ITO, Ward - 25(4) , Kolkata V. Abhishek Das , Kolkata

ITA 71/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9326 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 14-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RANU BISWAS
• Keywords: Unexplained cash credit; Unexplained expenditure; Fair market value; Competent authority
• Section: 56(2)(vii)(b); 69C; 43CA; 143(3); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.71/KOL/2019 ( / ASSESSMENT YEAR: 2014-15) ITO, WARD-25(4), KOLKATA VS. ABHISHEK DAS PROP. OF DEBJANI CONSTRUCTION, 26, LAKE EAST, 3 RD ROD, SANTOSHPUR, KOLKATA-700075. ./ ./PAN/GIR NO.: ADSPD 7211 R (APPELLANT) .. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 10/01/2020 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERT AINING TO ASSESSMENT YEAR 2014-15, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-7, KOLKATA IN APPEAL NO. 1432/CIT(A)-7/KOL /WARD-25(4)/17-18, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 29/12/2016. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. ABHISHEK DAS ITA NO.71/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 2 22 2 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITIONS OF RS. 36,85,000/- AND RS. 28,65,000/- BY HOLDING THAT THE PROVISIONS OF S ECTIONS 56(2)(VII)(B) AND 43CA WERE NOT APPLICABLE TO ASSESSMENT YEAR 2014-15 ALTHOUGH THESE SECTIONS WERE AMENDED BY THE FINANCE ACT, 2013 W.E. F. 01/04/2014. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 69 OF RS. 9 0 LAKHS WITHOUT APPRECIATING THE FACT BROUGHT ON RECORD BY THE A.O. FOR HOLDING THE ASSESSEES INVESTMENTS IN IMMOVABLE PROPERTIES AS U NACCOUNTED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITIONS OF RS. 10 LAKHS AND RS. 21,97,000/- MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT ON FLAT AND CA SH DEPOSITS IN UNDISCLOSED SAVINGS BANK ACCOUNT RESPECTIVELY BY AC CEPTING FRESH EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE IT RULES, 1962. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 26.02,855/- T OWARDS UNEXPLAINED CREDITS IN THE ASSESSEES CAPITAL ACCOUNT WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O. AND THEREBY FAILED TO DECIDED THE ISSUE ON MERITS. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR MODIFY ANY ONE OR ALL OF THE GROUNDS OF APPEAL MENTIONED ABOVE. 4. GROUND NO.1 RAISED BY THE ASSESSEE RELATES TO DE LETION OF THE ADDITIONS OF RS. 36,85,000/- AND RS. 28,65,000/- BY HOLDING THAT THE PROVISIONS OF SECTIONS 56(2)(VII)(B) AND 43CA WERE NOT APPLICABLE TO ASSES SMENT YEAR 2014-15. 5. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE AS SESSMENT PROCEEDINGS, FROM A.R DATA IT WAS NOTICED BY THE ASSESSING OFFICER THAT A SSESSEE HAD PURCHASED IMMOVABLE PROPERTY DURING F.Y. 2013-14. THE ASSESSI NG OFFICER EXAMINED THE REGISTERED DEED OF CONVEYANCE AND NOTICED THAT TH ERE WAS DIFFERENCE BETWEEN FAIR MARKET VALUE ADOPTED BY THE STAMP DUTY AUTHORI TY VIS--VIS THE DEED VALUE TO THE EXTENT OF RS. 36,85,000/-. THE ASSESSEE WAS ASK ED TO EXPLAIN, BUT HE COULD NOT PRODUCE ANY SATISFACTORY REPLY. HENCE, ADDITION WAS MADE U/S 56(2)(VII)(B) OF THE I.T. ACT, RS. 36,85,000/-. 