DCIT, Circle - 33, Kolkata, Kolkata V. Shri Haraprasad Banerjee, Kolkata

ITA 826/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2516 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 28-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2010
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: SRI D K BANDYOPADHYAY

Judgement Text

, A , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () BEFORE . . . . . . . . , , , , , !' !' !' !' /AND . .. . . .. .! !! !, , , , # , ,, , [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C. D. RAO , AM] '$ '$ '$ '$ / ITA NO. 826 /KOL/2010 %&' !() %&' !() %&' !() %&' !()/ // / ASSESSMENT YEAR : 2006-07 DEPUTY COMMISSIONER OF INCOME- TAX, CIRCLE-33, KOLKATA. SHRI HARAPRASAD BANERJEE (PA NO. AGUPB 5726 C) (+, / APPELLANT ) - !& - - VERSUS -. (.+,/ RESPONDENT ) +, / 0 / FOR THE APPELLANT: / SHRI PIYUSH KOLHE .+, / 0 / FOR THE RESPONDENT : / SHRI SRI D. K. BANDYOPADHYAY 1 / ORDER PER D. K. TYAGI, JM ( . . . . . . . . , , , , ) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 05.02.2010 FOR THE ASSESSMEN T YEAR 2006-07 ON THE GROUND OF DELETING THE ADDITION OF RS.19,86,783/- AS MADE BY THE AO AS UNDISCLOSED CONTRACTUAL RECEIPTS. . 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT ASSESSEES PERSONAL CAPITAL ACCOUNT HAS BEEN CREDITED WITH TOTAL CASH AMOUNT OF RS.10,07,925/- AND TOTAL CHEQUE AMOUNT OF RS.21,27,196/-. IT WAS EXPLAINED BEFORE THE AO THAT AN AMOUNT OF RS.2,00,000/- WAS R ECEIVED AS LOAN FROM SHRI TAPAN CHATTERJEE AND THE BALANCE OF RS.19,27,196/- WAS CO NTRACTUAL RECEIPTS FROM TEN PARTIES, WHICH PERTAINED TO THE EARLIER YEARS. BUT NO CONFI RMATION FROM THE LOAN CREDITOR WAS FILED AND THE AO HELD THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE LOAN. THE AO ALSO FOUND THAT THE CONTRACTUAL RECEI PTS OF RS.19,27,196/- WERE NOT SHOWN IN THE EARLIER YEARS. IN RESPONSE TO NOTICE U/S. 1 3396), THE BARANAGAR MUNICIPALITY INFORMED THE AO THAT THE ASSESEE HAS RECEIVED CONTR ACTUAL PAYMENTS OF RS.7,10,760/- DURING THE RELEVANT YEAR. THE INDIAN STATISTICAL I NSTITUTE INFORMED THE AO THAT CONTRACTUAL RECEIPTS OF RS.3,37,391/- PERTAINED TO THE PRECEDING YEAR. THE AO THEN ADDED THE CASH DEPOSITS OF RS.10,07,925/- AND CHEQU E DEPOSITS OF RS.17,89,805/- IN THE PERSONAL CAPITAL ACCOUNT TO THE INCOME OF THE APPEL LANT. BEFORE THE LD. CIT(A), THE LD. AR CONTENDED THAT THE CASH DEPOSITS IN THE CAPITAL ACCOUNT ARE COVERED BY THE CASH WITHDRAWALS FROM THE UTI BANK. IT WAS ALSO CONTENDE D THAT ONLY THE PROFIT ELEMENT OF THE UNDISCLOSED CONTRACTUAL RECEIPTS SHOULD BE TAX ED. THE LD. AR SUBMITTED THAT THE CLAIM OF LOAN OF RS.,2,00,000/- FROM SHRI TAPAN CHA TTERJEE WAS NOT CORRECT AND THEN, 2 ADMITTED THAT THE ENTIRE CHEQUE DEPOSITS OF RS.17,8 9,805/- IN THE CAPITAL ACCOUNT ARE ACTUALLY UNDISCLOSED CONTRACTUAL RECEIPTS. IT WAS SUBMITTED THAT ONLY THE PROFIT ELEMENT ON SUCH CONTRACTUAL RECEIPTS SHOULD BE TAXED, AS EX PENSES WERE ALSO INCURRED FOR EARNING SUCH CONTRACTUAL RECEIPTS, WHICH ARE CLEARLY REFLEC TED BY CASH AND CHEQUE WITHDRAWALS IN THE PERSONAL CAPITAL ACCOUNT. THE LD. AR THEN O FFERED THAT NET PROFIT @ 8% ON UNDISCLOSED CONTRACTUAL RECEIPTS MAY BE TAXED. ON T HESE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) SENT THE MATTER TO THE AO FOR REMAND REP ORT. THE AO HAS REPORTED THAT THE ASSESSEE CHANGED THE EXPLANATION REGARDING SOURCE O F CASH DEPOSITS IN THE CAPITAL ACCOUNT. IT WAS CLAIMED DURING THE COURSE OF APPEL LATE PROCEEDINGS THAT THE CASH DEPOSITS WERE MADE OUT OF WITHDRAWALS FROM THE UTI BANK. BUT, THE ASSESSEE CLAIMED IN THE REMAND PROCEEDINGS THAT THE CASH DEPOSITS WE RE MADE OUT OF RECEIPTS FROM LORRY OWNED BY THE ASSESSEE. THE AO NOTED THAT SUCH CLAI M WAS NEITHER MADE AT THE ASSESSMENT STAGE NOR AT THE APPELLATE STAGE, MOREOV ER, THE RECEIPTS FROM LORRY WAS NEVER SHOWN IN THE INCOME TAX RETURN. THE AO FURTHER REPO RTED THAT TOTAL CHEQUE DEPOSITS IN THE CAPITAL ACCOUNT ACTUALLY AMOUNT TO RS.19,61,475 /-, AND NOT RS.17,89,805/- AS MENTIONED IN THE ASSESSMENT ORDER. SECONDLY, THE C ONTRACTUAL RECEIPTS FROM BARANAGAR MUNICIPALITY ARE ACTUALLY THE NET AMOUNTS, AND IF T HE TDS OF RS.25,308/- IS ALSO TAKEN INTO ACCOUNT , THE TOTAL UNDISCLOSED CONTRACTUAL RE CEIPTS SHOULD WORK OUT AT RS.19,86,783/-. IN APPEAL, THE LD. CIT(A) HAS OBSE RVED AS UNDER : IN RESPONSE TO THE REMAND REPORT, THE LD. AR REITE RATED THAT THE ENTIRE CHEQUE DEPOSITS DO NOT REPRESENT UNDISCLOSED CONTRACTUAL RECEIPTS, AND, THAT IT ALSO INCLUDES ADVANCE OF RS.9,87,170/- AND LOAN OF RS.2,00,000/-. CONFIRMATI ONS IN THIS REGARD WERE FILED. BUT, THESE CONFIRMATIONS WERE NEITHER FILED AT THE ASSES SMENT STAGE NOR IN THE REMAND PROCEEDINGS. THE AO HAS HAD NO OPPORTUNITY TO VERIF Y THEM. THE APPELLANT COULD NOT EXPLAIN AS TO WHY THE CONFIRMATIONS WERE NOT FILED DURING THE ASSESSMENT OR REMAND PROCEEDINGS. THE CONFIRMATIONS ARE THEREFORE INADMI SSIBLE AT THIS STAGE. UNDER THE CIRCUMSTANCES, I AM OF THE OPINION THAT THE TOTAL C HEQUE DEPOSITS OF RS.19,86,783/- REPRESENT UNDISCLOSED CONTRACTUAL RECEIPTS. HOWEVER , I FIND SUBSTANCE IN THE CONTENTION OF THE APPELLANT THAT THE ENTIRE CONTRACTUAL RECEIP TS CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE APPELLANT. THE RATIO LAID DOWN BY THE JURISDICTIONAL ITAT IN THE CASE OF ITO VS NAWADA INVESTMENT (P) LTD (ITA NO.280/KOL/20 08) ALSO SUPPORTS THE CONTENTION OF THE APPELLANT. I FIND THAT THE APE11ANT HAS DECL ARED CONTRACTUAL RECEIPTS OF RS.54,40,556/- IN THE RETURN, AND, SHOWN PROFIT OF RS.2,18,350/-. IT IS AN ESTABLISHED FACT THAT THERE ARE UNDISCLOSED CONTRACTUAL RECEIPTS, WH ICH ARE NOT SHOWN IN THE BOOKS OF ACCOUNT. THE APPELLANT HAS CLAIMED THAT EXPENSES WE RE INCURRED AGAINST SUCH CONTRACTUAL RECEIPTS, WHICH ARE ALSO NOT RECORDED I N THE BOOKS OF ACCOUNT. UNDER THE CIRCUMSTANCES, THE BOOKS OF ACCOUNT ARE NOT RELIABL E, AND, CORRECT PROFIT CANNOT BE DETERMINED FROM SUCH BOOKS. THE BOOK RESULTS SHOWN BY THE APPELLANT ARE ALSO NOT ACCEPTABLE. THE APPELLANT HAS HIMSELF OFFERED THAT NET PROFIT @8% ON UNDISCLOSED CONTRACTUAL RECEIPTS MAY BE TAXED. UNDER THE CIRCUM STANCES, IT WOULD BE REASONABLE TO APPLY NET PROFIT RATE OF 8% ON TOTAL CONTRACTUAL RE CEIPTS OF RS.74,27,339/- (DISCLOSED CONTRACTUAL RECEIPTS OF RS.54,40,556/- + UNDISCLOSE D CONTRACTUAL RECEIPTS OF RS.19,86,783/-). THE PROFIT THUS WORKS OUT TO RS.5, 94,187/-, AGAINST THE PROFIT OF 3 RS.2,18,350/- SHOWN BY THE APPELLANT IN THE RETURN. IN VIEW OF THE ABOVE, ADDITION OF RS.3,75,837/- ON ACCOUNT OF UNDISCLOSED PROFIT IS C ONFIRMED. GROUND NO. 2 IS PARTLY ALLOWED. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US, THE LD. D.R. R ELIED ON THE ORDER OF THE AO AND ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A). 4. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE LD. CI T(A) ACCEPTED THE CONTENTIONS OF THE ASSESSEE BY PLACING RELIANCE ON THE TRIBUNALS ORDE R IN THE CASE OF ITO VS. NAWADA INVESTMENT (P) LTD. ITA NO. 280/KOL/2008. WE ALSO FIND THAT THE LD. DR DID NOT CONTROVERT THE ABOVE FINDINGS OF THE LD. CIT(A) BY PRODUCING ANY COGENT MATERIAL/EVIDENCE AT THE TIME OF HEARING BEFORE US. SINCE THE ORDER OF THE LD. CIT(A) IS BASED ON THE FINDINGS OF THE ORDER OF THE ITAT CITE D SUPRA AND ALSO IN ABSENCE OF ANY CONTROVERTING MATERIAL PLACED BEFORE US BY THE LD. DR, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.6.2010 SD/- SD/- (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (# # # #) )) ) DATED : 30 TH JUNE, 2010 !23 %&45 %6! JD.(SR.P.S.) 1 / .%%7 87(9- COPY OF THE ORDER FORWARDED TO: 1. +, /APPELLANT - DCIT, CIRCLE-33, KOLKATA 2 SHRI HARAPRASAD BANERJEE, 46/7, BARUIPARA LANE, ALA MBAZAR, BARANAGAR, 24 PGS (N), KOLKATA-35 3. %1&/ THE CIT, 4. %1& ()/ THE CIT(A), 5. !?% .%& / DR, KOLKATA BENCHES, KOLKATA 7 .%/ TRUE COPY , 1&@/ BY ORDER , A '5 / DEPUTY REGISTRAR .