ITO, WARD-3, ROURKELA, ROURKELA vs. KANHAIYALAL AGARWAL, ROURKELA

This is an appeal filed by the revenue against the order of CIT(A)-II,

Bhubaneswar, dated 21.10.2014, for the assessment year 2008-09 on the

following ground:

“Whether in the facts and circumstances of the case, the CIT(A) is correct in deleting the unexplained investment of Rs.25,00,000/- when it was established on record through cross verification of transaction during the assessment proceedings for which the assessee has offered to plausible explanation.”

2 ITA No. 07/CT K/ 2016 Asse ssment Year :20 08- 09 2. At the time of hearing, an adjournment petition was filed by the

Authorised Representative of the assessee on the ground that he has some

personal difficulties. It is observed that earlier the hearing was adjourned

on various dates at the request of the respondent-assessee i.e. on

4.10.2016,6.10.2016,8.11.2016, 2.1.2017, 13.1.2017 and 14.3.2017. As

the reason for seeking adjournment by ld Authorised Representative of the

assessee was found not convincing, the adjournment petition was rejected

and the appeal was heard exparte and disposed of after considering the

submission of ld Departmental Representative and materials available on

record.

materials available on record. In the instant case, the Assessing Officer

observed that on examination of S.B. Account No.05782010008580

maintained by the assessee with Oriental Bank of Commerce, Rourkela, the

assessee had paid Rs.77,00,000/- to Nisha Data Com Ltd., as under:

Date Cheque No. Amount (Rs.) 19.7.2007 586708 20,00,000.00 19.7.2007 586709 25,00,000.00 5.12.2007 586715 27,00,000.00 15.1.2008 586717 5,00,000.00 Total: 77,00,000.00 4. However, from the information received u/s.133(6) of the I.T.Act,

1961 from Nisha Data Co. Ltd., Basanti Colony, the Assessing Officer found

that the assessee had following transactions:

3 ITA No. 07/CT K/ 2016 Asse ssment Year :20 08- 09 Date Cheque No. Amount (Rs.)

19.7.2007 586708 20,00,000.00

5.12.2007 586715 27,00,000.00

15.1.2008 586717 5,00,000.00

Total: 52,00,000.00

on 19.7.2007, the assessee had made investment of Rs.20,00,000/- and

Rs.25,00,000/- aggregating to Rs.45,00,000/- but investment of

Rs.25,00,000/- on 19.7.2007 vide chque No.58609 in Nisha Data Com Ltd.,

remained unexplained in both the books of account and this unexplained

investment of Rs.25,00,000/- was added to the income of the assessee.

was asked to produce the ledger accounts copies of Sri Kanhayalal Agarwal

as per its books of account u/s.133(6) of the Act. In response to same, on

9.11.2010, Nisha Data Com Ltd., produced the ledger account copies of Sri

Kanhayalal Agarwal with a forwarding letter and it was found that

Rs.25,00,000/- paid to Nisha Data Com Ltd., did not appear. The Assessing

officer has observed that in reply dated 20.8.2013, the assessee submitted

that he had issued two nos of cheque in favour of M/s. Nisha Data Com

Ltd., on 19.7.2007 vide cheque No.586708 for Rs.20,00,000/- and cheque

no.586709 for Rs.25,00,000/-. Out of Rs.25,00,000/-, Rs.10,00,000/- was

squared up during the financial year by way of payment to M/.s ISE Stock

Broking on 16.8.2007 vide cheque No.431502 and Rs.15,00,000/- to

4 ITA No. 07/CT K/ 2016 Asse ssment Year :20 08- 09 Creditors for shares on 21.7.2007 vide cheque No.294850. The Assessing

Officer has not accepted this plea of the assessee by holding it to be an

afterthought.

“I have carefully considered the contents and substance of the assessment order and the Grounds of Appeal preferred and the other additional submissions made as above, following which I arrive at the following findings/decision(s):

a) In respect of the two impugned amounts of Rs. 10 Lakhs and Rs. 25 lakhs assessed as tax, it is clear from the available documentation that the amounts have been squared up by M/s NDCL by making payments on behalf of the Appellant to its share creditor (M/s Tarini Traders) and to M/s ISE Stock Broking(P) Ltd. The statements of accounts of the Appellant too reflect this position. Consequently, the addition made of Rs. 25 lakhs assessed as the Appellant's taxable income is deleted. Ground Number 1 is allowed.” 8. Before me, ld Departmental Representative relied on the order of the

Assessing Officer.

I find that except relying on the order of the Assessing Officer, he could not

point out any specific error in the order of the CIT(A). He could not

controvert the findings of the CIT(A) by bringing any positive material on

record that it is clear from the available documentation that the amount of

Rs.25 lakhs have been squared up by M/s. NDCL by making payments on

behalf of the assessee to its share creditor M/s. Tarini Traders and to M/s.

ISE Stock Broking (P) Ltyd.,. The statements of account of the assessee

too reflect this position. Therefore, I do not find any good and justifiable

5 ITA No. 07/CT K/ 2016 Asse ssment Year :20 08- 09 reason to interfere with the order of the CIT(A), which is hereby confirmed

and ground of appeal of the revenue is dismissed.

Order pronounced in the open court on 04/04/2017. Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 03/04/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Income Tax Officer, Ward- 3, Rourkela. 2. The Respondent. Sri Santosh Kumar Agarwal, S/O Late Kanhaiyalal Agarwal, Plot No.AM-44, Basanti Colony, Rourkela-12 3. The CIT(A)-II, Bhubaneswar 4. CIT, Sambalpur 5. DR, ITAT, Cuttack BY ORDER, 6. Guard file. //True Copy// SR.PRIVATE SECRETARY ITAT, Cuttack