Hind Trading Corporation, Kolkata V. ITO, Wd-34(3), Kolkata, Kolkata

ITA 1265/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100260 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2014
• Court: TRIBUNAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Gift
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.1265/KOL/2014 ASSESSMENT YEAR: 2006-07 HIND TRADING CORPORATION VS. INCOME-TAX OFFICER, WD-34(3), KOLKATA (PAN: AADFH9485P) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 09.12.2015 DATE OF PRONOUNCEMENT: 09.12.2015 FOR THE APPELLANT: SHRI MIRAJ D. SHAH, ADVOCATE FOR THE RESPONDENT: SHRI RAJENDRA PRASAD, JCIT, SR. DR THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XX, KOLKATA IN APPEAL NO.252/CIT(A)-XX/WD-34(3)/2008-09/KOL DATED 06.03.2 014. ASSESSMENT WAS FRAMED BY ITO, WARD-34(3), KOLKATA, U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2006-07 VIDE ITS ORDER DATED 29.12.20 08. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN UPHOLDING THE ADDITION MADE BY AO OF SUNDRY CREDITORS BEING ADVAN CES FOR SALE RECEIVED FROM EIGHT PARTIES AMOUNTING TO RS.9.5 LACS U/S. 68 OF THE ACT AS UNEX PLAINED CASH CREDIT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A TRADER OF IRON AND STEEL. DURING THE RELEVANT AY 2006-07 THE TOTAL TURNOVER OF THE ASSESSEE IS AT RS.18.43 CR. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDING NOTICED THAT IT HAS RECEIVED CASH ADVANCE OF RS.9.5 LACS FROM THE FOLLOWING PARTIES: NAME DATE AMOUNT IN RS. SHAH TRADERS, KOLKATA RELIABLE TRADERS, KOLKATA NAV BHARAT TRADERS, HOWRAH MONDAL TRADING CO., DURGAPUR MAKALI TRADING CO. M. K. STEEL CO. M. A. BROTHERS DURGA TRADING CO., HOWRAH 22.02.2006 03.09.2005 03.03.2006 04.11.2005 05.10.2005 22.11.2005 28.11.2005 01.06.2005 TOTAL 100,000 100,000 100,000 200,000 150,000 100,000 100,000 100,000 950,000 THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE CREDITW ORTHINESS OF THESE PARTIES. THE AO ISSUED NOTICE U/S. 133(6)/131 OF THE ACT WHICH RETURNED UN -SERVED DUE TO INCOMPLETE ADDRESS. THE ASSESSEE CLAIMED BEFORE THE AO THAT IT HAS SOLD GOO DS TO THESE PARTIES IN LIEU OF THE ADVANCE RECEIVED IN THE NEXT FINANCIAL YEAR AND FILED COPIE S OF BILLS, LEDGER ACCOUNT OF THE PARTIES, CHALLAN AND VAT DECLARATION BEFORE THE AO TO PROVE HIS BONA FIDE. BUT THE AO WAS NOT CONVINCED WITH 2 ITA NO.1265/K/2014 HIND TRADING CORPORATION, AY 2006-07 THE EXPLANATION AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. HENCE, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE TRIBUNAL. 4. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT OUT OF SUM OF RS.9.5 LACS ASSESSEE SOLD M ATERIAL TO ALL PARTIES EXCEPT ONE M/S. SHAH TRADERS FROM WHOM ADVANCE AMOUNTING TO RS. 1 LAC WA S RECEIVED. THUS, A SUM OF RS.8.5 LACS OUT OF THE SUM OF RS.9.5 LACS WERE BELONGING TO THE PARTIES WHO HAVE MADE ADVANCE FOR MATERIAL AND ASSESSEE SOLD THE MATERIALS TO THESE PARTIES. T HESE AMOUNTS WERE DULY REFLECTED AS SALE PROCEEDS IN THE NEXT FINANCIAL YEAR AND ASSESSEE DI D NOT REFLECT THE SAID AMOUNT AS LOAN, SHARE CAPITAL OR GIFT BUT ADJUSTED THE SAME AGAINST SALE PRICE. THE AMOUNT OF RS.8.5 LACS WAS RECEIVED FROM SALE PROCEEDS WHICH WERE DULY EFFECTED IN THE NEXT FINANCIAL YEAR AND IN SUPPORT OF THIS FACT LEDGER COPIES AS WELL AS COPIES OF BILLS FOR SALE A ND VAT DECLARATIONS WERE FILED BEFORE THE AO AS WELL AS BEFORE CIT(A) AND EVEN NOW BEFORE US. LD. COUNSEL FOR THE ASSESSEE BEFORE US DREW OUR ATTENTION TO ONE PARTICULAR PAGE 60 WHEREIN SALE OF MATERIAL AMOUNTING TO RS.1,00,183/- WAS ADJUSTED AGAINST THE ADVANCE OF RS.1 LAC TO NABA BH ARAT TRADERS. SIMILARLY, THE ASSESSEE HAS ALSO FILED CHALLANS OF OTHER PARTIES ALSO. IN VIEW OF T HE ABOVE FACTS, ONCE THE SALE IS EFFECT IN THE NEXT FINANCIAL YEAR AGAINST THE ADVANCE RECEIVED, THESE ADVANCES CANNOT BE TREATED AS CASH CREDIT U/S. 68 OF THE ACT AND CANNOT BE ADDED AS INCOME OF THE ASSESSEE. ACCORDINGLY, I DELETE THE ADDITION TO THE EXTENT OF RS.8.5 LACS BUT SUSTAIN THE ADDITI ON OF RS.1 LAC. APPEAL OF ASSESSEE IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 9 TH DECEMBER, 2015 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT HIND TRADING CORPORATION, C/O D. J. SHA H & CO. KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA-20. 2 RESPONDENT ITO, WARD-34(3), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .