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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: SRI RAJPAL YADAV & DR. MANISH BORAD
order
: May 23rd, 2023 ORDER
Per Manish Borad, Accountant Member:
This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2008-09 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income Tax (Appeal)-NFAC, Delhi [in I.T.A. No.: 610/KOL/2022 Assessment Year: 2008-09 Kavita Saraff. short ‘ld. CIT(A)’] dated 06.09.2022 arising out of the Assessment Order framed u/s 143(3) of the Act dated 31.12.2010.
Brief facts of the case as culled out from the records are that the assessee is an individual engaged in the business of share trading. NIL income declared in the return filed for AY 2008-09 on 07.01.2009. Ld. AO came across the information from Central Bureau of Investigation, Kolkata (in short ‘CBI’) where certain documents were seized and lying under their custody for which no details were produced. Thereafter, a letter was issued to the CBI dated 13.08.2010 requesting to provide xerox copies of the impounded documents so that time barred cases may be completed in due time. The said seized materials were confronted to the assessee to make necessary submissions. Replies were filed and further examination of those records were carried out. However, some of the details could not be filed. Ld. AO accordingly denied the claim of loss of Rs. 15,78,30,847/- incurred by the assessee on account of loss from share and derivative transactions and along with other additions, addition was also made towards commission income at Rs. 22,45,670/-. Income assessed at Rs. 22,45,670/-. 3. Aggrieved, the assessee preferred appeal before ld. CIT(A) but failed to furnish proper submissions. He, accordingly confirmed the action of ld. AO coupled with making further addition for unexplained cash credit u/s 68 of the Act of Rs. 1 Cr received by the assessee from M/s. Rajco Steel Enterprises. 4. Aggrieved, the assessee is now in appeal before this Tribunal raising following grounds: Page 2 of 7 I.T.A. No.: 610/KOL/2022 Assessment Year: 2008-09 Kavita Saraff. “1. That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [here in after referred to as Ld. CIT (Appeals)] was not justified in passing the order in great haste and in dismissing the appeal without considering the written submission and other supporting documents. 2.1 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in confirming the disallowance of net business loss from share & derivative transactions of Rs. 15,78,30,847. 2.2 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred disregarding the remand report of the ACIT, Circle 51, Kolkata before confirming the disallowance of net business loss from share & derivative transactions of Re. 15,78,30,847.
3. That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in enhancing the income by Rs. 1 Crore under section 68 of the Income-tax Act, 1961.
That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in not considering the ground of appeal
for allowing credit for TPS of Rs. 2,31,304.
5. That the appellant craves leave to add, amend, modify, rescind, supplement, or alter any of the grounds stated here-in-above, either before or at the time of hearing of this appeal.”
5. We first take up ground no. 1 through which the assessee has stated that ld. CIT(A) erred in passing the order in great haste and dismissing the appeal without considering the written submission and other supporting documents.
6. Ld. Counsel for the assessee referring to the paperbook submitted that ld. CIT(A) failed to consider all the details and supporting documents filed in support of the grounds raised and if the same had been considered the assessee was quite hopeful to have got relief on all the issues.
I.T.A. No.: 610/KOL/2022 Assessment Year: 2008-09 Kavita Saraff.
On the other hand, ld. D/R submitted that the assessee was given fair opportunity by both the lower authorities.
8. We have heard rival contentions and perused the records placed before us. Through ground no. 1 claim of the assessee is that ld. CIT(A) has not considered the written submission and other supporting documents and thus, it is a violation of principles of natural justice. Further, it has been submitted by ld. Counsel for the assessee that if fair opportunity has been provided then the assessee is hopeful to get relief on all the issues raised in the instant appeal. We observe that ld. CIT(A) sent the notice to assessee on 04.12.2019 fixing the date of hearing on 31.12.2019. The case was adjourned on few occasions. On 05.09.2021 & 27.01.2021 part of the details were submitted by the assessee. Thereafter, reply was submitted on 10.11.2021, 27.01.2021 & 21.10.2021 which have been considered by ld. CIT(A). Thereafter, we notice that ld. CIT(A) has given his finding from para 8 to 12 but in para 9 ld. CIT(A) is referring to a remand report dated 15.05.2014 and also referring to the reply of the assessee dated 28.04.2014. The finding of ld. CIT(A) reads as under: “7. As per the reply submitted on 10.11.2021, the appellant stated that deposit of Rs. 25 lakhs was made on 27.08.2007 in HDFC Bank and Rs.1 crores were made on 29.03.2008 in Central Bank. It came to notice of the appellant that Rs.25 lakhs were deposited by Mr. Ramesh Kumar Gupta, who is one of partner in Rajco Steel Enterprises. The appellant further stated that Sh. Ramesh Kumar Gupta ‘must have’ deposited the cheque from his personal account and ‘must have’ mentioned the name of his partnership firm and therefore, at the time of depositing the amount of Rs.1 crore, Mr. Gupta ‘must have’ communicated the name of M/s Rajco Steel Enterprises to the appellant, on the basis of which appellant recorded the entry in the name of Rajco Steel Enterprises.
I.T.A. No.: 610/KOL/2022 Assessment Year: 2008-09 Kavita Saraff.
I have considered the argument of the appellant. But the appellant was not able to provide sufficient documentary evidence to justify her above claim.
Further, as per the remand report dated 15.05.2014, the A/R of the appellant was asked to explain the amount of Rs. 1 crore received from M/s Rajco Steel Enterprises. On 28.04.2014, the A/R stated that the assessee used to have regular transactions with Rajco Steel Enterprises and Rajco Steel use to deposit the cheque directly to bank account and verbally communicate the same to the assessee.
To verify the same, Inspector was also deputed to visit M/s Rajco Steel Enterprises for re-verification. On re-verification, the Inspector in his report dated 02.05.2014 submitted that M/s Rajco Steel Enterprises stated that the ledger account submitted by them in reply to notice issued u/s 133(6) is correct and there is no transaction made by them with Kavita Saraff on 29.03.2008.
From the above, it is amply clear that the amount of Rs.1 crore deposited on 29.03.2008 is unexplained as the appellant has failed to establish the same and it is required to be added u/s 68 of the I.T. Act. Consequently, the addition made of Rs. 1 crore is required to be enhanced in the total income of the assessee for the A.Y. 2008-09.
As regards the disallowance of loss amounting to Rs. 15,78,30,847/- in the assessment order for the A.Y. 2008-09, it is seen that the documents related to share transaction loss was seized by the CBI. Consequently, a letter was written to CBI by the concerned AO requesting to provide the xerox copy of impounded documents. After receiving the documents, the same was shown to A/R of the assessee and he was requested to explain the impounded papers and show cause as to why the loss claimed be disallowed. In response, the A/R of the assessee submitted that assessee has suffered loss in share transaction details of which were from documents which were seized by the CBI. He also stated that most of transaction are routed through Motilal Oswal who is a share broker of the assessee. On that day, A/R was once again asked to explain the transaction of various parties as per seized books of accounts shown before him. But A/R stated that he was not in a position to explain the bank transaction by Kavita Saraff along with share loss. A notice U/s 133(6) was also issued to Motilal Oswal by AO for submitting the details of transactions. The same was received by the