Kamal Bhandari, Kolkata V. I.T.O., Ward - 4(3), Kolkata, Kolkata

ITA 65/KOL/2023

AI Insights

The case involves an appeal by Kamal Bhandari against the order of the National Faceless Appeal Centre (CIT(A)) concerning the assessment year 2007-08. The Assessing Officer had added undisclosed income to the assessee's account, alleging that the investments made in the names of his mother, wife, and HUF were unexplained. The CIT(A) partially upheld this addition, but the Tribunal found that the assessee had adequately proven the sources of the investments, leading to the deletion of the additions and corresponding gains/interest.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128140 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-03-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 250

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘एसएमसी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Įी संजय गग[, ÛयाǓयक सदèय के सम¢ Before Shri Sanjay Garg, Judicial Member I.T.A No.65/Kol/2023 Assessment year: 2007-08 Kamal Bhandari.....................................................................................Appellant 16, N.S. Road, Kolkata-1. [PAN: ADJPB0881E] vs. ITO, Ward-4(3), Kolkata...........................................................Respondent Appearances by: Shri Sunil Surana, AR, appeared on behalf of the appellant. Smt. Ranu Biswas, Addl. CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : March 13, 2023 Date of pronouncing the order : May 19, 2023 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 09.01.2023 of the National Faceless Appeal Centre (hereinafter referred to as the ‘CIT(A)’) passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The brief facts of the case are that during the assessment proceedings, the Assessing Officer found that the assessee had made total investments of Rs.2,80,00,000/- in the name of his mother namely Smt. Gulab Kunwar Bhandari, wife namely Smt. Puspa Bhandari and also in the name of his HUF. The Assessing Officer further observed that out of the said investment of Rs.2,80,00,000/-, Rs.241.30 lakhs were invested in the F.Y 2005-06 relevant to A.Y 2006-07 and the remaining I.T.A No.65/Kol/2023 Assessment year: 2007-08 Kamal Bhandari 2 amount of Rs.39 lakhs were invested during the F.Y relevant to A.Y under consideration. The Assessing Officer held that the assessee could not prove the source of the aforesaid investments made by him in the name of his mother, wife and HUF. The Assessing Officer further observed that the aforesaid persons namely Smt. Gulab Kunwar Bhandari, Smt. Puspa Bhandari and HUF of the assessee were not having independent source of income for making the aforesaid investment. In an assessment carried out for A.Y 2006-07, the Assessing Officer had already added the amount of Rs.241.30 lakhs as undisclosed income of the assessee. Further, for the year under consideration i.e. A.Y 2007-08, the Assessing Officer added the balance amount of Rs.39 lakhs into the income of the assessee. The matter relating to the additions made by the Assessing Officer in the assessment for A.Y 2006-07 travelled to the Tribunal. 3. The ld. CIT(A) in the impugned order has noted that the Tribunal accepted the contentions of the assessee that the investment was made by his mother and wife out of sale proceeds received on account of sale of property in Delhi and further that the investments belonged to them and not to the assessee. The ld. CIT(A) considering the above circumstances deleted the addition of Rs.34,00,000/- relating to the investment made by the mother and wife of the assessee for the year under consideration. However, the ld. CIT(A) confirmed the addition of Rs.5,00,000/- made in the name of the HUF of the assessee holding that the assessee could not prove the source of the HUF to make the aforesaid investment in mutual funds. 4. Before us, the ld. counsel for the assessee has relied upon the balance sheet of the HUF to submit that the HUF of the assessee had I.T.A No.65/Kol/2023 Assessment year: 2007-08 Kamal Bhandari 3 sufficient balance of Rs.11.51 lakh out of which Rs.5,00,000/- was invested. Since the assessee has shown the source in the hands of the HUF to make the aforesaid investment, therefore, I do not find justification on the part of lower authorities to make the impugned addition of Rs.5,00,000/- in the name of the assessee. The same is, accordingly, ordered to be deleted. 5. The next contention raised by the ld. counsel for the assessee is that the profits/interest earned on the investments of Rs.39,00,000/- made by his mother, wife and HUF of the assessee are also not sustainable since the additions relating to the source of the investments have already stood deleted. I find force in the aforesaid contention of the ld. counsel for the assessee. The corresponding gains/interest on the aforesaid investments of Rs.39,00,000/- in the name of mother, wife and HUF of the assessee is also ordered to be deleted which has been added in the name of the assessee. 6. In the result, the appeal of the assessee stands allowed. Kolkata, the 19 th May, 2023. Sd/- [संजय गग[ /Sanjay Garg] ÛयाǓयक सदèय /Judicial Member Dated: 19.05.2023. RS Copy of the order forwarded to: 1. Kamal Bhandari 2. ITO, Ward-4(3), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), I.T.A No.65/Kol/2023 Assessment year: 2007-08 Kamal Bhandari 4 //True copy// By order Assistant Registrar, Kolkata Benches