Md. Naimuddin, Kolkata v. DCIT, Cir-8, Kolkata, Kolkata

ITA 276/KOL/2014 | 2006-2007
Pronouncement Date: 21-10-2016

Appeal Details

RSA Number 27623514 RSA 2014
Assessee PAN AEUPM7154L
Bench Kolkata
Appeal Number ITA 276/KOL/2014
Duration Of Justice 2 year(s) 8 month(s) 4 day(s)
Appellant Md. Naimuddin, Kolkata
Respondent DCIT, Cir-8, Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 21-10-2016
Date Of Final Hearing 10-08-2016
Next Hearing Date 10-08-2016
Assessment Year 2006-2007
Appeal Filed On 17-02-2014
Judgment Text
I.T.A. NO. 276/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA B(SMC) BENCH KOLKATA BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER I.T.A. NO. 276/KOL/ 2014 ASSESSMENT YEAR: 2006-2007 MD. NAIMUDDIN ..................................... .................................APPELLANT 9 MITRA LANE KOLKATA-700 009 [PAN: AEUPM 7154 L] -VS.- DEPUTY COMMISSIONER OF INCOME TAX ................. ...............RESPONDENT CIRCLE-8 KOLKATA AAYAKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA-700 069 APPEARANCES BY: SHRI A.K. TIBREWAL FCA FOR THE ASSESSEE SHRI A.K. SINGH JCIT D.R. FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : AUGUST 10 2016 DATE OF PRONOUNCING THE ORDER : OCTOBER 21 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXX KOLKA TA DATED 04.11.2013 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS.8 05 689/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 68 OF THE INCOME TAX ACT 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF TRADING OF TIN SHEETS UNDER THE NAM E AND STYLE OF HIS PROPRIETARY CONCERN M/S. INDO TEEN COMPANY. THE RET URN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 26 .03.2007 DECLARING TOTAL INCOME OF RS.1 72 888/-. SUBSEQUENTLY A LETTE R DATED 20.11.2007 WAS FILED BY THE ASSESSEE ALONG WITH RE-COMPUTATION OF HIS INCOME WHEREIN ADDITIONAL INCOME OF RS.35 300/- WAS OFFERED BY HIM TO TAX ON ACCOUNT OF SERVICE CHARGES/COMMISSION. KEEPING IN VIEW THE SAI D RE-COMPUTATION I.T.A. NO. 276/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 5 FILED BY THE ASSESSEE NOTICE UNDER SECTION 148 WAS ISSUED BY THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS MAINTAINED A BANK ACCOUNT WITH JAMMU & KASHMIR BANK LIMITED KOLKATA WHEREIN TOTAL DEPOSITS OF RS.22 81 459/- WERE MADE DURING THE YEA R UNDER CONSIDERATION. SINCE THE SAID BANK ACCOUNT WAS NOT REFLECTED IN THE ACCOUNTS OF THE ASSESSEE THE ASSESSEE WAS CALLED U PON BY THE ASSESSING OFFICER TO EXPLAIN THE DEPOSITS FOUND TO BE MADE IN THE SAID BANK ACCOUNT. THE ASSESSEE HOWEVER COULD NOT OFFER ANY SATISFAC TORY EXPLANATION IN THIS REGARD. THE ASSESSING OFFICER THEREFORE TREA TED THE ENTIRE DEPOSITS FOUND TO BE MADE IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE WITH JAMMU & KASHMIR BANK LIMITED KOLKATA BRANCH AGGREG ATING TO RS.22 81 459/- AS UNDISCLOSED INCOME OF THE ASSESSE E AND THE SAME ALONG WITH INTEREST OF RS.220/- CREDITED IN THE SAID BAN K ACCOUNT WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSE SSMENT COMPLETED UNDER SECTION 143(3)/147 OF THE ACT VIDE ORDER DATE D 28.11.2008. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147 AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE ADDITIONS OF RS.22 81 459/- AND RS.220/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRANSAC TIONS APPEARING IN HIS UNDISCLOSED BANK ACCOUNT WITH JAMMU & KASHMIR BANK LIMITED KOLKATA BRANCH. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS) IT WAS SUBMITTED BY THE ASSESSEE THAT THE DEPOSITS FOUND TO BE MADE IN HIS BANK ACCOUNT WITH JAMMU & KASHMIR BA NK LIMITED WERE RELATED TO HIS TRANSACTIONS OF PURCHASE AND SALE OF IRON AND STEEL SHEETS MADE ON BEHALF OF THE DIFFERENT CUSTOMERS AS AGENT AND SINCE THE COMMISSION/SERVICE CHARGES RECEIVED IN RESPECT OF T HE SAID TRANSACTIONS AMOUNTING TO RS.35 300/- WAS ALREADY OFFERED TO TAX IN THE REVISED COMPUTATION THERE WAS NO JUSTIFICATION ON THE PART OF THE ASSESSING OFFICER TO ADD THE ENTIRE AMOUNT OF DEPOSITS TO THE TUNE OF RS.22 81 459/-. AFTER CONSIDERING THIS SUBMISSION OF THE ASSESSEE A S WELL AS THE MATERIAL I.T.A. NO. 276/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 5 AVAILABLE ON RECORD THE LD. CIT(APPEALS) DECIDED T HE ISSUE VIDE PARAGRAPH NO. 1.2 OF HIS IMPUGNED ORDER WHICH READS AS UNDER :- IN JAMMU & KASHMIR BANK LTD. A/C. NO.0325SB3444 DE POSITS OF ABOUT RS.22.81 LACS HAVE BEEN MADE IN FINANCIAL YEAR 2005-06 MOSTLY IN CHEQUE. ONE CASH DEPOSIT OF RS.5 LACS HAS BEEN MADE ON 30.05.2005. CASH WITHDRAWAL OF RS.6 LA CS HAS BEEN MADE ON 19.04.2005. THUS CONSIDERING THE CASH DEPOSIT OF RS.5 LACS OUT OF WITHDRAWAL OF RS.6 LACS THE CR EDITS OF RS.17 81 500/- [RS.22 81 500/- - RS.5 00 000/-] NEE DED TO BE EXPLAINED BY THE APPELLANT. THE APPELLANT CLAIMED TO HAVE EARNED SERVICE CHARGES/COMMISSION ON TRANSACTIONS OF RS.17 65 000/ - APPEARING AS DEPOSITS IN JAMMU & KASHMIR BANK A/C. THE INCOME FROM SUCH ACTIVITIES WAS OFFERED AS RS.35 30 0/- AND WAS REJECTED BY THE A.O. WHO TREATED ALL THE DEPOS ITS AS INCOME. THE APPELLANT IS A TIN SHEET RETAILER AND HAS SOME TURNOVER UNDER CONCERN OF M/S. INDO TEEN CO. THE APPELLANT O FFERED THE RECEIPT AS SALES RECEIPT AND CLAIMED TO HAVE EA RNED COMMISSION AT THE RATE OF 2.5-3%. THE APPELLANT FAI LED TO FULLY EXPLAIN TO A.O. HOW THE INCOME IN SAID TRANS ACTIONS WAS ABOUT 2.5%. IN P&L A/C. OF M/S. INDO TEEN CO. GROSS PROFIT MARGIN OF ABOUT 6% HAS. BEEN SHOWN. ONE OPTION MAY BE TO ASSESS THE INCOME CONTAINED IN THE UNDISCLOSED RECEIPTS/DEPOSITS AS 10% OF THE DEPOSITS. THIS GIVE S AN INCOME OF RS.1 76 500/-. ALTERNATIVELY PEAK VALUE OF DEPOSIT BALANCE IN THE SAID BANK ACCOUNT MAY BE TAKEN AS IN COME. IN THE SAID A/C. FIRST PEAK IS OF RS.6 LACS ON 18.04.2 005 AND SECOND PEAK OF RS.8 OS 689/- IS ON 30.05.2005. IN E ARLIER YEAR [A.Y.2002-03] CASH OF RS.10 LACS WAS FOUND AVA ILABLE WITH THE APPELLANT. THE CLAIM OF APPELLANT THAT THE CASH DEPOSIT IN ASSESSMENT YEAR 2002-03 SHOULD BE ADJUST ED AGAINST CASH DEPOSITS IN THE CURRENT ASSESSMENT YEA R 2006- 07 IS NOT ACCEPTABLE AS THE PERIOD RELEVANT TO ASSE SSMENT YEAR 2002-03 AND THAT RELEVANT TO ASSESSMENT YEAR 2 006-07 ARE FAR APART. AS A RESULT THE INCOME ASSOCIATED W ITH THE UNDISCLOSED DEPOSITS IS TAKEN AS RS.8 05 689/- BEIN G HIGHER OF -RS.8 05 689/- OR RS.1 76 500/-. THUS THE ADDIT ION IS RESTRICTED TO RS.8 05 689/- AND THE BALANCE AMOUNT IS DELETED. THE LD. CIT(APPEALS) THUS SUSTAINED THE ADDITION OF RS.22 81 459/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE TRANSACT IONS OF THE ASSESSEE APPEARING IN HIS UNDISCLOSED BANK ACCOUNT OF JAMMU & KASHMIR BANK LIMITED TO THE EXTENT OF RS.8 05 689/- BEING THE PE AK CREDIT APPEARING IN I.T.A. NO. 276/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 5 THE SAID ACCOUNT. STILL AGGRIEVED BY THE ORDER OF T HE LD. CIT(APPEALS) THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESESE HAS INVITED OUR ATTENTION TO THE COPY OF THE BANK ACCOU NT OF THE ASSESSEE MAINTAINED WITH JAMMU & KASHMIR BANK LIMITED AS PLA CED AT PAGE NOS. 1 TO 7 OF HIS PAPER BOOK TO POINT OUT THAT A SUM OF R S.10 00 000/- RECEIVED BY THE ASSESSEE IN CASH AS ADVANCE AGAINST SALE OF PROPERTY WAS DEPOSITED IN THE SAID ACCOUNT IN FEBRUARY 2002 AND THE SAME WAS SUBSEQUENTLY WITHDRAWN IN THE MONTH OF MARCH 2002. HE HAS CONTE NDED THAT THIS AMOUNT WAS AVAILABLE TO THE ASSESSEE TO EXPLAIN THE PEAK CREDIT APPEARING IN THE SAID BANK ACCOUNT FOR THE YEAR UNDER CONSIDE RATION AND THEREFORE THE ADDITION AS CONFIRMED BY THE LD. CIT(APPEALS) T O THE EXTENT OF PEAK CREDIT IS NOT SUSTAINABLE. I AM UNABLE TO ACCEPT TH IS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. AS RIGHTLY OBSERVED BY TH E LD. CIT(APPEALS) IN THIS REGARD THE AMOUNT WITHDRAWN IN THE FINANCIAL YEAR 2001-02 CANNOT BE CONSIDERED AS AVAILABLE TO THE ASSESSEE IN FINAN CIAL YEAR2005-06 DUE TO CONSIDERABLE TIME LAPSE ESPECIALLY WHEN THERE IS N OTHING BROUGHT ON RECORD BY THE ASSESESE TO SHOW THAT THE AMOUNT WITH DRAWN IN MARCH 2002 WAS STILL AVAILABLE WITH HIM TO EXPLAIN THE DE POSITS FOUND TO BE MADE IN HIS BANK ACCOUNT IN THE FINANCIAL YEAR 2004 -05. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO CONTENDED THAT THE TRANSA CTIONS REFLECTED IN THE UNDISCLOSED BANK ACCOUNT OF THE ASSESSEE WITH JAMMU & KASHMIR BANK LIMITED WERE RELATED TO HIS BUSINESS OF DEALING IN IRON AND STEEL SHEETS AS AGENT AND THE ASSESSEE HAVING OFFERED THE COMMISSIO N/SERVICE CHARGES AMOUNTING TO RS.35 300/- RECEIVED IN RESPECT OF SUC H TRANSACTIONS NO FURTHER ADDITION IS REQUIRED TO BE MADE. I AM UNABL E TO ACCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE ALSO . THERE IS NOTHING EITHER REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE WITH JAMMU & KASHMIR BANK LIMITED OR EVEN BROUGHT ON RECORD ON BEHALF OF THE ASSESSEE TO SUPPORT AND SUBSTANTIATE HIS CLAIM THAT THE TRANSACTIONS RE FLECTED IN HIS UNDISCLOSED BANK ACCOUNT WITH JAMMU & KASHMIR BANK LIMITED ARE I.T.A. NO. 276/KOL./2014 ASSESSMENT YEAR: 2006-2007 PAGE 5 OF 5 RELATED TO HIS BUSINESS OF DEALING IN IRON AND STEE L SHEETS AND IN THE ABSENCE OF THE SAME IT CANNOT BE SAID THAT THE SAI D TRANSACTIONS WERE RELATED TO THE BUSINESS OF THE ASSESSEE. IN ANY CAS E AS RIGHTLY CONTENDED BY THE LD. D.R. THE PEAK CREDIT REFLECTED IN THE U NDISCLOSED BANK ACCOUNT OF THE ASSESSEE WITH JAMMU & KASHMIR BANK LIMITED R EPRESENTS INVESTMENT OF THE ASSESSEE AND IN THE ABSENCE OF AN Y SATISFACTORY EXPLANATION OFFERED BY THE ASSESSEE REGARDING THE S OURCE THEREOF THE SAME IS LIABLE TO BE ADDED IN HIS HANDS AS UNEXPLAI NED INVESTMENT. I THEREFORE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF TRANSACTIONS APPEARING IN THE UNDISCLOSED BANK ACCO UNT OF THE ASSESSEE TO THE EXTENT OF PEAK CREDIT APPEARING IN THE SAID ACC OUNT AND UPHOLDING THE SAME I DISMISS THIS APPEAL FILED BY THE ASSESSEE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 21 2 016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA THE 21 ST DAY OF OCTOBER 2016 COPIES TO : (1) MD. NAIMUDDIN 9 MITRA LANE KOLKATA-700 009 (2) DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-8 KOLKATA AAYAKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX(APPEALS)-XXX KOLK ATA; (4) COMMISSIONER OF INCOME TAX- (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES KOLKATA LAHA/SR. P.S.