Narinder Kumar Chadha, Kolkata vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH : KOLKATA BEFORE HON'BLE HON'BLE SHRI RAJPAL YADAV, JM & SHRI B.P. JAIN, AM

I.T.A No. 2067/Kol/2009 A.Y : 2006-07

Sri Narinder Kumar Chadha Vs. I.T.O Ward 25(4), Kolkata PAN: ACOPC 5787C [Appellant] [Respondent]

Appellant by : Shri Aloke Kumar Ghosh, Advocate, ld.AR Respondent by : Shri Saboorul H. Usmani, ld. JCIT/Sr.DR

Date of Hearing: 06/05/2015

Date of Pronouncement: 8 / 5 /2015

ORDER PER RAJPAL YADAV, JM:

The assessee is in appeal before us against the order of the ld. CIT(A) dated 29-09- 2009 passed for the assessment year 2006-07.

2. Before adverting to the specific grievance pleaded in the grounds of appeal, we would like to refer the background of certain facts. This appeal was listed for hearing on 08- 01-2010. None appeared on behalf of the assessee. It was fixed for hearing on 1-4-2010. The appeal was dismissed for want of prosecution on 01-04-2010. The assessee moved an application for recall of this order. Somehow the notice of hearing in the application could not be served on the assessee and the application was also dismissed on 06-08-2010. The second misc. application moved by the assessee was also dismissed on the ground that no application is maintainable against an order passed u/s. 254(2). This misc. application was dismissed vide order dated 07-01-2011. The assessee approached the Hon'ble Jurisdictional High Court . The Hon'ble High Court has set aside both the orders of the tribunal vide its order dated 08-02-2012. In pursuance to the order of the Hon'ble Jurisdictional High Court, the tribunal has allowed the misc. application of the assessee vide order dated 15/3/2013 and restored the original appeal [ITA No.2067/Kol/2009] MA No. 82/Kol/2012.

3. The assessee has not filed any paper book rather the ld. Counsel for the assessee sought an adjournment. However, we find that this appeal is pending from 2009 and it does not involve any substantial issue, therefore, we rejected the prayer of the ld. Counsel of the assessee and proceeded to decide the appeal on merit.

2 ITA No. 2067/Kol/09-A-JM Shri Narinder Kumar Chadha

4. In the first ground of assessee's appeal, the assessee has pleaded that the ld.CIT(A) has erred in confirming the addition of Rs. 1. 26 lakh, which was added by the AO with the aid of section 68 of the I.T Act 1961.

5. The brief facts of the case are that the assessee has filed his return of income on 23- 03-07 declaring total income of Rs. 2,16,800/-. The case of the assessee was selected for scrutiny assessment. Notice u/s. 142(3) of the I.T Act 1961 was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee has deposited a sum of Rs. 22,06,000/- in his bank account maintained with Standard Chartered Bank. The AO has controverted the assessee to explain the source of cash deposits. In response to the query of the ld.AO, it was contended that out of total amount, a sum of Rs.13,54,302/- was received from the PAN Intercraft Pvt. Ltd. Ltd, in which the assessee was a director. This amount was received for making the payment to other parties on behalf of the company.

6. With regard to second major sources of cash was available with the assessee; it was contended that cash amount of Rs.11,65,000/- has been withdrawn from the bank account of the assessee maintained with the Standard Chartered Bank. It was re-deposited on different dates. The AO was not satisfied with the explanation of the assessee. Accordingly, he made an addition of Rs.22,06,000/-.

7. On appeal, the ld.CIT(A) has re-appreciated the facts and circumstances of the case. The ld. CIT(A) analyzed cash flow statement prepared by the assessee vis-à-vis transaction available in the bank account and arrived at a conclusion that the assessee has explained satisfactorily that a sum of Rs.13, 54,302/- was received from the said company.

8. With regard to the second major source of Rs.11,65,000/- is concern, the ld. 1st appellate authority has verified the bank statement as well as cash flow statement. The ld.CIT(A), in principle, had accepted the explanation of the assessee that cash withdrawn from the bank had been re-deposited in this account. However, on a detailed analysis the ld.CIT(A) found that 15 entries totaling to Rs.1,26,000/- were not in the nature of cash withdrawn from the bank. According to the ld.CIT(A) these amounts were not available with the assessee for re-depositing the same.

9. Before us no evidence has been filed by the assessee indicating that these entries were not in respect of any expenditure incurred by the assessee with the help of his debit card. In other words, the assessee failed to establish that entries narrated by the ld.CIT(A) in para 2 of page 5 are also with regard to cash withdrawn. Once, a finding of fact has been recorded 3 ITA No. 2067/Kol/09-A-JM Shri Narinder Kumar Chadha

by ld.CIT(A) that debit entries on 15 occasions during the year and appearing in the bank statement, do not pertain to the cash withdrawn by the assessee, than, unless assessee rebut this finding he cannot be absolved from the onus that he has shown the source of deposit. Therefore, we do not see any error in the order of the ld.CIT(A). This ground of assessee's appeal is rejected.

10. In the next ground of appeal the substantial grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs.93,000/-. The assessee has received cash from the following persons:-

S.No. Name of the persons Amount (Rs.) 1. Ranjit Saha 19,000 2. Ruma Chadda 18,000 3. Niladri Chowdhury 18,000 4. Sudip Ghosh 19,000 5. Rupak Kumar Nandy 19,000 Total 93,000

11. Section 68 of the IT Act 1961 contemplates that where any sum is found credited in the books of the assessee maintained for any previous year, and assessee offers no explanation about the nature and source thereof or the explanation offered by the assessee is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income-tax as income of the assessee of that previous year. In order to discharge his onus the assessee has filed confirmations from all the 5 persons. The AO in the remand proceedings did not issue any notice to these parties and no enquiry was made. It is not discernable from the orders as how the explanation given by assessee is not reliable. In view of above situation, the ld.CIT(A) is not justifiable in confirming the addition. We allow this ground by deleting this addition

12. In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 8-5 -2015

Sd/- Sd/- [ B.P. JAIN ] [ RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 8 -5 -2015 4 ITA No. 2067/Kol/09-A-JM Shri Narinder Kumar Chadha

Copy of the order forwarded to:

1. Appellant-Shri Narinder Kumar Chadha 129/24 S.N Roy Road, Kol-38.

2 Respondent : I T O W 25(4), Kol.

3. CIT,

4. CIT(A),

5. DR, Kolkata Benches, Kolkata *PP/SPS True Copy] By order, Asstt Registrar