Manik Chand Agarwal, Kolkata V. I.T.O. Wd - 32(3),Kolkata, Kolkata

ITA 740/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4116 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 29-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Court: TRIBUNAL
• Department Lawyers: S VENKATARAMANI
• Assessee Lawyers: ASHOK KUMAR TULSIYAN
• Keywords: Salary income; Source of fund
• Section: 69C; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI P.M.JAGTAP, AM & SRI N.V.VA SUDEVAN, JM ] I.T.A NO. 740/KOL/2013 ASSESSMENT YEAR : 2009-1 0 MANIK CHAND AGARWAL -VS.- I.T.O., WARD-32( 3), KOLKATA KOLKATA [PAN : ACMPA 9312P] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ASHOK KUMAR TULSIYAN, FCA FOR THE RESPONDENT : SHRI S.VENKATARAMANI, J CIT.SR.DR DATE OF HEARING : 29.11.2016. DATE OF PRONOUNCEMENT : 2.12.2016. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 21.01.2013 OF CIT(A)- XIX, KOLKATA RELATING TO AY 2009-10. 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS F OLLOWS :- 1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CITCA) ERRED IN NOT ACCEPTING THE CASH FLOW STATEMENT AND CONFIRMING THE ADDITION U/S 68 OF THE I. TAX ACT AMOUNTING TO RS.17,40,500/- BEING CASH DEPOSITS IN BANK ACCOUNTS . THE ADDITION, BEING BASED ON MIS- APPRECIATION OF FACTS, NEEDS BE DELETED. 3. THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE FILE D RETURN OF INCOME FOR A.Y.2009-10 DECLARING TOTAL INCOME OF RS.3,08,010/-. THE ASSESS EE HAD DEPOSITED CASH TOTALING A SUM OF RS.17,40,500/- IN THE BANK ACCOUNT IN HIS NAME W ITH SOUTH INDIAN BANK AND ABN AMRO BANK. THE ASSESSEE EXPLAINED THE SOURCE OF FUN DS OUT OF WHICH CASH WAS DEPOSITED INTO THE AFORESAID BANK ACCOUNTS BY FILING A CASH FLOW STATEMENT, A COPY OF WHICH IS AT 2 ITA NO.740/KOL/2013 MANIK CHAND AGARWAL A.YR.2009-10 2 PAGE NOS. 41 TO 44 OF THE ASSESSEES PAPER BOOK. TH E AO REJECTED THE CASH BOOK SO FILED BY THE ASSESSEE FOR THE FOLLOWING REASONS :- DURING THE COURSE OF HEARING THE A/R WAS ASKED TO PRODUCE THE SOURCE OF CASH DEPOSIT IN SOUTH INDIAN BANK AND ABN AMRO BANK. THE A/R PRODUC ED ONE CASH BOOK WHEREIN THE SAID SOURCE OF CASH DEPOSIT IN CASH BOOK WAS SHOWN AS SALARY INCOME, ARREAR SALARY INCOME, SHORT TERM ADVANCE FROM THE EMPLOYER WHICH WAS REPAID BACK IN THE SAME YEAR, ADVANCE SALARY AND OPENING CASH IN HAND. THE EXISTE NCE OF OPENING CASH-IN-HAND IS ALREADY DOUBTED EARLIER IN THIS ORDER AND THE EXIST ENCE OF OPENING CASH WAS FIRST DISCLOSED BY THE A/R AT THE AND OF THE ASSESSMENT I.E. ON 23. 11.2011. IN THE EARLIER HEARING I.E. ON 17.11.2011 THE A/R PRODUCED ONE CASH BOOK BUT THE S AME WAS NOT PROPERLY MAINTAINED AND THEREAFTER THE A/R PREPARED A FRESH CASH BOOK A ND SUBMITTED THE SAME WITH THE CASH BOOK IN RESPONSE TO THIS OFFICE LETTER DATED 23.11. 2011. MOREOVER, ON GOING THROUGH THE CASH BOOK AND THE BANK STATEMENT IT IS SEEN THAT TH E WITHDRAWALS FROM BANK OF RS.1,50,000/- & RS.2,00,000/- DATED 30.03.09 & 31.0 3.09 RESPECTIVELY WAS NOT ENTERED IN THE CASH BOOK AND ON THE OTHER HAND THE DEPOSIT IN SOUTH INDIAN BANK OF RS. 70,000/- & RS.1,00,000/- DATED 06.01.09 & 07.01.09 WAS NOT ROU TED. THROUGH THE CASH BOOK. CASH DEPOSIT OF RS.1,08,000/- IN SOUTH INDIAN BANK DATED 26.12.08 WAS NOT ALSO ROUTED THROUGH THE CASH BOOK. THERE ARE ALSO SOME OTHER DEPOSITS A ND WITHDRAWALS WHICH WERE NOT ROUTED THROUGH THE CASH BOOK. THE CASH BOOK ALSO SHOWS A N UMBER OF DEPOSITS IN THE SOUTH INDIAN BANK BUT ACTUALLY THE CASH WAS NOT DEPOSITED IN THE SAID BANK IN THE SAME DATE. ON THE BASIS OF THE ABOVE SET OF FACTS, BOTH CASH BOOK AND BALANCE SHEET OF THE ASSESSEE IS REJECTED. CONSIDERING THE NATURE OF PAYMENTS AND LI FESTYLE OF THE ASSESSEE THE OTHER FACTS AS MENTIONED ABOVE, CASH DEPOSIT IN SOUTH INDIAN BANK AND ABN AMRO BANK OF RS.15,36,500/- AND RS.2,04,000/-, TOTALING TO RS.17 ,40,500/- IS BEING ADDED BACK IN THIS ORDER AS UNDISCLOSED CASH CREDIT OF THE ASSESSEE U/ S.68 OF THE I.T.ACT. 4. BEFORE CIT(A), THE ASSESSEE SUBMITTED THE GI ST OF THE SOURCE OF CASH AS REFLECTED IN THE CASH BOOK THAT WAS FILED BEFORE THE AO. THE STA TEMENT OF CASH BALANCE SO GIVEN BY THE ASSESSEE READS AS FOLLOWS :- COMPOSITION OF CASH BALANCE OPENING CASH BLANCE RS.8,10,964.77 ADD: 1)CASH RECEIVED FROM EMPLOYER A) FOR SALARY EARNED DURING A.Y.2009-10 RS.1,75,680.00 B) FOR SALARY EARNED LAST YEAR REMAINED UNPAID SAME PAID DURING A.Y.09-10 RS.1,68,380.00 C) ADVANCE TAKEN FROM THE COMPANY RS.1,85,000.00 D) SHORT TERM LOAN FROM THE COMPANY RS.2,00,000.00 RS.7,29,060.00 2)WITHDRAWAL FROM BANK RS.6,00,000.00 RS.21,40,024.77 3 ITA NO.740/KOL/2013 MANIK CHAND AGARWAL A.YR.2009-10 3 LESS :- DEPOSITED TO SOUTH INDIAN BANK = RS.15,36,500/- ABN AMRO BANK = RS. 2,04,000/- TOWARDS CREDIT CARD EXPENSES = RS.1,81,300/- REPAYMENT OF SHORT TERM LOAN TAKEN FROM COMPANY = RS.2,00,000/- RS.21,21,800/- RS.18,224.77 5. THE CIT(A) HOWEVER REJECTED THE ABOVE RECONCIL IATION FOR THE REASON THAT THE SAME IS NOT SUPPORTED BY ANY EVIDENCE. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS RAISED GROUND NO.1 BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. AT PAGE 56 OF THE ASSESSEES PAPER BOOK WE FIND THAT M/S. STOR EWELL SHIPPING PVT. LTD. IN WHICH THE ASSESSEE WAS EMPLOYED HAVE CONFIRMED THE FOLLOWING PAYMENTS OF THE ASSESSEE :- 1. A) MR. MANICK CHAND AGARWAL IS OUR EXECUTIVE ST AFF. WE HAVE PAID A SUM OF RS.L,80,000/- AS GROSS SALARY TO SRI M C AGARWAL AN D AFTER DEDUCTING RS.L,320/-AS P.TAX AND TDS OF RS.3,000/- NET AMOUNT PAID WORKS OUT RS. 1,75,680/- FOR THE SAID FINANCIAL YEAR. THE MODE AND DATE OF PAYMENT IS ENCLOSED AS P ER LEDGER. B) WE HAVE ALSO PAID AN ARREAR SALARY OF RS.L,68,38 0/- DURING THE F.Y.2008- 09. 2. WE HAVE NOT PAID ANY LOAN TO THE SRI AGARWAL BUT PAID AN ADVANCE OF RS.L,85,000/- AGAINST SALARY DURING THE F.Y.2008-09 AS PER STATEM ENT ENCLOSED. 3. WE HAVE SHORT TERM ADVANCE TO THE ASSESSEE AMOUN TING TO RS 2,00,000/- DURING THE F.Y.2008-09 AND THE AMOUNT RECOVERED DURING THE SAM E YEAR. STATEMENT ENCLOSED. 7. THE REVENUE AUTHORITIES HAVE GIVEN NO REASON FOR DISREGARDING THIS CONFIRMATION FROM THE ASSESSEES EMPLOYER. AS FAR AS CASH BOOK F ILED BY THE ASSESSEE FOR PROVING THE FLOW OF CASH THAT WAS DEPOSITED IN THE BANK ACCOUNT , WE FIND THAT THERE IS A NEGATIVE CASH BALANCE OF RS.5,83,555.23 AS ON 01.03.2009 WHI CH IS THE PEAK OF NEGATIVE CASH BALANCE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO SHOULD BE DIRECTED TO GIVE CREDIT FOR THE AMOUNTS RECEIVED FROM THE EMPLO YER AS SET OUT IN PAGE 56 OF THE PAPER BOOK AND THEREAFTER CONSIDER THE NEGATIVE CAS H BALANCE AND DECIDE THE ISSUE OF MAKING THE ADDITION U/S 69 OF THE ACT IN RESPECT OF THE SOURCE OF FUNDS FOR CASH DEPOSITED IN THE BANK ACCOUNT. WE ARE OF THE VIEW THAT THE PL EA PUT FORTH BY THE LD. COUNSEL IS 4 ITA NO.740/KOL/2013 MANIK CHAND AGARWAL A.YR.2009-10 4 REASONABLE AND ACCORDINGLY WE DIRECT THE AO TO WORK OUT THE AVAILABILITY OF CASH WITH THE ASSESSEE TAKING INTO CONSIDERATION THE CONFIRMA TION OF THE ASSESSEES EMPLOYER WHICH IS PLACED AT PAGE-56 OF THE ASSESSEES PAPER BOOK AND ALSO CONSIDER THE CASH BOOK AT PAGES 41 TO 44 OF THE ASSESSEES PAPER BOOK AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER AFFORDING THE ASSESSEE OPPORTUNITY OF BEI NG HEARD. 8. GROUND NO.2 RAISED BY THE ASSESSEE READS AS FO LLOWS :- 2) THAT THE LD. CITCA) ERRED IN CONFIRMING THE ADD ITION U/S 69C OF THE ACT ON ACCOUNT OF PAYMENTS MADE AGAINST CREDIT CARDS OF RS.4,16,715/- WITHOUT APPRECIATING THE FACTS OF THE CASE. THE ADDITION NEEDS BE DELETED. 9. AS FAR AS GROUND NO.2 IS CONCERNED THE FACTS ARE THAT THE AO MADE AN ADDITION OF RS.4,16,715/- FOR THE FOLLOWING REASONS :- THE CREDIT CARD PAYMENTS EXCEPT THOSE WHICH ARE RE FLECTED IN THE BANK STATEMENT ARE ALSO BEING ADDED BACK IN THIS ORDER U/S 69C OF THE I.T.A CT AS PER FOLLOWING CALCULATION:- TOTAL CREDIT CARD PAYMENT RS.8,14,315/- LESS:ROUTED THROUGH SOUTH INDIAN BANK RS.3,97,6 00/- AMOUNT OF UNDISCLOSED EXPENDITURE U/S 69C OF THE A CT RS.4,16,715/- [ADDITION : RS.4,16,715/-] 10. THE CIT(A) CONFIRMED THE ORDER OF AO. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS ON T HIS ISSUE WE FIND THAT AT PAGE 64 OF THE ASSESSEES PAPER BOOK THE DETAILS OF THE CREDIT CAR D PAYMENTS MADE BY THE ASSESEE HAVE GIVEN AND THE SAME READS AS FOLLOWS : TOTAL AMOUNT ROUTED THROUGH SOUTH INDIAN BANK: CITI BANK AS PER LIST ATTACHED 364755 ABN AMRO BANK 95000 24.07.08 CHEQUE 668561 AXIS BANK 69600 09.01.09 ---668572 529355 LESS: ALLOWED 397600 131755 5 ITA NO.740/KOL/2013 MANIK CHAND AGARWAL A.YR.2009-10 5 12. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT AS AGAINST THE PAYMENT MADE BY THE ASSSESSEE OF RS.5,29,355 THROUGH CHEQUES ONLY P AYMENT OF RS.3,97,600 WAS CONSIDERED BY THE AO. HIS LIMITED PRAYER WAS FOR A DIRECTION TO THE AO TO VERIFY THE AFORESAID PAYMENTS AND ALLOW THE CLAIM OF THE ASSES SEE TO THE EXTENT THAT THE SAME IS SUBSTANTIATED BY THE PAYMENTS MADE FROM THE BANK AC COUNT. WE ARE OF THE VIEW THAT THE PLEA PUT FORTH BY THE ASSESSEE IS REASONABLE AND AC CORDINGLY THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AND IF IT IS FOUND CORREC T ALLOW THE RELIEF TO THE EXTENT PAYMENTS ARE SHOWN TO HAVE BEEN MADE THROUGH THE BANK ACCOUN T. 13. GROUND NO.3 RAISED BY THE ASSESSEE READS AS FOLLOWS :- 3) THAT THE LD. CITCA) ERRED IN CONFIRMING THE ADD ITION OF RS.1,68,000/- BEING THE UNPAID SALARY FOR THE ASST. YEAR 2008-09 RECEIVED I N THE YEAR UNDER CONSIDERATION. THE SALARY SO RECEIVED WAS DISCLOSED IN THE ASST. YEAR 2008-09 ITSELF. THE ADDITION ON THIS ACCOUNT IMPLIES DOUBLE ADDITION AND HENCE THE SAME NEED BE DELETED. 14. AS FAR AS GROUND NO.3 IS CONCERNED THE LIMIT ED PRAYER OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE AMOUNT OF SALARY RELATING TO A .,Y.2008-09 WHICH WAS RECEIVED BY THE ASSESSEE IN A.Y.2009-210 WAS ALREADY OFFERED TO TAX IN A.Y.2008-09. IN SUPPORT OF THE CLAIM OF THE ASSESSEE HE HAS DRAWN OUR ATTENTION TO PAGE 11 OF THE PAPER BOOK WHICH IS THE COMPUTATION OF TOTAL INCOME FOR A.Y.2008-09. TH E BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME SHOWS A SUM OF RS.1,68,380/- AS RE CEIVED FROM M/S. STOREWELL SHIPPING PVT. LTD WHICH HAS BEEN TAKEN INTO ACCOUNT BY THE ASSESSEE IN THE COMPUTATION OF THE TOTAL INCOME FILED FOR A.Y.2008-09. WE ARE O F THE VIEW THAT IT WOULD BE JUST AND APPROPRIATE TO SET ASIDE THE ORDER OF CIT(A) ON THI S ISSUE AND DIRECT THE AO TO VERIFY THE CLAIM OF THE ASSESSEE IF FOUND CORRECT, THEN ALLOW APPROPRIATE RELIEF. 15. GROUND NO.4 RAISED BY THE ASSESSEE READS AS FOLLOWS :- 4) THAT THE LD.CIT(A) ERRED IN UPHOLDING THE ADDIT ION OF RS.1,85,000/- U/S 17(1)(V) IGNORING THE FACT THAT THE SAID AMOUNT WAS ONLY A S HORT TERM ADVANCE AND WAS DULY RETURNED BY THE APPELLANT TO HIS EMPLOYER. THE ADDI TION NEEDS TO BE DELETED. 6 ITA NO.740/KOL/2013 MANIK CHAND AGARWAL A.YR.2009-10 6 16. AS FAR AS THIS ADDITION IS CONCERNED IT WAS AGAIN BROUGHT TO OUR NOTICE BY THE LD. COUNSEL FOR THE ASSESSEE THAT A SUM OF RS.1,85,000/ - RECEIVED FROM THE ASSESSEES EMPLOYER WAS OFFERED TO TAX IN A.Y.2010-11. IN THIS REGARD OUR ATTENTION WAS DRAWN TO PAGE NOS. 25 TO 28 OF THE ASSESSEES PAPER BOOK WHI CH IS THE COMPUTATION OF TOTAL INCOME OF THE ASSESSEE FOR A.Y.2010-11. WE ARE OF T HE VIEW THAT IT WOULD BE JUST AND APPROPRIATE TO SET ASIDE THE ORDER OF CIT(A) AND RE MAND THE ISSUE TO THE AO FOR FRESH CONSIDERATION IN THE LIGHT OF THE CLAIM OF THE ASSE SSEE REGARDING THE SAME INCOME HAVING BEEN OFFERED TO TAX IN A.Y.2010-11. THE AO WILL DEC IDE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 2.12.2016. SD/- SD/- [P.M.JAGTAP] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.12.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.SRI MANIK CHAND AGARWAL, 4, HUNGERFORD STREET, KO LKATA-700017. 2. I.T.O., WARD-32(3), KOLKATA. 3.CIT(A)-XIX, KOLKATA 4. CIT- XI, KOLKATA. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 7 ITA NO.740/KOL/2013 MANIK CHAND AGARWAL A.YR.2009-10 7