Shri Nirmal Saha, Purba Medinipur v. ITO, Ward - 4, Haldia, Purba Medinipur

ITA 670/KOL/2010 | 2005-2006
Pronouncement Date: 08-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 67023514 RSA 2010
Assessee PAN AYAPS7045P
Bench Kolkata
Appeal Number ITA 670/KOL/2010
Duration Of Justice 1 year(s) 3 month(s) 1 day(s)
Appellant Shri Nirmal Saha, Purba Medinipur
Respondent ITO, Ward - 4, Haldia, Purba Medinipur
Appeal Type Income Tax Appeal
Pronouncement Date 08-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 08-07-2011
Assessment Year 2005-2006
Appeal Filed On 07-04-2010
Judgment Text
.. IN THE INCOME TAX APPELLATE TRIBUNAL BENCH S MC KOLKATA /BEFORE . .. . . .. . . .. . /SHRI C.D.RAO ACCOUNTANT MEMBER /ITA NO.670/KOL/2010 !'# $%/ ASSESSMENT YEAR : 2005-06 (() / APPELLANT ) - ' - ( -() /RESPONDENT) SHRI NIRMAL SAHA -VERSUS- I.T.O. WARD-4 HALDIA. (PAN:AYAPS 7045 P) () . / / FOR THE APPELLANT: SHRI R.N.DAS ASHIM DAS & SUGATA DAS -() . / / FOR THE RESPONDENT: SHRI N.DUTTA GUPTA 0 / ORDER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 25.02.2011 OF THE CIT(A)-CENTRAL-I KOLKATA PERTAINING TO A.YR. 2007- 08. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO WHILE DOING THE SCRUTINY ASSESSMENT ADDED THREE AMOUNTS BY OBSERVING AS UNDER :- (I) ON ACCOUNT OF CASH GIFT AMOUNTING TO RS.1 90 00 0/-: THE ASSESSEE IN HIS ACCOUNTS FOR THE PREVIOUS YEAR 2004-05 CLAIMED CREDIT OF RS.1 90 000/- WHICH WAS INVESTED IN HIS B USINESS DURING THE SAID YEAR. THE SOURCE OF CREDIT OF RS.1 90 000/- WAS CLAIMED A S GIFT FROM FATHER. THE ASSESSEE DID NOT PROVE THE CREDITWORTHINESS OF HIS FATHER AND GENUINENESS OF THE TRANSACTION. THUS THE ASSESSEE FAILED TO EXPLAIN TH E NATURE AND SOURCE OF CREDIT OF RS.1 90 000/- IN HIS ACCOUNTS DURING THE PREVIOU S YEAR 2004-05. THE ASSESSEE WAS REQUESTED TO EXPLAIN THE NATURE AND SOURCE OF A FORESAID CASH CREDIT VIDE ORDER SHEET NOTING DATED 07.11.2007 BUT NO EXPLANAT ION WITH EVIDENCE WAS OFFERED. IN VIEW OF ABOVE RS.1 90 000/- IS CHARGED TO INCOME TAX U/S 68 AS THE INCOME OF THE ASSESSEE FOR PREVIOUS YEAR 2004-05 AND HENCE ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06. (II) ON ACCOUNT OF INTEREST ON FD AMOUNTING TO RS.3 700/- : THE ASSESSEE IN HIS ACCOUNTS FOR THE PREVIOUS YEAR 2004-05 DID NOT DISCLOSE ANY INTEREST ACCRUED ON FIXED DEPOSIT. HOW EVER UNITED BANK OF INDIA 2 NANDAKUMAR BRANCH IN THEIR INFORMATION U/S 133(6) S TATED THAT THE ASSESSEE HAD MAINTAINED ON FD OF RS.61 674/-. THE INTEREST ACCRU ED ON THE SAID FD DURING THE PREVIOUS YEAR 2004-05 WAS RS.3 700/-. THE ASSES SEE WAS DIRECTED TO SHOW- CAUSE VIDE ORDER SHEET NOTING DATED 07.11.2007 AS T O WHY THE SAID INCOME OF RS.3 700/- SHOULD NOT BE ADDED TO HIS TOTAL INCOME FOR ASSESSMENT 2005-05. THE ASSESSEE STATED THAT THE SAID MISTAKE WAS DUE TO IG NORANCE ON HIS PART. (III) DISALLOWANCE U/S 40A(3) AMOUNTING TO RS.31 11 4/- : IN THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS OBSE RVED THAT THE ASSESSEE HAS MADE PAYMENT IN CASH FOR A SUM EXCEEDING RS.20 000/ - OTHERWISE THAN ACCOUNT PAYEE CHEQUE OR DRAFT ON ACCOUNT OF EXPENDITURE ON PURCHASE FOR RS.1 55 572/- (20 640 + 22 625 + 92 053 + 20 254). IN VIEW OF ABOVE THE ASSESSEE WAS DIRECTED TO SHOW- CAUSE AS TO WHY RS.31 114/- (20% OF RS.1 55 572/-) SHOULD NOT BE DI SALLOWED U/S 40A(3) OF THE IT ACT AND ADDED TO THE TOTAL INCOME FOR THE ASSESS MENT YEAR 2005-06. THE ASSESSEE COULD NOT OFFER ANY SATISFACTORY EXPLANATI ON AND HENCE RS.31 114/- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 2.1. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE SAME ON ACCOUNT OF CASH GIFTS BY OBSERVING THAT :- THE TIMING OF THE RECEIPT OF THE GIFT AS MENTIONED IN THE ACCOUNTS DECLARATION OF GIFT AND THE WRITTEN SUBMISSION ARE AT VARIANCE WITH ONE ANOTHER. I AM THEREFORE OF THE OPINION THAT THE AMOUNT INTRODUCED DURING THE YEAR (AS PER GIFT DECLARATION) HAS NOT BEEN EXPLAINED AS TO ITS SOURC E AND NATURE AND THEREFORE WAS AN UN-EXPLAINED CASH CREDIT. THE ACTION OF THE ASSESSING OFFICER IS THEREFORE UPHELD. THIS GROUND OF THE ASSESSEE IS RE JECTED. ON ACCOUNT OF INTEREST ON FD BY OBSERVING THAT :- CONSIDERING THE INCOME ON ACCRUAL BASIS IS HELD TO BE JUSTIFIED IN THE CIRCUMSTANCES ACTION. EVEN OTHERWISE THE APPELLANT HAS HIMSELF ACCEPTED THIS AS HIS INCOME DURING THE COURSE OF ASSESSMENT PROCEEDI NGS. ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.3 700/- ON ACCOUNT OF ACCRUED INTEREST ON FIXED DEPOSIT IS UPHELD. THIS GROUND OF THE ASSESSEE FAILS. ON ACCOUNT OF DISALLOWANCE U/S 40A(3) BY OBSERVING THAT :- THE ASSESSEE IS NOT COVERED BY ANY OF THE MITIGATI NG CIRCUMSTANCES MENTIONED IN RULE 6DD. THE FACT THAT ASSESSEE HAS NO BANK ACC OUNT OR IT WAS THE FIRST YEAR OF BUSINESS DOES NOT TAKE HIM OUT OF THE MISCHIEF O F SECTION 40A(3). 2..2. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEA L BEFORE US. 3 3. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L APPEARING ON BEHALF OF THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND BY REFERRING TO THE DEED OF THE DECLARATION GIVEN BY H IS FATHER FURTHER AND A LIST OF SOME OF THE PROPERTIES SOLD BY THE FATHER ALONG WITH THE CO PIES OF THE SALE DOCUMENTS SUBSTANTIATING THE FACT THAT THE FATHER OF THE ASSE SSEE IS HAVING CREDITWORTHINESS AND HE GIFTED THE SAID AMOUNT OUT OF LOVE AND AFFECTION TO WARDS THE ASSESSEE. HE HAS GIFTED ON VARIOUS DATES EVEN IN THE PREVIOUS ASSESSMENT YEARS . THE GIFTS HAVE BEEN ACCEPTED BY THE REVENUE IN THE PAST THEREFORE HE SUBMITTED THAT THE REVENUE IS NOT JUSTIFIED IN DENYING THE GIFT MADE DURING THE YEAR UNDER DISPUTE . THEREFORE HE REQUESTED TO DELETE THE SAME. 3.1. REGARDING THE INTEREST ON BANK DEPOSIT HE STA TED THAT THE ASSESSEES INTENTION IS TO DECLARE THE INTEREST AT THE TIME OF MATURITY AND IN THE PREVIOUS YEARS ALSO THE ASSESSE HAS NOT CLAIMED ANY INTEREST AND THE FIXED DEPOSIT HAS BEEN MATURED AUTOMATICALLY BY THE BANK. THEREFORE HE WAS NOT AWARE OF THE EXACT I NTEREST INCOME. THEREFORE HE REQUESTED TO DELETE THE SAME. HE FURTHER TOOK AN UN DERTAKING THAT AT THE TIME OF MATURITY HE WILL ACCOUNT FOR THE SAME. 3.2. AS REGARDING THE CASH PAYMENTS HE REITERATED THE SAME SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND BEING THE FIRST YEAR OF BUSINESS AND THE PARTIES ARE INSISTING FOR CASH PAYMENTS DUE TO THE URGENCY OF B USINESS AND THE ASSESSEE MADE THE CASH PAYMENTS TO THE SAID PARTIES. THEREFORE HE RE QUESTED TO DELETE THE DISALLOWANCE MADE U/S 40A(3) OF THE ACT. 4. ON THE OTHER HAND THE LD. DR APPEARING ON BEHAL F OF THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD KEEPING IN VIEW OF THE FACT TH AT THE REVENUE HAS ACCEPTED THE GIFTS MADE IN THE PREVIOUS ASSESSMENT YEARS TO THE EXTENT OF RS.2 70 000/-. I FIND NO JUSTIFICATION IN DOUBTING THE CREDITWORTHINESS OF T HE FATHER IN THE GIFTS MADE DURING THE 4 PREVIOUS ASSESSMENT YEARS. THEREFORE I SET ASIDE T HE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND DELETE THE ADDITION OF RS.1 90 00 0/-. 5.1. AS REGARDING ACCRUED INTEREST ON FD AND OTHER DISALLOWANCES MADE U/S 40A(3) I FIND NO MERITS IN THE SUBMISSIONS OF THE LD. COUNSE L FOR THE ASSESSEE. THEREFORE I CONFIRM THE ORDERS OF THE REVENUE AUTHORITIES. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED IN PART. ORDER PRONOUNCED IN THE COURT ON 08.07.2011 SD/- . .. . . .. . C.D.RAO ACCOUNTANT MEMBER. ( (( ( ) )) ) DATE: 08.07.2011. R.G.(.P.S.) 0 . !!1 21$3- COPY OF THE ORDER FORWARDED TO: 1. SHRI NIRMAL SAHA VILL- KUMARPARA P.O. & P.S.-NAND AKUMAR PURBA MEDINIPUR PIN: 721648. 2 THE I.T.O. WARD-4 HALDIA. 3. THE CIT 4. THE CIT(A)-XXXIII KOLKATA 5. DR KOLKATA BENCHES KOLKATA -1 !/ TRUE COPY 0'8/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES