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Income Tax Appellate Tribunal, BENCH ‘A’ KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM & Shri S.S.Viswanethra Ravi, JM ]
This is an appeal by the Assessee against the order dated 14.01.2016 passed by C.I.T-(A)-15, Kolkata for A.Y.2010-11.
In this appeal the assessee has challenged the addition made by AO on account of undisclosed income of Rs.60,00,000/- and further enhancement by the CIT(A) to Rs.17,35,173/- totalling to Rs.77,35,173/- (Rs.60,00,000/- + 17,35,173/-) and other expenses disallowed by the AO at 25% amounting to Rs.73,462/-.
The brief facts of the case are that the assessee is an individual engaged in the business of deriving income from two proprietory concerns viz. M/s Ubique Hotel cum Restaurant and M/s Bengal System & Co. The AO based on the statement recorded during course of survey added an amount of Rs.60,00,000/- as undisclosed income and Rs.73,462/- on account of other expenses. The CIT(A) confirmed both the additions and further enhanced the addition under undisclosed income an extent of Rs.17,35,173/-. Sri Pinaki Ranjan Das A.Y.2010-11
The ld. AR submits that the Tribunal in a batch of appeals in assessee’s own cases involving A.Yrs. 2003-04 to 2008-09 upheld the order of CIT(A) in estimating the income of the assessee at 25% on the total deposits as found in undisclosed bank accounts as the same represents unaccounted profits of assessee and referred to para-6 of the said order. The ld. AR argued that the issues in the batch of appeals before the coordinate bench of this Tribunal in the aforesaid assessment years are similar to the issue on hand and pleaded to remit the matter to the file of the AO to estimate the income of the assessee at 25%. The ld. DR relied on the orders of CIT(A).
5. Heard rival submissions and perused materials on record. We find that there was a survey on 27.01.2010 in the business premises of the assessee in which the AO has recorded a statement of the assessee in the presence of AR Shri S.L.Mondal wherein the assessee disclosed Rs.75,00,000/-. While dealing with the assessment years 2003-04 to 2008-09 this Tribunal upheld the order of CIT(A) in estimating the income of the assessee at 25% on total deposits being reasonable in the facts and circumstances of the case. The relevant portion at para-6 in to 2603/Kol/2015 order dated 7th September, 2016 held as follows :- “6. The second contention raised by the Id. counsel for the assessee is that the estimation of the income of the assessee from undisclosed transactions as made by the ld. CIT(Appeals) at 25% of the total deposits found to be made in the undisclosed Bank accounts on the basis of cash withdrawals is on the higher side. In this regard, he has pointed out that there were substantial cash deposits also made by the assessee in the relevant Bank accounts, but the Id. CIT(Appeals) has taken into account only the cash withdrawals ignoring totally such cash deposits. He has also furnished the details of such cash deposits made in the undisclosed Bank accounts of the assessee during the years under consideration and a perusal of the same shows that such cash deposits were actually more than the cash withdrawals atleast in three years out of six years under consideration and in two years. i .e. A.Ys. 2007-08 and 2008-09, such cash withdrawals were substantially more than the corresponding cash withdrawals. It is thus clear that the cash deposits in his undisclosed Bank accounts were not made entirely out of cash withdrawals made from the said accounts and such cash deposits thus were made at least partly out of independent source of income. Moreover as rightly pointed out by the Id. D.R. in this regard, the total cash withdrawals from the undisclosed bank accounts of the assessee were found to be made in the range of 25% to 42% of the total fixed deposits, but the Id. ITA No.377/Kol/2016 Sri Pinaki Ranjan Das A.Y.2010-11
CIT(Appeals) estimated the income of the assessee only to the extent of 25% of the total deposits after considering all other aspects including the cash deposits made during the corresponding period. It is also pertinent to note here that some of the outgoings from the undisclosed Bank accounts of the assessee by cheques or by Bank Transfers were found to be made on account of personal expenses and personal investment by the Id CIT(Appeals). However, the same have not been taken into consideration separately by the Id. CIT(Appeals) while estimating the income of the assessee at 25% of the total deposits on the basis of the quantum of cash withdrawals. This again goes to prove that all other aspects of the matter including the adverse findings given by him were taken into account by the Id. CIT(Appeals) while estimating the income of the assessee at 25% of the total deposits found to be made in the undisclosed Bank accounts of the assessee. Having regard to all these facts and circumstances of the case, we are of the view that the estimate made by the Id. CIT(Appeals) of the income of the assessee from the transactions reflected in the undisclosed bank accounts of the assessee at 25% of the deposits made in the said Bank accounts is quite fair and reasonable and the same cannot be regarded as on higher side. In that view of the matter, we uphold the impugned order of the ld. CIT(Appeals) on this issue for all the years under consideration and dismiss these appeals filed by the assessee. “
Therefore taking into consideration the submissions of the ld. AR, we deem it proper to remand the matter to the file of the AO to compute the income @25% on an amount of Rs.77,35,173/-. The grounds 2(a)(b) and 3 raised by the assessee are allowed for statistical purposes.
In the result the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 28.03.2018.