ASIS SARKAR,KOLKATA vs. ITO, WARD 50(1), , KOLKATA

Brief facts of the case are that the assessee is an individual and had filed his return of income showing total income of ₹7,25,630/-. The assessee furnished copy of the bank statement, fund flow statement, details of loan received/paid and amount received from debtors. From perusal of the documents, the Assessing Officer (hereinafter referred to as Ld. 'AO') found that there was difference in balance amount as per the balance sheet as on 31.03.2013 and 31.03.2014. The return of income was initially selected for limited scrutiny but was subsequently taken up under complete scrutiny after obtaining the requisite approval. The Ld. AO treated the balance amount of ₹18,00,045/- as unexplained cash credits and added the same to the returned income of the assessee u/s 68 of the Act. The Ld. AO also found that the assessee had sold shares amounting to ₹5,41,925/- which were purchased for ₹3,02,241/- and accordingly added the short term capital gains of ₹2,39,684/- to the returned income of the assessee and assessed the total income of the assessee at ₹27,65,360/- u/s 143(3) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued five notices for hearing but the assessee remained non-compliant to the notices. The Ld. CIT(A) perused the records and dismissed Ground no. 2 raised by the assessee relating to the addition of ₹18,00,045/- being illegal and unjust and held that the Ld. AO has rightly mentioned that the proprietorship concern was not reflected in the earlier years. Hence, the Ld. AO’s treatment of the capital introduction being unsatisfactory and as income u/s 68 of the Act was held as good in law and needed no interference from the I.T.A. No.: 588/KOL/2025 Assessment Year: 2014-15 appellate authority. In Ground no. 3 raised by the assessee relating to the addition of ₹2,39,684/- being arbitrary and void, the Ld. CIT(A) allowed this ground by deleting the addition made by the Ld. AO. The appeal was thus partly allowed.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. During the course of the appeal before us, the assessee has also filed written submission as under: “Submission in writing: Your Appellant is a law abiding citizen of India and paying tax files his Return of Income regularly. Your Appellant carries on different proprietorship businesses. During the period under Assessment the Ld. Assessing Officer has made additions on the following ground which was upheld by the Ld. Appellate Authority:- Difference in opening Capital A/c Balance Brought Forward from last year (as on 01.04.2013) Rs. 16,07,204.48/-. In clarification Appellant submits that the proprietorship business of Asis Sarkar namely M/s. AS Construction was very much there during the Financial Year of 2012-13 & 2013-14. Appellant in support of the same is enclosing herewith the Trade License of M/S. AS Construction and Bank Account statements for the Financial Year of 2012-13 & 2013-14 herewith, which is now being filed only before this Hon'ble Tribunal and was not filed before the authorities below or in earlier stages. However, there were some technical errors in preparing the accounts of your Appellant during the Financial Year of 2012-13 & 2013-14. This requires a total reconciliation with the Bank Account of the A.S. Construction proprietor Asis Sarkar. The Appellant in response of the notices u/s. 143(2) and 142(1), the, A/R of the assessee appeared and various details were filed as asked for. During the relevant financial year the assessee earned his income from proprietary firm in the name and style of "A.S. Construction". All the I.T.A. No.: 588/KOL/2025 Assessment Year: 2014-15 documents as asked for were duly filed includes computation of income, P & LA/c, B/5 etc. From the Computation Sheet, we find under the caption: Income from Business (as per P & L a/c) 1,22,699/- Income from Business (as per P & L a/c) A.S. Construction 2,58,773/- 3,81,472/- The Ld. Appellate Authority though admitted that 'the income has been offered for taxation, but opined that ‘this does not exempt the capital introduction of Rs.16,07,204/- directly into the capital account without routing the same through the P&L in the current year’. The Ld. AA ought to have inspected the Balance Sheet of A.S. Construction and ask for necessary reconciliation/clarification/proper understanding. However, the Ld. AA has failed to do so. Capital belongs to A.S. Construction as on 1.4.2013 brought back in the Personal Balance Sheet of the appellant. Hence the final adjusted balance of Rs. 59,02,290.41 merged in the Capital a/c as noted by the I.T.O. is absolutely correct, perfect and justified. However, either the authorities below could not understand the entries or he was not properly explained what the entries stand for. When the income from A.S. Construction was included in the Computation Sheet and offered for taxation, the authorities below ought to have been consider the capital from which such profit derives, which the authorities below completely disregarded and thus came to an erroneous and unjustified conclusion in making the addition u/s 68 of the Act. This is unjust. Thus, your Appellant states that if your Honour deem fit and proper then the case may kindly be remanded back to the Assessing Authority for proper verification of its documents or pass such necessary order as your Honour deem fit and proper.”

We have considered the facts of the case, the submissions made and the documents filed. The assessee has now filed additional evidences in support of the claim that the capital added belonged to the proprietorship concern and, therefore, was not liable to be added under section 68 of the Act. These documents which were filed before us were admittedly not filed either before the Ld. AO or even before the Ld. CIT(A). It is also stated that the income from the proprietorship business was included, but the reconciliation with the bank account of the I.T.A. No.: 588/KOL/2025 Assessment Year: 2014-15 proprietorship business was required as there was some technical error in preparing the accounts during the financial years 2012-13 and 2013-

Since the required documents were not filed before the appellate authority, therefore, it was considered by the Bench that the same may be admitted as they go to the root of the matter. Therefore, after examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal back to him for disposal of the grounds of appeal taken by the assessee on merits by passing a speaking order. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 12th November, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 12.11.2025 Bidhan (Sr. P.S.) I.T.A. No.: 588/KOL/2025 Assessment Year: 2014-15 Copy of the order forwarded to:

Addl/JCIT(A)-Bhubaneswar.

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order