Sanjeeb Kumar Singh , Kolkata V. ACIT, Circle - 40, Kolkata , Kolkata

ITA 946/KOL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0401 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 09-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Section: 133A; 143(2)

Judgement Text

1 ITA NO. 946/KOL/2018 SANJEEB KUMAR SINGH. AY- 2013- 14 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( )BEFORE . , /AND . # . $ , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VAR KEY, JM] I.T.A. NO. 946/KOL/2018 ASSESSMENT YEAR: 2013-14 SANJEEB KUMAR SINGH (PAN: ALGPS1792L) VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-40, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 13.11.2019 DATE OF PRONOUNCEMENT 27.12.2019 FOR THE APPELLANT SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT SHRI SUPRIYO PAL, JCIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-12, KOLKATA DATED 06.03.2018 FOR AY 2013-14. 2. THE ASSESSEE HAS FILED FOLLOWING REVISED GROUNDS OF APPEAL: 1(A) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 14,15,000/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED DISCLOSED CASH RECEIPTS. B) FOR THAT THE LD. CIT(A) OUGHT TO HAVE GIVEN TELE SCOPING BENEFIT TO THE ABOVE MENTIONED INCOME OF RS. 14,15,000/- AGAINST THE INCOME OF RS. 45,00,000/- OFFERED DURING THE COURSE OF SURVEY. 2. (A) FOR THAT ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE, LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 3,36,00 0/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED UNDISCLOSED RENTAL INCOME. (B) FOR THAT THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE SAID INCOME OF RS. 3,36,000/- IS CHARGEABLE TO TAX UNDER THE HEAD' INCOME FROM HOUSE PROPERTY'. (C) FOR THAT THE LD. CIT(A) OUGHT TO HAVE GRANTED T HE BENEFIT OF STANDARD DEDUCTION @ 30% OF THE RENTAL INCOME AS PER SECTION 24(A) AGAINST T HE RENTAL INCOME OF RS. 3,36,000/- . 3. THE FIRST ISSUE INVOLVED IN THIS APPEAL OF ASSES SEE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.14,15,000/- ON ACC OUNT OF UNDISCLOSED CASH RECEIPTS AND ALSO NOT GIVING TELESCOPING BENEFIT TO THE ABOVE IN COME OF RA.14,15,000/- AGAINST THE INCOME OF RS.45,00,000/- OFFERED DURING THE COURSE OF SURVEY. 2 ITA NO. 946/KOL/2018 SANJEEB KUMAR SINGH. AY- 2013- 14 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE HAD F ILED RETURN OF INCOME ON 01.10.2013 DECLARING TOTAL INCOME AT RS.69,19,960/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND ASSESSEE WAS SERVED NOTICE U/S. 143(2) OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). A SURVEY OPERATION U/S. 133A OF THE ACT WAS CONDUCTED AT THE OFFICE PREMISES OF THE ASSESSEE ON 16.01.2013. DURING THE COURSE O F SURVEY, A DIARY WITH IDENTIFICATION NO SKS-5 WAS IMPOUNDED. THE AO RECORDED THE DEPOSITIO N OF THE ASSESSEE. IN PAGE NO. 6 OF THE SAID IMPOUNDED BOOK FOLLOWING ENTRY WAS FOUND R ECORDED: 31.10.11 CASH RS.8,00,000.00 07.04.11 CH. NO.00817101 RS.7,00,000.00 06.02.12 CHEQUE. MANGAL SINGH RS.5,00,000.00 11.02.12 CHEUE. KAMALA DEVI RS. 2,00,000.00 18.06.12 DADA RS.14,15,000.00 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS ASKED TO EXPLAIN THE NOTING ON THE DIARY. FROM THE REPLY OF THE ASSESSEE, THE AO GOT CONVINCED ABOUT THE FIRST FOUR ENTRIES AFTER THOSE FIGURE COULD BE TALLIED WITH BO OKS OF ACCOUNTS OF THE ASSESSEE, BUT THE LAST ENTRY OF RS.14,15,000/- COULD NOT FIND MENTION IN ANY OF THE CASH BOOKS (TWO PROPRIETORSHIP CONCERNS AND OF THE BUSINESS OF TRANSPORT). AFTER C ONSIDERING THE REPLY OF THE ASSESSEE, ACCORDING TO AO, THE ASSESSEE INITIALLY HAS TRIED T O EXPLAIN THAT THE DIARY BELONGS TO A STAFF WHO WAS MAINTAINING RECORDS FOR THE ASSESSEE AND WA S ALSO HAVING HIS OWN BUSINESS. THEREAFTER, THE ASSESSEE ALSO STATED THAT THIS AMOU NT OF RS.14,15,000/- WAS MOST PROBABLY COLLECTION FROM TRANSPORT RECEIPT WHICH HAS BEEN DE CLARED AND INCLUDED IN THE P&L ACCOUNT. ACCORDING TO AO, THE ABOVE EXPLANATION OF THE ASSES SEE IS NOTHING BUT A WEAK ENDEAVOR TO COVER UP THE UNDISCLOSED RECEIPT IN THE DISGUISE OF TRANSPORT RECEIPT AND AGAINST THIS RECEIPT TOO, INITIALLY HE TRIED TO STATE THAT THE ENTRY REL ATES TO THE BUSINESS OF THE EMPLOYEE. SO, THE AO CONSIDERED THE ABOVE SUM OF RS.14,15,000/- AS UN DISCLOSED RECEIPT OF THE ASSESSEE AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. AG GRIEVED, ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF AO BY OB SERVING THAT THE ASSESSEE HAS NOT SUBMITTED ANY PROOF OR DOCUMENTS WHATSOEVER TO SUBS TANTIATE HIS CLAIM THAT THE AMOUNT WAS ALREADY INCLUDED IN ITS ACCOUNTS. ACCORDING TO LD. CIT(A), AN UNSUBSTANTIATED STATEMENT HAS NO VALUE AND IT CANNOT BE SAID THAT THE ASSESSE E HAS DISCHARGED HIS ONUS. SO, HE CONFIRMED THE ACTION OF AO. AGGRIEVED, ASSESSEE IS BEFORE US. 3 ITA NO. 946/KOL/2018 SANJEEB KUMAR SINGH. AY- 2013- 14 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT DURING THE SURVEY U/S. 133A OF THE ACT ON 16.01.2013, THE ASSESSEE HAD OFFERED RS.95 LACS AS HIS UNDISCLOSED INCOME WHICH HAS BEEN FOUND DEPOSITED IN THE INDIAN BANK. HE HAD OFFERED THIS AMOUNT IN FOUR ASSESSMENT YEARS AND FOR THIS ASSESSMENT YEAR I.E. AY 2013-14 HE HAD OFFERED RS.45 LACS WHILE ANSWERIN G QUESTION NO. 5 DURING SURVEY. THE MAIN PLEA OF THE LD. AR IS THAT SINCE THE DIARY IMP OUNDED DURING THE SURVEY HAD FIVE ENTRIES AND THE ASSESSEE WAS ABLE TO CONVINCE THE AO IN RES PECT OF THE FOUR ENTRIES WHICH TALLIED WITH THE CASH BOOK MAINTAINED BY THE ASSESSEE, THE ONLY REMAINING ENTRY WHICH NEED TO BE EXPLAINED WAS DATED 18.06.2012 WHEREIN AN AMOUNT OF RS.14,15,000/- HAS BEEN RECORDED. ACCORDING TO LD. AR, SINCE THE ASSESSEE DURING SUR VEY HAS OFFERED RS. 45 LACS AS LUMP-SUM FOR THIS ASSESSMENT YEAR AS UNDISCLOSED INCOME FROM TRANSPORTATION BUSINESS, THIS AMOUNT OF RS.14,50,000/-HAS TO BE TELESCOPED WITH THE OVERALL DECLARATION OF RS.45 LACS AND HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN TH E CASE OF ANANTHARAM VEERASINGHAIAH & CO VS. CIT REPORTED IN 123 ITR 457 WHICH WAS FOLL OWED BY THE HON'BLE BOMBAY HIGH COURT & PUNJAB & HARYANA HIGH COURT IN THE CASES OF CIT VS. JAWANMAL GEMAJI GANDHI REPORTED IN 151 ITR 353 AND CIT VS. PREM CHAND JAIN REPORTED IN 189 ITR 320 RESPECTIVELY WHEREIN IT WAS HELD AS FOLLOWS: 8. THERE CAN BE NO ESCAPE FROM THE PROPOSITION THA T THE SECRET PROFITS OR UNDISCLOSED INCOME OF AN ASSESSEE EARNED IN AN EARLIER ASSESSMENT YEAR MA Y CONSTITUTE A FUND, EVEN THOUGH CONCEALED, FROM WHICH THE ASSESSEE MAY DRAW SUBSEQUENTLY FOR M EETING EXPENDITURE OR INTRODUCING AMOUNTS IN HIS ACCOUNT BOOKS. BUT IT IS QUITE ANOTHER THING TO SAY THAT ANY PART OF THAT FUND MUST NECESSARILY BE REGARDED AS THE SOURCE OF UNEXPLAINE D EXPENDITURE INCURRED OR OF CASH CREDITS RECORDED DURING A SUBSEQUENT ASSESSMENT YEAR. THE M ERE AVAILABILITY OF SUCH A FUND CANNOT, IN ALL CASES, IMPLY THAT THE ASSESSEE HAS NOT EARNED FURTH ER SECRET PROFITS DURING THE RELEVANT ASSESSMENT YEAR. NEITHER LAW NOR HUMAN EXPERIENCE GUARANTEES T HAT AN ASSESSEE WHO HAS BEEN DISHONEST IN ONE ASSESSMENT YEAR IS BOUND TO BE HONEST IN A SUBS EQUENT ASSESSMENT YEAR. IT IS A MATTER FOR CONSIDERATION BY THE TAXING AUTHORITY IN EACH CASE WHETHER THE UNEXPLAINED CASH DEFICITS AND THE CASH CREDITS CAN BE REASONABLY ATTRIBUTED TO A PRE- EXISTING FUND OF CONCEALED PROFITS OR THEY ARE REASONABLY EXPLAINED BY REFERENCE TO CONCEALED INCO ME EARNED IN THAT VERY YEAR. IN EACH CASE THE TRUE NATURE OF THE CASH DEFICIT AND THE CASH CREDIT MUST BE ASCERTAINED FROM AN OVEALL CONSIDERATION OF THE PARTICULAR FACTS AND CIRCUMSTA NCES OF THE CASE. EVIDENCE MAY EXIST TO SHOW THAT RELIANCE CANNOT BE PLACED COMPLETELY ON THE AV AILABILITY OF A PREVIOUSLY EARNED UNDISCLOSED INCOME. A NUMBER OF CIRCUMSTANCES OF VITAL SIGNIFIC ANCE MAY POINT TO THE CONCLUSION THAT THE CASH DEFICIT OR CASH CREDIT CANNOT REASONABLY BE RELATED TO THE AMOUNT COVERED BY THE INTANGIBLE ADDITION BUT MUST BE REGARDED AS POINTING TO THE RE CEIPT OF UNDISCLOSED INCOME EARNED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. 6. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR AND RELYING ON THE DECISION OF ANANTHARAM VEERASINGHAIAH & CO. AND OTHER CASE LAWS (CITED SUPRA), WE NOTE THAT SINCE THE 4 ITA NO. 946/KOL/2018 SANJEEB KUMAR SINGH. AY- 2013- 14 ASSESSEE DURING SURVEY OPERATION ON 16.01.2013 HAD ALREADY OFFERED UNDISCLOSED INCOME OF RS.95 LACS WHICH INCLUDES RS.45 LACS FOR THIS ASSE SSMENT YEAR AND SINCE ALL OTHER ENTRIES FOUND IN THE DIARY SKS-5 HAS ALREADY BEEN TALLIED W ITH THE CASH BOOK, WE ARE OF THE OPINION THAT THE ASSESSEE HAS BEEN ABLE TO GIVE A PLAUSIBLE EXPLANATION TO THIS AMOUNT OF RS.14,50,000/- DATED 18.06.2012 SINCE THIS AMOUNT I S ENTERED IN THE CASH BOOK PRIOR TO SURVEY AND THIS AMOUNT GET SUBSUMED IN THE RS.45 LA KHS SURRENDERED BY THE ASSESSEE FOR THIS ASSESSMENT YEAR. THEREFORE, NO OTHER ADDITION WAS W ARRANTED AND WE DELETE THE ADDITION OF RS.14,50,000/-. THEREFORE, THIS GROUND OF APPEAL O F ASSESSEE IS ALLOWED. 7. THE SECOND ISSUE INVOLVED IN THIS APPEAL OF ASSE SSEE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.3,36,000/- ON ACCOUNT OF UNDISCLOSED RENTAL INCOME. 8. BRIEFLY STATED FACTS ARE THAT DURING THE SURVEY OPERATION U/S. 133A OF THE ACT, A MONTHLY RECEIPT OF RENT OF RS.28,000/- WAS FOUND A ND THE ASSESSEE WAS QUESTIONED AS TO WHETHER THIS AMOUNT WAS SHOWN AS INCOME IN HIS P&L ACCOUNT. THE ASSESSEE HAD STATED THAT THIS AMOUNT WAS INCLUDED IN HIS INCOME UNDER T HE HEAD TRUCK BROKERAGE. DURING THE SCRUTINY PROCEEDINGS, THE ASSESSEE FURTHER EXPLAINE D THAT THE ASSESSEES BUSINESS CONSISTS OF BUSINESS OF TRANSPORT AND TRUCK HIRE CHARGES AND TR UCK PARKING AND THAT THE ASSESSEE HAS ONE GARAGE AT DANKUNI FROM WHICH HE HAD RECEIVED PARKIN G CHARGES FROM TWO PARTIES AGGREGATING TO RS.28,000/- PER MONTH. THE SAID REC EIPTS OF RS.3,36,000/- IS INCLUDED IN THE TRANSPORT RECEIPT CREDITED IN HIS PERSONAL P&L ACCO UNT AMOUNTING TO RS.16 LACS. THEREFORE, ACCORDING TO AO, IT TRANSPIRES THAT THE ASSESSEE DO ES NOT MAINTAIN ANY BOOKS OF ACCOUNTS IN RESPECT OF THIS BUSINESS AND THE QUESTION OF SHOWIN G RENTAL INCOME, WHICH THE ASSESSEE CLAIMED TO BE THE PARKING CHARGES, DOES NOT ARISE I N THIS CASE AS THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNTS. ACCORDING TO AO, A S THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF INCOME IN RESPECT OF TRANSPORT BUSINESS, T HERE IS NO SCOPE OF VERIFYING THE SAME SO, HE CONSIDERED THAT THE ASSESSEE HAD NOT SHOWN THIS RENTAL INCOME OF RS.3,36,000/- IN HIS INCOME. THEREFORE, HE ADDED BACK THE SAID SUM OF R S.3,36,000/- TO HIS TOTAL INCOME. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF AO. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE HAD RECEIVED RENTAL INCOME OF RS.3,36,000/- IN THIS 5 ITA NO. 946/KOL/2018 SANJEEB KUMAR SINGH. AY- 2013- 14 ASSESSMENT YEAR WHICH HAS BEEN RIGHTLY TAXED BY THE AO. HOWEVER THE ONLY LIMITED PRAYER OF THE LD. AR IS THAT THE STANDARD DEDUCTION ON THE RENTAL INCOME SHOULD BE GRANTED. NEEDLESS TO SAY, SINCE THIS AMOUNT IS ON ACCOUNT OF RENTAL INCOME, THEN STANDARD DEDUCTION NEEDS TO BE GRANTED TO THE ASSESSEE AND THE AO IS D IRECTED TO DO SO IN ACCORDANCE TO LAW. SO, THIS GROUND OF APPEAL OF ASSESSEE IS PARTLY ALLOWED . 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH DEC EMBER, 2019. SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27TH DECEMBER, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI SANJEEB KUMAR SINGH, C/O SUBASH AGARWAL & ASSOCIATES,SIDDHA GIBSON, 1, GIBSON LANE, SUITE-213 , 2 ND FLOOR, KOLKATA- 700 069. 2 RESPONDENT ACIT, CIRCLE-40, KOLKATA. 3. 4. 5. CIT(A)-12, KOLKATA. (SENT THROUGH E-MAIL) CIT, KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR