Shyamsundar Sadhukhan, Howrah V. ITO, WD-46(4), KOLKATA, Kolkata

ITA 12/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0661 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: S M SURANA
• Section: 133(6)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.12/KOL/2016 ASSESSMENT YEAR:2008-09 SHYAMSUNDAR SADHUKHAN VILL & P.O. UDAYNARAYNPUR, DIST. HOWRAH-711226 [ PAN NO.ARIPS 9849 L ] / V/S . INCOME TAX OFFICER, WARD-46(4), 3, GOVT. PLACE, (WEST), KOLKATA- 001 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.M. SURANA, ADVOCATE /BY RESPONDENT SHRI ARINDAM BHATTACHARJEE, ADDL. CIT-DR /DATE OF HEARING 02-11-2017 /DATE OF PRONOUNCEMENT 26-12-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-14, KOLKATA DATED 26.11.2015. ASSESSM ENT WAS FRAMED BY ITO WARD- 46(4), KOLKATA U/S 143(3)/263 OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28.03.2014 FOR ASSE SSMENT YEAR 2008-09. THE GROUNDS RAISED BY THE ASSESSEE PER ITS APPEAL ARE AS UNDER: - 1. FOR THAT THE ORDER OF THE LD. CIT IS ARBITRARY, ILLEGAL AND BAD IN LAW. 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.25,39,514/- IS DIFFERENCE IN PURCHASE FIGURES WITHOUT PROPERLY APP RECIATING THE REASONS FOR ITA NO.12/KOL/2016 A.Y. 2008 -09 S.SADHUKHAN VS. ITO WD-46(4) KOL. PAGE 2 SUCH DIFFERENCE WHICH WAS PROPERLY EXPLAINED WITH R EFERENCE TO THE BOOKS OF ACCOUNT, PAYMENT MADE TO THE PARTIES AND THE PURCHA SE BILLS. 3. FOR THAT THE LD. CIT(A) EVEN OTHERWISE ERRED IN CONFIRMING THE DISALLOWANCE OF THE ENTIRE DIFFERENCE AND COULD HAVE ADDED ONLY THE NET PROFITS ON THE UNRECONCILED PURCHASE IF NOT SATISFIED WITH THE EXP LANATION OF THE ASSESSEE. 4. FOR THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2539514/ -. 5. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR MEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 2. IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN RAISED BY ASSESSEE, OUT OF WHICH GROUND NO. 1 AND 5 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY SEPARATE ADJUDICATION. GROUND NO. 2 TO 4 ARE INTER-RELATED AND THEREFORE B EING TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE. 3. THE INTER-RELATED ISSUE RAISED BY ASSESSEE IN TH IS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUS TAINING THE DISALLOWANCE OF 25,39,514/- ON ACCOUNT OF DIFFERENCE IN THE AMOUNT OF PURCHASES FROM THE PARTIES. 4. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND ENGAGED IN BUSINESS OF PURCHASE & SALE OF MEDICINES, DRUGS AND PHARMACEUTI CAL PRODUCTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO OBSERVED CERTAIN DIFF ERENCES IN THE AMOUNT OF PURCHASES SHOWN BY THE ASSESSEE VIS--VIS INFORMATI ON RECEIVED FROM THE PARTIES U/S 133(6) OF THE ACT. THE NECESSARY DETAILS STAND UNDE R:- SL.NO. NAME OF THE PARTY PURCHASE DISCREPANCY AS PER