Mineral Metal Centre (Dissolved) represented by Aditya Sharma, Kolkata V. I.T.O.,Ward-35(4), Kolkata

ITA 1122/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5905 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-02-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 13-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA JCITSRDR
• Assessee Lawyers: B K SINGH
• Keywords: Unexplained expenditure; Commercial expediency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.1122/KOL/2019 ASSESSMENT YEAR:2013-14 MINERAL METAL CENTRE ( DISSOLVED ) C/O SUBASH AGARWAL & ASSOCIATES, ADVOCATES SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-700001 [ PAN NO. AAEFM 5037 B ] / V/S . INCOME TAX OFFICER WARD-35(4), AAYAKAR BHAWAN, (POORVA),110, SHANTIPALLY, KOLKATA- 700107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI B.K. SINGH, ADVOCATE /BY RESPONDENT SHRI JAYANTA KHANRA, JCIT-SR-DR /DATE OF HEARING 05-02-2020 /DATE OF PRONOUNCEMENT 14-02-2020 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-10, KOLKATAS ORDER DATED 01.03.2017 PASSED IN CASE NO.75/CIT(A)-10/WD-35(4)/16-17/KOL. INVOLV ING PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. IT EMERGES FROM THE PERUSAL OF THE CASE FILE THA T ASSESSEES INSTANT APPEAL SUFFERS FROM 743 DAYS DELAY IN FILING. THE ASSESSEE HAS FI LED ITS AUTHORIZED PERSONS MEDICAL RECORD RUNNING INTO ALMOST THIRTY PAGES INDICATING HIM TO HAVE UNDERGONE VARIOUS TREATMENTS. THE SAME HAS NOT BEEN REBUTTED FROM REV ENUE SIDE. I THEREFORE HOLD THAT THE IMPUGNED 743 DAYS DELAY IS NEITHER INTENTIONAL NOR DELIBERATE BUT ON ACCOUNT OF ITA NO.1122/KOL/2019 A.Y.2013-14 MINERAL METAL CENTRE (DISSOLVED) VS. ITO WD- 35(4), KOL. PA GE 2 REASONS BEYOND ASSESSEES CONTROL. THE SAME STANDS CONDONED. THE CASE IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. 3. IT TRANSPIRES DURING THE COURSE OF HEARING ABLE ASSISTANCE OF SHRI SINGH; LEARNED AUTHORIZED REPRESENTATIVE AND SHRI KHANRA, SENIOR D EPARTMENTAL REPRESENTATIVE THAT BOTH THE LOWER AUTHORITIES HAVE ESTIMATED ASSESSEE S GROSS PROFIT @ 6.02% ALONGWITH UNEXPLAINED EXPENDITURE OF 6,69,561/- IN THE NATURE OF UNDISCLOSED INVOLVING S UM(S) OF 66,501/-, LOSS OF CASH DISALLOWANCE OF 11,74,400/-, RETAINERHIP EXPENSES OF 3,64,800/- AND LEGAL FEES OF 1,00,449/-; RESPECTIVELY. LEARNED COUNSEL SUBMITS T HAT THE FIRST HEAD OF UNDISCLOSED EXPENDITURE PURCHASE DESERVES TO BE RESERVED SINCE ASSESSEE HAS FILED ALL THE CORRESPONDING DETAILS AN D DOCUMENTARY EVIDENCE. IN VIEW OF THE FACT THAT THE ASSESSEE HAS FAILED TO GET ALL TH E IMPUGNED PURCHASES VERIFIED; AND ON THE OTHER HAND, THE LOWER AUTHORITIES HAVE ACCEPTED THE SALES INVOLVED THEREFROM. I DEEM IT APPROPRIATE THAT A LUMP SUM DISALLOWANCE OF 50,000/- OUT OF 6,69,561/- WOULD MEET THE ENDS OF JUSTICE. CONSEQUENTIAL NECES SARY COMPUTATION SHALL FOLLOW. 4. NEXT COMES SECOND SUBSTANTIVE GRIEVANCE OF LOSS OF CASH DISALLOWANCE OF 11,74,400/- MADE IN BOTH THE LOWER PROCEEDINGS. LEA RNED COUNSELS CASE IS THAT THE ASSESSEE HAD GOT A FIRST INFORMATION REPORT REGISTE RED WITH POLICE AUTHORITIES IN SUPPORT OF THE IMPUGNED CLAIM. CASE LAWS (1953) 23 ITR 481 (SC) CHAINRUP SAMPATRAM VS. COMMISSIONER OF INCOME TAX, WEST BENGAL HELD LONG BACK THAT PRINCIPLES OF CONSERVATION AND CONSIDERATION OF PRUDENCE IN ACCOU NTING TREATMENT REQUIRE THAT NO ANTICIPATED PROFITS BE TREATED AS INCOME LIST THEY ARE REALIZED, THE CONVERSE IS NOT TRUE RECORDING ANTICIPATED LOSS BASED ON THE FIRST SIGHT OF RES JUDICATA PROBABILITY. I THEREFORE CONCLUDE THAT ONCE THE ASSESSEE HAS PROVE D THAT IT HAD GOT LODGE POLICE INFORMATION / FIR, THE SAME FRAMED SUFFICIENTLY REA SON TO CLAIM THE IMPUGNED LOSS OF CASH AMOUNTING TO 11,74,400/-.THIS SECOND SUBSTANTIVE GROUND IS ACCEP TED THEREFORE. 5. NEXT COMES THE LATTER TWO HEAD(S) OF RETAINERSHI P EXPENSES AND LEGAL FEES OF 3,64,800/- AND 1,00,449/-; RESPECTIVELY. LEARNED COUNSEL FAILS TO DISPUTE ALTHOUGH THE ASSESSEE HAS FILED ALL DOCUMENTARY EVIDENCE, IT HAS FAILED TO DISCHARGE ITS ONUS THAT ITA NO.1122/KOL/2019 A.Y.2013-14 MINERAL METAL CENTRE (DISSOLVED) VS. ITO WD- 35(4), KOL. PA GE 3 AS THE IMPUGNED EXPENDITURES TO HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS INVOLVING COMMERCIAL EXPEDIENCY . I THEREFORE DEEM IT APPROPRIATE TO RESTRICT BOTH THE HEADS @ 10% SUM INVOLVED IN TH ESE PECULIAR FACTS AND CIRCUMSTANCES WITH A RIDER THAT SAME SHALL NOT BE T REATED AS A PRECEDENT IN ANY OTHER ASSESSMENT YEAR. CONSEQUENTIAL COMPUTATION TO FOLLO W AS PER LAW. 6. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN OPEN COURT ON 14/02/2020 SD/- (S.S. GODARA) JUD ICIAL MEMBER KOLKATA, *DKP/SR.PS - 14/02/2020 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-MINERAL METAL CENTRE ( DISSOLVED ) C/O SUBASH AGARWAL & ASSOCIATES, AD VOCATES SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-69 2. /RESPONDENT-ITO WARD-35(4), AAYAKAR BHAWAN (POORVA) , 110, SHANTIPALLY, K OLKATA-107 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ ',