Kush Mishra , Kolkata V. D.C.I.T.,Circle-45, Kolkata

ITA 842/KOL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4779 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 1990-1991
• Appeal Filed On: 18-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 201; 143(2)

Judgement Text

ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NOS. 842 & 843/KOL/2019 ASSESSMENT YEAR: 1990-1991 & 1991-1992 KUSH MISHRA,....................................... ......................................APPELLANT C/O. SRI JAY SHANKAR TEXTILES, 200, M.G. ROAD, KOLKATA-700007 [PAN: AEYPM8981J] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,,................ .....................RESPONDENT CIRCLE-45, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 APPEARANCES BY: SHRI ANIL KOCHAR, ADVOCATE, FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, SR. D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : SEPTEMBER 18, 201 9 DATE OF PRONOUNCING THE ORDER : NOVEMBER 06, 2019 O R D E R THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- 13, KOLKATA, BOTH DATED 29.03.2019 FOR ASSESSMENT Y EARS 1990-91 AND 1991-92 AND SINCE SOME OF THE ISSUES INVOLVED THERE IN ARE COMMON, THE SAME HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSE D OF BY A SINGLE CONSOLIDATED ORDER. 2. FIRST WE SHALL TAKE UP THE ASSESSEES APPEAL FOR A.Y. 1990-91 BEING ITA NO. 842/KOL/2019 , IN WHICH THE FOLLOWING GROUNDS ARE RAISED:- (1) FOR THAT THE ORDERS PASSED BY THE LOWER AUTHORI TIES ARE ARBITRARY, ERRONEOUS, WITHOUT PROPER REASONS, ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 2 INVALID AND BAD-IN-LAW, TO THE EXTENT TO WHICH THEY ARE PREJUDICIAL TO THE INTEREST OF THE APPELLANT. (2) FOR THAT THE ORDER PASSED U/S147/143(3)/254 BY THE AO ON 31.12.2009 OUGHT NOT TO HAVE BEEN CONFIRMED B Y THE LD. CIT(A) IN VIEW OF THE FACT THAT NO NOTICE U /S 143(2) WAS EVER ISSUED. (3) FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.25,000/- MADE BY THE AO ON ESTIMAT4E ON ACCOUNT OF ALLEGED RECEIPTS FROM EXCHANGE OF OLD NO TES. (4) FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,80,520/- BY NOT PROPERLY APPRECIAT ING THE DETAILS AND EVIDENCES SUBMITTED. 3. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED GROUNDS NO. 1 & 2 RAISED I N THE APPEAL OF THE ASSESSEE. THE SAME ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 4. APROPOS THE ISSUE RAISED IN GROUND NO. 3 RELATIN G TO THE ADDITION OF RS.25,000/- MADE BY THE ASSESSING OFFICER AND CONFI RMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF ASSESSEES ESTIMATED INC OME FROM THE ACTIVITY OF EXCHANGE OF TORN OUT AND SOILED INDIAN CURRENCY NOTES, THE RELEVANT FACTS ARE THAT A SEARCH WAS CONDUCTED BY THE OFFICE RS OF THE DIRECTORATE OF REVENUE INTELLIGENCE AT THE ASSESSEES OFFICE PREMI SES ON 12.08.1989. DURING THE COURSE OF THE SAID SEARCH, CASH OF RS.2, 80,580/- WAS FOUND AND SEIZED. THE SAID CASH WAS SUBSEQUENTLY HANDED OVER TO THE DIRECTOR OF INCOME TAX (INVESTIGATION) IN TERMS OF WARRANT OF A UTHORISATION ISSUED UNDER SECTION 132(A) OF THE INCOME TAX ACT ON 13.03 .1990. WHILE EXPLAINING THE SAID CASH, ONE OF THE SOURCES STATED BY THE ASSESSEE WAS THAT HE WAS CARRYING ON THE BUSINESS OF EXCHANGE OF TORN OUT AND SOILED INDIAN CURRENCY NOTES AND FOR THE PURPOSE OF THE SA ID BUSINESS, HE WAS ALWAYS REQUIRED TO MAINTAIN SOME CASH. KEEPING IN V IEW THIS EXPLANATION OFFERED BY THE ASSESSEE IN THE PETITION FILED UNDER SECTION 132(5) OF THE ACT, THE ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE FROM THE BUSINESS OF EXCHANGE OF TORN OUT AND SOILED INDIAN CURRENCY AT ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 3 RS.25,000/- AND MADE ADDITION TO THAT EXTENT. ON AP PEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION. 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 NOT RAISED ANY MATERIA L CONTENTION TO DISPUTE THE ACTION OF THE AUTHORITIES BELOW IN ESTI MATING THE INCOME OF THE ASSESSEE FROM THE BUSINESS OF EXCHANGE OF TORN OUT AND SOILED INDIAN CURRENCY NOTES, HE HAS CONTENDED THAT THE ESTIMATE OF INCOME SO MADE AT RS.25,000/- IS ON HIGHER SIDE, WHICH MAY BE RESTRIC TED TO SOME REASONABLE AMOUNT. I AM UNABLE TO ACCEPT THIS CONTENTION OF TH E LD. COUNSEL FOR THE ASSESSEE. HE HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW AS TO HOW THE INCOME ESTIMATED BY THE ASSESSING OFFICER AT RS.25, 000/- IS EXCESSIVE OR UNREASONABLE. ON THE OTHER HAND, I FIND THAT SUCH E STIMATE MADE BY THE ASSESSING OFFICER AT RS.25,000/- IN THE FACTS AND C IRCUMSTANCES OF THE ASSESSEES CASE IS QUITE FAIR AND REASONABLE AND TH ERE IS NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) IN CONFI RMING THE SAME. I, THEREFORE, FIND NO MERIT IN GROUND NO. 3 OF THE ASS ESSEES APPEAL AND DISMISS THE SAME. 6. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 4, I T IS OBSERVED THAT THE CASH OF RS.2,80,520/- FOUND AND SEIZED DURING T HE COURSE OF SEARCH WAS EXPLAINED BY THE ASSESSEE AS UNDER:- (I) CASH BALANCE KEPT FOR THE BUSINESS OF EXCHANGE OF TORN OUT AND SOILED INDIAN CURRENCY NOTES RS.1,54,000/ - (II) CASH BELONGING TO HIS WIFE KEPT FOR THE PURPOSE OF BUSINESS RS. 79,500/ - (III) CASH BELONGING TO HIS CHILDREN RS. 47,020/ - ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 4 NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(APPEA LS) ACCEPTED THE ABOVE SOURCE EXPLAINED BY THE ASSESSEE IN THE ABSENCE OF ANY RELIABLE EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME AND ACCORDINGL Y A SUM OF RS.2,80,520/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH. 7. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT EVEN THOUGH THE EXPLANATION OF THE ASSESSEE REGARDI NG THE AVAILABILITY OF CASH WITH HIS WIFE AND CHILDREN WAS NOT SUPPORTED B Y ANY RELIABLE EVIDENCE, THE FACT THAT HE CARRIED ON THE BUSINESS OF EXCHANGE OF TORN OUT AND SOILED INDIAN CURRENCY NOTES, WAS SUFFICIENT TO SHOW THAT SOME AMOUNT OF CASH WAS REQUIRED TO BE MAINTAINED BY THE ASSESSEE FOR THE PURPOSE OF THE SAID BUSINESS. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE IN THIS REGARD, WHEN THE INCOME OF SUC H BUSINESS WAS ESTIMATED BY THE ASSESSING OFFICER AT RS.25,000/-, THERE WAS NO JUSTIFIABLE REASON TO NOT CONSIDER THE AVAILABILITY OF CASH, WH ICH THE ASSESSEE WAS REQUIRED TO MAINTAIN FOR THE PURPOSE OF THE SAID BU SINESS. IN MY OPINION, THE EXPLANATION OF THE ASSESSEE REGARDING THE AVAIL ABILITY OF SUCH CASH TO THE EXTENT OF RS.1,54,000/- CAN REASONABLY BE ACCEP TED KEEPING IN VIEW THE FACTUM OF THE BUSINESS CARRIED ON BY THE ASSESS EE AS WELL AS THE QUANTUM OF INCOME ESTIMATED BY THE ASSESSING OFFICE R. I ACCORDINGLY RESTRICT THE ADDITION OF RS.2,80,520/- MADE ON THIS ISSUE TO RS.1,26,520/- AND ALLOW PARTLY GROUND NO. 4 OF THE ASSESSEES APP EAL. 8. NOW I TAKE UP THE ASSESSEES APPEAL FOR A.Y. 199 1-92 BEING ITA NO. 843/KOL/2019 , GROUNDS NO. 1 & 2 OF WHICH, SIMILAR TO GROUNDS NO . 1 & 2 OF THE ASSESSEES APPEAL FOR A.Y. 1990-91, ARE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. THE SAME ARE ACCORDINGLY DISMISSED AS NOT PRESSED. ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 5 9. AS REGARDS GROUND NO. 3, IT IS OBSERVED THAT THE ISSUE INVOLVED THEREIN RELATING TO THE ADDITION OF RS.30,000/- MAD E BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON AC COUNT OF THE ESTIMATED INCOME OF THE ASSESSEE FROM THE BUSINESS OF EXCHANG E OF TORN OUT AND SOILED INDIAN CURRENCY NOTES IS SIMILAR TO THE ONE INVOLVED IN GROUND NO. 3 OF THE ASSESSEES APPEAL FOR A.Y. 1990-91, WHICH HAS ALREADY BEEN DECIDED BY ME IN THE FOREGOING PORTION OF THIS ORDE R. FOLLOWING MY CONCLUSION DRAWN IN A.Y. 1990-91, I CONFIRM THE ADD ITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON THIS ISSUE. GROUND NO. 3 OF THE ASSESSEES APPEAL FOR A.Y. 1991 -92 IS ACCORDINGLY DISMISSED. 10. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 4 R ELATING TO THE ADDITION OF RS.3,24,000/- MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UNEXPLAINED GOLD BARS FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEE, IT IS O BSERVED THAT AS PER THE INFORMATION RECEIVED BY THE ASSESSING OFFICER, NINE PIECES OF GOLD BARS WERE SEIZED BY THE CUSTOMS AUTHORITY FROM THE ASSES SEE ON 08.06.1990. SINCE THE SEIZURE LIST WAS IN THE NAME OF ONE SHRI KRISHNA DEV DUBEY, THE ASSESSEE ARGUED THAT NINE PIECES OF GOLD BARS WERE NOT SEIZED FROM HIM. IN HIS STATEMENT RECORDED BY THE DRI IN THE COURSE OF SEARCH, THE ASSESSEE, HOWEVER, HAD STATED THAT HE WAS ENGAGED I N SMUGGLING OF GOLD. SIMILAR STATEMENT WAS ALSO MADE BY THE ASSESSEE EVE N BEFORE THE ENFORCEMENT DIRECTORATE. KEEPING IN VIEW THIS CATEG ORICAL STATEMENTS MADE BY THE ASSESSEE, THE STAND TAKEN BY THE ASSESS EE THAT HE WAS NOT ENGAGED IN SMUGGLING OF GOLD AND NINE PIECES OF GOL D BARS WERE NOT BELONGING TO HIM WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HE HELD THAT SHRI KRISHNA DEV DUBEY WAS ENGAGED BY THE ASSESSEE TO SMUGGLE GOLD ON HIS BEHALF AND CONSIDERING THE COST OF EACH BAR AT RS.36,000/-, ADDITION OF RS.3,24,000/- WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT M ADE IN GOLD BARS. ON ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 6 APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE. 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 CONTENDED THAT NINE PI ECES OF GOLD BARS HAVING BEEN SEIZED FROM SHRI KRISHNA DEV DUBEY AND NOT FROM THE ASSESSEE, THE ADDITION MADE BY THE ASSESSING OFFICE R AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UNEXPLAINED INVESTME NT MADE IN THE SAID BARS IS NOT SUSTAINABLE, I AM UNABLE TO ACCEPT THE SAME. AS RIGHTLY HELD BY THE ASSESSING OFFICER, THE ASSESSEE WAS ENGAGED IN SMUGGLING OF GOLD AS CATEGORICALLY ADMITTED BEFORE THE DIRECTORATE OF RE VENUE INTELLIGENCE (DRI) AS WELL AS THE ENFORCEMENT DIRECTORATE AND KE EPING IN VIEW THE SAME, THE ONLY CONCLUSION WHICH LOGICALLY FOLLOWED WAS THAT SHRI KRISHNA DEV DUBEY WAS ENGAGED BY THE ASSESSEE TO SMUGGLE GO LD ON HIS BEHALF AND NINE PIECES OF GOLD BARS SEIZED FROM SHRI KRISHNA D EV DUBEY WERE BELONGING TO THE ASSESSEE. I, THEREFORE, FIND NO IN FIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE ADDITI ON MADE BY THE ASSESSING OFFICER ON THIS ISSUE AND UPHOLDING THE S AME, I DISMISS GROUND NO. 4 OF THE ASSESSEES APPEAL. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A .Y. 1990-91 IS PARTLY ALLOWED, WHILE THE ASSESSEES APPEAL FOR A.Y . 1991-92 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 06, 2019. SD/- (P.M. JAGTAP) VICE-PRESIDENT KOLKATA, THE 6 TH DAY OF NOVEMBER, 2019 COPIES TO : (1) SHRI KUSH MISHRA, C/O. SRI JAY SHANKAR TEXTILES, 200, M.G. ROAD, KOLKATA-700007 ITA NOS. 842 & 843/KOL/2019 AS SESSMENT YEARS: 1990-1991 & 1991-1992 KUSH MISHRA 7 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-45, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLK ATA, (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.