SMT REENA MAJUMDAR,MIDNAPORE vs. CIT (A)-XXXIII, KOLKATA, KOLKATA

At the outset, it is noticed that there is a delay of 25 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, the assessee has filed an application seeking condonation of the said delay and keeping in view the reasons given therein, which are duly supported by an affidavit filed by the assessee, I am satisfied that there was a sufficient cause for the delay on the part of the assessee in filing

The issue raised in Ground No. 1 relates to the addition of Rs.2,00,000/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of gift claimed to be received by the assessee from her husband by treating the same as unexplained cash credit under section 68.

The assessee in the present case is an individual, who is engaged in the business of manufacturing and trading of steel furniture under the name and style of her proprietary concern M/s. Aristocrat Engineering. The return of income for the year under consideration was filed by her on 31.03.2007 declaring total income of Rs.1,25,630/-. During the course of assessment proceedings, notices were issued by the Assessing Officer under section 143(2) and 142(1) fixing the case of the assessee for hearing from time to time. There was, however, no satisfactory compliance on the part of the assessee to the said notices and the Assessing Officer, therefore, was left with no option to complete the assessment to the best of his judgment under section 144 of the Act. In the assessment so completed vide order dated 31.12.2008, the gift claimed to be received by the assessee in cash from her husband was added by the Assessing Officer to the total income of the assessee by treating the same as unexplained cash credit under section 68 on the ground that the creditworthiness of the donor as well as the genuineness of the transaction was not satisfactorily explained by the assessee. On appeal, the ld. CIT(Appeals) confirmed the said addition made by the Assessing Officer for the following reasons given in paragraph no. 3 of his impugned order:- “During the course of the appellate proceedings the appellant submitted that she and her husband had been ill for a long time and it was the wish of her husband to make a gift to her. Accordingly he issued cheques to his son Shri Sandeep Majumdar who deposited them in his account and paid Shri Amit Agarwal, proprietor of M/s. Agarwal Steel,

I have heard the arguments of both the sides on this issue and also perused the relevant material available on record. Although the ld. Counsel for the assessee has submitted that a confirmation letter of the donor was filed by the assessee during the course of assessment proceedings before the Assessing Officer and also invited our attention to the copy of the same placed at page no. 25 of the paper book, a perusal of the said confirmation as well as the relevant portion of the impugned order of the ld. CIT(Appeals) clearly shows that a different stand was taken by the assessee at different stages by claiming in the confirmation filed before the Assessing Officer that the gifts were received in cash and by stating before the ld. CIT(Appeals) that the donor had issued cheques to his son Shri Sandeep Majumdar, who deposited them in his account and paid the amount to two creditors on behalf of the assessee. Moreover, as rightly pointed out by the ld. D.R., cash of Rs.2,11,000/- was found to be deposited in the bank account of the donor before issuing the cheques towards gifts. The ld. Counsel for the assessee has also invited our

The issue raised in Ground No. 2 relates to the addition of Rs.19,000/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of cash loan claimed to be received by the assessee treating the same as unexplained cash credit.

In the assessment completed under section 144, the loan amount of Rs.2,28,000/- claimed to be received by the assessee in cash from twelve creditors in a sum of Rs.19,000/- each was added by the Assessing Officer treating the same as unexplained cash credits under section 68 as a result of the failure of the assessee to establish the creditworthiness of the concerned loan creditors as well as the genuineness of the relevant

I have heard the arguments of both the sides on this issue and also perused the relevant material available on record. Although the ld. Counsel for the assessee has filed an affidavit of Shri Sudip Mukherjee executed on 30.07.2015 in support of the assessee’s case on this issue, there is no application filed seeking admission of the same as additional evidence. The ld. Counsel for the assessee also has failed to offer any satisfactory explanation as to what prevented the assessee from filing the said affidavit before the authorities below. I, therefore, decline to take cognizance of the said affidavit and uphold the impugned order of the ld. CIT(Appeals) sustaining the addition made by the Assessing Officer on this issue to the extent of Rs.19,000/- as there was a clear failure on the part of the assessee to explain satisfactory the creditworthiness of the concerned loan creditor. Ground No. 2 is accordingly dismissed.

The issue involved in Ground No. 3 relates to the addition of Rs.84,000/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of deemed rental income from the house property owned by the assessee.

During the year under consideration, the assessee was the owner of the residential property at C-40, Durgachak Colony, Haldia, which was

I have heard the arguments of both the sides on this issue and also perused the relevant material available on record. Although the ld. Counsel for the assessee has submitted that no rent was charged by the assessee from her husband for use of the house property, he has not disputed the fact that the said house property was owned by the assessee during the year under consideration. The annual value of the said property thus is liable to be assessed as income in the hands of the assessee under the head “income from house property” and the question that arises is what is such annual value of the property. In this regard, it is observed that the fair rental value of Rs.1,20,000/- is taken by the Assessing Officer as annual value of the assessee’s property without giving any basis and the ld. Counsel for the assessee at the time of hearing before me has also not been able to give any sound or convincing basis, which can be adopted for determining the annual value of the assessee’s property. I, therefore, consider it just and proper to restore this issue to the file of the Assessing Officer for determining the annual value of the assessee’s property on some sound and convincing basis in accordance with law after giving the assessee proper and sufficient opportunity of being heard. Ground No. 3 is accordingly treated as allowed for statistical purposes.

Ground No. 4 raised by the assessee in this appeal relating to the issue of disallowance under section 40A(3) has not been pressed by the

In the result, the appeal of the assessee is treated as partly allowed for statistical purposes.