M/s. G.C. Shaw & Co., Kolkata v. ITO, Ward - 37(1),, Kolkata

ITA 1113/KOL/2019 | 2013-2014
Pronouncement Date: 22-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 111323514 RSA 2019
Assessee PAN AACFG8699P
Bench Kolkata
Appeal Number ITA 1113/KOL/2019
Duration Of Justice 6 month(s) 12 day(s)
Appellant M/s. G.C. Shaw & Co., Kolkata
Respondent ITO, Ward - 37(1),, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 22-11-2019
Last Hearing Date 22-10-2019
First Hearing Date 22-10-2019
Assessment Year 2013-2014
Appeal Filed On 10-05-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC) KOLKATA [BEFORE SHRI P.M. JAGTAP VICE PRESIDENT (KZ)] I.T.A. NO. 1113/KOL/2019 ASSESSMENT YEAR: 2013-14 M/S. G.C. SHAW & CO.............................................................................APPELLANT 82 B.B. GANGULY STREET BOWBAZAR COLLEGE STREET KOLKATA 700 012. [PAN: AACFG 8699 P] VS ITO WARD-37(1) KOLKATA................................RESPONDENT 3 GOVERNMENT PLACE (WEST) KOLKATA 700 001. APPEARANCES BY: SHRI B.B. PAYRA ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI JAYANTA KHANRA JCIT SR. DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : OCTOBER 22 2019 DATE OF PRONOUNCING THE ORDER : NOVEMBER 22 2019 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) 25 KOLKATA DATED 28.02.2019 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS. 11 14 648/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF UNACCOUNTED SALES. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF TRADING OF INDIA MADE FOREIGN LIQUOR ON WHOLESALE AND RETAIL BASIS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 23.09.2013 DECLARING A TOTAL INCOME OF RS. 3 54 270/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 5 63 59 868/- ON ACCOUNT OF PURCHASES IN THE PROFIT AND LOSS ACCOUNT WHEREAS THE FIGURE OF ASSESSEES PURCHASES AS REFLECTED IN 26AS DATA BASE WAS RS. 5 74 39 838/-. SINCE THE ASSESSEE COULD NOT OFFER ANY SATISFACTORY EXPLANATION AS REGARDS THE SAID DIFFERENCE OF RS. 2 I.T.A. NO. 1113/KOL/2019 ASSESSMENT YEAR: 2013-14 M/S. G.C. SHAW & CO. 1079 970/- IN PURCHASE THE AO TREATED THE SAME AS UNDISCLOSED PURCHASE AND AFTER ADDING THE GROSS PROFIT @ 3.211% HE WORKED OUT THE UNACCOUNTED SALES OF THE ASSESSEE AT RS. 11 14 648/-. THE AMOUNT OF UNDISCLOSED SALES SO WORKED OUT WAS ADDED BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 18.01.2016. ON APPEAL THE LD. CIT(A) CONFIRMED THE SAID ADDITION MADE BY THE AO. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE WHEN THE UNACCOUNTED PURCHASES ALLEGEDLY MADE BY THE ASSESSEE WERE FOUND BY THE AO AND THE CORRESPONDING UNACCOUNTED SALE MADE OUT OF THE SAID PURCHASES WAS PRESUMED BY HIM THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION ON ACCOUNT OF THE ENTIRE AMOUNT OF SUCH UNACCOUNTED SALE AND THE SAME SHOULD BE RESTRICTED TO GROSS PROFIT EARNED BY THE ASSESSEE ON SUCH UNACCOUNTED SALES. I THEREFORE FIND MERIT IN THE STAND OF THE ASSESSEE THAT WHEN UNACCOUNTED PURCHASES AND UNACCOUNTED SALE ARE THERE AS ALLEGEDLY POINTED OUT BY THE AO WHAT CAN BE CONSIDERED FOR ADDITION IS ONLY THE DIFFERENCE REPRESENTING THE PROFIT EARNED BY THE ASSESSEE ON SUCH UNACCOUNTED TRANSACTIONS. AT THE SAME TIME I ALSO FIND MERIT IN THE CONTENTION OF THE LD. DR THAT SUCH UNACCOUNTED TRANSACTIONS REQUIRE SOME INVESTMENT THAT IS REQUIRED TO BE MADE BY THE ASSESSEE. HAVING CONSIDERED ALL THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING ESPECIALLY THE NATURE OF ASSESSEES BUSINESS I CONSIDER IT FAIR AND PROPER TO ESTIMATE SUCH INVESTMENT TO THE EXTENT OF TWO MONTHS OF UNACCOUNTED PURCHASES. I ACCORDINGLY MODIFY THE IMPUGNED ORDER 3 I.T.A. NO. 1113/KOL/2019 ASSESSMENT YEAR: 2013-14 M/S. G.C. SHAW & CO. OF THE LD. CIT(A) AND RESTRICT THE ADDITION MADE BY THE AO TO RS. 2 14 677/- BEING THE ESTIMATED INVESTMENT THAT IS MADE BY THE ASSESSEE IN UNACCOUNTED TRANSACTIONS AND RS. 34 677/- BEING THE GROSS PROFIT EARNED BY THE ASSESSEE ON SUCH UNACCOUNTED SALES. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER 2019. SD/- (P.M. JAGTAP) VICE PRESIDENT DATED: 22/11/2019 BISWAJIT SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. G.C. SHAW & CO. 82 B.B. GANGULY STRET BOWBAZAR COLLEGE STREET KOLKATA 700 012. 2. ITO WARD-37(1) ASANSOL. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY BY ORDER ASSISTANT REGISTRAR / H.O.O. ITAT KOLKATA