M/s Pravin Kumar Ajit Saria, Kolkata V. I.T.O Wd - 35(1),kolkata, Kolkata

ITA 663/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99928 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2013
• Court: TRIBUNAL
• Department Lawyers: P B PRAMANICK
• Assessee Lawyers: S M SURANA
• Keywords: Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.663/KOL/2013 ASSESSMENT YEAR: 2008-09 M/S. PRAVIN KUMAR AJIT SARIA VS. INCOME-TAX OFFIC ER, WD-35(1), KOLKATA (PAN: ACYPA5446L) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 15.10.2015 DATE OF PRONOUNCEMENT: 29.10.2015 FOR THE APPELLANT: SHRI S. M. SURANA, ADVOCATE FOR THE RESPONDENT: SHRI P. B. PRAMANICK, JCIT, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XX, KOLKATA IN APPEAL NO. 206/CIT(A)-XX/WARD-35(1)/2010-11/KOL DATED 13.0 2.2013. ASSESSMENT WAS FRAMED BY ITO, WARD-35(1), KOLKATA U/S. 143(3) OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2008- 09 VIDE ITS ORDER DATED 06.12.2010. 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 D EPOSITS MADE IN BANK ACCOUNT AMOUNTING TO RS.7,55,400/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING TH E ADDITION OF RS.7,55,400/- IGNORING THE EXPLANATION FILED BY THE APPELLANT WITHOUT ANY BASIS AND WITHOUT BRINGING ON RECORD ANY EVIDENCE TO THE CONTRARY AND EVEN WITHOUT EXAMI NING THE SAID EVIDENCE FILED BY THE APPELLANT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE MADE CASH DEPOSIT OF RS. .23,63,106/-, IN SB A/C MAINTAINED WITH AXIS BANK, KONNAGAR BRANCH D URING THE FY 2007-08 RELEVANT TO AY 2008-09. THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNT. THE ASSESSEE BEFORE AO EXPLAIN ED THAT HIS FATHER, WHO EXPIRED ON 22.01.2007 LEAVING BEHIND A WILL, ON THE BASIS OF W HICH THE EXECUTOR OF THE SAID WILL SHRI PRADIP KUMAR GOENKA GAVE HIM A SUM OF RS. 8 LACS FO R HIS BUSINESS PURPOSES AND THE SAME WAS DEPOSITED IN THE BANK ACCOUNT MAINTAINED W ITH AXIS BANK AND THE AMOUNT WAS RETURNED BACK TO THE EXECUTOR OF THE WILL. BUT THE AO HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF DEPOSITS OF RS.13 ,61,300/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) HAS NOT CONSIDERED THE EXPLANATION OF THE 2 ITA NO.663/KOL/2013 M/S. PRAVIN KR. AJIT SARIA AY 2008-09 ASSESSEE BUT AGREED THAT ONLY PEAK CREDIT SHOULD HA VE ADDED AND HE ESTIMATED THE PEAK AT RS.7,55,400/- AS ON 25.02.2008 AGAINST THE TOTAL AD DITION MADE BY AO AT RS.13,61,300/-. AGGRIEVED AGAINST THE SUSTENANCE OF ADDITION OF RS. 7,55,400/-, ASSESSEE PREFERRED SECOND APPEAL BEFORE TRIBUNAL. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US ASSESSEE FILED COPY OF LETTER ADDRESSED TO ITO, WARD-35(1), KOLKATA DATED 16.11.2010 WHEREBY HE SUBMITTED WILL OF ASSESSEES FATHER WHO EXPIRED ON 22.01.2007 AND BY VIRTUE OF THIS WILL A SUM OF RS. 8 LAC WAS DISCLOSED TO BE GIVEN TO THE ASSESSEE BY THE EXECUTOR OF WILL SH RI PRADIP KUMAR GOENKA. A COPY OF WILL AND DEATH CERTIFICATE OF ASSESSEES FATHER LATE MOHANLAL AJITSARIA IS ALSO ENCLOSED IN ASSESSEES PAPER BOOK. THE WILL DATED 17.11.2006 BEARS A CLAUSE WHICH READS AS UNDER: AND WHEREAS I HAVE BEEN CARRYING ON A BUSINESS FOR SEVERAL YEARS AND THEREAFTER I WAS ENGAGED IN A PRIVATE COMPANY IN THE CAPACITY AS A D IRECTOR AND OUT OF SUCH ENGAGEMENTS I HAVE SAVED SOME MONEY TO THE TUNE OF RS. 10,00,000/ - (APPROX.) (RUPEES TEN LAKHS) ONLY WHICH IS LYING IN MY ALMIRAH; AND WHEREAS MY SON PRAVIN IS RUNNING IN FINANCIAL C RIS DUE TO ADVERSE BUSINESS CONDITIONS AND AS SUCH I WANT TO BEQUEATH MY ENTIRE CASH MONEY TO HIM. SUBJECT TO THE CONDITIONS AND STIPULATIONS AS AFOR ESAID I GIVE DEVISE AND BEQUEATH THE SAID SUM OF RS.10,00,000/- (RUPEES TEN LAKHS) ONLY TO MY SON PRAVIN ABSOLUTELY AND FOR EVER. 5. WE HAVE ALSO GONE THROUGH THE COPY OF BANK ACCOU NT MAINTAINED WITH AXIS BANK AND SEEN THE DEPOSITS THAT THE ASSESSEE HAS DEPOSIT ED CASH AND MADE WITHDRAWALS ALSO AMOUNTING TO RS.23,63,106/-, ADMITTEDLY THE PEAK CR EDIT IS TO THE EXTENT OF RS.7,55,400/-, WHICH IS EXPLAINED BY THE CASH RECEIPT OF RS. 8 LAC S BY ASSESSEE THROUGH THE WILL OF HIS FATHER. NOW QUESTION ARISES, WHETHER THE ASSESSEE HAS RECEIVED THE SUM OF RS. 8 LACS OR NOT? WE FIND THAT ALL THE DOCUMENTS WERE AVAILABLE BEFORE THE AO & CIT(A) AND NONE OF THE AUTHORITIES BELOW HAVE EXAMINED THE EXECUTOR OF THE WILL SHRI PRADIP KUMAR GOENKA, WHO ADMITTED THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.8 LACS FROM HIS FATHER THROUGH WILL. ONCE THE SOURCE OF PEAK IS PROVED, T HE ADDITION ON ACCOUNT OF PEAK CANNOT BE SUSTAINED. ACCORDINGLY, WE DELETE THE ADDITION A ND REVERSE ORDERS OF THE AUTHORITIES BELOW. THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWE D. 6. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION OF 5% OUT OF FOODING AND LO DGING, TRAVELING AND CONVEYANCE, 3 ITA NO.663/KOL/2013 M/S. PRAVIN KR. AJIT SARIA AY 2008-09 MISC. EXPENSES AND TRANSPORT AND HANDLING CHARGES A ND 10% OUT OF TELEPHONE EXPENSES. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NOS. 3 AND 4: 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADD ITION OF 5% OUT OF FOODING AND LODGING, TRAVELING AND CONVEYANCE, MISC. EXPENSES AND TRANSP ORT AND HANDLING CHARGES ADMITTEDLY SUPPORTED BY SELF MADE VOUCHER ONLY ON SUPPOSITION AND POSSIBILITY, WHEN THE EXPENSES INCURRED WERE QUITE REASONABLE. 4. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF 10% OF THE TELEPHONE EXPENSES FULLY INCURRED FOR BUSINESS PURPOSES. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT(A) CONFIRMED THE ADDITI ON AS MADE BY AO TO THE EXTENT OF 5% OF THE TOTAL EXPENDITURE ON ACCOUNT OF FOODING, LODGING, TRAVELLING, CONVEYANCE, MISC. EXPENSES AND TRANSPORTATION AND HANDLING CHAR GES, WHICH WERE SUPPORTED BY SELF MADE VOUCHERS ON ESTIMATE BASIS. WE ALSO FIND THAT THE AO MADE THE DISALLOWANCE OF 20% ON ACCOUNT OF CLAIM OF TELEPHONE EXPENSES, LD. CIT(A) RESTRICTED THE DISALLOWANCE TO 10% ON ESTIMATE BASIS AS THERE IS PERSONAL ELEME NT OF EXPENDITURE IS INVOLVED. WE FIND THAT ALL THE DISALLOWANCES WERE MADE ON ESTIMA TE BASIS WITHOUT ANY COGENT REASON. HENCE, WE DO NOT FIND ANY REASONABLENESS ON THESE D ISALLOWANCES. THEREFORE, THE DISALLOWANCES ARE DELETED. THIS GROUND OF APPEAL O F ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. 11. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29.10. 2015 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29TH OCTOBER, 2015 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. PRAVIN KUMAR AJIT SARIA, 55, NIMTA LA GHAT STREET, KOLKATA-700 001 2 RESPONDENT ITO, WD-35(1), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .