ITO, Ward - 38(1), Kolkata, Kolkata v. Shri Jamna Das Gupta, Kolkata

ITA 692/KOL/2010 | 2006-2007
Pronouncement Date: 31-08-2010

Appeal Details

RSA Number 69223514 RSA 2010
Assessee PAN ADQPG1029A
Bench Kolkata
Appeal Number ITA 692/KOL/2010
Duration Of Justice 4 month(s) 21 day(s)
Appellant ITO, Ward - 38(1), Kolkata, Kolkata
Respondent Shri Jamna Das Gupta, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 31-08-2010
Assessment Year 2006-2007
Appeal Filed On 09-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () BEFORE . . . . . . . . !' !' !' !' /AND . .. . . .. .! !! ! # ) [BEFORE HONBLE SRI D. K. TYAGI JM & HONBLE SRI C . D. RAO AM] '$ '$ '$ '$ / I.T.A NO. 692 /KOL/2010 %&' !() %&' !() %&' !() %&' !()/ // / ASSESSMENT YEAR : 2006-07 INCOME-TAX OFFICER WD-38(1) KOLKATA -VS- SHRI J AMNA DAS GUPTA (PA NO.ADQPG 1029 A) (+ / APPELLANT ) (-+ / RESPONDENT ) FOR THE APPELLANT : SRI PIYUSH KOLHE FOR THE RESPONDENT SRI A. K. TIBREWAL . / ORDER PER D. K. TYAGI JM ( . . . . . . . . ) THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CI T(A) KOLKATA DATED 07.01.2010 FOR ASSESSMENT YEAR 2006-07 IN DELETING THE ADDITION OF RS.16 25 961/- BEING UNDISCLOSED CASH CREDIT U/S. 68 OF THE I. T. ACT. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE FILED RETURN OF INCOME ON 16.10.2006 DISCLOSING TOTAL INCOME OF RS.1 62 982/- . THE AO VIDE HIS ORDER PASSED U/S. 143(3) ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.17 90 940/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSES SEE TOOK LOANS FROM FRIENDS AND RELATIVES AND RS.16 25 961/- WAS OUTSTANDING AT TH E END OF THE YEAR. THE AO EXAMINED THE DETAILS OF LOAN ENCLOSED WITH THE RETURN AND IS SUED SUMMONS U/S. 131 TO SOME OF THE PERSONS WHO HAD GIVEN THE LOAN TO THE ASSESSEE. IN RESPONSE TO THE SUMMONS THE LOAN CREDITORS ATTENDED AND THEIR STATEMENTS WERE RECORD ED AND NECESSARY DETAILS AS CALLED FOR WERE PRODUCED BY THEM BEFORE THE AO. THE AO THERE FORE NOTED THAT THE PERSONS WHO HAD GIVEN LOAN HAD TRIED TO PROVE THEIR CREDITWORTH INESS BUT PERUSAL OF THEIR BANK ACCOUNTS SHOWED THAT JUST BEFORE THE CHEQUES FOR LO AN WERE ISSUED BY THEM THERE WERE DEPOSITS OF EQUIVALENT AMOUNT IN THEIR BANK ACCOUN TS. THUS THE AMOUNTS GIVEN AS LOANS WERE OUT OF DEPOSITS IN THE BANK ACCOUNT OF THE CR EDITORS JUST BEFORE THE DAY OF ISSUING THE CHEQUES FOR LOAN. THE AO THEREFORE HELD THAT THE LOANS REPRESENTED MONEY OF THE ASSESSEE ROUTED THROUGH THE LOAN CREDITORS AND ADDE D THE AMOUNT U/S. 68 OF THE I. T. ACT 2 1961. IN APPEAL THE LD.CIT(A) DIRECTED THE AO TO DELETE THE SAID ADDITION. AGGRIEVED BY THE SAID ORDER THE REVENUE IS NOW IN APPEAL BEF ORE US. 3. AT THE TIME OF HEARING BEFORE US THE LD. DR RE LIED ON THE ORDER OF THE AO AND SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROC EEDINGS THE AO ASCERTAINED THAT THE ASSESSEE INTRODUCED UNEXPLAINED MONEY IN THE DISGUI SE OF UNSECURED LOAN AMOUNTING TO RS.16 25 961/-. HE ALSO CONTENDED THAT IT WAS ESTA BLISHED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT SO CALLED LOAN CREDI TORS DO NOT HAVE CREDITWORTHINESS FOR THE TRANSACTIONS. THE SAID MONEY GIVEN AS LOANS WE RE OUT OF DEPOSITS IN THE BANK ACCOUNT OF THE CREDITORS JUST BEFORE THE DAY OF ISS UING THE CHEQUES FOR LOANS. THE AO THEREFORE RIGHTLY HELD THAT THE LOANS REPRESENTED MONEY OF THE ASSESSEE ROUTED THROUGH THE LOAN CREDITORS AND ADDED THE AMOUNT U/S. 68 OF THE I. T. ACT. HE LASTLY CONCLUDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE SAID ADDITION IGNORING THE FINDINGS GIVEN BY THE AO AT THE ASSESSMENT STAGE. HE THEREFORE URG ED BEFORE THE BENCH TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THAT OF THE AO. 4. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSES SEE RELIED ON THE ORDER OF THE LD. CIT(A) AND URGED BEFORE THE BENCH TO CONFIRM HIS AC TION. HE ALSO SUBMITTED THAT TO PROVE THE CREDITWORTHINESS OF THE LOAN CREDITOR THE ASSESSEE FILED COPIES OF ACKNOWLEDGEMENT OF I. T. RETURN P & L ACCOUNT BALA NCE SHEET LOAN CONFIRMATION XEROX COPIES OF THE BANK ACCOUNT OF LOAN CREDITORS BANK STATEMENT IN RESPECT OF BANK ACCOUNT OF SWASTIK REFINERY (P) LTD. BANK STATEMEN T IN RESPECT OF BANK ACCOUNT OF VEGETABLE OIL (P) LTD. AND ASSESSEES BALANCE SHEET AND P & L ACCOUNT. HE ALSO CONTENDED THAT THE ABOVE DOCUMENTS SHOWS THE CREDI TWORTHINESS AND GENUINENESS OF THE LOAN CREDITORS. THE ABOVE CREDITORS WERE REGULARLY ASSESSED TO INCOME TAX. THE LOAN AMOUNTS WERE DULY DISCLOSED IN THEIR BALANCE SHEET AND INCOME TAX RETURNS FILED WHICH WERE DULY ACCEPTED BY THE AO. HE ALSO CONTENDED THA T THE ASSESSEE PRODUCED CONFIRMATORY LETTERS FROM THE CREDITORS AND THE CRE DITORS HAD ALSO DECLARED THE AMOUNTS IN THEIR INCOME TAX RETURNS WHICH WERE ACCEPTED BY THE AO ADDITION MADE AS CASH CREDITS BY IGNORING THE AFORESAID FACTS WOULD NOT B E JUSTIFIED. HE ALSO CONTENDED THAT IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF MONEY OF HIS CREDITORS OR OF THE GENUINENESS OF THE TRANSACTION WHICH TOOK PLACE BETWEEN THE CREDITOR AND SUB- CREDITOR AND/OR CREDITWORTHINESS OF THE SUB-CREDITO RS. IN SUPPORT OF HIS SUBMISSIONS HE ALSO PLACED RELIANCE ON THE DECISION OF JALAN TIMBE RS VS. CIT (1997) 223 ITR 11 (GAU) 3 AND NEMI CHAND KOTHARI VS. CIT (2004) 136 TAXMAN 21 3 (GAU). HE FURTHER SUBMITTED THAT MONEY DEPOSITED IN BANK ACCOUNTS OF THE CREDIT ORS WAS OUT OF REPAYMENT OF LOANS RECEIVED BY THEM FROM THE TWO CONCERNS NAMELY SWAST IK REFINERY PVT. LTD. AND SHRI VEGETABLE OIL CO. PVT. LTD. WITHDRAWAL FROM PPF AC COUNT AND DEPOSITS FROM PERSONAL ACCOUNT. HE LASTLY CONCLUDED THAT AS THE NATURE AND SOURCE OF THE SAID AMOUNTS HAS ALREADY BEEN EXPLAINED BEFORE THE AO AND THE CREDI TWORTHINESS AND GENUINENESS OF THE PARTIES HAS BEEN PROVED THE ASSESSEE HAS COMPLIED WITH THE REQUIREMENTS OF SECTION 68 OF THE I. T. ACT. HE LASTLY SUPPORTED THE ORDER OF THE LD. CIT(A) AND URGED BEFORE THE BENCH TO CONFIRM HIS ACTION 5. AFTER HEARING THE RIVAL SUBMISSIONS PERUSING TH E MATERIAL AVAILABLE ON RECORD AND THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSE SSEE WE FIND THAT THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY PASSING A SPEAKING ORDER AND AFTER OBTAINING THE REPORT OF THE AO ON THE SUBMISSIONS MADE BEFORE HIM BY THE AS SESSEE IN RESPECT OF CREDITWORTHINESS AND GENUINENESS OF THE CREDITORS. FOR THE SAKE OF BREVITY WE REPRODUCE THE RELEVANT PORTION OF HIS ORDER AS UNDE R : IN VIEW OF THE ABOVE SUBMISSION OF THE APPELLANT A ND SCRUTINY OF THE DOCUMENTS SUBMITTED BY THE APPELLANT IN SUPPORT OF THE LOANS A LETTER WAS WRITTEN TO THE AO VIDE THIS OFFICE LETTER NO. CIT(A)XXIV/REMAND/09-10/227 DATED 10.07.2009. BY THIS LETTER IT WAS POINTED OUT TO THE AO THAT FOR THE YEAR UNDER C ONSIDERATION TOTAL LOANS OF RS.35 30 000/- WAS RECEIVED AND RS.16 35 961/- WAS BALANCE OUTSTANDING IN THE ACCOUNT OF 8 CREDITORS NAMELY (1) MAHABIR PRASAD BUBNA & OTHERS (2) ASHOK KR BUBNA & SONS (3) SUDARSHAN BUBNA (4) ASHOK KUMAR BUBNA ( 5) SUMAN DEVI BUBNA (6) SWATI GUPTA (7) ANURADHA SARAF & (8) SUDARSHAN BUBNA FAM ILY TRUST. THE AO WAS ASKED TO CLARIFY AS TO WHETHER THE BALANCE AMOUNT OF RS.19 0 4 039/- (I.E. 35 30 000 16 25 961) WAS FOUND TO BE SATISFACTORILY EXPLAINED OR NOT. THE AO WAS ALSO ASKED TO VERIFY THE CONTENTION OF THE APPELLANT THAT MOST OF THE LOANS WHICH WERE GIVEN TO THE APPELLANT BY THE LOAN CREDITORS WERE OUT OF REPAYME NT OF LOANS RECEIVED BY THEM FROM TWO CONCERNS NAMELY (1) SWASTIK REFINERY PVT LTD & (2) SHRI VEGETABLE OIL CO PVT LTD. THE APPELLANT HAD ALSO STATED THAT PART OF THE LOAN WAS ALSO OUT OF WITHDRAWAL FROM PPF ACCOUNT AND CASH DEPOSIT FROM PERSONAL ACCOUNT. THE AO WAS ALSO ASKED TO VERIFY THE CLAIM OF THE APPELLANT THAT THE ABOVE TWO CONCE RNS I.E. SWASTIK REFINERY P LTD AND SHRI VEGETABLE OIL CO P LTD ARE FILING RETURN OF I NCOMES SINCE SEVERAL YEARS AND THE BALANCES OF THE CASH CREDITORS WERE DULY REFLECTED IN THE SAID CONCERN. IN RESPONSE TO THE ABOVE LETTER A REPLY WAS RECEIVED FROM THE AO V IDE LETTER NO. ITO WD.38(1)/REMAND/ 09-1O/KOL/ 104 DATED 20.08.2009. I N THIS LETTER THE AO SUBMITTED THAT THE ENTIRE AMOUNT OF RS.35 30 000/- REPRESENTE D UNEXPLAINED CASH CREDIT AND ONLY BY MISTAKE AMOUNT OF RS. 16 25 961/ - WAS ADDED. IT WAS FURTHER STATED BY THE AO THAT FROM THE BANK STATEMENT IT WAS AMPLY EVIDENT THAT W ITHOUT THE ALLEGED RECEIPTS FROM SWASTIK REFINERY P LTD / SHRI VEGETABLES P LTD /WIT HDRAWAL FROM PPF AMOUNT THE CASH CREDITORS DID NOT HAVE THE CREDITWORTHINESS TO ADVA NCE THE LOANS AND THEREFORE THE AO 4 REQUESTED THAT FURTHER TIME MAY BE GRANTED FOR EXAM INATION OF THE ABOVE TRANSACTIONS. HOWEVER NO REPORT HAS BEEN SUBMITTED BY THE AO SO F AR THEREFORE THE ISSUE IS DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THERE AFTER ON 16.07.09 THE APPELLANT FILED FURTHER WRITTEN SUBMISSIONS IN WHICH THE APPELLANT REITERATED WHAT WAS STATED EARLIER AND ALSO FILED COPIES OF RELEVANT DOCUMENTS SUCH AS CONFIRMATION COPIES OF BALANCE SHEET AND AUDIT REPORTS OF SWASTIK REFINERY P LTD A ND SHRI VEGETABLE OIL P LTD DETAILS OF SOURCES OF LOANS GIVEN BY THE CASH CREDITORS ETC . ON PERUSAL OF THE ABOVE DETAILS IT IS SEEN THAT ALL THE 8 PERSONS HAVE CONFIRMED THAT DEP OSITS WERE GIVEN BY THEM THEY HAD STATED THE SOURCES OF THE LOANS GIVEN. THE LOANS ST ANDING IN THEIR NAME IN THE ACCOUNTS OF SHRI VEGETABLE OIL P LTD AND SWASTIK REFINERY P. LTD ARE DULY CONFIRMED AND ARE FOUND TO BE REFLECTED IN THE BALANCE SHEET OF THE S AID CONCERN. APPELLANT FILED COPIES OF BANK ACCOUNT AS ALSO CASH FLOW CHART SHOWING THE SO URCES OF THE LOANS GIVEN. ON THE CONTRARY NO MATERIAL HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT THE DEPOSITS IN THE BANK ACCOUNT OF THE CASH CREDITORS WERE OUT OF FUND S RECEIVED FROM THE APPELLANT. THE PRIMARY ONUS U/S 68 CAST ON THE APPELLANT HAS BEEN DISCHARGED BY THE APPELLANT BY FURNISHING THE COMPLETE NAME & ADDRESS OF THE DEPOS ITORS BY FURNISHING THEIR CONFIRMATION AND DETAILS OF INCOME TAX RETURNS FILE D BY THEM AS ALSO BY PRODUCING COPIES OF THEIR BANK STATEMENTS AND SOURCES OF FUND S OUT OF WHICH THE LOANS HAD BEEN GIVEN. SOME OF THE DEPOSITORS WERE EVEN EXAMINED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO TO SHOW THAT IN THEIR DEPOSITIONS THEY HAVE DENIED GIVING THE LO ANS OR THAT THEIR CREDITWORTHINESS WAS NOT ESTABLISHED. ONCE THE DEPOSITORS HAVE ACCEPTED THE FACT THAT THE AMOUNTS HAVE BEEN ADVANCED BY THEM BY WAY OF BANKING CHANNELS AND THE Y HAVE PRODUCED THEIR BANK STATEMENTS IN SUPPORT OF THEIR CONTENTION NO ADVERS E INFERENCE CAN BE DRAWN IN THE HANDS OF THE APPELLANT MERELY ON THE GROUND THAT BE FORE THE ISSUE OF LOAN CHEQUES AN EQUIVALENT AMOUNT WAS DEPOSITED IN THE ACCOUNT OF T HE DEPOSITORS. THE ONUS TO EXPLAIN THE DEPOSIT IN THEIR BANK ACCOUNTS IS ON THE DEPOSI TORS AND IF ANY ADVERSE INFERENCE HAS TO BE DRAWN ON THE BASIS OF EXAMINATION OF THESE AC COUNTS UNLESS NEXUS IS ESTABLISHED BETWEEN THE DEPOSITS IN THE BANK ACCOUNTS OF THE DE POSITORS AND FLOW OF FUND FROM THE APPELLANT SUCH ADVERSE INFERENCE HAS TO BE DRAWN ON LY IN THE HANDS OF THE DEPOSITORS AND NOT THE APPELLANT. CONSIDERING THE ABOVE FACTS OF THE CASE THE ADDITION OF RS.16 25 691/- IS DIRECTED TO BE DELETED. THESE GRO UNDS OF THE APPELLANT ARE THEREFORE ALLOWED. THE APPELLANT GETS RELIEF OF RS. 16 25 691 /-. IN VIEW OF THE ABOVE AND SINCE THE SUBMISSIONS OF T HE ASSESSEE AND ALSO THE FINDINGS OF THE LD. CIT(A) HAS NOT BEEN CONTROVERTED BY THE LD. DR AT THE TIME OF HEARING BEFORE US WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF TH E LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS THEREFORE D ISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.8.10 SD/- SD/- . . ! # . . (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( # # # #) )) ) DATED : 31ST AUGUST 2010 !/0 %&12 %3! JD.(SR.P.S.) 5 . 4 -%%5 65(7- COPY OF THE ORDER FORWARDED TO: 1. + / APPELLANT ITO WARD-38(1) KOLKATA. 2 -+ / RESPONDENT SHRI JAMNA DAS GUPTA C/O MR. ASHOKE KUMAR BUBNA 23A NETAJI SUBHAS ROAD 1 ST FLOOR ROOM NO. 1 KOLKATA-700 001. 3. %.&/ THE CIT 4. %.& ()/ THE CIT(A) KOLKATA 5. !>% -%& / DR KOLKATA BENCHES KOLKATA 5 -%/ TRUE COPY .&?/ BY ORDER @ '2 / DEPUTY REGISTRAR .