Supash Agarwal, Surat V. ITO, Ward -45(2), Kolkata

ITA 559/KOL/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0904 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Capital asset converted into stock in trade; Unexplained expenditure; Principle of natural justice; Tangible material; Reassessment proceedings
• Section: 147; 148; 133A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member I.T.A. No.559/Kol/2020 Assessment Year: 2011-12 Supash Agarwal..................................................................................Appellant 4,CF Tower, Ratna Jyoti Apartment, Vesu Surat-395007. [PAN: ACYPA2036Q] vs. ITO-45(2), Kolkata............................................................................Respondent Appearances by: Shri Sunil Kr. Agarwal, AR, appeared on behalf of the appellant. Smt. Ranu Biswas, Addl. CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 30, 2022 Date of pronouncing the order : May 30, 2022 ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 27.01.2020 of the Commissioner of Income Tax (Appeals)-13, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). The assessee in this appeal has taken the following grounds of appeal: “1. On the facts and circumstances of the case and in law, initiation of reassessment proceedings u/s 147/148 on 29.03.2018 is bad in law as there is no tangible material which has live link with the formation of belief for the alleged escaped income of Rs.20 lakhs, while the alleged document/transaction is not related/belonged to the assessee; the alleged initiation which is based on irrelevant documents/ transactions merely on presumption and surmises is invalid, hence, is liable to be quashed. 2. On the facts and circumstances of the case and in law, initiation of reassessment proceedings u/s147/ 148 on 29-3-18, 1s bad 1n law, void-ab-initio & without having jurisdiction, as there is no proper/ valid sanction as required u/s151(1) from Pr.CIT had been obtained which is a pre-requisite for initiating proceedings u/s147/ 148 in a case of after lapse of 4 years from the end of the relevant AY, and in absence of this, reassessment proceedings /s147/ 148 is bad in law, void-ab-initio and is liable to be. 3. On the facts and circumstances of the case and in law, the ld CIT(A) has erred in sustaining the addition of Rs. 10 lakhs on the count of unexplained cash credit u/s 68, while no such amount has been received/credited in the books of account or any bank accounts of the assessee in the relevant AY11-12; the alleged transaction is not related to I.T.A. No.559/Kol/2020 Assessment Year: 2011-12 Supash Agarwal 2 the assessee in any manner; the arbitrary addition sustained without having any legal basis, is liable to be deleted. 4. On the facts and circumstances of the case and in law, the ld CIT(A) has erred in sustaining the alleged addition of Rs. 10 lakhs, while copy of alleged 'diary impounded' from third party premises on 8-2-15 in search proceedings on Nadiadwala Group, has not been provided confronted to the assessee and even without giving proper opportunity to cross examine the alleged witness which is used against the assessee for making addition, and thus, it is violation of principle of natural justice; hence, the order passed by the ld CIT(A) be treated as illegal, null & void-ab-initio, is liable to be quashed. 5. The appellant craves 1eave, to add, urge, alter, modify or withdraw any ground/s before at the time of hearing.” 2. The brief facts of the case are that the assessee filed his return of income for Assessment Year 2011-12 electronically declaring total income of Rs.1,64,258/- on 30.03.2013. Subsequently, the case of the appellant was reopened on account of information received from ACIT, Central Circle-4(4) on 28.03.2018. As per the said information received the appellant bearing PAN ACYPA2036Q had advanced an amount of Rs.20,00,000/- to various persons. The contents of the said letter/information as extracted from the order of the CIT(A) were as under: Sharing of information in the case of Ramavtar Agarwal (Supash Agarwal) (PAN- ACYPA20360): Ann exure Page no. Amount received PAN (L) Amount Given to PAN (B) Amount Date FY Medium 25 Ramavtar Agarwal ACYPA2036Q Trilok S 200000 5.1.2010 2010- 11 Cash 35 Ramavtar ACYPA2036Q Shree Jagmohan Walia 500000 4.12.2010 2010- 11 Cheque 3 66 Ramavtar Agarwal ACYPA2036Q Shree Jagmohan Walia 500000 4.12.2010 2010- 11 Cheque 3 69 Ramavtar Agarwal ACYPA2036Q Trilok S 200000 5.1.2010 2010- 11 Cash 3 75 Ramavtar Agarwal ACYPA2036Q Kamal Gagodiya AACPG9650J 600000 1.1.2011 2010- 11 Cheque I.T.A. No.559/Kol/2020 Assessment Year: 2011-12 Supash Agarwal 3 Total 2000000 The A.O reopened by the case under section 147 of the Income Tax Act 1961. The Assessing Officer observed that during the course of survey u/s 133A conducted in the case of M/s Dayal Tours and Travels (I) Pvt. Ltd. on 08.12.2015, a diary was impounded which belonged to Shri Gauri Shankar Choudhary, father of Shri Nitin Choudhary, Director of M/s Dayal Tours and Travels (I) Pvt. Ltd. and the name of the appellant was found in the same diary. The Assessing Officer observed that the appellant did not attend the assessment proceedings. The Assessing Officer made the assessment u/s 144 of the Income Tax Act by making an addition of Rs.20,00,000/- on account of unexplained expenditure. 3. However, the ld. CIT(A) restricted the addition of Rs.10,00,000/- as against that of Rs.20,00,000/- made by the Assessing Officer, observing as under: “5.6 I have carefully gone through the assessment order, the observations of the A.O and the contentions & assertions of the appellant. 5.7 It is seen that the impounded diary on page-25,35,66,69 & 75 pertains to various payments made by person named Ramavtar Agarwal (PAN-ACYPA2036Q) during Financial Year 2010-11 in cash and cheque. It is relevant that PAN-ACYPA2036Q has made the payments to various persons as per the impounded diary. 5.8 A perusal of the entries show that the two entries on page 35 and page 66 regarding payment of Rs.5,00,000/- by cheque twice on 04.12.2010 pertain to Financial Year 2010- 11 relevant to assessment year 2011-12. The remaining entreis pertain to assessment year 2010-11 as the dates pertain to Financial Year 2009-10. The A.O is required to check the information received by the A.O from the ACIT, Central Circle-4(4), C.R.-4, Mumbai before giving relief. 5.9 Therefore, the addition of Rs.10,00,000/- (Rs.5,00,000 + Rs.5,00,000) is confirmed pertaining to the payments made by cheque to Shri Jagmohan Walia and the appellant gets a relief of Rs.10,00,000/- (Rs.20,00,000 – Rs.10,00,000).” 4. Being aggrieved by the confirmation of the aforesaid addition of Rs.10,00,000/-, the assessee has come in appeal before this Tribunal. 5. At the outset, the ld. Counsel for the assessee has invited my attention to the chart vide which the information regarding the unexplained investment by the assessee was found in the diary of one Shri Gouri Shankar Choudhary. A perusal of the above chart shows that there is no allegation that the assessee namely Shri Supash Agarwal has made I.T.A. No.559/Kol/2020 Assessment Year: 2011-12 Supash Agarwal 4 any such unexplained deposits/investment. The name of the chart/diary has been mentioned as that of Shri Ramavtar Agarwal, deceased father of the assessee. There is no allegation either by the Assessing Officer or by the CIT(A) that the name of the assessee was mentioned in the said diary. However, the ld. DR has stated that the PAN number of the assessee has been mentioned in the chart. I am not convinced with the above argument of the ld. DR. The entries in the diary of the alleged one Shri Gouri Shankar Choudhary were in the name of Shri Ramavtar Agarwal and not in the name of the assessee. It has been alleged that the disputed amount of Rs.10,00,000/- was given by the assessee through cheque. However, there is no mention either of any bank account of the assessee or any other details to show that the said amount was paid by the assessee through cheque. The ld. Counsel for the assessee has relied upon paper-book page 20 onwards which is the copy of the bank account statement of the assessee to submit that the assessee did not issue any alleged cheque of Rs.10,00,000/- to any such person. However, otherwise if the payment was made through cheque then how the same may be alleged to be out of unexplained sources especially when there is no allegation that the deposit in the bank account of the assessee was from any unknown source of income. I do not find any justification on the part of the CIT(A) in confirming the addition of Rs.10,00,000/- and the same is ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed. Kolkata, the 30 th May, 2022. Sd/- [Sanjay Garg] Judicial Member Dated: 30.05.2022. RS Copy of the order forwarded to: 1. Supash Agarwal 2. ITO-45(2), Kolkata I.T.A. No.559/Kol/2020 Assessment Year: 2011-12 Supash Agarwal 5 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches