MR. PULAK CHAKRABORTY,AGARTALA vs. INCOME TAX OFFICER, WARD-2, AGARTALA
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Income Tax Appellate Tribunal, KOLKATA-GUWAHATI‘e-COURT’, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), Shillong dated 14.11.2019 passed for A.Y. 2017-18. 1
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty 2. The assessee has taken two grounds of appeal, out of which Ground No. 2 is a general ground, which does not call for recording of any specific finding.
In Ground No. 1, the assessee has pleaded that ld. CIT(Appeals) has erred in confirming the addition of Rs.12,24,644/-, which was added by the ld. Assessing Officer with the aid of section 69A of the Income Tax Act on the ground that the assessee has deposited cash in his loan account and hence it is an unexplained investment.
In response to the notice of hearing, the assessee filed an application for adjournment. However, after going through the record with the assistance of ld. D.R., we do not deem it necessary to adjourn the hearing and heard the appeal ex-parte qua the assessee.
Brief facts of the case are that the assessee was employed in Kotak Mahindra Life Insurance Company Limited. He has filed his return of income electronically on 06.02.2018 declaring total income at Rs.3,12,650/-. According to the ld. Assessing Officer, his case was selected for scrutiny on account of large value of cash deposits during the demonetization period. Thus it was selected for limited scrutiny through CASS. The ld. Assessing Officer has issued a questionnaire under section 142(1) and
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty observed that on verification of assessment record, it revealed that the assessee has been maintaining an account in State Bank of India, ONGC Colony Branch, Badharghat, Agartala. In this account, a sum of Rs.12,24,644/- was deposited in cash, therefore, he asked the explanation of the assessee about the source of this cash. In response to this query, the assessee has given an explanation alongwith the documents. The explanation is verbatim as submitted in the statement of facts before ld. CIT(Appeals). Such explanation reads as under:-
“BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) - SHILLONG Name of the appellant: Pulak Chakraborty KANHANPALLY, ONGC, AGARTALA PAN: AGUPC4717C Assessment Year : 2017-18 Previous Year : 2016-17 Order appealed against: Order U/s. 143(3) passed on 28.05.2019 by Ld. ITO W- 2,
Statement of Facts I deposited for an amount of Rs. 12,24,644/- in cash in my bank account maintained with State Bank of India bearing a/c No.10788997886 during the demonetization period in the Financial Year 2016- 17. Hence an amount of Rs.12,24,644/- is added back u/s 69A of the Income -Tax Act, 1961 to the total income by Ld. ITO. Ground of Appeal I entered into an "agreement for sale " for purchase of Residential unit ( Name of Building - " Hari Nivas" Grond Floor, G- 2, Area of Flat - 925 Sq. Ft. Super Built Up area) with M/s B. B. Developer ( A registered Partnership Firm, represented by Balaraj Dey) on 01.06.2013 under Revenue Village - Odalbakra, Mouza - Beltola, Dist:- Kamrup, Assam. For purchase of that property I paid Rs. 14,20,000/- from taking home loan from SBI Bank - Account No - 1078899786, ONGC Colony Branch and Rs. 7,00,000/- from HDFC Bank - Account No - 01861140002440, Total paid Rs. 21,20,000/- .But due to unavoidable circumstances I cancelled my "agreement for sale" on 23.12.2015 vide deed of cancellation / Agreement No - 20566 dated 23.12.2015. On cancellation of this agreement, I received Total amount of Rs. 23,65,000/- received on 29.04.2016 (Out of this Rs. 11,36,491/- received from BALARAJ DEY,
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty partner of Firm) vide Cheque No - 000040 - Rs. 3,00,000/- Cheque No - 000041 - Rs. 3,00,000/- Cheque No - 000042 - Rs. 3,00,000/- Cheque No - 000043 - Rs. 2,36,491/- and Rs. 12,28,509/- received in cash) .All cheque deposited in my HDFC Bank Account No - 01861140002440 dated 29.04.2016 and 17.05.2016. Cash which was also received on 29.04.2016 from Developer against cancellation of agreement deposited on 21.11.2016 of Rs 12,20,344.00 and on 21.11.16 of Rs. 4,300.00 respectively. Therefore total cash amount deposited in SBI Account of Rs.12,24,644.00 (Rs.12,20,344.00 + Rs.4,300.00) genuinely from my sale proceeds o Flat which was received before demonetization period and deposited during demonetization period. Cash received from legal source of income, it cannot be added back by Ld ITO u/s 69A of the Income -Tax Act, 1961 since only it was deposited during demonetization period. Therefore Ld. ITO erred in law and should be vacated. Thanking You, Yours faithfully, Sd/- [PULAK CHAKRABORTY] 26.06.19” 6. The ld. Assessing Officer did not accept this explanation on the ground that the assessee failed to submit a confirmation from M/s. B.B. Developer. According to the ld. Assessing Officer, he has issued a notice to the developer but he did not respond to his notice, therefore, the ld. Assessing Officer has treated such deposit as unexplained investment by the assessee during the demonetization period.
Appeal to the ld. CIT(Appeals) did not bring any relief to the assessee.
Before the Tribunal, the assessee has filed a paper book running into 53 pages. In this paper book, the assessee has placed on record the notice issued under section 143(2), certified copies of the order-sheet, copy of agreement to sell, details of 4
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty payment made by the asseessee to the developer, Bank statement of the Savings Bank Account with SBI, copy of House Building Loan Account with SBI, copy of the House Building Insurance Loan Account, copy of Deed of Cancellation etc. On page no. 19, he placed on record details of payment to M/s. B.B. Developer against booking of flat vide registered agreement, such details read as under:-
“Sri Pulak Charkraborty Agartala Details of Payments of Rs. 20,98,000/- made to M/s. B. B. Developers against booking of Flat Vide Registered Agreement dated 01.06.2013 for Rs. 21.20.000/-: From Saving Account No. 1078 899 7886 maintained with State Bank of India :
Date Mode Amount 18.05.2013 NEFT 50,000 25.05.2013 NEFT 1,50,000 27.05.2013 NEFT 2,00,000 05.06.2013 NEFT 20,000 24.07.2013 Ch. No. 282 301 1,60,000 11.12.2013 Ch. No. 282 305 1,00,000 13.01.2014 Ch. No. 282 306 1,00,000 16.01.2014 Ch. No. 282 307 40,000 8,20,000/- (Relevant Bank Statements annexed) From House Building Loan A/c No. 3314 687 8123 with State Bank of India : Date Mode Amount 31.07.2013 Transfer 6,79,000 08.08.2013 Transfer 3,00,000 21.10.2013 Transfer 1.92.500 13.12.2013 Transfer 1.06.500 12,78,000/- Grand Total 20,98,000/- (Relevant Bank Statements annexed)”
With the assistance of ld. D.R., we have gone through the record carefully. A perusal of the record would suggest that the assessee has entered into a purchase agreement with the
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty developer on 1st day of June, 2013. He made payments started from 2013 to 2014. Thereafter on 23.12.2015, he cancelled the purchase of agreement and received the payments upto April, 2016. The case of the assessee is that he received part payment by cheque and part payment by cash. Since demonetization was declared, therefore, he deposited the cash balance in the Bank account. These facts were not accepted by both the revenue authorities on the ground that- (a) the payments were received somewhere in April and deposits in the Bank account in November; (b) the assessee has failed to file confirmation from the developer that he has made repayment in cash.
On due consideration of the material placed before us and the reasoning of both the revenue authorities, we are of the view that the revenue authorities have failed to appreciate the facts and circumstances of the assessee in right perspective. It is to be kept in mind that he is a salaried employee in Insurance Company. He took loan of more than Rs.20 lakhs and made payments to the builder. There cannot be a doubt of availability of the funds because such funds have come through banking channel, i.e. through Housing Loan Account in the hands of the assessee. All these amounts were paid to the builder through the banking channel and the revenue authority is not disputing these 6
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty facts and cannot dispute about the genuineness of these details. It is to be appreciated that purchase of flat was cancelled. Part payment was received by cheque. Sometime it is very difficult for a layman like assessee to get complete payment from the builder. If litigation is commenced, then it will take 15 to 20 years. In such situation, an ordinary person would always prefer whatever is coming in whatever manner, let it be accepted. In this type of cases before rejecting the claim of assessee, it is for the revenue authority to demonstrate if this is not the source then what can be the possible source in the hands of the assessee. Whatever type of money was lying in the hands of assessee before demonetization, he deem it appropriate to deposit such amount in the Bank account. These facts are to be appreciated by keeping in mind that assessee is not an organized business house from whom details could be expected with mathematical precession because he must not be maintaining any details in his day-to-day life, therefore, these facts are to be appreciated with that mind set, which both the authorities have failed to look into. Taking into consideration of the details on the record, we allow this ground of appeal and delete the addition.
On page no. 53 of the paper book, the assessee has placed on record an application, whereby he has raised an additional ground and in this additional ground, he has submitted that no valid notice under section 143(2) was issued by the ld. Assessing Officer having jurisdiction over the assessee. According to the ld. Assessing Officer, the notice under section 143(2) was issued by 7
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty the ld. ITO, Ward-1(3), whereas assessment order has been passed by the ITO, Ward-2, Agartala. The ld. Assessing Officer has observed that original notice was issued by the ITO, Ward- 1(3), however, later on case was transferred to ITO, Ward-2, Agartala. According to the observation of the ld. Assessing Officer, the jurisdiction was transferred to him. However, from the available record, it is not ascertainable where the jurisdiction of the assessee lies, namely what is the jurisdiction in his PAN data or in his return of income. In the absence of such details, it is difficult to adjudicate this ground of appeal. However, we would have called for the assessment record and the details in this connection but considering our finding on Ground No. 1 whereby we have deleted the addition, we do not deem it necessary to carry out such a detailed exercise, hence for the time-being, this ground is being treated as redundant.
In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 29.03.2023.
Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President Kolkata, the 29th day of March, 2023 Copies to :(1) Mr. Pulak Chakraborty, S/o. Sunil Chakraborty, Ward-03/162, Shantiniketan Para, Dakshin Jolaibari, Tripura-799041
ITA No. 39/GAU/2020 Assessment Year: 2017-2018 Mr. Pulak Chakraborty
(2) Income Tax Officer, Ward-2, Agartala, Office of the Income Tax Officer, Aayakar Bhawan, Mantribari Road, Agartala, Tripura-799001 (3) Commissioner of Income Tax (Appeals), Shillong, (4) Commissioner of Income Tax- , (5) The Departmental Representative (6) Guard File TRUE COPY By order
Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.
