ITO, WD-3(2), SURI, BIRBHUM, Birbhum v. Sri Swapan Kumar Chakraborty, Birbhum

ITA 685/KOL/2016 | 2010-2011
Pronouncement Date: 15-11-2017 | Result: Allowed

Appeal Details

RSA Number 68523514 RSA 2016
Assessee PAN ADIPC2431J
Bench Kolkata
Appeal Number ITA 685/KOL/2016
Duration Of Justice 1 year(s) 7 month(s)
Appellant ITO, WD-3(2), SURI, BIRBHUM, Birbhum
Respondent Sri Swapan Kumar Chakraborty, Birbhum
Appeal Type Income Tax Appeal
Pronouncement Date 15-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 15-11-2017
Assessment Year 2010-2011
Appeal Filed On 15-04-2016
Judgment Text
SRI SWAPAN KR. CHAKRABORTY I.T.A NO. 685/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOLKATA BEFORE: SHRI S.S. VISWANETHRA RAVI JUDICIAL MEMBER AND DR. A. L. SAINI ACCOUNTANT MEMBER I.T.A NO. 685/KOL/2016 (ASSESSMENT YEAR: 2010-11) ITO WD-3(2) SURI BIRBHUM APPELLANT VS SRI SWAPAN KR. CHAKRABORTY RESPONDENT [PAN: ADIPC 2431 J] FOR THE APPELLANT : SHRI ARINDAM BHATTACHARJEE ADDL.CIT FOR THE RESPONDENT : NONE DATE OF HEARING : 18.10.2017 DATE OF PRONOUNCEMENT : 15.11.2017 ORDER SHRI S.S.VISWANETHRA RAVI JM: THIS APPEAL FILED BY REVENUE ARE ARISING OUT OF ORDER DATED 29.01.2016 OF COMMISSIONER OF INCOME TAX (APPEALS)-BURDWAN FOR THE ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE IS TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) JUSTIFIED IN DIRECTING THE AO TO CALCULATE UNDECLARED INCOME BY APPLYING THE RATE OF NET PROFIT IN THE FACT AND CIRCUMSTANCES OF THE CASE. 3. WE FIND THAT NONE APPEARED ON BEHALF OF THE RESPONDENT THE ASSESSEE NOR FILED ANY APPLICATION SEEKING ADJOURNMENT. THE LD. DR SUBMITS THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE BEFORE THE AO AND PRODUCE ALL THE DETAILS BEFORE THE CIT(A) PLACING ON WHICH CIT(A) HAS GIVEN RELIEF TO ASSESSEE VIOLATING RULE 46A OF THE I.T RULES. THEREFORE WE PROCEED TO HEAR THE LD. DR AND BY EXAMINING THE SRI SWAPAN KR. CHAKRABORTY I.T.A NO. 685/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 2 MATERIAL AVAILABLE ON RECORD DISPOSE OF THE APPEAL IN THE ABSENCE OF ASSESSEE. 4. THE AO DURING THE COURSE OF SCRUTINY PROCEEDINGS BASING ON AIR INFORMATION FOUND THAT THE ASSESSEE HAS NOT DISCLOSED IN HIS RETURN OF INCOME OF RS.56 58 506/- THEREBY ADDED THE SAME ON ACCOUNT OF UNDISCLOSED INCOME TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE LD. CIT(A) THE ASSESSEE CONTENDED THAT THE NON-DISCLOSURE OF RELEVANT RECEIPTS SHOWING SECURITY CHARGES RECEIPTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS OCCURRED DUE TO CONTINUED SEVERE ILLNESS OF THE ASSESSEE AND HE WAS UNDER TREATMENT FOR DIALYSIS OF KIDNEY FOR TWO TO THREE TIMES IN A WEEK. IN SUPPORT OF HIS CONTENTIONS THE ASSESSEE FILED BANK PASS-BOOK BILLS VOUCHERS BOOKS OF ACCOUNTS IN RELATION TO THE ABOVE SAID RECEIPTS. BASING ON WHICH THE CIT(A) DIRECTED THE AO TO CALCULATE UNDECLARED INCOME TAKING INTO CONSIDERATION THE RATE OF NET PROFIT. THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREINBELOW: THE UNDISPUTED FACTS OF THIS APPEAL ARE THAT THE APPELLANT RUNS A SECURITY AGENCY IN THE NAME OF BGS SECURITY & ALLIED SERVICES AND HIS RECEIPTS ARE SOLELY IN THE FORM OF COMMISSION INCOME FROM THE SAID SECURITY AGENCY. BESIDES THESE RECEIPTS SINCE THE APPELLANT IS A RETIRED ARMY PERSON HE HAS AN INCOME FROM HIS PENSION. THERE WAS AIR INFORMATION IN POSSESSION OF THE AO WITH REGARD TO RECEIPTS AMOUNTING TO RS 56 58 506/-. THE APPELLANT HAD ADMITTEDLY NOT SHOWN AN AMOUNT OF RS.5 658 506.00 SHOWN UNDER THE HEAD 'SECURITY CHARGES RECEIPT' IN HIS RETURN OF INCOME. SINCE NO EXPLANATION HAD BEEN FORTHCOMING FROM THE APPELLANT IN THIS REGARD THIS AMOUNT WAS ADDED BACK TO HIS INCOME AS CONCEALED INCOME. DURING APPELLATE PROCEEDINGS THE APPELLANT HAS WHILE ACCEPTING THE SAID RECEIPTS AS HIS OWN HAS SUBMITTED THAT THIS NON-DISCLOSURE HAD OCCURRED ON ACCOUNT OF THE FAILING CONTINUED SEVERE ILLNESS OF THE APPELLANT DUE TO WHICH HE HAD BEEN OBLIGED TO BE ON DIALYSIS TWO TO THREE TIMES A WEEK. HE HAS FURTHER CONTENDED THAT WHILE THESE WERE ADMITTEDLY THE RECEIPTS FROM THE SECURITY AGENCY THAT HE WAS RUNNING HE HAD ALSO INCURRED EXPENSES WITH RESPECT TO THESE RECEIPTS. HE HAS PRAYED FOR THE APPLICATION OF NET PROFIT RATE AND THE RESTRICTION OF THE ADDITION TO THE AMOUNT OF NET PROFIT AS APPLIED TO THESE RECEIPTS. HE HAS ALSO RELIED UPON SEVERAL COURT DECISIONS IN SUPPORT OF HIS PROPOSITION THAT IT IS ONLY THE NET PROFIT RATE THAT CAN BE APPLIED IN SUCH CASES OF UNDISCLOSED RECEIPTS. THESE CITATIONS UPON WHICH HE HAS RELIED ARE: CIT VS GURBACHAN SINGH J. JUNEJA [2008] 171 ITR TAXMAN 406 (GUJ); MAN MOHAN SADANI VS CIT [2000] 188 TAXMAN 277(MP); CIT VS BALCHAND AJIT KUMAR [2003] 263 ITR 610[2004] 135 TAXMAN 180(MP) AND CIT VS SM OMAR 201 ITR 608 (KOL). IN ALL OF THESE THE PROPOSITION IS THAT EVEN IN THE SRI SWAPAN KR. CHAKRABORTY I.T.A NO. 685/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 3 CASE OF UNDISCLOSED RECEIPTS IT IS ONLY THE NET PROFIT THAT CAN BE BROUGHT O TAX AND NOT THE ENTIRE RECEIPTS. THE APPELLANT HAS ALSO PRODUCED THE NECESSARY SUPPORTING MATERIAL INCLUDING THE BANK PASSBOOK AS WELL AS BILLS/VOUCHERS; BOOKS OF ACCOUNTS AND DETAILS OF EXPENSES THAT HE HAS INCURRED IN RELATION TO THESE RECEIPTS. THESE LATTER HAVE BEEN EXAMINED ON A TEST CHECK BASIS. COPIES OF THE CASES CITED HAVE ALSO BEEN PRODUCED AND PLACED ON RECORD. I HAVE GONE THROUGH THE ENTIRE MATERIAL ON RECORD AS WELL AS THE CITATIONS. IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAD NOT DISCLOSED A LARGE PART OF THE RECEIPTS THAT WERE SUBSEQUENTLY DISCOVERED BY THE AO. IT IS ALSO AN UNDISPUTED FACT RECORDED BY THE AO IN HIS ORDER THAT HE HAD EXAMINED THE BOOKS OF ACCOUNT AND RELEVANT SUPPORTING DOCUMENTS PRODUCED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS IN RELATION TO THE SECURITY BUSINESS THAT HE RUNS. THE AO HAS FOUND NO DEFECTS IN THEM AND HAS THEREFORE ACCEPTED THE NET PROFIT RATE DECLARED BY THE APPELLANT. THE AO HAS ALSO NOT BROUGHT ON RECORD ANYTHING TO SUGGEST THAT THE APPELLANT HAD BEEN RUNNING ANY OTHER BUSINESS FROM WHICH THE SAID UNDECLARED RECEIPTS HAD ARISEN. THE SUM AND SUBSTANCE OF THE MATTER THEREFORE IS THAT THE APPELLANT HAD BEEN RUNNING A SINGLE BUSINESS SOME RECEIPTS FROM WHICH HAD BEEN DECLARED AND SOME SUPPRESSED. THE AO HAS ACCEPTED THAT IN THE EARNING OF THE DECLARED RECEIPTS THE APPELLANT HAD INCURRED A CERTAIN