Niranjan Lal Soni, 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. 986/Kol/2012 A.Y : 2005-06

Sri Niranjan Lal Soni Vs. I.T.O, Ward 45(1), Kolkata PAN: AKZPS9825N [Appellant] [Respondent]

Appellant by : Shri Subash Agarwal, 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 19-03- 2012 passed for the assessment year 2005-06.

2. The solitary grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs.11,27,000/-.

3. The brief facts of the case are that the assessee has not filed his return of income. The ld.AO got an information from the Annual Information Report [AIR] that the assessee has deposited cash of Rs.11,27,000/- into his saving bank account maintained with Indian Overseas Bank [IOB], Kolkata-1 bearing account no.7563. The AO had issued notice u/s. 148 of the I.T Act 1961 and re-opened the assessment. In response to the notice of hearing, the assessee did not file any return. The ld. AO has commenced the investigation proceeding by issuing notice u/s. 142(1) of the I.T Act 1961. In response to notice the ld. Authorized representative of the assessee appeared and submitted that the assessee has filed his last return for the assessment year 2003-04 declaring total income of Rs.51,255/-. It was pleaded that the assessee is engaged in trading of jewellery. He has filed his P & L account and balance sheet showing net profit of Rs.96,938/- and closing stock of jewellery of Rs.2,13,160/-.

4. With regard to the source of deposit in the said saving bank account, it was contended by the assessee that he has purchased the jewellery partly by account payee cheques and partly in cash. The jewellery was sold in cash and sale proceeds were 2 ITA No. 986/Kol/12-A-JM Niranjan Lal Soni

deposited in the bank account. The ld. AO did not accept the story put forth by the assessee on the basis of human probability and situation. Accordingly, he made the addition.

5. Appeal to the ld. CITA) did not bring any relief to the assessee.

6. Before us the ld. Counsel for the assessee has submitted that the assessee produced the list of six persons before the AO from whom the jewellery was purchased. The major purchases of jewellery were made from Shri Mahabir Prasad Soni of Rs. 5,90,000/. These payments were made by a/c payee cheque. Similarly, from Sh.Nand Lal Soni the jewellery of Rs.1.50 lakh was purchased and payment was made by a/c payee cheque. From rest of 4 persons the payment towards jewellery purchased was made in cash. This jewelly was sold to different persons in cash and sale proceeds were deposited in the bank account. The ld. AO has deputed an inspector to pay visit to these persons. He found these persons, but not satisfied with the explanation offered by the assessee/them. According to the ld. Counsel for the assessee the revenue authorities failed to collect any evidence, which can falsify the stand of the assessee. Therefore, he prayed that the addition deserves to be deleted.

7. On the other hand, the ld.DR has relied upon the orders of the revenue authorities. He empahsised that the assessee has failed to produce any plausible explanation/evidence in support of his story that he was trading in the business of gold jewellery. This story has been concocted by the assessee after service of notice u/s. 148 of the Act.

8. We have duly considered the rival contentions and gone through the record carefully. On an analysis of the impugned orders, we find that the basic reason assigned by the ld. Revenue authorities is that sale bill issued by the assessee are self made. They do not bear any logo, sales tax regn. no. , telephone no etc. Similarly, the purchase bills were also self made. The next reason assigned by the ld. Authorities is that except Shri Nand Lal Soni none of the vendors of the jewellery could establish the possession of the jewellery with them. This indicates that these persons had not sold the jewellery to the assessee. In our opinion, the ld. Authorities have failed to appreciate the human conduct of possession of jewellery in right perspective. The sale proceed ranges in between Rs.14,450/- to Rs. 92,200. The jewellery used to be sold in our society, only when compelling circumstances arisen in the family. We find that the other jewellery was purchased by the assessee through account payee cheques. To expect a documentary evidence of possession of jewellery from 6 persons is a little contrary to the human behavior in our daily life. No one maintain such type of evidence, particularly, if person is not an income tax assessee. The inspector was 3 ITA No. 986/Kol/12-A-JM Niranjan Lal Soni

also able to identify these persons, but he reported that they could not give any evidence regarding possession of the jewellery. To our mind, it is to be appreciated keeping in mind, their living conditions and standard of living. If the inspector had made some observation about neighborhood, where these persons were living, then these observations; that these persons could not be expected to possess the jewellery may of some relevance. But merely on the ground that documentary evidence was not possessed with these persons exhibiting the jewelly cannot be a ground to disbelieve these persons. Therefore, taking into consideration the facts and circumstances, we are of the view that the assessee has explained the source of deposits in the bank account. The addition on this count is not justifiable. We delete the addition.

9. In the result, the appeal of the assessee is allowed.

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

Sd/- Sd/- [ B.P. JAIN ] [ RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 08- 05 -2015

Copy of the order forwarded to:

1. Appellant-Shri Niranjan Lal Soni C/o M/s. P.C Soni & Co. 844, Marshall House, 33/1 N.S Road, Kol-1..

2 Respondent : I T O W 45(4), Kol. 3 Govt. Pl(W), Kol-1.

3. CIT,

4. CIT(A),

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