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Income Tax Appellate Tribunal, “D” BENCH : KOLKATA
Before: Hon’ble Shri M.Balaganesh, AM & Shri S.S.Viswanethra Ravi, JM]
ORDER Per M.Balaganesh, AM
This appeal by the Assessee arises out of the order of the Learned Commissioner of Income Tax(Appeals)-10, Kolkata [in short the ld CIT(A)] in Appeal No.1237/ITO.W- 45(3)/CIT(A)-21/KOL/14-15 dated 08.12.2015 against the order passed by the ITO, Ward-45(3), Kolkata [ in short the ld AO] under section 143(3)/147 of the Income Tax Act, 1961 (in short “the Act”) dated 30.09.2008 for the Assessment Year 2002-03.
The ground nos. 1 and 5 raised by the assessee are not pressed by the Ld. AR. The same is reckoned as statement from the Bar and accordingly ground nos. 1 and 5 are dismissed as not pressed.
2 Md. Naimuddin A.Yr.2002-03 3. The only issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the addition made in the sum of Rs. 10 lacs. towards deposits made in the bank account of the assessee, in the facts and circumstances of the case.
The brief facts of this issue is that the assessee filed its return of income for the assessment year 2002-03 on 28.10.2002 declaring total income of Rs. 81,389/-. The assessee is a proprietor of M/s Indo Teen Company, dealing in trading in tin sheets, apart from deriving total income and income from other sources. The Ld. AO in the course of assessment proceedings observed that the assessee had maintained a bank account with J & K Bank Ltd. bearing Account no. 0325SB3444 wherein, there was a single cash deposit of Rs. 10 lacs. on 08.02.2002. The Ld. AO further observed that there were no further deposits either by cash or by cheque in this bank account during the financial year 2001-02 relevant to assessment year 2002-03. The assessee was asked to explain the source of the said deposit. Since, no satisfactory explanation was given by the assessee before the Ld. AO, the said cash deposit of Rs. 10 lacs. was treated as unexplained cash credit u/s 68 of the Act in the hands of the assessee. The assessee explained before the ld CITA that he had entered into an agreement of sale of property on 07.02.2002 in respect of its flat situated at 179, Shakespeare Sarani, Kolkata and this sum of Rs. 10 lacs. was received as advance from the intending purchaser of the said property in cash at the time of entering into agreement of sale. The assessee also produced the agreement of sale duly notarized before the Ld. CIT(A) as an additional evidence. The same was directed to be examined by the Ld. AO and accordingly, remand report was called for by the Ld. CIT(A). The Ld. AO in the assessment proceedings issued summons u/s 131 of the Act dated 15.01.2014 to M/s Mriduhari Trade and Investment Ltd. (intending purchaser). Another notice was also issued to the said party on 15.07.2014 at an alternative address at 10, Govt. Place,(East), Kolkata-69. Both these notices returned unserved. Thereafter, the Inspector of Income Tax Department was deputed to ascertain the whereabouts of the said party and these efforts 2
3 Md. Naimuddin A.Yr.2002-03 were also in vain. When this was put to assessee in the remand proceedings, the assessee could not offer any satisfactory explanation before the Ld. AO. Accordingly, the Ld. AO justified his action of treating the said agreement as bogus and justifying his action of adding this sum of Rs. 10 lacs. as unexplained cash credit u/s 68 of the Act. The Ld. CIT(A) by following the said remand report upheld the addition made by the Ld. AO.
Aggrieved, the assessee is in appeal before us on the following grounds:
2. That without prejudice, on the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 10,00,000 made by the Assessing Officer in the impugned re-assessment order passed under section 143(3)/147 of the Income Tax Act, 1961.
3. That the Ld. Commissioner of Income Tax (Appeals) erred in agreeing with the Assessing Officer that the sum of Rs. 10,00,000 deposited in the Bank account of the Appellant herein was undisclosed income of the assessee chargeable to tax under section 68 of the Income Tax Act, 1961.
4. That the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 10,00,000 in total income of the Appellant solely relying on the Remand Report of the Assessing Officer without considering the evidences submitted by the Appellant explaining the source of the cash deposit of Rs. 10,00,000.
We have heard the rival submissions. The ld. AR before us stated that the said intending purchaser had initially complied with the notice issued u/s 133(6) of the Act by the Ld. AO and had confirmed the property transaction before the Ld. AO and accordingly the said cash deposit of Rs. 10 lacs. is properly explained by the assessee by way of proper source. He argued that merely because these summons and subsequent notices that could not be served on the said party, during assessment proceedings, would not make the transaction of agreement of sale as bogus. However, he stated that this fact could be verified by the Ld. AO in order to understand the truth. In response to this, the 3
4 Md. Naimuddin A.Yr.2002-03 Ld. DR vehemently objected for setting aside of this appeal to the file of the Ld. AO in as much as the assessee has not either produced the party in response to summons u/s 131 of the Act or produce relevant documents before the Ld. AO (both in original as well as remand proceedings) or before the Ld. CIT(A).
6.1. We find that the said party M/s Mriduhari Trade and Investment Ltd. had complied with to the notice issued u/s 133(6) of the Act before the Ld. AO vide letter dated 18.04.2013 filed before the Ld. AO on 02.05.2013 wherein it had enclosed the relevant documents called for by the Ld. AO. We find that this letter and documents filed thereon had not been considered by the Ld. AO. Hence, we deem it fit and appropriate in the interest of justice and fair play, to remand this issue to the file of the Ld. AO for examination afresh, in accordance with law. The Ld. AO, if he considers necessary, make necessary enquiries with the concerned parties i.e. M/s Mriduhari Trade and Investment Ltd. for understanding the facts of the case. The assessee is also directed to produce the said party for the examination by the Ld. AO to reveal the facts. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the Court on 22.11.2017