ITO, Ward - 33(1), Kolkata, Kolkata v. M/s. R. T. ENTERPRISE, Kolkata

ITA 1133/KOL/2010 | 2007-2008
Pronouncement Date: 06-02-2012

Appeal Details

RSA Number 113323514 RSA 2010
Assessee PAN AAGFR8124F
Bench Kolkata
Appeal Number ITA 1133/KOL/2010
Duration Of Justice 1 year(s) 8 month(s) 2 day(s)
Appellant ITO, Ward - 33(1), Kolkata, Kolkata
Respondent M/s. R. T. ENTERPRISE, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 06-02-2012
Appeal Filed By Department
Bench Allotted B
Tribunal Order Date 06-02-2012
Date Of Final Hearing 30-03-2011
Next Hearing Date 30-03-2011
Assessment Year 2007-2008
Appeal Filed On 04-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BEN CH B KOLKATA () BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . #$ SHRI C.D.RAO ACCOUNTANT MEMBER %&' %&' %&' %&' ( ( ( ( / ITA NO . 1133/KOL/2010 )* + / ASSESSMENT YEAR : 2007-08 (./ / APPELLANT ) I.T.O. WARD-33(1) KOLKATA. - ) - - VERSUS - . (12.// RESPONDENT ) M/S.R.T.ENTERPRISE KOLKATA (PAN: AAGFR 8124 F ) 3 &' 3 &' 3 &' 3 &' /C.O. NO.81/KOL/2010 ( ( ( ( / A/O ITA NO.1133/KOL/2010 )* + / ASSESSMENT YEAR : 2007-08 (./ / APPELLANT ) M/S.R.T.ENTERPRISE KOLKATA (PAN: AAGFR 8124 F) - ) - - VERSUS - . (12.// RESPONDENT ) I.T.O. WARD-33(1) KOLKATA. ./ 4 5 #/ FOR THE DEPARTMENT: SHRI AJOY KR.SINGH 12./ 4 5 #/ FOR THE ASSESSEE : SHRI R.K.GOEL 6)7 4 '$ /DATE OF HEARING : 06.02.2012. 8+ 4 '$ /DATE OF PRONOUNCEMENT : 06.02.2012. #9 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ) #$ PER SHRI C.D.RAO AM THE ABOVE TWO APPEALS ONE FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE AGAINST ORDERS DATED 26.03.201 0 OF THE CIT(A)-XX KOLKATA PERTAINING TO A.YR. 2007-08. 2 2. IN THIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWI NG GROUND :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD.C.I.T.(APPEAL) HAS ERRED IN DELETING THE ADDITION OF RS.1 46 44 37 0/- MADE UNDER SECTION 41(1) OF THE I.T.ACT 1961 ON THE BASIS OF FRESH AND ADDI TIONAL DOCUMENTS/MATERIAL IN VIOLATION OF RULE 46A OF THE I.T.RULES 1962. 3. IN CROSS OBJECTION THE ASSESSEE HAS TAKEN THE FO LLOWING GROUND : 1. FOR THAT THE LD. CIT(A) CONFIRM THE I.T.O.S OR DER REGARDING DISALLOWANCE OF EXPENSES RS.265 864/- OBSERVING THAT NO BUSINESS ACTIVITY HAS BEEN CARRIED OUT DURING THE YEAR WHICH IS UNJUSTIFIED AND AGAINS T THE LAW. 4. AT THE TIME OF HEARING REGARDING THE REVENUES APPEAL THE LD. DR APPEARING ON BEHALF OF THE REVENUE BY POINTING OUT PARA 4.2. OF THE IMPUGNED ORDER CONTENDED THAT THE MATERIAL BASED ON WHICH THE LD..CIT(A) HAS DELE TED THE ADDITION IS NOT EITHER BEFORE ASSESSING OFFICER NOR THE LD. CIT(A) HAS OBTAINED T HE REMAND REPORT FROM AO WHILE DECIDING THIS ISSUE. THEREFORE HE REQUESTED TO SET ASIDE THIS MATTER TO THE FILE OF AO SINCE ASSESSEE HAS NOT PRODUCED ANY MATERIAL AT THE TIME OF ASSESSMENT. 5. ON THE OTHER HAND THE LD. AR APPEARING ON BEHA LF OF ASSESSEE SUBMITTED THAT COPIES OF THE BALANCE SHEET BASED ON WHICH THE LD. CIT(A) HAS DELETED THE ADDITIONS ARE FURNISHED BEFORE THE AO AT THE TIME OF PASSING THE ASSESSMENT ORDER. IN SUPPORT OF THESE SUBMISSIONS HE FILED INCOME TAX ACKNOWLEDGEME NT FOR A.YRS. 2008-09 AND 2009-10 AT PAGES 3 AND 4 OF THE PAPER BOOK WHICH WE RE FILED ON 1 ST OCTOBER 2008 AND 30 TH SEPTEMBER 2009 I.E. PRIOR TO COMPLETION OF ASSESS MENT DATED 22.12.2009. THEREFORE HE REQUESTED TO UPHELD THE ACTION OF LD. CIT(A). 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF MATERIALS AVAILABLE ON RECORD IT IS OBSERVED THAT THE AO HIM SELF HAS ANALYSED THE BALANCE SHEET DETAILS IN THE ASSESSMENT ORDER WHICH ARE AS UNDER :- IT IS FURTHER OBSERVED THAT THE ASSESSEE HAS FOLLO WING CREDITS IN ITS BALANCE SHEET DETAILS OF WHICH WERE NEVER FURNISHED S.CREDITORS ADVANCE FROM LOAN LIABILITIES FOR CUSTOMERS EXPENSES A.Y.2005-06 98 50 484.47 41 25 325.78 1 12 000 3 13 195.96 A.Y.2006-07 1 00 70 758.39 41 25 325.78 1 12 000 4 41 811.36 A.Y.2007-08 99 64 798.39 41 25 760.72 1 12 000 4 41 811.36 3 6.1. IT IS FURTHER OBSERVED THAT THE LD. CIT(A) HAS SIMPLY ANALYSED THE ABOVE BALANCE SHEET IN PARA 4.2. WHICH IS AS UNDER :- 4.2. THE LD. A.R. SUBMITTED THAT PAYMENTS WERE MAD E IN THE SUBSEQUENT YEARS AGAINST THE LIABILITIES APPEARING IN THE BALANCE SH EET WHICH WAS APPARENT FROM THE BALANCE SHEETS OF THE SUBSEQUENT YEARS. COPIES OF B ALANCE SHEET AS ON 31-03-2008 AND THAT AS ON 31-03-2009 WERE FILED. THE OUTSTAND ING SUNDRY CREDITORS AS ON 31-03- 2007 WAS RS.99 64 798.39; TOTAL PAYMENTS OF RS.29 6 1 314.85 WERE MADE IN THE FY 2007-08 AND THE OUTSTANDING SUNDRY CREDITORS AS O N 31-03-2008 WERE REDUCED TO RS.70 03 483.54. FURTHER PAYMENTS OF RS.13 29 142/- WERE MADE IN THE FY 2008-09 AND THE OUTSTANDING SUNDRY CREDITORS AS ON 31-03-2 009 WERE REDUCED TO RS.56 74 341.54. SIMILARLY THE ADVANCE FROM CUSTOM ERS AS ON 31-03[2007 STOOD AT RS.41 25 325.78; PAYMENTS OF RS.3 34 325.78 WERE MA DE IN THE FY 2007-08 AND THE LIABILITY WAS REDUCED TO RS.37 91 000/-. 6.2. FROM THE ABOVE AND INCOME TAX ACKNOWLEDGEMENT WHICH WERE PLACED AT PAGES 3 AND 4 OF THE PAPER BOOK FOR A.YRS. 2008-09 AND 20 09-2010 WE ARE OF THE VIEW THAT THE ASSESSING OFFICER IS HAVING ALL THE MATERIALS B EFORE COMPLETION OF THE ASSESSMENT BUT NOT PROPERLY ANALYSED THE FACTS BEFORE APPLYING THE PROVISION OF SECTION 41(1) OF THE IT ACT. HOWEVER THE LD. CIT(A) BASED ON THE SA ME MATERIAL HAS DELETED THE DISALLOWANCE MADE BY AO U/S 41(1) OF THE IT ACT AND HE FURTHER RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF VISNAG AR TALUKA SAHAKARI MANDLI LTD VS CIT 242 ITR 627 (GUJ) THEREFORE WE FIND NO INFIRMIT Y IN THE ORDERS OF LD. CIT(A) TO BE INTERFERED WITH. HENCE WE CONFIRM THE SAME AND D ISMISS THE APPEAL OF REVENUE. 7. IN THE CROSS OBJECTION ASSESSEE HAS RAISED AN IS SUE WHICH RELATES TO DISALLOWANCE OF EXPENDITURE TO THE EXTENT OF RS.2 6 5 864/-. 8. THE RELEVANT OBSERVATIONS OF THE ASSESSING OFFIC ER ARE AS UNDER :- IT IS OBSERVED FROM THE PROFIT & LOSS ACCOUNT OF T HE ASSESSEE FIRM THAT THE ASSESSEE HAD NO MADE A SINGLE SALE OR PURCHASED DURING THE Y EAR WHICH IMPLIES THAT THE ASSESSEE HAD NO BUSINESS DURING THE YEAR. HOWEVER THE ASSESSEE AHD DEBITED RS.2 65 864/- INCLUDING RS.1 56 000/- ON ACCOUNT O F PARTNER SALARY THEREBY INCURRING A LOSS OF RS.2 65 864/-. SINCE THE ASSESS EE DID NOT HAVE ANY BUSINESS DURING THE CONCERNED PREVIOUS YEAR SUCH EXPENSES DEBITED BY THE ASSESSEE CANNOT BE CONSIDERED AS EXPENSES FOR THE PURPOSE OF THE BUSIN ESS OF THE ASSESSEE. HENCE I DISALLOW THE EXPENSE OF RS.2 65 864/- DEBITED BY TH E ASSESSEE. 4 8.1. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE SAM E BY OBSERVING THAT NO BUSINESS ACTIVITY HAS BEEN CARRIED OUT DURING THE YEAR. 8.2. AGGRIEVED BY THIS THE ASSESSEE HAS RAISED THE CROSS OBJECTION BEFORE US. 9. AT THE TIME OF HEARING BEFORE US THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE SUBMITTED THAT THE REVENUE HAS NOT DISPUTED THE INC URRING OF EXPENDITURE FIRST ON ACCOUNT OF PARTNERS SALARY TO THE EXTENT OF RS.1 5 6 000/- AND ALSO THE DETAILS OF THE EXPENDITURE HAS NOT BEEN DISPUTED. THEREFORE HE CON TENDED THAT THE REVENUE IS NOT JUSTIFIED TO DISALLOW SIMPLY BY BASING ON THE FACT THAT THE ASSESSEE HAS NOT CONDUCTED ANY BUSINESS DURING THE YEAR. 10. ON THE OTHER HAND THE LD. DR APPEARING ON BEHA LF OF THE REVENUE HAS RELIED ON ORDERS OF THE REVENUE AUTHORITIES. 11. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF MATERIALS AVAILABLE ON RECORD SINCE THE EXPENDITURE DISALLOW ED IS RELATING TO THE PARTNERS SALARY THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD WHETHER THIS PARTNERS SALARY IS IN ACCORDANCE WITH THE PROVISION OF PARTN ERSHIP DEED AND IN ACCORDANCE WITH THE PROVISION OF I.T.ACT. THE DETAILS OF THE OTHER EXPENDITURE HAS NOT BEEN NARRATED BY THE AO. THEREFORE IN THE INTEREST OF JUSTICE WE CON SIDER IT FIT TO SET ASIDE THIS ISSUE TO THE FILE OF AO TO DECIDE THE SAME AFRESH AS PER LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 12. IN THE RESULT THE REVENUES APPEAL IS DISMISSED AND ASSESSEES CROSS OBJECTION IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06.02.2012. SD/- SD/- MAHAVIR SINGH JUDICIAL MEMBER . .. .!' !'!' !'. .. . #$ #$ #$ #$ C.D.RAO ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 06.02.2012. R.G.(.P.S.) 5 #9 4 1& :#&+;- COPY OF THE ORDER FORWARDED TO: 1. M/S.R.T.ENTERPRISE 6C MIDDLETON STREET KOLJATA-7 00071. 2 THE I.T.O. WARD-33(1) KOLKATA. 3. THE CIT 4. THE CIT(A)-XX KOLKATA. 5. DR KOLKATA BENCHES KOLKATA 2& 1/ TRUE COPY #9)6/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES