ACIT, Circle - 44, Kolkata, Kolkata v. M/s. Panna International, Kolkata

ITA 530/KOL/2011 | 2007-2008
Pronouncement Date: 18-11-2011 | Result: Dismissed

Appeal Details

RSA Number 53023514 RSA 2011
Assessee PAN AADFP9592P
Bench Kolkata
Appeal Number ITA 530/KOL/2011
Duration Of Justice 7 month(s) 13 day(s)
Appellant ACIT, Circle - 44, Kolkata, Kolkata
Respondent M/s. Panna International, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 18-11-2011
Assessment Year 2007-2008
Appeal Filed On 04-04-2011
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.530/KOL/2011 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 ASSTT. COMMISSIONER OF INCOME TAX -VS.- M/S. PANNA INTERNATIONAL CIRCLE-44 KOLKATA. KOLKATA [PAN : AADFP 9592 P]. [ *+ *+ *+ *+ /APPELLANT ] ]] ] [ -.*+ -.*+ -.*+ -.*+/ // / RESPONDENT ] ]] ] *+ *+ *+ *+ / FOR THE APPELLANT : SHRI S. K. ROY -.*+ -.*+ -.*+ -.*+ / FOR THE RESPONDENT : SHRI S. BANDYOPADHYAY / 0 !# / 0 !# / 0 !# / 0 !# /DATE OF HEARING : 15.11.2011 1' 0 !# 1' 0 !# 1' 0 !# 1' 0 !# /DATE OF PRONOUNCEMENT : 18.11.2011 '2 /ORDER . . . . PER N. VIJAYA KUMARAN J. M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST ORDER OF LD. CIT(A)-XXX KOLKATA DATED 11.01.2011 FOR ASSESSMENT YEAR 2007-08. 2. THE GROUNDS URGED BY THE DEPARTMENT ARE AS UNDER :- A SECOND APPEAL IS STRONGLY RECOMMENDED AGAINST THE SAID ORDER OF THE CIT(A) XXX KOLKATA ON THE FOLLOWING GROUNDS :- (I) THAT THE LD. CIT(A) ERRED IN LAW AN D ON THE FACTS AND CIRCUMSTANCES OF THE CASE TO DELETING THE ADDITION OF RS.62 68 486/- WIT HOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO EXPLAIN RAPID FALL IN THE G.P. RATE. (II) THAT THE LD. CIT(A) ERRED IN LAW AN D ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. WITHOUT THE AD DITION OF RS.7 50 000/- WITHOUT APPRECIATING THE COGENT REASONS THE A.O. ME NTIONED IN THE BODY OF ORDER. [ ITA NO.530/KOL/2011] 2 3. THE FIRST GROUND RELATES TO DELETION OF ADDITION OF RS.62 68 486/-. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. 5. LD. DEPARTMENTAL REPRESENTATIVE ADVANCED HIS ARG UMENTS IN SUPPORT OF THE FINDINGS OF THE ASSESSING OFFICER AND THE GROUNDS URGED BEFORE US. 6. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE IS A FOOD GRAIN TRADER AND ALSO AN EXPORTER OF FOOD GRAINS TO BANGL ADESH. ORIGINALLY ASSESSEE HAS SHOWN A GROSS LOSS ON SALE OF GRAINS AND PARTICULARLY DURING THE YEAR ASSESSEE HAD PURCHASED MASOOR DAL DUNPEAS. ALL THE PAYMENTS WERE MADE BY CHEQUE AS EVIDENCE BY ASSESSEES PAPER BOOK AT PAGES 62 & 63. THE SAME RATE OF G.P. ALSO ALMOST SAME AND WHILE MAKING THE ADDITION ASSESSING OFFICER NEVER REJECTED THE BOOKS. NO DEFECTS FOUND IN THE BOOK RESULT AND MOST OF THE PURCHASES WERE LOCAL AND VOUCHED. THESE DETAILS WERE AVAILABLE AT ASSESSEES PAPER BO OK AT PAGES 91 TO 93. BASED ON THE ABOVE FACTS AND ON PERUSAL OF THE SAME LD. CIT(A) FOUND THAT A SSESSING OFFICERS ESTIMATION ON G.P. OF MASOOR DAL & DUNPEAS HAD NO BASIS WHATSOEVER AND ES TIMATION OF PROFIT BY HIM WAS MERE GUESS WORK. IT IS SETTLED LAW THAT ESTIMATION OF INCOME S HOULD BE WITH RELEVANCE TO EVIDENCE ON RECORD AND IT SHOULD NOT BE ON PRESUMPTION SURMISES AND CONJE CTURE. FURTHER IN THIS CASE THE ULTIMATE RESULT IS POSITIVE OF INCOME AS THE ASSESSEE HAS GOT THE BENE FIT OF FOREIGN TRADE POLICY VISHESH KRISHI UPAJ YOJANA (SPEICAL AGRICULTURAL PRODUCE SCHEME) T O PROMOTE EXPORT OF FRUITS VEGETABLES ETC. AND THEIR VALUE ADDED PRODUCTS BY INCENTIVISING EXP ORTERS ON SUCH PRODUCTS. IN OTHER WORDS EXPORTERS OF SUCH PRODUCTS WERE ENTITLED TO DUTY CR EDIT SCRIP EQUIVALENT TO 5% OF FOB VALUE OF EXPORTS. BASED ON THIS ASSESSEE SOLD IT FOR 95%. T AKING INTO INCENTIVE OF 5% FOB AND ADDED WITH THE EXCHANGE RATE OF FLUCTUATION AND THE NET RESULT IS POSITIVE PROFIT. THE COMPARATIVE FIGURE OF G.P. AS AVAILABLE AT ASSESSEES PAPER BOOK AT PAGE 87 WI LL CLEARLY SHOW THAT THERE IS NO REQUIREMENT TO CHANGE THE RATE OF G.P. FOR THIS ASSESSMENT YEAR WI THOUT ANY VALID REASON. UNDER THE ABOVE FACTS AND CIRCUMSTANCES WE REJECT THE ARGUMENTS OF LD. DEPAR TMENTAL REPRESENTATIVE AND WE ACCEPT THE CONTENTION OF THE LD. COUNSEL THAT IT IS PRUDENT DE CISION OF THE ASSESSEE TO PURCHASE GOODS AT A RATE HIGHER THAN THE MINIMUM PRICE PRESCRIBED BY THE GOV ERNMENT AS HELD IN THE CASE OF GODAVARI SUGAR MILLS LTD. VS. CIT [1992] 193 ITR 756 (BOM.). FURTH ER IN THE ABSENCE OF EVIDENCE TO SHOW THAT THE SALES MADE BELOW THE MARKET PRICE WERE SHAM TRANSAC TIONS OR THAT THE MARKET PRICES WERE IN FACT PAID BY THE PURCHASERS THE MERE FACT THAT THE GOOD S WERE SOLD AT A CONCESSIONAL RATE WOULD NOT [ ITA NO.530/KOL/2011] 3 ENTITLE THE INCOME TAX DEPARTMENT TO ASSESS THE DIF FERENCE BETWEEN THE MARKET PRICE AND THE PRICE PAID BY THE PURCHASER. THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SMT. NANDINI NOPANY [1998] 230 ITR 679 (CAL.) WILL SUPPORT THE CASE OF THE ASSESSEE. THE ASSESSEE IS AN EXPORTER AND HE HAS TO COMPLY THE REQUIREMENT OF EXPORTS SO AS TO AVAIL THE BENEFIT AND ALL THE PAYMENTS WERE MADE BY CHEQUE IS ALSO NOT DISPUTED B Y THE LD. DEPARTMENTAL REPRESENTATIVE. LD. COUNSEL INVITED OUR ATTENTION THAT THE ASSESSING OF FICER ACCEPTED CASH PAYMENTS IN OTHER GRAINS WHEREAS HE IS NOT ACCEPTING THE CHEQUE PAYMENTS WIT H RESPECT TO MASOOR DAS & DUNPEAS WHICH ARE ONLY AT CHEQUE TRANSACTION. HENCE WE HAVE NO HESIT ATION IN CONFIRMING THE ORDER OF LD. CIT(A) UNDER THE GIVEN SET OF FACTS AND CIRCUMSTANCES. 7. COMING TO THE SECOND GROUND IT IS ANOTHER ADDIT ION OF RS.7 50 000/-. IT IS AN ADHOC ADDITION ON ESTIMATE ON ACCOUNT OF PURCHASE AND TRANSPORT EX PENSES 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF THE MATERIAL AVAILABLE ON RECORD THE ASSESSING OFFICER DID NOT DOUBT IN THE BOOKS OF ACCOUNTS. THE ASSESSEE HAS ALSO FILED FULL DETAILS OF PURCHASE AND TRANSPORT EXPENSES. THE ASSESSEE AM PLY PROVED THAT THE GOODS WERE NOT ONLY PURCHASED BUT ALSO RECEIVED BY THE ASSESSEE AND IN THE ABSENCE OF ANY OTHER MATERIAL TO DISCREDIT THE FACT THAT THE GOODS WERE NOT ONLY PURCHASED BUT ALS O RECEIVED BY THE ASSESSEE. FURTHER THE MATERIAL FILED CLEARLY GIVES FULL DETAILS OF PURCHASE AND TR ANSPORT EXPENSES AND THE DECISION OF I.T.A.T. CALCUTTA BENCH IN THE CASE OF SAGAR BOSE VS. ITO [1 996] 56 ITD 561 WHICH THE LD. CIT(A) RELIED WILL ALSO SUPPORT THE CASE OF THE ASSESSEE. HENCE WE HAVE NO HESITATION IN CONFIRMING THE FINDINGS OF THE LD. CIT(A) ON THIS SECOND GROUND WHICH RELAT ES TO DELETION OF ADDITION OF RS.7 50 000/-. 9. IN THE RESULT REVENUE APPEAL IS DISMISSED. '2 '2 '2 '2 #' #' #' #' 3 4 56 3 4 56 3 4 56 3 4 56 !# !# !# !# ORDER PRONOUNCED IN THE COURT ON 18.11.2011 SD/- SD/- [ . . . . 7 77 7. .. .'58 '58 '58 '58 '# '# '# '# ] [ . . . . ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 18TH NOVEMBER 2011. [ ITA NO.530/KOL/2011] 4 '2 0 -%% 9''/ COPY OF THE ORDER FORWARDED TO: 1. *+ /APPELLANT : ASSTT. COMMISSIONER OF INCOME TAX CI RCLE-44 3 GOVT. PLACE (WEST) KOLKATA- 700 001. 2 . -.*+ / RESPONDENT : M/S. PANNA INTERNATIONAL 2 R.C. R OY STREET KOLKATA-700007. 3. %2 - / CIT 4. %2 ()/ CIT(A) KOLKATA. 5. 7%4 -%/ DR KOLKATA BENCHES KOLKATA [. -%/ TRUE COPY] '2/ BY ORDER /ASSTT. REGISTRAR [KKC BC %D %E /SR.PS]