Sri Subrat Prasanna Mishra, Bhubaneswar V. ACIT, Bhubaneswar

ITSSA 18/CTK/2009

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7525 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 02-04-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 28-01-2009
• Court: TRIBUNAL
• Department Lawyers: P
• Keywords: Unexplained investment; Income from undisclosed sources; Assessment record; Capital receipt; Revised return
• Section: 80C; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM, AND SHRI K.S.S.PRASAD RAO, JM IT(SS)A NO. 18/ CTK / 2009 (A.Y. 2001 - 02 ) IT(SS)A N O . 19/ CTK/2009 (A.Y. 2002 - 03 ) IT(SS)A N O . 20/CTK /2009 ( A.Y. 2003 - 04 ) IT(SS)A N O . 66/CTK/2009 ( A.Y. 2004 - 05 ) IT(SS)A N O . 21/CTK/2009 ( A.Y. 2005 - 06 ) IT A NO. 200/ CTK / 2009 (A.Y. 2006 - 07 ) AND IT(SS)A. NO.100/CTK/2009 (A.Y. 2006 - 07) IT(SS)A100/CTK - 2009 FOR THE (A.Y. S RI SUBRAT PRASANNA MISHRA, 138, NILKANTHESWAR ROAD, BARAAMUNDA, BHUBANESWAR 751 003 PAN: ACMPM 7565 L VERSUS ASST.COMMISSIONER OF INCOME - TAX, WARD 1(2), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.S.PANDA/K.AGARWALA, ARS FOR THE RES PONDENT SMT. PARAMITA TRIPATHY, DR DATE OF HEARING : 02.04.2012 DATE OF PRONOUNCEMENT : 25.04.2012 ORDER PER BENCH : IT(SS)A NOS.18,19,20,.66,21/CTK/2009 AND ITA NO.200/CTK/2009 ARE APPEALS FILED BY THE ASSESSEE PERTAINING TO ASSESSMENTS MADE U/S.153A/143(3) OF THE I.T.ACT,1961 FOR THE AYS 2001 - 02,2001 - 03, 2003 - 04, 2004 - 05, 2005 - 06 AND U/S.143(3) FOR THE ASSESSMENT YEAR 2006 - 07 ,WHEREAS IT(SS)A NOS.100/CTK/2009 FILED BY THE ASSESSEE PERTAINING TO ORDER IMPOSING PENALTY U/S.271(1)(C) OF THE I.T .ACT, 1961 FOR THE ASSESSMENT YEAR 2006 - 07. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. WE FIRST TAKE UP THE APPEALS IN IT(SS)A NOS.18,19,20,.66,21/CTK/2009 AND ITA NO.200/CTK/2009 3. THE ASSESSEE, AN INDIVIDUAL, DERIVES INCOME BY WAY OF REMUNERATION AND INTEREST ON CAPITAL FROM PARTNERSHIP FIRM ORISSA COMPUTER EDUCATION AND BANK INTEREST. A S EARCH AND SEIZURE OPERATION U/S.132 OF THE L.T.ACT,1961 WAS IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 2 CONDUCTED BY THE DEPARTMENT ON 09. 08.2005 IN THE OFFICE PREMISES OF THE SOCIETY, ORISSA COMPUTER ACADEMY AND RESIDENTIAL PREMISES OF THE DIRECTORS. DURING THE COURSE OF SEARCH OPERATION, INCRIMI NATING DOCUMENTS , BOOKS OF ACC OUNT ETC. WERE FOUND AND SEIZED, BASED ON WHICH THE ASSESSING OFFI CER ISSUED NOTICE U/S.153A OF THE ACT ON 08.03.2006 REQUIRING THE ASSESSEE TO FI LE A RETURN OF INCOME. ON 28.04. 2006, THE ASSESSEE FILED HER RETURNS FOR THE AYS UNDER CONSIDERATION. THEREAFTER THE ASSESSING OFFICER ISSUED NOTICE U/S.143(2) ON 16.1.2007. TH E ASSESSEE SUO MOTU FILED REVISED RETURNS ON 6.12.2007. THE ASSESSING OFFICER, THOUGH TREATED THE REVISED RETURN AS NON - EST ALLEGING TO HAVE BEEN FILED BELATEDLY, HELD THE ADDITIONAL INCOME DISCLOSED IN THE REVISED RETURN S AS REGARDS THE FOLLOWING DEPOSITS /INVESTMENTS AND INTEREST ON R.D.A/C., AS UNDISCLOSED INCOME OF THE ASSESSEE BESIDES MAKING ADDITION ON OTHER COUNTS AND COMPLETED THE ASSESSMENTS FOR ALL THE AYS U/S.153A/143(3) OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEALS BEFORE THE COMMISSI ONER OF INCOME - TAX (APPEALS) WHO UPHELD THE FOLLOWING ADDITIONS IN RESPECTIVE AYS AS TABULATED BELOW. A.Y. INVESTMENT IN R.D. A/C. INTEREST ON R.D. A/C. INVESTMENT IN BIRLA SUN LIFE INVESTMENT IN BAJAJ ALLIANZ CAPITAL WITHDRAWN FROM FIRM INVESTMENT IN FDR/ NSC 2001 - 02 - - - - - 2,10,000 2002 - 03 - - - - 3,20,575 10,000 2003 - 04 30,00,000 77,730 - - - - 2004 - 05 - 2,78,238 - - - 70,000 2005 - 06 - 3,03,456 - - - 30,000 2006 - 07 - 6,91,635 66,00,000 72,938 - - IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 3 BESIDES, HE ENHANCED THE ASSESSMENTS BY MAKING FURTHER ADDITIONS OF 10,6000 AND 3,32,307 FOR THE ASSESSMENT YEAR 2004 - 05 AND 2006 - 07. 5. AGGRIEVED, THE ASSESSEE HAS FILED THESE APPEALS AGAINST THE ADDITIONS SUSTAINED BY THE LEARNED CIT(A) AND ALSO AGAINST THE ENHANCEMENT OF INCOME AS STATED IN THE FOREGOING PARAGRAPH. 6 . AS REGARDS THE SUSTENANCE OF ADDITION OF 2,10,000 IN THE ASSESSMENT YEAR 2001 - 02, ON EXAMINATION OF THE SEIZED MATERIALS THE ASSESSING OFFICER FOUND A NATIONAL SAVING CERTIFICATE (VIII ISSUE BEARING NO. 21EE146435 DATED 26.03.2001 FOR . 10,000 WITH SU B - POST OFFICE, BARAMUNDA COLONY, BHUBANESWAR IN THE NAME OF SRI JIBAN BANDHU MISHRA. HE FURTHER FOUND TERM DEPOSIT RECEIPTS IN THE NAME OF SRI JIBAN BANDHU MISHRA, THE DETAILS OF WHICH HAVE BEEN MENTIONED IN PARAGRAPH 4 OF THE ASSESSMENT ORDER. THE SAID CE RTIFICATES WERE ISSUED BY STATE BANK OF INDIA, FOREST PARK BRANCH, BHUBANESWAR. SINCE THE INVESTMENT CERTIFICATES WERE SEIZED FROM THE RESIDENCE OF THE ASSESSEE, THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSING OFFICER OBSERVED THAT THERE WAS NO C OMPLIANCE FROM THE ASSESSEE. HE FURTHER OBSERVED THAT THE SAID INVESTMENTS ARE NOT PART OF SO CALLED CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE. ACCORDINGLY, HE HELD THE SAME AS INVESTMENTS WERE OUT OF UNACCOUNTED INCOME OF THE ASSESSEE AND ADDED TO THE TOTAL INCOME. 6.1 . BEFORE THE LEARNED CIT(A) IT WAS SUBMITTED BY THE ASSESSEE THAT THE NSC, AND FDS FOUND DURING THE SEARCH ACTUALLY BELONGED TO THE ASSESSEES FATHER, WHO IS AN INCOME - TAX ASSESSEES. THE LEARNED CIT(A) DID NOT ACCEPT SUCH CONTENTION OF T HE ASSESSEE STATING IN HIS ORDER THE SAME TO BE A MERE IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 4 SUBMISSION WITHOUT ANY DOCUMENTARY EVIDENCE, AND HE CONFIRMED THE ADDITION. 6.2. THE LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE US THAT D URING THE COURSE OF SEARCH NSC FOR 10,000 AND FDR S FOR 2,00 ,000 MADE IN THE NAME OF SRI JIBAN BANDHU MISHRA , FATHER OF THE ASSESSEE WERE FOUND FROM THE RESIDENCE OF THE ASSESSEE . SRI JIBAN BANDHU MISHRA WAS WORKING WITH STATE BANK OF INDIA AND WAS DRAWING SALARY OF APPROXIMATELY 22,000 PER MONTH DURING THE YEAR. THE AFORESAID INVESTMENT S WERE MADE OUT OF HIS PAST SAVINGS AND CANNOT BE CONSIDERED AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT FROM THE DETAILS OF THE INVESTMENT MADE, IT MAY BE FOUND THAT THE SAME WERE MADE IN PIECEMEAL AND ON SEVERAL OCCASIONS. SINCE, THE APPELLANT HAS FILLED HIS RETURNS WITH SUBSTANTIAL AMOUNT INCLUDING THE ADDITIONAL INCOME OFFERED, THE SOURCE OF ABOVE INVESTMENT MADE BY THE FATHER OF THE APPELLANT SHOULD NOT BE DOUBTED. MERELY BECAUSE THE NSC AND FDRS WE RE FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE THE INVESTMENT S MADE BY THE FATHER OF THE ASSESSEE CANNOT BE CONSIDERED TO BE MADE BY THE ASSESSEE OUT OF HIS UNACCOUNTED INCOME. THE LEARNED DR, HOWEVER, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 6.3. HAVING HEARD BOTH THE PARTIES AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND ALSO THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL, WE FIND THAT THERE IS NO DISPUTE TO THE FACT THAT THE FDRS AND NSC WAS IN THE NAME OF THE FATHER OF THE ASSESSEE, WHO WAS AN EMPLOYEE IN THE STATE BANK OF INDIA DRAWING A SALARY OF APPROXIMATELY 22,000 PER MONTH. ALSO IT IS NOT DISPUTED THAT THE INVESTMENT ON NSC WAS MADE ON 26.3.2001 AND THE FDRS IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 5 WERE MADE PIECE MEAL ON DIFFERENT DATES DURING THE MONTHS OF MAY AND AUGUST, 2000. CONSIDERING THE FACT THAT THE FATHER OF THE ASSESSEE WAS AN EMPLOYEE IN STATE BANK OF INDIA DRAWING A GOOD SALARY, IT IS NOT UNBELIEVABLE THAT HE COULD HAVE INVESTED IN NSC AND FDRS TOTALING TO 2,00,000 OUT OF H IS PAST SAVINGS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN HOLDING THE SAID INVESTMENTS WERE FROM OUT OF UNACCOUNTED INCOME OF THE ASSESSEE WITHOUT COGENT MATERIAL EVIDENCE AND AS SUCH THE ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE DELETED. 7. AS REGARDS THE SUSTENANCE OF ADDITION OF 3,20,575 IN THE ASSESSMENT YEAR 2002 - 03, THE ASSESSING OFFICER FOUND FROM THE CASH FLOW STATEMENT THAT THE ASSESSEE HAS SHOWN CAPITAL RECEIPT FROM FIRM AT 3,20,575. THE ASSESSING OFFICER ASKED THE ASSESSEE TO F URNISH THE DATE WISE FUND FLOW STATEMENT, WHICH COULD NOT BE PRODUCED BY THE ASSESSEE STATING THAT NO PERSONAL BOOKS OF ACCOUNT ARE MAINTAINED BY HIM. THEREFORE, THE ASSESSING OFFICER HELD THE SAID AMOUNT AS INCOME OF THE ASSESSEE FROM OTHER SOURCES AND MA DE THE IMPUGNED ADDITION. THE LEARNED CIT(A) CONFIRMED THE SAME. THE LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE WAS A PARTNER IN ORISSA COMPUTER EDUCATION AND AS ON 31.3.2001 HE HAD INVESTED 3,20,575 THEREIN. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7.1. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL. THE LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE WAS A PARTNER IN ORISSA COMPUTER EDUCATION AND AS ON 31.3.2001 HE HAD INVESTED 3,20,575 THEREIN. SUBSEQUENTLY DURING THE F.Y. 2001 - 02 THE AFORESAID FIRM WAS DISSOLVED AND THE ASSESSEE WITHDREW HIS IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 6 CAPITAL FROM THE FIRM AND ACCORDINGLY DISCLOSED IN HIS CASH FLOW STATEM ENT . WE HAVE PERUSED STATEMENT OF AFFAIRS FOR BOTH THE A.Y. 2001 - 02 AND 2002 - 03 (PLACED AT PAGES 13 & 25 IN PAPER BOOK) AND FOUND THAT THE INVESTMENT IN THE FIRM AS ON 31ST MARCH2001 WAS 3,20,575 WHICH WAS NOT THERE AS ON 31ST MARCH2002. WHEN POINTED O UT, THE LEARNED DR COULD NOT CONTROVERT THE SAME. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION OF 3,20,575 MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) HOLDING THE SAME AS INCOME FROM OTHER SOURCES IS NOT AT ALL JUSTIFIE D AND AS SUCH, WE DIRECT DELETION OF THE SAID ADDITION OF 3,20,575. 8. AS REGARDS THE ADDITION OF 10,000 MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A), AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, THE UNDISPUTED FACTS ARE THAT THE TERM DEPOSIT CERTIFICATE FOR 10,000 WAS IN THE NAME OF JIBAN BANDHU MISHRA, FATHER OF THE ASSESSEE. WE MAY MENTION HERE THAT WE HAVE DEALT WITH A SIMILAR ISSUE IN THE APPEAL FOR THE ASSESSMENT YEAR 2001 - 02 IN PARAGRAPHS 6 TO 6.3 OF THIS ORDER. FOR THE VERY SAME REASONING, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION OF 10,000 MADE IN THE HANDS OF THE ASSESSEE IS NOT PROPER AND AS SUCH, WE DIRECT DELETION OF THE SAME. 9. IN THE ASSESSMENT YEAR 2003 - 04, 2004 - 05, 2005 - 06 AND 2006 - 07, THE ASSESSEE HAS RAISED COMMON ISSUE IS THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AUTHORITIES BELOW ARE NOT JUSTIFIED IN TREATING THE REVISED RETURN DATED ON 06.12.2007 AS NON EST . 9.1. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASS ESSEE HAD FILED HIS RETURN S FOR THE ASSESSMENT YEARS UNDER CONSIDERATION 28.05.2006 IN RESPONSE TO NOTICE U/S 153A WHICH WAS CLAIMED TO BE FILED BELATEDLY. AFTER IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 7 REVIEWING THE DOCUMENTS AND DETAILS OF INVESTMENT MADE BY THE APPELLANT, IT WAS FOUND THAT THE RE ARE SOME INVESTMENT S WHICH HAD NOT BEEN DISCLOSED IN THE RETURN S OF INCOME. ACCORDINGLY, AFTER RECONCILING THE ENTIRE INVESTMENT WITH THE STATEMENT OF AFFAIRS, ON 06.12.2007 THE ASSESSEE FILED SUO MOTTO THE REVISED RETURN S DISCLOSING ADDITIONAL INCOME B EFORE THE SAME WAS DETECTED BY THE TAX AUTHORITIES. HE FURTHER SUBMITTED THAT WHILE PASSING THE ORDER, THE ASSESSING OFFICER CONSIDERED THE REVISED RETURN AS NON EST WITH A CONTENTION THAT THE ORIGINAL RETURN WAS NOT FILED WITHIN THE DUE DATE GIVEN BY HIM. HOWEVER, THE ASSESSING OFFICER HAS UTILISED THE INFORMATION AVAILABLE IN THE REVISED RETURN S AS A VALID PIECE OF EVIDENCE AND MADE ADDITION S IN THE RESPECTIVE AYS. THE LEARNED AR OF THE ASSESSEE THOUGH DID NOT DISPUTE THE ADDITIONS AS PER THE REVISED RET URNS, VEHEMENTLY CHALLENGED THE ACTION OF THE AUTHORITIES BELOW IN TREATING THE REVISED RETURN FILED ON 6.12.2007 AS NON - EST. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 9.2. ON CAREFUL GOING THROUGH THE IMPUG NED ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL, THE UNDISPUTED FACTS ARE THAT FOR ALL THE AYS UNDER CONSIDERATION THE ASSESSEE FILED RETURNS ON 28.4.2006 IN RESPONSE TO NOTICE U/S.153A. BUT AFTER RECONCILING THE ENTIRE INCOME/INVESTMENT WITH THE STATEMENT OF AFFAIRS, THE ASSESSEE FILED SUO MOTU THE REVISED RETURNS ON 6.12.2007 DISCLOSING THE ABOVE ADDITIONAL INCOME OF 30,77,730, 3,07,380, 3,32,595 AND 49,19,238 IN THE AYS 2003 - 04, 2004 - 05, 2005 - 06 AND 2006 - 07 RESPECTIVELY BEFORE THE SAME WAS DETECTED BY THE TAX AUTHORITIES. THERE IS ALSO NO DISPUTE TO THE FACTS THAT THE ASSESSING OFFICER HAS UTILISED THE INFORMATION M ADE IN THE REVISED RETURN FILED BY THE ASSESSEE. BY FILING THE REVISED RETURNS DISCLOSING ADDITIONAL INCOME IN THE REVISED IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 8 RETURNS, THE INTENTION OF THE ASSESSEE APPEARS TO BE VERY MUCH CLEAR FOR VOLUNTARY DISCLOSURE OF THE SAID INCOME WHICH WAS CLAIMED BY THE ASSESSEE TO HAVE BEEN DETECTED AFTER FILING OF THE ORIGINAL RETURNS BUT BEFORE ASSESSMENTS. SINCE THE ASSESSEE HAS DISCLOSED THE INCOME/INVESTMENT SUO MOT U IN THE REVISED RETURNS OF INCOME FILED BEFORE DETECTION OF THE SAME BY THE DEPARTMENT, AND SINC E THE ASSESSING OFFICER HAS UTILIZED THE INFORMATION MADE IN THE REVISED RETURNS, THE SAID AMOUNTS CANNOT BE HELD AS UNDISCLOSED INCOME, AS RIGHTLY CONTENDED BY THE LEARNED AR OF THE ASSESSEE. 11. AS REGARDS THE CONFIRMATION OF THE ADDITION OF 70,000 AND 30,000 MADE IN THE ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 ON ACCOUNT OF INVESTMENT S MADE IN MIS DEPOSIT BY SRI RA TNAKAR TRIPATHY IN HIS OWN NAME, H AVING HEARD BOTH THE PARTIES AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ABOVE DEPOSITS WERE IN THE NAME OF SRI RATNAKAR TRIPATHY, THE FATHER - IN - LAW OF THE ASSESSEE. SHRI TRIPATHY WAS STATED TO BE AN EMPLOYEE IN ORISSA STATE ELECTRICITY BOARD HAVING SUBSTANTIAL CREDITWORTHINESS TO INVEST THE ABOVE AMOUNT. WE MAY MENTION HERE THAT WE HAVE CONSIDERED A SIMILAR ISSUE IN THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2001 - 02 IN RESPECT OF DEPOSITS FOUND IN THE NAME OF FATHER OF THE ASSESSEE AND DELETED THE SIMILAR ADDITION. FOR THE VERY SAME REASONING AS DISCUSSED IN PARAGRAPH 6.3 AB OVE, SRI RATNAKAR TRIPATHY BEING AN EMPLOYEE IN ORISSA STATE ELECTRICITY BOARD , THE CLAIM OF THE ASSESSEE THAT THE IMPUGNED INVESTMENT HAD BEEN MADE BY SRI RATNAKAR TRIPATHY OUT OF HIS PAST SAVINGS CANNOT BE BRUSHED ASIDE BY THE AUTHORITIES BELOW WITHOUT A NY COGENT MATERIAL ON RECORD. THEREFORE, WE ALLOW THE GROUND OF THE ASSESSEE AND DIRECT DELETION OF THE ADDITION OF 70,000 MADE IN THIS REGARD. IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 9 1 2 . IN THE ASSESSMENT YEAR 2006 - 07, ON THE BASIS OF SEIZED MATERIALS THE ASSESSING OFFICER FOUND THAT THE ASSESSEE TO HAVE MADE INVESTMENT OF 66,00,000 IN POLICY NO.503111 OF BIRLA SUNLIFE INSURANCE CO. LTD. THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE HAD NOT DISCLOSED THE SAME IN THE RETURN FILED ON 30.3.2007. ON BEING ASKED TO EXPLAIN, THE ASSESSEE FILED CASH FLOW STATEMENT. ON EXAMINATION OF THE SAID CASH FLOW STATEMENT, THE ASSESSING OFFICER OBSERVED AS UNDER : ON PERUSAL OF THE CASH FLOW STATEMENT, IT IS EVIDENT THAT THE OPENING CASH BALANCE WAS NOT SUFFICIENT TO EXPLAIN SUCH INVESTMENT. IT IS SEEN THAT IN THE CASH FLOW STATEMENT THE ASSESSEE HAS TAKEN 45,04,205 AS INCOME FROM OTHER SOURCES TO EXPLAIN INVESTMENT OF 46,00,000 IN BIRLA SUNLIFE INSURANCE. THOUGH IN THE STATEMENT OF AFFAIRS, 66,00,000 OF INVESTMENT IN BIRLA SUNLIFE IS SHOWN, IT IS TO BE NOTED THAT THE ASSESSEE HAD INVESTED THE ENTIR E PREMIUM OF 66,00,000 BY WAY OF CHEQUE ON IDBI BANK AND CLAIMED THE BANK ACCOUNT AT IDBI BANK AS HIS DISCLOSED ACCOUNT. THE CONTENTION OF THE ASSESSEE THAT SINCE THE INVESTMENT WAS MADE OUT OF HIS DISCLOSED BANK ACCOUNT AND THE DEPOSITS ARE MADE BY WAY OF CHEQUES NO ADDITION IS WARRANTED, IS NOT ACCEPTABLE. BECAUSE, EVEN IF THESE DEPOSITS ARE BY CHEQUES, THE ONUS IS ON ASSESSEE TO EXACTLY RELATE THESE INVESTMENTS TO THOSE ACCOUNTS ON WHICH THESE CHEQUES DRAWN AND THESE ACCOUNTS ARE DISCLOSED AND THE EN TRIES THEREIN ARE SATISFACTORILY EXPLAINED. IT IS, THEREFORE, HELD THAT HE HAS NO SUFFICIENT REASON TO OFFER THE EXPLANATION AND ACCORDINGLY, THE AMOUNT OF 66,00,000 IS TREATED AS AN UNACCOUNTED INCOME OF THE ASSESSEE AND ADDED TO THE TOTAL INCOME. IT IS WORTHWHILE TO MENTION THAT THE ASSESSEE DURING THE YEAR HAS SUO MOTO OFFERED AN AMOUNT OF 49,19,283 AS UNDISCLOSED INCOME IN THE RETURN FILED ON 16.12.2 007, TREATED AS NON EST . 12.1. AGGRIEVED THE ASSESSEE WENT IN APPEAL AND THE LEARNED CIT(A) CONFIRMED THE ADDITION OBSERVING IN PARAGRAPH 6 OF HIS ORDER AS UNDER : 6. THE FIFTH GROUND OF APPEAL IS THAT THE APPELLANT MADE INVESTMENT OF 66,00,000 IN BIRL A SUNLIFE INSURANCE WHICH HAS IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 10 BEEN DULY REFLECTED IN THE STATEMENT OF AFFAIRS, CASH FLOW & BANK STATEMENT OF THE APPELLANT FILED WITH THE DEPARTMENT. THE ADDITIONS OF SAID INVESTMENT ON MERE SUSPICION BY THE LD. AO ARE NOT LEGALLY SUSTAINABLE AND ARE LIABL E FOR DELETION. THERE IS NO DETAILS AVAILABLE IN THE STATEMENT OF FACT ATTACHED WITH THE APPEAL MEMO. HOWEVER FROM THE ASSESSMENT ORDER, IT IS FOUND THAT THE APPELLANT HAS MADE INVESTMENT OF 66,00,000 IN BIRLA S UNLIFE INSURANCE DURING THE ACCOUNTING YEAR AS DISCUSSED IN PARA 4.1 OF THE ASSESSMENT ORDER BY THE AO. THE APPELLANT WAS PROVIDED AN OPPORTUNITY TO EXPLAIN THE SOURCE OF INVESTMENT BY THE AO AND IT WAS SIMPLY REPLIED THAT IT IS OUT O F FUND AVAILABLE WITH THE APPELLANT AND ALSO SUBMITTED A CASH - FLOW STATEMENT FOR THE YEAR (ATTACHED WITH THE ASSESSMENT ORDER). SINCE, THE APPELLANT IS HAVING INCOME FROM THE CAPITAL GAIN, HONORARIUM FROM OCA AND THE INTEREST INCOME FROM SAVINGS ACCOUNT AN D RD, THE CASH - FLOW STATEMENT WAS NOT ACCEPTED BY THE AO AND IT WAS TREATED AS UNEXPLAINED INVESTMENT OF THE APPELLANT AS THE AMOUNT WAS INVESTED BY INSTRUMENT/CHEQUE OF IDBI BANK AND NOT IN CASH. IN VIEW OF THE ABOVE FACT, THE ADDITION MADE BY THE AO IS C ONFIRMED. 12.2. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND ALSO THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL. WE FIND THAT THE ASSESSEE HAD SURRENDERED A SUM OF 49,19,238 AS ADDITIONAL INCOM E WHILE FILING THE REVISED RETURN ON 6.12.2007, WHICH INCLUDES 30,68,277 LONG TERM CAPITAL GAINS EXEMPTED U/S.10(38) FOR TAXATION PURPOSE. IT IS NOTEWORTHY TO MENTION HERE THAT WE HAVE ALREADY HELD THAT THE REVISED RETURN FILED BY THE ASSESSEE ON 6.12.200 7 CANNOT BE HELD AS NON - EST. FURTHER THE ASSESSEE HAD ALSO BORROWED LOAN FROM IDBI THE OUTSTANDING BALANCE AS ON 31.3.2006 AGAINST THE SAME WAS 25,50,507. THE SAME HAS ALSO BEEN REFLECTED IN THE STATEMENT OF AFFAIR (PLACED AT PAGE 88 OF THE PB). WE HAVE PERUSED THE STATEMENT OF AFFAIRS AND WHEN THE ABOVE FACTS ARE POINTED OUT, THE LEARNED DR COULD NOT CONTROVERT THE SAME. WHEN THE ENTIRE INCOME/LOAN HAS BEEN DULY REFLECTED IN THE IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 11 STATEMENT OF AFFAIRS OUT OF WHICH 66,00,000 HAS BEEN INVESTED IN BIRLA SUN LIFE INSURANCE POLICY AND SAME HAS ALSO BEEN DISCLOSED IN THE STATEMENT OF AFFAIRS, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF 66,00,000 AND AS SUCH, WE DIRECT DELETION OF THE SAID ADDITIO N. 13. AS REGARDS THE ADDITION OF 72,938 MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A), THE ASSESSING OFFICER OBSERVED THAT IN THE C OMPUTATION OF INCOME THE ASSESSEE HAS ONLY SHOWN INVESTMENT IN POLICIES OF BAJAJ ALLIANZ INSURANCE CO. TO THE TUNE OF 1,00,00 AND INVESTMENT IN LIC POLICY TO THE TUNE OF 53,102 THOUGH THE CLAIM U/S 80C IS RESTRICTED TO 1,00,000. BUT THE ASSESSEE HAS NOT DISCLOSED THE TOTAL INVESTMENT OF 1,72,938 IN POLICIES OF BAJAJ ALLIANZ INSURANCE CO. SINCE T HE ENTIRE INVESTMENT IN BAJAJ ALLIANZ INSURANCE HAS NOT BEEN DISCLOSED , THE ASSESSING OFFICER HELD THE DIFFERENTIAL AMOUNT OF 72,938 AS UNACCOUNTED INVESTMENT OF THE ASSESSEE AND ACCORDI NGLY ADDED TO THE TOTAL INCOME. THE LEARNED CIT(A) CONFIRMED THE SAM E. 13.1. HAVING HEARD BOTH THE PARTIES AND GOING THROUGH THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL, WE FIND THAT AS ON 31.3.2005 THE TOTAL INVESTMENT IN BAJAJ ALLIANZ WAS 22,833 AGAINST WHICH THE TOTAL INVESTMENT AS ON 31.3.2006 WAS 1,95,771 (I.E., 45 ,771 + 1,00,000 + 50,000). THE SAID INVESTMENT HAS BEEN DULY DISCLOSED IN THE STATEMENT OF AFFAIRS FOR THE ASSESSMENT YEAR 2005 - 06 AND 2006 - 07 PLACED AT PAGES 60 & 88 OF THE PB RESPECTIVELY. WHEN THIS WAS POINTED OUT, THE LEARNED DR COULD NOT CONTROVERT THE SAME. IN SUCH VIEW OF THE MATTER, SINCE THE NET INVESTMENT OF 1,72,938 MADE DURING THE ASSESSMENT YEAR 2006 - 07 WHICH CANNOT BE IGNORED. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED MAKING THE IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 12 IMPUGNED ADDITION BY HOLDING THE BALANCE AMOUNT OF 72,938 AS UNEXPLAINED INVESTMENT AND AS SUCH, WE DIRECT DELETION OF THE SAID AMOUNT OF 72,938. 14. AS REGARDS THE ENHANCEMENT OF ASSESSMENT BY MAKING ADDITION OF 10,76,000 IN THE ASSESSMENT YEAR 2004 - 05, THE LEARNED CI T(A) FOUND FROM THE CASH FLOW STATEMENT THAT THE ASSESSEE HAS DEPOSITED CASH OF 10,60,000 IN IDBI BANK. OBSERVING THAT THE SAID FINANCIAL STATEMENT NEITHER DATE WISE RECEIPT NOR PAYMENTS AND IT IS MERELY A DESCRIPTION OF EVENTS, THE LEARNED CIT(A) SOUGHT TO ADD THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE AND ACCORDINGLY SHOW CAUSE AND AFTER CONSIDERING THE REPLY THE LEARNED CIT(A) ENHANCED THE ASSESSMENT BY MAKING ADDITION OF 10,60,000 OBSERVING IN PARAGRAPH 6.1 OF HIS ORDER AS FOLLOWS. I HAVE C ONSIDERED THE SUBMISSION OF MR. Y. PANI CAREFULLY AND FOUND THAT IT IS NOT CONVINCING. EVEN IN THE PRECEDING ASSESSMENT YEARS, THE CASH - FLOW STATEMENT SUBMITTED BY THE APPELLANT EITHER BEFORE THE A.O. OR BEFORE ME HAS NOT BEEN ACCEPTED. IN VIEW OF THE ABOV E FACT, THE EXPLANATION OF MR. PANI WITHOUT ANY DOCUMENTARY EVIDENCE IS REJECTED AND THE INCOME OF THE APPELLANT IS ENHANCED BY 10,60,000 AS PROPOSED IN SHOW - CAUSE LETTER DT. 14.01.2009. 14.1. HAVING HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERU SING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND ALSO THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAS FURNISHED CASH FLOW STATEMENT, WHICH IS EXTRACTED IN THE ASSESSMENT ORDER ITSELF, WHEREIN HE HAS SHOWN CA SH DEPOSITS IN IDBI BANK OF 10,60,000. IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAID AMOUNT WAS THE BALANCE BROUGHT FORWARD FROM EARLIER YEAR AND THE SAME AMOUNT WAS DEPOSITED OUT OF OWN CASH BALANCE . THE ASSESSING OFFICER IN PARAGRAPH 3.4 OF HIS ORDER H AS , THEREFORE, RIGHTLY OBSERVED - AS THE OPENING BALANCE OF THE YEAR IS ACCEPTED, IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 13 NO SEPARATE ADDITION IS MADE . IN SUCH VIEW OF THE MATTER, WE ARE OF THE CONSIDERED VIEW THAT T HE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING OTHERWISE AND MAKING ENHANCEMENT OF ASSESSMENT MERELY ON THE GROUND THAT HAD NOT ACCEPTED THE CASH FLOW STATEMENTS THE SAME HAVING NOT PREPARED DATE WISE . THEREFORE, THE ENHANCEMENT OF ASSESSMENT MADE BY THE LEARNED CIT(A) BY MAKING ADDITION OF 10,60,000 IN THE ASSESSMENT YEAR 2004 - 05 IS N OT JUSTIFIED AND AS SUCH, WE DIRECT DELETION OF THE SAID AMOUNT. 15. AS REGARDS THE ENHANCEMENT OF ASSESSMENT BY MAKING ADDITION OF 3,32,307 IN THE ASSESSMENT YEAR 2006 - 07, THE LEARNED CIT(A) FOUND FROM THE BANK STATEMENTS OF DIFFERENT BANKS, OBTAINED TH ROUGH THE ASSESSING OFFICER, THAT THE ASSESSEE HAS DEPOSITED 4.4,56,512 WITHIN THE PERIOD FROM 1.4.2005 TO 31.3.2006, THE DETAILS OF WHICH HE MENTIONED IN PARAGRAPH 8.1 OF HIS ORDER. HE FURTHER OBSERVED THAT THESE DEPOSITS WERE MOSTLY IN CASH AND FROM THE ASSESSMENT RECORD NO SATISFACTORY SOURCE OF DEPOSIT WAS FOUND. THE LEARNED CIT(A) THOUGHT THAT IT WAS THE SIPHONED MONEY OF OCA WHEREIN THE ASSESSEE WAS THE SECRETARY. HE ASKED THE ASSESSEE TO EXPLAIN THE DEPOSITS BY ISSUING A SHOW CAUSE NOTICE FOR ENHANC EMENT, IN RESPONSE TO WHICH THE ASSESSEE FURNISHED RECONCILIATION . THEREAFTER EXAMINING THE RECONCILIATION, THE LEARNED CIT(A) HELD THE DEPOSIT TO THE EXTENT OF 3,32,307 TO BE UNEXPLAINED, AS DETAILED IN PARAGRAPH 8.2 OF HIS ORDER. 15.1. HAVING HEARD BOTH THE PARTIES AND PERUSING THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL, WE FIND THAT THE ASSESSEE EXPLAINED THE DEPOSITS WERE OUT OF AVAILABLE CASH IN HAND. THE ASSESSEE FILED THE STATEMENT OF AFFAIRS AS ON 31.3.2005 PLACED AT PAGE 60 OF THE PB, WHEREFROM I T IS FOUND THAT THE ASSESSEE HAD CASH WITH HAND OF 3,67,469 AS ON 31.3.2005. THEREFORE, CONSIDERING THIS ASPECT OF THE CASE THE CLAIM OF THE ASSESSEE THAT THE DEPOSIT IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 14 OF 3,32,307 WAS MADE OUT OF THE AVAILABLE CASH IN HAND CANNOT BE BRUSHED ASIDE. IN SUCH VIEW OF THE MATTER, THE ENHANCEMENT OF ASSESSMENT MADE BY THE LEARNED CIT(A) BY MAKING ADDITION OF 3,32,007 IS NOT SUSTAINABLE AND AS SUCH, WE DIRECT DELETION OF THE SAME BY ALLOWING THE GROUND RAISED BY THE ASSESSEE IN THIS REGARD. 16 NOW ADVERTING TO A PPEALS IN ITA NOS.98 AND 99/CTK/2009, WE FIND THAT THE LEARNED CIT(A) HAS LEVIED PENALTY U/S.271(1)(C), VIDE HIS ORDER DT.18.5.2 009 BASED ON THE ADDITION OF 3,32,307 IN THE ASSESSMENT YEAR 2006 - 907 MADE BY HIM WHICH RESULTED IN ENHANCEMENT OF ASSESSMENTS . IN THE QUANTUM APPEALS FILED BY THE ASSESSEE, WE HAVE DIRECTED DELETION OF THE SAID ADDITION IN THE FOREGOING PARAGRAPH. THEREFORE, THE BASIS FOR LEVYING PENALTY BEING NO MORE BY NOW, THE IMPUGNED PENALTY U/S.271(1)(C) OF THE I.T.ACT LEVIED ON THAT BASI S CANNOT SURVIVE. IN SUCH VIEW OF THE MATTER, WE CANCEL THE PENALTY LEVIED BY THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR 2006 - 07 BY ALLOWING THE APPEAL OF THE ASSESSEE IN THIS REGARD. 17. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 25.04.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. IT(SS) A NOS.18,19,20,.66,21/CTK/2009 ITA NO.200/CTK/2009 AND IT(SS)A. 100/CTK/2009 SRI SUBRAT PRASANNA MISHRA V. ACIT 15 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SRI SUBRAT PRASANNA MISHRA, 138, NIL KANTHESWAR ROAD, BARAAMUNDA, BHUBANESWAR 751 003 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, WARD 1(2), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.