PERCENTAGE OF EXPENSES RESULTING IN A NET PROFIT RATE THAT WAS ACCEPTABLE TO THE AO. IN THESE CIRCUMSTANCES THEN HOW CAN IT BE PRESUMES THAT THE SAME APPELLANT RUNNING THE SAME BUSINESS DURING THE SAME TIME PERIOD INCURRED EXPENSES IN RELATION TO A PROPORTION OF THE TOTAL RECEIPTS BUT DID NOT INCUR ANY EXPENSES IN RELATION TO THE OTHER PROPORTION. IT IS SETTLED LAW THAT EVEN IN THE CASE OF UNDECLARED RECEIPTS OF A BUSINESS THE APPELLANT IS ENTITLED TO THE EXPENSES THAT HE MAY REASONABLY HAVE INCURRED FOR THE EARNING OF THESE UNDECLARED RECEIPTS. THE RATIOS OF THE CITATIONS RELIED UPON BY THE APPELLANT ALSO SUPPORT THIS PROPOSITION. IN THE INSTANT CASE THEREFORE WHILE HOLDING THAT THESE WERE INDEED UNDECLARED RECEIPTS OF THE APPELLANT I FEEL THAT HE IS ENTITLED TO THE NET PROFIT RATE AS DECLARED BY HIM IN RELATION TO HIS DISCLOSED RECEIPTS AND DULY ACCEPTED BY THE AO AFTER A THOROUGH SCRUTINY OF THE SAME. THESE SET OF GROUNDS OF THE APPELLANT ARE THEREFORE ALLOWED WITH DIRECTIONS TO THE AO TO CALCULATE THE UNDECLARED INCOME AFTER APPLICATION OF THE ABOVEMENTIONED RATE OF NET PROFIT. 5. BEFORE US THE LD. DR SUBMITS THAT THERE WAS NO EVIDENCE SUPPORTING THE CONTENTION OF CIT(A) BEFORE AO AND THE SAME WAS NOT PRODUCED BEFORE THE AO WHICH IS EVIDENT FROM THE ASSESSMENT ORDER AND REFERRED TO PAGE NO.2 OF AOS ORDER. THE LD. DR ALSO SUBMITS THAT THE CIT(A) EXAMINED THE CONTENTION OF THE ASSESSEE TOGETHER WITH NECESSARY DOCUMENTS AS FILED BEFORE HIM DURING THE FIRST APPELLATE PROCEEDINGS REFERRED TO PAGE NO.5 OF CIT(A) AND SUPPORTED THE ORDER OF CIT(A) IN GIVING A DIRECTION TO THE AO FOR RECALCULATING THE SAID IMPUGNED ADDITION TAKING INTO CONSIDERATION THE RATE OF NET PROFIT. WE FIND THAT THERE WAS NO REPRESENTATION ON BEHALF OF THE CIT(A). SRI SWAPAN KR. CHAKRABORTY I.T.A NO. 685/KOL/2016 ASSESSMENT YEAR: 2010-11 PAGE | 4 6. HEARD THE LD. DR PERUSED THE MATERIALS ON RECORD ADMITTEDLY AS RIGHTLY POINTED OUT BY THE LD. DR THERE WAS NO EVIDENCES SUPPORTING THE CONTENTIONS OF THE ASSESSEE BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REGARDING THE IMPUGNED ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. BUT HOWEVER OBSERVED FROM THE ORDER OF CIT(A) THE ASSESSEE PRODUCED ALL THE DETAILS IN SUPPORT OF HIS CONTENTION THAT THE IMPUGNED AMOUNT SHOWN UNDER THE HEAD OF SECURITY CHARGES RECEIPTS. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN DIRECTING THE AO TO COMPUTE THE INCOME OF ASSESSEE TAKING INTO CONSIDERATION THE RATE OF NET PROFIT. THE ASSESSEE IS IN LIBERTY TO FILE THE EVIDENCES BEFORE THE AO IN SUPPORT OF HIS CLAIM. ACCORDINGLY THE GROUND RAISED BY THE REVENUE IS ALLOWED. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON15.11.2017. SD/- SD/- DR. A. L. SAINI S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15.11.2017 PLACE : KOLKATA RS(SPS) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO WARD-3(2) S URI BIRBHUM AAYAKAR BHAWAN LALKUTHIPARA SURI BIRBHUM 731101. 2 RESPONDENT SRI SWAPAN KUMAR CHAKRABORTY PROP-BGS SECURITIES & ALLIED SERVICES LOTUS PRESS MORE RAMPURHAT DIST-BIRBHUM. 3 . THE CIT(A) KOLKATA 4. 5. CIT KOLKATA DR KOLKATA BENCHES KOLKATA //TRUE COPY// BY ORDER SR.PS/H.O.O ITAT KOLKATA