M/s. Majumder & Co., Nadia v. ITO, Ward - 3, Nadia, Nadia

ITA 105/KOL/2011 | 2005-2006
Pronouncement Date: 21-03-2011 | Result: Allowed

Appeal Details

RSA Number 10523514 RSA 2011
Assessee PAN AADCM4695B
Bench Kolkata
Appeal Number ITA 105/KOL/2011
Duration Of Justice 2 month(s) 6 day(s)
Appellant M/s. Majumder & Co., Nadia
Respondent ITO, Ward - 3, Nadia, Nadia
Appeal Type Income Tax Appeal
Pronouncement Date 21-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 21-03-2011
Assessment Year 2005-2006
Appeal Filed On 14-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE /AND . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SHR I C. D. RAO AM] # # # # / I.T.A NO. 105/KOL/2011 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2005-06 M/S. MAJUMDER & CO. VS INCOME TAX OFFICER WD-3 NADIA (PAN-AADCM 4695 B) ( )* /APPELLANT ) (+ )*/ RESPONDENT ) FOR THE APPELLANT: S/SHRI A. K. CHAKRABORTY & D. SAHA FOR THE RESPONDENT: SHRI B. R. PUROKAYASTHA !- / ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A)-XXXVI KOLKATA IN APPEAL NO.A-290/CIT(A)-XXXVI/KOL/NADIA/08-09 VIDE D ATED 08.12.2010. THE ASSESSMENT WAS FRAMED BY ITO WARD 3 NADIA OF TH E INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2005-06 VIDE HIS ORDER DATED 05.12.2007. THE PENALTY IN DISPUTE WAS LEVIED BY I TO WARD-3 NADIA U/S 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 30.06.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE PENALTY LEVIED BY ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT ON THE ADDITION OF OUTSTANDING BALANCES CARRIED FORWARD ON ACCOUNT OF SEVEN SUNDRY CREDITORS ADDED BY ASSESSING OFFICER. FOR THIS THE ASSESSEE HAS RAISED THE FOLLOWING FOUR GROUNDS: 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN SUSTAINING THE PENALTY UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT 1961. 2. FOR THAT HAVING REGARDS TO THE FACTS OF THE CAS E AND TO THE EVIDENCES PRODUCED AND FILED IN THE FORM OF A PAPER BOOK HE HAS NO RE ASON TO SUSTAIN THE PENALTY ORDER. 3. FOR THAT ON THE FACTS THE LD. CIT(A) FAILED TO CONSIDER AND APPRECIATE THAT THE BROUGHT FORWARD AMOUNT CAN NEVER THE SUBJECT MATTER FOR THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C). 2 ITA 105/K/2011 MAJUMDER & CO. A.Y.05-06 4. FOR THAT IN ANY EVENT THE IMPOSITION OF PENALT Y STANDS BAD IN LAW AND ON FACTS. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSING OFFICER ON VERIFICATION OF SUNDRY CREDITORS NOTED THAT THE OUT STANDING BALANCES OF THE FOLLOWING SEVEN CREDITORS ARE UNSUBSTANTIATED AND ACCORDINGLY ADDITION WAS MADE: NAME OF THE PARTIES UNSUBSTANTIATED BALANCE 1. CHARBHUJA MARBLE RS.18 773/- 2. LAXMI GOUR MARBLE PVT. LTD. RS.54 992/- 3. N. S. MARBLE EMPORIUM RS. 7 113/- 4. VISHNU MARBLE RS.41 156/- 5. TILAK MARBLE RS.55 546/- 6. ASIAN MARBLE ENTERPRISE RS. 3 414/- 7. GIRHAR TILES INDUSTRIES RS.32 000/- THIS ADDITION WAS NOT CHALLENGED BY THE ASSESSEE AN D IT HAS BECOME FINAL. ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO INITIATED PENALTY PROCEEDINGS. SUBSEQUENTLY HE STARTED PENALTY PROCEEDINGS. ASSES SING OFFICER ON THE ABOVE ADDITION OF OUTSTANDING BALANCES LEVIED PENALTY U/S. 271(1)( C) OF THE ACT. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER VIDE PARA 5 OF HIS APPELLATE ORDER AS UNDER : 5. THE SUBMISSION OF THE AR OF THE APPELLANT HAS B EEN CONSIDERED IN THE LIGHT OF MATERIALS PLACED BEFORE ME AND CASE LAWS REFERRED T O AND I FIND MYSELF UNABLE TO ACCEPT THEM. IN HIS SUBMISSION THE AR HAS MAINLY S TATED THAT THE BROUGHT FORWARD SUNDRY CREDITORS WERE ADDED BY THE AO IN THE ASSESS MENT WHICH IS NOT A SUBJECT MATTER OF THE PRESENT APPEAL. THIS MATTER HAS REACH ED ITS FINALITY AS THE ADDITION MADE IN THE ASSESSMENT WAS NOT CHALLENGED BY THE AP PELLANT IN APPEAL. THUS THE ISSUE THAT THE APPELLANT FURNISHED INACCURATE PARTI CULARS ABOUT OUTSTANDING CREDITORS IN ITS RETURN OF INCOME HAS BEEN CLEARLY ESTABLISHED. SO FAR AS THE CASE LAWS CITED BY THE AR ARE CONCERN ED THEY ARE DISTINGUISHABLE ON FACTS OF THE CASE AS WELL AS SECTIONS INVOLVED. IN THE CASE OF DURGA KAMAL RICE MILL DUPLICATE BOOKS OF ACCOUNT WERE FOUND WHERE O PENING BALANCE SHOWN WAS MORE THAN THE CLOSING BALANCE OF THE PREVIOUS YEAR AND THE EXCESS WAS TREATED AS INCOME. THE COURT HELD THAT WHERE TWO VIEWS ARE POS SIBLE AND WHEN NO CLEAR AND DEFINITE INFERENCE CAN BE DRAWN PENALTY CANNOT BE IMPOSED. IN THE CASE OF THE APPELLANT IT HAS BEEN PROVED BEYOND DOUBT THAT SUN DRY CREDITORS WERE BOGUS. IN THE CASE OF DHARAM CHAND L SHAH THE COURT HELD THA T ADDITIONS MADE IN THE ASSESSMENT WOULD NOT AUTOMATICALLY ENTITLE REVENUE TO IMPOSE PENALTY AND BURDEN IS ON REVENUE TO PROVE CONCEALMENT OF INCOME. IN T HE CASE OF THE APPELLANT PENALTY HAS BEEN IMPOSED NOT ON SOME ESTIMATED ADDI TIONS OR SO BUT ON UNSUBSTANTIATED SUNDRY CREDITORS AFTER ESTABLISHING THEM AS BOGUS AND THE SAID ADDITION WAS ACCEPTED BY THE APPELLANT AS NO APPEAL HAS BEEN FILED AGAINST THE SAID ASSESSMENT. 3 ITA 105/K/2011 MAJUMDER & CO. A.Y.05-06 AGGRIEVED NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT LOWER AUTHORITIES HAVE CONF IRMED THE PENALTY ON THE ADDITION OF UNSUBSTANTIATED OUTSTANDING BALANCES OF SUNDRY CRED ITORS AMOUNTING TO RS.2 12 994/- AS DETAILED OUT IN PARA 3 ABOVE. IT IS AN ADMITTED FA CT THAT ASSESSEE HAS NOT WRITTEN OFF THESE OUTSTANDING BALANCES AND PERTAINS TO EARLIER YEARS AND NOT TO THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS ADDED THES E OUTSTANDING BALANCES U/S. 68 OF THE ACT. WE ARE DOUBTFUL WHETHER ASSESSING OFFICER CA N ADD THIS U/S.68 OF THE ACT OR NOT. HOWEVER THIS BEING A PENALTY APPEAL U/S. 271(1)(C) THE LOWER AUTHORITIES HAVE ERRED IN LEVYING PENALTY ON ADDITION OF UNSUBSTANTIATED OUTS TANDING BALANCES WHICH WERE NEVER DOUBTED IN THE YEAR OF INTRODUCTION OR WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT DURING THE YEAR UNDER CONSIDERATION. REVENUES ONLY CONTENTION THAT THE ASSESSEE HAS NOT CHALLENGED THE ADDITIONS BEARS NO SIGNIFICANCE REA SON BEING ASSESSMENT PROCEEDINGS ARE QUITE DISTINCT FROM PENALTY PROCEEDINGS THOUGH AN ORDER OF ASSESSMENT IS A GOOD EVIDENCE BUT IT IS NOT OF A CONCLUSIVE NATURE. IN T HE PRESENT CASE EVEN ON CONSIDERATION OF EVIDENCE ON ISSUE ON MERITS THE PENALTY IS NOT JUST IFIED. ACCORDINGLY WE ARE OF THE CONSIDERED VIEW THAT LOWER AUTHORITIES HAVE ERRED IN LEVYING PENALTY AND WE DELETE THE SAME. APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. 6. ORDER PRONOUNCED IN OPEN COURT ON 21ST DAY OF MA RCH 2011. SD/- SD/- . . !' (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 21ST DAY OF MARCH 2011 ./ $01 2 JD.(SR.P.S.) 4 ITA 105/K/2011 MAJUMDER & CO. A.Y.05-06 !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT M/S. MAJUMDER & CO. A-9/12(S) KALYANI P.O. KALYANI DIST. NADIA 2 + )* / RESPONDENT ITO WARD-3 NADIA 3 . -$ / THE CIT(A) KOLKATA 4. -$ ( )/ CIT KOLKATA 5 . => +$ / DR KOLKATA BENCHES KOLKATA 4 +/ TRUE COPY !-$?/ BY ORDER 1 /ASSTT. REGISTRAR .