ACIT, CIR-49, KOLKATA, Kolkata V. Ashim Krishna Bhatta, Kolkata

ITA 764/KOL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3818 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOKE NAG
• Keywords: Unexplained cash credit; Unexplained expenditure; Gift; Source of fund
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. GODARA, JUDICIAL MEMBER) I.T.A. NO. 764/KOL/2016 ASSESSMENT YEAR: 2010-11 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-49, KOLKATA............................................... APPELLANT VS. ASHIM KRISHNA BHATTA....................................................RESPONDENT [PAN : AGKPB 3372 N] APPEARANCES BY: SHRI ALOKE NAG, ADDL. CIT (DR) , APPEARING ON BEHALF OF THE REVENUE. SHRI PRATYUSH JHUNJHUNWALA, ADV., APPEARED ON BEHALF OF THE ASSESSEE. DATE OF CONCLUDING THE HEARING : JULY 7 TH , 2019 DATE OF PRONOUNCING THE ORDER : AUGUST 14 TH , 2019 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-15, KOLKATA [HEREINAFTER THE LD. CIT (A)], PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) DATED 04.02.2016 FOR ASSESSMENT YEAR 2010-11. 2. WE HAVE HEARD MR. ALOKE NAG, ADDL. CIT(DR) ON BEHALF OF THE REVENUE AND MR. PRATYUSH JHUNJHUNWALA, ADV., THE LD. COUNSEL FOR THE ASSESSEE. 3. THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF TRADING AND ORDER SUPPLY OF FOODGRAINS. THE ISSUES THAT ARISE IN THIS REVENUES APPEAL IS DISPOSED OFF GROUND-WISE. 4. GROUND NO.-1: THIS GROUND IS AGAINST THE DELETION OF AN ADDITION MADE ON ACCOUNT OF UNDISCLOSED SALES BY THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER AND THEREAFTER AT PAGE-7, PARA-1 AS FOLLOWS: I HAVE GONE THROUGH THE PAPER BOOK, COMMENTS OF THE A.O. AND THE COUNTER COMMENTS GIVEN BY THE AR OF THE ASSESSEE. IT IS VERY CLEAR FROM THE LEDGER A/C OF S.B. TRADING CO. AS APPEARING IN THE BOOKS OF M/S A.S. AGENCY (PAGE 35 & 36 OF THE PAPER BOOK) THAT ALL 2 I.T.A. NO. 764/KOL/2016 ASSESSMENT YEAR: 2010-11 ASHIM KRISHNA BHATTA THE PURCHASES AND SALES HAVE BEEN DULY ACCOUNTED FOR. ALSO, THE ASSESSEE IS DEALING IN BUSINESS OF FOOD GRAINS, WHICH IS EXEMPT FROM VAT AND CST. HENCE, THE ABSENCE OF VAT & CST NO. ON THE BILLS OF M/S A.S. AGENCY DOES NOT MAKE THE BILLS BOGUS. COPY OF THE BANK STATEMENT (PAGES 126 TO 133 OF THE PAPER BOOK) PROVE THE GENUINENESS OF THE TRANSACTION. THE ADJUSTMENT OF RS. 5,51 LACS AS GIFT TO WIFE ARE ALSO DULY RECORDED IN THE LEDGER A/C OF M/S S.B. TRADING CO. IN THE BOOKS OF M/S A.S. AGENCY (PAGE 36 OF PAPER BOOK). HENCE, I AM INCLINED TO ACCEPT THE REPLY OF THE AR OF THE ASSESSEE AND ACCORDINGLY ADDITION OF RS. 48,50,967/- IS DELETED. 5. THE LD. DR COULD NOT COTROVERT THESE FACTUAL FINDINGS OF THE LD. CIT(A). THUS WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS GROUND NO.-1 OF THE REVENUE. 6. GROUND NO.-2: THIS GROUND IS ON THE ISSUE OF CLUBBING OF WIFES INCOME WITH THAT OF THE ASSESSEE. THE LD. CIT(A) AT PAGE-9 PARA-1 HAS DEALT WITH THIS ISSUE. THIS IS EXTRACTED FOR READY REFERENCE: I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE SUBMISSION OF THE ASSESSEE AND THE PAPER BOOK, THE REMAND REPORT AND THE COUNTER COMMENTS OF THE AR OF THE ASSESSEE. PAGES 163 TO 215 OF THE PAPER BOOK CONTAIN VARIOUS DOCUMENTS LIKE THE COPY OF RETURN OF SMT. SOUMI BHATTA FOR A.Y. 2010-11 IN WHICH SHE HAS SHOWN NET TAXABLE INCOME OF RS. 20,34,238/-, COPY OF AUDITED ACCOUNTS FOR A.Y. 2010-11, COPY OF RETURN AND OTHER DOCUMENTS PERTAINING TO EARLIER YEARS, DEED OF LEASE DT. 16.12.2008 BETWEEN SRI KALYAN NASKAR AND SMT. SOUMI BHATTA REGARDING THE PREMISES OF M/S S.B.TRADING CO, COPY OF LOAN SANCTION LETTER DATED 24.09.2009 BY SYNDICATE BANK. ALL THESE DOCUMENTS CLEARLY PROVE THE INDEPENDENT STATUS OF SMT. SOUMI BHATTA. THE DEPARTMENT HAS ALSO ACCEPTED THE INDEPENDENT STATUS OF SMT. SOUMI BHATTA AS IT HAS NEVER ASSESSED HER INCOME ON PROTECTIVE BASIS. MRS. SOUMI BHATTA HAS BEEN PAYING SUBSTANTIAL INCOME-TAX ON THE RETURNED INCOME. THE A.O. HAS NOT SHOWED AS TO WHAT BENEFIT THE ASSESSEE HAS BEEN DERIVING BY CREATING A DUMMY ASSESSEE IN THE NAME OF HIS WIFE. IN VIEW OF THE ABOVE, IT IS HELD THAT THE CLUBBING OF INCOME BY THE A.O. IS LEGALLY AND FACTUALLY INCORRECT. HENCE, ADDITION OF RS. 21,32,698/- IS DELETED. 7. LD. DR COULD NOT CONTROVERT THIS FACTUAL FINDINGS OF THE LD. CIT(A). THE WIFE OF THE ASSESSEE IS AN INDEPENDENT PERSON AND SHE HAS FILED HER RETURN OF INCOME AND PAID TAXES ON THIS BUSINESS AND MOREOVER SHE HAS ALSO OBTAINED LOAN FROM BANK FOR HER BUSINESS. UNDER THE CIRCUMSTANCES WE FIND NO REASON TO INTERFERE IN THIS UNCONTROVERTED FACTUAL FINDINGS OF THE LD. CIT(A). IN THE RESULT GROUND NO.-2 OF THE REVENUE IS DISMISSED. 8. GROUND NO.-3: THIS GROUND IS ON THE ISSUE OF UNEXPLAINED EXPENDITURE. THE LD. CIT(A) ON THIS ISSUE HAD HELD AS FOLLOWS: I HAVE GONE THROUGH THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT GIVEN BY THE A.O. IT IS SEEN FROM THE REMAND REPORT THAT THE A.O. HAS MISUNDERSTOOD THE WHOLE ISSUE. IT WAS CLEARLY MENTIONED IN THE SUBMISSION OF THE AR DATED 21.12.2015 THAT THE LAND DEVELOPMENT EXPENSES WERE INCURRED IN CASH THROUGH HIS PERSONAL BANK ACCOUNT IN SYNDICATE BANK ACCOUNT NO. 109 AND CURRENT S/C NO. 1801 OF M/S A.S. AGENCY. THE COPY OF BANK STATEMENT OF THESE TWO BANK ACCOUNTS WERE PART OF THE ASSESSEES 3 I.T.A. NO. 764/KOL/2016 ASSESSMENT YEAR: 2010-11 ASHIM KRISHNA BHATTA SUBMISSION, WHICH WERE AVAILABLE BEFORE THE A.O. FOR VERIFICATION. STILL THE A.O. DID NOT VERIFY THESE PERSONAL BANK ACCOUNTS AND REPEATED THE FINDINGS GIVEN IN THE ASSESSMENT ORDER THAT THE CASH EXPENSES WERE NOT ENTERED IN THE CASH BOOK OF M/S A.S. AGENCY. THE A.O. HAS ALSO MADE AN ALLEGATION THAT THE SOURCE OF FUND I.E. SALE PROCEEDS OF LAND TO PHED DEVELOPMENT OF GOVT. OF WEST BENGAL WAS NOT DISCLOSED. THE A.O. HAS COMPLETELY OVERLOOKED THE FACT THAT IN A.Y. 2009-10, THE ASSESSMENT WAS COMPLETED U/S 143(3)/147 IN THE CASE OF THE ASSESSEE ON 26.02.2014 (COPY OF ASSESSMENT ORDER KEPT ON PAGES 218-233 OF PAPER BOOK) AND THE SALE CONSIDERATION OF LAND WAS TAXED IN THAT ASSESSMENT ORDER. HENCE, THE SOURCE OF FUND IS EXPLAINED AND FURTHER THE CASH EXPENSES TOWARDS LAND DEVELOPMENT WERE INCURRED IN CASH WHICH WERE SOURCED THROUGH CASH WITHDRAWAL FROM SYNDICATE BANK A/C NOS. 1801 AND 109. THE AR OF THE ASSESSEE HAD SUBMITTED THE RELEVANT DETAILS OF THE EXPENSES AND WHICH WERE PART OF THE PAPER BOOK. IN VIEW OF THE FOREGOING DISCUSSION, IT IS HELD THAT THE SOURCE OF RS. 40,12,638/- IS EXPLAINED AND THE CORRESPONDING ADDITION IS DELETED. 9. THESE FACTUAL FINDINGS COULD NOT BE CONTROVERTED BY THE LD. DR. WHEN THE EXPENDITURE IN QUESTION WAS INCURRED THROUGH WITHDRAWAL OF CASH THROUGH BANK AND ALL THESE DETAILS WAS SUBMITTED TO THE AO NO ADDITION SHOULD HAVE BEEN MADE WITHOUT VERIFICATION. THESE FACTUAL FINDINGS COULD NOT BE CONTROVERTED BY THE LD. CIT(A). THUS THIS GROUND OF THE REVENUE IS DISMISSED. 10. GROUND NO.-4: THIS GROUND IS ON THE ISSUE OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT. THE LD. CIT(A) DELETED THE SAME BY HOLDING THAT, THE AMOUNTED QUESTION WAS ALREADY INCLUDED IN THE SALES ACCOUNT. THUS THE ADDITION, ARE RIGHTLY HELD BY THE CIT(A), CANNOT BE MADE. THUS WE UPHOLD THIS FINDING OF CIT(A) AND DISMISS THE GROUND NO.-4 OF THE REVENUE. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE AUGUST 14, 2019. SD/- SD/- [S.S. GODARA] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14.08.2019 BIDHAN 4 I.T.A. NO. 764/KOL/2016 ASSESSMENT YEAR: 2010-11 ASHIM KRISHNA BHATTA COPY OF THE ORDER FORWARDED TO: 1. ASHIM KRISHNA BHATTA, 13 & 14, DUMDUM PARK, KOLKATA- 700 055. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-49, KOLKATA. 3. CIT(A)- 15, KOLKATA. 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES