B P PROJECTS PRIVATE LIMITED,KOLKATA V. ASSESSING OFFICER, KOLKATA

ITA 2504/KOL/2024

AI Insights

The case involves B P Projects Private Limited, which appealed against the order of the Ld. Addl/JCIT(A)-4, Chennai, concerning the assessment year 2010-2011. The primary contention was the addition of \\u20b9 15,75,390/- to the income of the assessee, which was identified as a discrepancy between the books of the assessee and M/s. Sweka Powertech Engineers Pvt. Ltd., a debtor. The assessee argued that the sales were recorded in different assessment years by both parties, leading to the discrepancy. The Income Tax Appellate Tribunal found merit in the assessee's request for a detailed reconciliation of accounts and remitted the matter back to the Ld. CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714508 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Revised return; Search and seizure
• Section: 143(3); 133(6); 133A

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA श्री संजय शमाा, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited Vs. Assessing Officer (Appellant) (Respondent) PAN: AABCB0564C Appearances: Assessee represented by : None. Department represented by : Kallol Mistry, JCIT, Sr. DR. Date of concluding the hearing : 13-May-2025 Date of pronouncing the order : 04-August-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Addl/JCIT(A)-4, Chennai [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2010-11 dated 28.11.2024, which has been passed against the assessment order u/s 143(3) of the Act, dated 21.03.2013. 2. The assessee is in appeal before the Bench raising the following grounds of appeal: Printed from counselvise.com Page | 2 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. “(A) Ground of Appeal No. 1 On the facts and circumstances of the case and in law, the Honorable Addl/ JCIT(A) -4, Chennai erred by not allowing relief related to addition to the income of Rs.15,75,390/- being difference in the books of appellant and the M/s. Sweka Powertech Engineers (P) Ltd. one of the debtors of the appellant disapproving the written Submission/additional evidences submission under Rule 46 A(1) reconciliation confirmation from party submitted both appellant and its debtors are corporates and audited concern of the Income Tax Rules. (B) Ground of Appeal No. 2 On the facts and circumstances of the case and in law, Second ground of appeal was \"Calculation mistake, excess income of Rs. 9,39,088/- was assessed and demand raised on it. Because of totalling mistake in the assessment order U/s 143(3) dated 21.03.2013. Also above is not discussed in the appellant order U/s 250 of the Income tax act.” 3. Brief facts of the case are that the assessee is a private limited company incorporated under the Companies Act, 2013 and is engaged in the business of manufacturing and trading. The assessee had filed the revised return of income declaring income of ₹18,71,570/- and subsequently, the case was selected for scrutiny through CASS and the assessment order u/s 143(3) of the Act dated 21.03.2013 was passed by adding a sum of ₹15,75,390/- by the Assessing Officer (hereinafter referred to as Ld. 'AO') on account of discrepancy noticed in the ledger account in respect of sales and sundry debtors in the case of M/s. Sweka Powertech Engineers Pvt. Ltd., as was noticed on the basis of reply received in response to the notice issued u/s 133(6) of the Act and the statement of accounts submitted during the course of the assessment proceedings. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 28.11.2024, has reproduced the assessment order and has also considered the submission made by the assessee. It was submitted before the Ld. CIT(A) that as regards the difference of ₹15,75,392/-, the Printed from counselvise.com Page | 3 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. reason was due to the fact that the sales were booked by the assessee in AY 2008-09 and the actual sale transactions of ₹15,75,392/- were billed to M/s. Sweka Powertech Engineers Pvt. Ltd. in AY 2009-10 and rightly entered in the books of accounts by the assessee but the customer M/s Sweka Power Tech Engineers Pvt. Ltd. incorrectly entered the same in their books of account in the AY 2010-2011. The assessee filed various details viz. copy of sales tax return, copy of sales invoices, copy of excise return, copy of G.R. of transporter, copy of ledger account of M/s. Sweka Powertech Engineers Pvt. Ltd. for the AY 2009-10 and AY 2010-11, copy of reconciliation statement of the assessee’s books and transactions as appearing in the books of account of M/s. Sweka Powertech Engineers Pvt. Ltd. The assessee also submitted the reconciliation statement of accounts with M/s. Sweka Powertech Engineers Pvt. Ltd. as done by the Ld. AO in the assessment order and stated that the purchase difference between the two accounts is a sum of ₹15,75,392/- for which the addition is made. The difference between opening balance was stated to be ₹15,93,422/- being a sum of ₹15,75,392/- (+) ₹18,030/-, the latter amount being due to the reasons which were explained in the reconciliation statement of closing balance as on 31.03.2010 submitted during the assessment proceedings. The Ld. CIT(A) has mentioned in para 4.3 that during the appellate proceedings, the assessee submitted the additional evidences under Rule 46A(1) of the Income Tax Rules, 1962 and requested to admit the additional evidences, which were sent to the Jurisdictional Assessing Officer for his comments. The Ld. AO in his remand report dated 11.12.2023 submitted that the evidences produced by the assessee during the course of scrutiny proceedings as well as during the course of appeal proceedings were incapable of disproving the conclusion Printed from counselvise.com Page | 4 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. arrived at in the impugned assessment order and the entries recorded in the books of accounts cannot show out of books transactions. The assessee’s premises were surveyed u/s 133A of the Act on 28.10.2010 in connection with the search and seizure action in the case of M/s. Sweka Powertech Engineers Pvt. Ltd. and thereafter the discrepancy of ₹15,75,390/- noted was added. The Ld. AO submitted a remand report mentioning the 3 bills relating to M/s. Sweka Powertech Engineers Pvt. Ltd. for the discrepancy in the books of account as transactions made out of books. The Ld. CIT(A) examined the submission of the assessee and held that the assessee’s submission that the bills were ‘extra’ and ‘double entry’ on account of reconciliation was found not acceptable to the Ld. AO and in the books of account of M/s. Sweka Powertech Engineers Pvt. Ltd., the bills were entered on 26.02.2010. The assessee’s claim that the bills were accounted in FY 2008-09 by it and the same were accounted in FY 2009-10 by M/s. Sweka Powertech Engineers Pvt. Ltd. did not stand the test of probability as there cannot be a difference of almost one year in accounting the bills by the two parties. The relevant para extracted from the order of the Ld. CIT(A) is reproduced as under: “4.4 The facts of the case, submission of the appellant and findings of AO have been considered. It is found that the AO made the said addition of Rs. 15,75,390/- based on the reconciliation submitted by the appellant itself during the course of assessment proceedings. The appellant's submission that the bills were 'extra' and ‘double entry’ on account of reconciliation was found not acceptable by AO. Further, it is found that in the books of M/s Sweka Powertech, the bills were entered on 26.02.2010. The appellant's claim is that the bills were accounted in FY08-09 by appellant and the same were accounted in FY09-10 by M/s Sweka power tech. This argument doesn't stand the test of probability as there can't be a difference of almost one year in accounting the bills by 2 parties. The details available with M/s Sweka Power Tech was impounded during the survey operations and hence liable to be more probable. Moreover, even during the remand proceedings, Printed from counselvise.com Page | 5 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. the AO was not satisfied with the additional evidences submitted by the appellant to prove its claim. His observations that “It is interesting to note that while there was considerable mismatch in opening balance of either of the parties, the same narrowed down to a negligible amount in closing balance and this was without any reconciliation between the transacting parties at that point of time. Therefore, it is quite possible that both the parties were well aware of the issue and settled the mismatch between themselves by manipulation of books on both sides and by settling the amounts involved through out of books methodology like cash payments. It may kindly be noted that the two bills labelled 'extra' by the Assessee were found complete in all respect, even having Voucher Nos. 20 and 44 respectively. Therefore, there is little ground to suspect their genuineness. Further, the bills labelled ‘double entry’ were also found to be having separate Voucher Nos. 402 and 405. These facts clearly establish that these bills pertained to business transactions and should have been made part of both the transacting parties. While the party issuing these bills entered them into their books, the other party did not do the same evidently for some ulterior reasons as mentioned in the preceding para - thus the mismatch\" are found acceptable. Hence, going by these facts, the addition is sustained and ground of appeal is rejected.” 4. Accordingly, the appeal was dismissed. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before this Tribunal. 5. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal only on the ground that there was a gap of about one year in accounting the bills in the books of account of the assessee and the books of account of M/s. Sweka Powertech Engineers Pvt. Ltd. The assessee had submitted detailed submission as regards the reconciliation of both the accounts. The Ld. AR requested that the assessee may be granted another opportunity by demanding the matter to the Ld. CIT(A) to reconcile the difference as it has sufficient evidence for reconciling the same. 6. The Bench was of the view that this is a case of difference in the account on account of reconciliation not being accepted. Before us, the Printed from counselvise.com Page | 6 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. assessee has filed the detailed submission including the reconciliation of the difference in the accounts of the debtor. It was submitted that the Ld. CIT(A) has not considered the voluminous evidences filed by the assessee including the copy of bills and the reconciliation made. Therefore, in the interest of justice and fair play, the Bench was of the view that the matter may be remitted to the Ld. CIT(A) for granting another opportunity to the assessee and considering the submission made. The assessee shall file the specific bills on the basis of which the reconciliation was made and the Ld. CIT(A) shall also consider the same vis-à-vis the details of bills entered in the books of account of M/s. Sweka Powertech Engineers Pvt. Ltd. and consider the submission as per law. Merely because the bills are entered after a gap of about one year cannot saddle the assessee with additional liability if the bills entered related to the same transactions. For statistical purposes, Ground No. 1of the appeal is allowed. 7. Ground no. 2 is against the calculation mistake of ₹9,39,088/- on account of excess income. This ground of appeal is also set aside to the Ld. CIT(A) who shall decide the same on the basis of reconciliation made by the assessee in the grounds of appeal before us. 8. We, therefore, set aside the order of the Ld. CIT(A) and remit the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereby pass an order in accordance with law. For statistical purposes, the appeal of the assessee is allowed. Printed from counselvise.com Page | 7 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 4th August, 2025. Sd/- Sd/- [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 04.08.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 8 I.T.A. No.: 2504/KOL/2024 Assessment Year: 2010-2011 B P Projects Private Limited. Copy of the order forwarded to: 1. B P Projects Private Limited, 167A, Vivekananda Road, Kolkata, West Bengal, 700006. 2. Assessing Officer. 3. Addl/JCIT(A)-4, Chennai. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "