DCIT, Jamshepur V. Shyamal Kumar Khan, West Singhbhum

ITA 55/RAN/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0349 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROUSHAN SR S C
• Keywords: Unexplained investment
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 55/RAN/2012 (ASST. YEAR : 2006-07) DCIT, CIRCLE-1, JAMSHEDPUR VS. SHRI SHYAMAL KUMAR KHAN, NUTAN BAZAR, CHAKULIA, EAST SINGHBHUM (JHARKHAND) PAN NO. ADLPK 7723 N (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI DEEPAK ROUSHAN SR.SC DATE OF HEARING : 26/10/2015. DATE OF PRONOUNCEMENT : 26/10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), JAMSHEDPUR, D ATED 16/03/2012. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIF IED IN DELETING THE UNEXPLAINED INVESTMENT OF RS. 26,68,018.43. 3 . FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSI NG OFFICER OBSERVED THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OUT OF WHICH THE DEPOSITS OF RS. 27,93,432/- WERE MADE/RENEWED. THE ASSESSEE SUBMITTED THAT THE DEPOSITS WERE MADE OUT OF MATURITY AMOUNT OF EA RLIER DEPOSITS. THE 2 ITA NO. 55/RAN/2012 ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NO T DECLARED THE FIXED DEPOSITS MADE IN THE YEAR IN WHICH THE ASSESSEE CLA IMED TO HAVE MADE THE INVESTMENT. HE OBSERVED THAT SINCE THE RE-INVE STMENT OF THE FDRS REPRESENT EARNINGS OF EARLIER YEARS FOR WHICH ASSES SMENT HAS BEEN MADE WITHOUT TAXING THOSE EARNINGS. THE INVESTMENT OF THOSE DEPOSITS SHOULD BE LEGITIMATELY TREATED AS UNEXPLAINED INVES TMENT IN THE YEAR IN WHICH THEY HAVE BEEN REINVESTED AND ACCORDINGLY MAD E THE ADDITION UNDER SECTION 69 OF THE ACT. 4. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) OB SERVED THAT ON PERUSAL OF THE DETAILS FILED DURING THE APPELLAT E PROCEEDINGS, IT IS SEEN FROM THE CONFIRMATION LETTERS DATED 18/11/2008 & 17/02/2012 OF STANDARD CHARTERED BANK, KOLKATA THAT THE INITIAL Y EARS OF INVESTMENTS OF THE PRINCIPAL AMOUNT OF THE MATURITY AMOUNT OF T HE FDRS WERE PRIOR TO 1998. ACCORDING TO THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS), THE DETAILS OF INVESTMENT OF FDRS AND MA TURITY AMOUNT AS PER THE LETTERS OF THE BANK CREDITED IN ACCOUNT NO. 322-1-041843-9 WITH STANDARD CHARTERED BANK, KOLKATA ARE AS UNDER:- ACCOUNT NO. DATE OF OPEN MATURITY DATE OF FD MATURITY AMOUNT INTEREST ACCRUED 32830123737 07/02/98 6/29/2005 25,000 542.24 32830123745 07/06/98 6/29/2005 25,000 542.24 32830123982 07/08/98 6/29/2005 25,000 542.24 32830124016 07/15/98 6/29/2005 25,000 542.24 32830124032 06/06/97 6/29/2005 25,122.95 544.90 32830124008 07/06/98 6/29/2005 25,346.58 549.75 32830123990 06/09/98 6/29/2005 24,444.82 551.89 32830124024 06/04/98 6/29/2005 25,788.68 559.34 32810019411 05/29/93 6/29/2005 630,954.21 544.90 TOTAL OF OLD FDRS 832,657.24 18,059.92 3 ITA NO. 55/RAN/2012 ACCOUNT NO. DATE OF OPEN OF FD MATURITY DATE OF FD MATURITY AMOUNT OF FD 32830116587 4/20/1998 9/14/2005 39,522.20 1714.43 32830116595 4/20/1998 9/14/2005 39,957.83 1733.33 32810032493 4/20/1998 9/14/2005 40,103.03 1739.63 32830116560 4/20/1998 9/14/2005 40,103.03 1739.63 32830116579 4/20/1998 9/14/2005 40,103.03 1739.63 328100032493 BAL 9/14/2005 93,023.11 292817.23 TOTAL OF OLD FDS & OLD SB A/C BAL 1125,474.47 26,72 6.57 5. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT IT CAN BE SEEN THAT OUT OF RS. 6,30,954.21 AND RS. 93,028. 11 ARE NOT THE MATURITY AMOUNT OF FDRS BUT THEY ARE TRANSFER OF CL OSING BALANCE OF RS. 6,17,467.78 + RS. 13,468.43 AND RS. 92,488.60 + RS. 539.50 FROM ACCOUNT NOS. 328-1-00194-1 AND 328-1-003249-3 OF ST ANDARD CHARTERED BANK, KOLKATA RESPECTIVELY TO ACCOUNT NO. 322-1-041843-9 IN THE SAME BANK. ON A QUERY BY HIM, THE ASSESSEE SUB MITTED THAT IT WAS AN ERROR TO STATE THAT THE AMOUNT OF RS. 6,30,954.2 1 WAS THE MATURITY AMOUNT OF FDRS. IT WAS EXPLAINED BY THE ASSESSEE T HAT IT HAD OPENED BANK ACCOUNT NO. 328-1-001941-1 IN STANDARD CHARTER ED BANK, KOLKATA, JORASANKO BRANCH, KOLKATA WHICH WAS OPENED BEFORE 1993 AND SUBMITTED THE BANK STATEMENT OF THE SAID ACCOUNT. ON PERUSAL OF THE BANK STATEMENT IT IS SEEN THAT THE OPENING BALANCE AS ON 31/12/2003 WAS RS. 5,98,625.07 AND THE OPENING BALANCE AS ON 0 1/04/2005 WAS RS. 6,05,476.64. THIS ACCOUNT WAS CLOSED ON 29/06/ 2005 AND THE AMOUNT TRANSFERRED TO ACCOUNT NO. 322-1-041843-9 WH EREIN THE BALANCE LYING IN THE SAID BANK ACCOUNT AMOUNTING RS . 6,17,467.78 + 13.486.43 TOTALLING TO RS. 6,30,954.21 WAS TRANSFER RED. IT WAS SUBMITTED THAT IN RESPECT OF THIS BANK ACCOUNT, THE ASSESSEE HAD OFFERED AN AMOUNT OF RS. 13,685.08 VIDE LETTER DATED 04/11/ 2011 ON ACCOUNT OF 4 ITA NO. 55/RAN/2012 INTEREST AND STATED THE BALANCE AMOUNT OF RS. 11,79 2.49 MAY FURTHER BE TAXED. THE ASSESSEE EXPLAINED THAT IT HAD A BANK A CCOUNT NO. 328-1- 003249-3 IN WHICH THE OPENING BALANCE AS ON 01/04/2 005 WAS RS. 1,91,686.35 AND OUT OF THE SAID AMOUNT OF BALANCE, RS. 92,488.60 + RS. 539.51 = RS. 93,028.11 AS ON 14/09/2005 WAS CRE DITED IN THE ACCOUNT NO. 322-1-041843-9. THE ASSESSEE SUBMITTED THAT SINCE THIS AMOUNT WAS OUT OF OPENING BALANCE, THE SAME WAS NOT TAXABLE. HOWEVER, HE ADMITTED THAT INTEREST AMOUNTING TO RS. 539.51 + RS.802.25 CREDITED DURING THE YEAR WAS TAXABLE. 6 . THE COMMISSIONER OF INCOME TAX (APPEALS) ON PERUS AL OF THE LETTERS OF STANDARD CHARTERED BANK, KOLKATA SUBMITT ED BY THE ASSESSEE AND THE EXPLANATION FURNISHED BY THE ASSESSEE OBSER VED THAT IT IS SEEN THAT SOURCE OF DEPOSITS MATURED DURING THE YEAR AND CREDIT BALANCES TRANSFERRED IN BANK ACCOUNT NO. 322-1-041843-9 AS D ETAILED ABOVE (EXCLUDING INTEREST CREDITED DURING THE YEAR) IS NO T DURING THE YEAR. THE OBSERVATION OF THE ASSESSING OFFICER THAT SINCE THE SOURCE OF INVESTMENTS WAS NOT DISCLOSED IN THE YEAR OF INVEST MENT, THE ADDITION HAS TO BE MADE IN ASSESSMENT YEAR 2006-07 IS NOT FO UND IN ACCORDANCE WITH THE PROVISIONS OF LAW. SEC. 69 OF THE ACT PRO VIDES FOR TAXABILITY OF UNEXPLAINED INVESTMENT IN THE YEAR OF INVESTMENT. FINANCIAL YEAR 2005- 06 IS NOT THE YEAR OF INVESTMENT FOR THE SUM OF RS. 11,26,625.54 (EXCLUDING THE INTEREST AMOUNT OF RS. 39,860.82) + RS. 18,059.92 + RS.8,666.65 + RS. 11,792.49 + RS. 539.51 + RS. 802. 25). THE INTEREST OF RS. 39,860.82 HAS NOT BEEN OFFERED FOR TAXATION. THEREFORE, HE HELD THAT AFTER CONSIDERING THE FACTS, THE ADDITION IS R ESTRICTED TO RS.39,860.82 AND THE ADDITION OF RS. 10,86,764.72 W AS ESTIMATED. 7 . SIMILARLY, THE COMMISSIONER OF INCOME TAX (APPEAL S) OBSERVED THAT OUT OF THE ADDITION OF RS. 2,82,889/-, THE ADD ITION IS RESTRICTED TO RS. 13,254.50 WHICH WAS THE AMOUNT OF INTEREST EAR NED DURING THE YEAR BY THE ASSESSEE AND DELETED THE BALANCE AMOUNT OF R S. 2,69,634.50. 5 ITA NO. 55/RAN/2012 8 . ON A SIMILAR REASON FOR RS. 3,23,339/-, THE COMMI SSIONER OF INCOME TAX (APPEALS) RESTRICTED THE ADDITION ON ACC OUNT OF INTEREST EARNED DURING THE YEAR OF RS. 9,743.68 AND DELETED THE BALANCE AMOUNT OF RS.3,13,595.32. FURTHER, WITH REGARD TO THE ADD ITION OF RS. 5,75,493/-, THE COMMISSIONER OF INCOME TAX (APPEALS ) RESTRICTED THE ADDITION TO RS.25,932.83 WHICH WAS THE INTEREST EAR NED DURING THE YEAR ON FDRS AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS. 5,49,569.17. THIS WAS DONE BY THE COMMISSIONER OF INCOME TAX (AP PEALS) AFTER CALLING REMAND REPORT FROM THE ASSESSING OFFICER. 9. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY SPECIFIC MISTAKE IN THE ABOVE FINDINGS OF THE COMMISSIONER O F INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS ) AFTER DETAILED EXAMINATION OF ALL EVIDENCES AND SUBMISSIONS OF THE ASSESSEE, DELETED THE ABOVE ADDITION. WE, THEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE IN THE ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE DEPARTMENT IS DISMISSED. 10 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON MONDAY, THE 26 TH DAY OF OCTOBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH OCTOBER, 2015. VR/- 6 ITA NO. 55/RAN/2012 COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER 7 ITA NO. 55/RAN/2012 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 26/10/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27/10/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 27/10/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 27/10/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27/10/2015 SR.PS 6. DATE OF PRONOUNCEMENT 26/10/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 27/10/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER