ITO, Ward -51(1), Kolkata, Kolkata V. Swapan Chanda,

ITA 1068/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54777 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2011
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 04-08-2011
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: N O N E
• Keywords: Peak credit
• Section: 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . , ! '# '# '# '# /AND ' # , ! ) [BEFORE SHRI S. V. MEHROTRA, AM & SRI MAHAVIR SINGH , JM] #$ #$ #$ #$ / I.T.A NO. 1068/KOL/2011 %& ''( %& ''( %& ''( %& ''(/ // / ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WD-51(1), KOLKATA VS. SWAPAN C HANDA (PAN: ACNPC 6753 F) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) DATE OF HEARING: 27.12.2011 DATE OF PRONOUNCEMENT: 27.12.2011 FOR THE APPELLANT: SHRI P. S. DUTTA FOR THE RESPONDENT: SHRI N O N E . / ORDER PER MAHAVIR SINGH, JM ( ' # ' # ' # ' #, , , , ! ! ! ! ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXXII, KOLKATA IN APPEAL NO.148/CIT(A)-XXXII/09-10/51(1)/KOL DATED 25.02.201 1. ASSESSMENT WAS FRAMED BY ITO, WD-51(2), KOLKATA U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DA TED 31.12.2009. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.57.89 LACS OUT OF THE ADDITION MADE BY ASSESSING OFFICER AT RS.64.26 LACS ON ACCOUNT OF UNACCOUNTED PURCHASES. FOR THIS, REVENU E HAS RAISED FOLLOWING GROUND AS WELL AS THE ISSUE OF VIOLATION OF RULE 46A OF I. T. RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES): 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.57.89 LAKHS OUT OF 64.26 LAKHS M ADE ON ACCOUNT OF DISCREPANCY IN PURCHASES. 3. WE HAVE HEARD SUBMISSIONS OF LD. DR AND GONE THR OUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THAT THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS DECLARED PU RCHASES TO THE TUNE OF RS.17,57,66,343/-, WHEREAS ON VERIFICATION OF PURCHASES CARRIED OUT AF TER ISSUING NOTICES U/S. 133(6) OF THE ACT TO VARIOUS PARTIES, ACTUAL PURCHASES ARE TO THE TUNE O F RS.18,21,93,046/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE PRODUCED BOOKS OF A CCOUNT, STOCK AND BANK ACCOUNT. THE ASSESSING OFFICER ADDED BACK DIFFERENTIAL AMOUNT OF RS.64,26,703/- ALONG WITH PROFIT ON 2 ITA 1068/K/2011 SWAPAN CHANDA. A.Y.07-08 UNACCOUNTED PURCHASES AT RS.93,187/- BEING PROFIT R ATE AT 1.45% DECLARED BY ASSESSEE. THE ASSESSEE HAS NOT DISPUTED THE UNACCOUNTED PURCHASES OF RS.64,26,703/-. THE ASSESSEE CONCEDED UNACCOUNTED PURCHASES BUT ARGUED THAT ADDITION SHOU LD BE RESTRICTED TO THE EXTENT OF RS.2,93,909/- I.E. THE PEAK CREDIT OF PURCHASES OF RS.64,26,703/-. ACCORDING TO ASSESSEE, UNACCOUNTED PURCHASES REPRESENT HIGHEST PEAK OF RS. 2,93,909/- BEING HIGHEST VALUE OF ONE PURCHASE BILL. THE CIT(A) DIRECTED THE ASSESSING O FFICER TO VERIFY THE DETAILS OF UNACCOUNTED PURCHASES BUT DIRECTION WAS RESTRICTED FOR MAKING A DDITION OF RS.6,37,326/- BY GIVING FOLLOWING FINDINGS: FROM THE PERUSAL OF THE ASSESSMENT ORDER OF THE A. O. AND SUBMISSIONS OF THE APPELLANT AND FROM THE FACTS AND CIRCUMSTANCES OF THE CASE IT APPEARS THAT PART OF THE PURCHASE AND SALE OF THE APPELLANT WERE NOT DISCLOSED IN HIS REGULAR BOOKS OF ACCOUNT AND FROM THE LIST OF UNDISCLOSED PURCHASE SUBMITTED BY THE A PPELLANT IT ALSO TRANSPIRES THAT PURCHASE TRANSACTIONS HAVE TAKEN PLACE ON RECURRIN G BASIS AND PAYMENTS FOR SUCH PURCHASE HAVE ALSO MADE REGULARLY. THEREFORE, IN A BSENCE OF ANY MATERIAL ON RECORDS TO PROVE THAT THERE WAS ONLY SINGLE UNACCOUNTED PURCHA SE OR SINGLE PAYMENT FOR SUCH PURCHASE OR THE FUNDS ARE NOT ROTATED THE ADDITION OF TOTAL UNACCOUNTED PURCHASE OF RS.64,26,703/- IS NOT WARRANTED AND THE ADDITION SH OULD BE RESTRICTED TO THE EXTENT OF HIGHEST AMOUNT OF PAYMENT MADE TO SUPPLIER ON A SIN GLE DAY. FROM THE LIST OF UNACCOUNTED PURCHASE SUBMITTED BY THE APPELLANT IT HAS BEEN FOUND THAT PAYMENT OF RS.6,37,326/- MADE ON 22/04/2006 IS CONSTITUTE THE HIGHEST AMOUNT OF PAYMENT MADE ON A SINGLE DAY. THEREFORE, THE A.O. IS DIRECTED TO C ALL FOR RECORDS FROM THE ASSESSEE AND VERIFY THE DETAILS OF UNACCOUNTED PURCHASE. IF ANY VARIATION IS FOUND IN THESE FIGURES, THE INCOME OF RS.6,37,326/- SHALL BE CHANGED ACCORDINGL Y WHILE GIVING EFFECT TO THIS APPELLATE ORDER. 4. WE FIND THAT IT IS AN ADMITTED FACT THAT UNACCOU NTED PURCHASES OF RS.64,26,703/- ARE THERE. NEITHER REVENUE NOR ASSESSEE DISPUTED THAT THERE ARE PURCHASES AND SALES, WHICH ARE NOT AT ALL ACCOUNTED OR DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT, AS VERIFIED FROM LIST OF UNDISCLOSED PURCHASE SUBMITTED BY ASSESSEE. WE FIND THAT THESE PURCHASE LIST ARE NOT BEFORE I.E. PURCHASE AND SALE OF UNACCOUNTED TRANSACTIONS, BEFORE THE AS SESSING OFFICER BUT CIT(A) FOUND THAT THE PAYMENT MADE ON 22.04.2006 I.E. OF RS.6,37,326/- BE ING THE HIGHEST AMOUNT PAID ON A SINGLE DAY AND IT FORMS PEAK AMOUNT. WE CANNOT AGREE WITH THE RESTRICTED DIRECTION OF THE CIT(A), THE ASSESSING OFFICER SHOULD BE GIVEN FREE HAND TO VERI FY THE ACTUAL PEAK. THE ASSESSEE WILL COMPUTE THE PEAK AFTER TAKING THE UNACCOUNTED PURCH ASE AND SALES OF RS.64,26,703/- AND THEREAFTER AO AFTER VERIFYING THE PEAK AMOUNT, WILL DECIDE THE PEAK ADDITION. THERE IS NO QUARREL OVER THE PEAK ADDITION TO BE MADE AS DIRECTED BY TH E CIT(A). HENCE, WE MODIFY THE DIRECTION AND DIRECT THE ASSESSING OFFICER ACCORDINGLY. THIS ISSUE OF REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 3 ITA 1068/K/2011 SWAPAN CHANDA. A.Y.07-08 5. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF VARIOUS EXPENSES DESPITE THE FACT T HAT THE ASSESSEE COULD NOT PRODUCE PROOF OF GENUINENESS OF EXPENSES CLAIMED. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE FOR RS.86,323/- MADE ON ACCOUNT OF VARIOUS EXPENSES ON WHERE NO EVIDENCE COULD BE PRODUCED REGARDING THE PROOF OF G ENUINENESS OF THE EXPENSES CLAIMED. 6. WE FIND THAT ASSESSING OFFICER MADE ADDITION OF RS.86,323/- ON ACCOUNT OF VARIOUS EXPENSES ESTIMATED. THE ASSESSEE SUBMITTED COMPARA TIVE CHART OF VARIOUS EXPENSES FOR CURRENT YEAR AND PREVIOUS YEAR AND STATED REASONS FOR VARIA TION. THE CIT(A) FOUND THAT EXCEPT DEMURRAGE AND WASTAGE CHARGES, WHICH VARIED DUE TO SWINE FLU, OTHER EXPENSES ARE NOT MATERIALLY DIFFERENT. TAKING A CONSISTENT VIEW, CI T(A) DELETED THE ADDITION. WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A), IN VIEW OF T HE ABOVE REASON STATED IN THE ORDER OF CIT(A). HENCE, THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED IN P ART FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- . . ! ' '' ' # # # # , ! (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( / / / /) )) ) DATED : 27 TH DECEMBER, 2011 '01 %23 4' JD.(SR.P.S.) . 5 ,6 76'8- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT ITO, WD-51(1), KOLKATA 2 ,-*+ / RESPONDENT, SHRI SWAPAN CHANDA, CL-227, HB TOWN, SODEPUR, 24 PGS. (NORTH), PIN-700110. . 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA 5 . '> ,% / DR, KOLKATA BENCHES, KOLKATA -6 ,/ TRUE COPY, .%?/ BY ORDER, #3 /ASSTT. REGISTRAR .