMIM YAHYA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14TH OCTOBER, 2014 ,- #./ 0 JD.(SR.P.S.) 6 ITA 538/K/2014 ATUL BAJAJ AY 2009-10 1 *2 3 2%4- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT SHRI ATUL BAZAZ, 63, NALINI RANJAN AVEN UE, BLOCK- G, KOLKATA-700 053. 2 *+() / RESPONDENT ITO, WARD-43(3), KOLKATA. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 2:; *# / DR, KOLKATA BENCHES, KOLKATA +2 */ TRUE COPY, #