Siddhartha Dasgupta, Kolkata V. ACIT, CIR-25, KOLKATA, Kolkata

ITA 921/KOL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7988 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 02-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: MANISH TIWARI
• Keywords: Competent authority
• Section: 143(3); 142(1); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA D BENCH, KOLKATA (BEFORE SRI S.S. GODARA, JUDICIAL MEMBER & SRI M. BALAGANESH, ACCOUNTANT MEMBER) ITA NO. 921/KOL/2016 ASSESSMENT YEAR: 2011-12 SIDDHARTHA DASGUPTA......................................................APPELLANT A/2, 10 CENTRAL PARK JADAVPUR KOLKATA 700 032 [PAN : ADKPD 9923 G] VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-52/NOW CIRCLE-25, KOLKATA........RESPONDENT APPEARANCES BY: SHRI MANISH TIWARI, FCA, APPEARED ON BEHALF OF THE ASSESSEE . SMT. RANU BISWAS, ADDL. CIT D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 27 TH , 2018 DATE OF PRONOUNCING THE ORDER : JANUARY 1 ST , 2019 ORDER PER BENCH :- THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -7, KOLKATA, (HEREINAFTER REFERRED TO AS THE LD. CIT(A)), DATED 25/05/2016, ARISING OUT THE ASSESSMENT ORDER OF THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE LD. AO), DT. 28/03/2014, PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), RELATING TO ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET, WE FIND THAT THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND BEFORE US STATING THAT THE NOTICE U/S 143(2) OF THE ACT, WAS NOT ISSUED BY THE COMPETENT AUTHORITY. AT THE TIME OF HEARING, WE FIND THAT NO ARGUMENTS WERE ADVANCED BY THE LD. A/R WITH REGARD TO THIS GROUND. BUT FROM THE ASSESSMENT ORDER, WE FIND THAT NOTICE U/S 143(2) AND 142(1) OF THE ACT, WERE INDEED ISSUED AND SERVED ON THE ASSESSEE. HENCE WE DISMISS THIS ADDITIONAL GROUND RAISED BY THE ASSESSEE ON THE NON ISSUANCE OF NOTICE U/S 143(2) OF THE ACT, BY THE COMPETENT AUTHORITY. 3. THE ONLY GROUND TO BE DECIDED IN THIS APPEAL AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE IN THE SUM OF RS.5,69,85,205/- TOWARDS CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING COMMISSION INCOME FROM NETWORKING I.E. THROUGH UNIPAY 2U MARKETING PVT. LTD.. THE ASSESSEE 2 ITA NO. 921/KOL/2016 ASSESSMENT YEAR: 2011-12 SIDDHARTHA DASGUPTA PLEADED THAT IT IS AN INDEPENDENT DISTRIBUTOR OF THE SAID COMPANY. IT WAS PLEADED THAT THE SAID COMPANY HAD LAUNCHED ITS WEB BASED BUSINESS IN INDIA, IN THE FORM OF NETWORK MARKETING OR DIRECT SELLING. THE ASSESSEE IS AN INDEPENDENT DISTRIBUTOR WITHIN THE STIPULATED TERMS AND CONDITIONS VIDE LETTER DT. 02/05/2009, ISSUED BY THE PRINCIPAL COMPANY I.E., UNIPAY 2U MARKETING PVT. LTD.. THE LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DEPOSITED CASH IN THE TOTAL SUM OF RS.5,69,85,205/- IN THREE DIFFERENT AXIS BANK ACCOUNTS AS UNDER:- CUST ID NAME PAN NAME OF THE BANK ACCOUNT NO. AMOUNT (RS.) 255007633 SIDDHARTHA DAS GUPTA ADKPD9923G AXIS BANK 255010100062718 3,01,40,605/- 255007633 SIDDHARTHA DAS GUPTA (JOINT) ADKPD9923G AXIS BANK 25501100068891 83,36,200/- 835706370 