Panchanan Jana, Purba Medinipur v. ITO, Wd - 27(3), Purba Medinipur

ITA 373/KOL/2017 | 2012-2013
Pronouncement Date: 22-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 37323514 RSA 2017
Assessee PAN ACSPJ7683C
Bench Kolkata
Appeal Number ITA 373/KOL/2017
Duration Of Justice 2 year(s) 8 month(s) 29 day(s)
Appellant Panchanan Jana, Purba Medinipur
Respondent ITO, Wd - 27(3), Purba Medinipur
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 22-11-2019
Date Of Final Hearing 23-10-2019
Next Hearing Date 23-10-2019
Last Hearing Date 23-10-2019
First Hearing Date 27-08-2019
Assessment Year 2012-2013
Appeal Filed On 23-02-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENC H KOLKATA BEFORE SHRI A.T. VARKEY JM &DR. A.L.SAINI AM ./ITA NO.373/KOL/2017 ( / ASSESSMENT YEAR: 2012-13) PANCHANAN JANA BHUBAN KALUA TAMLUK PURBA MEDINIPUR WEST BENGAL-721627 VS. ITO WARD-27(3) HALDIA ./ ./ PAN/GIR NO. : ACSPJ 7683 C (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SUBASH AGARWAL ADVOCATE SHRI ATIN DAS & SUGATA DAS ADVOCATE RESPONDENT BY :SHRI SUPRIYO PAL JCIT SR. DR / DATE OF HEARING : 23/10/2019 /DATE OF PRONOUNCEMENT : 22/11/2019 / O R D E R PER DR. A. L. SAINI AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PER TAINING TO ASSESSMENT YEAR 2012- 13 IS DIRECTED AGAINST THE ORDER PASSED BY THE COM MISSIONER OF INCOME TAX (APPEAL)-7 KOLKATA IN APPEAL NO. 79/CIT(A)-7/KOL/WD-27(3)/16- 17 WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) DATED 30.03.2015. PANCHANAN JANA ITA NO.373/KOL/2017 ASSESSMENT YEAR:2012-13 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 92 51 7 89/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED DIFFERENCE BETWEEN THE PROPRIETO RS CAPITAL ACCOUNT DECLARED IN THE ORIGINAL RETURN AND THE REVISED RETURN PERTAINI NG TO A.Y. 2011-12. 2. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN GIV ING DIRECTIONS TO THE A.O. TO REOPEN THE ASSESSMENTS OF THE ASSESSEE FOR THE A.YS . 2010-11 AND 2011-12 FOR PROTECTIVE ADDITION ON ACCOUNT OF ALLEGED BROUGHT F ORWARD BUILT UP CAPITAL. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 80 78 700/- MADE BY THE A.O. ON ACCOUNT OF PAYMENTS MADE TO M/S KHADIM INDIA LTD. B Y WRONGLY INVOKING THE PROVISIONS OF SEC. 40A(3) OF THE ACT. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 3 2 0 000/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED UNDISCLOSED CONTRACTUAL INCOME. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 3. GROUND NOS. 1 AND 2 RAISED BY THE ASSESSEE RELAT E TO ADDITION OF RS. 92 51 789/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED DIFF ERENCE BETWEEN THE PROPRIETORS CAPITAL ACCOUNT DECLARED IN THE ORIGINAL RETURN AND REVISED RETURN PERTAINING TO A.Y. 2011- 12. 4. AT THE OUTSET ITSELF THE LD. COUNSEL FOR THE AS SESSEE BROUGHT TO OUR NOTICE THAT THIS ADDITION HAS ALREADY BEEN MADE BY THE ASSESSING OFF ICER IN THE A.Y. 2010-11 THEREFORE TO MAKE THE ADDITION IN THE CURRENT ASSESSMENT YEAR IS TANTAMOUNT TO DOUBLE ADDITION. THE LD. COUNSEL TOOK US THROUGH THE PREVIOUS YEARS ASS ESSMENT ORDER DATED 29.12.2017 FOR A.Y. 2010-11 WHEREIN THE ASSESSING OFFICER HAS OBSE RVED AS FOLLOWS: PANCHANAN JANA ITA NO.373/KOL/2017 ASSESSMENT YEAR:2012-13 3 THE ASSESSEE HAS FILED HIS ORIGINAL RETURN OF INCO ME FOR THE ASSESSMENT YEAR 2010-11 BELATEDLY ON 22.12.2010 DECLARING TOTAL INCOME OF R S. 7 81 510/-. THEREAFTER THE ASSESSEE HAS ALSO FILED AN ANOTHER RETURN ON 31.03. 2012 DECLARING TOTAL INCOME OF RS. 8 31 510/-. SINCE THE ORIGINAL RETURN WAS FILED BEL ATEDLY THE RETURN FILED ON 31.03.2012 WAS TREATED AS NON-EST. BY FILING THIS RETURN TREA TED AS NON-EST RETURN THE ASSESSEE HAS ENHANCED HIS CAPITAL OF RS. 90 56 197/- (RS. 1 22 2 0 494/- MINUS RS. 31.64 297/- SHOWN IN ORIGINAL RETURN). TAKING CUE FROM THAT NON-EST R ETURN FOR A.Y. 2010-11 CAPITAL ACCOUNT IS DRAWN RS. 1 31 15 571/- IN THE BALANCE SHEET AS ON 31-03-2012. THUS THE INCREASE IN CAPITAL OF RS. 92 51 789/- WAS ADDED TO THE TOTAL I NCOME OF THE ASSESSEE FOR A.Y. 2012-13 IN THE ASSESSMENT U/S 143(3) DATED 30.03.2015. THE ASSESSEE PREFERRED THE APPEAL AGAINST THE SAID ORDER U/S 143(3) DATED 30.03.2015 AND LD. CIT(A)-7 KOLKATA VIDE HIS ORDER DATED 17.01.2017 HAS CONFIRMED THE SAID ADDITION WI TH A DIRECTION: THE A.O. IS DIRECTED TO REOPEN THE ASSESSMENT OF TH E APPELLANT OF THE A.Y. 2010-11 AND A.Y. 2011-12 FOR PROTECTIVE ADDITION OF THE BROUGHT FORWARD BUILT UP CAPITAL OF THE APPELLANT IN THE HANDS OF THE APPELLANT IN THE PROT ECTIVE ASSESSMENT TO BE MADE FOR THE A.YS. 2010-11 AND 2011-12 AS THE APPELLANT HAS CLAI MED THAT CAPITAL OF RS. 1 31 15 571/- HAD BEEN CARRIED OVER FROM THE PREVIOUS YEARS RELEV ANT TO THE A.YS 2010-11 & 2011-12. ACCORDINGLY THE SAME IS REJECTED. CONSEQUENTLY TH E ASSESSEE HAS FAILED TO SUBSTANTIATE THE SOURCE OF ENHANCED CAPITAL OF RS. 90 56 197/- D URING THE F.Y. 2009-10 RELEVANT TO THE A.Y. 2010-11. ACCORDINGLY THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 271(1)(C ) IS ALSO INITIATED SEPARA TELY FOR CONCEALMENT OF INCOME. SINCE THE ADDITION ON THIS SCORE HAS ALREADY BEEN M ADE SUBSTANTIVELY IN ASSESSMENT U/S 143(3) DATED 30.03.2015 FOR A.Y. 2012-13 AND FOLLOW ING THE DIRECTION OF LD. CIT(A)-7 KOLKATA DATED 17.01.2017 THE ADDITION MADE IN THI S PROTECTIVE ASSESSMENT IS PROTECTIVE IN NATURE. 5. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THR OUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FUR NISHED AND THE CASE LAWS RELIED UPON AND PERUSED THE FACT OF THE CASE INCLUDING THE FIND INGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THE ASS ESSEE INTRODUCED FRESH CAPITAL IN ASSESSMENT YEARS 2010-11 AND 2011-12. THE INCREASED CAPITAL BALANCE OF RS. 92 51 789/- IS COMING AS A BROUGHT FORWARD BALANCE FROM PREVIOU S YEARS. THE SAID INCREASE IN CAPITAL OF RS. 92 51 789/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR A.Y. 2012-13 IN THE ASSESSMENT U/S 143(3) DATED 30.03.2015. THE ASSESSE E PREFERRED APPEAL AGAINST THE SAID ORDER U/S 143(3) DATED 30.03.2015 AND LD. CIT(A) CO NFIRMED THE SAID ADDITION WITH A DIRECTION TO ASSESSING OFFICER THAT HE SHOULD MAKE PROTECTIVE ASSESSMENT FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12. ACCORDINGLY THE ASSESSING OFFICER MADE PANCHANAN JANA ITA NO.373/KOL/2017 ASSESSMENT YEAR:2012-13 4 PROTECTIVE ASSESSMENT IN A.Y. 2010-11 AND 2011-12. HOWEVER THE ASSESSING OFFICER ALSO MADE SUBSTANTIVE ASSESSMENT IN THE A.Y. 2012-13 WH ICH AMOUNT TO DOUBLE ADDITION. WE NOTE THAT ASSESSMENT ORDER FOR A.Y. 2010-11 DATED 2 9.12.2017 PASSED BY A.O U/S 144 /147 OF THE ACT CLEARLY SPEAKS THAT ADDITION OF RS . 90 56 157/- WAS MADE ON PROTECTIVE BASIS. IN THE ASSESSMENT ORDER FOR A.Y. 2012-13 PAS SED U/S 143(3) DATED 30.03.2015 THE ADDITION OF RS. 90 56 157/- WAS MADE ON SUBSTANTIVE BASIS. THUS IN THE A.Y. 2010-11 THE ADDITION WAS MADE ON PROTECTIVE BASIS WHEREAS IN A .Y. 2012-13 THE ADDITION WAS MADE ON SUBSTANTIVE BASIS HENCE IT IS DOUBLE ADDITION M ADE BY ASSESSING OFFICER WHICH IS NOT TENABLE IN LAW; THEREFORE WE DELETE THE ADDITION O F RS. 93 51 789/- MADE BY ASSESSING OFFICER. THESE GROUND NOS. 1 AND 2 RAISED BY THE A SSESSEE ARE ALLOWED. 6. GROUND NO. 3 RAISED BY THE ASSESSEE RELATES TO A DDITION OF RS. 80 78 700/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENTS MADE TO M/ S KHADIM INDIA LTD. 7. WHEN THIS ISSUE WAS CALLED OUT FOR HEARING THE L D. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TOWARDS THE ADDITIONAL EVIDENCES SUBMITTE D BY THE ASSESSEE IN RESPECT OF PAYMENT MADE OTHERWISE THEN BY ACCOUNT PAYEE CHEQUE S WHICH EXCEEDS BY RS. 20 000/- THE THRESHOLD LIMIT PRESCRIBED BY THE PROVISIONS OF SECTION 40A(3) OF THE ACT. WE HAVE GONE THROUGH THE ADDITIONAL EVIDENCES SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE AND WE ARE OF THE VIEW THAT THESE ADDITIONAL EVIDENCES WERE NEVER EXAMINED BY THE LOWER AUTHORITIES THEREFORE WE ARE OF THE VIEW THAT THIS ISSUE NEEDS TO BE SENT TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THE REASONABLE CAUSE FOR NON-PRODUCTION O F THESE ADDITIONAL EVIDENCES BEFORE THE LOWER AUTHORITIES WHICH IS GIVEN BELOW: A) THE ASSESSING OFFICER STATED AT PAGE 6 OF THE AS SESSMENT ORDER THAT THE ENTIRE PAYMENT OF RS. 80 78 700/- WAS MADE IN CASH BY THE ASSESSEE IN VIOLATION OF SECTION 40A(3) AS PER THE CONFIRMATION RECEIVED FRO M M/S KHADIM INDIA LTD. B) THE A/R WHO APPEARED BEFORE THE LD. CIT(A) MADE GENERAL SUBMISSIONS BEFORE HIM STATING THAT SINCE THE TRANSACTIONS ARE GENUINE SECTION 40A(3) WOULD NOT APPLY. PANCHANAN JANA ITA NO.373/KOL/2017 ASSESSMENT YEAR:2012-13 5 C) THE ASSESSEE AND THE A/R BONAFIDELY BELIEVED TH AT THE VERSION OF THE A.O. AS STATED IN THE ASSESSMENT ORDER IS CORRECT. IT IS CA TEGORICALLY STATED THAT THE ASSESSING OFFICER NEVER PLACED BEFORE THE ASSESSEE ANY LETTER ALLEGEDLY OBTAINED FROM M/S KHADIM INDIA LTD. WHERE THEY ALLEGEDLY STA TED THAT THE ENTIRE PAYMENTS WERE RECEIVED IN CASH IN VIOLATION OF SECTION 40A(3 ). D) THE ASSESSEE APPROACHED M/S KHADIM INDIA LTD. AT THE ADVICE OF THE COUNSEL REPRESENTING HIS CASE BEFORE THE ITAT TO ASCERTAIN THE EXACT DETAILS OF PAYMENTS MADE IN CASH. ACCORDINGLY THE ASSESSEE APPROACHED M/S KHADIM INDIA LTD. E) THE SAID M/S KHADIM INDIA LTD. THEREUPON EXAMINE D THEIR RECORDS AND THEN ISSUED THE CERTIFICATE IN QUESTION WHEREIN THEY HAV E CERTIFIED THE AMOUNT RECEIVED BY THEM IN CASH. THEREFORE WE NOTE THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR NON- PRODUCTION OF THESE EVIDENCES BEFORE THE LOWER AUT HORITIES HENCE WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS PARTICULAR ISSUE AND REMI T THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO EXAMINATION AND TO AD JUDICATE THE ISSUE IN ACCORDANCE WITH LAW. THEREFORE GROUND NO. 3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO. 4 RAISED BY THE ASSESSEE RELATES TO A DDITION OF RS. 3 20 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED CONTRAC TUAL INCOME. 9. AT THE OUTSET ITSELF THE LD. COUNSEL FOR THE AS SESSEE POINTED OUT THAT THIS IS UNDISCLOSED CONTRACTUAL INCOME OF THE ASSESSEE. THE LD. COUNSEL FURTHER ARGUED THAT SAID UNDISCLOSED CONTRACTUAL INCOME IS RELATED TO THE ASSESSEES BUS INESS THEREFORE ONLY NET PROFIT ELEMENT IS TO BE DISCLOSED INSTEAD OF MAKING ADDITION OF T HE ENTIRE SUM OF RS. 3 20 000/-. THE LD. COUNSEL ALSO SUBMITTED TO THE BENCH THAT AVERAGE NE T PROFIT RATE OF THE ASSESSEE CONSISTING PREVIOUS YEAR AND CURRENT YEAR IS AT 9% THEREFORE T HE MAXIMUM ADDITION IF ANY TO BE MADE SHOULD NOT EXCEED 9% OF RS. 3 20 000/- WHICH C OMES TO RS. 28 800/-. THE LD. D.R. FOR THE REVENUE HAS FAIRLY AGREED THAT ONLY NET PR OFIT ELEMENT IS TO BE ADDED. 10. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE TH ROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FUR NISHED AND THE CASE LAWS RELIED UPON AND PERUSED THE FACT OF THE CASE INCLUDING THE FIND INGS OF THE LD CIT(A) AND OTHER PANCHANAN JANA ITA NO.373/KOL/2017 ASSESSMENT YEAR:2012-13 6 MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF RANICHERRA TEA CO. LTD. REPORTED IN 207 ITR 979 HELD THAT ONLY PROFIT ELEMENT THAT IS NET PROFIT RATE SHOULD BE ADDED TO THE TOTAL INCOM E OF THE ASSESSEE. THEREFORE KEEPING IN MIND THE PRINCIPLE OF NATURAL JUSTICE AND FAIR PLA Y WE DIRECT THE ASSESSING OFFICER TO DISALLOW 9% OF UNDISCLOSED CONTRACTUAL INCOME OF RS . 3 20 000/- WHICH COMES TO RS. 28 800/-. THUS GROUND RAISED BY THE ASSESSEE IS PA RTLY ALLOWED. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 22.11.2019 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 22/11/2019 ( SB SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. PANCHANAN JANA 2. ITO WARD-27(3) HALDIA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR) KOLKATA BENCHES KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT KOLKA TA BENCHES