6. ON APPEAL, LD. CIT(A) DELETED THE ADDITION OBSER VING THE FOLLOWING: ABHISHEK DAS ITA NO.71/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 3 33 3 ADDITION ON ACCOUNT OF UNDISCLOSED PURCHASE OF LAN D TO THE TUNE OF RS. 90,00,000/- PRIMA FACIE THE PROPOSED ADDITION U/S 5 6(2)(VII)(B) OF RS. 36,85,000/- APPEARS TO BE WRONGLY MADE BY THE A.O. IN THIS REGA RD, SECTION 56(2)(VII)(B) HAD BEEN AMENDED AND WAS APPLICABLE W.E.F -1/04/2014. I N OTHER WORDS, THE AMENDED PROVISION WAS APPLICABLE FROM A.Y. 2015-16 ONWARDS. HOWEVER, SINCE THE TRANSACTION HAD BEEN UNDER TAKEN BY THE ASSESSEE IN F.Y. 2013-14 I.E. A.Y. 2014- 15 AND THE SAME WAS FOR A CONSIDERATION, THE SAID ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE IN THE EYES O F LAW. THEREFORE, THE SAME STANDS DELETED AND THE ASSESSEE IS ENTITLED TO RELIEF OF R S. 36,85,000/-. 7. WE HEARD LD. D.R. AND PERUSED THE MATERIALS A VAILABLE ON RECORD. WE NOTE THAT PRIMA FACIE, THE PROPOSED ADDITION U/S 56(2)(VII)(B ) OF RS. 36,85,000/- APPEARS TO BE WRONGLY MADE BY THE A.O. IN THIS REGARD, SECTION 56(2)(VII)(B) HAD BEEN AMENDED AND WAS APPLICABLE W.E.F 01/04/2014. IN OTH ER WORDS, THE AMENDED PROVISION WAS APPLICABLE FROM A.Y. 2015-16 ONWARDS. HOWEVER, SINCE THE TRANSACTION HAD BEEN UNDERTAKEN BY THE ASSESSEE IN F.Y. 2013-14 I.E. A.Y. 2014-15 AND THE SAME WAS FOR A CONSIDERATION THE SAID ADD ITION MADE BY THE A.O. IS NOT SUSTAINABLE IN THE EYES OF LAW. THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE I S HEREBY ACCEPTED AND GROUND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 8. GROUND NO.2 RAISED BY THE REVENUE RELATES TO DEL ETION OF ADDITION OF RS. 90,00,000/- MADE U/S 69 OF THE ACT. 9. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PROVIDE ANY SATISFACTORY REP LY REGARDING THE UNDISCLOSED PURCHASE OF LAND OF RS. 90,00,000/-. HENCE ADDITION WAS MADE BY ASSESSING OFFICER TO THE TUNE OF RS. 90,00,000/-. 10. ON APPEAL, LD. CIT(A) DELETED THE ADDITION OBSE RVING THE FOLLOWING: THE PROPOSED ADDITION AMOUNTING TO RS. 90,00,000/ - ON THE GROUNDS OF NON- DISCLOSURE IN THE BOOKS OF ACCOUNTS, PRIMA FACIE, I S NOT APPLICABLE IN THIS CASE. AS CAN BE SEEN FROM THE BODY OF THE ORDER THAT THE ASS ESSING OFFICER HAS ADMITTED THAT THE PAYMENT RELATED TO THE PURCHASE OF LAND WA S FOR BUSINESS PURPOSES AND WAS MADE FROM THE ASSESSEES DISCLOSED BANK ACCOUNT S. HENCE, THE QUESTION OF THE SAME BEING UNDISCLOSED DOES NOT ARISE. THE PURCHASE OF LAND IS DULY RECORDED IN THE BOOKS OF ACCOUNT, THE SAME IS REGISTERED WITH C OMPETENT AUTHORITY AFTER DUE PAYMENT OF STAMP DUTY AND THE SAID LAND, AS MENTION ED, IS HELD FOR BUSINESS PURPOSE. THEREFORE, THE PURCHASE OF THE LAND IS NOT A UNDISCLOSED INVESTMENT. ACCORDINGLY, SECTION 69C DOES NOT APPLY AND SUBSEQU ENT LEVY U/S 115BBD AND IMPOSITION OF PENALTY U/S 271(1)(C ) IS NOT ACCORDI NG TO LAW. IN VIEW OF THE SAME, ABHISHEK DAS ITA NO.71/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 4 44 4 THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREB Y DELETED AND THE ASSESSEE IS ENTITLED TO RELIEF OF RS. 90,00,000/-. 11. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 12. THE LD. DR HAS PRIMARILY REITERATED THE STAND T AKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 13. WE HAVE HEARD LD. D.R. FOR THE REVENUE AND PER USED THE MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THE PROPOSED ADDITION AMOUN TING TO RS. 90,00,000/- WAS MADE ON THE GROUNDS OF NON-DISCLOSURE IN THE BOOKS OF ACCOUNTS, WHICH IS PRIMA FACIE, IS NOT APPLICABLE IN THIS CASE. AS CAN BE SE EN FROM THE BODY OF THE ORDER THAT THE ASSESSING OFFICER HAS ADMITTED THAT THE PAYMENT RELATED TO THE PURCHASE OF LAND WAS FOR BUSINESS PURPOSES AND WAS MADE FROM THE ASS ESSEES DISCLOSED BANK ACCOUNTS. HENCE, THE QUESTION OF THE SAME BEING UND ISCLOSED DOES NOT ARISE. THE PURCHASE OF LAND IS DULY RECORDED IN THE BOOKS OF A CCOUNT, THE SAME IS REGISTERED WITH COMPETENT AUTHORITY AFTER DUE PAYMENT OF STAMP DUTY AND THE SAID LAND, AS MENTIONED, IS HELD FOR BUSINESS PURPOSE. THEREFORE, THE PURCHASE OF THE LAND IS NOT A UNDISCLOSED INVESTMENT. THAT BEING SO, WE DECLIN E TO INTERFERE IN THE ORDER OF THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HEREBY ACCE PTED AND THE GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 14. GROUND NO. 3 RAISED BY THE REVENUE RELATES TO ADDITIONS OF RS. 10 LAKHS AND RS. 21,97,000/- MADE ON ACCOUNT UNDISCLOSED INVESTMENT ON FLAT AND CASH DEPOSITS IN UNDISCLOSED SAVINGS BANK ACCOUNT. 15. BRIEF FACTS QUA THE ISSUE ARE THAT FROM AIR INF ORMATION IT WAS NOTICED BY ASSESSING OFFICER THAT ASSESSEE MADE CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT DURING THE F.Y. 2013-14. THE SAID BANK ACCOUNT WAS NOT DISCLOSED. HENCE, ENTIRE CASH DEPOSIT RS. 21,97,000/- WAS TREATED AS UNEXPLA INED MONEY IN THE HANDS OF ASSESSEE U/S 69A OF THE I.T. ACT, 1961. ABHISHEK DAS ITA NO.71/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 5 55 5 16. ON APPEAL, LD. CIT(A) DELETED THE ADDITION. AGG RIEVED THE REVENUE IS IN APPEAL BEFORE US. 17. WE NOTE THAT THE TOTAL ADDITION MADE BY THE A.O . STOOD AT RS. 21.97 LACS. FROM THE DETAILS SUBMITTED, IT WAS NOTED BY LD. CIT(A) THAT OUT OF THIS AMOUNT, THE SOURCE OF RS. 11.97 LACS IS CLEARLY AVAILABLE FROM THE DISCLOSED BANK STATEMENTS. AS IT IS KNOWN THAT THE ASSESSEE IS A DEVELOPER AND IT IS SEEN THAT BEFORE REGISTERING THE PROPERTIES WITH THE STAMP DUTY DEVELOPER AND IT IS SEEN THAT BEFORE REGISTERING THE PROPERTIES WITH THE STAMP DUTY AUTHORITIES, HIS CLI ENTS USUALLY MAKE CASH DEPOSITS DIRECTLY IN ASSESSEES BANK ACCOUNT FOR THE FEES RE QUIRED FOR REGISTRATION PURPOSES. AS IT CAN BE SEEN FROM THE DISCLOSED BANK ACCOUNT, CERTAIN CASH DEPOSITS PRIMARILY MEANT FOR REGISTRATION OF PROPERTY WHICH HAVE BEEN MADE ON DIFFERENT DATES. THEREFORE, THE SOURCE OF AN AMOUNT OF RS. 10.00 LAC S, THE BENEFIT OF AN AMOUNT OF RS. 5.00 LACS CAN OTHERWISE BE EXPLAINED FROM THE A SSESSEES ACCUMULATED, RESIDUAL SAVINGS IN CASH AS NOTED BY LD. CIT(A). GIVING THE ASSESSEE THE BENEFIT OF THIS RS. 5.00 LACS FROM RESIDUAL ACCUMULATED SAVINGS, THE LD . CIT(A) DIRECTED THE ASSESSING OFFICER TO CONFIRM THE ADDITION OF REMAINING OF RS . 5.00 LACS UNDER THE HEAD AS UNEXPLAINED EXPENDITURE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND GROUNDS OF APPEAL RAISED BY REVENUE IS D ISMISSED. 18. GROUND NO. 4 RAISED BY THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 26,02,855/- TOWARDS UNEXPLAINED CREDITS IN THE ASSE SSEES CAPITAL ACCOUNT. 19. BRIEF FACT QUA THE ISSUE ARE THAT DURING THE SC RUTINY PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE CAPITAL ACCOUNT OF THE ASS ESSEE IN THE BOOKS OF M/S DEBJANI CONSTRUCTIONS, (THE PROPRIETORSHIP FIRM OF THE ASSE ESEE) WAS HAVING EXCESS CREDIT OF RS. 26,02,855/- AS ON 31.03.2014. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INVESTMENT OF THE ASSESSEE TOWARDS HIS CONSTRUC TION BUSINESS IN THE NAME AND STYLE OF M/S DEBJANI CONSTRUCTIONS HAS BEEN INCREAS ED BY RS. 26,02,855/- FOR WHICH NO EXPLANATION WAS FURNISHED BY ASSESSEE, THE REFORE, ASSESSING OFFICER MADE ADDITION TO TOTAL INCOME TO THE ASSESSEE AS UN EXPLAINED INVESTMENT IN THE HANDS OF ASSESEE. ABHISHEK DAS ITA NO.71/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 6 66 6 20. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. WE NOTE THAT THE MAIN BONE OF CON TENTION HAS BEEN THE PURCHASE OF A MOTOR CAR THROUGH JOURNAL ENTRY, THE EMI PAID FOR THE MOTOR CAR AND TRANSFER OF RS. 10.00 LACS FROM SYNDICATE BANK. THE LD. CIT(A) NOTED THAT THE SAID MOTOR CAR WAS PURCHASED UNDER THE NAME OF HIS PROPRIETARY CON CERN. THE PAYMENT FOR THE SAID CAR WAS MADE THROUGH THE DISCLOSED BANK ACCOUN T FROM WHERE ALL THE BUSINESS TRANSACTIONS HAD TAKEN PLACE. THE ACCOUNTING HAS BE EN DONE ON PURELY ACCRUAL BASIS AND THE SOURCE OF RS. 2,83,559/- CAN BE OTHER WISE EXPLAINED FROM HIS ACCUMULATED SAVINGS OF PREVIOUS YEAR. FURTHER, ALL THE TRANSACTIONS HAVE HAPPENED FROM DISCLOSED BANK ACCOUNT OF SHRI ABHISHEK DAS, T HE ASSESSEE, AND THE BANK ACCOUNT OF M/S DEBJANI CONSTRUCTION, A PROPRIETARY CONCERN. HAD THE CONCERN BEEN A PARTNERSHIP FIRM HAD IT BEEN A PRIVATE LIMITED CO MPANY THEN THE STATUS OF THE ASSESSEE AND HIS BUSINESS WOULD HAVE BEEN DIFFERENT . IN THE INSTANT CASE, SINCE THE STATUS OF THE ASESSEE AND HIS BUSINESS IS ONE AND S AME, THE ACTION OF THE A.O. IS UNCALLED FOR. IN VIEW OF THE SAME, THE ADDITION MAD E BY THE A.O. WAS RIGHTLY DELETED BY THE LD. CIT(A), THEREFORE, WE CONFIRM TH E ORDER OF LD. CIT(A). 21. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 10.01. 2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 10/01/2020 ( SB, SR.PS ) ABHISHEK DAS ITA NO.71/KOL/2019 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 7 77 7 COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-25(4), KOLKATA 2. ABHISHEK DAS 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES