MD SERAJUDDIN,HOWRAH vs. I.T.O WD - 32(2),KOLKATA., KOLKATA

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ITA 359/KOL/2013Status: DisposedITAT Kolkata07 October 2015AY 2008-20094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee presented a different plea before it compared to the AO. To ensure justice and fair play, the Tribunal granted the assessee one more opportunity by restoring the file to the AO for fresh adjudication.

What were the facts?

The assessee failed to disclose bank account transactions totaling Rs. 11,67,500/- in his income tax return. The Assessing Officer (AO) applied the assessee's declared profit rate of 30% to these undisclosed receipts, making an addition to income. The CIT(A) upheld the AO's order.

What were the issues?

Whether the assessee's failure to disclose bank transactions constituted concealment of income, and if the AO correctly applied the profit rate to the undisclosed receipts.

Which sections of the Income-tax Act were involved?

Section 44AF

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA

Before: Shri N.V.Vasudevan & Shri Waseem Ahmed

आदेश/O R D E R

PER Waseem Ahmed, AccountantMember:-

1.

This appeal by the assessee is arising out of order of Commissioner of Income Tax (Appeals)-XIX, Kolkata in appeal No.46/CIT(A)-XIX/ITO, Ward- 32(2), Kol/10-11dated 10.08.2011. Assessment was framed by ITO Ward- 32(2), Kolkata u/s 143(3)(II) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 28.09.2012 for assessment year 2008-09.

A.Y. 2008-09 Md. Serajuddin v. ITO Wd-32(2) Kol. Page 2 2. The issue raised by the assessee in this appeal is that the Ld CIT(A) has erred in confirming and sustaining the addition made by the AO in his order on account of non-disclosure of the receipt of the bank.

3. Briefly stated facts are that the assessee is an individual and has the income from the retail business of stationery items and income from other sources. The Assessee was maintaining the various bank accounts in different bank. While filing the return of income the assessee failed to disclose the transaction of the following bank account:- SL Name of Bank A/c No. Total receipts in No. the bank 1 Standard Chartered 324-1-018118-1 Rs.10,20,400/- Bank 2 Standard Chartered CB A/c 322-0-533426-5 Rs. 1,47,100/- Bank Rs.11,67,500/- The AO calls upon the assessee to justify the transaction of the banks as mentioned above. The assessee submitted that the above said bank accounts were not considered for filing the Income Tax returns due to mistake. The assessee offered the above bank receipts to tax and prayed to compute profit under section 44 AF of the Act @ 13.50% on the such receipts. However, the AO found that the assessee has declared turnover in its return of income Rs. 7,95,210/- and gained profit on it of Rs. 2,34,722/- which is around 30% of the turnover. Hence the AO applied the same rate of profit and determined assessee’s income at Rs.3,50,250/- on his undisclosed sales(30% of Rs.11,67,500/- = Rs.3,50,250/-). Aggrieved, assessee preferred appeal before Ld. CIT(A) who has upheld the order of the AO by passing an ex-parte order as none appeared on behalf of the assessee in spite of several notices/reminders issued to the assessee. Now, assessee preferred 2ndappeal before us on the following grounds:- “1. For that the order is arbitrary far from natural justice.

2.

For that ITO WD 32(2) given stigma to the assessee that Bank A/c No. 324-10181 as undisclosed account which was not to be true.

A.Y. 2008-09 Md. Serajuddin v. ITO Wd-32(2) Kol. Page 3

3.

For that ITO ignored the theory of recycling of money in trading business and acted illegally.

4. For that ignorance of English the assessee had no knowledge what actually presented before ITO. Even he was prevented by lawyer to appear before ITO Ward-32(2) with him.

5. For that CIT(A) XIX could not judge the assessment properly and passed order.”

4.

Before us Ld. AR of the assessee has taken a new plea stating that he has disclosed all the bank accounts in filing the return income of the assessee. The Ld. AR submissions are enumerated below :

1) The provisions of the section 44AF of the Act are automatically applicable as the assessee does not maintain the books of accounts.

2) The assessee has recorded standard chartered bank account no. 32910181 in the balance sheet but the correct account no. is 32410181. It was just a typographical mistake. The closing bank balance was correctly recorded Rs. 137840.58 while submitting the return of income. Therefore, the question of concealment of income does not arise at all.

3) The Ld. AO has taken only the receipt of the bank accounts and the withdrawals were totally neglected and also ignored the recycling of money in trading business.

Finally the Ld. AR of the assessee has prayed to set aside the orders of Authorities below. On the contrary, Ld. DR vehemently supported the view of the lower authorities below.

5.

We have heard the rival parties and perused the materials available on record. In this appeal the assessee has taken a different plea before us in comparison to the facts recorded before the Assessing Officer besides Ld. AR of assessee pleaded that there is no suppression of the sales and consequently no concealment of income. So, in the interest of justice and fair A.Y. 2008-09 Md. Serajuddin v. ITO Wd-32(2) Kol. Page 4 play, we are of the view that one more opportunity should be granted to the assessee. Therefore we keep the order of the CIT(A) and restore the file to AO with a direction to adjudicate afresh as per law. Needless to mentioned, assessee should co-operate in the assessment proceedings.

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