Anandalok Medical Centre (P) Ltd., Darjeeling V. DCIT, CC-XXI, KOLKATA, Kolkata

ITSSA 147/KOL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3082 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER IT (SS) A NO. 147 / KOL / 2014 ASSESSMENT YEAR :2010-11 ANANDALOK MEDICAL CENTRE (P) LTD., SEVOKE ROAD, SILIGURI, DARJEELING-734 001 [ PAN NO.AADCA 8941 N ] V/S . DCIT, CENTRAL CIRCLE- XXI, /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SUBASH AGARWAL, ADVOCATE /BY RESPONDENT SHRI RAJAT SUBHRA BISWAS, CIT-DR /DATE OF HEARING 11-01-2017 /DATE OF PRONOUNCEMENT 23-02-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OU T OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, KOLKATA DA TED 10.09.2014. ASSESSMENT WAS FRAMED BY DCIT,CC-XXI, KOLKATA U/S 1 53A/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 31.03.2014 FOR ASSESSMENT YEAR 2010-11. ASSESSEE HA S RAISED FOLLOWING GROUNDS OF APPEAL:- 1. FOR THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE AO IN MAKING THE ADDITION OF RS.55,949/- ON ACCOUNT OF ALLEGED UNDI SCLOSED INTEREST INCOME. IT(SS)A NO.147/KOL/2014 A.Y. 2010-11 ANANDALOK MEDICAL CENTRE (P) LTD. VS. DCIT CC-XX I, KOL. PAG E 2 2. FOR THAT ON THE FACTS AND ON THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.6,99, 363/ MADE BY THE AO ON ACCOUNT OF THE ALLEGED UNDISCLOSED IN FIXED DEP OSITS. SHRI SUBASH AGARWAL, LD. ADVOCATE APPEARED ON BEHAL F OF ASSESSEE AND SHRI RAJAT SUBHRA BISWAS, LD. DEPARTMENTAL REPRESENTATIV E REPRESENTED ON BEHALF OF REVENUE. 2. AT THE OUTSET, IT WAS OBSERVED THAT THE ISSUE RA ISED IN BOTH GROUNDS OF APPEAL IS INTER-CONNECTED THEREFORE WE HAVE CLUBBED THEM TOGETHER FOR THE SAKE OF CONVENIENCE. THE INTER-CONNECTED ISSUE RAISED BY ASSESSEE IN THI S APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAINING THE ADDITION OF 55,949/- AND 6,99,363/- ON ACCOUNT OF UNDISCLOSED INTEREST AND UNDISCLOSED INVESTMENT IN FIXED DEPOSITS. 3. BRIEFLY, THE FACTS ARE THAT ASSESSEE A PRIVATE L IMITED COMPANY IS ENGAGED IN BUSINESS OF MEDICAL & DIAGNOSTIC CLINIC. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS SHOWN INTEREST ON FIXED DEP OSITS (FD) FOR 97,456.00 BUT IN THE ANNUAL INFORMATION REPORT (AIR FOR SHORT ) INTEREST INCOME WAS SHOWN FOR RS.1,53,407.00. ACCORDINGLY, THE AO OBSER VED THE DIFFERENCE OF INTEREST INCOME FOR 55,949/- WHICH WAS NOT DISCLOSED IN ASSESSEES RETU RN OF INCOME. THE ASSESSING OFFICER ALSO OBSERVED THAT TH E CORRESPONDING INVESTMENT IN FD ON INTEREST INCOME OF 55,949/- HAS ALSO NOT BEEN DISCLOSED BY ASSESSEE. ACCORDINGLY, AO WORKED OUT THE UNDISCL OSED INVESTMENT IN FD @ 8% ON THE UNDISCLOSED INTEREST INCOME OF 55,949/- WHICH WORKED OUT TO 6,99,363/- (55,949 X 100 8). THE AO CALLED UPON TH E ASSESSEE AND SOUGHT EXPLANATION FOR THE AFORESAID DIFFERENCE OF INTERES T INCOME AND UNDISCLOSED INVESTMENT. IN REPLY THERETO, THE ASSESSEE SUBMITTE D THAT THE INTEREST HAS BEEN OFFERED TO TAX ON ACCRUAL AND YEAR-TO-YEAR BASIS. T HE ASSESSEE, FURTHER SUBMITTED THAT IN THE IMMEDIATE PRECEDING ASSESSMEN T YEAR, THE INTEREST INCOME WERE SHOWN FOR 1,24,352/- BUT FOR THE SAME YEAR, THE INCOME WAS SHOWN IN AIR FOR 50,686/-. HOWEVER, AO DISREGARDED THE CLAIM OF ASSE SSEE AND TREATED THE UNDISCLOSED INTEREST INCOME FOR 55,949/- AND ITS IT(SS)A NO.147/KOL/2014 A.Y. 2010-11 ANANDALOK MEDICAL CENTRE (P) LTD. VS. DCIT CC-XX I, KOL. PAG E 3 CORRESPONDING INVESTMENT OF 6,99,363/- AS UNDISCLOSED INCOME AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT BANK HAS BEEN SHOWING INTEREST EXPENSE ON THE MATURITY OF FD. BUT THE ASSESSEE HAS BEEN SHOWING THE INTEREST INCOME ON ACCRUAL BASIS. THEREFORE, THE DI FFERENCE WAS OBSERVED NOT ONLY IN THE YEAR UNDER CONSIDERATION BUT ALSO IN TH E IMMEDIATE PRECEDING ASSESSMENT YEAR. THE ASSESSEE ALSO SUBMITTED THAT T HE AO HAS NOT BROUGHT ANY DEFECT IN ITS RETURN AND BOOKS OF ACCOUNT BUT H AS JUST RELIED ON THIRD PARTY INFORMATION. HOWEVER, LD. CIT(A) DISREGARDED THE CL AIM OF ASSESSEE BY OBSERVING AS UNDER:- 5. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND PERUSED THE ASSESSMENT ORDER. IT IS OBSERVED THAT ON FACTS THER E IS NO DISPUTE THAT THE AO HAD MADE ADDITION ON ACCOUNT OF INTEREST AND UNDISCLOSED INVESTMENT IN FDR ON THE BASIS OF THE INFORMATION S UBMITTED BY THE BANK IN AIR RETURN. HOWEVER, IT IS ALSO A FACT THAT THERE WAS DIFFERENCE IN THE AMOUNT OF INTEREST AS INFORMED BY THE BANK AND THE AMOUNT OF THE INTEREST SHOWN BY THE APPELLANT IN THE BOOKS OF ACC OUNT. IT IS OBSERVED THAT IN THE CURSE OF ASSESSMENT PROCEEDINGS, THE AO ALLOWED AN OPPORTUNITY TO THE APPELLANT TO EXPLAIN AND RECONCI LE THE DIFFERENCE IN THE INTEREST AS REPORTED BY THE BANK VIS-A-VIS CREDITED BY THE APPELLANT IN THE PROFIT AND LOSS ACCOUNT. IN RESPONSE, THE APPELLANT ONLY SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION THE ACCRUED INTEREST W AS RS.97,456/- BUT THE BANK HAD UPLOADED THE FIGURE OF RS.1,53,405/- W HICH INCLUDES LAST YEAR INTEREST AND THAT DURING ASSESSMENT YEAR 2009- 10, THE ACCRUED INTEREST CREDITED BY THE ASSESSEE WAS RS.1,24,352/- WHEREAS AS PER BANK IT WAS ONLY RS.50,686/-. THUS, IT IS OBSERVED THAT BEFORE THE AO THE ONLY CONTENTION OF THE APPELLANT WAS THAT IN THE YE AR UNDER CONSIDERATION BANK HAD INCLUDED THE INTEREST OF A.Y. 2009-10 AND IT HAD RESULTED INTO DIFFERENCE IN THE AMOUNT OF INTEREST AS PER THE BAN K AND AS PER THE APPELLANT. BUT, THE APPELLANT DID NOT SUBMIT ANY RE CONCILIATION STATEMENT ETC. EITHER BEFORE THE AO OR IN THE COURSE OF APPEL LATE PROCEEDINGS. I AM OF THE OPINION THAT EVEN IF THE CONTENTION OF THE A PPELLANT IS CONSIDERED THAT THE INTEREST OF RS.1,53,407/- AS REPORTED BY T HE BANK INCLUDES LAST YEARS INTEREST, EVEN THEN THE AMOUNT OF THE INTERE ST IS SNOT RECONCILED. I AM OF THE OPINION THAT THE ONUS WAS ON THE APPELLAN T TO SUBMIT THE COMPLETE YEAR-WISE RECONCILIATION OF FDR AND INTERE ST INCOME BEFORE THE AO. HOWEVER, THE APPELLANT HAS FAILED TO DISCHA RGE ITS ONUS CAST UPON HIM. THE APPELLANT SHOULD HAVE PROVEN BEFORE T HE AO THAT THE DIFFERENCE IN THE AMOUNT OF INTEREST WAS NOT DUE AN Y ADDITIONAL FDRS NOT RECORDED IN THE BOOKS OF ACCOUNT. UNDER THE CIR CUMSTANCES, I AM IT(SS)A NO.147/KOL/2014 A.Y. 2010-11 ANANDALOK MEDICAL CENTRE (P) LTD. VS. DCIT CC-XX I, KOL. PAG E 4 NOT INCLINED TO INTERFERE WITH THE VIEW TAKEN BY TH E AO AND THE ADDITIONS MADE BY HIM ON ACCOUNT OF INTEREST INCOME AND INVE STMENT IN FDRS ARE CONFIRMED. THE GROUND NO 1 AND 2 ARE DISMISSED. BEING AGGRIEVED BY THIS, ASSESSEE CAME IN SECOND AP PEAL BEFORE US. 5. LD. AR FOR THE ASSESSEE BEFORE US REITERATED SAM E SUBMISSIONS AS MADE BEFORE LD. CIT(A). LD. AR FILED PAPER BOOK WHI CH IS RUNNING PAGES 1 TO 52. ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW AND PRAYED BEFORE BENCH THAT THE ISSUE MAY BE RESTO RED TO THE FILE OF AO FOR FURTHER VERIFICATION. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INS TANT CASE RELATES TO THE MISMATCH IN THE INTEREST INCOME AND ITS CORRESPONDI NG INVESTMENT VIZ A VIZ THE INFORMATION GATHERED ON THE BASIS OF AIR. THE AO HA S TREATED THE SAME AS UNDISCLOSED INCOME OF ASSESSEE AND LD. CIT(A) HAS A LSO CONFIRMED THE ORDER OF AO. ON EXAMINATION OF ORDERS OF AUTHORITIES BELO W AND OTHER MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ADDITION HAS BEEN SOLELY MADE BY THE AUTHORITIES BELOW ON THE BASIS OF AIR AND NONE OF T HE AUTHORITIES BELOW HAS BROUGHT ON RECORD ANY DEFECT IN THE RETURN OF INCOM E FILED BY ASSESSEE AND OTHER DOCUMENTS. WE ALSO FIND THAT THE CLAIM OF ASS ESSEE THAT IT HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING HAS N OT BEEN ADJUDICATED BY THE AUTHORITIES BELOW. INDEED, THE DIFFERENCE WAS OBSER VED IN INTEREST INCOME BETWEEN AMOUNT SHOWN BY ASSESSEE AND REFLECTED IN T HE AIR. HOWEVER, NO OTHER MATERIAL HAS BEEN BROUGHT ON RECORD WITH REGA RD TO UNDISCLOSED INVESTMENT IN THE FDR BUT THE ADDITION HAS BEEN MAD E ON THE PREMISE OF AUTHORITIES BELOW. HOWEVER, THE INFORMATION GATHERE D FROM THE AIR CANNOT BE BRUSHED ASIDE THEREFORE, WE ARE OF THE VIEW THAT TH E ISSUE NEEDS TO BE RE- EXAMINED BY AO IN ACCORDANCE WITH THE LAW AND IN TH E LIGHT OF THE OBSERVATION AS DISCUSSED ABOVE. THEREFORE FOR THE LIMITED PURPO SE AS SET OUT ABOVE, THE MATTER STANDS RESTORED TO THE FILE OF AO. NEEDLESS TO ADD THAT ANY MATERIAL, ADVERSE TO THE ASSESSEE, WILL HAVE TO BE CONFRONTED TO THE ASSESSEE BY THE IT(SS)A NO.147/KOL/2014 A.Y. 2010-11 ANANDALOK MEDICAL CENTRE (P) LTD. VS. DCIT CC-XX I, KOL. PAG E 5 AO, AND THAT, IN CASE AO INTENDS TO PASS ANY FRESH ORDER AS A RESULT OF THESE DIRECTIONS, HE WILL DO SO ONLY AFTER GIVING DUE AND FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH THE LAW AND BY WAY OF A SPEAKING ORDER. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 23 /02/2017 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 23 / 02 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ANANDALOK MEDICAL CENTRE (P), LTD. SEVOK E ROAD, SILIGURI, DARJEELING-734 001 2. /RESPONDENT-DCIT, CENTRAL CIRCLE-XXI, KOLKATA 3. ) *+ , , - / CONCERNED CIT KOLKATA 4. , , -- / CIT (A) KOLKATA 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,