PURCHASE LIST PROVIDED BY THE ASSESSEE AS PER CONFIRMATION BY THE PARTY U/S 133(6) OF THE ACT 1 GHOSH MEDICAL AGENCIES 73,80,486 56,54,552 17,25,934 2 S.N. DISTRIBUTORS 24,15,438 16,01,858 8,13,580 ACCORDINGLY, AO SOUGHT FOR AN EXPLANATION FROM THE ASSESSEE FOR THE DISCREPANCIES AS DISCUSSED ABOVE. IN COMPLIANCE THERETO IT WAS SUBMI TTED THAT HE INADVERTENTLY FURNISHED WRONG INFORMATION DURING ASSESSMENT PROCE EDINGS. THE ASSESSEE FURTHER FILED THE REVISED DETAILS OF THE PURCHASES FROM THE PARTIES AS DETAILED UNDER:- ITA NO.12/KOL/2016 A.Y. 2008 -09 S.SADHUKHAN VS. ITO WD-46(4) KOL. PAGE 3 THE ACTUAL BREAK UP OF PURCHASE OF RS. 73,80,486.00 SHOWN IN THE NAME OF GHOSH MEDICAL AGENCY STANDS AS UNDER :- PURCHASE FORM GHOSH MEDICAL AGENCY 56,54,557.00 PURCHASE FORM SONALI ENTERPRISE 17,25,929.00 TOTAL 73,80,486.00 SIMILARLY THE ACTUAL BREAK UP OF PURCHASE OF RS. 24 ,15,438.00 SHOWN IN THE NAME OF S.N. DISTRIBUTORS STANDS AS UNDER :- S.N. DISTRIBUTOR 16,01,858.00 SUN PHARMA 3,94,966.00 SONALI ENTERPRISE 4,33,209.00 24,30,033.00 ACCORDINGLY THE ASSESSEE PRAYED TO THE AO THAT UNDE R SUCH CIRCUMSTANCES NO ADDITION IS CALLED FOR AS DISCUSSED ABOVE ON ACCOUNT OF DISC REPANCY IN THE AMOUNT OF PURCHASES. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE A SSESSEE AND ADDED THE AMOUNT OF DIFFERENCE IN PURCHASE TO THE TOTAL INCOME OF ASSES SEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT IF PURCHASE ARE TR EATED FALSE THEN THE CORRESPONDING SALES SHOULD ALSO BE TREATED AS BOGUS. HOWEVER, LD. CIT(A) DISREGARDED THE CONTENTION OF ASSESSEE AND CONFIRMED THE ORDER OF A O BY OBSERVING AS UNDER:- IN MY OPINION, THE APPELLANT HAS COMPLETELY FAILED TO GRASP THE PROVISIONS OF LAW IN THIS RESPECT. THE FACT OF THE MATTER IS THAT THERE WERE GLARING AND VERY LARGE DISCREPANCIES IN THE PURCHASE FIGURES AS OBTA INED BY THE AO AND THOSE DECLARED BY THE APPELLANT TO WHICH THE APPELLANT HA D VERY UNCONVINCING EXPLANATIONS BESIDES HIMSELF ADMITTING TO HUGE ERRO RS COMMITTED BY HIM. HE NOWHERE ATTEMPTED TO RECONCILE THE FIGURES OR OFFER COGENT EXPLANATIONS FOR THEM. IN VIEW OF THIS I CANNOT FIND MYSELF FINDING ANY FAULT WITH THE ACTION OF THE AO IN ADDING THE SAID AMOUNTS AS UNDISCLOSED PURCHA SES. AGGRIEVED, BY THIS, THE ASSESSEE HAS COME UP IN APP EAL BEFORE US. 6. LD. AR FOR THE ASSESSEE BEFORE US FILED A PAPER BOOK WHICH IS RUNNING FROM PAGES 1 TO 73 AND SUBMITTED THAT THE ADDITION WAS M ADE BY THE AO ON ACCOUNT OF ITA NO.12/KOL/2016 A.Y. 2008 -09 S.SADHUKHAN VS. ITO WD-46(4) KOL. PAGE 4 MISMATCH OBSERVED IN THE AMOUNT OF PURCHASES IN RES PECT OF CERTAIN PARTIES BUT WITHOUT POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNT OF ASSESSEE. THE LD. AR ALSO STATED THAT ALL THE PARTIES FROM WH OM THE PURCHASES WERE MADE BY ASSESSEE HAVE DULY CONFIRMED IN RESPONSE TO THE NOT ICES ISSUED TO THEM U/S 133(6) OF THE ACT. LD. AR IN SUPPORT OF ASSESSEES CLAIM DREW OUR ATTENTION TO THE CONFIRMATION ISSUED BY THE PARTIES U/S.133(6) OF THE ACT WHICH A RE PLACED ON PAGES 8 TO 16 AND 23 TO 63 OF THE PAPER BOOK. ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ADDITION WAS MADE BY THE AO ON ACCOUNT OF MISMATCH AS OBSERVED BY AO IN THE AMOUNT OF PURCHASES FROM CERTAIN PARTIES AS DISCUSSED ABOVE. THE ACTION TAKEN BY THE AO WAS SUBSEQUENTLY CONFIRMED BY THE LD. CIT-A. HOWEVER, WE NOTE THAT THE DIFFERENCE IN THE PURCHAS ES AS DISCUSSED ABOVE HAS BEEN DULY RECONCILED BY THE ASSESSEE DURING THE COURSE O F HEARING BEFORE AUTHORITIES BELOW. ALL THE PARTIES FROM WHOM THE PURCHASES WERE MADE B Y THE ASSESSEE DULY CONFIRMED THE TRANSACTIONS IN RESPONSE TO THE NOTICE ISSUED U /S 133(6) OF THE ACT. 7.1 WE ALSO FIND THAT NO DEFECT IN THE BOOKS OF ACC OUNT / AUDITED FINANCIAL STATEMENT WAS POINTED OUT BY THE AUTHORITIES BELOW. IN VIEW O F THE ABOVE, WE OBSERVE THAT THE AO HAS CONFIRMED THE ADDITION MERELY ON THE BASIS O F MISMATCH OBSERVED IN THE PURCHASE DURING THE COURSE OF ASSESSMENT PROCEEDING S. NONE OF THE AUTHORITIES BELOW HAS CHALLENGED THE CONFIRMATION RECEIVED FROM THE P ARTIES IN RESPONSE TO THE NOTICE ISSUED U/S 133(6) OF THE ACT. WE ALSO NOTE THAT THE TOTAL PURCHASE CLAIMED BY ASSESSEE IN ITS AUDITED PROFIT AND LOSS ACCOUNT HAS NOT BEEN CHALLENGED. MOREOVER WE ALSO NOTE THAT THE ASSESSEE HAS SHOWN L ESS PURCHASE FROM THE PARTIES AS DISCUSSED ABOVE IN ITS BOOKS OF ACCOUNTS. NOW THE I SSUE ARISES WHETHER THE AMOUNT OF LESS PURCHASE SHOWN BY THE ASSESSEE REPRESENTS HIS INCOME. IN THE GIVEN FACTS & CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT IF THE ASSESSEE HAS SHOWN LESS PURCHASES THEN ITS INCOME WILL INCREASE. IT IS BECA USE THERE IS NO ALLEGATION OF THE LOWER AUTHORITIES THAT THE ASSESSEE HAS MADE THE SA LE OF UNDISCLOSED PURCHASES OUTSIDE ITA NO.12/KOL/2016 A.Y. 2008 -09 S.SADHUKHAN VS. ITO WD-46(4) KOL. PAGE 5 THE BOOKS. IT MEANS THE SALE DECLARED BY THE ASSESS EE HAS NOT BEEN DOUBTED AND THE SAME WAS DULY ACCEPTED. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE ADDITI ON MADE BY AO ON ACCOUNT OF MISMATCH IN THE AMOUNT OF PURCHASES IS NOT SUSTAINA BLE. HENCE, WE REVERSE THE ORDER OF AUTHORITIES BELOW. CONSEQUENTLY GROUNDS OF APPEA L OF THE ASSESSEE ARE ALLOWED. WE ORDER ACCORDINGLY. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 26/12/2017 SD/- SD/- ( % ') ( ') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S ) - 26/12/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHYAMSUNDAR SADHUKHAN, VILL & PO UDAYNAR YAPUR, DIST. HOWRAH-7112 26 2. /RESPONDENT-ITO WARD,46(4), 3 GOVT. PLACE, (WEST), KOLKATA-001 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY HEAD OF OFFICE/DDO ,,