ITO, Ward - 53(2), Kolkata, Kolkata v. Shri Tapash Kr. Saha, South 24 Parganas

ITA 1765/KOL/2010 | 2006-2007
Pronouncement Date: 25-11-2011 | Result: Dismissed

Appeal Details

RSA Number 176523514 RSA 2010
Assessee PAN AKLPS4378L
Bench Kolkata
Appeal Number ITA 1765/KOL/2010
Duration Of Justice 1 year(s) 2 month(s) 11 day(s)
Appellant ITO, Ward - 53(2), Kolkata, Kolkata
Respondent Shri Tapash Kr. Saha, South 24 Parganas
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-11-2011
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year 2006-2007
Appeal Filed On 13-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . . . ! !! ! . ] [BEFORE SHRI N. VIJAYA KUMARAN J.M. & SHRI C. D . RAO A.M.] $ $ $ $ / I.T.A NO.1765/KOL/2010 / // / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER/WARD-53(2) -VS.- TAPASH KUMAR SAHA KOLKATA. KOLKATA [PAN : AKLPS 4 378 L] [ + + + + /APPELLANT ] ]] ] [ -.+ -.+ -.+ -.+/ // / RESPONDENT ] ]] ] + + + + / FOR THE APPELLANT : SHRI S. K. ROY -.+ -.+ -.+ -.+ / FOR THE RESPONDENT : SHRI S. BANDYOPADHYAY 0 ! 0 ! 0 ! 0 ! /DATE OF HEARING : 17. 11. 2011 0 ! 0 ! 0 ! 0 ! /DATE OF PRONOUNCEMENT : 25.11.2011 [ /ORDER . . . . PER N. VIJAYA KUMARAN J. M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-XXXIII KOLKATA DATED 18.06.2010 FOR ASSESSMENT YEAR 2006- 07. 2. THE FIRST ISSUE IS ON THE DELETION OF ADDITION O F RS.5.00 LAKHS UNDER THE HEAD UNEXPLAINED INVESTMENT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. ASSESSING OFFICER RELIED TOTALLY ON THE DECLARATION MADE BY THE ASSESSEE DURING SURVEY PROCEEDINGS. THE SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT. WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 23.09.2005. THE IMPOUNDED DOCUMENTS WITH IDENTIFICATION MARK SP-4 WHICH RELATES TO PURCHASE OF LAND MEASURING 5 KATTAH AT RS.1.00 LAKH PER KATTAH. THIS WAS [ ITA NO.1765/KOL/2010 2 TOTALLY RELIED BY THE ASSESSING OFFICER. HOWEVER A SSESSEE CONTENDED THROUGHOUT THE PROCEEDINGS THAT THE ASSESSEE BROUGHT TO THE KNOWLEDGE OF THE A SSESSING OFFICER THAT HE RECEIVED BACK SOME OF RS.3.50 LAKHS IN CASH AS THE DEED DID NOT EMPOWER. THE VENDOR DEDUCTED A SUM OF RS.25 000/- AS MISCELLANEOUS COST WHICH WAS MUTUALLY AGREED BETWEE N THE PARTIES. THUS A SUM OF RS.1 25 000/- WAS SHOWN BY THE ASSESSEE IN HIS BALANCE SHEET AS A DVANCE FOR LAND [RS.5 00 000 (-) RS.3 75 000]. FOR WANT OF DETAILS FOR RS.25 000/- SHOWN AS MISCEL LANEOUS EXPENSES ASSESSING OFFICER ADDED THE ENTIRE RS.5.00 LAKHS AS UNEXPLAINED. THE LD. CIT(A) CALLED FOR ASSESSMENT RECORDS. THE CONFIRMATION FROM SK. ABID HUSSAIN REGARDING REFUND OF MONEY AS ON 31.03.2006 WERE AVAILABLE BEFORE THE ASSESSING OFFICER. THE RELIANCE OF THE A SSESSING OFFICER ONLY ON THE STATEMENT RECORDED DURING THE COURSE OF SURVEY WITHOUT CONSIDERING THE EXPLANATION IN THE FORM OF EVIDENCE WHICH THE ASSESSING OFFICER FAILED TO CONSIDER. THE LD. CIT(A ) JUSTIFIED IN DELETING THE ADDITION AS THE ASSESSEE SATISFACTORILY EXPLAINED THIS WITH ALL NEC ESSARY DETAILS INCLUDING CONFIRMATION LETTERS. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE DECL INE TO INTERFERE WITH THE ORDER OF LD. CIT(A) ON THIS ISSUE AS IT IS IN ACCORDANCE WITH LA W. HENCE GROUND NO.1 IS DECIDED AGAINST THE REVENUE. 5. COMING TO GROUND NO.2 THIS DELETION OF ADDITION OF RS.17 25 919/- UNDER THE HEAD UNEXPLAINED CASH CREDIT FROM SUNDRY DEBTORS. ASSESS ING OFFICER TREATED THE WHOLE SUM OF RS.20 25 919/- IN THE PROPRIETARY BUSINESS M/S. MA HANAM AS UNEXPLAINED CASH CREDIT. ON APPEAL TO THE LD. CIT(A) IT WAS CONTENDED AS UNDER :- THE APPELLANT DREW YOUR KIND ATTENTION IN EARLIER SUBMISSION FILED BEFORE YOUR KIND HONOUR TO THE FACT THAT THE ACCOUNTANT OF YOUR APPE LLANT HAD LOST THE BOOKS OF ACCOUNTS IN TRANSIT WHILE BRINGING THE SAME TO THE I.T. CONSULTANT OFFICE. THE COPY OF F.L.R VIDE G.D.E. NO.696/09 WHICH WAS FILED WIT H THE OFFICER IN-CHARGE BARASAT RAILWAY STATION DATED 21-07-2009 WAS ALSO SUBMITTED TO YOU FOR YOUR KIND PERUSAL AND RECORD. DUE TO THE ABOVE REASONS THE RECONCILI ATION WITH THE SUNDRY CREDITORS COULD NOT BE PREPARED AT THIS STAGE. HOWEVER AS THE FACTS STAND THE CORRESPONDING PUR CHASES OUT OF THE SAID SUNDRY CREDITORS WERE DULY REFLECTED BOTH IN SALES INCOME AND CLOSING STOCK ON 31-03-2006 OF THE RELEVANT ASSESSMENT YEAR (PREVIOUS YEAR ENDI NG 31-03-2006). THE LD. A.0. DID NOT QUESTION THE PURCHASES SALES AND THE CLOSI NG STOCK AMOUNTS IN THE ASSESSMENT ORDER. IN THE ASSESSMENT ORDER THE LD A.O COULD NOT PIN POINT ANY SPECIFIC AMOUNT OF UNEXPLAINED SUNDRY CREDITORS. HE MERELY ADDED THE AMOUNT OF SUNDRY CREDITORS APPEARING IN THE BALANCE SHEET. IT IS SETTLED FACT THAT PURCHASES WERE MADE FROM SUNDRY CREDITORS AND THE CORRESPONDI NG SALES DISCLOSED IN THE PROFIT & LOSS ACCOUNT WERE OUT OF SAID PURCHASES. M ERELY ADDING BACK TOTAL SUNDRY [ ITA NO.1765/KOL/2010 3 CREDITORS APPEARING IN THE BALANCE SHEET WAS WHOLLY UNJUSTIFIED AND EXTREME HARSH AND WAS DISTORTING THE BASIC CONCEPT OF REAL INCOME CHARGEABLE TO TAX. YOUR APPELLANT DURING THE YEAR DISCLOSED A NET LO SS OF RS.13 291/- OUT OF TOTAL TURNOVER OF RS..14 05 432/- AND THE CLOSING STOCK A T THE END OF THE YEAR I.E ON 31- 03-2006 WERE DISCLOSED FOR RS.25 68 498/-. THE APPE LLANT WAS ENGAGED IN RETAIL TRADE OF GARMENTS AND ALLIED GOODS IN SEMI URBAN AR EA OF DIST 24 PARGANAS (SOUTH) COMING UNDER THE PURVIEW OF SECTION 44AF OF THE INC OME TAX ACT WHEREIN NET PROFIT RATIO @ 5% HAS BEEN STATUTORILY PROVIDED. THE ABOVE ADDITION OF RS.20 25 919/- MADE BY THE L D. A.O RESULTED NET PROFIT OF RS.20 12 628/- (RS.20 25 919/- MINUS NET LOSS DISCL OSED RS.13 291/- = RS.20 12 628/-) AS AGAINST THE TOTAL RETAIL SALES T URNOVER OF RS.14 05 432/-. THE NET PROFIT RATIO THAT COMES TO 143.20% WHICH IS MORE TH AN THE SALES TURNOVER. THIS IS ABSOLUTELY ABSURD AND CONTRARY TO NATURAL PRINCIPLE S OF JUSTICE. THEREFORE THE ADDITION MADE BY THE LD. A.O REFLEC TED ABNORMAL NET PROFIT RATIO (I.E. 143.20%) WHICH IS IMPRACTICABLE IN REAL LIFE BUSINESS AND CAN NEVER BE ACHIEVABLE BY ANY BUSINESSMAN. IN VIEW OF THE ABOVE CIRCUMSTANCES YOUR KIND HONO UR IS EARNESTLY REQUESTED TO INVOKE THE PROVISION OF SECTION 145 OF THE INCOME T AX ACT AND TO ESTIMATE THE NET PROFIT @ 5% OF THE RETAIL SALE TURNOVER AS APPLICAB LE U/S. 44AF OF THE INCOME TAX ACT. AND TO DELETE THE ADDITION OF RS.20 25 919/-. IT WAS FOUND THAT ASSESSEE HAD GIVEN DETAILS ABOUT LIST OF PURCHASES GIVING NAME AND ADDRESS OF SUPPLIERS AMOUNT BILL NUMBER AND DATE. FURTHER A SSESSEE SPECIFICALLY MENTIONED TO THE ASSESSING OFFICER THAT THE PURCHASE REGISTER HAD BEEN IMPOUND ED AFTER SURVEY AND WAS IN THE POSSESSION OF ASSESSING OFFICER HIMSELF AND THE SUNDRY CREDITORS RELATING TO PURCHASES WERE AVAILABLE IN THE REGISTER. IN ADDITION HAND WRITTEN LIST OF SUPPLIE R WERE ALSO FILED. HENCE IT IS NOT JUSTIFIED TO SH OW THAT ASSESSEE HAS NOT GIVEN THE DETAILS. ASSESSING OFFICER FAILED TO VERIFY THE PURCHASES THAT SHOULD BE SOURCE OF SUNDRY CREDITORS. UNDER THE ABOVE OBSE RVATIONS LD. CIT(A) FOUND THAT IT WOULD BE JUSTIFIED TO RETAIN THE ADDITION TO THE TUNE OF RS. 3.00 LAKHS AND RESULTING IN THE DELETION OF REMAINING SUM OF RS.17 25 919/-. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT DURING THE COURSE OF SURVEY DEPOSITION WAS MADE. ASSESSING OFFICER RELIED ON TH AT DEPOSITION AND THE IMPOUNDED BOOKS DURING THE COURSE OF SURVEY. ASSESSING OFFICER HAS SPECIFI CALLY STATED THAT THE DETAILS WERE AVAILABLE IN THE REGISTER AND WAS STILL IN THE CUSTODY OF THE ASSESS ING OFFICER. ASSESSING OFFICER WOULD HAVE VERIFIED THE REGISTER FOR THE PURPOSE OF TAKING THE DETAILS. FURTHER HAND WRITTEN DETAILS WERE ALSO SUBMITTED BY THE ASSESSEE. IT SEEMS THAT THAT THERE WERE TWO SURVEY ONE ON 23.09.2005 AND OTHER ON 28.09.2006. IT IS NOT DISPUTED THAT THE BOOKS OF ACCOUNTS WERE IMPOUNDED BY THE SURVEY PARTY. [ ITA NO.1765/KOL/2010 4 THAT BEING THE CASE THAT THE DETAILS WERE AVAILABLE WITH THE ASSESSING OFFICER AND ONLY DISCREPANCY IF ANY FOUND THE ASSESSEE IS IN THE BURDEN OF GIVING OF DISCREPANCY. WHEN THE FULL DETAILS WERE AVAILABLE THE BOOKS WERE IN THE CUSTO DY OF THE DEPARTMENT ASSESSEE WILL BE CLEARLY HANDICAPPED UNLESS THE COPIES OF BOOKS OF ACCOUNTS AND OTHER DETAILS MADE AVAILABLE TO THE ASSESSEE. HENCE WE AGREE WITH THE PARTIAL RELIEF G IVEN BY THE LD. CIT(A) ON THIS ISSUE. THE GROUND NO.2 IS ALSO DECIDED AGAINST THE REVENUE. 7. COMING TO ANOTHER DELETION OF ADDITION OF RS.2 7 5 000/- UNDER THE HEAD UNEXPLAINED INVESTMENT IN SHOP. THIS WAS OUT OF 133A CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 28.01.2006. THE ASSESSEE STATED DURING SURVEY BY DE POSITION THAT TOTAL INVESTMENT IS RS.8.00 LAKHS MADE FOR RENOVATION OF THE SHOP (MAHANAM). HOWEVER RS.1.00 LAKH HAS BEEN SHOWN AS INVESTMENT BY THE ASSESSEE AND RS.1.25 LAKHS BY TWO OF HIS BROTHERS. ASSESSING OFFICER WAS OF THE VIEW TAKING ALL THREE TOGETHER AT LEAST INVESTMENT OF RS.4 75 000/- FOR RENOVATION OF MAHANAM. HE THEREFORE ADDED RS.1.00 LAKH AS UNEXPLAINED IN VESTMENT UNDER SECTION 68 OF THE INCOME TAX ACT. ON APPEAL TO THE LD. CIT(A) IT IS EXPLAINED B Y THE ASSESSEE AS UNDER :- THE LD. A.O RELYING ON STATEMENT OF YOUR APPELLAN T DURING THE COURSE OF SURVEY ADDED BACK A SUM OF RS. 2 75 000/- AS UNEXPLAINED INVESTMENT. DURING THE COURSE OF SURVEY IT WAS ALLEGED TO HAVE BEEN STATED BY YOUR APPELLANT THAT A SUM OF RS.8 00 000/- HAVE BEEN INCURRED BY THE APPELLANT A ND HIS BROTHER WHO CARRY OUT BUSINESS FORM THE SAME PREMISES. THE A.O RELIED ON THE ACCOUNTS OF THE OTHER TWO BROTHERS OF YOUR APPELLANT WHO ARE ALLEGED TO H AVE INCURRED AN EXPENDITURE OF RS.2 00 000/- @ RS.1 00 000/- LACKS EACH. THE A.O C LAIMED THAT YOUR APPELLANT HAS SHOWN AN EXPENDITURE OF RS.1 25 000/- IN HIS RE TURN. OUT OF THE REMAINING BALANCE OF RS.4 25 000/- (RS.8 00 000/- MINUS RS.3 75 000/-) THE LD A.O ADDED BACK A SUM OF RS.275 LAKHS AS UNEXPLAINED INVESTMEN T ON ESTIMATE. THIS ESTIMATION OF UNEXPLAINED EXPENDITURE CLEARLY INDIC ATES THAT THE LD. A.0. DID NOT MAKE ANY ENQUIRY REGARDING THE INVESTMENT IN THE SH OP. IN FACT NO EXPENDITURE WHATSOEVER HAD BEEN MADE BY YOUR APPELLANT ON ACCOU NT OF RENOVATION OF THE SHOP. THE SURVEY TEAM OF THE DEPARTMENT COULD NOT U NEARTH ANY CONCEALMENT AS REGARDS STOCK/SALE/PURCHASES ETC. (AS IS EVIDENT FO RM THE ASSESSMENT ORDER). ACCORDINGLY THE SURVEY TEAM PUT PRESSURE ON THE AP PELLANT TO DISCLOSE HUGE INCOME. AFTER THE SURVEY WAS OVER THE APPELLANT WA S NOT IN CORRECT MENTAL STATE OF AFFAIR. IN ORDER TO BUY PEACE WITH THE DEPARTMENT THE APPELLANT MIGHT HAVE GIVEN SUCH DECLARATION UNDER PRESSURE AND DURESS. IT IS A LSO BROUGHT TO YOUR NOTICE THAT NO COPY OF THE DECLARATION WAS EVEN SUPPLIED TO THE APPELLANT IN SPITE OF HIS REPEATED VERBAL REQUEST. IT IS SETTLED LAW THAT ADM ISSION IN STATEMENT DURING SURVEY IS A RELEVANT PIECE OF EVIDENCE ONLY BUT NOT A CONC LUSIVE PROOF OF FACT. THE LD. A.O. HAS FAILED TO BRING ON RECORD ANY EVIDENCE WH ATSOEVER THAT YOUR APPELLANT HAD MADE EXPENDITURE IN RENOVATION OF THE SHOP BUIL DING. YOUR APPELLANT WOULD [ ITA NO.1765/KOL/2010 5 LIKE TO PUT ON RECORD THE DECISION IN THE CASE OF C IT VS. ASOKE KR SONI (PLACE 2007) 291-ITR 172 (RAJ) WHERE IT HAS BEEN HELD THAT ADMISSION IN STATEMENT MADE DURING SEARCH NOT CONCLUSIVE PROOF OF FACT. BASED ON THE ABOVE SUBMISSION LD. CIT(A) FOUND THA T THE BROTHERS CASE HE HAS DELETED. THEREFORE HE DELETED BASED ON THE ABOVE EXPLANATIO N OF THE ASSESSEE. HOWEVER LD. DEPARTMENTAL REPRESENTATIVE CLARIFIED THAT IN BROTHERS CASE THE DEPARTMENT COULD NOT APPEAL IN VIEW OF TAX EFFECT. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE EXPLANATION FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) IT IS MADE CLEAR THAT THE SURVEY TEAM O F THE DEPARTMENT COULD NOT UNEARTH ANY CONCEALMENT OF STOCK SALE & PURCHASE OUT OF THE PR ESSURE TO DISCLOSE HUGE INCOME AND AFTER THE SURVEY ASSESSEE WAS NOT IN FIT METAL STATE OF AFFAI R AND ADMISSION HAS TO BE MADE BUT THAT EVIDENCE IS NOT A CONCLUSIVE PROOF. WHEN THE EXPENDITURE COU LD NOT BE BROUGHT ON RECORD BY ANY EVIDENCE AND THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. ASOKE KR. SONI [2007] 291 ITR 172 (RAJ.) IT IS NOT A CONCLUSIVE PROOF OF FACT TAKING OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND CONSIDERING THE INVESTMENT AS PROPORTI ONATE IN THE HANDS OF THE ASSESSEE AND THE ADDITION HAS BEEN RIGHTLY DELETED AS THERE IS NO MA TERIAL EVEN AFTER SURVEY TO FIX THE ASSESSEE WITH THAT OF THE INVESTMENT FOR RENOVATION. HENCE IT CA N NOT BE TAKEN AS UNEXPLAINED INVESTMENT AS THE ASSESSEES EXPLANATION IS FOUND SATISFACTORY. THE O RDER OF THE ASSESSING OFFICER IS QUITE JUSTIFIED AND IN ACCORDANCE WITH LAW. THE GROUND NO.3 IS ALSO DECIDED AGAINST THE REVENUE. 9. COMING TO LAST GROUND THE ACTUAL AMOUNT IS RS.2 30 000/- BY WRONGLY TYPED AS RS.5.00 LAKHS UNDER THE HEAD CASH CREDIT FROM LOAN CREDITOR S. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. ASSESSING OFFICER TREATED THE ENTIRE AMOUNT OF RS.7.00 LAKHS AS UNEXPLAINED CASH CREDIT. THE ASSESSEE CLAIMED THAT HE HAD RECEIVED LOANS AGGREGATING TO RS.7.00 LAKHS FROM 7 PERSONS EACH HAVING A LOAN OF RS.1.00 LAKH. THE LOAN CONFIRMATIONS WERE FILED IN RESPECT OF IN RESPECT OF LOAN CREDITORS. OUT OF THE 7 PERSONS PAN WAS AVAILABLE WITH ONLY 3 I.E. SHRI RATAN CHANDRA DAS UTTAM KUMAR DUTTA & PRADIP KAR. 131 SUMMONS ISSUED TO 7 LOAN CREDITORS WHICH WAS RETURNED AS NOT FOUND OR NO SUCH PREMI SES. 3 LOAN CREDITORS WERE PRODUCED FOR EXAMINATION BY THE ASSESSEE BEFORE THE ASSESSING OF FICER. ASSESSING OFFICER NOT SATISFIED AND THE [ ITA NO.1765/KOL/2010 6 SOURCE IS DOUBTFUL ULTIMATELY HE ADDED THIS AMOUN T AS INCOME OF THE ASSESSEE. ON APPEAL TO THE LD. CIT(A) LD. CIT(A) FOUND THAT SUMMONS WERE NOT SENT BY POST BUT WAS TRIED TO BE SURVEYED BY THE DEPARTMENTAL PERSONNEL. THERE IS DISCREPANCY IN THE NOTING ALSO. THE NOTING OF THE DEPARTMENTAL PERSONNEL DATED 24.12.2008 WHEREAS AS PER ORDER SHEET ENTRY DATED 23.12.2008. FURTHER DEPOSITION HAS BEEN RECORDED ON 26.12.2008 AND THE ASSESSMENT ORDER PASSED ON 29.12.2008. IT WILL GO TO SHOW THAT THERE IS NO SUF FICIENT OPPORTUNITY OF REBUTTAL. UNDER THE ABOVE CIRCUMSTANCES LD. CIT(A) RESTRICTED THE ADDITION T O THOSE 4 LOAN CREDITORS. HE THEREFORE RESTRICTED RELIEF TO THE EXTENT OF RS.2 30 000/-. IT IS A REAS ONED ORDER AS DECIDED BY THE LD. CIT(A) WHICH REQUIRES NO INTERFERENCE. THIS GROUND IS ALSO DECID ED AGAINST THE REVENUE. 11. IN THE RESULT REVENUE APPEAL IS DISMISSED. 3 3 3 3 ! ! ! ! ORDER PRONOUNCED IN THE COURT ON 25.11.2011. SD/- SD/- [ . . ! !! ! . ] [ . . . . ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 25TH NOVEMBER 2011. 0 - 7/ COPY OF THE ORDER FORWARDED TO: 1. + /APPELLANT : INCOME TAX OFFICER/WARD-53(2) AAYAKA R BHAWAN (DAKSHIN) 2 GARIAHAT ROAD (S) KOLKATA-700 068. 2 . -.+ / RESPONDENT : TAPASH KUMAR SAHA BARUIPUR KULPI ROAD 24-PARGANAS (S) KOLKATA-700 069 . 3. - / CIT 4. ()/ CIT(A) KOLKATA. 5. -/ DR KOLKATA BENCHES KOLKATA [. -/ TRUE COPY] / BY ORDER /ASSTT REGISTRAR [KKC AB C /SR.PS]