I.T.O.,WARD-50(4), KOLKATA vs. SHRI ARUN PRASAD MONDAL, KOLKATA

The Registry has informed that the cross-objection filed by the assessee is time barred by 590 days and application for condonation of delay has been filed and on observing that the assessee is 86 years of age and was under medical treatment for long time due to Covid 19, we condone the delay and admit the cross-objection for adjudication.

Brief facts of the case are that the assessee is an individual engaged in construction of housing complex. Income of Rs. 10,14,740/- declared in the e-return filed for Assessment Year 2015-16 furnished on 19/10/2016. Case selected for scrutiny through CASS followed by validly serving notice u/s 143(2) and 142(1) of the Act. During the course of assessment proceedings, the ld. Assessing Officer noticed that there is an increase in the capital of the assessee during the year by Rs.2,36,04,624/-. The assessee was asked to explain the source of the said credit. In reply, the assessee filed submission giving details of various amounts written off during the year but there was no specific reply about the alleged increase in the capita during the year. The ld. Assessing Officer was not satisfied with the submissions of the assessee and made addition of Rs.2,36,04,624/- and assessed the income of the assessee at Rs.2,46,19,364/-. Assessment Year: 2015-16 C.O. No. 10/Kol/2022 Assessment Year: 2015-16 Shri Arun Prasad Mondal 3

Aggrieved the assessee preferred appeal before the ld. CIT(A) and filed the details of amounts written off during the year. It was also submitted that the scrutiny assessment for Assessment Year 2012-13 was completed on 27/03/2015 and in order to give the effect to the said order various entries were made in the books of accounts for the year under appeal. The ld. CIT(A) examined the same and finally sustained the addition of Rs.2,12,77,375/-.

Aggrieved the revenue is now in appeal before this Tribunal and the assessee has raised cross-objection against the addition confirmed by the ld. CIT(A).

The ld. Counsel for the assessee vehemently argued referring to the written submissions before the lower authorities. He further stated that on account of the assessment proceedings for Assessment Year 2012-13, completed during the year, wherein the turnover of the assessee for Assessment Year 2012-13 was increased and the advance received from customers were adjusted against the said sales. The assessee did not challenge the addition made for Assessment Year 2012-13 and made corresponding adjustment/entries in the books for Assessment Year 2015-16 and, therefore, no addition was called for. On the other hand, the ld. D/R supported the orders of both the lower authorities.

We have heard rival contentions and perused the record placed before us. Assessment Year: 2015-16 C.O. No. 10/Kol/2022 Assessment Year: 2015-16 Shri Arun Prasad Mondal 4

The ld. Assessing Officer has made the addition at Rs.2,36,04,624/- on account of increase in capital, not explained by the assessee. Though, the assessee has not furnished any financial statement for the year under appeal, but since this fact has not been challenged by the assessee before the lower authorities, it remains an admitted fact that there is an increase in the capital of the assessee by Rs.2,36,04,624/-. During the course of assessment proceedings, the ld. Assessing Officer asked the assessee to explain the alleged increase in capital to which, assessee replied by giving details of amounts written off during the year which actually reduced the capital of the assessee, but in no way could explain the increase in capital. When the matter came up before the ld. CIT(A), assessee again furnished the same details and along with the details filed before the Assessing Officer, also gave details of advance from various customers appearing in the books for FY 2011-12 and ld. CIT(A) has dealt with the same by giving following findings:- “I have carefully gone through the assessment order, the observations of the A.O. and the arguments and contentions of the appellant. It is seen that in the scrutiny assessment for A.Y. 2012-13, the A.O. had accepted the following advances taken from various customers as mentioned in the following table.:-

From perusal of the above details and also considering the fact that the assessee has not furnished financial statements for Assessment Year 2012-13 and 2015-16 and copies of the assessment order for Assessment Year 2012-13, we on the basis of the findings of ld. CIT(A) in the impugned year, notice that the issue raised by the Assessing Officer about increase in capital has not been addressed in a correct manner. On the one hand, there is a detail of write off of old balance which included advance given as well as investment in shares. On the other hand, advance from customers have been adjusted against the turnover which the ld. Assessing Officer increased while assessing the Assessment Year: 2015-16 C.O. No. 10/Kol/2022 Assessment Year: 2015-16 Shri Arun Prasad Mondal 6 income for Assessment Year 2012-13. But there is a difference between the said adjustment and the accounting treatment of such difference is also not clear from the finding of the ld. CIT(A).

Under these given facts and circumstances, we find that the order of the ld. CIT(A) is not addressing the issue of increase in capital during the year and a proper re-conciliation statement depicting the details of capital account for the year under appeal needs to be looked into. We, therefore, are of the considered view that the issues needs to be remitted back to the Assessing Officer before whom, the assessee shall furnish proper details to explain the alleged issue of increase in capital during the year with proper details and financial statements. Thus, all the issues raised in the appeal of the revenue as well as in the cross-objection of the assessee are restored back to the file of the Assessing Officer.

In the result, both the appeal of the revenue as well as the cross- objection filed by the assessee are allowed for statistical purposes. Order pronounced in the Court on 6th September, 2023 at Kolkata. (SANJAY GARG) ACCOUNTANT MEMBER Kolkata, Dated 06/09/2023 *SC SrPs Assessment Year: 2015-16 C.O. No. 10/Kol/2022 Assessment Year: 2015-16 Shri Arun Prasad Mondal 7

""यथ" / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु" अपील ( ) / The CIT(A)- 5. िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाड" फाई/ Guard file.