ITO, Ward - 33(2), Kolkata, Kolkata V. M/s. L.M. Das & Sons, Kolkata

ITA 639/KOL/2010

• Counselvise Citation: 63923514 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L K S DAHIYA; B HAZRA
• Assessee Lawyers: S BAKCHI
• Keywords: Unexplained cash credit; Income from undisclosed sources; Source of fund; Assessment record
• Section: 143(3)

Judgement Text

I.T.A. NO.: 639/ KOL. / 2010 ASSESSMENT YEAR : 2006-07 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER), AND SHRI MAHAVIR SINGH (JUDICIAL MEMBER) I.T.A. NO.: 639/ KOL. / 2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-33(2), KOLKATA ..APPELLANT -VS.- M/S. L.M. DAS & SONS ... RESPONDENT, 10B, MIDDLETON ROW, 3RD FLOOR, KOLKATA-700 071 [PAN : AAAFL 9790 LJ] APPEARANCES BY: SHRI B. HAZRA, SR. D.R. & SRI L.K.S. DAHIYA, CIT(D. R.), FOR THE APPELLANT SHRI S. BAKCHI, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JUNE 25, 2012 DATE OF PRONOUNCING THE ORDER : JUNE 29 TH , 2012 O R D E R PER PRAMOD KUMAR: 1. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICA TE IN THIS APPEAL IS WHETHER OR NOT THE CIT(APPEALS) WAS JUSTIFIED IN DELETING THE IMPUGNED ADDITION OF RS.24,97,000/- IN RESPECT OF C ONTRIBUTION FROM PARTNERS RECEIVED IN CASH. THE ASSESSMENT YEAR INVO LVED IS 2006-07 AND THE IMPUGNED ASSESSMENT WAS FRAMED U/S. 143(3) OF T HE INCOME TAX ACT, 1961. I.T.A. NO.: 639/ KOL. / 2010 ASSESSMENT YEAR : 2006-07 PAGE 2 OF 4 2. TO DECIDE THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE BEFORE US IS A CIVIL CONTRACT OR FIRM. DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE INTRODUCED ADD ITIONAL CAPITAL OF RS.24,97,000/- FROM ITS PARTNERS IN CASH. THESE AM OUNTS WERE RECEIVED ON DIFFERENT DATES AND IN CASH. ON THESE FACTS, AND HAVING NOTED THAT THE ASSESSEE DID NOT PRODUCE CASH FLOW STATEMENTS O F PARTNERS AND FURTHER DETAILS OF CASH IN THEIR HANDS, THE ASSESSI NG OFFICER TREATED THE AMOUNT OF RS.24,97,000/- AS UNEXPLAINED CASH CREDIT . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(APPEALS), WHO DELETED THE IMPUGNED ADDITION AND OBSERVED AS FOLLO WS :- 4.3. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E SUBMISSION OF THE APPELLANT. I HAVE ALSO PERUSED THE ASSESSMEN T RECORD. THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE AO AND IT HAS BEEN ACKNOWLEDGED IN THE ASSESSMENT ORDER. IN RESPONSE T O THE SHOW CAUSE NOTICE DATED 27.11.2008, THE LD. AR APPEARED BEFORE THE AO ON 24.12.2008 AND FILED A SUBMISSION DATED 10.12.20 08, WHEREIN IT WAS EXPLAINED THAT THE AMOUNT UNDER CONSIDERATION W AS CONTRIBUTED BY THE PARTNERS OF THE FIRM, WHO ARE AL L SEPARATELY ASSESSED TO INCOME TAX. AND, ALONG WITH THE SUBMISS ION, THE APPELLANT FURNISHED PANS OF ALL THE PARTNERS. COPIE S OF IT ACKNOWLEDGEMENT AND THOSE OF COMPUTATION OF INCOME, BALANCE SHEET, INCOME & EXPENDITURE ACCOUNT AND CAPITAL ACC OUNT, IN RESPECT OF EACH PARTNER, WERE ALSO FILED. I FIND TH AT ALL THESE EVIDENCES ARE AVAILABLE IN THE ASSESSMENT RECORD, T HOUGH, THEY ARE NOT MENTIONED IN THE ASSESSMENT ORDER. A PERUSAL OF THE ORDER SHEET REVEALS THAT THE LAST HEARING WAS CONDUCTED B Y THE AO ON 24.12.2008, AND THEN, THE ASSESSMENT ORDER WAS PASS ED ON 31.12.2008. AFTER THE APPELLANT FILED ITS SUBMISSIO N, ALONG WITH NECESSARY EVIDENCES, ON 24.12.2008, NO FURTHER QUER Y WAS RAISED BY THE AO. I ALSO FIND THAT THE AO HAS NOT REQUIRED THE APPELLANT TO FURNISH CONFIRMATION, BANK STATEMENT OR CASH FLO W STATEMENT OF THE PARTNERS. 4.4. I FIND SUBSTANCE IN THE SUBMISSIONS OF THE APP ELLANT. THE BOOKS OF ACCOUNT WERE DULY PRODUCED BEFORE THE AO. I WAS EXPLAINED BEFORE HIM THAT THE AMOUNT WAS CONTRIBUTE D BY THE PARTNERS, WHO ARE ALL SEPARATELY ASSESSED TO INCOME TAX. THE PANS I.T.A. NO.: 639/ KOL. / 2010 ASSESSMENT YEAR : 2006-07 PAGE 3 OF 4 OF THE PARTNERS WERE FURNISHED BEFORE THE AO. COPIE S OF IT ACKNOWLEDGMENT ALONG WITH THE COMPUTATION OF INCOME , BALANCE SHEET, INCOME & EXPENDITURE ACCOUNT AND CAPITAL ACC OUNT, IN RESPECT OF EACH PARTNER, WERE ALSO FURNISHED. AND T HEREAFTER, NO QUERY WAS RAISED BY THE AO. I ALSO FIND THAT THE AO HAS MADE NO EFFORTS TO ASCERTAIN THE FACTS OR TO VERIFY THE EVI DENCES FILED BEFORE HIM, FROM THE ASSESSMENT RECORDS OF THE PARTNERS. O N THE OTHER HAND, THE AO HAS ALSO FAILED TO BRING ANY ADVERSE M ATERIAL ON RECORD. THE AO HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THE APPELLANT EARNED UNACCOUNTED INCOME, WHICH WAS PASS ED ON TO THE PARTNERS, AND THE, FLEW BACK TO THE APPELLANT FIRM IN THE FORM OF PARTNERS CONTRIBUTION. THE DECISION OF THE AO IS NO T BASED ON PROPER FINDINGS. THE EXPLANATION AND THE EVIDENCES FILED BY THE APPELLANT SEEM TO HAVE BEEN SUMMARILY REJECTED MORE ON PRESUMPTION THAN ON FACTUAL GROUND. THIS HAS LED TH E AO TO A STATE OF AFFAIRS WHERE SALIENT EVIDENCES WERE OVERL OOKED. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT THE ADDITION MA DE BY THE AO IN THE HANDS OF THE APPELLANT FIRM IS NOT JUSTIFIED. T HE ACTION OF THE AO IS WITHOUT ANY BASIS AND ALSO CONTRARY TO THE MA TERIAL AND EVIDENCES AVAILABLE ON RECORD AND, IS THEREFORE, NO T SUSTAINABLE. THE ADDITION MADE BY THE AO IS DELETED. GROUND NO. 2 & 3 ARE ALLOWED. 3. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GRANTED BY THE CIT(APPEALS) AND IS IN APPEAL BEFORE US. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE SEE NO REASONS TO INTERFERE IN THE ORDER OF THE CIT(APPEALS). AS FAR ASSESSEE BEFORE US IS CONCERNE D, THE SOURCE OF MONEY IS REASONABLY EXPLAINED. THE FACT THAT MONEY IS RECEIVED FROM PARTNER IS NOT IN DOUBT, AND IN CASE ASSESSING OFFI CER HAS ISSUES ABOUT SOURCE OF FUNDS IN THE HANDS OF THE PARTNER, IT IS OPEN TO HIM TO EXAMINE THAT ASPECT OF THE MATTER IN THE ASSESSMENT S OF PARTNERS. ALL THE REQUISITE RELEVANT DETAILS ARE ON RECORD. MEREL Y BECAUSE THE AMOUNTS ARE RECEIVED IN CASH AND THE ASSESSING OFFI CER HAS SOME DOUBTS ABOUT SOURCE OF THESE FUNDS, THE ADDITIONS T O CAPITAL CANNOT BE I.T.A. NO.: 639/ KOL. / 2010 ASSESSMENT YEAR : 2006-07 PAGE 4 OF 4 TREATED AS UNEXPLAINED. WE APPROVE THE ACTION OF TH E CIT(APPEALS) AND DECLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF JUNE, 2012. SD/- SD/- MAHAVIR SINGH PRAMOD KUMAR (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE29TH DAY OF JUNE, 2012 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.