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Income Tax Appellate Tribunal, BENCH ‘SMC’ KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM]
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax-(A)-21, Kolkata relating to A.Y. 2006-07.
The Assessee is an individual and is a partner in a partnership firm M/s. Clinical Diagnostic Centre. He filed return of income on 26.03.2007 declaring total income of Rs.98,997/-. The AO, during the course of assessment proceedings called upon the assessee to explain the source of deposit in HDFC Bank Ltd of Rs.12,58,500/-. The assessee explained the same as follows :- 1. Cash Loan was shown Rs.7,95,000/- 2. Cash gift received Rs.2,00,000/- 3. Received from firm towards Share of profit, partners remuneration And interest on capital Rs.2,00,000/- Total Rs.11,95,000/-
The assessee also disclosed receipt from NSC by cash of rs.85,000/- and share application return for Rs.34,500/- etc.
Pratip Saha A.Y.2006-07 2
The AO rejected some of the explanations of the assessee and determined the total income at Rs.17,25,520/- inter-alia making the following additions
(i) Unexplained cash credit Rs.9,95,000/- (ii) Interest income Rs. 26,990/- (iii) Investment in MIP Rs.90,000/- (iv) Investment in shares and bondsRs.4,64,941/- (v) Less shown balance Rs.53,593/- 5. Aggrieved the assessee carried the matter on appeal. The First Appellate Authority granted part relief. Further aggrieved the assessee is in appeal on the following grounds :- “
1. For that on the facts of the case, the order passed by the Ld.C.I.T.(A) is completely arbitrary, unjustified and illegal.
2. For that on the facts of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the addition amounting to R~,95,000/- as unexplained cash credit which is completely arbitrary, unjustified and illegal.
3. For that on the facts of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the addition amounting to Rs.26,990/- as non offering of interest income which is completely arbitrary, unjustified an illegal. ~
4. For that on the facts of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the addition amounting to Rs.90,000/- as non reflection of Monthly Income Scheme of Post Office which is completely arbitrary, unjustified and illegal.
5. For that on the facts of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the addition amounting to..Rs.4,,64,941/- on account of investment in share & bonds which is completely arbitrary, unjustified and illegal.
6. For that on the facts of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the addition amounting to Rs.53,594/- on account of difference in bank balance which is completely arbitrary, unjust and illegal.
7. For that the interest u/s. 234A & 234B amounting to Rs.42,080/ - & Rs.1,73,5S0/ - charged mechanically is wrong & illegal.
8. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.”
After hearing the rival contentions and considering the papers on record I held as follows :-
Pratip Saha A.Y.2006-07 3 Ground No.1 is general in nature. Ground No.2 is against the addition of Rs.9,95,000/- as unexplained cash credit. The assessee claimed that he had received loan of Rs.5,00,000/- from Shri Tapas Kumar Bark. This claim is proved as false by the AO. The assessee was unable to establish the genuineness of the loan and on the other hand, the AO found out that Mr.Tapas Kumar Barik has not shown any such advance in his balance sheet during the year. The assessee also changed his version on the above issue. Thus I confirm this addition, of Rs.5,00,000/-.
In respect of the cash credit, the claim of the assessee is that he received a loan of Rs.2,00,000/- from his father-in-law which was later converted into a gift. As the father-in-law is a close relative, this claim of the assessee can be believed. Just because the father-in-law is a retired person, it does not lead to a conclusion that the donor has no creditworthiness. The assessee has produced confirmation letters and other documents in support of his claim. Thus this addition of Rs.2,00,000/- towards cash gift is deleted.
The claim of the assesse that he had received loan from friends and relatives to the tune of Rs.2,95,000/- is not supported by any evidence. Hence this credit u/s 68 is upheld.
Ground No.3 and 4 are dismissed as not pressed.
Ground Nos. 5 and 6 relate to the addition of Rs.4,64,941/- being investment in shares and bonds and an amount of Rs.53,594/- on account of difference in bank balance. I have confirmed the addition of Rs.7,95,000/- u/s 68 of the Act. The assessee claimes the benefit of telescoping of this income with the investments. In my view this amount has to be telescoped with the investments. Thus the addition of Rs.4,64,941/- on account of investment in shares and bonds and the amount of Rs.53,594/- have difference in the bank balance is hereby deleted by granting telescopic benefit to the assessee. Hence these grounds of the assessee are allowed.
Ground No.7 is consequential in nature. Ground no.8 is general in nature.
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In the result the appeal of the assessee is allowed in part.
Order pronounced in the Court on 31.10.2017.