Principal Commissioner Of Income Tax-3, Kolkata v. Shri Kanti Prasad Kedia

Form No.(J2) IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE Present : THE HON’BLE JUSTICE T.S. SIVAGNANAM A N D THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA IA NO.GA/2/2018(Old No.GA/574/2018) ITAT/57/2018 PRINCIPAL COMMISSIONER OF INCOME TAX-3, KOLKATA -Versus- SHRI KANTI PRASAD KEDIA For the Appellant: Mr. Smarajit Roychowdhury, Adv. Mr. Manabendranath Bandopadhyay, Adv. For the Respondent: Mr. Nageshwar Rao, Adv. Mr. Avra Majumdar, Adv. Sk. Md. Biswal Hossain, Adv. Mr. Shatnik Chakraborty, Adv. Ms. Viyushi Rawat, Adv. Heard on : 15.02.2022 Judgment on : 15.02.2022 T. S. SIVAGANANAM, J. : This appeal by the revenue filedunder Section 260A of the Income Tax Act, 1961 (the ‘Act’ inbrevity) is directed against the order dated 31[st] March, 2017passed by the Income Tax Appellate Tribunal, Kolkata “B” Bench (the ‘Tribunal’ in short) in IT(SS)A No.104/Kol/2008 for the blockperiod 1.4.1988 to 12.03.1999. The revenue has raised for the following substantial questions of law for consideration: “(a) Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law as wellas on fact in deleting an amount of Rs.7.10 croreswhich was voluntarily disclosed by the assesseehimself in his return of income for the block periodfrom 1[st] April, 1988 to 12[th] March, 1999 ? (b)Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law as wellas on fact in confirming the decision of the CIT(A)regarding the deletion of the addition ofRs.73,04,75,000/- made by the assessing officer towards contribution of share capital by the assesseeto 117 companies out of undisclosed income ?to 117 companies out of undisclosed income ? (c)Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law as wellas on fact in deleting the addition ofRs.10,29,45,776/- towards the cash deposited invarious bank accounts of the proprietary concerns ofthe benamdar of the assessee for which the assesseecould not substantiate the source of deposit and eventhe addition was confirmed by the CIT(Appeals) ? (d)Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law as wellas on fact in deleting the addition of Rs.10,00,00,000/- towards income out of sharesdealing for assessment year 1992-93 which wasconfirmed by CIT(A) and which was in fact stated bythe assessee himself as his income during recordingof his statement ? (e)Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law as wellas on fact in deleting Rs.7.10 crores which was infact the returned income of the assessee in responseto notice under Section 158BC (a)(ii) of the IncomeTax Act, 1961 ?”case, the Learned Tribunal has erred in law as wellas on fact in deleting Rs.7.10 crores which was infact the returned income of the assessee in responseto notice under Section 158BC (a)(ii) of the IncomeTax Act, 1961 ?” We have heard Mr. Smarajit Roychowdhury, learned counsel assisted by Mr. Manabendranath Bandopadhyay, learned advocate forthe appellant/revenue and Mr. Nageshwar Rao, learned counselassisted by Mr. Avra Majumdar, learned Advocate for therespondent/assessee. First we take up the substantial questions of law (a) and(e) together as suggested by the revenue. These pertain todeletion of an amount of Rs.7.10 crores which was disclosed by theassessee in the return of income filed pursuant to notice underSection 158BC(a)(ii) of the Act. In fact, this issue was notraised before the Commissioner of Income Tax (Appeals)-VI, Kolkata(CIT(A) when the assessee challenged the order of assessment dated28[th] March, 2001. However, the assessee was on an appeal beforethe tribunal on the said issue. The tribunal considered the assisted by Mr. Manabendranath Bandopadhyay, learned advocate forthe appellant/revenue and Mr. Nageshwar Rao, learned counselassisted by Mr. Avra Majumdar, learned Advocate for therespondent/assessee. First we take up the substantial questions of law (a) and(e) together as suggested by the revenue. These pertain todeletion of an amount of Rs.7.10 crores which was disclosed by theassessee in the return of income filed pursuant to notice underSection 158BC(a)(ii) of the Act. In fact, this issue was notraised before the Commissioner of Income Tax (Appeals)-VI, Kolkata(CIT(A) when the assessee challenged the order of assessment dated28[th] March, 2001. However, the assessee was on an appeal beforethe tribunal on the said issue. The tribunal considered the contentions of either side and set aside the finding of theassessing officer with regard to the addition of Rs.7.10 croresand restored the matter back to the assessing officer to examinethe seized materials and re-compute the income of the assessee forthe block period. The learned counsel for the respondent/assesseesubmits that the order passed by the tribunal has been giveneffect to and the assessing officer has passed an order which isadverse to the interest of the assessee and the assessee ispursuing further remedies against the said order. Thus, in ourconsidered view, there is no substantial question of law arisingfor consideration with regard to the questions suggested in (a)and (e) above. Therefore, the same are rejected.The other three substantial questions of law also pertainto deletion of certain additions which have been made towardscontribution of share capital by the assessee to 117 companies;deletion of addition of Rs.10,29,45,776/- towards cash depositsand deletion of addition of Rs.10 crores towards income out ofshares. Theses issues have been dealt with by the tribunal asmentioned below:So far as substantial question of law (b) is concerned,the discussion in the order passed by the tribunal is in paragraph4. On reading of the said paragraph, we find that the tribunalhas re-appreciated the facts which were available on record while affirming the order passed by the CIT(A). In fact, it hasrendered a finding that the assessing officer without bringing anyevidence to show that the companies which are legal entities andassessed to tax every year have not disclosed the paid-up or lesspaid-up capital, the amount of paid-up capital which have beendisclosed in its balance-sheet every year. There are otherfindings of fact as well. Thus, we find that there is nosubstantial question of law arising on the said issue.Accordingly, the substantial question of law (b) as suggestedstands rejected. With regard to substantial question of law (c) isconcerned, the discussion is in paragraph 6 of the order passed bythe tribunal. After analysing the facts, the tribunal concludedthat addition made by the assessing officer is not on the basis ofevidence or material to even remotely suggest that the cashdeposited in bank accounts belongs to the assessee and theaddition was totally contrary to the findings recorded at variousplaces in the assessment order and accordingly deleted theaddition. Here also we find that a thorough investigation of thefactual position has been done by the tribunal while grantingrelief to the assessee and we do not find any substantial questionof law arising for consideration on the said issue. With regard to substantial question of law (c) isconcerned, the discussion is in paragraph 6 of the order passed bythe tribunal. After analysing the facts, the tribunal concludedthat addition made by the assessing officer is not on the basis ofevidence or material to even remotely suggest that the cashdeposited in bank accounts belongs to the assessee and theaddition was totally contrary to the findings recorded at variousplaces in the assessment order and accordingly deleted theaddition. Here also we find that a thorough investigation of thefactual position has been done by the tribunal while grantingrelief to the assessee and we do not find any substantial questionof law arising for consideration on the said issue. The next issue concerns the deletion of addition of Rs.10crores which is suggested as substantial question of law (d)above. The tribunal has considered the same and once again re-appreciated the factual position and that the assessing officerhimself has rendered a finding that the assessee is not a man ofmeans and he has also accepted that he has engaged only in thename lending and providing accommodation entries for a smallcommission. Further, factual analysis have also been made and ithas been held that addition based on statement alone which hasbeen recorded when the assessee was mentally disturbed cannot besustained. In this regard it will be beneficial to note thecircular issued by the CBDT dated 10[th] March, 2003 wherein theBoard has stated that confession during the course of search,seizure and survey operations did not serve any useful purpose andthe assessing officers were advised that there should focus andconcentrate on collection of evidence of income which leads toinformation on what has not been disclosed or is not likely to bedisclosed before the Income Tax Department. Further, it has beenmentioned that while recording statement during the course ofsearch and seizure operation, no attempt should be made to obtainconfession as to the undisclosed income. Thus, we are of the clearview that no question of law as suggested in substantial questionof law (d) arises for consideration on the said issue as well. In the result, we find that there is no question of lawmuch less substantial question of law arises for consideration inthis appeal. Accordingly, the appeal stands dismissed. The connected application for stay being GA/2/2018 standsdismissed. (T.S. SIVAGNANAM, J.) I agree. (HIRANMAY BHATTACHARYYA, J.) S.Das/A/s.