Income Tax Appellate Tribunal - Lucknow
Sri Anand Kumar Tripathi, Kanpur vs Income Tax Officer, Ward - 3(5), Kanpur on 19 November, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH "SMC", LUCKNOW
BEFORE SHRI A.D JAIN, VICE PRESIDENT AND
ITA No.786 & 787/LKW/2017
Assessment Years 2010-11 & 2011-12
Anand Kumar Tripathi Vs. ITO, Ward 3(5),
30-A, Ganga Nagar Housing Society, Kanpur
Azad Nagar, Kanpur
PAN ADMPT 4538 R
(Appellant) (Respondent)
Appellant by Shri Jitendra Kumar Yadav, Advocate
Respondent by Shri C.K. Singh, DR
Date of hearing 19/11/2018
Date of pronouncement 19/11/2018
ORDER
These are assessee's appeals for Assessment Years 2010-11 and 2011-12. The issues involved being common, they are being disposed of by this composite order. Facts, for convenience, are being taken from ITA No.786/Lkw/2017.
2. The following grounds have been raised:
"1. That the Ld. C.I.T. Appeal has erred on facts that the assessing officer has wrote down in his Assessment Order that the case was transferred to the under signed (i.e. assessing officer) and case record along with folder of SIR due to change in jurisdiction and in point no. 2 of remand order assessing officer has said that no reply dated 06/10/2015 has been found on records and it is not acceptable as notice u/s 148 issued only on 22/03/2016 but we have provide the copy of statement which is deposited to department on 06/10/2015 to the Ld. C.I.T. Appeal.2
ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12
2. That the Ld. C.I.T. Appeal has erred on facts that the assessee himself accepted that the assessee is owner of bank account of Bank of India in which there are only business transactions and which is duly declared in ITR of that asstt. Year. And transactions in Punjab national bank are not related to his business .
3. That the Ld. C.I.T. Appeal has erred on facts that the in the assessment order A.O. itself said that the amount transferred from M/s National Gran Udyog and this concern is engaged in business of food processing and merely transfer of amount doesn't prove that amount belongs to trade transactions .
4. That the Ld. C.I.T. Appeal has erred on facts that case is already pending in debt recovery tribunal and he is not one of the victim of this case about 10-15 persons are also victim of this type of case in Kanpur city which is clearly depict in copy of FIR and case history which is provided to assessing officer."
3. As per the assessment order, a Suspicious Transaction Report was sent to the AO by the ADIT (Inv.)-2, Kanpur to the AO of the assessee. This STR, reads as follows:
"2. Vide above mentioned STR is informed that "The subject entity is proprietors in concern of Shri Anand Kumar Tripathi. On 16.02.2010, the amount of Rs.8 lacks was transferred to this amount of M/s Sai Logistics-A C & F Agency. This amount was withdrawn on the same day itself. On 31.3.2010, the above account received amounts of Rs.48 lakhs and Rs.30 lakhs from M/s National Grah Udyog-a firm engaged in business of food processing. This amount was also withdrawn on the same day itself. On 11.05.2010 and 15.5.2010 amounts of Rs.25 lakhs and Rs.20 lakhs were transferred to this account by M/s Manish Traders-afirm engaged in business of Aara Machine (wood business) on the same day itself amounts of Rs.24.50 lakhs and Rs.20 lakhs were transferred by M/s Sai Traders which engaged in business of handicrafts and Rs.45 lakhs were withdrawn in cash on same day itself, Balance amount of Rs.5 lakhs was withdrawn a few days later. Total amount of debits and credits 3 ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12 during the current F.Y. aggregated to Rs. 1.03 Crore and Rs. 1.03 crore approx respectively."
4. On the basis of the above STR, the AO recorded in the following for formation of belief of escapement reasons of income of the assessee:
"The department is in the possession of information to the effect that certain huge transaction made by Shri Anand Kumar Tripathi, Prop. Tripathi Atta Evam Tel Udyog, 30-A, Ganga Nagar Housing Society, Azad nagar, Kanpur in current a/c no. 0727002100051946 of Punjab National Bank, Swaroop Nagar, Kanpur. On examination of the entries of said account amount to Rs. 98,08,000/- for A.Y. 2010-11 found unexplained. The assessee filed his return of income on 12.10.2010 declaring total income at Rs. 1,79,820/- for A.Y. 2010-11. The credit entries amounting to Rs. 98,08,000/- in the aforesaid bank account does not form part of total income disclosed before the department. Thus, undersigned has no option but to treat amount of Rs. 98,08,000/- as undisclosed income in the hands of the assessee for the F.Y. 2009-10 relevant to A. Y. 2010-11 which has escaped income within the meaning of section 147 of the lncome Tax Act, 1961.
As the undisclosed income has escaped income, therefore, to tax the same initiation of proceedings u/s 147 of the Income Tax Act, 1961 is necessary."
5. The AO recorded statement on oath, on 14.12.2016, of Shri Anand Kumar Tripathi, the assessee. This statement is reproduced at Pages 3 to 4 of the assessment order. In this statement, the assessee, inter alia, stated that he did not have anything to do with transactions in the Bank account, on which, proceedings u/s 147 of the I.T. Act had been initiated against the assessee; that this account was operated by one Shri Om Jaiswal, owner of M/s Clasic Flour Mill, Unnao, in the name of the assessee, by utilizing thirty 4 ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12 signed blank cheques obtained by him from the assessee; that no cheque of any amount had either been deposited, nor drawn by the assessee; that in this regard, the assessee had filed a First Information Report against Om Jaiswal, for the fraud committed by him on the assessee; and that copy of the said FIR dated 17.12.2010 had been submitted by the assessee in the Office of the AO.
6. The AO, however, while passing the order of assessment, made addition of Rs.7,84,640/- being 8% of the total credits of Rs.98,08,000/- in the current account during the year. The ld. CIT(A) has confirmed the addition. For A.Y. 2010-11, a similar addition of Rs.2,75,827/- has been made and confirmed. Aggrieved, the assessee is in appeal for both the years.
7. Heard. It is seen that while making the additions, the AO has, interalia, observed that "Though the assessee has furnished the copies of FIR and some papers related to police enquiry against Shri Om Jaiswal but these are not satisfactory element to sustain the reliability of statement of the assessee. It appears that the assessee have made all the transactions at his own and after knowing that Shri Om Jaiswal is a defaulter of Bank and police enquiry are pending against him and aftermath was calculated by him to take the advantage of absconding of Shri Om Jaiswal by registering the complaint in police station......"
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ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12
8. While confirming the addition, the ld. CIT(A) has, on this score, observed as follows:
"4. Assessee has found history sheeter and filed an FIR against him without explaining how he is related to this bank account when now where his identity or signatures are appearing either in withdrawals in cheques and cash or in the account opening form."
9. Thus, it is seen that neither of the authorities below has taken into account the undisputed position that an FIR had been lodged by the assessee against Shri Om Jaiswal, on 17.12.2010, regarding the fraud alleged to have been committed on the assessee by Shri Jaiswal. The AO did not deem it appropriate to enquire into the fate of this FIR and went on to make the addition on the mere surmise and conjecture that 'it appears' that the assessee had lodged the FIR against Om Jaiswal merely because he was a history-sheeter in the police records as a defaulter of the Bank and enquiries were already pending against him, whereas the bank account in which the deposits in question had been found, had been operated by the assessee himself only. Thus, the documentary evidence filed by the assessee, in the shape of the FIR lodged by him on 17.12.2010 against Om Jaiswal and papers related to the police enquiry against Om Jaiswal, was wrongly not considered by the AO, causing prejudice to the case of the assessee. Likewise, the ld. CIT(A) also fell in error in not taking into consideration this very unrebutted documentary evidence and held that the 6 ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12 assessee had not explained as to how the bank account in question was related to the assessee. The ld. CIT(A) has failed to appreciate that the assessee, in his statement (Supra) dated 14.12.2016, recorded on oath by the AO, the assessee had stated that Shri Om Jaiswal had taken thirty blank cheques from the assessee on the pretext of obtaining CC limit for the assessee from the Bank.
10. All considered, in the interest of justice, the matter needs to be examined afresh ab initio by the AO, on enquiring about the fate of the FIR got lodged by the assessee against Om Jaiswal, way back on 17.12.2010. As such, the matter is remanded to the file of the AO, to be decided afresh in accordance with law, after affording due and adequate opportunity of hearing to the assessee to prove his case. Ordered accordingly. No doubt, the assessee shall cooperate in the fresh proceedings before the AO. All pleas available under the law shall remain so available to the assessee.
11. In the result, for statistical purposes, both the appeals are treated as allowed.
(Order pronounced in the open court on 19/11/2018) (A.D. Jain) Vice President Aks -
Dtd. 19/11/2018 7 ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order Assistant Registrar 8 ITA No. 786 & 787/Lkw/2017 A.Ys. 2010-11 & 2011-12 Date 1. Draft dictated / (DNS) 19.11.2018 PS 2. Draft placed before author 19.11.2018 PS 3. Draft proposed & placed before the second member JM/AM 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS PS/PS 6. Kept for pronouncement on PS 7. File sent to the Bench Clerk PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.