SIDDHARTHA DAS GUPTA ADKPD9923G AXIS BANK 910010028040935 1,85,08,400/- TOTAL AMOUNT RS. 5,69,85,205/- WHEN ASKED ABOUT THE SOURCE OF THESE DEPOSITS IN AXIS BANK ACCOUNTS, THE ASSESSEE EXPLAINED THAT HE EARNED COMMISSION OF RS.1,29,76,599/-, FROM THE PRINCIPAL COMPANY AGAINST BUSINESS DEVELOPMENT AND SUBSTANTIAL COLLECTION OF DEPOSITS FROM MEMBERS/INVESTORS. THE SAID RECEIPT WAS DULY SUBJECTED TO DEDUCTION OF TAX AT SOURCE TO THE TUNE OF RS.12,97,705/-. IT WAS PLEADED THAT THE ASSESSEE WAS AUTHORISED BY THE PRINCIPAL COMPANY VIDE LETTER DT. 02/05/2009, TO RECEIVE CASH/CHEQUES, DEMAND DRAFTS FROM THE DEPOSITORS ON BEHALF OF THE COMPANY. THE RELEVANT TERMS AND CONDITIONS STIPULATED IN THE SAID LETTER ARE REPRODUCED HEREIN. 1. HE WOULD BE COLLECTING THE DEPOSITS FROM OTHER MEMBERS/DEPOSITORS IN THE FORM OF INVESTMENT TO THE PRINCIPAL COMPANY. 2. HE WAS NOT AUTHORIZED TO ISSUE ANY RECEIPTS OR ACKNOWLEDGEMENTS AGAINST THOSE DEPOSITS. 3. THE COMPANY WOULD RECEIVE THE COLLECTED DEPOSITS FROM THE ASSESSEE AS PER THEIR CONVENIENCE AND TIME, THROUGH VARIOUS FORMS AND MODES FROM TIME TO TIME. 4. THE ACKNOWLEDGMENT/CERTIFICATE OF THE DEPOSITS WOULD BE ISSUED DIRECTLY BY THE PRINCIPAL COMPANY TO THE DEPOSITORS/INVESTORS. 3.1.1. ACCORDINGLY, MANY DEPOSITORS/MEMBERS, WHO PARTICIPATED IN THE SCHEME INVESTED FROM FUNDS DIRECTLY OR INDIRECTLY TO THE ASSESSEES BANK ACCOUNT FROM DIFFERENT PARTS OF INDIA. 3 ITA NO. 921/KOL/2016 ASSESSMENT YEAR: 2011-12 SIDDHARTHA DASGUPTA 3.2. IT WAS PLEADED THAT THE MONEY COLLECTED IN VARIOUS MODES INCLUDING DIRECT CASH DEPOSITS INTO AXIS BANK ACCOUNTS BY THE DEPOSITORS FOR AND ON BEHALF OF THE PRINCIPAL COMPANY I.E., UNIPAY 2U MARKETING PVT. LTD., ARE NOT INCOME OF THE ASSESSEE. ACCORDINGLY, IT WAS PLEADED THAT THE PROVISIONS OF SECTION 68 OF THE ACT, CANNOT BE MADE APPLICABLE IN THE INSTANT CASE. THE LD. ASSESSING OFFICER, HOWEVER, DISREGARDED THESE CONTENTIONS AND HELD THAT NO EXPLANATION/SATISFACTORY EXPLANATION WAS ADDUCED BY THE ASSESSEE EXPLAINING THE SOURCE OF DEPOSITS IN THE BANK ACCOUNTS AND ACCORDINGLY PROCEEDED TO MAKE ADDITION OF RS.5,69,85,205/-, AS UNEXPLAINED CASH U/S 68 OF THE ACT. THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HOLD THAT IT IS THE PRIMARY RESPONSIBILITY OF THE ASSESSEE TO FURNISH THE CONFIRMATION FROM THESE PARTIES WHO HAD PAID MONIES TO THE ASSESSEE FOR ONWARD TRANSMISSION OF THE SAME TO THE PRINCIPAL COMPANY I.E., UNIPAY 2U MARKETING PVT. LTD., TO DRIVE HOME AND PROVE THE FACT CONCLUSIVELY THAT THE ASSESSEE HAD RECEIVED THOSE MONIES ONLY FOR AND ON BEHALF OF THE PRINCIPAL COMPANY AND NOT ON HIS INDIVIDUAL BEHALF. WE FIND THAT THE LD. CIT(A) HAS UPHELD THE ACTIONS OF THE LD. ASSESSING OFFICER BY HOLDING AS UNDER:- 3.2 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT BUT DO NOT FIND ANY FORCE IN THE ARGUMENT. ACCORDING TO THE APPELLANT, THE APPELLANT HAS SUBMITTED THE DETAILS VIDE LETTER DATED 28.03.2014 AND THE AO PASSED THE ASSESSMENT ORDER WITHOUT CONSIDERING THE SUBMISSIONS MADE IN HIS LETTER CITED. ON VERIFICATION OF THE ASSESSMENT ORDER IT WAS NOTICED THAT THE ASSESSMENT ORDER WAS PASSED ON 28.3.2014 AND THERE WAS NO OCCASION TO EXAMINE THE CONTENTS OF THE LETTER. I HAVE EXAMINED THE COPY' OF THE LETTER PLACED BEFORE ME AND DIRECTED THE APPELLANT TO PRODUCE ANY EVIDENCE TO EXPLAIN THE SOURCE OF DEPOSITS MADE IN THE BANK ACCOUNTS WITH NAMES AND ADDRESSES OF THE PERSONS AND ALSO THE CONFIRMATIONS FROM THE PERSONS WHO MADE THE DEPOSITS IN THE BANK ACCOUNT. I ALSO DIRECTED THE APPELLANT TO FURNISH THE CONFIRMATIONS FROM THE AGENTS AND SUB-AGENTS WHO COLLECTED THE MONEY WITH NAMES AND ADDRESSES OF THE PERSONS FROM THE MONIES WERE COLLECTED. BUT TILL DATE THE APPELLANT DID NOT FURNISH ANY DETAILS TO EXPLAIN THE SOURCE OF DEPOSITS MADE IN THE BANK ACCOUNTS. I ALSO DIRECTED THE APPELLANT TO FURNISH THE DETAILS FROM THE PRINCIPAL COMPANY TO WHOM THE MONEY WAS REMITTED TO SHOW THAT THE MONEY WAS REMITTED IN RESPECT OF THE INDIVIDUALS WHO MADE THE DEPOSITS. THE APPELLANT FAILED TO FURNISH ANY SUCH INFORMATION. IN THE CIRCUMSTANCES I HAVE NO OPTION EXCEPT TO AGREE WITH THE AO TO HOLD THAT THE DEPOSITS WERE MADE FROM THE UNEXPLAINED SOURCES. HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF SUSHIL MODI V. COMMISSIONER OF INCOME-TAX. CENTRAL-II. [2015] 59 TAXMANN.COM 63 (CALCUTTA) HELD THAT IN THE ABSENCE OF ANY PROOF WITH REGARD TO CASH DEPOSITED IN ASSESSEE'S SAVING BANK ACCOUNT. ASSESSING OFFICER WAS JUSTIFIED IN INVOKING PROVISIONS OF SECTION 69. HOWEVER, THE AO HAS MADE THE ADDITION U/S 68 INSTEAD OF SECTION 69. THE APPELLANT ALSO IN HIS SUBMISSION FILED 4 ITA NO. 921/KOL/2016 ASSESSMENT YEAR: 2011-12 SIDDHARTHA DASGUPTA BEFORE ME AGREED THAT THE ADDITION SHOULD BE MADE U/S 69 OF IT ACT. ACCORDINGLY I CONFIRM THE ADDITION MADE BY THE AO AMOUNTING TO RS.5,69,85,20S/- U/S 69 OF THE IT ACT. THIS GROUND OF APPEAL IS DISMISSED. 5.1. FROM THE ABOVE IT CAN BE SEEN THAT THE ASSESSEE HAD NOT EXPLAINED THE SOURCE OF DEPOSITS MADE IN THE BANK ACCOUNT WITH ANY EVIDENCES. THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE EVEN FROM UNIPAY 2U MARKETING PVT. LTD., TO PROVE THE FACT THAT THE ASSESSEE HAD COLLECTED THESE MONIES TO THE TUNE OF RS.5,69,85,205/-, ONLY ON BEHALF OF THE SAID PRINCIPAL COMPANY. HENCE IT CAN BE SAFELY CONCLUDED THAT THE ASSESSEE HAS NOT DISCHARGED HIS PRIMARY ONUS OF PROVING THE IDENTITY AND CREDITWORTHINESS OF THE VARIOUS ALLEGED PARTIES AND GENUINENESS OF THE TRANSACTIONS SO AS TO FALL OUTSIDE THE KEN OF PROVISION OF SECTION 68 OF THE ACT. HENCE, WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY DISMISSED THE CASE OF THE ASSESSEE, WHICH IN OUR CONSIDERED OPINION DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED. KOLKATA, THE 1 ST DAY OF JANUARY, 2019. SD/- SD/- [S.S. GODARA] [ M. BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.01.2019 {SC SPS} 5 ITA NO. 921/KOL/2016 ASSESSMENT YEAR: 2011-12 SIDDHARTHA DASGUPTA COPY OF THE ORDER FORWARDED TO: 1. SIDDHARTHA DASGUPTA A/2, 10 CENTRAL PARK JADAVPUR KOLKATA 700 032 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-52/NOW CIRCLE-25, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES