SUPRAKASH SAHA,BAGUIHATI vs. D.C.I.T., CIRCLE - 52(1), KOLKATA

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ITA 2266/KOL/2024Status: DisposedITAT Kolkata24 April 2025AY 2013-20143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of ₹16,36,800/- made by the AO and confirmed by the CIT(A) was incorrect and could not be sustained. The Tribunal noted that the assessee, a retired Government employee, had received ₹83 lacs as retirement benefits. The investment in LIC was made from cash received from I-Core Services Limited, which was a repayment of an FDR. The Tribunal found that the assessee had sufficient sources to make the investment in LIC, and the evidence filed by the assessee corroborated this. The Tribunal observed that the cash received from I-Core Services Limited was the source of the LIC investment. Therefore, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. No issue was expressly left undecided.

What were the facts?

The assessee, Suprakash Saha, filed an appeal against the order of the National Faceless Appeal Centre, Delhi (NFAC), dated 13.08.2024, for Assessment Year 2013-14. The appeal concerns the confirmation of a disallowance of ₹16,36,800/- by the Assessing Officer (AO) and confirmed by the CIT(A) regarding investment in LIC. The assessee had initially filed a return declaring ₹2,49,800/-. The case was reopened under Section 147, and a revised return was filed on 26.09.2013, declaring ₹4,20,340/-. The reopening was based on the assessee's investment in LIC in cash amounting to ₹16,36,800/-. The AO made the addition under Section 69 as unexplained investment, which the CIT(A) upheld.

What were the issues?

1. Whether the disallowance of ₹16,36,800/- made by the AO and confirmed by the CIT(A) in respect of investment by the assessee in LIC is sustainable? (Question of law and fact, concerning Section 69 of the Income Tax Act, 1961). Assessee's contentions: The assessee argued that the investment in LIC was made from cash received from I-Core Services Limited. The assessee, a retired Government of India employee, received ₹83 lacs as retirement benefits. Out of this, ₹30 lacs was invested in I-Core Services Ltd. by account payee cheque. Subsequently, a cheque for ₹32,76,764/- was issued for LIC investment in two installments. When the FDR with I-Core Services matured, a cheque dated 04.01.2013 bounced, and the assessee was paid in cash. This cash was then used to pay LIC installments of ₹16,38,800/-, which the AO treated as unexplained. The assessee claims sufficient sources for this investment, supported by evidence. Revenue's contentions: The revenue, through the DR, did not record any specific arguments in the judgment, other than implicitly supporting the order of the CIT(A) which confirmed the addition made by the AO.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM

For Appellant: Shri Sunil Surana, AR
For Respondent: Shri Madhumita Das, DR
Hearing: 16.04.2025Pronounced: 24.04.2025

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 13.08.2024 for the AY 2013-14.

2.

The only issue raised by the assessee is against the confirmation of disallowance of ₹16,36,800/- by the ld. CIT (A) as made by the ld. AO in respect of investment by the assessee in LIC.

3.

At the outset, we observe from the appellate folder that there is a delay of 12 days in filing the appeal for which the assessee has filed a condonation petition stating that the delay to be on account of medical issue such as acute hypertension etc. for which the medical certificate is attached.

5.

So far as the facts of the issue are concerned, I note that in this case, the assessee filed the return of income on 10.03.2014, declaring the total income of ₹2,49,800/-. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act, which was also replied by the assessee by filing the return of income on 26.09.2013, declaring the total income of ₹4,20,340/-. The reopening was made on the ground that the assessee invested in LIC in cash of ₹16,36,800/-. Accordingly, the statutory notices were served and assessee duly replied the said notices. The ld. AO finally made the addition of ₹16,36,800/- u/s 69 of the Act as unexplained investment. In the appellate proceedings, the ld. CIT (A) confirmed the addition.

6.

I note that the assessee is a retired employee of Government of India and received ₹83 lacs as retirement benefits out of the said 83 lacs, the assessee invested ₹30 lacs in I-Core Services Ltd through account payee cheque dated 29.12.2011. On the same day the assessee bought LIC by investing 32,76,764/-( in two installments of ₹16,38,800/- by account payee cheques drwn non SBI). Thereafter, at the time of maturity of FDR with I-Core Services Limited a cheque was issued dated 04.01.2013, which got bounced, a copy of which is available at page no.10 of the Paper Book. Thereafter, the assessee was paid a cash and out of the said cash, the assessee paid LIC instalments of ₹16,38,800/- , which according to AO is unexplained and added to the income of the assessee . In our opinion, the addition made by the ld. AO and confirmed by the ld. CIT (A) is wrong and cannot be sustained on the basis of the facts available before us, which were duly corroborated with

7.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 24.04.2025.

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