ITO, Ward - 1(3), Durgapur, Durgapur v. Shri Anil Kumar Singh, Durgapur

ITA 968/KOL/2010 | 2007-2008
Pronouncement Date: 07-01-2011

Appeal Details

RSA Number 96823514 RSA 2010
Assessee PAN AYVPS3384G
Bench Kolkata
Appeal Number ITA 968/KOL/2010
Duration Of Justice 7 month(s) 27 day(s)
Appellant ITO, Ward - 1(3), Durgapur, Durgapur
Respondent Shri Anil Kumar Singh, Durgapur
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 07-01-2011
Assessment Year 2007-2008
Appeal Filed On 11-05-2010
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL A BE NCH : KOLKATA [BEFORE HONBLE SHRI D. K. TYAGI JM AND HONBLE SH RI C. D. RAO AM] ITA NO. 968 (KOL) OF 2010 : ASSESSMENT YEAR : 2007 -08 INCOME TAX OFFICER/WARD-1(3) -VS.- SRI ANIL KUMAR SINGH DURGAPUR. [PAN : AYVPS 3384 G] PROP. OF M/S. SHANKAR IRON STORES DURGAPUR. [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI PIYUSH KOLHE RESPONDENT BY : NONE PER C. D. RAO A.M. THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2007-08 AGAINST THE ORDER OF THE LD. CIT(A) DURGAPUR DATED 10.02.2010. THE ONLY ISSUE RAISED IN THIS APPEAL REGARDING DELETION OF ADDITION OF RS.26 10 900/- MADE ON ACCO UNT OF SUNDRY CREDITORS. 2. BRIEF FACTS OF THE ISSUE ARE THAT WHILE DOING TH E SCRUTINY ASSESSMENT THE ASSESSING OFFICER ADDED AN AMOUNT OF RS.26 10 900/- BY OBSER VING AS UNDER :- DURING THE COURSE OF SCRUTINY PROCEEDING LETTER WA S ISSUED TO M/S. AMAN STEEL CORPORATION 24/9 MUSALMAN PARA LANE HOWRAH-71110 1 AT THE ADDRESS INITIALLY PROVIDED BY THE ASESSEE. THE LETTER WAS R ETURNED UNSERVED WITH POSTAL COMMENT OF NOT KNOWN. SO IN THIS REGARD THE ASSES SEE WAS ASKED TO EXPLAIN THE MATTER. IN REPLY THE ASSESSEE FURNISHED A NEW A DDRESS AT 24 GOPAL GHOSH LANE SALKIA HOWRAH-711106. ACCORDINGLY LETTER WAS ISSUED TO THE NEW ADDRESS OF M/S. AMAN STEEL CORPORATION AS PROVIDED BY THE ASSESSEE BUT THE SAME HAS ALSO BEEN RETURNED BACK WITH POSTAL COMMEN T OF NOT KNOWN. THEREAFTER SHOW CAUSE LETTER WAS ISSUED TO THE ASSE SSEE ON 21/12/2009 AND ON 24/12/2009 THE A/R OF THE ASSESSEE APPEARED AND SUB MITTED THAT REGARDING THE NON SERVICING OF THE LETTER TO THE NEW ADDRESS OF H IS PURCHASE PARTY IS THAT THEY MIGHT HAVE CHANGED THEIR BUSINESS ADDRESS. NOW THE ONUS WAS ON THE ASSESSEE TO PROVIDE THE PROPER ADDRESS OF HIS ABOVE MENTIONE D SUNDRY CREDITOR SO THAT LIABILITY SHOWN IN THIS REGARD IN HIS BALANCE SHEET CAN BE CROSS VERIFIED BUT THE ASSESSE FAILED TO DO SO. DURING THE COURSE OF HEARI NG THE A/R OF THE ASSESSEE PRODUCED THE LEDGER COPY OF THE SAID SUNDRY CREDITO RS FOR THE F.Y.2004-05 2005-06 AND 2006-07 FROM WHICH IT IS FOUND THAT THE TOTAL PURCHASE AMOUNTING TO RS.26 10 900/- WAS MADE DURING THE FINANCIAL YEA R 2004-05 AND NO PAYMENTS WERE MADE THEREAFTER UP TO THE END OF THE F.Y.2006-07. MOREOVER NO TRANSACTION WAS MADE WITH THE PARTY AFTER THE F.Y.2 004-05. SO IT IS CLEAR THAT THE ASSESSEE NEITHER COULD ESTABLISH THE EXISTENCE OF M/S AMAN STEEL CORPORATION BY PROVIDING THE ADDRESS OF IT NOR HAD ANY BUSINESS TRANSACTION ITA NO. 968/KOL/20 10 2 WITH THE PARTY SINCE THE LAST TRANSACTION IN THE F. Y.2004-05. IN THIS REGARD THE A/R OF THE ASSESSEE WAS ASKED WHY THE SAME WILL NOT BE TREATED AS BOGUS LIABILITY