Income Tax Appellate Tribunal - Kolkata
Soumya Bhattacharya, Kolkata vs Assessee on 29 April, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL "C " BENCH: KOLKATA
[Before Hon'ble Shri Mahavir Singh, JM & Hon'ble Shri B.P.Jain, AM ]
I.T.A No.1675/Kol/2012
Assessment Year: 2008-09
Soumya Bhattacharya, Vs. I.T.O., Ward-55(1),
Kolkata Kolkata
(Appellant) (Respondent)
(PAN:ALGPB 7757A)
For the Appellant : Shri Sugata Shankar Roy, Advocate
For the Respondent : Smt. Ranu Biswas, JCIT
Date of hearing : 20.04.2015.
Date of pronouncement: 29.04.2015.
ORDER
Per Shri B.P.Jain, AM :
This appeal of the assessee arises out of the order of ld.CIT(A)-XXXVI, Kolkata dated 17.09.2012 for Assessment Year 2008-09.
2. The assessee has raised the following grounds of appeal :
"1. The Commissioner of Income Tax (Appeals) erred in upholding the order of the Income Tax Officer rejecting the assessee's revised books of account under section 145(3) of the Income Tax Act 1961 merely on the ground that the Assessing Officer did not make an Ex-parte assessment or an estimated assessment but added amounts under section 69,69A,69B69C of the I.T.Act 1961 taking the figure from revised accounts.
2. The Commissioner of Income Tax (Appeals) erred in upholding the order of the Income Tax Officer by not accepting the gift of Rs.40,000 received from Mother-in-law and making an addition of the said amount under section 69 of the Income Tax Act, 1961 as undisclosed.
3. The Commissioner of Income Tax (Appeals) erred in upholding the order of the Income Tax Officer by not accepting the gift of Rs.60,000 received from Father and making an addition of the said amount under section 69 of the Income Tax Act, 1961 as undisclosed.
4. The Commissioner of Income Tax (Appeals) erred in upholding the order of the Income Tax Officer by adding a part of the alleged difference in capital i.e. Rs.11,20,339 as undisclosed investment of the assessee under section 69 of the Income Tax Act.ITA No.1675/Kol/2012 2
Soumya Bhattacharya A.Yr.2008-09
5. The Commissioner of Income Tax (Appeals) erred in upholding the order of the Income Tax Officer by treating the investment in furniture and fixture amounting to Rs.1,64,233 as undisclosed income.
6. The Commissioner of Income Tax (Appeals) erred in confirming the addition of the entire chamber maintenance of rs.37,782, printing and stationery of Rs.10,288, Books and periodicals of Rs.16,320, electricity expenses of Rs.18,670 and Miscellaneous Expenses of Rs.11,363 to the total income. The Learned CIT(A) ought to have allowed these legitimate expenditures as a deduction under section 37(1) as they are expended wholly and exclusively for the purpose of the profession carried on by the appellant."
3. The brief facts of the case are that the assessee is a medical practitioner by profession. The books of account of the assessee are audited. Since the professional receipts during the financial year ending 31st March, 2008 exceeded Rs.10,00,000/- the AO noted several discrepancies in the books of account as compared to the audited account and other documents produced. The relevant discrepancy as noted by the AO are as under :-
From the analysis balance sheet as on 31.3.2008 along with the books of accounts, the following discrepancies were detected.
Particulars As per ITR and audited B/S As per Books of accounts placed in records of assets F.D. with Opening Addition Closing Opening Addition Closing HSBC Rs.325687/- Rs.4991528/- Rs.5317215/- Rs.325687/- Rs.5802046/- Rs.6127733/- P.O.MIS Rs.300000/- Nil Rs.300000/- Rs.300000/- Rs.300000/- Rs.600000/- A/c 9811651 Advance Rs.1721000/- Rs.2056371/- Rs.37,77,371/- Rs.1721000/- Rs.2963431/- 46,84,453/- for flat Furn. & Rs.58,950/- Nil Rs.53,055/- Rs.58,950/- Rs/.1,64,233/- Rs.2,17,288/- Fixture Several other discrepancies were also noted by the AO and assessee was show caused to explain the said discrepancy in the books of account. The assessee made written submissions and submitted the explanations with regard to the discrepancy as noted by the AO and filed revised balance sheet. AO not being satisfied with the explanation invoked the provision of section 145(3) of the IT Act. The ld. CIT(A) confirmed the action of AO and invoked the provision of section 145(3) of the Act.
4. We have heard the parties. The assesse has submitted the revised balance sheet and explanations to the differences and the balance sheet filed along with the return of income. But no defect has been pointed by the AO. Under such circumstances and ITA No.1675/Kol/2012 3 Soumya Bhattacharya A.Yr.2008-09 facts of the case AO is not justified in invoking the provision of section 145(3) of the Act by simply calculating the differences between the revised balance sheet and the balance sheet in the audited accounts attached with the return of income and adding the same to the income of assessee. Therefore under such circumstances of the case this action of the AO for rejecting the books of account only on account of computation difference between the revised balance sheet and the audited balance sheet is no basis for invoking the provision of section 145(3) of the Act. Accordingly the same action of the ld. ,CIT(A) is directed to be reversed. Thus ground No.1 of the assessee is allowed.
5. As regards ground nos.2 and 3 the assessee received gifts of Rs.40,000/- from mother-in-law and Rs.60,000/- from his father. The assessee submitted the affidavit of Smt.Pratima Bhattacharya, mother-in-law of the assessee and also similar affidavit of Shri Sachindra Mohan Bhattacharya, the father of assessee and written submissions submitted along with the affidavit and the bank statements. The AO not being satisfied with the genuineness and creditworthiness of the transaction added the same to the income of assessee vide page 4 of his order.
5.1. Before the ld. CIT(A) the assessee submitted the explanation and the documents which were sent to the AO for report which was obtained. Accordingly after considering these submissions of the assessee and the report of the AO the ld. CIT(A) confirmed the action of AO.
6. We have heard the rival contentions and perused the facts of the case. The undisputed fact in this case is that mother-in-law is a retired reader from a college from 1974 to 2001 and receiving pension after her retirement along with interest from post office and the bank and the cash is being regularly withdrawn from the bank. The assessee has submitted the affidavit, Income Tax return, computation of income, copy of the bank pass book and details of cash withdrawn which are available in the paper book. The assessee has submitted the explanation of availability of cash and therefore there is no question on the creditworthiness or identity or genuineness of the ITA No.1675/Kol/2012 4 Soumya Bhattacharya A.Yr.2008-09 transactions. The finding of the AO and the ld. CIT(A) that there was no drawing during the five days prior to the date of gift and mere cash withdrawal by the donor long back i.e. 120 days cannot make the act probable. Such reasonings by both the authorities below cannot convert the facts of genuineness and creditworthiness of the transactions. In such circumstances and facts of the case we are of the view that the assessee has explained the identity, creditworthiness and genuineness of the transactions and the AO was not justified in treating the same as income of the assessee. Accordingly the order of the ld. CIT(A) is reversed. Ground No.2 of the assessee is allowed.
7. As regards ground no.3 which is an identical fact as in ground no.2, therefore, order of the ld. CIT(A) is reversed. Ground No.3 of the assessee is allowed.
8. As regards ground No.4 AO made addition of Rs.11,20,339/- u/s 69 of the I.T.Act being undisclosed investment of the assessee due to difference in capital arising out of audit and revised balance sheet. The ld. CIT(A) confirmed the action of AO.
9. We have heard the rival contentions and perused the facts of the case. We find that the assessee has submitted the revised balance sheet during the course of assessment proceedings along with the reconciliation. The ld. Counsel of the assesee before us tried to explain the difference and the reconciliation and prayed to examine the differences between the revised balance sheet and audited balance sheet by us. Prima facie as appears from the order of ld. CIT(A) the assessee has stated to have reconciled the differences but the same has neither been examined by the AO in the right perspective nor by the ld. CIT(A). It will be in the interest of justice if it is set aside the matter to the file of AO, who will examine the issue in the right perspective being the differences between the revised balance sheet and the audited balance sheet and if the explanation is found satisfactory the addition may be deleted. The assessee may be afforded adequate opportunity of being heard. The assessee shall cooperate in ITA No.1675/Kol/2012 5 Soumya Bhattacharya A.Yr.2008-09 the assessment proceedings and AO is directed to act accordingly. Thus ground no.4 of the assessee is allowed for statistical purposes.
10. As regards ground no.5 AO made addition of Rs.1,64,233/- in respect of furniture and fixture for personal purposes. Before the ld. CIT(A) the assessee submitted explanation which was sent to the AO and the report was sought. After considering the explanation of the assessee and the remand report of the AO the ld. CIT(A) confirmed the action of AO.
11. After hearing the parties we are of the view that the assessee having incurred the expenditure in cash for personal purposes and in the absence of any documents for the expenditure not filed before any of the authorities below or before us we do not find any infirmity in the order of ld. CIT(A), who has rightly confirmed the action of AO. Thus ground No.5 of the assessee is dismissed.
12. As regards ground No.6 the brief facts of the case are that the AO made additions in respect of entire chamber maintenance, printing and stationery, books and periodicals , electricity expenses and miscellaneous expenses. Assessee submitted the explanation before the ld. CIT(A), who asked for the report from the AO. The ld. CIT(A) after considering the explanation of the assessee and the report of the AO confirmed the action of AO.
13. We have heard the rival contentions and perused the facts of the case. We find that the arguments made by the ld. Counsel of the assessee are that these are legitimate and petty expenses incurred throughout the year. As per the report of the AO which has not been rebutted by the ld. AR that assessee himself has admitted vide his submission dated 14.12.2010 which states that he has made a chamber at his ancestral home but rarely get the time to provide the consultation. Nothing has been substantiated before the authorities below or even before us to establish that the expenditures having been incurred wholly and exclusively for the purpose of profession and not allowable u/s 37(1) of the Act. We find no infirmity in the order of ITA No.1675/Kol/2012 6 Soumya Bhattacharya A.Yr.2008-09 ld. CIT(A), who has rightly confirmed the action of AO. Thus ground No.6 of the assessee is dismissed.
14. In the result the appeal of the assessee is partly allowed.
Order pronounced in the court on 29.04.2015.
Sd/- Sd/-
[ Mahavir Singh ] [B.P.Jain]
Judicial Member Accountant Member
Date: 29.04.2015.
R.G.(.P.S.)
Copy of the order forwarded to:
1. Soumya Bhattacharya, 171/P/22, Picnic Garden Road, Kolkata-700039.
2 I.T.O., Ward-55(1), Kolkata
3. CIT(A)-XXXVI, Kolkata 4. CIT - Kolkata.
5. CIT-DR, Kolkata Benches, Kolkata True Copy, By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches