Income Tax Appellate Tribunal - Kolkata
Gopal Chandra Ghosh, Malda vs Department Of Income Tax on 30 May, 2012
आयकर अपीलीय अधीकरण, Ûयायपीठ - " ऐ" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA
(सम¢)Before ौी महावीर िसंह, Ûयायीक सदःय एवं/and ौी सी.डȣ.राव, लेखा सदःय)
[Before Shri Mahavir Singh, JM & Shri C. D. Rao, AM]
आयकर अपील संÉया / I.T.A No. 301/Kol/2011
िनधॉरण वषॅ/Assessment Year: 2004-05
Income-tax Officer, Wd-1, Malda Vs. Gopal Chandra Ghosh
(PAN: ACZPG 2109 B)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
&
आयकर अपील संÉया / I.T.A No. 338/Kol/2011
िनधॉरण वषॅ/Assessment Year: 2004-05
Gopal Chandra Ghosh Vs. Income-tax Officer, Ward-1, Malda
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
Date of hearing: 30.05.2012
Date of pronouncement: 31.05.2012
For the Appellant: Shri B. K. Das
For the Respondent: Shri S. M. Surana
आदे श/ORDER
Per Mahavir Singh, JM ( महावीर िसंह, Ûयायीक सदःय)
सदःय These Cross appeals by revenue and assessee are arising out of order of CIT(A), Jalpaiguri in Appeal No. 217/MLD/CIT(A)/JAL/2006-07 dated 08.11.2010. Assessment was framed by ITO, Ward-1, Malda u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 2004-05 vide his order dated 27.12.2006.
2. The first common issue in these cross appeals is as regards to the order of CIT(A) deleting the addition of Rs.19,13,643/- and assessee is against the confirmation of addition of Rs.1,48,000/- and Rs.66,784/- being the differential amount as against outstanding loan of West Bengal Finance Corporation (WBFC) and interest thereon. For this, revenue has raised following ground no.1:
"1. That on the fact and in circumstances of the case the Ld. CIT(A) erred in deleting the addition of Rs.19,13,648/- against the addition of Rs.31,98,119/- on account of the difference outstanding loan amount shown by the assessee and disallowance by the A.O."
And the assessee has raised following ground:
2 ITA 301-338/K/2011 Gopal Ch. Ghosh A.Y. 43-05 "For that the Ld. CIT(A) erred in confirming the addition of Rs.1,48,000/- and Rs.66,784/-
when the loan account with WBFC was fully explained and there was no discrepancy."
3. We have heard rival submissions and gone through facts and circumstances of the case. Brief facts leading to the above issue are that during the year under consideration, the AO during the course of assessment proceedings noticed that the assessee has declared outstanding loan of Rs.12,35,687/- in its books of account in the name of WBFC. The AO required WBFC to file information regarding outstanding loan and WBFC stated that the outstanding loan is Rs.31.98,.119/-, which is as under:
"A/c No. LTRA 07 Principal Rs. 13,01,461/-
Interest Rs. 12,28,545/-
Others Rs. 244/-
Total: Rs. 25,30,250/-
A/c No. LTRA 10 Overdue interest Rs. 6,67,868
Rs. 31,98,110/-"
It was also infomed to the AO by Branch Manager of WBFC that assessee has liquidated his loan as on 01.11.2004 by way of final settlement. As there was difference between the declared amount by assessee as outstanding loan and information received from WBFC of Rs.19,62,432/-, the same was added by AO as unexplained liability. Aggrieved, assessee preferred appeal before CIT(A), who deletred the addition of Rs.12,35,687/- and also overdue interest of Rs.6,67,868/- by giving following finding:
"l have carefully considered the submission of the assessee and also perused the assessment order. Regarding the addition of Rs.l,48.000/-. the AO has mentioned that Rs.1,08,000/- was paid on 30.12.2003 and Rs.40000/- was paid on 11.03.2004. It is a payment by the assessee against the principal amount. Therefore. the fact described by the assessee in the Statement of facts is not correct and in his subsequent subinission, the assessee had given a different story without explaining the contradiction. It is clear, whatever may be the nature of the payinents, assessee could not explain the source of the nioney out of which the payment was made. Therefore. the AO has rightly rnade the addition. There is no reason to interfere with the same.
l have perused the copy of Statements and Certificates issued by the WBFC and filed by the AR. As per letter dated 11 .09.2007 issued by, it is clear that as on 3l .03.2004 the total dues in the loan accounts were as under:
A/c No. LTRA07 Principal- Rs,13,01,461.00
lnterest - Rs.12,28,545.81
Others - Rs. 244.10
Total Rs.25,30,250.91
A/c No. LTRA10 Overdue lnterest Rs. 6,67,868.33"
We find that the only argument of Ld. Sr. DR was that the settlement with WBFC was finalised and the liability was crystallised as on 08.09.2004 and finally the liability of Rs.12,35,687/- was liquidated as on 01.11.2004. Ld. Sr. DR's argument was that this write off can be done in assessment year 2005-06 because the write off or final settlement by WBFC was reached as on 3 ITA 301-338/K/2011 Gopal Ch. Ghosh A.Y. 43-05 08.09.2004 vide their letter information was passed on to the assessee. Even no doubt certificate was issued by WBFC on 09.09.2004 and it means that the settlement was reached on that date only. On the other hand, Ld. Counsel for the assessee stated that the assessee never raised liability qua interest of Rs.12,28,595/- and also over due interest of Rs.6,67,868/-. He stated that in his books of account he never created this liability and only WBFC has created this liability. Once the assessee has not claimed this as an expenditure in any of the previous year when this expenditure was incurred, the write off cannot be made as income of the assessee or this cannot be added his unexplained liability. We find that the facts and figures are tallied by CIT(A) and no objection is raised either by Ld. Sr. DR or by the assessee's counsel. It means that facts and figures are final. We find that when the assessee has not credited the interest in its books of account and it has never claimed as expenses, the same cannot be added as income of the assessee or the unexplained liability of the assessee on that account. Hence, we confirm that the CIT(A) has rightly deleted the addition. As regards to the addition of Rs.1,08,000/- repayment of WBFC loan and Rs.40,000/- as repayment of loan as on 30/12/2003 and 11.03.2004 respectfully against the principle amount added by AO and confirmed by CIT(A) because the assessee has made this repayment against principal amount and it was never explained by the assessee. As regards to the addition of Rs.1,48,000/- as the assessee could not explain either before AO or before CIT(A) and even now before us it was not explained what is the source of this payment. Once this is the case, we have no hesitation in confirming the order of CIT(A). As regards the confirmation of deletion of Rs.66,784/-, by CIT(A), we are of the view that this being in the nature of interest payment which never credited by assessee or claimed by assessee as explained in this purpose. The addition cannot be saistaied on the similar resonsing as in the first ground of revenue's appeal. Hence, we delete the same. Revenue's ground is dismissed. The ground of assessee's appeal is partly allowed.
5. The next issue in this appeal of assessee is as regards to the order of CIT(A) confirming the addition of gift received from relatives i.e. seven persons viz., Dulali Ghosh, Kartick Ch. Ghosh, Ratan Kr. Ghosh, Ajit Kr. Ghosh, Baidyanath Sarkar, Bikash Prasad Yadav and Debabrata Chakraborty in all amounting to Rs.14,15,000/-. The assessee has raised following ground for the same:
"For that the Ld. CIT(A) erred in confirming the addition of Rs.14,15,000/- being gift received from close relatives when all of them were assessed to tax and have confirmed the fact of gift."
4 ITA 301-338/K/2011 Gopal Ch. Ghosh A.Y. 43-05
6. We have heard rival submissions and gone through facts and circumstances of the case. At the outset, Ld. Counsel for the assessee before us filed copies of confirmation of all the donors having gifted the amounts and the Ld. SR. DR objected that none of the documents were signed any one, all documents are in same handwriting and in same specimen framed. The Ld. Sr. DR stated that in all these gifts facts and circumstances are exactly identicle and for example, he explained that in the case of Dulali Ghosh cash gift of Rs.3 lacs was received by assessee. It was claimed by the assessee during the course of assessment proceedings that Smt. Dulali Ghosh has claimed to have received income from seasonal mango business but not maintanded any acocunt and donor has filed her first return of income relating to AY 2006-07 on 28.07.2007 enclosing the accounts of earlier assessment years showing below taxable income. But the AO by noting that the confirmation of cash gift received was not enclosed with the return of income but it was submitted during the course of hearing during assessment proceedings, the AO without examining the donor made addition by holding that there is no documentary evidence as regards to the claim of business income. Hence, there is no source of income. Almost similar are the facts in respect to other donors. In view of this, the ld. Counsel for the assessee stated that being similar in nature in respect to other donors i.e. Kartick Ch. Ghosh, Ratan kr. Ghosh, Ajit Kr. Ghosh, Baidyanath Sarkar, Bikash Prasad Yadav and Debabrata Chakraborty. The issue can be remitted back to the file of AO for fresh adjudication and the AO after examining these persons, decide the issue of genuineness of transaction as well as capacity to gift this amount. When this query was put to Ld. DR, he objected to the same. But we find that out of these seven donors only three were examined by AO but he has not examined the documentary evidence or the CIT(A) has not taken into consideration the statements of these three donors. In respect to other four donors, none was examined by AO and without examining the additions were made. We, in the interest of justice are of the view that before making addition of unexplained gifts, AO should have examined the source of gift and genuineness of transaction after examining all the donors. Hence, in the light of this, we set aside this issue to the file of AO and he after examining all the seven donors afresh and after taking evidence from the assessee will decide the issue of gifts whether the same is explained or unexplained. The assessee will also produce all the seven donors before the AO as and when called for. Hence, this issue is remitted back to the file of the AO in view of above observations.
7. Next three issues i.e. the addition of difference on sales, addition on account of income from husking mill and addition of various expenses at Rs.51,637/-, Rs.26,500/- and Rs.25,500/- respectively. The assessee has raised following three grounds:
5 ITA 301-338/K/2011 Gopal Ch. Ghosh A.Y. 43-05 "For that the ld. CIT(A) erred in confirming the addition of Rs.51,637/- on account of difference of sales ignoring the submissions made and evidences produced.
For that the Ld. CIT(A) etrred in confirming the addition of Rs.26,500/- as income from Husking Mill when the same not belonged to the assessee.
For that the Ld. CIT(A) erred in confirming the addition of Rs.25,000/- out of various expenses incurred when admittedly the expenses were evidenced by self made vouchers and were quite fair and reasonable."
8. At the outset, Ld. Counsel for the assessee stated that when the main issues are being sent back to the file of AO for examination, these three issues i.e. difference of sales, income from Husking Mill and issue of various expenses can also be remitted back to the file of AO as this needs factual consideration by the AO. On this, Ld. Sr. DR has not objected to the same. In the light of the above, we remit back these three issues to the file of AO for fresh adjudication and these grounds of appeal of assessee are allowed for statistical purposes
9. In the result, revenue's appeal is dismissed and that of assessee is partly allowed for statistical purposes.
10. Order pronounced in open court on 31.05.2012 Sd/- Sd/-
सी.डȣ.राव, लेखा सदःय महावीर िसंह, Ûयायीक सदःय
(C. D. Rao) (Mahavir Singh)
Accountant Member Judicial Member
तारȣख)
तारȣख) Dated: 31st May, 2012
(तारȣख
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - Shri Gopal Chandra Ghosh, C/o Radhakrishna Lodge, Vill Jamtala, P.O & PS. Gazole, Dist. Malda, Pin-732128 . 2 ू×यथȸ/ Respondent - ITO, Ward-1,Malda
3. आयकर किमशनर (अपील)/ The CIT(A), Jalpaiguri
4. आयकर किमशनर/CIT,
5. वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt. Registrar.