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2015 (11) TMI 423 - ITAT KOLKATA

2015 (11) TMI 423 - ITAT KOLKATA - TMI - Unexplained investment - CIT(A) deleted the addition - Held that:- The addition is on account of alleged nondisclosure of the debit balance ₹ 14,91,448/- appearing in the assessee's ledger account in the books of the broker, SSKI Securities Pvt. Ltd. as on 01/04/04. The assessee in her books in the said broker's personal ledger account shows no opening balance of that sum. The AO was under wrong belief that this receipt from the said party has been .....

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ve resolved the question not entailing any addition. It is an uncleared cheque received at the end of the earlier year and returned at the vey opening day of the year without any transmission of the value on either side. In view of these facts and circumstances, we are of the considered view that the CIT(A) has rightly deleted the addition and we confirm the same - Decided in favour of assessee.

Addition made on account of anomaly of bank deposits - this addition is also based on the .....

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s of account showing that there is no concealment of any payment/receipt. The payment of first cheque of ₹ 6 lac appeared in the ledger copy against 10/05/2004. Therefore, the inference of the two payments being unaccounted for is on account of confused approach to the whole matter. The AO is singularly mistaken. there is no ground for the addition for the mere clerical error in the broker's account. Irrespective of the error, the inexorable fact is that this very sum of ₹ 3,25,000/- .....

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er of CIT(A) on this account. Accordingly, the order of CIT(A) deleting the addition of ₹ 12 lacs is confirmed.- Decided in favour of assessee.

Undisclosed credit in bank account - CIT(A) deleted the addition - Held that:- For want of circumspection and for non-appreciation due to obsessive suspicion he failed to see that what he condemns as tampered bank account is, in fact, not the entire bank account but contains one parameter of the bank account related to investment in secu .....

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the sums. There is no cause for any inference of suppression and the resultant error of adding the sum. The same is straightway wrongful disallowance in view of the patent state of accounts steering on the face. Accordingly, this addition has rightly been deleted by CIT(A) and we confirm the same. - Decided in favour of assessee.

Addition made by AO on account of gift - CIT(A) deleted the addition of gift after taking remand report from the AO on the additional evidences - Held that: .....

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f these were in the possession of the assessee at the time of assessment. In view of these documents, the CIT(A) concluded, after taking remand report from the AO, that the credit entries on account of gift received from Dr. Ashok Shroff are genuine and the identity and creditworthiness of Dr. Ashok Shroff is proved. Accordingly, he deleted the addition as made by AO by invoking the provisions of section 68 of the Act. We find no infirmity in the order of CIT(A) and hence, the same is confirmed. .....

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t and thereby in the books of a/cs., the same could not be considered as undisclosed investment of the assessee. It was submitted that no addition could be made under these circumstances. It was further mentioned that the amount paid to Shipla Stock Brokers Pvt. Ltd. was out of loan of ₹ 4,00,000/- received form Apeksha Jaggi and ₹ 2,00,000/- received from SSKI Securities Pvt. Ltd. It was submitted that the amount was refunded to Apeksha Juggi along with interest. This interest has b .....

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A No. 808/Kol/2010 - Dated:- 30-9-2015 - Mahavir Singh, JM And M. Balaganesh, AM For the Appellant : Shri Amitabh Choudhuri, Addl. CIT, DR For the Respondent : Shri S P Choudhury Adv. & Shri Soumitra Choudhury, Adv ORDER Per Shri Mahavir Singh, JM This appeal by Revenue is arising out of the order of CIT(A)-XXXIII, Kolkata in appeal No. 210/CIT(A)-XXXIII/Cir-52/07-08 dated 29.01.2008. Assessment was framed by DCIT, Circle-52, Kolkata u/s 143(3) of the Income-tax Act, 1961 (hereinafter referr .....

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ssee by resorting to the provision of section 133(6). 3. Briefly stated facts of the case on the first issue are that the AO during assessment proceedings noticed from the Income & Expenditure A/c for the year ended 31/03/2005 filed along with the return of income that the assessee has declared Short Term Capital Gain on sale of shares of ₹ 10,46,418/- and the details of such Short Term Capital Gains was given in the return. The AO issued notice u/s. 133(6) of the act to SSKI Securitie .....

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In reply to the same the assessee claimed that the said amount is reflected are the corrected balance sheet and P&L A/c. filed on 22/11/2007. But the AO observed from statement of account of UCO Bank, which was a tampered one and some entries were willfully changed in photocopy. According to AO, this is evident from copy of original bank statement obtain from UCO Bank, Southern Avenue Branch, Kolkata on 28/05/2007 and comparison of the same with the bank statement submitted by the assessee. .....

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by the AO is that the ledger a/c. obtained from the Broker M/s. SSKI Securities Pvt. Ltd., showed an amount of ₹ 14,91,448/- as payable to the assessee on 01/04/04 but the same was not reflected in the Balance Sheet of the assessee as receivable as on 31/03/04. The A/R has explained that the difference in on account of cheque received at the fag-end from the Broker in year ending 31/03/04 and accounted by the assessee in its accounts in that year itself. It was submitted that the Bank bal .....

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he Bank A/c. The Ledger A/c. of the Broker in the assessee's book shows that the account was debited by payment of ₹ 14,91,448/- on 01/04/04 bringing the balance outstanding in the books of the Broker and the assessee on same footing. Hence the account stands reconciled and there was no difference which could have been considered as undisclosed investment. The difference arose only due to accounting entries passed by the parties to the transaction differently and have been reconciled b .....

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ank balance in the balance sheet as on 31.02.2004 is shown as ₹ 15,25,283/- which includes this balance. If AO could have applied his mind with regard to difference in opening balance of SSKI Securities (P) Ltd vis-à-vis difference in opening balance of UCO Bank, the same could have been explained. The ledger copy of Bank account and effect of Bank Reconciliation is enclosed now filed in the assessee's paper book. The difference in opening balance was never brought to the notice .....

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on. But it was explained to the AO that at the end of the earlier financially year the said party wrongly issued a cheque to the assessee for the amount which the assessee surrendered on the very opening day of the instant year vide our submitted ledger account. Therefore, in the assessee's account this does not appear as opening balance. The Assessing Officer failed to appreciate. Reference to earlier year's ledger account of the broker account could have resolved the question not entai .....

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nt of anomaly of bank deposits of ₹ 12 lac and ₹ 20, 72,715/-. For this, revenue has raised following ground no.2: "2. On the facts and in the circumstances of the case the Learned CIT(A) has flawed in drawing the conclusion that the anomaly of bank deposits of ₹ 12,00,000/- & ₹ 20,72,715/- detected by the AO by way of comparative study of the bank statement provided b the assessee with the one procured from the bank itself rests on documents segmental in nature. .....

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ccount and according to AO, some entries were willfully changed while producing photo copy of bank pass book. Accordingly, the AO on exactly identical facts made the addition of ₹ 15.25 lac and also ₹ 20,72,715/- by observing as under: "(iii) On comparing the two bank statements (the tampered one submitted by the assessee and the one obtained from the bank) it is seen that the following credit have been willfully suppressed from the original bank statement while submitting the c .....

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sed in Para (1)(iii) (I have not considered ₹ 12,00,000/- in the Bank a/c on 7.5.04 as income, since I have Already added ₹ 6,00,000/- and ₹ 6,00,000/- being utilization of the said ₹ 12,00,000/- in the addition of ₹ 15,25,000/-) Rs.20,72,715.43 Aggrieved, assessee preferred appeal before CIT(A). 8. The CIT(A) deleted the addition vide para 4.2.2, 4.3 and 5.1 by observing as under: "4.2.2 I have gone through the Assessment Order, submission of the A/R and the e .....

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e statement obtained from Bank and with the Ledger A/c of the assessee as obtained from the Broker and also the Bank Ledger A/c maintained by the assessee. Only if there was a discrepancy on such comparison, the AO should have made the addition. It is not material whether the said payments are reflected in the segmental statement. What is material is that the payment should be reflected in the complete Bank Statement and the transaction in Bank statement should be duly reflected in the Books. It .....

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the addition to the extent of ₹ 12,00,000/- (Rs.6,00,0000 + ₹ 6,000,000/-) was not warranted. However the same cannot be said about the remaining amount of ₹ 3,25,000/-. The assessee has claimed that these credits were on account of share difference profit already accounted and not on account of any payment made by them to the Broker and would result in the same income being taxed twice. The Ledger account of M/s. SSKI Securities Pvt. Ltd. shows receipt of this amount by chequ .....

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ncome. Since the entry is not reflected in the account of the assessee, it is considered as unexplained investment and addition to this extent is sustained. 4.3 This ground of the assessee is partly allowed . 5.1 I have gone through the submission of the A/R and the reason for addition made by the AO. The AO has made the addition not because this entry did not reflect in the Books of A/cs. of the assessee but because the entry did not appear in the segmental or tampered bank a/cs. statement. I a .....

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rities Pvt. Ltd. Hence there was no reason for the addition as there is no difference in the Books of assessee and that of the Broker and the transaction is also reflected in the Bank Statement. The entry duly reflected in the Books and this addition is therefore deleted." Aggrieved, revenue came in second appeal before Tribunal. 9. We have heard rival contentions and gone through facts and circumstances of the case. We find that this addition of ₹ 15,25,000/- is also based on the wro .....

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. It is quite apparent that the original copy of the Bank account received from UCO Bank offers a complete tally with the copy of the Bank ledger account in the assessee's books of account showing that there is no concealment of any payment/receipt. The payment of first cheque of ₹ 6 lac appeared in the ledger copy against 10/05/2004. Therefore, the inference of the two payments being unaccounted for is on account of confused approach to the whole matter. The AO is singularly mistaken. .....

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from share difference on 21/05/2004- the same day the broker had credited the sum to the assessee. The only discrepancy is in the narration in the assessee's ledger account in the broker's books. It shows as the assessee's credit through bank payment instead of credit for share difference profit. But the credit is in fact for profit. This amount, therefore, does not appear in the assessee's account with UCO Bank. But the defective narration in the broker's account is immater .....

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n the income, once by the assessee himself in his profit & loss account and also the profit and gain by the AO as undisclosed sum appearing in the broker's account. So there is no ground for the addition for the mere clerical error in the broker's account. Irrespective of the error, the inexorable fact is that this very sum of ₹ 3,25,000/- forms part of the assessee's revenue receipt entering the profit and loss account. However, the CIT(A) has deleted the addition of ͅ .....

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ue of revenue's appeal is dismissed . 10. The next aspect of this ground is with regard to the order of AO making an addition of ₹ 20,72,715/- in respect of undisclosed credit in bank account. The reason of the AO for making the said addition has already been reproduced in Para 7, Page 4 of the order. We find that this addition of ₹ 20,72,715/- made by AO in view of the fact that the assessee tampered bank statement and that the comparison of the same with the actual bank stateme .....

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tments with reference to the entries in the disclosed bank account as the source as well as the gains entering the bank account and the profit. It is demonstrably neither the full copy of the bank's ledger account appearing in the assessee's Books of account nor the bank statement received from the bank but the AO overlooked that the assessee suo motu also filed, in addition to this statement sowing particularized transactions called from the overall bank transactions, the copy of the fu .....

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ount stand on a parity of situation. Despite having notice of both the sums as reflected in the assessee's bank statement he picks only one amount and capriciously made the addition. Once the sums are duly reflect in the assessee's bank account, there is no rhyme or reason for choosing one of them as suspect and liable to addition. Therefore, the allegation of undisclosed credit either of ₹ 12 lakh or ₹ 20,72,715.43 as unaccounted for in the assessee's account is wholly c .....

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want of circumspection and for non-appreciation due to obsessive suspicion he failed to see that what he condemns as tampered bank account is, in fact, not the entire bank account but contains one parameter of the bank account related to investment in securities meant for correlation of assessee's investment in securities with the force of the money in bank so invested and to prove that the investments are from within the assessee's disclosed bank account. This segmented bank account bei .....

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is addition has rightly been deleted by CIT(A) and we confirm the same. This issue of revenue's appeal is dismissed. 11. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of gift of ₹ 9,39,060/-. For this revenue has raised following ground no.3: "3. On the facts and in the circumstances of the case the Learned CIT(A) has erred in holding the donor of ₹ 9,39,060/- as one who fulfilled the criterion laid down i .....

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er of husband) and therefore, claimed it as exempt u/s 56(2)(v) of the Act. From the details submitted by the assessee, the AO found that ₹ 9,39,060/- shown as gift was received from one Mr. Ashok Shroff of USA who was claimed to be brother-in-law. The AO noted that a declaration of the donor is on a plain paper only and no documentary evidence to verify the genuineness of the gift as far Sec. 56(2)(v) of the Act is concerned, was produced. It was also noted by the AO that identity of pers .....

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essee it cannot be established that Dr. Ashok Shroff is a relative of the assessee as defined in Sec. 56. Though the AO has not mentioned as to how he has arrived at this conclusion, it is presumed that it is because the US Passport of Sri Ashok Shroff does not mention in the name of the father. In response to the comments of the AO in the Remand Report, the assessee submitted the Birth Certificate of Ashok Shroff issued by the Public Health Deptt. Municipal Corporation of Greater Bombay vide Ce .....

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law of the assessee and therefore covered by the definition of Relative given in Explanation below Sec. 56(2)(v). The assessee has already given the source of the said credits and the AO had not recorded any objection in the Remand Report on this. The only objection of the AO was with regard to the donor not being covered by the definition of relative u/s. 56(2)(v). I has been established on the strength of the evidences filed by the assessee that the donor was a relative of the assessee. The ad .....

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3/09/08 10,000 4,57,800 Key Bank, USA 15/10/04 5,500 2,51,560 Key Bank, USA 21/07/04 5,000 2,29,800 Key Bank, U(SA Total 20500 9,39,060 In support of its claim the assessee submitted a notarized declaration of gift from Dr. Ashok Shroff, copy of donor's bank account with Key Bank, inwards remittance on Oriental Bank of Commerce, copy of Passport of Sri Jayant Shroff showing him to be son of Sri Vasudev Shroff and husband of the assessee and also copy of passport of Sri Ashok Shroff, donor. T .....

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deleted the addition as made by AO by invoking the provisions of section 68 of the Act. We find no infirmity in the order of CIT(A) and hence, the same is confirmed. This issue of revenue's appeal is dismissed. 15. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition of unexplained investment of ₹ 5 lacs. For this, revenue has raised following ground no.4: "4. On the facts and in the circumstances of the case the Learned CIT(A) has erred i .....

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and PAN No. Since no details were forth coming, the AO treated the advance as unexplained u/s. 69 of the Act. Aggrieved, assessee preferred appeal before CIT(A), who deleted the additions by observing in para 7.2 as under : "7.2 I have gone through the facts of the case. It is seen that the AO has made addition because proper confirmation of account was not field in respect of loan given to Shilpa Stock Brokers Pvt. Ltd. amounting to ₹ 5,00,000/- He made the addition u/s. 69. However .....

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in the books of a/cs. The addition is therefore required to be deleted. Even otherwise on merits, the assessee deserves to win. The assessee has explained the source of investment by way of bank statement and confirmation of credits preceding the said advances. The nature and source of the said investment is stands explained. Therefore whichever way we look at it the addition made by the AO was not correct. The addition made u/s. 69 is therefore deleted. This ground of the assessee is allowed.&q .....

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