KEPT IN THE BOOKS OF THE ASSESSEE AND HE COULD NOT OFFER ANY EXPLANATION. SO ALL THESE FACTS LEAD TO ONE LOGICA L INFERENCE THAT THE SUNDRY CREDITOR IS NOT IN EXISTENCE AS THAT MUCH AMOUNT OF LIABILITY MUST HAVE ALREADY BEEN MET UP BY THE ASSESSEE DURING THE YEAR FROM SO ME UNDISCLOSED SOURCE OF INCOME. SO RS.26 10 900/- IS ADDED BACK TO THE INCO ME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCE. 1 ON APPEAL THE LD. CIT(A) HAS DELETED THE SAME BY O BSERVING AS UNDER :- I HAVE CONSIDERED THE MATTER. THE AO BECAUSE OF TH E NON-TRACEABILITY OF M/S. AMAN STEEL CORPORATION HELD THAT THE LIABILITY WAS BOGUS. HE FURTHER OBSERVED THAT THAT THE LIABILITY NO LONGER EXISTED AS THE AS SESSEE MUST HAVE PAID UP THE LIABILITY DURING THE YEAR FROM UNDISCLOSED SOURCES OF INCOME. IT IS AN ADMITTED FACT IN THE ASSESSMENT ORDER ITSELF THAT THE LIABIL ITY RELATED TO THE F.YR. 2004-05 THUS FOR THE YEAR UNDER APPEAL IT WAS A BROUGHT-FO RWARD CREDIT IN THE BOOKS IN THE NAME OF AMAN STEEL CORPORATION. THE DELHI HIGH COURT IN THE CASE OF CIT VS. OM PRAKASH MAHAJAN & SONS 152 ITR 583 HELD THAT IF THE EXPLANATION OF THE ASSESSEE THAT THE CASH CREDIT BELONGED TO SOME PREVIOUS PERIOD IS ACCEPTED THE AMOUNT OF THE SAID TAX CREDIT CANNOT BE TAXED I N THE YEAR UNDER CONSIDERATION. IN THE PRESENT CASE UNDER APPEAL IT IS AN ACCEPTED FACT THAT THE LIABILITY AROSE IN AN EARLIER YEAR. IT CANNOT THER EFORE BE TAXED IN THIS YEAR. THE A.O. ALSO OBSERVED THAT THE LIABILITY MUST HAVE BEE N PAID OUT OF FUNDS ARISING FROM UNDISCLOSED SOURCES OF INCOME. HOWEVER THIS O BSERVATION IS NOT SUBSTANTIATED BY ANY FACTS OR EVIDENCE AND HENCE CA NNOT BE SUSTAINED. FURTHER AS CONTENDED BY THE LEARNED A/R THERE IS NOTHING O N RECORD TO SHOW THAT THERE HAS BEEN REMISSION OF THE LIABILITY. I AGREE THAT T HE LIABILITY REMAINS ENFORCEABLE AND HENCE CANNOT BE TAXED U/S. 41(1) ALSO. IN VIEW OF THESE FACTS THE ADDITION IS DELETED. AGGRIEVED BY THIS NOW THE REVENUE IS IN APPEAL BEFO RE US. 3. AT THE TIME OF HEARING BEFORE US NONE APPEARED ON BEHALF OF THE ASSESSEE NOR THERE IS ANY APPLICATION FOR ADJOURNMENT OF APPEAL. NOTICE F IXING DATE OF HEARING WAS SENT BY REGISTERED POST A/D BUT THE SAME RETURNED UNSERVED WITH THE RE MARK LEFT BY THE POSTAL AUTHORITY. WE HAVE DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 4. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESEN TATIVE HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E AND KEEPING IN VIEW OF THE FACT THAT THE FINDING OF THE LD. CIT(A) COULD NOT BE CONTRADI CTED BY THE LD. DEPARTMENTAL REPRESENTATIVE ITA NO. 968/KOL/20 10 3 BY BRINGING ANY MATERIAL. THEREFORE WE FIND NO INF IRMITY IN THE ORDER OF THE LD. CIT(A) TO BE INFERRED WITH AND THE GROUND TAKEN BY THE REVENUE I S DISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 07. 01. 2011. SD/- SD/- [ D. K. TYAGI ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUN TANT MEMBER DATED : 07. 01. 2011. COPY FORWARDED TO THE - 1. INCOME TAX OFFICER/WARD-1(3) DURGAPUR. 2. SRI ANIL KUMAR SINGH PROP. OF M/S. SHANKAR IRON ST ORES CINEMA HALL ROAD DURGAPUR-713 201. 3. CIT(A)- (4) CIT- 5. D.R. I.T.A.T. KOLKATA. [TRUE COPY] BY ORDER DEPUTY/ASSISTANT REGISTRAR (KKC) I .T.A.T. KOLKATA.