Asish Ranjan Chowdhury, Hooghly V. I.T.O Wd - 49(3),kolkata, Kolkata

ITA 766/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5010 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBASISH LAHIRI
• Keywords: Unexplained investment; Peak credit
• Section: 143(3); 142(1); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA (BEFORE SHRI P. M. JAGTAP, A.M. & SHRI S.S.VISWANET HRA RAVI, J.M.) ITA NO. 766/KOL/2013 : AS STT. YEAR : 2009-2010 ASISH RANJAN CHOWDHURY (PAN AEJPC 5136L VS I.T.O., WARD-49(3), KOLKATA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SOMNATH GHOSH, ADVOCATE RESPONDENT BY : SHRI DEBASISH LAHIRI, JCIT, SR.DR DATE OF HEARING : 03.03.2016 DATE OF PRONOUNCEMENT : 11-03-2016 ORDER PER SHRI S.S.VISWANETHRA RAVI, J.M . THIS APPEAL IS FILED BY THE ASSESSEE HAVING AGGRIEV ED BY THE ORDER DATED 19.10.2011 PASSED BY THE CIT(APPEALS)-XXXII, KOLKATA IN APPEAL NO.165/CIT(A)-XXXII/09-10/49(3)/KOL FOR THE ASSESSMENT YEAR 2007-08 FRAMED UNDER SECTION 143(3) OF I.T.ACT. 2. CHALLENGING THE ABOVE IMPUGNED ORDER, THE ASSESS EE RAISED THE FOLLOWING GROUNDS BEFORE THE TRIBUNAL. 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) XXXII, KOLKATA ACTED UNLAWFULLY IN UPHOLD ING THE PURPORTED ADDITION IN THE SUM OF RS. 13,41,800/- MA DE BY THE LD. INCOME TAX OFFICER, WARD 49(3), KOLKATA ON ACCO UNT OF ALLEGED UNDISCLOSED INCOME INVOKING THE PROVISIONS OF S.69A OF THE INCOME TAX ACT, 1961 IN THE FACTS AND CIRCUM STANCES OF THE INSTANT CASE AND THE SPECIOUS FINDING ON THA T ISSUE IS ABSOLUTELY ARBITRARY, UNWARRANTED AND PERVERSE. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) XXXII, KOLKATA INDULGED IN SPECULATION, S URMISE 2 ITA NO.766/KOL/2013 A SISH RANJAN CHOWDHURY ASSESSMENT YEAR: 2007-08 AND CONJECTURE IN UPHOLDING THE PURPORTED ADDITION OF RS. 13,41,800/- MADE BY THE INCOME TAX OFFICER, WARD 49 (3), KOLKATA ON ACCOUNT OF ALLEGED INCOME FROM UNDISCLOS ED SOURCES BEING CASH DEPOSITS MADE IN ACCOUNT NO. 03491000030922 HELD WITH H.D.F.C. BANK AND ACCOUNT NO. 938453 HELD WITH A.B.N. AMRO BANK ON EXTRANEOUS CONSIDERATIONS AND TOTALLY IGNORING THE COGENT EXPL ANATION ADDUCED ON RECORD AND THE IMPUGNED FINDING ON THAT ISSUE IS COMPLETELY UNFOUNDED, UNJUSTIFIED AND UNTENABLE IN LAW. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) XXXII, KOLKATA ERRED IN NOT ADOPTING THE SURPLUS AM OUNT OF RS.1,98,427/- BEING THE UNEXPLAINED INVESTMENT FOR CONSIDERATION AND HIS ACTION OF UPHOLDING THE IMPUG NED ADDITION OF RS. 13,41,800/- MADE BY THE LD. INCOME TAX OFFICER, WARD 49(3), KOLKATA WITHOUT ADDUCING ANY JUSTIFICATION THEREFORE IS WHOLLY ERRONEOUS, FLAWED , INFIRM AND CONTRARY TO THE SETTLED POSITION IN LAW. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM PARTNERSHIP BUSINESS AS WELL A S FROM INVESTMENTS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.03.20 08 FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME OF RS.1,43,5 70/-/- WHICH WAS SELECTED FOR SCRUTINY BY CASS AND SUBSEQUENTLY, ON SCRUTINY, NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED AND IN RESPONSE TO WHICH THE ASSESSEE APPEARED BEFORE THE AO AND PRODUCED DE TAILS OF BANK ACCOUNTS. DURING THE COURSE OF ASSESSMENT, THE AO FOUND THAT TWO BANK STATEMENTS REGARDING DEPOSITS IN HDFC BANK, LAKE TO WN BRANCH AND ABN AMRO BANK IN SALT LAKE BRANCH WERE UNDISCLOSED IN THE RETURN OF INCOME. THE AO ASKED THE A/R ATTENDING ON BEHALF OF THE ASSESSEE TO EXPLAIN THE SOURCE OF THE DEPOSITS IN THE BANK AND THE PAYMENTS MADE BY THE ASSESSEE THROUGH BANK. THE A/R ONLY SUBMITTE D THE CASH INFLOW AND CASH OUTFLOW STATEMENT BUT THE SOURCE OF DEPOSI TS IN BANK WAS NOT EXPLAINED. NOTICE UNDER SECTION 133(6) OF THE I.T. ACT WAS ISSUED TO THE AFORESAID TWO BANKS TO PROCURE THE BANK STATEMENTS AND THE SAME WERE 3 ITA NO.766/KOL/2013 A SISH RANJAN CHOWDHURY ASSESSMENT YEAR: 2007-08 OBTAINED FROM THEM. ON EXAMINATION OF THE TOTAL TRA NSACTIONS MADE IN THESE TWO BANK ACCOUNTS, THE AO OBSERVED THAT CASH DEPOSITS HAVE BEEN MADE IN EXCESS THAN CASH WITHDRAWALS EVERY MONTH WH ICH DOES NOT JUSTIFY THE SOURCE OF CASH DEPOSITS IN BANK. THEREB Y, IN TOTAL THE AO COMPUTED THE INCOME OF THE ASSESSEE AT RS.13,41,800 /-. 4. AGGRIEVED BY THE ASSESSMENT ORDER UNDER SECTION 143(3), THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT-A. THE CIT (A) IN THE APPELLATE PROCEEDINGS, ONLY AFTER CONSIDERING THE A SSESSMENT ORDER, CONFIRMED THE ORDER OF THE AO BY PASSING EX PARTE ORDER. 5. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE ARGUED THAT THE ASSESSEE HAD EXPLAINED THE SOURCE O F THE UNDISCLOSED DEPOSITS BY A CASH FLOW STATEMENT BUT THE SAME HAS BEEN REJECTED BY THE AO ASSUMING THAT THE SOURCES OF SUCH DEPOSITS WERE UNEXPLAINED. THE LD. COUNSEL ALSO SUBMITTED THAT THE AO COMPUTED THE UNDISCLOSED MONIES BY TAKING THE AGGREGATE OF THE DEPOSITS TO T HE EXTENT OF RS.12,95,300/- IN ABN AMRO BANK ACCOUNT AND RS.46,5 00/- WITH HDFC BANK ACCOUNT WHIMSICALLY. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN THE ASSESSMENT PROCEEDING S, THE ASSESSEE IN SUPPORT OF HIS SUBMISSIONS EXPLAINED THE DEPOSITS W ITH A CASH FLOW STATEMENT SHOWING INFLOW AND OUTFLOW OF CASH WITH R ESPECT TO THE BANK ENTRIES FOR THE ASSESSMENT YEAR UNDER CONSIDERATION . THE AO ACTED UNLAWFULLY IN NOT CONSIDERING THE PEAK BALANCE OF U NDISCLOSED MONIES. THE LD. COUNSEL AGAIN STATED THAT THERE IS NO EVIDE NCE ON RECORD TO PRESUME THAT THE AMOUNT WITHDRAWN HAS BEEN UTILIZED BY THE ASSESSEE IN ANY EXPENSES OR FOR ANY INVESTMENT. HENCE, THERE CA NNOT BE ASSUMPTION TO TREAT THE DEPOSITS AS UNDISCLOSED MONEY. THE AS SESSEE HAS SUBMITTED THE CASH FLOW STATEMENT AND EXPLAINED THE SOURCE AN D NATURE OF THE DEPOSITS IN THE BANK STATEMENTS. THE LD. COUNSEL AL SO SUBMITTED THAT THE 4 ITA NO.766/KOL/2013 A SISH RANJAN CHOWDHURY ASSESSMENT YEAR: 2007-08 ASSESSEE HAD UTILIZED THE BANK ACCOUNT IN HIS TRADI NG BUSINESS AND THE AO HAS NOT CITED ANY REASON FOR TAKING THE ENTIRE D EPOSITS AS THE INCOME OF THE ASSESSEE AND THE ENTIRE ACTION OF THE AO IS NOT BASED ON ANY MATERIAL. THE LD. COUNSEL FOR THE ASSESSEE HAS ALS O CITED VARIOUS CASE LAWS TO STRENGTHEN THE CASE OF THE ASSESSEE. THE LD . COUNSEL FOR THE ASSESSEE THEREFORE, ARGUED THAT THE AO HAS ACTED WH IMSICALLY AND IMPROPERLY WHICH HAS BEEN CONFIRMED BY THE LD. CIT( A) EX PARTE. HENCE, THE ORDERS OF THE LOWER AUTHORITIES SHOULD B E DISMISSED AND THE CASE OF THE ASSESSEE BE ALLOWED IN HIS FAVOUR. THE LD. DR, ON THE OTHER HAND, VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHOR ITIES BELOW. 6. HEARD ASSESSEES REPRESENTATIVE AND PERUSED THE RECORD. THE MAIN STAND OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE ASSESSEE HAS SUBMITTED THE DETAILS OF THE BANK STATEMENTS INCLUD ING THE CASH FLOW STATEMENT SHOWING INFLOW AND OUTFLOW OF CASH WITH R ESPECT OF THE BANK ENTRIES AND FURNISHED THE EXPLANATION REGARDING THE SOURCE AND NATURE OF THE SAME. ON APPEAL, THE LD. CIT(A) CONFIRMED THE A CTION OF THE AO EX PARTE WITHOUT MENTIONING ANY REASON FOR CONFIRMING THE S AME. UNDER SECTION 250(6) OF THE I.T. ACT, THE ORDER OF THE LD. COMMISSIONER (APPEALS) DISPOSING OF THE APPEAL SHALL BE IN WRITI NG AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION . BUT WE FIND FROM THE ORDER OF THE LD. CIT(A) THAT HE HAS CONFIRMED THE ORDER OF THE AO WITHOUT DECIDING THE SAME ON MERITS. MOREOVER, THE LD. CIT(A) SHOULD HAVE GIVEN ANOTHER OPPORTUNITY TO THE ASSESSEE TO APPEAR BEFORE HIM TO EXPLAIN THE UNDISC LOSED DEPOSITS BUT THE LD. CIT(A) HAS PASSED THE ORDER EX PARTE AND TH AT ALSO WITHOUT MENTIONING ANY REASONS IN CONFIRMING THE ACTION OF THE AO. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND REMIT THE 5 ITA NO.766/KOL/2013 A SISH RANJAN CHOWDHURY ASSESSMENT YEAR: 2007-08 MATTER TO HIM WITH A DIRECTION TO DECIDE THE SAME O N MERIT, AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF B EING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2016. SD/- SD/- ( P.M.JAGTAP) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/03/2016 TALUKDAR/SR.PS COPY OF ORDER FORWARDED TO: 1 ASISH RANJAN CHOWDHURY, C/O- SHRI SOMNATH GHOSH, AD VOCATE, SEVEN BROTHERS LODGE, CHINSURAH, DIST- HOOGHLY, PI N- 712 105 2 I.T.O., WARD-49(3), KOLKATA 3 THE CIT(A), 4 5 CIT, 5. D.R. TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA