Shri Dilip Kumar Agarwala, Malda v. ITO, Ward - 1, Malda, Malda

ITA 662/KOL/2011 | 2005-2006
Pronouncement Date: 14-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 66223514 RSA 2011
Assessee PAN ACSPA0628C
Bench Kolkata
Appeal Number ITA 662/KOL/2011
Duration Of Justice 3 year(s) 6 month(s) 12 day(s)
Appellant Shri Dilip Kumar Agarwala, Malda
Respondent ITO, Ward - 1, Malda, Malda
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 14-11-2014
Assessment Year 2005-2006
Appeal Filed On 02-05-2011
Judgment Text
I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 662 /KOL . / 20 1 1 ASSESSMENT YEAR : 200 5 - 20 0 6 SRI DILIP KUMAR AGARWALA ............. ...... ............... .. .APP ELL ANT GOUR ROAD MOKDUMPUR MALDA [PAN : A C SPA 0628 C ] - VS. - INCOME TAX OFFICER ................................. ..... .... ........ . RESPONDENT WARD - 1 MALDA INCOME TAX OFFICE FIRST FLOOR NETAJI COMMERCIAL MARKET P.O . + P.S. : MALDA DISTRICT - MALDA - 732 101 APPEARANCES BY: SHRI SOMNATH GHOSH ADVOCATE FOR THE ASSESSEE SHRI IMLIMEREN JAMIR JC IT SR. D.R. FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEM BER 1 3 2 01 4 DATE OF PRONOUNCING THE ORDER : NO VEM BER 14 201 4 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) JALPAIGURI IN APPEAL NO. 2 2 / MLD/ CIT(A) / JAL/ 2010 - 11 DATED 18 . 03 .20 1 1 FOR THE ASSESSMENT YEAR 200 5 - 0 6 . 2 . SHRI SOMNATH GHOSH ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI IMLIMEREN JAMIR J CIT SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 2 OF 7 3. IN THE ASSESSEE S APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - (1) THE ORDERS PASSED BY THE LOWER AUTHORITIES ARE ARBITRARY ERRONEOUS INVALID AND BAD IN LAW. (2)(A) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE COULD NOT ESTABLISH WITH ANY EVIDENCE THAT THE CASH CREDITORS HAVE ANY CREDIT WORTHINESS . (2)(B) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN HOLDING THAT SHRI SANJAY PANDEY ONE OF THE PROPOSED PURCHASERS OF LAND HAD GIVEN FALSE STATEMENT REGARDING THE TRANSACTION WITH THE APPELLANT. (2)(C) ON THE FACT S IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THE ADVANCE AMOUNTS RECEIVED FROM THE PROPOSED PURCHASERS OF LAND REMAINED WITH THE APPELLANT FOR A VERY SHORT WHILE AND THAT THEY DID NOT SERVE ANY WORTHWHILE PURPOSE WITH T HE APPELLANT WHETHER IN HIS BUSINESS OR EVEN IN HIS PERSONAL FINANCIAL AFFAIRS DURING THE PERIOD THEY REMAINED WITH THE APPELLANT. (2)(D) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DISBELIEVING THE AFFIDAVITS FILED BY THE PRO POSED PURCHASERS OF LAND WITHOUT ANY POSITIVE EVIDENCE AGAINST THEM. (2)(E) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN HOLDING THAT THE CREDITWORTHINESS OF THE CREDITORS WERE NOT ESTABLISHED AND THAT THE ASSESSEE ALSO FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS . (2)(F) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN SUSTAIN ING TH E ADDITION OF RS.20 00 000/ - ON ACCOUNT OF SO - CALLED UNDISCLOSED CASH FOUND IN THE BANK. (3)(A) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN SUSTAINING THE DISALLOWANCES OF RS.21 787/ - BEING 10% OUT OF THE TRUCK FREIGHT CHARGES RS.7 383/ - BEING 20% OF TELEPHONE CHARGES AND OF RS.1 188/ - BEING THE BUILDING INSURANCE CHARGES INCURRED BY THE APPELLANT. (3)(B) ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN SUSTAINING THE ABOVE ROUTINE DISALLOWANCES MADE IN A RE - ASSESSMENT DONE U/S 147 OF THE INCOME TAX ACT 1961 NEGLECTING TO TAKE INTO ACCOUNT THAT THESE DISALLOWANCES CANNOT BE CONSIDERED AS ESCAPEMENT OF INCOME. I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 3 OF 7 4 . AT THE TIME OF HEARING IT WAS SUBMITTED BY THE LD. A.R. THAT HE DID NOT WISH TO PRESS GROUNDS 3(A) AND 3(B) OF THE ASSESSEE S APPEAL. CONSEQUENTLY THE SAME STANDS DISMISSED AS NOT PRESSED. 5. IN RESPECT OF GROUNDS 2(A) TO 2(F) IT WAS SUBMITTED BY THE LD. A.R. THAT THE ASSESSEE OWNED LAND AT MALDA. IT WAS THE SUBMISSION THAT HE HAD ENTERED INTO AN AGREEMENT TO SELL THE SAID PROPERTY TO SIX PERSONS NAMELY SHRI APURBA SARKAR SHRI DILIP KUMAR BARMAN SHRI RAMKRISHNA SAHA MISS MALOBIKA MUKHERJEE SHRI PRABHAT KUMAR MONDAL AND SHRI SANJAY PANDEY . IT WAS THE SUBMISSION THAT THE COPIES OF THE AGREEMENTS FOR LAND SALE WERE AT PAGES 37 TO 57 OF THE PAPER BOOK. IT WAS THE SUBMISSION THAT THE AGREEMENTS WERE ENTE RED INTO WITH THE SAID SIX PERSONS ON 30.03.2005 AND IT WAS AGREED IN THE SAID AGREEMENTS THAT THE SALE CONSIDERATION WAS TO BE PAID ON OR BEFORE 7 TH APRIL 2005. THE ASSESSEE HAD RECEIVED ADVANCES FROM THE S AID PERSONS TOTALLING TO RS.20 00 000/ - . AS PER THE SAID AGREEMENTS THE PURCHASERS HAD PAID ADVANCES VARYING BETWEEN RS.3 50 000/ - AND RS.3 25 000/ - TOTALLING TO RS.20 00 000/ - . THE TOTAL CONSIDERATION FOR THE SAID LAND WAS NEARLY RS.40 00 000/ - . AS THE SAID PURCHASERS HAD BEEN UNABLE TO PAY THE BALANCE OF THE SAID CONSIDERATION BEFORE 7 TH APRIL 2005 AS MENTIONED IN THE SALE AGREEMENT THE SALE AGREEMENT WAS CANCELLED AND THE AMOUNTS WERE RETURNED ON 11 TH APRIL 2005. IT WAS THE SUBMISSION THAT OUT OF THE SIX PERSONS FIVE PERSONS HAD APPEARED BEFORE TH E ASSESSING OFFICER AND THEIR STATEMENTS HAD ALSO RECORDED BY THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT ALL OF THEM HAD AGREED THAT THEY HAD PAID THE ADVANCE S TO THE ASSESSEE. THEY HAD ALSO EXPLAINED THE SOURCE FOR MAKING THE ADVANCE PAYMENT TO THE ASSESSEE. THEY HAD ALSO STATED IN THE STATEMENT THAT AS THEY WERE UNABLE TO PAY THE SALE CONSIDERATION THEY COULD NOT PROCEED WITH THE AGREEMENT AND THEY HAD ALSO RECEIVED BACK THE SAID ADVANCE. IT WAS THE SUBMISSION THAT THE COPIES OF THE SAID DEPOSITIO NS MADE BEFORE THE ASSESSING OFFICER WERE I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 4 OF 7 SHOWN AT PAGES 26 TO 35 OF THE PAPER BOOK. IT WAS THE FURTHER SUBMISSION BY THE LD. A.R. THAT NECESSARY AFFIDAVITS FROM THE INTENDING PURCHASERS HAD ALSO BEEN FILED WHICH WAS SHOWN AT PAGES 12 TO 17 OF THE PAPER BO OK. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER DISBELIEVED THE CLAIM OF THE ASSESSEE THAT HE HAD RECEIVED THE AMOUNT OF RS.20 00 000/ - AS ADVANCE FROM THE SAID SIX PERSONS AND HAD TREATED THE SAME AS UNEXPLAINED INCOME OF THE ASSESSEE. ON A SPECIFIC QUERY FROM THE BENCH AS TO WHAT THE ASSESSING OFFICER HAS DONE IN RESPECT OF THE REFUND OF THE ADVANCE PAID. IT WAS THE SUBMISSION BY THE LD. A.R. THAT THE AMOUNTS HAD BEEN RECEIVED BY THE ASSESSEE ON 30.03.2005 AND CONSEQUENTLY FOR THE ASSESSMENT YEAR UND ER APPEAL BEING ASSESSMENT YEAR 2005 - 06 THE ASSESSING OFFICER HAD ADDED THE SAME BUT REFUND HAVING BEEN DONE ON 07.04.2005 RELEVANT TO THE ASSESSMENT YEAR 2006 - 07 NO PROCEEDINGS HAVE BEEN INITIATED. IT WAS THE SUBMISSION THAT THE REFUND HAS NOT BEEN DIS TURBED IN THE COURSE OF ANY ASSESSMENT PROCEEDINGS. IT WAS THE FURTHER SUBMISSION BY THE LD. A.R. THAT THE ASSESSING OFFICER HAS QUESTIONED THE CREDITWORTHINESS OF THE SIX PERSONS. IT WAS THE SUBMISSION THAT ALL THE PERSONS HAVING APPEAR ED BEFORE THE ASSES SING OFFICER AND HAVING CONFIRMED THE TRANSACTIONS BEFORE THE ASSESSING O FFICER AND THE ADVANCE AMOUNT RECEIVED BY THE ASSESSEE HAVING BEEN REFUNDED AND THE REFUND HAVING ALSO BEEN CONFIRMED BY THE PERSONS BEFORE THE ASSESSING OFFICER NO ADDITION WAS LIAB LE TO BE MADE IN THE HANDS OF THE ASSESSEE. IT WAS THE FURTHER SUBMISSION THAT THE LD. CIT(APPEALS) HAD CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY HOLDIN G THAT THE WHOLE TRANSACTIONS WERE NON - BELIEVABLE TRANSACTIONS. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSING OFFICER HAD ALSO MADE AN ALLEGATION THAT THE AGREEMENT - HOLDERS WERE EMPLOYEES OF THE ASSESSEE. IT WAS THE FURTHER SUBMISSION THAT BEFORE THE ASSESSING OFFICER IT WAS CLARIFIED THAT ALL THE PERSONS WERE NOT EMPLOYEES OF THE ASSESSEE AND THAT ONE OF THEM WAS ALSO WORKING IN BANGALORE AS HAS BEEN RECORDED BY THE LD. CIT(APPEALS). IT WAS THE SUBMISSION THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) MAY BE DELETED. I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 5 OF 7 6. IN REPLY LD. D.R. DREW OUR ATTENTI ON TO PAGE 72 OF THE PAPER BOOK WHICH WAS THE PERSONAL BALANCE - SHEET OF THE ASSESSEE AS ON 31.03.2005 WHEREIN THE RECEIPTS FROM THE SIX PERSON S TOWARDS ADVANCE AGAINST THE SAID LAND HAVE BEEN RECORDED. IT W A S THE SUBMISSION THAT THE SAID BALANCE - SHEET DI D NOT DISCLOSE ANY LAND IN THE ASSETS SIDE. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(APPEALS) WAS LIABLE TO BE CONFIRMED. 7. TO THIS SUBMISSION LD. A.R. DREW OUR ATTENTION TO PAGE 90 OF THE PAPER BOOK WHICH WAS THE COPY OF THE BALANCE SHEET OF SHRI DEORAHA ENTERPRISES A PROPRIETORSHIP CONCERN OF THE ASSESSEE WHEREIN THE SAID LAND HAS BEEN DISCLOSED. IT WAS THE FURTHER SUBMISSION THAT THE ADVANCE S HAD BEEN RECORDED IN THE BOOKS OF THE ASSESESE IN HIS PERSONAL ACCOUNT AS THE AMOUNT HAD BEEN REC EIVED BY HIM PERSONALLY AND THE SAME WAS LIABLE TO BE TRANSFERRED TO THE BUSINESS ACCOUNT ONLY WHEN THE TRANSACTIONS WERE COMPLETED. IT WAS THE SUBMISSION THAT THERE WAS NO DEFECT IN THE CLAIM OF ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS SPECIFICALLY MADE A CLAIM THAT THE ASSESSEE HAS RECEIVED ADVANCE FOR THE SALE OF A PROPERTY OF LAND OWNED BY HIM. THAT THE SAID ASSET BEING THE LAND IS SHOWN IN THE BALANCE - SHEET OF THE PROP RIETORSHIP CONCERN OF THE ASSESSEE OR IN THE PERSONAL ACCOUNTS OF THE ASSESSEE COULD NOT MAKE A DIFFERENCE IN SO FAR AS THE PROPERTY IS IN THE NAME OF ASSESSEE AND THE TRANSACTION IS BEING DONE BY THE ASSESSEE. THE ASSESSEE HAS ALSO CATEGORICALLY STATED TH E PERSONS WHO ARE THE INTENDING PURCHASERS. THE ASSESSEE HAS PRODUCED THE AGREEMENTS ENTERED INTO BETWEEN THE ASSESSEE AND THE PURCHASERS. THESE AGREEMENTS ADMITTEDLY ARE NOT BACKDATED ALSO IN SO FAR AS THE DATE OF PURCHASE AND THE STAMP PAPER ARE DATED 07 .03.2005 . THEREFORE IT CANNOT EVEN BE ALLEGED THAT THE AGREEMENT FOR SALE IS AN AFTER - THOUGHT. FURTHER I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 6 OF 7 THE AGREEMENT - HOLDERS HAVE SPECIFICALLY APPEARED BEFORE THE ASSESSING OFFICER AND HAVE ALSO CONFIRMED THE TRANSACTION. A PERUSAL OF THE STATEMENT RECORD ED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS FROM THE SAID AGREEMENT - HOLDERS ALSO SHOWS THAT THEY HAVE CATEGORICALLY ADMITTED BEFORE THE ASSESSING OFFICER THAT THEY HAVE RECEIVED BACK THE ADVANCES GIVEN ALSO. THE AGREEMENT - HOLDERS HAVE ALSO SPECIFICALLY STATED THE SOURCES OF MONEY FOR MAKING THE PAYMENT OF THE ADVANCE. ADMITTEDLY THE ASSESSEE HAS PROVED THE IDENTITY BY PRODUCING THE PERSONS GENUINENESS HAS BEEN PROVED BY THE FACT THAT THE PERSONS HAVE CONFIRMED THE TRANSACTION BEFORE THE ASSESSING O FFIC ER AND THE TRANSACTIONS ARE ALSO SUPPORTED BY THE AGREEMENTS FOR SALE AND THE CREDITWORTHINESS IS PROVED BY THE FACT THAT THE AGREEMENT - HOLDERS HAVE ALSO EXPLAINED THE SOURCE FROM WHICH THEY HAVE GIVEN THE ADVANCE. IN THESE CIRCUMSTANCES WE ARE OF THE VIE W THAT THE ADDITION OF THE SAID AMOUNT CANNOT BE MADE IN THE HANDS OF THE ASSESESE BY INVOKING THE PROVISIONS OF SECTION 69A OF THE ACT. IN THE RESULT THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(APPEALS) STANDS DELETED. 9 . IN THE RESULT THE APPEAL OF THE ASSESSE E IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEM BER 2014. SD/ - SD/ - SHAMIM YAHYA GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEMB ER) KOLKATA THE 14 TH D AY OF NOVEM B ER 201 4 I.T.A. NO . 662 /KOL./201 1 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 7 OF 7 COPIES TO : (1) SRI DILIP KUMAR AGARWALA GOUR ROAD MOKDUMPUR MALDA (2) INCOME TAX OFFICER WARD - 1 MALDA INCOME TAX OFFICE FIRST FLOOR NETAJI COMMERCIAL MARKET P.O. + P.S. : MALDA DIS TRICT - MALDA - 732 101 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSI STANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES KOLKATA LAHA/SR. P.S.