Narinder Kr. Chadha, Kolkata vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "C", KOLKATA

[Before Hon'ble Sri Mahavir Singh, JM& Hon'ble Sri Shamim Yahya, AM ] ITA No.2131/Kol/2009 Assessment Year : 2006-07 (APPELLANT ) (RESPONDENT) I.T.O.Ward-25(4), -vs- Narinder Kr.Chadha Kolkata Kolkata (PAN:ACOPC 5787 C)

For the Appellant Shri Kanhiya lal Kanak, JCIT, Sr.DR

For the Respondent None

Date of Hearing : 28.01.2015. Date of Pronouncement : 30.01.2015.

ORDER

Per Shri Shamim Yahya, AM

This appeal by the Revenue is directed against the order of ld. C.I.T-(A)-XIV, Kolkata dt. 29.09.2009 and pertains to Assessment year 2006-07.

2. The grounds of appeal read as under :-

"1. Whether on the fact and circumstances of the case the Ld.CIT(A)-XIV, Kolkata was justified in deleting the addition made by the A.O. and violating the Rule 46A of the I.T.Rules, 1962. The ld. CIT(A)-XIV, Kolkata, was not correct in examining various documents filed with the submissions made by the assessee in the course of the appeal proceedings, which were never confronted to the A.O. Whether on the fact and circumstances of the case, the Ld.CIT(A)-XIV, Kolkata was justified to give any relief to the assessee without giving any opportunity to the A.O."

3. In this case the fact of the case is that the AO came to know that cash of Rs.22,06,000/- was deposited in the bank account of the assessee in Standard Chartered Bank. When the assessee was asked to explain the source of this cash it was stated that out of this amount Rs.13,54,302/- was received from the company PAN INTERCRAFT PVT. LTD., in which the assessee was a director, for payment to other parties on behalf of the company and the balance of Rs.8,51,698/- was deposited from the cash in hand of the assessee.

2 ITA No.2131/Kol/2009 Narinder Kr.Chadha A.Yr.2006-07

The AO rejected the explanation of the assessee regarding Rs.8,51,698/- on the ground that as on 01.04.2005 the assessee had NIL cash balance and during the previous year he earned salary of Rs.2,56,800/- and therefore, it was not possible for him to deposit this cash in his bank account.

As regards the amount of Rs.13,54,302/- claimed to be received from the company PAN INTERCRAFT PVT.LTD. the AO has mentioned that though the cash book of the company was produced for verification of payment of this amount to the assessee but the assessee could not produce any evidence about the party to whom these payments were given. The AO was of the view that the ledger copy of the assessee in the books of this company and cash book could not give any indication as to whom were the payments given. On the basis of this reasoning the AO treated this amount as the concealed income of the assessee.

Thus, the whole of the cash of Rs.22,06,000/- deposited in the bank account of the assessee was treated as unexplained and added in his total income.

3.1. Before the ld. CIT(A) the assessee claimed the following cash in flow :

Pan Intercraft Pvt. Ltd. Rs.13,64,302.66 Unsecured loan Rs.93,000.00 Standard Chartered Bank (Cash withdrawal) Rs.11,65,000

The above cash flow was said to be supporting cash deposits of Rs.22,06,000/- in the Standard Chartered Bank. The ld. CIT(A) accepted the receipt from Pan Intercraft Pvt.Ltd. amounting to Rs.13,64,302/- as the same was reflected in the books of the said company. Out of the cash in flow from the Standard Chartered Bank the ld. CIT(A) accepted Rs.10,39,000/- as having been withdrawn from assessee's bank account to deposit into the same bank. The ld. CIT(A) rejected the cash inflow of Rs.93,000/- from unsecured loans.

Against the relief given by ld. CIT(A), the revenue is in appeal before us.

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4. We have heard the ld. DR. None appeared on behalf of the assessee. In our considered opinion the issue may be disposed of by hearing the ld. CIT(DR) in perusing the records. As regards the acceptance of inflow of Rs.13,64,302/- from M/s. Pan Intercraft Pvt. Ltd., we find that the same has been accepted by the ld. CIT(A) as the same is duly reflected in the books of the company which was also available before the AO. Hence we find that there is no infirmity in acceptance of the source of cash.

4.1. As regards acceptance of deposit in the Standard Chartered Bank amounting to Rs.10,39,000/- to be out of cash withdrawal from the same bank we find that it is quite bizarre that assessee was withdrawing cash from his bank account of Rs.10,39,000/- on various dates and making deposits again in his bank account on different dates of different amounts. This in itself is beyond the preponderance of probability. The assessee has not come up with cogent evidence that he was withdrawing the money out of his own bank account and again depositing the same in his own bank account. We find that there is absence of cogent material on record to justify the claim of the assessee. Furthermore the source was not explained before the AO, and revenue's grievance is correct that there is violation of Rule 46A of the Act. Accordingly we remit this issue to grant relief to the extent of Rs.10,39,000/- to the file of the AO. AO shall grant the assessee opportunity to prove that he was withdrawing the money from his own bank account and at the same time depositing the same also in his own bank account. Unless there is cogent material to this effect the sum of deposit is liable to be added in the hands of the assessee as undisclosed sources.

5. In the result the appeal of the revenue stands partly allowed for statistical purposes.

Order pronounced in the court on 30.01.2015.

Sd/- Sd/- [ Mahavir Singh ] [Shamim Yahya] Judicial Member Accountant Member

Date: 30.01.2015. R.G.(.P.S.) 4 ITA No.2131/Kol/2009 Narinder Kr.Chadha A.Yr.2006-07

Copy of the order forwarded to:

1. Narinder Kr.Chadha, 129/24, S.N.Roy Road, Kolkata-700038.

2 I.T.O., Ward-25(4), Kolkata.

3. CIT(A)- XIV, Kolkata. 4. CIT- Kolkata

CIT(DR), Kolkata Benches, Kolkata.

True Copy, By order,

Asst. Registrar, ITAT, Kolkata Benches