Income Tax Appellate Tribunal - Kolkata
Sheila Mukherjee, Kolkata vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL : "A" BENCH : KOLKATA
[ Before Shri B.R. Mittal, J.M. & Shri C.D. Rao, A.M. ]
I.T.A.No. 1450 (Kol) of 2009
Assessment year 2006-07
Income-tax Officer, Ward-30(3), -Vs- Sheila Mukherjee
Kolkata. Kolkata.(PAN-AFEPM8421J)
( Appellant ) ( Respondent )
Appellant by : Sri Sanjay Bara, Sr. D.R.
Resopondent by : Sri Manoj Kataruka.
ORDER
Per Sri C.D. Rao, A.M. : The appeal by the Revenue arises out of the order
dated 20/05/2009 of the C.I.T.(A)-XIV, Kolkata for assessment year 2006-07 and the only ground raised in this appeal reads as under:-
"On the facts and circumstances of the case, the Ld. CIT(A)-XIV, Kolkata has erred in deleting the unexplained source of investment in mutual fund amounting to Rs.40,00,000/-."
2. In the course of assessment proceedings, the A.O. found that in the assessment year under consideration the assessee invested total amount of Rs. 40 lakhs in four mutual funds between December, 2005 and February, 2006. It was explained by the assessee that this investment was made out of the advance received from M/s. Ching Wah & Co. for sale of her tenancy right in property located at 36, Rowland Road, Kolkata. In support of the said contention, the assessee produced her bank pass book and copy of account in the books of M/s. Ching Wah & Co. The A.O. issued summon to the managing partner of the said company asking him to appear before him with books of accounts and evidences for filing of income-tax returns. The managing partner did not attend personally, but statements of account of the firm were submitted to the A.O. The A.O. also issued summon u/s. 131 to the assessee requiring her to appear before him personally, but the assessee expressed her inability as she was 85 years old and had just discharged from hospital. In the above context the A.O. took adverse view against the assessee, holding that the following aspects could not be verified by him in absence of attendance of the assessee as well as managing partner of the said firm :
1a) How did the assessee come in touch with Ching Wah & Co. or vice versa?
b) When was the property acquired by the assessee ?
c) If the alleged advance received by the assessee was for sale of property, when was the sale finalized and what was the amount of final payment ?
Whether resulting capital gains was offered by assessee for taxation ?
In view of the above, the A.O. held that the assessee had failed to explain the source of investment of Rs.40 lakhs in mutual fund and, therefore, added the same to her income as unexplained investment.
3. Before the ld. C.I.T.(A), the assessee filed a written submission, which has been incorporated on pages 3 to 6 of the appellate order. After considering the facts of the case, submissions of the assessee and the material on record, the ld. C.I.T.(A) held that the assessee has explained the source of Rs.40 lakhs invested in mutual fund and thus he deleted the addition with the following observations :-
"4. I have considered all the facts and circumstances of this case. It is noted that when the assesseee was asked to explain the source of investment of Rs.40,00,000!- in the Mutual Funds she explained that this investment was made out of an amount of Rs.85,00,000/- received by her from M/s Ching Wah & Co. as an advance towards sale of tenancy right in a property located at 36, Rowland Road, Kolkata-20. This amount of Rs.85,00,000/- was received by six cheques issued during the period Augus5to- December, 2005. The assessee produced the copy of her bank passbook where these cheques had been deposited. The assessee also produced the confirmation of these transactions from Ching Wah & Co. wherein the said concern had confirmed advancement of this money to the assessee. In this confirmation the PAN of this concern had also been clearly mentioned. When the Assessing Officer issued summons to managing partner of Ching Wah & Co. he did not attend personally but through his Authorised Representative furnished ledger copy of the account of the assessee for previous year 2005- 06, its profit & loss and balance sheet for financial year 2005-06 and 2006- 07 and Xerox copy of acknowledgement of filing of return for assessment year 2006-07 and 2007-08. I am of the opinion that these details were sufficient compliance on the part of the assessee to discharge the onus regarding the nature and source of Rs.85,00,000/- received by her, out of which Rs.40,00,000/- was invested in Mutual Funds.
The Assessing Officer was not justified in taking an adverse view against the assessee just on the ground that the assessee herself and the managing partner of Ching Wah & Co. did not appear before him personally. The aspects which according to the Assessing Officer have remained unverified do not have any relevance to the source of investment made by the assessee in the Mutual Funds. During the appellate proceedings the Authorised Representative of the assessee has explained that the property under 2 consideration was not owned by the assessee. She only had tenancy rights in the property. Finally the proposal to transfer the tenancy rights to Ching Wah & Co. did not materialise and assessee had returned the whole amount of Rs.85,00,000/- to that concern. The details regarding repayment of Rs.85,00,000/- to this concern were also filed during appellate proceedings.
In view of the above discussion I am satisfied that the assessee has explained the source of Rs.40,00,000/- invested by her in the Mutual Funds during the previous year under consideration. Therefore, the addition made by the Assessing Officer on this account is deleted."
Hence this appeal by the Revenue.
4. At the time of hearing before us, the ld. Departmental Representative apart from relying on the order of the A.O. submitted that neither the assessee nor M/s. Ching Wah & Co. did appear before the A.O. in response to the summons served on them to verify the authenticity of the transaction vis-à-vis investment of Rs.40 lakhs by the assessee in Mutual Fund. Further the books of accounts were not filed before the A.O. to verify the same by him. Therefore, the A.O. was justified in treating the said investment of Rs.40 lakhs by the assessee as from her unexplained source and the ld. C.I.T.(A) was not justified in deleting the same.
5. The learned counsel appearing on behalf of the assessee reiterated the submissions made before the ld. C.I.T.(A) and he also relied on the order of the ld. C.I.T.(A). He also filed a paper book containing, inter alia, copies of bank account of the assessee, confirmation of accounts of M/s. Ching Wah & Co., letter dated 25.8.2008 submitted by M/s. Ching Wah & Co. to the A.O. with a copy of ledger account of the assessee, letter of assessee dated 22.10.2008 in response to notice u/s. 131 dated 10.9.2008 and documents regarding tenancy between M/s. Ching Wah & Co. and the assessee. All these papers/evidences were as well filed before the authorities below. The learned counsel, therefore, requested for upholding the order of the ld. C.I.T.(A) deleting the addition of Rs.40 lakhs.
6. We have carefully perused the orders of the authorities below, documents filed in the paper book and considered the submissions of the learned representatives of the parties. On perusal of the documents regarding tenancy between M/s. Chigh Wah & Co. and assessee, placed on pages 34 to 36 of the paper book, we find that the assessee was a tenant in the property located at 3 36, Rowland Road, Kolkata and her landlords were Prafulla Charan Law & Others, who were lessees under Sir Uday Chand Mahatab of Burdwan Maharaj Family. The assessee agreed to assign her tenancy right in favour of M/s. Ching Wah & Co. on negotiation with her landlords, i.e. Law Family and accordingly received on several dates total sum of Rs.85 lakhs by A/c. Payee Cheques, as would be evident from page-10 of the book, which is bank statement maintained by the assessee with U.B.I. It is also evident from the said bank statement that the assessee simultaneously invested on several dates total sum of Rs.40 lakhs in Mutual Funds. Subsequently, when the assessee faced some disputes over assigning her tenancy right in favour of M/s. Ching Wah & Co., she vide her letter dated 07/1/2007 intimated M/s. Ching Wah & Co. about her inability to do so and ultimately returned the entire advance amount of Rs.85 lakhs to it, as would be evident from letter dated 07/3/2007 written by the assessee to M/s. Ching Wah & Co., placed on page 36 of the paper book. In view of the above, we do not find any reason to endorse the view of the A.O. that the assessee has failed to explain the source of investment of Rs.40 lakhs in Mutual Fund and thereby adding the same as unexplained investment. We, therefore, uphold the order of the ld. C.I.T.(A), who has rightly deleted the addition. The ground of appeal of the Revenue is, therefore, dismissed.
7. In the result, the Revenue's appeal is dismissed.
Order is pronounced in the Court on 18.06.2010.
Sd/- Sd/-
[B.R.Mittal] [C.D. Rao]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 18 -06-2010
Copy forwarded to :
1. Sheila Mukherjee, 67-B, Ballygunge Circular Road, Kolkata-700 019.
2. I.T.O., Ward-30(3), Kolkata. (3) The C.I.T.(A)-XIV, Kolkata.
4. CIT, Kol- (5) The Departmental Representative, ITAT, Kolkata.
True copy, By order
[dkp]
Dy.Registrar.
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