Smt Reena Majumdar, Midnapore V. CIT (A)-XXXIII, KOLKATA, Kolkata

ITA 746/KOL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4979 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2014
• Court: TRIBUNAL
• Department Lawyers: MD GAYAS UDDIN
• Assessee Lawyers: PARTHA SEN
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard; Source of fund; Additional evidence
• Section: 40A(3); 142(1); 68; 144

Judgement Text

I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 746/KOL/ 2014 ASSESSMENT YEAR: 2006-2007 SMT. REENA MAJUMDAR,............................... ......................APPELLANT VILL. DURGACHAK COLONY, BLOCK-C/40, DURGACHAK, HALDIA, PURBA MEDINIPUR-721 602 [PAN : ADUPM 9869 Q] -VS.- INCOME TAX OFFICER,................................ ........................RESPONDENT WARD-1, HALDIA APPEARANCES BY: SHRI PARTHA SEN, ADVOCATE, FOR THE ASSESSEE MD. GAYAS UDDIN, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRUARY 16, 2016 DATE OF PRONOUNCING THE ORDER : MARCH 02, 2016 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXIII, KOLKAT A DATED 24.01.2014 FOR THE ASSESSMENT YEAR 2006-07. 2. AT THE OUTSET, IT IS NOTICED THAT THERE IS A DEL AY OF 25 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE T HE TRIBUNAL. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION SEEKI NG CONDONATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN TH EREIN, WHICH ARE DULY SUPPORTED BY AN AFFIDAVIT FILED BY THE ASSESSEE, I AM SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY ON THE PART OF THE ASSESSEE IN FILING I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 7 THIS APPEAL BEFORE THE TRIBUNAL. I, THEREFORE, COND ONE THE SAID DELAY AND PROCEED TO DISPOSE OF THE APPEAL OF THE ASSESSEE ON MERIT. 3. THE ISSUE RAISED IN GROUND NO. 1 RELATES TO THE ADDITION OF RS.2,00,000/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF GIFT CLAIMED TO BE RECEI VED BY THE ASSESSEE FROM HER HUSBAND BY TREATING THE SAME AS UNEXPLAINE D CASH CREDIT UNDER SECTION 68. 4. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF STEEL FURNITURE UNDER THE NAME AND STYLE OF HER PROPRIETARY CONCERN M/S. ARIS TOCRAT ENGINEERING. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON WAS FILED BY HER ON 31.03.2007 DECLARING TOTAL INCOME OF RS.1,25,630/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICES WERE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 143(2) AND 142(1) FIXING THE CASE OF THE ASSESSEE FOR HEARING FROM TIME TO TIME. THERE WAS, HOWEVER, NO S ATISFACTORY COMPLIANCE ON THE PART OF THE ASSESSEE TO THE SAID NOTICES AND THE ASSESSING OFFICER, THEREFORE, WAS LEFT WITH NO OPTI ON TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT UNDER SECTIO N 144 OF THE ACT. IN THE ASSESSMENT SO COMPLETED VIDE ORDER DATED 31.12. 2008, THE GIFT CLAIMED TO BE RECEIVED BY THE ASSESSEE IN CASH FROM HER HUSBAND WAS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 ON THE GROUND THAT THE CREDITWORTHINESS OF THE DONOR AS WE LL AS THE GENUINENESS OF THE TRANSACTION WAS NOT SATISFACTORILY EXPLAINED BY THE ASSESSEE. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADD ITION MADE BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS GIVEN I N PARAGRAPH NO. 3 OF HIS IMPUGNED ORDER:- DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED THAT SHE AND HER HUSBAND HAD BE EN ILL FOR A LONG TIME AND IT WAS THE WISH OF HER HUSBAND TO MAKE A GIFT TO HER. ACCORDINGLY HE ISSUED CHEQUES TO HIS S ON SHRI SANDEEP MAJUMDAR WHO DEPOSITED THEM IN HIS ACCOUNT AND PAID SHRI AMIT AGARWAL, PROPRIETOR OF M/S. AGARWAL STEEL, I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 7 CREDITOR OF THE APPELLANT, ON BEHALF OF THE APPELLA NT. CONFIRMATIONS FROM SHRI AMIT AGARWAL AND SHRI SANDE EP MAJUMDAR WERE ALSO SUBMITTED. I HAVE CONSIDERED THE FACTS OF THE CASE. THE ADDITION WAS MADE AS THE CREDIT WORTH INESS OF SHRI SATYENDRA MAJUMDAR, HUSBAND OF THE APPELLANT W AS NOT PROVED DURING THE ASSESSMENT PROCEEDINGS. DURING TH E APPELLATE PROCEEDINGS ALSO NO ATTEMPT HAS BEEN MADE BY THE APPELLANT TO EXPLAIN THE NATURE OF INCOME EARNING A CTIVITIES, IF ANY OR THE FINANCIAL CAPACITY OF SHRI SATYENDRA MAJUMDAR. A COPY OF BANK ACCOUNT FROM WHICH THE ORIGINAL WITH DRAWALS OF RS.60,000/-(STATED TO BE RS.40,000/- IN THE CONF IRMATION OF SHRI SANDEEP MAJUMDAR AND THE SUBMISSIONS MADE B Y THE APPELLANT), RS.30,000/- AND RS.1,30,000/- WERE MADE IN FAVOUR OF SHRI SANDEEP KUMAR MAJUMDAR WERE ALSO SUB MITTED BY THE APPELLANT FROM WHICH IT IS EVIDENT THAT A LU MP SUM AMOUNT OF RS.2,11,000/- IN CASH HAS BEEN DEPOSITED IN THE SAME BANK ACCOUNT ON 18.01.2006 IMMEDIATELY BEFORE THE AFORESAID WITHDRAWALS ON 10.02.2006, 03.03.2006 AND 18.03.2006. THIS CASTS SERIOUS DOUBTS ON THE GENUIN ENESS OF THE TRANSACTION AND THE FINANCIAL CAPACITY OF SHRI SATYENDRA MAJUMDAR. AS THE APPELLANT HAS NOT ESTABLISHED THE GENUINENESS OF THE GIFT AND THE CREDIT WORTHINESS O F SHRI SATYENDRA MAJUMDAR, THE ASSESSING OFFICER RIGHTLY T REATED THE AMOUNT OF RS.2,00,000/- AS UNEXPLAINED CASH CRE DIT. THE ADDITION OF RS.2,00,000/- IS CONFIRMED. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT A CONFI RMATION LETTER OF THE DONOR WAS FILED BY THE ASSESSEE DURING THE COURSE O F ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER AND ALSO I NVITED OUR ATTENTION TO THE COPY OF THE SAME PLACED AT PAGE NO. 25 OF THE P APER BOOK, A PERUSAL OF THE SAID CONFIRMATION AS WELL AS THE RELEVANT PORTI ON OF THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CLEARLY SHOWS THAT A DIFFERENT STAND WAS TAKEN BY THE ASSESSEE AT DIFFERENT STAGES BY CLAIMI NG IN THE CONFIRMATION FILED BEFORE THE ASSESSING OFFICER THAT THE GIFTS W ERE RECEIVED IN CASH AND BY STATING BEFORE THE LD. CIT(APPEALS) THAT THE DON OR HAD ISSUED CHEQUES TO HIS SON SHRI SANDEEP MAJUMDAR, WHO DEPOSITED THE M IN HIS ACCOUNT AND PAID THE AMOUNT TO TWO CREDITORS ON BEHALF OF THE A SSESSEE. MOREOVER, AS RIGHTLY POINTED OUT BY THE LD. D.R., CASH OF RS.2,1 1,000/- WAS FOUND TO BE DEPOSITED IN THE BANK ACCOUNT OF THE DONOR BEFORE I SSUING THE CHEQUES TOWARDS GIFTS. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 7 ATTENTION TO THE COPY OF INCOME-TAX RETURN OF THE D ONOR PLACED IN HIS PAPER BOOK ALONG WITH THE BALANCE-SHEET AND PROFIT & LOSS ACCOUNT AT PAGE NOS. 26 TO 28 TO CONTEND THAT THE DONOR IS REGULARL Y ASSESSED TO TAX WITH THE SAME ASSESSING OFFICER AND THE GIFTS GIVEN TO T HE ASSESSEE WERE DULY REFLECTED IN THE BALANCE-SHEET FILED ALONG WITH HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IT IS, HOWEVER, OBSER VED THAT THERE IS NO REFERENCE TO THESE DOCUMENTS EITHER IN THE ASSESSME NT ORDER OR IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS). MOREOVER, A S POINTED OUT BY THE LD. D.R., THE PAPER BOOK FILED BY THE ASSESSEE ALSO DOES NOT CONTAIN ANY CERTIFICATE TO THE EFFECT THAT THESE DOCUMENTS WERE FILED BY THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE L D. CIT(APPEALS). THE ASSESESE HAS ALSO NOT FILED ANY APPLICATION SEEKING ADMISSION OF THESE DOCUMENTS AS ADDITIONAL EVIDENCE BEFORE THE TRIBUNA L. I, THEREFORE, DECLINE TO TAKE COGNIZANCE OF THESE DOCUMENTS AND K EEPING IN VIEW THE FAILURE OF THE ASSESSEE TO ESTABLISH THE CREDITWORT HINESS OF THE DONOR AS WELL AS THE GENUINENESS OF THE GIFT TRANSACTIONS AS WELL AS THE DIFFERENT STAND TAKEN AT DIFFERENT STAGES, I UPHOLD THE IMPUG NED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE ADDITION OF RS.2,00,000 /- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF GIFTS CLAIMED TO BE RECEIVED BY THE ASSESSEE FROM HER HUSBAND TREATING THE SAME AS UNEX PLAINED CASH CREDIT UNDER SECTION 68. GROUND NO. 1 IS ACCORDINGLY DISMI SSED. 6. THE ISSUE RAISED IN GROUND NO. 2 RELATES TO THE ADDITION OF RS.19,000/- MADE BY THE ASSESSING OFFICER AND CONFI RMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF CASH LOAN CLAIMED TO BE RECEIVED BY THE ASSESSEE TREATING THE SAME AS UNEXPLAINED CASH CRED IT. 7. IN THE ASSESSMENT COMPLETED UNDER SECTION 144, T HE LOAN AMOUNT OF RS.2,28,000/- CLAIMED TO BE RECEIVED BY THE ASSESSE E IN CASH FROM TWELVE CREDITORS IN A SUM OF RS.19,000/- EACH WAS ADDED BY THE ASSESSING OFFICER TREATING THE SAME AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 AS A RESULT OF THE FAILURE OF THE ASSESSEE TO ESTABLISH THE CRE DITWORTHINESS OF THE CONCERNED LOAN CREDITORS AS WELL AS THE GENUINENESS OF THE RELEVANT I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 5 OF 7 TRANSACTIONS. ON APPEAL, THE LD. CIT(APPEALS) DELET ED THE SAID ADDITION TO THE EXTENT OF RS.2,09,000/- AFTER HAVING FOUND THAT THE LOANS TO THAT EXTENT WERE RECEIVED BY THE ASSESSEE IN THE EARLIER YEARS AND NOT IN THE YEAR UNDER CONSIDERATION. AS REGARDS THE BALANCE LO AN AMOUNT OF RS.19,000/- CLAIMED TO BE RECEIVED BY THE ASSESSEE IN CASH FROM ONE SHRI SUDIP MUKHERJEE DURING THE YEAR UNDER CONSIDERATION , THE LD. CIT(APPEALS) FOUND THAT THE SAID LOAN CREDITOR WAS NOT ASSESSED TO TAX AND NEITHER THE NATURE OF HIS OCCUPATION NOR THE EX ACT SOURCE OF FUNDS FOR GIVING LOAN WAS EXPLAINED BY THE ASSESSEE. HE, THER EFORE, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSU E TO THE EXTENT OF RS.19,000/-. 8. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS FILED AN AFFIDAVIT OF SHRI SUDIP MUKHERJEE EXECUTED ON 30.07.2015 IN SUPPORT OF THE ASSESSEES CASE ON THIS ISSUE, THERE IS NO APPLICATION FILED SEEKING ADMISSION OF THE SAME AS ADDITIONAL EVIDENCE. THE LD. COUNSEL FOR THE ASSESSEE ALSO HAS FAILED TO OFFER ANY SATISFACTORY EXPLANATION AS TO WHAT PREVENTED THE A SSESSEE FROM FILING THE SAID AFFIDAVIT BEFORE THE AUTHORITIES BELOW. I, THE REFORE, DECLINE TO TAKE COGNIZANCE OF THE SAID AFFIDAVIT AND UPHOLD THE IMP UGNED ORDER OF THE LD. CIT(APPEALS) SUSTAINING THE ADDITION MADE BY THE AS SESSING OFFICER ON THIS ISSUE TO THE EXTENT OF RS.19,000/- AS THERE WA S A CLEAR FAILURE ON THE PART OF THE ASSESSEE TO EXPLAIN SATISFACTORY THE CR EDITWORTHINESS OF THE CONCERNED LOAN CREDITOR. GROUND NO. 2 IS ACCORDINGL Y DISMISSED. 9. THE ISSUE INVOLVED IN GROUND NO. 3 RELATES TO TH E ADDITION OF RS.84,000/- MADE BY THE ASSESSING OFFICER AND CONFI RMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF DEEMED RENTAL INCOME FRO M THE HOUSE PROPERTY OWNED BY THE ASSESSEE. 10. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE WAS THE OWNER OF THE RESIDENTIAL PROPERTY AT C-40, DURGACHAK COLONY, HALDIA, WHICH WAS I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 6 OF 7 USED BY HER HUSBAND AS GODOWN FOR THE PURPOSE OF HI S BUSINESS. NO RENT, HOWEVER, WAS CHARGED BY THE ASSESSEE FROM HER HUSBA ND FOR SUCH USE. THE ASSESSING OFFICER, THEREFORE, ESTIMATED THE FAIR RE NTAL VALUE OF THE PORTION OF THE ASSESSEES HOUSE PROPERTY USED BY HER HUSBAN D FOR THE PURPOSE OF BUSINESS AT RS.1,20,000/- AND AFTER ALLOWING DEDUCT ION UNDER SECTION 24 TO THE EXTENT OF RS.36,000/-, A SUM OF RS.84,000/- WAS BROUGHT TO TAX BY HIM IN THE HANDS OF THE ASSESSEE UNDER THE HEAD IN COME FROM HOUSE PROPERTY. ON APPEAL, THE LD. CIT(APPEALS) CONFIRME D THE SAID ADDITION MADE BY THE ASSESSING OFFICER. 11. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT NO RENT WAS CHARGED BY THE ASSESSEE FROM HER HUSBAND FOR USE OF THE HOUSE PROP ERTY, HE HAS NOT DISPUTED THE FACT THAT THE SAID HOUSE PROPERTY WAS OWNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE ANNUAL VAL UE OF THE SAID PROPERTY THUS IS LIABLE TO BE ASSESSED AS INCOME IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THE QUESTION THAT ARISES IS WHAT IS SUCH ANNUAL VALUE OF THE PRO PERTY. IN THIS REGARD, IT IS OBSERVED THAT THE FAIR RENTAL VALUE OF RS.1,20,0 00/- IS TAKEN BY THE ASSESSING OFFICER AS ANNUAL VALUE OF THE ASSESSEES PROPERTY WITHOUT GIVING ANY BASIS AND THE LD. COUNSEL FOR THE ASSESS EE AT THE TIME OF HEARING BEFORE ME HAS ALSO NOT BEEN ABLE TO GIVE AN Y SOUND OR CONVINCING BASIS, WHICH CAN BE ADOPTED FOR DETERMINING THE ANN UAL VALUE OF THE ASSESSEES PROPERTY. I, THEREFORE, CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DETERMINING THE ANNUAL VALUE OF THE ASSESSEES PROPERTY ON SOME SOUND AND CONVINCING BASIS IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE PROPE R AND SUFFICIENT OPPORTUNITY OF BEING HEARD. GROUND NO. 3 IS ACCORDI NGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO. 4 RAISED BY THE ASSESSEE IN THIS APP EAL RELATING TO THE ISSUE OF DISALLOWANCE UNDER SECTION 40A(3) HAS NOT BEEN PRESSED BY THE I.T.A. NO. 746/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 7 OF 7 LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 02, 201 6. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 2 ND DAY OF MARCH, 2016 COPIES TO : (1) SMT. REENA MAJUMDAR, VILL. DURGACHAK COLONY, BLOCK-C/40, DURGACHAK, HALDIA, PURBA MEDINIPUR-721 602 (2) INCOME TAX OFFICER, WARD-1, HALDIA (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXXIII, K OLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.