I. T. O, WARD - 27(4), KOLKATA vs. SRI SUBHRANIL BHATTACHARJEE, KOLKATA

आदेश/O R D E R

PER Waseem Ahmed, Accountant Member:-

ITO Wd-27(4) Kol v. Sri SubhranilBhattacharjee Page 2 3. Briefly stated facts are that the assessee is an individual and has earned income from salary and other sources. During the year the assessee has made an investment in the shares for a value of Rs. 3,71,700/-. The AO calls upon the assessee to explain the source of fund utilized for the investment. The assessee explained that a sum of Rs. 2,20,500/- was borrowed as personal loan from the State Bank of India and Rs. 152000/- was lakhs was received from Smt. Sriparna Pal. However the assessee failed to produce the necessary evidentiary documents that the sum of Rs. 152000/- lakh was received from Mrs. Sriparna Pal. Hence the AO has added to the total income of the assessee. The AO also noticed that there are various incoming entries in the bank which are in the form of cash and other bank receipts. Cash receipt entries reflecting in the bank statement are of Rs. 3,21,699/- and bank entries reflecting in bank statement are of Rs. 6.57,729/- On question by the AO to the assessee about the supporting evidence of the money deposited in the bank, the assessee did not attend the hearing at all. Hence, there was no alternate available to the AO but to pass the order to the best of his judgment. Hence the AO added a sum of Rs.9,79,428/- (152000+321699+657729) to the total income of the assessee as unexplained cash credit under section 68 of the Act. Aggrieved, assessee preferred an appeal before the CIT(A) who has deleted additions made by the AO by observing the following : “The assessee is an employee of IBM company and keeps travelling to the countries out of India very frequently. The assessee could not attend the hearing during the assessment stage as he was in USA. However, As regards loan from Smt. Sriparna Pal, the AR has demonstrated before the CIT(A) that the transaction was only through the banking channel only and also furnished the necessary supporting documents for the confirmations. Therefore the CIT(A) has deleted the addition made by the AO.

As regards the deposit of cash and other bank receipts in the saving bank account, the Ld. AR has submitted that the deposit in the bank has been made out of salary received from employer M/s Tata Consultancy services limited, reimbursement of expenses by the employer, loan from state bank of India, loan from Smt. Sriparna Pal, cash deposit into bank out of cash in hand and sale proceeds of shares. The Ld. AR has also ITO Wd-27(4) Kol v. Sri SubhranilBhattacharjee Page 3 submitted day to day bank summery for the financial year 2004-05 and cash summery for the financial year 2003-04 and 2004-05. A statement showing details of purchase and sale of shares made online through Demat Account with ICICI bank and contract notes thereto. The Ld. AR also offered short term capital gain of Rs. 37744.76 and interest income of Rs. 2,408/- . Hence the CIT(A) has deleted all the addition made by the AO except the capital gain income and interest income. “ Aggrieved Revenue is an appeal before the Tribunal and has raised the following grounds of appeal.

1. That on the facts and in the circumstances of the case Ld. CIT(A) has erred in admitting additional evidence u/r 46A of the IT Rule.

2. That on the facts and in the circumstances of the case Ld. CIT(A) has erred in deleting addition of Rs.3,21,699/- by considering cash flow statements for FY 2003-04 and 2004-05 when the said cash flow statements are incorrect and therefore, not reliable.

3. That on the facts and in the circumstances of the case Ld. CIT(A) has erred in deleting addition of Rs.6,57,729/- being unexplained deposit in the bank account other than cash.

4. That on the facts and in the circumstances of the case LD. CIT(A) has erred in deleting the addition of Rs.1,52,000/- being unexplained loan deposit in the bank account.

5. That on the facts and in the circumstances of the case LD. CIT(A) has erred in directing the AO to add Rs.37,744/- as capital gain being profit from transactions of shares when assessee held the shares as closing stock at the end of the previous year and thus, profit is assessable u/s. 28.”

Mr. Rip Das, Ld. Authorized Representative appearing on behalf of assessee and Mr. Pinaki Mukherjee, Ld. Departmental Representative on behalf of Revenue.

ITO Wd-27(4) Kol v. Sri SubhranilBhattacharjee Page 4 The AO has passed the order u/s 144 of the Act to the best of his judgment. At the time of framing the assessment, the assessee could not attend the hearing as he was outside India. Therefore he could not defend his case at the time of assessment. The AO issued several notices to the assessee for the want of certain information/clarification from the assessee regarding the assessment. But the AO could not have the clarification from the assessee. Hence there was no option to the AO but to pass the ex-parte order under section 144 of the Act. However, during the appellate stage, the assessee has submitted the requisite details justify his all incoming entries in the bank and the loan taken from Smt. Sriparna Pal. The assessee has also offered the tax on income from sale /purchase of shares under the head capital gain and interest income. Therefore we find no infirmity in the order of the CIT(A),hence, we dismiss the appeal of the Revenue.