Bengal Agro Products, Burdwan v. ACIT, Circle - 1, Burdwan, Burdwan

ITA 711/KOL/2010 | 2006-2007
Pronouncement Date: 23-03-2011 | Result: Dismissed

Appeal Details

RSA Number 71123514 RSA 2010
Assessee PAN AAGFB4569H
Bench Kolkata
Appeal Number ITA 711/KOL/2010
Duration Of Justice 11 month(s) 11 day(s)
Appellant Bengal Agro Products, Burdwan
Respondent ACIT, Circle - 1, Burdwan, Burdwan
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 23-03-2011
Assessment Year 2006-2007
Appeal Filed On 12-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE /AND . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SHR I C. D. RAO AM] # # # # / I.T.A NO. 711/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 2006-07 BENGAL AGRO PRODUCTS VS ASSISTANT COMMISSIONER OF INCOME-TAX (PAN AAGFB 4569 H) CIRCLE-1 BURDWAN. ()* /APPELLANT ) (+ )*/ RESPONDENT ) FOR THE APPELLANT: SHRI A. K. TIBREWAL FOR THE RESPONDENT: SHRI S. I. BARA !- / ORDER PER MAHAVIR SINGH JM ( ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A) ASANSOL IN APPEAL NO.87/CIT(A)/ASL/CIR-1/ERST.BWN/2008-09 VIDE DATED 27.01.2010. THE ASSESSMENT WAS FRAMED BY ACIT CIRCLE-1 BURDWAN UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006- 07 VIDE HIS ORDER DATED 26.12.2008. 2. THE FIRST ISSUE IN THIS APPEAL IS AS REGARDS TO THE ORDER OF CIT(A) BEING ILLEGAL AND VOID AB INITIO. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED THE ISSUE AND ENDORSEMENT TO THAT EFFECT IS MADE ON THE GROUNDS O F APPEAL. ACCORDINGLY THE SAME IS DISMISSED AS NOT PRESSED. 3. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING ADDITION OF INFLATION IN PURCHASES. FOR THIS THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.2: 2. THAT WITHOUT PREJUDICE TO THE LEGALITY OF THE I MPUGNED ASSESSMENT ORDER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.4 24 517/- MADE BY THE ASSESSING OFFICER ARBITRARILY ALLEGING INFLATION IN PURCHASES. 4. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSEE FIRM FILED ITS RETURN OF INCOME ON 31.10.2006. THE ASSESSEES CASE WAS TAKEN UP FO R SCRUTINY ASSESSMENT BY ISSUING NOTICES U/S. 143(2) AND 142(1) OF THE ACT. THE ASSESSEE PR ODUCED BOOKS OF ACCOUNT VIZ. CASH BOOK LEDGER PURCHASE AND SALES REGISTERS STOCK REGISTE R ETC. ALONG WITH SUPPORTING BILLS VOUCHERS ETC. FROM THE DETAILS THE ASSESSING OFFICER REQUI RED THE ASSESSEE TO FURNISH THE DETAILS OF TRANSACTIONS IN RESPECT OF SUNDRY CREDITORS. ASSES SING OFFICER ISSUED LETTERS TO THREE CREDITORS 2 ITA 711/K/2010 BENGAL AGRO PRODUCTS. A.Y.06-07 NAMELY (I) SHRI SAMBHU GHOSH (II) SHRI BARUN GUHA AND (III) SHRI GOLAM JIKRIA FROM WHOM THE ASSESSEE HAD MADE PURCHASES AND MADE PAYMENT IN CASH BUT LETTERS RETURNED UNSERVED WITH THE REMARKS NOT KNOWN BY THE POSTAL AUTHORITIES. THE ASSESSEE FURTHER FAILED TO PRODUCE THE SUNDRY CREDITORS AS REQUIRED BY THE ASSESSING OFFIC ER FROM WHOM THE ASSESSEE HAS PURCHASED PADDY AND MADE PAYMENT IN CASH. ASSESSING OFFICER NOTED THAT IT HAS MADE TOTAL PURCHASE OF RS.2 12 25 853/- DURING THE YEAR FROM DIFFERENT FAR MERS AGAINST CASH PAYMENT WHICH IS SUPPORTED BY ASSESSEES INTERNAL/DEBIT VOUCHERS. A CCORDINGLY ASSESSING OFFICER MADE DISALLOWANCE OF TOTAL PURCHASES AT 3% ON THE REASON ING THAT THE CASH PURCHASE IS UNVERIFIABLE AS ASSESSEE IS MAINTAINING INTERNAL VOUCHERS ONLY AND EVEN LETTERS ISSUED TO CREDITORS RETURNED UNSERVED BY THE POSTAL AUTHORITIES WITH REMARKS NO T KNOWN. AGGRIEVED AGAINST ADDITION OF INFLATED PURCHASES AT 3% IT PREFERRED APPEAL BEFOR E CIT(A) WHO ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY GIVING FOLLOWING FINDING I N PARA 3 OF HIS APPELLATE ORDER: DURING COURSE OF THE APPEAL HEARINGS THE LD A/R S UBMITTED THAT THE A.O. HAD NOT FOUND ANY DEFECT OR IRREGULARITY IN THE STOCK R EGISTERS OR THE QUANTITATIVE DETAILS. IT WAS ALSO STATED THAT SINCE THE PURCHAS ES WERE MADE FROM THE FARMERS AT THE MILL GATE IF WAS NOT POSSIBLE TO VERIFY THE NAMES AND ADDRESSES OF THE SELLERS AND HENCE INCORRECT NAMES AND ADDRESSES CO ULD NOT BE RULED OUT. I HAVE CONSIDERED THE MATTER. IN SPITE OF GRANT OF O PPORTUNITY THE GENUINENESS OF THE TRANSACTIONS WITH THE SUNDRY CREDITORS WAS NOT SUBSTANTIATED BY THE ASSESSEE. THE ASSESSEES A/R HAD HIMSELF OFFERED T O PRODUCE THE SUNDRY CREDITORS BUT DID NOT DO SO ON THE APPOINTED DATES. FURTHER IN MOST CASES RICE MILL OWNERS PURCHASE PART OF THE PADDY FROM FARMERS AND PART FROM TRADERS. HOWEVER IN THIS CASE THE TOTAL PURCHASES AMOUNTIN G TO RS.2.12 CRORES WERE SHOWN TO HAVE BEEN MADE IN CASH AND NOT A SINGLE PU RCHASE WAS MADE FROM ANY TRADER. UNDER THE CIRCUMSTANCES I HAVE THE OP INION THAT THE A.O. WAS CORRECT IN MAKING AN ESTIMATED DISALLOWANCE. HOWEV ER ADDITION OF 3% OF THE PURCHASES IS ON THE HIGHER SIDE AND I LIMIT THE SAM E TO 2% AND THE ADDITION IS RESTRICTED TO RS.4 24 517/-. FURTHER AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US STATED T HAT THE ASSESSEE PRODUCED COMPLETE BOOKS OF ACCOUNT STOCK REGISTER SUPPORTED BY BILLS AND VOU CHERS OF PURCHASES AND SALES. ACCORDING TO HIM IT IS NOT THE CASE OF REVENUE THAT SALES OR PU RCHASES HAVE NOT TALLIED OR THESE PURCHASES ARE NOT SUPPORTED BY VOUCHERS. HE STATED THAT ONLY SOM E OF THE CREDITORS COULD NOT BE PRODUCED BUT THE FACT REMAINS THAT ASSESSEE HAD MADE PURCHASES I N CASH FOR THE REASON THAT ENTIRE PURCHASE OF PADDY IS FROM FARMERS AND WHEN THE ENTIRE PURCHASE AND SALE ARE TALLIED NO ADDITION ON ACCOUNT OF INFLATION OF PURCHASES CAN BE MADE. WE FIND THA T THE ASSESSING OFFICER HAS MADE ADDITION ON INFLATION OF PURCHASES BY TAKING 3% OF TOTAL PURCHA SE OF RS.2 12 25 853/- AND THEREBY ADDED A SUM OF RS.6 36 776/- BUT CIT(A) REDUCED TO 2% AND S USTAINED THE ADDITION AT RS.4 24 517/-. 3 ITA 711/K/2010 BENGAL AGRO PRODUCTS. A.Y.06-07 NO DOUBT ASSESSEES SALES AND PURCHASES ARE TALLIE D BUT AS RECORDED IN THE BOOKS OF ACCOUNT ARE NOT VERIFIABLE AS THE ASSESSEE COULD NOT PRODUCE T HE ALLEGED CREDITORS FROM WHOM ASSESSEE HAD MADE PURCHASES IN CASH AND THE SAME ARE OUTSTANDING IN THE BOOKS OF ACCOUNT. EVEN THE VOUCHERS ARE SELF MADE. KEEPING IN VIEW THE DISCREP ANCY ASSESSING OFFICER MADE A REASONABLE DISALLOWANCE AT 3% AND CIT(A) CONFIRMED PARTLY AT 2 %. WE IN VIEW OF THE DISCREPANCY ARE OF THE VIEW THAT LOWER AUTHORITIES HAVE RIGHTLY CONFIR MED THE ADDITION AT 2% ON TOTAL PURCHASE BY STATING THE SAME AS INFLATED PURCHASE. WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF ASSESSEES APPEAL IS DISMISSED. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. 7. ORDER PRONOUNCED IN OPEN COURT ON 23RD DAY OF MA RCH 2011. SD/- SD/- . . !' (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 23RD DAY OF MARCH 2011 ./ $01 2 JD.(SR.P.S.) !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT BENGAL AGRO PRODUCTS VILL. DEBIBORPUR P.O. SHYAMSUNDAR DIST. BURDWAN 713424. 2 + )* / RESPONDENT ACIT CIRCLE-1 BURDWAN. 3 . -$ / THE CIT(A) ASANSOL 4. -$ ( )/ CIT ASANSOL 5 . => +$ / DR KOLKATA BENCHES KOLKATA 4 +/ TRUE COPY !-$?/ BY ORDER 1 /ASSTT. REGISTRAR .