ITO, Ward - 34(3), Kolkata, Kolkata v. Smt. Chandrima Mitra, Kolkata

ITA 1715/KOL/2010 | 2006-2007
Pronouncement Date: 14-02-2012

Appeal Details

RSA Number 171523514 RSA 2010
Assessee PAN AEOPM2010G
Bench Kolkata
Appeal Number ITA 1715/KOL/2010
Duration Of Justice 1 year(s) 5 month(s) 11 day(s)
Appellant ITO, Ward - 34(3), Kolkata, Kolkata
Respondent Smt. Chandrima Mitra, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 14-02-2012
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 14-02-2012
Assessment Year 2006-2007
Appeal Filed On 02-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BEN CH C KOLKATA () BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . '# SHRI C.D.RAO ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 1715/KOL/2010 %& '(/ ASSESSMENT YEAR 2006-07 (*+ / APPELLANT ) I.T.O. WARD-34(3) KOLKATA ( -*+/ RESPONDENT ) SMT.CHANDRIMA MITRA KOLKATA (PAN:AEOPM 2010 G) *+ . / '/ FOR THE APPELLANT: SHRI P.S.DUTTA -*+ . / '/ FOR THE RESPONDENT: SHRI A.K.BANERJEE 0%1 . !# /DATE OF HEARING : 14.02.2012. 2' . !# /DATE OF PRONOUNCEMENT : 14.02.2012. '3 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ) '# PER SHRI C.D.RAO AM THE ABOVE APPEAL IS FILED BY REVENUE AGAINST ORDER DATED 11.06.2010 OF THE LD. CIT(A)-XX KOLKATA PERTAINING TO A.YR. 2006-07. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS RELATING TO DELETION OF ADDITION OF RS.17 78 428/- MADE BY ASSESSING OFFICE R U/S 141(1) OF THE IT ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT WHILE DOING THE SCRUTINY ASSESSMENT AO MADE AN ADDITION OF RS.17 78 428/- ON ACCOUNT OF SU NDRY CREDITORS BY OBSERVING AS UNDER :- 2 2. THE ASSESSEE IS THE PROPRIETOR OF M/S MIIIMAX I NDUSTRIAL CORPORATION. IN THE BALANCE SHEET AS ON 31-03-2006 THE ASSESSEE HAD SH OWN LIABILITY FOR SUNDRY CREDITORS TO BE RS.32 50 331/-. DURING THE COURSE OF ASSESSME NT THE ASSESSEE WAS ASKED TO FURNISH THE LIST OF SUNDRY CREDITORS AND THE ASSESS EE FILED A LIST OF SUNDRY CREDITORS TOGETHER WITH THEIR NAMES & ADDRESSES AND THE AMOUN T. LETTERS / NOTICES U/S. 133(6) / SUMMONS U/S.131 WERE ISSUED TO THESE SUNDRY CREDITO RS AT THE GIVEN ADDRESSES. OUT OF THESE LETTERS NOTICES AND SUMMONS THE FOLLOWING C AME BACK UN-SERVED: 1. G.D.PHOSPHATING & ELECTROPLATING RS.2 90 521/- 2. P.K.ENGINEERING RS.2 49 942/- 3. S.R.ELECTRIC STORES RS.5 11 533/- 4. ASHOK TRADING CO. RS. 95 100/- 5. TASIRA & CO. RS.2 54 640/- 6. SREE DURGA TRADING RS.1 53 796/- 7. MAA KAMAKHYA FURNITURE RS.2 22 950/- RS.17 88 428/- 3.1. ON APPEAL THE LD. CIT(A) HAS DELETED THE SAME BY OBSERVING AS UNDER :- 7- THE APPELLANT HAS CONTINUED TO SHOW THE AMOUNTS AS ADMITTED LIABILITY IN THE BALANCE SHEET. THE AO HAS BROUGHT NO MATERIAL ON RE CORD TO SHOW THAT THERE IS ANY CESSATION OF LIABILITY. ALSO THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE APPELLANT HAS PAID OFF THE LIABILITY FROM HER UNACCOUNTED SOU RCES AND THAT THEY NO LONGER EXIST. THE LIABILITY HAS BEEN APPEARING IN THE BALANCE SHE ET FOR THE PAST SEVERAL YEARS BECAUSE NO PAYMENTS COULD BE MADE DUE TO APPELLANTS POOR F INANCIAL POSITION. SIMPLY BECAUSE NOTICES U/S 133(6) COULD NOT BE SERVED ON T HE CREDITORS IT CANNOT BE PRESUMED THAT THE LIABILITY HAS CEASED TO EXIST. THE BOOKS O F ACCOUNT AND OTHER RELEVANT DETAILS WERE PRODUCED BEFORE THE AO; WHICH IS ACKNOWLEDGED IN THE ASSESSMENT ORDER. IN THIS FACTUAL BACKGROUND THE AO WAS NOT JUSTIFIED IN ADD ING THE OUTSTANDING LIABILITY ON ACCOUNT OF ITS CESSATION WITHOUT ANY BASIS AND W ITHOUT BRINGING ANY SUPPORTING MATERIAL ON RECORD. IF THE AO FELT THAT THE ADMITTE D LIABILITY SHOWN IN THE AUDITED BALANCE SHEET OF THE APPELLANT HAS CEASED TO EXIST THE ONUS WAS ON HIM TO BRING POSITIVE MATERIAL ON RECORD TO ESTABLISH THAT THE L IABILITY HAD ACTUALLY CEASED TO EXIST. I FIND NO JUSTIFICATION FOR THE AO TO PRESUME THAT TH E LIABILITY HAS CEASED TO EXIST. EVEN IF THE NOTICE U/S 133(6) COULD NOT BE SERVED ON THE CREDITORS THE AO CANNOT SIMPLY PRESUME THAT THE LIABILITY APPEARING IN THE BALANCE SHEET HAS CEASED TO EXIST. I FIND SUBSTANCE IN THE ARGUMENT THAT THE PROVISIONS OF SE CTION 41(1) HAVE NO APPLICATION IN THE CASE OF THE APPELLANT. THE LEGAL PRONOUNCEMENTS IN THIS REGARD ALSO SUPPORT THE CASE OF THE APPELLANT. IN VIEW OF THE ABOVE I AM O F THE OPINION THAT THE AO WAS NOT JUSTIFIED IN ADDING THE OUTSTANDING LIABILITY APPEA RING IN THE BALANCE SHEET. THE ADDITION OF RS.17 78 428/- IS DIRECTED TO BE DELETE D. GROUND NO. I IS ALLOWED. 3.2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEF ORE US. 4. AT THE TIME OF HEARING THE LD. DR APPEARING ON BEHALF OF THE REVENUE BY REFERRING TO PAGE NOS.7 TO 12 OF THE PAPER BOOK WHE RE ASSESSEE HAS GIVEN THE DETAILS OF 3 THE SUNDRY CREDITORS FOR THE PERIOD ENDING ON 31.03 .2003 CONTAINING THE OPENING BALANCE OF CREDITORS DURING THE YEAR 2003-04 AND PA YMENTS MADE DURING THE YEAR AND BALANCE OUTSTANDING FOR A.YRS. 2003-04 2004-05 AND 2005-06. HE CONTENDED THAT AO NEVER ADDED THE CREDIT BALANCE APPEARING IN THE NAM E OF SEVEN PARTIES CONSIDERING THE SAME AS BOGUS PURCHASE. HOWEVER THE LD. CIT(A) HAS DELETED THE SAME SIMPLY BY ACCEPTING THE SUBMISSIONS OF ASSESSEE THAT THE LIAB ILITY HAS BEEN APPEARING IN THE BALANCE SHEET FOR THE PAST SEVERAL YEARS WHICH IS N OT A FACT IN THIS CASE. THEREFORE HE REQUESTED TO SET ASIDE THE MATTER TO THE FILE OF AO TO RE-DECIDE THIS ISSUE. 5. ON THE OTHER HAND THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT( A) AND CONTENDED THAT THE ACTION OF LD. CIT(A) IS FAIR AND JUSTIFIABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE HE REQUESTED TO UPHELD THE SAME. 6. WHEN THE BENCH ASKED FOR A SPECIFIC QUERY WHETH ER THERE ARE TRANSACTIONS DURING THE PREVIOUS YEAR DURING THE RELEVANT ASSESS MENT YEAR UNDER CONSIDERATION WITH THE SAID PARTIES THE LD. COUNSEL FOR ASSESSEE HAS FAIRLY CONTENDED THAT THERE ARE TRANSACTIONS AND THE LIABILITY HAS NOT BEEN APPEARI NG IN THE BALANCE SHEET FOR THE PAST SEVERAL YEARS IN SOME OF THE CREDITORS. THEREFORE H E AGREED TO SET ASIDE THE ISSUE TO THE FILE OF AO. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD KEEPING IN VIEW OF THE FACT TH AT THERE ARE TRANSACTIONS DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CON SIDERATION IN RESPECT OF SOME OF THE CREDITORS THE FINDINGS OF THE LD. CIT(A) THAT T HE CREDIT BALANCES ARE APPEARING IN THE BOOKS OF ASSESSEE FOR THE PAST SEVERAL YEARS DO NOT APPEAR TO BE CORRECT. THEREFORE WE SET ASIDE THE MATTER OF THE LD. CIT(A) AND RESTORE THE MATTER TO AO TO DECIDE THE ISSUE AS PER LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 8. IN THE RESULT THE APPEAL OF REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.02.2012. SD/- SD/- MAHAVIR SINGH JUDICIAL MEMBER . .. . ! ! ! !. .. . '# '# '# '# C.D.RAO ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 14.02.2012. R.G.(P.S.) '3 . 4 5'4'6- COPY OF THE ORDER FORWARDED TO: 1. SMT.CHANDRIMA MITRA M/S.MILLIMAX INDUSTRIAL CORPN. 5B M.C.DUTTASARANI KOLKATA-700001. 2 I.T.O. WARD-34(3) KOLKATA 3. THE C.I.T. 4. CIT(A)-XX KOLKATA 5. THE CIT(DR) KOLKATA BENCHES KOLKATA -4 / TRUE COPY '3%0/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES