Niranjan Choudhury, Bhubaneswar V. ACIT, Bhubaneswar

ITSSA 72/CTK/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7517 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 14-05-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 14-10-2011
• Court: TRIBUNAL
• Department Lawyers: A NAYAK
• Assessee Lawyers: S C BHADRAB MOHANTY ARS
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 143(3); 132

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 S . 72,73,7475,7677 AND 78 /CTK/2011 ( AYS 2001 - 02,2002 - 03,2003 - 04,2004 - 05,2005 - 06,2006 - 07 AND 2007 - 08) NIRANJAN CHOUDHURY , PLOT NO.122, SAHID NAGAR, BHUBANESWAR PAN: AHOPC 2909 D VERSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.C.BHADRA/B.MOHANTY, ARS FOR THE RESPONDENT SHRI A.NAYAK, DR DATE OF HEARIN G : 14.05.2012 DATE OF PRONOUNCEMENT : 25.05.2012 ORDER SHRI K.K.GUPTA, AM : THESE APPEALS FOR THE AYS 2001 - 02, 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07 AND 2007 - 08 PERTAIN TO AN ASSESSEE WHO WAS WORKING FOR MUDALI GROUP OF ASSESSEES WHO WERE SUBJECTED TO SEARCH AND SEIZURE UNDER THE PROVISIONS OF SECTION 132 OF THE I.T.ACT,1961 ON 23.8.2006. STATEMENT WAS TAKEN ON OATH AND THE ASSESSEE WAS REQUIRED TO FILE RETURNS OF INCOME BY ISSUANCE OF NOTICE U/S.153A. ASSESSMENTS HAVE BEEN FRAMED UNDER PR OVISIONS OF SECTION 153A(B) R.W.S. 143(3) OF THE ACT FOR THE IMPUGNED AYS WHEN THE ASSESSEE FILED RETURNS OF INCOME ENCLOSING THEREIN THE STATEMENT OF AFFAIRS FOR THE AYS WHEN THE ASSESSING OFFICER SOUGHT TO TAX THE PART AGRICULTURAL INCOME AS UNDISCLOSED INCOME IN ALL THE AYS UNDER CONSIDERATION AND ALSO THE PURCHASE OF FLAT IN THE ASSESSMENT YEAR 2002 - 03 AND TRUST CONTRIBUTIONS IN THE ASSESSMENT YEAR 2005 - 06 AND 2007 - 08. THE LEARNED CIT(A) HAS REPRODUCED THE FACTUAL ASPECTS AND THE GROUNDS RAISED BY THE A SSESSEE BEFORE HIM FOR THE IMPUGNED AYS AND ON IDENTICAL FASHION HAS CONFIRMED THE QUANTUM SO CONSIDERED BY THE ASSESSING OFFICER FOR TAXATION AGAINST WHICH THE ASSESSEE HAS FILED THE PRESENT APPEALS BEFORE US. IN OTHER WORDS, THE APPEALS OF THE ASSESSEE F OR THE IMPUGNED AYS ARE ON THE ORDERS OF THE ASSESSING OFFICER AND HAVE BEEN DISMISSED BY THE LEARNED CIT(A). IT(SS)A NOS.72,73,7475,7677 AND 78 /CTK/2011 2 2. AS REGARDS THE DISALLOWANCE OF PART AGRICULTURAL INCOME AND MAKING PART ADDITION AS FROM UNDISCLOSED INCOME, THE LEARNED AR OF THE ASSESSEE SUB MITTED THAT THE ASSESSING AUTHORITIES IN COMPLETE DISREGARD TO THE FACTS AND CIRCUMSTANCES ACCEPTED ONLY PART AGRICULTURAL INCOME AND TREATED THE BALANCE AS UNDISCLOSED INCOME FROM OTHER SOURCES. WHILE DOING SO, THE ASSESSING OFFICER HAS CONSIDERED THEM ON THE BASIS OF STATEMENT RECORDED FROM HIM (WHICH WAS IN ENGLISH AND THE ASSESSEE DID NOT UNDERSTAND THE SAME) AND DID NOT CONSIDER THE SUBMISSIONS MADE BY THE ASSESSEE HIMSELF INCLUDING THE CERTIFICATE FROM TAHSILDAR , NIALI, CUTTACK. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT IN SCRUTINY ASSESSMENT, DETAILS IN SUPPORT OF AGRICULTURAL INCOME ALONG WITH CASH FLOW STATEMENTS WERE PRODUCED. IT WAS ALSO CONTENDED THAT WHEN THE ASSESSEE HIMSELF OFFERED THE AGRICULTURAL INCOME AND WHEN A SENIOR GOVERNME NT OFFICIAL CERTIFIED THE SAME, THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) WERE NOT JUSTIFIED IN PART ACCEPTING THE AGRICULTURAL INCOME AND TREATING THE BALANCE AS INCOME FROM UNDISCLOSED SOURCES. THEREFORE, THE LEARNED AR OF THE ASSESSEE PRAYED FOR DELETION OF THE BIFURCATION MADE IN THIS RESPECT IN ALL THE AYS. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 3. HAVING HEARD BOTH THE PARTIES AND PERUSING THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL , WE FIND THAT THERE IS NO DISPUTE OF THE FACT THAT THE A ASSESSEE IS A FARMER AND OWNS CULTIVABLE AGRICULTURAL LAND. THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME OF 1,00,000 EACH IN THE AYS 2001 - 02,2002 - 03, 2003 - 04, 2004 - 05 OUT OF WHICH THE ASSESSING OFFICER HAS HELD 60,000 IN EACH OF THE AYS AS INCOME FROM UNDISCLOSED SOURCES. SIMILARLY 1,10,000 EACH IN THE AYS 2005 - 06, 2006 - 07 AND 2007 - 08 OUT OF THE CLAIM OF AGRI CULTURAL INCOME OF 1,50,000 EACH , WAS HELD AS INCOME FROM UNDISCLOSED SOURCES. IN IT(SS)A NOS.72,73,7475,7677 AND 78 /CTK/2011 3 SUPPORT OF AGRICULTURAL INCOME, THE ASSESSEE PRODUCED THE INCOME CERTIFICATE FROM TAHSILDAR, NIALI, CUTTACK INDICATING THAT THE ASSESSEE GENERATED INCOME FROM AGRICULTURAL OPERATION. BUT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE CERTIFICATE OF TAHSILDAR THOUGH THEY HAVE ACCEPTED AGRICULTURAL INCOME PARTLY AND HELD THE BALANCE AS INCOME FROM UNDISCLOSED SOURCES. WE ARE UNABLE TO SATISFY OURSELVES TO THIS CONFIRMATION BY T HE LEARNED CIT(A) AS WELL INSOFAR AS THE DOCUMENTARY EVIDENCE AS SUBMITTED BY THE ASSESSEE DID NOT REQUIRE FURTHER PROBE FOR ESTABLISHING UNDISCLOSED INCOME FROM UNDISCLOSED SOURCE WITHOUT BRING ANY OTHER CORROBORATIVE MATERIAL ON RECORD . IN THIS VIEW OF THE MATTER THE ADDITION MADE IN EACH OF THE AYS UNDER CONSIDERATION WITH RESPECT TO CONVERSION OF AGRICULTURAL INCOME INTO UNDISCLOSED INCOME IS DIRECTED TO BE DELETED. 4. AS REGARDS THE ADDITION OF 8,76,870 MADE TOWARDS PURCHASE OF FLAT IN THE ASSESSMENT YEAR 2002 - 03 , THE ASSESSEE HAS SHOWN THE SOURCES OF THIS INVESTMENT AS AGRICULTURAL INCOME OF 1 LAKH, CONTRACT INCOME 44,265, SALE OF JEWELLERY 94,500, RECOVERY OF ADVANCE 1,40,000, UNSECURED LOAN 3,00,000 AND OUT OF SAVINGS OF PAST INCOME 1,98,105 . THE ASSESSING OFFICER DID NOT ACCEPT THE VERSION OF THE ASSESSEE FOR THE SOURCES OF INVESTMENT BY HOLDING A VIEW THAT THE ASSESSEE HAD NOT SHOWN THESE IN THE REGULAR A RETURN FILED BY IT BUT IN THE RETURN IN PURSUANCE TO NOTICE U/S.153A.THE LEARNED CIT( A) CONFIRMED THE SAME WITHOUT ADJUDICATING AS TO HOW THESE DETAILS COULD NOT BE HELD AVAILABLE TO THE ASSESSING OFFICER FOR THE SIMPLE REASON THAT THE INCOMES GENERATED BY THE ASSESSEE HAVE BEEN ADJUDICATED BY THE ASSESSING OFFICER HIMSELF BUT BY HOLDING T HEM AS FROM UNDISCLOSED SOURCES. THE AGRICULTURAL INCOME HAS BEEN DEALT WITH BY US ABOVE, THEREFORE, LEAVES NO ROOM FOR DOUBT IN THE MIND OF THE ASSESSI NG OFFICER THAT THE ASSESSEE HAD NO SUCH PERSONAL LOAN WHICH COULD BE RECOVERED OR SALE OF JEWELLERY WHI CH MAY BE ENCASHED FOR IT(SS)A NOS.72,73,7475,7677 AND 78 /CTK/2011 4 PURCHASE OF FLAT. THE ASSESSEE HAD SUFFICIENT INCOME IN THE EARLIER YEARS TO HOLD SAVINGS WHICH HAVE BEEN UTILISED FOR THE PURCHASE OF THE ASSET ON WHICH TAX HAS BEEN PAID BEING AGRICULTURAL INCOME EXEMPT FROM TAX. THE ONLY DETAILS O F OBTAINING OF LOAN OF 3 LAKHS IN THE IMPUGNED ASSESSMENT YEAR FOR THE PURCHASE OF FLAT REMAINED UNEXPLAINED WHICH WE ARE OF THE CONSIDERED VIEW THAT AS THE LOANS ARE OVER AND ABOVE THE INCOMES GENERATED BY THE ASSESSEE IN EARLIER YEARS REQUIRES CONSIDERATION ON THE SUBMISSION OF THE ASSESSEE FOR ESTABLISHING THAT THEY DO NOT FORM PART OF THE UNDISCLOSED INCOME . FOR THE LIMITED PURPOSE OF VERIFYING THE LOAN, WE RESTORE THE ISSUE TO THE AO IN VIEW OF THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTING THE DETAILS OF THE L OAN CREDITORS IN THE PB WHICH WAS N OT ADJUDICATED UPON IN THE PROPER PERSPECTIVE FOR COMPILING THE DISALLOWANCE UNDER THE PROVISIONS OF SECTION 68. 5. AS REGARDS THE TRUST CONTRIBUTION IN THE ASSESSMENT YEAR 2005 - 06, WE FIND THAT THE ASSESSEE HAD SUFFICIEN T INCOME IN THE EARLIER YEARS TO HOLD SAVINGS WHICH HAVE BEEN UTILISED FOR TRUST CONTRIBUTION ON WHICH TAX HAS BEEN PAID BEING AGRICULTURAL INCOME EXEMPT FROM TAX. THE ONLY DETAILS OF OBTAINING UNSECURED LOAN OF 80,000 OVER AND ABOVE THE INCOME GENERATED REQUIRES TO BE EXPLAINED BY THE ASSESSEE AS REQUIRED U/S.68, FOR WHICH LIMITED PURPOSE, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER AND TO PASS NECESSARY CONSEQUENTIAL ORDER AS PER LAW AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE . 6. AS R EGARDS THE TRUST CONTRIBUTION IN THE AY 2007 - 08, THE AMOUNT OF 3,00,000 HAS BEEN WITHDRAWN FROM UCO BANK ACCOUNT NO.8522 IS AN ADMITTED FACT THEREFORE CANNOT BE DISPUTED FOR ADDITION AS CONTRIBUTION TO THE TRUST WHICH IS ALSO SUBJECT TO VERIFICATION WHEN THE AMOUNT HAS BEEN GIVEN TO A TRUST HOLDING PAN AS GENUINE AND IDENTIFIED. IN ANY CASE, IT CANNOT BE TAXED IT(SS)A NOS.72,73,7475,7677 AND 78 /CTK/2011 5 N THE HANDS OF THE ASSESSEE AS UNDISCLOSED INCOME FOR THE SIMPLE REASON THAT THE AO HAS NOT CHALLENGED THE DEPOSITS IN THE BANK BUT ONLY THE WITHDRAWAL FOR THE PURPOSE OF TAXATION OF CONTRIBUTION TO THE TRUST FR OM UNDISCLOSED SOURCE. AS REGARDS THE OTHER AMOUNT OF 40,000 FOR TRUST CONTRIBUTION CLAIMED BY THE ASSESSEE WAS AGRICULTURAL INCOME , WHICH IN OUR CONSIDERED VIEW CANNOT BE DISCARDED IN VIEW OF THE FACT OF HAVING AGRICULTURAL INCOME OF 1,10,000 DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE, THE ADDITION OF 3,40,000 MADE ON ACCOUNT OF TRUST CONTRIBUTION CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE DELETED. 7. IN THE RESULT, THE APPEALS FOR THE AYS 2001 - 02,2003 - 04,2004 - 05, , 200 6 - 07 AND 2007 - 08 ARE ALLOWED AND THAT FOR THE ASSESSMENT YEAR 2002 - 03 AND 2005 - 06 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: NIRANJAN CHOUDHURY, PLOT NO.122, SAHID NAGAR, BHUBANESWAR 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(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.