SMT. PURNIMA GHOSH,KOLKATA vs. ITO, WARD-40(4), KOLKATA, KOLKATA

The Assessee is an individual and has income from business, capital gain and other sources. She filed her return of income for A.Y.2006-07 on 28.03.2007 declaring total income of Rs.2,55,230/-. The AO found that the assessee has disclosed two bank accounts in the name of M/s. Bapi Enterprises and another in the name of M/s. Ghosh Guinea House, which is the proprietory concern of the assessee. No personal balance sheet or profit and loss account were furnished. The disclosed bank accounts were a) Standard Chartered Bank, Shyambazar Branch, Curr/A/c No.334-05-0044-29. b) State Bank of India, Sashi Bhusan Dey Street, S.B.A/c No.0229000081111 in the name of Smt. Purnima Ghosh. In the case of M/s. Ghosh Guinea House no bank details had been furnished.

The AO in the meanwhile, obtained confirmations from Mutual Fund authorities of Standard Chartered Bank, State Bank of India, Reliance Mutual Fund, HDFC and ITA No.16/Kol/2015-Smt. Purnima Ghosh A.Y.2006-07 2 Fidelity International. On examination of these confirmations, he found that the assessee had invested in the mutual funds through four bank accounts, which were not disclosed in the balance sheet for A.Y. 2005-06 and 2006-07. The total investments were of Rs.1,49,08,073/-. The AO added an amount of Rs.92,80,000/- being fresh investments u/s 69 of the Act as unexplained investments.

The assessee carried the matter to the ld. CIT(A). Before the First Appellate Authority the assessee filed his submissions along with the paper book containing supporting documents. The ld. CIT(A) called for a remand report from the AO. The remand report was served on the assessee and the assessee filed a rejoinder. After considering all these materials, the first appellate authority granted part relief. Further aggrieved the assessee is before us on the following grounds :- “1. (a) That on the facts and in the circumstances of the case, the observations of Ld. CIT(A) that cash deposits in A/c No. 334-1-14211-7 with Standard Chartered Bank remained unexplained are perverse and opposed to assessee's statement available at page 8 of paper book.

The ld. Counsel for the assessee Mr. Manish Tiwari,, submitted that as far as ground no.1 is concerned the amount of Rs.49,000/- and Rs.6,000/- were made out of ITA No.16/Kol/2015-Smt. Purnima Ghosh A.Y.2006-07 3 cash withdrawals and it was the case of rotation of cash and no separate addition is called for. He filed a paper book containing copies of bank account of Standard Chartered bank which shows cash withdrawals on 20th April of Rs.25,000/-, 27th April of Rs.25,000/- and 4th May of Rs.50,000/- and argued that the cash so withdrawn was re-deposited on 23rd and 24th August. On ground no.2 the ld. Counsel for the assessee submitted a photocopy of the deposit slip and argued that this amount was transferred from one Bank account of the assessee to another Bank account of the assessee and under these circumstances no addition can be made. He submitted that this is not a fresh credit and the money already available in one of the bank accounts of the assessee was transferred to another bank account of the assessee.

The ld. DR, on the other hand, submitted that these claims of the assessee need to be verified by the AO, and prayed that the issue may be set aside for verification.

After hearing the rival contention we are of the considered opinion that these issues may be set aside to the file of the AO for verification of these claims and fresh adjudication denovo in accordance with law. The AO shall confine himself to these grounds. Wherever there is a cash withdrawal and subsequent deposit of cash in the bank account, the AO shall give telescoping benefit to the assesse. The AO shall also verify the claim of the assessee that Rs.9,00,000/- in question is nothing but a transfer of an amount from one bank account to another bank account of the assessee. Thus both these grounds raised by the assessee are set aside to the file of the A.O. for fresh adjudication in accordance with law.

In the result the appeal of the assessee is allowed for statistical purposes.