SUBRAT KUMAR SATPATHY,BHUBANESWAR vs. ACIT, CIRCLE-2(2), BHUBANESWAR

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ITA 339/CTK/2017Status: DisposedITAT Cuttack16 April 2018AY 2011-125 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the lower authorities did not properly verify the fund flow statement and the claimed sources of deposits submitted by the assessee. Therefore, the issue was restored to the Assessing Officer for fresh adjudication.

What were the facts?

The Assessing Officer added Rs. 21,43,367/- to the assessee's income as unexplained deposits in bank accounts. The assessee claimed that several sources, including loans and maturity claims, were not considered by the lower authorities.

What were the issues?

Whether the Assessing Officer and CIT(A) erred in not properly considering the explanation and evidence provided by the assessee regarding the sources of bank deposits.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE

For Appellant: Shri P.K.Mishra, AR
For Respondent: Shri A. Tigga, DR
Hearing: 26/04

1 ITA No . 339/CT K/ 2017 Asse ssment Year : 20 11- 201 2

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No. 339/CTK/2017 Assessment Year : 2011-2012

Subrat Kumar Satpathy, Vs. ACIT, Circle -2(2), At:Plot No.183/6, Gajapati Bhubaneswar Nagar, near Press Chhak, Bhubaneswar. PAN/GIR No.ALMPS 6463 Q (Appellant) .. ( Respondent)

Assessee by : Shri P.K.Mishra, AR Revenue by : Shri A. Tigga, DR

Date of Hearing : 26/04/ 2018 Date of Pronouncement : 26 /04/ 2018

O R D E R Per N.S.Saini, AM This is an appeal filed by the assessee against the order of the

CIT(A)- 2, Bhubaneswar dated 7.6.2017 for the assessment year 2011-

2012.

2.

The sole issue involved in this appeal is that the CIT(A) erred in

confirming the addition of Rs.21,43,367/- made by the Assessing Officer

as income from undisclosed sources.

3.

The brief facts of the case are that the assessee is an individual and

derives income from salary and interest. He is the Managing Director of

Om Shree Logistic Pvt Ltd., and partner in partnership firms, namely, M/s.

Om Logistic Exports, M/s. A.B. Commercial and M/s. Noble Housing

2 ITA No . 339/CT K/ 2017 Asse ssment Year : 20 11- 201 2

Infrastructure and filed the return of income on 1.10.2011 declaring total

income of Rs.28,54,624/-. During the course of assessment proceedings,

the Assessing Officer found that the assessee maintains three bank

accounts’ viz; (1) Karnatak Bank A/c No.1082500100002501, 2) HDFC

Bank A/c No.10801930000295 and 3) Axis Bank A/c

No.024010100359085 and deposits (cash as well as cheque/draft) in

three bank accounts of the assessee are Rs.1,64,06,107/-. The Assessing

Officer required the assessee to reconcile the deposits made in three bank

accounts with source of income. The assessee could able to explain the

source of deposits of Rs.1,42,62,740/- and could not explain the source of

deposit of Rs.21,43,367/-. Therefore, the Assessing Officer made an

addition of Rs.21,43,367/-.

4.

Before the CIT(A), the assessee submitted that the total deposits in

three bank accounts are of Rs.2,01,14,979/-. The explanations of the

assessee regarding the source of deposits before the CIT (A) are that

the Assessing Officer has ignored the following deposits in the banks while

making additions:

“i) Loan received from Karnataka Bank of - Rs. 33,60,000/- ii) Loan received from D.K.Mohapatra - Rs. 2,00,000/- iii) Loan received from Suravi Ventures - Rs. 5,00,000/- iv) Maturity claim of Birla M.F. - Rs. 4,13,327.50 v) HDFC M.F. maturity claim - Rs. 2,91,766.01 vi) Reliance M.F.Maturity claim - Rs. 62,906.34 vii) Sundram BNPP Maturity claim - Rs. 15,859.85 viii) UTI Mutual Fund claim - Rs. 50,154/- ix) Int. received from Axis Bank - Rs. 13,613/- x) Kotak MF Maturity claim - Rs. 19,046/- xi) Birla Sun Life Maturity claim - Rs. 46,665.59

3 ITA No . 339/CT K/ 2017 Asse ssment Year : 20 11- 201 2

xii) Max New work Life - Rs. 5,018.37

5.

The CIT(A) observed that the assessee could not reconcile the

deposits in bank of Rs.2,01,14,979/- with computation of assessee’s

income with supporting evidence. Therefore, the CIT(A) confirmed the

action of the Assessing Officer.

6.

We have heard the rival submissions, perused the orders of lower

authorities and materials available on record. In the instant case, the

Assessing Officer found that out of deposits of Rs.1,64,06,107/- in the

three bank accounts, the assessee could explain the source of deposit of

Rs.1,42,62,740/- only. Thus, he observed that the assessee could not

explain the source of Rs.21,43,367/-. He, therefore, added the same to

the income of the assessee.

7.

On appeal, the CIT(A) confirmed the action of the Assessing Officer.

8.

Before us, the assessee explained that the following source of

deposits were not taken into consideration by the lower authorities:

Source Amount

“i) Loan received from Karnataka Bank of - Rs.33,60,000/- ii) Loan received from D.K.Mohapatra - Rs. 2,00,000/- iii) Loan received from Suravi Ventures - Rs. 5,00,000/- iv) Maturity claim of Birla M.F. - Rs.4,13,327.50 v) HDFC M.F. maturity claim - Rs.2,91,766.01 vi) Reliance M.F.Maturity claim - Rs. 62,906.34 vii) Sundram BNPP Maturity claim - Rs. 15,859.85 viii) UTI Mutual Fund claim - Rs. 50,154/- ix) Int. received from Axis Bank - Rs. 13,613/- x) Kotak MF Maturity claim - Rs. 19,046/-

4 ITA No . 339/CT K/ 2017 Asse ssment Year : 20 11- 201 2

xi) Birla Sun Life Maturity claim - Rs. 46,665.59 xii) Max New work Life - Rs. 5,018.37 Rs.49,78,356.66

9.

The assessee also submitted that the fund flow statement duly

disclosing the source of funds available with the assessee out of which

deposit in three bank accounts was made was submitted before the lower

authorities.

10.

We find that no specific defect in the fund flow statement submitted

by the assessee could be pointed by the lower authorities. Further, the

sources which have been claimed before us by the assessee needs

verification for being accepted. In the circumstances, in our considered

view, it shall be in the interest of justice to restore the issue back to the

file of the Assessing Officer for adjudication afresh after proper

verification. Needless to mention that the Assessing Officer shall allow

proper opportunity of hearing to the assessee before adjudicating the

issue afresh. Therefore, the orders of lower authorities are set aside with

the above directions.

11.

In the result, appeal filed by the assessee is allowed for statistical

purposes.

Order pronounced on 26/04/2018. Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIALMEMBER ACCOUNTANT MEMBER Cuttack; Dated 26 /04/2018 B.K.Parida, SPS

5 ITA No . 339/CT K/ 2017 Asse ssment Year : 20 11- 201 2

Copy of the Order forwarded to : 1. The Appellant : Subrat Kumar Satpathy, At:Plot No.183/6, Gajapati Nagar, near Press Chhak, Bhubaneswar 2. ACIT, Circle -2(2), The Respondent. Bhubaneswar 3. The CIT(A)-2, Bhubaneswar 4. Pr.CIT-2, Bhubaneswar BY ORDER, 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// SR.PRIVATE SECRETARY ITAT, Cuttack

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