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Income Tax Appellate Tribunal, “C” BENCH : KOLKATA
Before: Hon’ble Sri N.V.Vasudevan, JM & Shri Waseem Ahmed, AM]
Sri Ramesh Kr.Baheti -vs.- I.T.O., Ward-38(3), Kolkata Kolkata [PAN : AEUPB2143K) (Respondent) (Appellant) For the Appellant : Shri S.M.Surana, Advocate For the Respondent : Shri Sallong Yaden, Addl.CIT Date of Hearing : 21.03.2016. Date of Pronouncement : 6.4.2016. Per N.V.Vasudevan, JM ORDER This is an appeal by the Assessee against the order dated 26.11.2015 of CIT(A)- 11, Kolkata, relating to AY 2011-12.
The Assessee is an individual. He derives income from house property and income from other sources being interest received from advancing of loans and on deposits from bank. For A.Y.2011-12 the assessee filed return of income declaring total income of Rs.1,58,969/-.The Assessee had one bank account in his name with ICICI Bank Ltd., wherein cash deposit totaling Rs.22,53,262/- were made during the previous year. There was another account with ICICI Bank Ltd in the name of the assessee and name of his minor son Aswin Baheti, wherein cash deposit totaling Rs.12,26,500/- had been made during the previous year.
In the course of assessment proceedings AO called upon the assessee to explain the source of funds out of which cash deposits referred to above were made in ICICI Bank
2 Sri Ramesh Kumar Baheti A.Yr.2011-12 Ltd. The asseessee submitted before AO that sums that had been withdrawn from the very same ICICI Bank account had been re-deposited in the very same account. The assessee also explained that it had sold gold on 02.04.2010 for a sum of Rs.3,00,000/- to Maxpro India and received cash of Rs.3,00,000/- on such sale. Similarly, gold was sold on 31.01.2011 to Maxpro India and cash of Rs.1,50,000/- was received on such sale. After taking into account the cash deposit of Rs.3,00,000/- on sale of gold on 02.04.2010 and cash deposit of Rs.1,50,000/- on sale of gold on 31.01.2011, the assessee had sufficient cash as per the cash book. After taking into consideration the withdrawals and deposit of money in the very same account and sale proceeds of gold, the source of deposit of monies in the bank account on each day prior to the deposit in the bank account stands duly explained. A copy of the cash book filed by the assessee before AO is given as annexure to this order. It is not in dispute that if the sale of gold and receipt of cash on such sale of gold and if the withdrawals of the bank account are considered then there would be availability of cash with the assessee and therefore the source of funds out of which cash was deposited in the bank would stand explained.
The AO did not believe the plea of the assessee that on sale of gold cash of Rs.3,00,000/- and Rs.1,50,000/- was received by assessee on 02.04.2010 and 31.01.2011 respectively. In this regard AO referred to the fact that an inspector was deputed to verify whether the concern Maxpro India was existing at the address given in the purchase bill by the assessee as evidence for sale of gold. The Inspector reported to the AO that such a concern was not available at the given address. This fact was confronted to the assessee by the AO. Notice u/s 131 of the Act was also issued to Maxpro India by the AO. This was ought to be served on Maxpro India at the address given in the bill namely 89, Burtolla Street, Kolkata-700007. Inspector of Income tax department who went to serve notice u/s 131 of the Act reported that Maxpro India could not be found at the address given. He had detailed the efforts made by him in this regard. In the given circumstances AO was of the view that sale of gold and receipt of 2
3 Sri Ramesh Kumar Baheti A.Yr.2011-12 cash on such sale could not be verified. The assessee submitted before AO that it had sold gold to Maxpro India and was unable to explain as to why notice could not be served on them. The AO however concluded that sale of gold by the assessee remained unexplained and the source of cash to the extent remained unexplained.
Another anomaly which was noted by the AO was that cash was withdrawn at Kolkata and on the very same day cash was deposited in the assessee’s bank account at Bikaner. Such an instance happened on 19.04.2010 and a sum of Rs.3,00,000/- had been withdrawn at Kolkata from the bank account of the assessee and on that very same day a sum of Rs.49,000/- was deposited at Bikaner in the account of the assessee with his minor son. Similar instance of withdrawal of cash at Kolkata ICICI Bank and deposit at Shillong on 17.08.2010 was also noted by the AO.
On the above anomaly noticed by the AO, AO observed as follows :- “In the letter dated 17.03.2014 the assessee has also stated, " ..... 1) As I told you that I am facing financial problem from last three years and in a big tension for the treatment of my mother Shanti Devi Baheti, Kamala Devi Harsh(sister), and Radha Kishan Damani(Father in Law) . ……………………………………………………………………………………………. .... As I told you that I am only elder male member in my family, it is my social responsibility to meet any urgency comes, but due to the help of Sri Mohan Lal Dujari(Mantri of Nagarik Swastha Sangha, NGO) if Sovaram Bysak Street, Kolkata7. I had never able to use my fund just because of Mr. Mohan Lal Dujari has arranged it free in Delhi, Rajasthan (for my mother sister) and in Assam for (Radha Kishan Damani). Mr. Dujari has also expired in the month of January 2014 " Assessee's above submission is perused carefully. At this stage the same cannot be verified since as per assessee's statement the person Sri Mohanlal Dujari has expired in January 2014. Moreover, during the course of the proceeding never he had given such statement before the expiry of Mohanlal Dujari. So, the statement of the assessee clearly seems to be an afterthought. Hence, the contention of the assessee cannot be sustained. As such the nature and source of aggregate cash deposit in assessee's bank accounts is treated as unexplained. On the basis of above observation, the cash deposit of Rs. 22,53,262 in aggregate to the A/C No 627601512043 and Rs. 12,26,500 in aggregate to A/c No. 627601149954 with
Accordingly the cash deposits in the bank account was treated as unexplained and a sum of Rs.34,79,762/- (Rs.22,53,262 + Rs.12,26,500/-) was added to the total income of the assessee.
On appeal by the asssessee CIT(A) confirmed the order of AO. Aggrieved by the order of CIT(A) assessee has preferred the present appeal before the Tribunal.
We have heard the submissions of the learned counsel for the assessee, who submitted that the AO should have accepted the sale of the gold jewellery for which the assessee duly filed two purchase bills issued by Maxpro India. According to the AO the purchaser was not found traceable by the Inspector at the given address even after making local enquiry. He submitted that the purchaser was doing business at the same address which is proved from the fact that they were issued trade licence at the given address during the period, when the Inspector made enquiry. The assessee has been able to get hold of the trade licence issued to the purchaser by Calcutta Municipality Corpn. A copy of the said trade licence was also filed before us, which was also filed before CIT(A). He further submitted that the assessee has also been able to get the copy of the bank statement of the said party for the bank account maintained by them with ICICI Bank and copy of the said bank account was also filed before us. The same had also been filed before CIT(A). It was submitted that it would be evident from the said bank account that even at the time when the AO made the enquiry, the said party was in existence and doing business from the same address as mentioned in the said bank statement. Therefore, it cannot be said that the said party was not in existence at the given address and the Inspectors report cannot be relied on. It was submitted that there was no justification to treat the sale of the said gold ornaments as not genuine.
5 Sri Ramesh Kumar Baheti A.Yr.2011-12 10. In the alternative he submitted that the addition of the entire gross deposits made in the disclosed bank account in the name of the Assessee his minor son was not proper. In this regard it was submitted that there was no basis to reject the cash book nor such cash book have been rejected. The credits in the said book have not been disputed except the sale of gold ornaments. It was submitted that out of total deposits of Rs. 34,79,762/- in the name of the assessee and his minor son being the cash deposits on various dates were explained from the cash withdrawals from the same bank except that the sum of Rs. 4,50,000/ - received by way of sale of gold ornaments. It was pointed out that the said cash book will explain the entire deposits are referable to the earlier withdrawals made from the same banks by the assessee. A peak statement of the deposits and withdrawals from the bank which was filed before CIT(A) was also filed before us and it was pointed out that the peak of the deposits is Rs. 314850/- and if credit of Rs. 4,50,000/- is allowed for the amount received on account of sale of gold there is no negative peak. The withdrawals were in fact more than the deposits made during the year, therefore it should be reduced from the total amount of deposits which has been treated as income of the assessee as they were reused for making further deposits on later dates and therefore should be netted off from total deposits made.
For the proposition only consolidated peak of the bank accounts could be considered for making addition of undisclosed income. The learned counsel for the assessee placed reliance on the following decisions of ITAT, Kolkata :- i)ITA No.141/Kol/2012 in the case of Dilip Kumar Nahata order dated 09.05.2012. ii)ITA No.1903/Kol/2009 in the case of Uday Shankar Mahawar.
The learned DR placed reliance on the order of CIT(A).
We have given a careful consideration to the rival submissions. We have already observed that if the receipt of sale of gold is accepted and various withdrawals of the 5
6 Sri Ramesh Kumar Baheti A.Yr.2011-12 bank accounts are considered then that would sufficiently explain the sources of funds out of which cash deposits were made in the bank accounts. It has been the plea of the assessee that he had financial problem and was in need of funds for treatment of his mother Shanti Devi Baheti and his sister Kamala Devi Harsh and his father in law Radha Kishan Damani. It was also the plea of the assessee that Shri Radha Kishan Damani died of cancer on 10.02.2013 and he was a person, who was taking care of the affairs of the assessee. The Assessee also pleaded that he was a handicapped person and could not move about freely. To meet the medical expenditure cash used to be withdrawn and kept with the assessee and re-deposited in the bank account. As far as sale of gold by the assessee to Maxpro India is concerned the evidence on record shows that Maxpro India had issued purchase vouchers for having purchased gold from the assessee and having made payments in cash for such purchase of gold. Copy of the purchase vouchers have been filed before us. A perusal of the same shows that Maxpro India to whom gold was sold on 02.04.2010 and 31.10.2011 is assessed to tax having PAN NO.ABCPA 3898 M. Before CIT(A) assessee also filed a copy of the bank statement of Maxpro India with ICICIC bank from the period 10.12.2011 to 05.12.2013. The address in the bank statement is 89, Burtolla Street, Kolkata-700007. The assessee has filed a copy of the licence issued by Kolkata Municipal Corporation which shows that Maxpro India having address at 89., Burtolla Street, Kolkata-700007 was licenced to use the aforesaid terms for office as well as retail sale of non food items. In the light of the above documentary evidence the failure of the department to procure the presence of Maxpro India for verification of the claim made by the assessee remains unexplained. We are of the view that in the light of the documentary evidence on record the assessee has successfully explained the sale of gold through Maxpro India and the conclusions to the contrary by the revenue authorities cannot be sustained. Since the sale of gold is held to be properly explained the sale proceedings of the gold and withdrawals from the bank account was sufficiently explained the cash deposits in the bank account. 6 7 Sri Ramesh Kumar Baheti A.Yr.2011-12 14. The anomaly pointed out by CIT(A) is that on 19.04.2010 cash of Rs.3,00,000/- was withdrawn from ICICI Bank and on the very same day deposit of Rs.49,000/- is made in ICICI bank at Bikaner. As already stated it can be seen from the cash book of the assessee that as on 19.04.2010 there was the availability of cash as on 19.04.2010 even after withdrawal of Rs.3,00,000/- to the extent of Rs.73,000/-. In such circumstances we are of the view that there cannot be any adverse inference drawn from these circumstances. Taking into consideration the facts and circumstances of the case we are of the view that the addition made by the AO and sustained by CIT(A) deserves to be deleted. Accordingly the same is deleted.
We may also add that the question of adding the peak credit does not arise in view of the source having been fully explained by the assessee.
In the result the appeal by the assessee is allowed.
Order pronounced in the Court on 6.4.2016.