Income Tax Appellate Tribunal - Kolkata
Meheria Reid & Associates, Kolkata vs Department Of Income Tax on 7 December, 2011
आयकर अपीलीय अधीकरण, Ûयायपीठ - "बी ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "B", KOLKATA
(सम¢)Before ौी एन.
एन.ǒवजयकुमारन,
मारन, Ûयायीक एवं/and
सदःय,
Shri N.Vijayakumaran, Judicial
Member.
ौी सी.
सी.डȣ.
डȣ.राव, लेखा सदःय
Shri C.D.Rao, Accountant Member
सàपǒƣ अपील संÉया /
ITA No.119/Kol/2010
िनधॉरण वषॅ/Assessment Year 2006-07
-वनाम-
(अपीलाथȸ/APPELLANT ) - (ू×यथȸ/RESPONDENT)
I.T.O., Ward-54(4), Kolkata Versus- Meheria Reid &
. Associates, Kolkata
(PAN: AAHFM 4510 G)
आयकर अपील संÉया /
ITA Nos.53 & 54/Kol/2010
िनधॉरण वषॅ/Assessment Years :
2005-06 & 2006-07
-वनाम-
(अपीलाथȸ/APPELLANT ) - (ू×यथȸ/RESPONDENT)
Meheria & Company Kolkata Versus- I.T.O., Ward-54(4),
(PAN: AAHFM 4510 G) . Kolkata
अपीलाथȸ कȧ ओर से/ For the Department: Shri R.Gupta
ू×यथȸ कȧ ओर से/For the Assessee : Shri A.K.Tibrewal
सुनवाई कȧ तारȣख/Date of Hearing : 07.12.2011.
घोषणा कȧ तारȣख/Date of Pronouncement : 24.02.2012.
आदे श/ORDER
(सी.
सी.डȣ.
डȣ.राव)
राव), लेखा सदःय
Per Shri C.D.Rao, AM
Out of the three appeals two are cross appeals and one filed by the Revenue for A.Year 2006-07 and the other one filed by the assessee for A.Year 2005-06 against 2 orders dated 23.10.2009 of the CIT(A)-XXXVI, Kolkata . For the sake of convenience all the three appeals are disposed of by a common order.
ITA No.119/Kol/2010 (by the revenue) A.Yr.2006-072. The revenue has raised the following grounds of appeal :-
"Ld.CIT(A) erred in deleting the addition of Rs.14,88,972/- on account of professional receipt on the following grounds :
(i) that the assessed during the course of appeal hearing contended that the amount shown in the TDS certificates represents the current professional fees receipts and also the realization out of sundry debtors.
(ii) That the assessee also submitted that the Sundry debtors were offered as income during the earlier years on accrual basis.
(iii) That the assessee as per TDS certificates filed with the return total receipt of professional charges should be Rs.14,10,409/- whereas in the profit and loss account professional fees credited to Rs.28,99,381/-. So, there is a discrepancy of Rs.14,88,972/- which was added back to the total income of the assessee. Consequential tax effect was much above Rs.2 lac.
(iv) That the ld. CIT(A) deleted the addition on conjecture and surmises and no strong evidences could be produced by the assessee even in the appeal stage."
ITA Nos.53 & 54/Kol/2010 (by the assessee A.Yrs.2005-06 & 2006-07)
3. The assessee has raised the following grounds of appeal in both A.Yrs.:-
1. That the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.6,39,019(Rs.29,00,000/- for A.Yr.2006-07) being assessee's investment in Mutual Funds admittedly made out of disclosed bank account of the assessee.
2. That the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.6,39,019/-(Rs.29,00,000/- for A.Yr.2006-07) wrongly relying on the decision of Supreme Court in the case of Sumati Dayal vs CIT (214 ITR 801) which case is not applicable to the facts of the case."
4. The issue raised by the revenue in its appeal is relating to deletion of addition of Rs.14,88,972/- on account of professional receipt.
5. The brief facts of this issue are that the Assessing Officer while doing the scrutiny assessment observed that as per TDS certificates filed with the return total receipt owing to professional charges should be Rs.14,10,409/- wherein the Profit and Loss account it is found that the Professional charges was shown as Rs,.28,99,381/-. Hence, it is found that the gross professional income as shown by the assessee in the profit and loss account as well as in the return does not tally the amount as reveals 3 from the TDS certificates enclosed with the relevant return. Hence, there is a discrepancy of Rs.14,88,972 which was added to the income of assessee.
5.1. On appeal the ld. CIT(A) deleted the same by observing as under :-
"I have carefully perused the above. It is clear from the above that the appellant has been regularly admitting the professional receipts in respect of the bills raised during the previous year, irrespective of the amounts received during the previous year. As can be seen from the table in page-4, the professional receipts admitted in the returns filed for the Assessment Years 2003-04 and 2005-06 are less than the professional receipts as per the TDS certificates. However, for the Assessment Years 2004-05 and 2006-07 the professional receipts admitted in the P&L A/c, accounts are more than the receipts as per TDS certificates.
The receipts during the year relevant for the Assessment Year 2005-06 may not tally with the bills raised during the previous year because the received during the year include amounts for which bills were raised in the earlier previous year also. Further, as can be seen from the chart extracted in Page-4 indicates that the receipts admitted by the appellant, for the Assessment Years 2004-05 and 2006-07, in their P&L A/c are more than the receipts as per TDS certificates. Therefore, it can not be concluded that the appellant has suppressed the professional receipts. In view of the above, there is no justification for the above discussed addition. Accordingly, the Assessing Officer is directed to delete the addition of Rs.1,88,882/-."
6. After hearing the rival submissions and on careful perusal of materials available on record, keeping in view of the fact that the professional receipts admitted in the returns filed for the Assessment Years 2003-04 and 2005-06 are less than the professional receipts as per the TDS certificates. However, for the Assessment Years 2004-05 and 2006-07 the professional receipts admitted in the P&L A/c, accounts are more than the receipts as per TDS certificates. We find no infirmity in the orders of the ld. CIT(A). Therefore we confirm the action of the ld. CIT(A)and dismiss the appeal of the Revenue.
7. The only issue raised by the assessee is relating to confirmation of addition of Rs.6,39,019/- in respect of investment in Mutual Funds for A.Yr.2005-06 and Rs.29,00,000/- for A.Yr.2006-07.
8. The brief facts are that the Assessing Officer while doing the scrutiny assessment observed that the assessee made the investment of Rs.6,55,119/- in Standard Chartered Mutual Fund during the relevant financial year. In course of 4 hearing the assessee was asked to explain the source, nature and mode of payment of such investments along with supporting papers and documents. But he failed to explain the same along with substantial and documentary evidences. As such the investment of Rs.6,55,119/- is treated as unexplained. Hence the value of the investment of Rs.6,55,119/- is treated as the deemed income of the assessee u/s 69 of the I.T.Act and added to the returned income of the assessee. Similarly for A.Yr. 2006-07 an amount of Rs.29,00,000/- has been added u/s 69 of the IT Act.
8.1. On appeal the ld. CIT(A) confirmed the same for both the A.Years by observing as under :-
"I have carefully perused the above. I have also perused the appellant's Bank statements for the relevant period. It is seen, from the written submissions that the appellant has made investments, during the previous year, in Mutual Funds, aggregating to Rs.6,39,019/-. It is also seen, that all the investments, have flown from the Appellant's bank account with Standard Chartered Bank. However, regarding sources, not much information was furnished before me. It is true that the investments have flown from the Bank account. But that does not by itself explain the sources. The appellant has admitted total income for the Assessment Year 2005-06 only at Rs.13,090/-. Further no details like borrowings or drawings from Deposits etc. were furnished. Considering all, the appellant did not substantiate the sources for the investments in Mutual funds. Further, merely because the transactions was put through Bank account, does not make it a genuine/bonafide transaction. The Hon'ble Supreme Court, in the case of Sumati Dayal 214 ITR 801 has held that receipt by way of cheques does not by itself makes the transaction a bonafide one. In view of the above the investments in Mutual fund made by the appellant remains unsubstantiated. Accordingly, the addition of Rs.6,39,019/- is confirmed."
9. After hearing the rival submissions and on careful perusal of materials available on record and taking into consideration of the various case laws relied on by the ld. Counsel appearing for assessee which was placed at pages 1 to 51 of the paper book are as under :
1. Kiran Devi Rajgarhia vs ITO - ITA No.1027/Kol/2009(ITAT, Kol)
2. ITO Vs Dutta Construction - ITA No.2013/Ahd/2008(ITAT,Ahd)
3. Tripurti Securities Limited vs DCIT (2010) 132 TTJ 257 (ITAT,Mum)
4. Malti Gupta vs ITO - ITA No.18/Ind./2010(ITAT,Indore)
5. Ranbaxy Laboratories Limited vs CIT (2011) 336 ITR 136 (Del)
6. CIT vs Jet Airways (I)Ltd. (2011) 331 ITR 236 (Bom) 5 we are of the view that in the present case the issue is relating to the investment made in the disclosed bank accounts which was not substantiated by the assessee with any corroborative evidences. The fact that the bank account disclosed is not so material when compared to the fact the deposits made in the said account is explained or not.
Since in this case the assessee is unable to explain the deposits made in the said bank accounts which was ultimately invested in the mutual funds. We find no infirmity in the orders of the ld. CIT(A). Therefore we confirm the action of the ld. CIT(A) and dismiss the appeal of assessee on this issue.
10. At the time of hearing the assessee has raised the additional ground which reads as under :-
"2. That in absence of any valid reasons to believe that income of the assessee escaped assessment within the meaning of sec.147 of the Income Tax Act, 1961, the notice issued by the Assessing Officer u/s 148 was without jurisdiction and therefore the impugned Assessment Order passed on 15th December, 2008 in pursuance to such Notice is liable to be annulled."
11. After hearing the rival submissions and on careful perusal of materials available on record, the additional ground taken by the assessee will not be sustained keeping in view of the fact the original assessment in this case has been made u/s 143(1) which was evident from the assessment order itself. Therefore we dismiss the additional ground raised by assessee.
12. In the result both the revenue's appeal as well as assessee's appeals are dismissed.
Order pronounced in the court on 24.02.2012.
Sd/- Sd/-
एन.
एन.ǒवजयकुमारन,
मारन, Ûयाियक सदःय सी.
सी.डȣ.
डȣ.राव,
राव, लेखा सदःय,
सदःय
N.Vijayakumaran, Judicial Member C.D.Rao, Accountant Member.
(तारȣख)
तारȣख)Date: 24.02.2012.
R.G.(.P.S.)
6
आदे श कȧ ूितिलǒप अमेǒषतः-
Copy of the order forwarded to:
1. M/s.Meheria & Co.(formerly Meharia Reid & Associates, 9, Old Post Office Street, Kolkata-1.
2 The I.T.O., Wd-54(4), Kolkata.
3. The CIT, 4. The CIT(A)-XXXVI, Kolkata
5. DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches