ITO, Ward - 35(3), Kolkata, Kolkata v. Kewal Kishore Agarwal, Kolkata

ITA 1182/KOL/2011 | 2007-2008
Pronouncement Date: 30-04-2015

Appeal Details

RSA Number 118223514 RSA 2011
Assessee PAN ACXPA5872D
Bench Kolkata
Appeal Number ITA 1182/KOL/2011
Duration Of Justice 3 year(s) 7 month(s) 15 day(s)
Appellant ITO, Ward - 35(3), Kolkata, Kolkata
Respondent Kewal Kishore Agarwal, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 30-04-2015
Assessment Year 2007-2008
Appeal Filed On 14-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [BEFORE SHRI P. K. BANSAL AM & SHRI MAHAVIR SINGH JM ] I.T.A NO. 1182 /KOL/201 1 ASSESSMENT YEAR : 200 7 - 0 8 INCOME - TAX OFFICER WD - 3 5 ( 3 ) KOLKATA. VS. KEWAL KISHORE AGARWAL (PAN: A CXPA5872D ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 1 0 .0 4 .2015 DATE OF PRONOUNCEMENT: 30 . 04 . 2015 FOR THE APPELLANT : S HRI P. K. CHAKRABORTY SR. DR JCIT FOR THE RESPONDENT : SHRI P. K. HIMMATSINGHKA FCA ORDER PER SHRI MAHAVIR SINGH JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF CIT (A) - X X KOLKATA IN APPEAL NO . 2 6 8 / CIT(A) - X X / WARD 35(3)/09 - 10/KOL DATED 19 . 0 7 .201 1 . ASSESSMENT WAS FRAMED BY ITO WARD - 3 5 ( 3 ) KOLKATA U/S. 14 3( 3 ) OF THE INCOME - TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 200 7 - 0 8 VIDE HIS ORDER DATED 3 1 .1 2 .20 0 9 . 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO ON ACCOUNT OF BOGUS CREDITORS AT RS.21 96 246/ - . FOR THIS REVENUE HAS RAISED FOLLOWING THREE GROUNDS: I) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A0 HAS ERRED IN DELETING THE ADDITION OF RS.21 96 246/ - ON ACCOUNT OF BOGUS CREDITORS. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.21 96 246/ - WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS FAILING TO JUDGE THE PARAMETERS AS LAID IN THE SECTION 68. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.21 96 246/ - WITHOUT APPRECIATING THE FACTS STATED IN THE REMAND REPORT. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE HAS MADE PURC HASES ON CREDIT AND THE FOLLOWING TRADE CREDITORS WERE ADDED BY THE AO AS UNEXPLAINED CREDITORS OR BOGUS CREDITORS: - I) A. K. ENTERPRISES - RS. 3 02 224/ - II) JUPITER TRADING CO. - RS. 3 08 880/ - III) TRADE N TRADE - RS.53 54 664/ - IV) MAX WELL TRA DERS - RS. 9 77 678/ - TOTAL : RS. 21 96 246/ - 2 ITA NO. 1182 /K/201 1 KEWAL KISHORE AGARWAL AY 200 7 - 08 THE AO REQUIRED THE ASSESSEE TO EXPLAIN THESE CREDITORS. THE ASSESSEE FILED COMPLETE POSTAL ADDRESS OF THESE PARTIES. THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT BUT NOTICES RETURNED UNSERVED WITH REMAR K NOT KNOWN . THE ASSESSEE HAS RECORDED COMPLETE PURCHASE FROM THESE PARTIES AND MATERIALS PURCHASED WERE SOLD ALSO. THE AO HAS NOT DOUBTED THE PURCHASES OR THE SALES BUT MADE ADDITION OF THESE SUNDRY CREDITORS AS BOGUS CREDITORS AMOUNTING TO RS. 21 96 246/ - . AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND ENTIRE FACTUM OF THE CASE DELETED THE DISALLOWANCE VIDE PARA 10 OF HIS ORDER AS UNDER: I HAVE PERUSED THE ASSESSMENT ORDER AND THE REMAND REPO RT OF THE AO. I HAVE ALSO CONSIDERED THE SUBMISSIONS OF T HE APPELLANT. IT IS AN ADMITTED FACT THA T THE IDENTITY OF THE SUNDRY CREDITORS IS NOT IN DISPUTE. THE APPELLANT PRODUCED THE PURCHASE BILLS ISSUED BY THE CONCERNED PARTIES AT THE ASSESSMENT STAG E. THE PAYMENTS TO THE CREDITORS WERE MADE BY ACCOUNT PAYEE CHEQUES; AND BANK CERTIFICATE OF THE APPELLANT'S BANKER IN THIS REGARD WAS ALSO PRODUCED. THE NECESSARY PARTICULARS OF TRANSACTIONS WERE PLACED BEFORE THE AO BY THE CREDITORS. THESE FACTS ARE NOT DISPUTED BY THE AO IN HIS REMAND REPORT. IT WAS CONTENDED BEFORE ME THAT THE G OODS P URCHASED ARE DULY RECORDED IN THE BOOKS OF ACCOUNT; AND WERE ALSO SUBSEQUENTLY SOLD AND SALE PROCEEDS CREDITED IN THE P&L A/C. SUPPORTING DOCUMENTS ARE PLACED IN THE PAPE R - BOOK (AVAILABLE BEFORE THE AO IN THE REMAND PROCEEDINGS) WHICH REMAINS UNCONTROVERTED BY THE AO. IN FACT THESE DOCUMENTS HAVE INVITED NO ADVERSE COMMENTS FROM THE AO. I ALSO FIND THAT THE CASE OF THE APPELLANT IS DIRECTLY COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF DIAGNOSTICS VS. CIT (2011) 334 ITR L11(CAL) WHEREIN IT WAS HELD THAT IN CASE PURCHASE WAS MADE BY ACCOUNT PAYEE CHEQUES; AND SUBSEQUENTLY THE CONCERNED PARTY DOES NOT APPEAR BEFORE THE AO OR HAS EVEN CLOSED ITS BUS INESS THE TRANSACTION OF PURCHASE CANNOT BE DISCARDED AS N O N - EXISTENT. THESE INGREDIENTS ARE ALSO PRESENT IN THE CASE OF THE APPELLANT. FOR THE APPELLANT HAD MADE PURCHASES THROUGH ACCOUNT PAYEE CHEQUES WHICH IS DULY EVIDENCED BY BANKER'S CERTIFICATE AN D ALSO NOT DISPUTED BY THE AO.I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS BROUGHT SUFFICIENT MATERIAL ON RECORD TO SHOW THAT THE PURCHASES ARE ALLOWABLE AS BUSINESS EXPENDITURE. ON THE OTHER HAND THE AO HAS BROUGHT NO MATERIAL ON RECORD TO SHOW TH AT THE TRANSACTIONS OF PURCHASES ARE NOT GENUINE . IN VIEW OF THE ABOVE AND THE RATIO LAID DOWN BY THE JURISDICTIONAL H IGH COURT THE ADDITION OF RS.21 96 246/ - IS DIRECTED TO BE DELETED. GROUND NO. 2 AND 3 ARE ALLOWED. WE FIND THAT THE AO HAS NOT DOUBTED THE PURCHASES AS WELL AS SALES WHICH ARE RECORDED IN THE BOOKS OF ACCOUNT. EVEN THE AO COULD NOT POINT OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT OR SALE AND PURCHASE VOUCHERS. THESE ARE ONLY TRADE CREDITORS. ONCE PURCHA SES ARE ADMITTED AS GENUINE THE TRADE CREDITORS CANNOT BE ADDED AS BOGUS. IN TERMS OF THE ABOVE WE ARE OF THE VIEW THAT CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUE S APPEAL IS DISMISSED. 3 ITA NO. 1182 /K/201 1 KEWAL KISHORE AGARWAL AY 200 7 - 08 4. THE NEXT ISSUE OF REVENUE S APPEAL IS AGAINST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF COMMISSION PAYMENT OF RS.13 05 022/ - . FOR THIS REVENUE HAS RAISED FOLLOWING GROUND NOS. (IV) TO (VI) : IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.13 05 000/ - ON ACCOUNT OF COMMISSION. V) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.13 05 000/ - ONLY BASED ON ACCURACY OF TRANSACTION I. E. CHEQUE ISSUED AND PAYMENT MADE THEREOF. VI) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.13 05 000/ - WITHOUT APPRECIATING THE FACT THAT WHETHER ANY SERVICE WAS RENDERED BY THE PAYEE TO THE A SSESSEE OR NOT AND DELETING THE SAID ADDITION MERELY BASED ON SACROSANCT OF THE TRANSACTION. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE HAS PAID COMMISSION TO TEN PERSONS THE DETAILS OF WHIC H IS NO. (I) KAPIL DEV AGARWAL RS.1 50 018/ - (II) MANISH AGARWAL RS.1 38 294/ - (III)SEEMA AGARWAL RS.1 50 518/ - (IV) ISHA AGARWAL RS.2 09 996/ - (V) MONA AGARWAL RS.22 215/ - (VI) SUPARAS RAMPURIA RS.1 69 725/ - (VII) SRENIK RAMPURIA RS.1 32 239/ - (VIII) GEMINI INTEGRATED FINANCE LTD. RS.1 30 705/ - (IX) GOKUL CHAND BAGRI RS.1 02 420/ - AND (X) RADHA KISHAN MISHRA RS.99 670/ - . OUT OF THESE COMMISSION OF RS.13 05 022/ - THERE IS OUTSTANDING COMMISSION OF RS.11 99 204/ - AS ON 31.0 3.2007. THE AO ISSUED NOTICES U/S. 131 OF THE ACT TO THESE PARTIES BUT NONE RESPONDED. THE AO ALSO PROVIDED MANY OPPORTUNITIES TO THE ASSESSEE BUT NO EVIDENCE WHATSOEVER WAS PRODUCED EXCEPT THE LETTER EXPLAINING THE COMMISSION VIDE LETTER DATED 20.11.200 9. BUT NO EVIDENCE WAS FILED IN SUPPORT OF THE LETTER. IT SEEMS THAT ALL THE RECIPIENT S OF COMMISSION ARE FAMILY MEMBERS OR RELATIVES WITH NO EDUCATIONAL QUALIFICATIONS. EVEN THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SERVICES RENDERED BY THESE PARTI ES IN LIEU OF RECEIPT OF COMMISSION. IN SUCH CIRCUMSTANCES AND IN THE INTEREST OF JUSTICE WE REMIT THE ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF THIS ISSUE. THE CIT(A) DELETED MERELY ON THE SUBMISSIONS OF THE ASSESSEE OR ON THE BASIS OF EARLIER YEAR S ALLOWANCE OF THE COMMISSION PAYMENT. WE ARE NOT AWARE WHETHER IN THOSE YEARS SERVICES WERE RENDERED BY THESE PARTIES IN LIEU OF RECEIPT OF COMMISSION OR NOT. BUT CERTAINLY IN THIS YEAR THE ASSESSEE IS UNABLE TO PROVE THAT THESE PARTIES HA VE RENDERED ANY SERVICES IN LIEU OF RECEIPT OF COMMISSION. IN TERM OF THE ABOVE WE SET ASIDE THIS 4 ITA NO. 1182 /K/201 1 KEWAL KISHORE AGARWAL AY 200 7 - 08 ISSUE TO THE FILE OF AO. THIS ISSUE OF REVENUE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT APPEAL OF REVENUE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 7 . ORDER IS PRONOUNCED IN THE OPEN COURT . SD/ - SD/ - ( P. K. BANSAL ) (MAHAVIR SINGH) ACCOUNTANT MEMB E R J UDICIAL MEMBER DATED : 30TH APRIL 201 5 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT ITO WARD - 3 5 ( 3 ) KOLKATA . 2 RESPONDENT SHRI KEWAL KISHORE AGARWAL 18 RAJA WOOD MOUNT STREET GROUND FLOOR KOLKATA - 700 001. 3 . THE CIT (A) KOLKATA 4. 5. CIT KOLKATA DR KOLKATA BENCHES KOLKATA / TRUE COPY BY ORDER ASSTT. REGISTRAR .