Sri Bhaskar Chowdary, Bhubaneswar V. ACIT, Corporate Circle-1(2), Bhubaneswar

ITSSA 39/CTK/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3726 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-04-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 28-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MOHAPATRA
• Assessee Lawyers: B D OJHA
• Keywords: Unexplained investment; Salary income; Source of fund

Judgement Text

1 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER IT (SS) A NO S . 39,40 & 41 /CTK/201 6 ASSESSMENT YEAR S : 20 04 - 05, 2005 - 06 & 2006 - 07 BHASKAR CHOWDARY, PLOT NO.A/103, SAHEED NAGAR, BHUBANESWAR. VS. ACIT, CORPORATE CIRCLE, 1(2), BHUBANESWAR PAN/GIR NO. AHXPB 8818 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.D.OJHA, AR REVENUE BY : SHRI A .K.MOHAPATRA, CIT DR DATE OF HEARING : 1 1 / 0 4 / 201 8 DATE OF PRONOUNCEMENT : 24 / 0 4 / 201 8 O R D E R PER N.S.SAINI, AM THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE CIT(A) - 3, BHUBANESWAR ALL DATED 30.6.2016 FOR THE ASSESSMENT YEARS 2004 - 05, 2005 - 06 & 2006 - 07, RESPECTIVELY. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING COMMON GROUNDS OF APPEAL IN ALL THESE APPEALS: 2.1 GROUND NO.1 OF APPEAL FOR IS IN RESPECT OF ADDITION IN INVESTMENT IN SRI RAM CHIT (P) LTD., OF RS.21,600/ - , RS.21,600/ - AND RS.3,600/ - FOR THE ASSESSMENT YEARS 2004 - 05, 2005 - 06 AND 2006 - 07, RESPECTIVELY. 2. 2 GROUND NO. 2 OF APPEAL FOR THE ASSESSMENT YEAR 20 04 - 05 IS AGAINST THE CONFIRMATION OF ADDITION OF RS.41,000/ - TOWARDS PURCHASE OF KINETIC MOPED. 2 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 2.3 GROUND NO.3 FOR THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 AND GROUND NO.2 FOR THE ASSESSMENT YEAR 2006 - 07 IS AGAINST CONFIRMATION OF DEPOSIT IN BANK ACCOUNT OF RS.2,74,139/ - , RS.6,22,700/ - AND RS.1,69,571/ - . 2.4 GROUND NO.4 OF APPEAL FOR THE ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 IS AGAINST CONFIRMATION OF ADDITION OF RS.61,704/ - AND RS.1,23,409/ - TOWARDS UNEXPLAINED INVESTMENT IN HOUSE PROPERTY. 2.5 GROUND NO.5 OF APPEAL FOR THE ASSESSMENT YEAR 2004 - 05 IS AGAINST CONFIRMATION OF ADDITION OF RS.3,75,000/ - TOWARDS PAYMENT MADE FOR IMMOVABLE PROPERTY ON BEHALF OF HIS MOTHER. 2.6 GROUND NO.2 OF APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 IS AGAINST CONFIRMATION OF ADDITIO N OF RS.20,000/ - TOWARDS ADVANCE PAID TO S.CHINNA BABU. 3. LD A.R. OF THE ASSESSEE DID NOT PRESS GROUND NO.5 OF APPEAL FOR THE ASSESSMENT YEAR 2004 - 05 WITH REGARD TO PAYMENT MADE FOR IMMOVABLE PROPERTY ON BEHALF OF THE MOTHER OF THE ASSESSEE AND HENCE, SA ME IS DISMISSED FOR WANT OF PROSECUTION. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER MADE THE ADDITIONS IN ALL ASSESSMENT YEARS ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE EVIDENCE TO PROVE THE SOURCE OF INVESTMENT . 5. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITIONS FOR THE VERY SAME REASONS. 6. BEFORE US, LD A.R. OF THE ASSESSEE HAS FILED CASH FLOW STATEMENT FOR THE ASSESSMENT YEARS 2004 - 05 TO 2006 - 07, WHICH ARE AS UNDER: CASH FLOW STATEMENT AS ON 31.03.2004 CASH BANK INFLOW OPENING BALANCE 38,323.00 512.50 CASH WITHDRAWN FROM BANK CONTRA 120,000.00 - CASH DEPOSITED IN BANK CONTRA - 160,500.00 3 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 CHEQUE RECEIVED FROM OTHERS - 113,639.00 INTEREST RECEIVED - 337.00 RECEIVED FROM HIS WIFE 41,000.00 HAND LOAN RECEIVED 350,000.00 INCOME FROM SALARY REMUNERATION RECEIVED FROM HITECH ESTATES & PROMOTERS (P) LTD 60,000.00 INCOME DURING THE YEAR: - INCOME FROM COMMISSION, INTEREST, ETC. 92,000.00 - GRAND TOTAL 701,323.00 274,988.50 OUTFLOW LIC PREMIUM PAID 10,900.00 - ADVANCE TAX PAID 6,000.00 - PERSONAL DRAWINGS 18,000.00 - LAND ADVANCE 375,000.00 INVESTMENT IN HOUSE PROPERTY 50,000.00 CASH DEPOSITED IN BANK CONTRA 160,500.00 - CASH WITHDRAWN FROM BANK CONTRA - 120,000.00 INTEREST ON HOUSING LOAN PAID 20,077. 00 - REPAYMENT OF HOUSING LOAN - 30,000.00 REPAYMENT OF MORTGAGE LOAN 24,000.00 BANK CHARGES - 18.00 INVESTMENT IN SHRIRAM CHITS (P) LTD. 21,600.00 PURCHASE OF KINETIC NOVA MOPED 41,000.00 M/S SRINIVASH MEDICAL AGENCY 100,000.00 683,000.00 274,018.00 CLOSING BALANCE 18,323.00 970.50 CASH FLOW STATEMENT AS ON 31.03.2005 CASH BANK INFLOW OPENING BALANCE 18,323.00 970.50 CASH WITHDRAWN FROM BANK CONTRA 715,500.00 - CASH DEPOSITED IN BANK CONTRA - 438,700.00 CHEQUE RECEIVED FROM OTHERS - 184,000.00 RECEIVED FROM HARERAM CHOWDARY 250,000.00 INTEREST RECEIVED - 695.00 INCOME FROM SALARY REMUNERATION RECEIVED FROM HITECH ESTATES & PROMOTERS (P) LTD 60,000.00 INCOME DURING THE YEAR: INCOME FROM COMMISSION, INTEREST, ETC. 96,500.00 GRAND TOTAL 890,323.00 874,365.50 OUTFLOW 4 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 LIC PREMIUM PAID 10,900.00 PERSONAL DRAWINGS 18,000.00 INVESTMENT IN SHRIRAM CHITS (P) LTD. 21,600.00 PAID TO S.CHINNA BABU.BENDIPETTA 20,000.00 HAND LOAN REFUND 300,000.00 CASH DEPOSITED IN BANK CONTRA 438,700.00 CASH WITHDRAWN FROM BANK CONTRA 715,500.00 REPAYMENT OF HOUSING LOAN 27,500.00 REPAYMENT OF MORTGAGE LOAN 22,000.00 BANK CHARGES PAID 108.00 PAID TO MAIN MANNER ORGANIC 12,638.00 PAID TO B.BEDDEMMA 53,000.00 PAID TO TRINADH CHOWDARY 42,000.00 809,200.00 872,746.00 CLOSING BALANCE 81,123.00 1,619.50 CASH FLOW STATEMENT AS ON 31.03.2006 CASH BANK INFLOW OPENING BALANCE 81,123.00 1,619.50 CASH WITHDRAWN FROM BANK CONTRA 141,000.00 CASH DEPOSITED IN BANK CONTRA - 141,700.00 INTEREST RECEIVED - 181.00 CHEQUE RECEIVED FROM OTHERS - 27,690.00 INCOME FROM SALARY REMUNERATION RECEIVED FROM HITECH ESTATES & PROMOTERS (P) LTD 60,000.00 INCOME DURING THE YEAR: INCOME FROM COMMISSION, INTEREST, ETC. 100,000.00 - GRAND TOTAL 382,123.00 171,190.50 OUTFLOW LIC PREMIUM PAID 10,900.00 - PERSONAL DRAWINGS 36,000.00 - HAND LOAN REFUND 50,000.00 CASH DEPOSITED IN BANK CONTRA 141,700.00 - CASH WITHDRAWN FROM BANK CONTRA - 141,000.00 INVESTMENT IN SHRIRAM CHITS (P) LTD. 3,600.00 - REPAYMENT OF HOUSING LOAN 25,000.00 REPAYMENT OF MORTGAGE LOAN 2,500.00 BANK CHARGES PAID 85.00 242,200.00 168,585.00 CLOSING BALANCE 139,923.00 2,605.50 5 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 7. LD A.R. SUBMITTED THAT THE SOURCE OF FUNDS FOR MAKING THE INVESTMENT IS DULY EXPLAINED BY THE CASH FLOW STATEMENT AND IN SUPPORT OF THE SAME, THE BANK STATEMENT OF THE ASSESSEE WAS ALSO FILED BEFORE THE LOWER AUTHORITIES AND BEFORE US IN THE PAPER BOOK . HE SUBMITTED THAT AS THE SOURCE OF FUNDS IS EXPLAINED, NO ADDITION AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS CALLED FOR IN THE CASE OF THE ASSESSEE. 8. LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISS IONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN THE SUM OF INVESTMENT MADE AS UNDER: ASSESSMENT YEAR AMOUNT (RS.) 2004 - 05 7,88,869/ - 2005 - 06 8,18,561/ - 2006 - 07 1,7 4 ,171/ - 10. THE CIT(A) ALSO CONFIRMED THE ABOVE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT CORROBORATIVE MATERIAL OF THE SOURCE OF INVESTMENT BY THE ASSESSEE COULD NOT BE FURNISHED. 11. WE FIND THAT THE ASSESSEE EXPLAINED THE SOURCE OF INVESTMENT AS UNDER: CASH FLOW STATEMENT AS ON 31.03.2004 6 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 CASH BANK INFLOW OPENING BALANCE 38,323.00 512.50 CASH WITHDRAWN FROM BANK CONTRA 120,000.00 - CASH DEPOSITED IN BANK CONTRA - 160,500.00 CHEQUE RECEIVED FROM OTHERS - 113,639.00 INTEREST RECEIVED - 337.00 RECEIVED FROM HIS WIFE 41,000.00 HAND LOAN RECEIVED 350,000.00 INCOME FROM SALARY REMUNERATION RECEIVED FROM HITECH ESTATES & PROMOTERS (P) LTD 60,000.00 INCOME DURING THE YEAR: - INCOME FROM COMMISSION, INTEREST, ETC. 92,000.00 - GRAND TOTAL 701,323.00 274,988.50 CASH FLOW STATEMENT AS ON 31.03.2005 CASH BANK INFLOW OPENING BALANCE 18,323.00 970.50 CASH WITHDRAWN FROM BANK CONTRA 715,500.00 - CASH DEPOSITED IN BANK CONTRA - 438,700.00 CHEQUE RECEIVED FROM OTHERS - 184,000.00 RECEIVED FROM HARERAM CHOWDARY 250,000.00 INTEREST RECEIVED - 695.00 INCOME FROM SALARY REMUNERATION RECEIVED FROM HITECH ESTATES & PROMOTERS (P) LTD 60,000.00 INCOME DURING THE YEAR: INCOME FROM COMMISSION, INTEREST, ETC. 96,500.00 GRAND TOTAL 890,323.00 874,365.50 CASH FLOW STATEMENT AS ON 31.03.2006 CASH BANK INFLOW OPENING BALANCE 81,123.00 1,619.50 CASH WITHDRAWN FROM BANK CONTRA 141,000.00 CASH DEPOSITED IN BANK CONTRA - 141,700.00 INTEREST RECEIVED - 181.00 CHEQUE RECEIVED FROM OTHERS - 27,690.00 INCOME FROM SALARY REMUNERATION RECEIVED FROM HITECH ESTATES & PROMOTERS (P) LTD 60,000.00 7 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 INCOME DURING THE YEAR: INCOME FROM COMMISSION, INTEREST, ETC. 100,000.00 - GRAND TOTAL 382,123.00 171,190.50 12. IN RESPECT OF ASSESSMENT YEAR 2004 - 05, WE FIND THAT EXCEPT FOR RS.41,000 / - EXPLAINED AS BEING THE AMOUNT RECEIVED FROM HIS WIFE BY THE ASSESSEE AND RS.3,50,000/ - EXPLAINED AS HAND LOAN, THE OTHER SOURCES EXPLAINED BY THE ASSESSEE ARE CORROBORATED WITH THE MATERIALS AVAILABLE ON RECORD. SALARY OF RS.60,000/ - AND INCOME FROM C OMMISSION AND ETC., OF RS.92,000/ - HAVE ALREADY BEEN ACCEPTED BY THE ASSESSING OFFICER AND ASSESSED TO TAX AS INCOME OF THE ASSESSEE. WITHDRAWALS FROM BANK OF RS.1,20,000/ - IS SUPPORTED WITH BANK STATEMENT, WHICH WAS FILED BEFORE THE LOWER AUTHORITIES AND IS PLACED ON RECORD AT PAGE NOS.26 TO 35 OF PAPER BOOK. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE ADDITION IN EXCESS OF RS.3,91,000/ - ON ACCOUNT OF UNEXPLAINED SOURCE OF INVESTMENT IS UNSUSTAINABLE. 13. THE ASSESSEE HAS NOT PRESSED GROUND NO.5 FOR THE ASSESSMENT YEAR 2004 - 05 TOWARDS PAYMENT MADE FOR IMMOVABLE PROPERTY ON BEHALF OF HIS MOTHER OF RS.3,75,000/ - . THEREFORE, AFTER TAKING INTO CONSIDERATION THIS AMOUNT, IN OUR CONSIDERED VIEW, FURTHER ADDITION OF RS.16,000/ - (RS.3,91,000 RS.3,75,000) CAN BE MADE TO THE INCOME OF THE ASSESSEE FOR THE YEAR 2004 - 05. 1 4 . IN RESPECT OF ASSESSMENT YEAR 2005 - 06, WE FIND THAT EXCEPT FOR RS.1,84,000/ - CHEQUE RECEIVED FROM OTHERS, RS.2,50,000/ - CHEQUE 8 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 RECEIVED FROM HAR ERAM CHOWDARY, SOURCES EXPLAINED BY THE ASSESSEE ARE CONSIDERED WITH THE MATERIALS AVAILABLE ON RECORD. SALARY OF RS.60,000/ - AND INCOME FROM COMMISSION AND ETC., OF RS.96,500/ - HAVE ALREADY BEEN ACCEPTED BY THE ASSESSING OFFICER AND ASSESSED TO TAX AS IN COME OF THE ASSESSEE. WITHDRAWALS FROM BANK OF RS.7,15,500/ - IS SUPPORTED WITH BANK STATEMENT, WHICH WAS FILED BEFORE THE LOWER AUTHORITIES AND IS PLACED ON RECORD AT PAGE NOS. 36 TO 37 OF PAPER BOOK. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, TH E ADDITION IN EXCESS OF RS .4,34,000/ - ON ACCOUNT OF UNEXPLAINED SOURCE OF INVESTMENT IS UNSTAINABLE . THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTRICT THE ADDITION OF RS.4,34,000/ - FOR THE ASSESSMENT YEAR 2005 - 06. 1 5 . SIMILARLY, I N RESPECT OF ASSESSMENT YEAR 2006 - 07, WE FIND THAT EXCEPT FOR RS.27,690/ - CHEQUE RECEIVED FROM OTHERS, SOURCES EXPLAINED BY THE ASSESSEE ARE CONSIDERED WITH THE MATERIALS AVAILABLE ON RECORD. SALARY OF RS.60,000/ - AND INCOME FROM COMMISSION AND ETC., OF R S. 1,00,000 / - HAVE ALREADY BEEN ACCEPTED BY THE ASSESSING OFFICER AND ASSESSED TO TAX AS INCOME OF THE ASSESSEE. WITHDRAWAL OF RS.1,41,000/ - FROM THE BANK IS SUPPORTED WITH BANK STATEMENT. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE ADDITION I N EXCESS OF RS. 27,690 / - IS NOT TENABLE . THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND REST RICT THE ADDITION OF RS.27,690/ - . 9 IT(SS)A NOS.39,40 & 41/CTK/2016 ASSESSMENT YEARS : 2004 - 05, 2005 - 06 & 2006 - 07 16. IN SUM AND SUBSTANCE, THE ADDITION OF RS. 3,91,000/ - FOR THE ASSESSMENT YEAR 2004 - 05, RS.4,34,000/ - FOR THE ASSESSMENT YEAR 2005 - 06 AND RS.27,690/ - FOR THE ASSESSMENT YEAR 2006 - 07 IS SUSTAINED. 1 7 . IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE PARTLY ALL OWED. ORDER PRONOUNCED ON 24 / 0 4 /201 8 . S D/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 24 / 0 4 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : BHASKAR CHOWDARY, PLOT NO.A/103, SAHEED NAGAR, BHUBANESWAR 2. THE RESPONDENT. ACIT, CORPORATE CIRCLE, 1(2), BHUBANESWAR 3. THE CIT(A) - 3, BBSR 4. PR.CIT - 3, BBSR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//