M/s. Shree Sakambari Enterprises, Kolkata V. DCIT, Circle - 44, Kolkata

ITA 102/KOL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9232 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 14-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 28-01-2009
• Court: TRIBUNAL
• Department Lawyers: P C NAYAK
• Assessee Lawyers: V N DATTA
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Set aside
• Section: 142(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE . .. . . .. . , , , , , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER % % % % / ITA NO . 102/KOL/2009 &' ()/ ASSESSMENT YEAR : 2005-06 (+, / APPELLANT ) M/S. SHREE SAKAMBARI ENTERPRISES,.KOLKATA (PAN: AAOFS 0209 F) - & - - VERSUS - . (./+,/ RESPONDENT ) THE D.C.I.T., CIRCLE-44, KOLKATA % % % % / ITA NO . 471/KOL/2009 &' ()/ ASSESSMENT YEAR : 2005-06 (+, / APPELLANT ) THE D.C.I.T., CIRCLE-44, KOLKATA - & - - VERSUS - . (./+,/ RESPONDENT ) M/S. SHREE SAKAMBARI ENTERPRISES,.KOLKATA (PAN: AAOFS 0209 F) +, 0 1 #/ FOR THE APPELLANT: SHRI V.N.DATTA ./+, 0 1 #/ FOR THE RESPONDENT: SHRI P.C.NAYAK #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THE ABOVE CROSS APPEALS ONE FILED BY THE ASSESSEE AND THE OTHER FILED BY THE REVENUE ARE AGAINST THE ORDER DATED 18.12.2008 OF THE CIT(A)-XXX, KOLKATA PERTAINING TO A.YR. 2005-06. 2. THE BRIEF FACTS OF THIS CASE ARE THAT WHILE DOI NG THE SCRUTINY ASSESSMENT THE AO HAS MADE THE FOLLOWING ADDITIONS : 2 I) RS.15,08,192/- ON ACCOUNT OF GP RATE AFTER TAKIN G INTO CONSIDERATION THE COMPARATIVE STATEMENT OF SALES, GP, NP FOR THE PRECEDING THREE YEARS HAVE BEEN RECORDED IN PARAS 1,2 AND 3 OF THE ASSESSMENT ORDER. HE FURTHER ADDED AN AMOUNT OF RS.9,59,430/- BY OBSERVING THAT :- IT WAS SEEN THAT THE ASSESSEE HAD CLAIMED RS.10,53 ,693/- EXPENSES TOWARDS SALES PROMOTION. VIDE PARA-2 OF NOTICE DATED 01.10. 2007 U/S 142(1) OF THE IT ACT, THE ASSESSEE WAS REQUESTED TO FURNISH PARTY-WI SE DETAILS OF SALES PROMOTION EXPENSES WITH COMPLETE ADDRESS AND PAN OF PARTIES O F ABOVE RS.25,000/- FOR EACH PARTY AND PRODUCE EVIDENCE FOR INCURRING THE E XPENSES . VIDE LETTER DATED 12.11.2007 THE ASSESSEE HAS FURNI SHES A LIST SHOWING NAMES, ADDRESSES AND PAN (ONLY FOR ONE PARTY) AND A MOUNT FOR EXPORT SALES PROMOTION ACCOUNT (ABOVE RS.25,000/-) TOTALING TO R S.9,59,430/-. HOWEVER, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR INCURRIN G THESE EXPENSES. A SUM OF RS.9,59,430/- IS, THEREFORE, DISALLOWED AND ADDED TO THE ASSESSEES TOTAL INCOME AS UNPROVED CLAIM OF ASSESSEES SALES PROMOT ION EXPENSES. 2.1. HE FURTHER DISALLOWED AN AMOUNT OF RS.2,28,760 /- ON ACCOUNT OF VARIOUS EXPENDITURE BY OBSERVING THAT : THE ASSESSEE FIRM IS THE PROPRIETOR M/S.RASHMISHRE E EXPORTS. THE ASSESSEE HAS GOT THE ACCOUNTS OF THIS PROPRIETORSHIP CONCERN AUDITED U/S 44AB OF THE IT ACT. AS PER THE AUDITED P&L A/C. OF THIS CONCERN, V ARIOUS EXPENSES TOTALING TO RS.31,16,305/- HAVE BEEN CLAIMED. THE NET PROFIT OF THIS PROPRIETARY CONCERN HAS BEEN ARRIVED AT RS.19,91,808/-. THE ASSESSEE HAS SUBMITTED ALONG WITH HIS RETURN OF INCOME ANOTHER P&L A/C WHERE THE PROFIT OF RS.19,91,808/- FORM RASHMISHREE EXPORTS AND ANOTHER PROFIT OF RS.3,076/- FROM TRIM & TASSEL TOTALING TO RS.19,94,884/- WERE CREDITED. AGAINST THIS INCOME, THE ASSESSEE HAS CLA IMED FURTHER EXPENSES OF RS.2,28,762/-. NO DETAILS HAVE BEEN FURNISHED AS TO WHAT IS THE ACTIVITY OF TRIM & TASSEL AND HOW THE PROFIT OF RS.3,076/- FROM THIS CONCERN HAS BEEN ARRIVED AT NO P& L A/C AND BALANCE SHEET OF THIS CONCERN HAS B EEN SUBMITTED BY THE ASSESSEE. HOWEVER, IT IS OBVIOUS THAT THE PROFIT OF RS.3,076/- FROM TRIM & TASSEL HAS BEEN ARRIVED AT AFTER CLAIMING THE RELAT ED EXPENSES FOR EARNING THE INCOME IN THIS CONCERN. IN VIEW OF THE ABOVE, IT EMERGES THAT THE ASSESSEE S FURTHER CLAIM OF EXPENSES TO THE TUNE OF RS.2,28,760/- IN A SEPARATE P&LA/C WHERE THE ONLY CREDITS OF TWO INCOMES OF HIS PROPRIETARY CONCERNS ARE ACCOUNTED FOR AFTER DEBITING THE RELATES EXPENSES IN THE P&L A/C OF THE SE PROPRIETARY CONCERNS IS NOT EXIGIBLE. 2.2. AND AGAIN AN AMOUNT OF RS.7,54,457/- BY OBSERV ING THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF THE BORROWINGS OF RS.7,50, 000/- RECEIVED FROM 4 DIFFERENT PERSONS NAMELY : 3 1. MR.KUNJ BEHARI BERIWALA RS.2,00,000/- 2. MRS.SUSHILA BERIWALA RS.2,00,000/- 3. MR.SITARAM BERIWALA RS.2,50,000/- 4. MR.SUNDARLAL GUPTA RS.1,00,000/- RS.7,50,000/- BY OBSERVING THAT THE ASSESSEE HAS NOT SHOWN THE RA TE OF INTEREST ALLOWED ON HIS BORROWING. IN ABSENCE OF COMPLETE DETAILS, SPECIFIC WORKING OF INTEREST ON THE FUND BORROWED DURING THE YEAR CANNOT BE MADE. THE ASSESS EE ALSO NOT PROVED WITH ANY EVIDENCE THE USER OF BORROWED FUND FOR ANY BUSINESS PURPOSE. 2.3. HE FURTHER ADDED AN AMOUNT OF RS.4,437/- ALSO BY OBSERVING THAT THE ASSESSEES CLAIM OF INTEREST OF RS,.4,437/- ALSO IS ACCORDINGL Y DISALLOWED. THE SUM OF RS.4,437/- IS ACCORDINGLY ADDED TO THE ASSESSEES TOTAL INCOME . 2.4. ON APPEAL THE LD. CIT(A) AFTER TAKING INTO CON SIDERATION THE VARIOUS SUBMISSIONS HAS GIVEN RELIEF OF RS.5,08,192/- ON AC COUNT OF GP AND DELETED RS.9,59,430/- ON ACCOUNT OF SALES PROMOTION EXPENDI TURE AND RS.1,28,762/- ON ACCOUNT OF EXPENSES AND AGAIN DELETED AN AMOUNT OF RS.7,54, 437/- U/S 68 ON UNEXPLAINED CREDIT. 2.5. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEF ORE US IN RESPECT OF THE DELETIONS MADE BY THE LD. CIT(A) AND THE ASSESSEE IS IN APPEA L BEFORE US IN RESPECT OF THE SUSTENANCE OF GP AND SUSTENANCE OF RS. 1 LAKH IN RE SPECT OF EXPENDITURE RELATING TO THE HEAD OFFICE CLAIMED BY THE ASSESSEE. 3. AT THE TIME OF HEARING BEFORE US, THE LD. DR AP PEARING ON BEHALF OF THE REVENUE HAS CONTENDED THAT THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY ACCEPTING ADDITIONAL EVIDENCES AND WITHOUT CALLING FOR REMAND REPORT FROM THE AO. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDERS OF THE LD. CIT (A) AND RESTORE THE MATTER TO THE FILE OF THE AO. 4. AT THE SAME TIME THE LD. COUNSEL APPEARING ON B EHALF OF THE ASSESSEE ALSO CONTENDED THAT THE AO HAS NOT GIVEN SUFFICIENT OPPO RTUNITY TO SUBSTANTIATE THE ISSUES 4 RAISED BY THE AO. THEREFORE, HE ALSO REQUESTED TO S ET ASIDE THE ISSUES INVOLVED IN THIS APPEAL TO THE FILE OF THE AO. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD AND AFTER TAKING INTO CONSIDERA TION OF BOTH THE PARTIES, IN THE INTEREST OF JUSTICE, WE CONSIDER IT A FIT CASE TO S ET ASIDE TO THE FILE OF THE AO TO DECIDE THE ISSUES INVOLVED IN THESE APPEALS AFRESH AS PER LAW AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT THE APPEALS OF THE ASSESSEE AND T HE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.03.2011. . .. . . .. . , , , , B.R.MITTAL, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 14.03.2011. #2 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S. SHREE SAKAMBARI ENTERPRISES, 2, KALI KRISHNA T AGORE STREET, KOLKATA- 700007. 2 THE D.C.I.T., CIRCLE-44, KOLKATA. 3. THE CIT, 4. THE CIT(A)-XXX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, #2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 5