SHRI NASIRUDDIN SEKH,HOOGHLY vs. ACIT,CIR-23(1), HOOGHLY. , HOOGHLY

आयकर अपीलीय अिधकरण कोलकाता 'बी' पीठ, कोलकाता म� IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA �ी राजेश कुमार, लेखा सद�य एवं �ी अिनकेश बनज�, �याियक सद�य के सम� Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & SRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 Assessment Years: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh.....………….............................................Appellant [PAN: EMHPS 5218 F] Vs. ACIT, Circle-23(1), Hooghly...................................................Respondent Appearances: Assessee represented by: Sh. Abhisek Bansal, FCA. Department represented by: Sh. Abhijit Kundu, CIT D/R. Date of concluding the hearing : March 12th, 2024 Date of pronouncing the order : April 12th, 2024 ORDER Per Bench: The instant bunch of appeals of the assessee were filed against separate orders of the Commissioner of Income-tax (Appeals)-NFAC, Delhi [in brevity ld. ‘CIT(A)’] dated 14.08.2023 passed u/s 250 of the Income Tax Act, 1961 (in brevity the ‘Act’) for assessment years 2013-14, 2015-16 & 2018-19. The impugned orders were emanated from the order of the ACIT, Circle-23(1), Hooghly (in brevity the ‘AO’) passed u/s 144/153A of the Act dated 26.12.2019. 2. All the appeals are in the same nature of fact and have a common issue except some factual differences in two appeals. So, all the appeals are taken

I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 AYs: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh. together, heard together and disposed of together. For the brevity, the ITA No. 168/KOL/2023 for AY 2018-19 filed by the assessee is taken as lead case.

“1. For that the order of the Ld. CIT (A) as well as Ld. AO is arbitrary, illegal and bad in law. 2. For that the Ld. C.I.T(A) erred in deciding the appeal exparte without allowing the appellant any proper and reasonable opportunity of being heard. 3. For that the order passed by the Ld. C.I.T(A) is bad in law since the Id. C.I.T(A) has not decided the issues ground wise in respect of the grounds raised by the appellant in the Memo of Appeal. 4. For that the Ld. C.I.T.(A) is bad in law since the order passed is not any speaking order nor the C.LT(A) has looked into the assessment records and relevant materials to conclude that the order of the Ld. AO cannot be interfered with. 5. For that the Ld. CIT(A) erred in making addition of Rs. 79,77,679 as unexplained money in spite of the fact the assessee duly explained that the above sum is sale proceeds of Gold and Jewellery ornaments. 6. For that the Ld. CIT(A) as well as Ld. AO erred in not providing the statement of parties which alleged to be recorded by investigation wing u/s 131(1A) of the IT act, 1961 and have also not provided with opportunity of cross examination. 7. For that even otherwise the assessee in his statement u/s 132(4) of the IT act, 1961 categorically proved that he and his father is engaged in the business of trading of Jewelleries and ornaments and thereby has duly explained the Nature of business. 8. For that under the facts and circumstances of the case the addition of Rs. 79,77,679 made by Ld. AO is liable to be deleted. 9. For that the Ld. CIT(A) erred in considering the closing cash balance of Rs. 2,67,357/- as unexplained cash credit without bringing any material facts on the record and without appreciating the fact that the assessee is working men and can have this meagre cash in hand during the entire year. 10. For that the Ld. CIT (A) erred in confirming the action of Ld. AO in considering cash deposit of Rs. 1097/- as unexplained investment without appreciating the nature of business of the assessee.

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I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 AYs: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh. 11. For that the Ld. CIT (A) erred in accepting the addition made by Ld. AO in spite of the fact that all the addition made by Ld. AO are merely based on surmises and conjunctures. 12. For that the Ld. CIT(A) erred in confirming the addition of Rs. 1,20,000/- as unexplained expenses on estimation basis merely for the reason that the assessee have not filed his return of income. 13. For that on the facts and in the circumstances of the case the order passed by the Ld. C.I.T.(A) is not maintainable. 14. For that the order of the AO be modified and the assessee be given relief prayed for. 15. For that the appellant craves leave to add, alter or withdraw any ground/s of appeal on or before hearing of the appeal.” 4. The brief fact of the case is that a survey was initiated against the assessee in Bihar, Patna dated 13.10.2017. During the inception the cash was found amounting to Rs. 62,99,890/- and jewellery/bullion weighing of 601.82 Gram made by SHO, P.S. Pribahore Police Station, Gandhi Maidan, Patna. The search warrant u/s 132 of the Act was executed on the assessee at Patna. The case was selected for scrutiny and notice was issued u/s 153A of the Act. On basis of the notice the assessee filed the return of income for AY 2012-13 to AY 2017-18. During the assessment proceedings the assessee’s father Sekh Narul Islam had accepted that all the cash and jewelleries under his belongings and the notice U/s 131 of the Act was issued and the father of the assessee appeared. The statement was recorded and the ownership of the cash and jewellery was accepted by the father. The father of the assessee claimed that he runs a jewellery shop and filing the return regularly and the assessee was deputed to collect the cash and deliver the gold to different customers in Patna. The assessment was completed u/s 144 of the Act with addition of Rs. 79,77,679/- related to search and with Rs. 2,67,357/- for cash credit, Rs. 1,097/- for unexplained money and Rs. 1.20 Lakh for undisclosed income. The assessment was completed with the addition u/s 69A read with Section 115BBE of the Act. Also, in substantive basis the addition was also confirmed in the hands of the assessee’s father for the impugned assessment years. The same addition was added back in substantive and protective basis both in father and son’s hand. The assessee filed an appeal before the ld.

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I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 AYs: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh. CIT(A). Ld. CIT(A) upheld the assessment order. Being aggrieved the assessee filed an appeal before us. 5. The ld. A/R argued and placed that the order of Sekh Narul Islam, father of the assessee passed u/s 143(3) of the Act bearing DIN and Order No. ITBA/AST/S/143(3)/2019-20/1023227590(1) dated 27.12.2019. The ld. A/R has placed the assessment order of Sekh Narul Islam, father of the assessee before the bench. 6. The ld. A/R further placed that the addition was made related to cash amounting to Rs. 62,99,890/- and the valuation of gold and jewellery weighing 601.82 Gram valued at Rs. 16,77,789/- which works out total of Rs. 79,77,679/- was added in the assessee’s hand in protective basis. Whereas it is clear that the same amount is already added in the assessee’s father’s hand bearing PAN ACXPI 9303 F. So, the assessee requests for quashing the entire addition in the hands of the assessee. 7. The ld. A/R further argued the rest of the issues of all the years and requested for further verification before the ld. AO. 8. Ld. D/R fully relied on the order of the Revenue authorities. 9. We heard the rival submission and considered the documents available in the record. The appeal wise observation is as follows:- IT(SS)A No. 168/KOL/2023 10. Considering this appeal, we find that the addition was made in the assessee’s hand in protective basis whereas the entire seized goods were duly claimed the ownership by the assessee’s father. There is no ambiguity in between the assessee and his father about the ownership of the cash and jewellery. So, the addition made in the hands of the assessee is unjustified and liable to be quashed. It is to be directed that the addition in case of the assessee amounting to Rs. 79,77,679/- is deleted. But the same addition will be sustained in the hands of the assessee’s father subject to the further judicial proceeding of the party. Related to addition amounting to Rs. 2,67,357/- the assessee submitted the return by declaring the business u/s Page 4 of 7

I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 AYs: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh. 44AD of the Act with net profit amounting to Rs. 2,18,998/-. The rate of net profit was 14.08%. But the assessee was unable to substantiate the business activities before the ld. assessing authority. Related to addition of Rs. 1,097/- and Rs. 1.20 Lakh the assessee was not able to explain the issue properly before both the assessing authority and appellate authority. So, all the three issues are remitted back to the file of the AO for further verification de novo. 11. Accordingly, ground nos. 1 to 4, 13 & 14 are general in nature which needs no adjudication. Ground nos. 5 to 8 are allowed. Ground nos. 9 to 12 are allowed for statistical purposes. IT(SS)A No. 166/KOL/2023 12. In this instant appeal the addition was confirmed related to difference of cash balance amounting to Rs. 1,46,665/- which was declared in the return of income and the cash balance as on 31.03.2012 amounting to Rs.75,385/-. The difference works out to Rs. 71,280/-. The ld. AO added back this amount to the total income of the assessee on the ground that the assessee has no debtors and creditors during this impugned assessment year. So, the difference of cash balance; opening and closing remained unexplained before the ld. AO and added back with the total income of the assessee. Further, Rs. 1.14 Lakh was added which was deposited cash in the bank account in State Bank of India which remained unexplained before the ld. AO and added back u/s 69 of the Act. In both the cases the assessee is getting cash from his father to run his livelihood and also from his business. But the issue was never verified by any of the fiscal authorities. Considering this, we remit back the matter to the file of ld. AO for further verification on these two additions. 13. Accordingly ground nos. 1 to 4 & 8 to 10 are general in nature which needs no adjudication. Ground nos. 5 to 7 are allowed for statistical purposes.

IT(SS)A No. 167/KOL/2023

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I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 AYs: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh. 14. In this appeal, the addition was confirmed by the ld. AO amounting to Rs. 12,834/- for difference of net profit in the business. Ld. AO has taken the average profit of 10.50% which was assessee maintaining year after year. After considering this net profit rate of 10.50% the difference of net profit amounting to Rs. 12,834/- was added back with the total income of the assessee. Further, the addition of Rs. 1,500/- was made due to unexplained deposit in bank at State Bank of India and the same amount was added back u/s 69 of the Act. The assessee has purchased a car valued at Rs. 5,93,479/- . The ld. AO added back with the total income of the assessee u/s 69 read with Section 115BBE of the Act on the ground that the source of investment was not explained. Further, the ld. AO added back Rs. 8,000/- per month for the maintenance of car for the three months i.e. January to March, 2015 which works out to Rs. 24,000/- was added back u/s 69 of the Act. Considering all these additions, the ld. A/R prayed that the assessee was unable to explain before the ld. AO as the order was passed ex-parte u/s 144/153A of the Act. So, the entire additions are requested to send back to the file of the ld. AO for further verification de novo. Needless to say, that the assessee should get a reasonable opportunity of hearing in the set aside proceeding. 15. Accordingly, ground nos. 1 to 4 & 11 to 13 are general in nature which needs no adjudication. Ground nos. 5 to 10 are allowed for statistical purposes. 16. In the result, IT(SS)A Nos. 166 to 168/KOL/2023 are partly allowed for statistical purposes. Order pronounced on 12.04.2024 in accordance with Rule 34(4) of the Income tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- [Rajesh Kumar] [Anikesh Banerjee] Accountant Member Judicial Member Dated: 12.04.2024 Bidhan (P.S.)

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I.T.(S.S.)A. Nos.: 166, 167 & 168/KOL/2023 AYs: 2013-14, 2015-16 & 2018-19 Shri Nasiruddin Sekh. Copy of the order forwarded to: 1. Shri Nasiruddin Sekh, Malia Madhya Muslimpara, Near Nalikul Paschim, Hooghly-712 407. 2. ACIT, Circle-23(1), Hooghly. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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