Shri Bishnu Pada Ghosh, Malda V. JCIT, MALDA RANGE, MALDA, Malda

ITA 1270/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9847 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR ADD L
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & HONBLE S HRI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 1270/KOL/20 16 ASSESSMENT YEAR : 2011-1 2 SHRI BISHNU PADA GHOSH -VS- JCIT, MALDA RANGE, MALDA [PAN: ADAPG 5283 A] (APPELLANT) (RESPOND ENT) FOR THE APPELLANT : SHRI SUBASH AGARWA L, ADVOCATE FOR THE RESPONDENT : SHRI SAURABH KUMAR, ADD L. CIT SR. DR DATE OF HEARING : 19.09.2018 DATE OF PRONOUNCEMENT : 26.09.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-JALPAIGURI [IN SHORT THE LD CIT(A)] IN APPEAL NO. 123/JAL/CIT(A)/JAL/2013-14 DATED 03.05.2016 AGAINST THE ORDER PASSED BY THE ACIT, MALDA CIRCLE, MALDA [ IN SHORT THE LD AO] UNDER SEC TION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 25.03.2014 F OR THE ASSESSMENT YEAR 2011-12. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS WITH REGARD TO ADDITION SUSTAINED BY THE LD. CIT(A) IN RESPECT OF SUNDRY CR EDITOR BALANCE OF RS. 9,30,625/- U/S 68 OF THE ACT. 2 ITA NO.1270/KOL/2016 SHRI BISHNU PADA GHOSH A.YR. 2011-12 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS AN INDIVIDUAL CONTRACTOR AND HAD FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 ON 31.03.2012 DECLARING TOTAL INCOME OF RS. 1,23,63,670/-. THE LD. AO OBSER VED IN HIS ASSESSMENT ORDER IN PAGE 1 THAT THE ASSESSEE PRODUCED DOCUMENTS AND EVI DENCES IN SUPPORT OF THE CLAIMS FURNISHED IN THE RETURN OF INCOME WITH CASH BOOK, L EDGER ACCOUNTS, BANK STATEMENT, BILLS AND VOUCHERS WHICH WERE ALSO SUBJECTED TO EXA MINATION BY THE LD. AO. THE LD. AO SOUGHT TO EXAMINE THE DETAILS OF SUNDRY CREDITOR S FILED BY THE ASSESSEE U/S 133(6) OF THE ACT. THE LD. AO OBSERVED THAT THREE S UNDRY CREDITORS HAD REPORTED THAT SOME AMOUNT WAS REPORTED BY THEM FROM THE ASSESSEE, BUT HAD HOWEVER NOT CONFIRMED THE CLOSING BALANCE FIGURE. BASED ON THIS EXPLANATION, THE LD. AO CAME TO CONCLUSION THAT THE BALANCE CONFIRMATION BY THOSE P ARTIES WERE RS. NIL AS ON 31.03.2011. ACCORDINGLY, THE LD. AO ISSUED SHOW CAU SE NOTICE TO THE ASSESSEE AS TO WHY THE BALANCE SHOWN IN THE FORM OF TRADE CREDITOR S IN RESPECT OF THREE PARTIES SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT U/ S 68 OF THE ACT. THE ASSESSEE REPLIED THAT HE HAS GOT NO COMMENTS TO OFFER IN RES PECT OF THE SAME. ACCORDINGLY, THE LD. AO STRANGELY SOUGHT TO TAX THE CLOSING BALA NCE SHOWN IN THE NAME OF M/S JAHARLAL GHOSH IN RESPECT OF ONLY ONE CREDITOR IN THE SUM OF RS. 9,30,625/- AND BROUGHT THE SAME TO TAX U/S 68 OF THE ACT. IN OTHER WORDS, EVEN THOUGH SHOW CAUSE NOTICE WAS ISSUED BY THE LD. AO IN RESPECT OF THREE SUNDRY CREDITORS, THE ADDITION U/S 68 WAS ULTIMATELY MADE ONLY IN RESPECT OF ONE SUNDR Y CREDITOR I.E. MR. JAHARLAL GHOSH. THIS ADDITION WAS CONFIRMED BY THE LD. CIT(A ). AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS. AT THE OUTSET, WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS FURNISHED ENTIRE REQUISITE DE TAILS TOGETHER WITH THE BILLS AND 3 ITA NO.1270/KOL/2016 SHRI BISHNU PADA GHOSH A.YR. 2011-12 3 VOUCHERS AND ALL THE SUPPORTING DOCUMENTS IN SUPPOR T OF THE CLAIMS MADE IN THE RETURN OF INCOME, WHICH FACT HAS BEEN ACKNOWLEDGED BY THE LD. AO IN HIS ASSESSMENT ORDER. THE ASSESSEE HAS SHOWN A SUM OF R S. 9,30,625/- AS AMOUNT PAYABLE TO MR. JAHARLAL GHOSH (TRADE CREDITOR) AS O N 31.03.2011 IN ITS BALANCE SHEET. THE SAID SUPPLIER (TRADE CREDITOR) HAD SUPPL IED MATERIALS TO THE ASSESSEE FOR THE PURPOSE OF ROAD CONTRACT WORK EXECUTED BY THE A SSESSEE. WE FIND THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF LEDGER ACCOUN T OF THE SAID SUNDRY CREDITOR (I.E. JAHARLAL GHOSH) FOR THE PERIOD 01.04.2010 TO 31.03. 2011 TOGETHER WITH THE ENTIRE INVOICES GIVEN BY THE SAID SUPPLIER TO THE ASSESSEE FOR SUPPLY OF MATERIALS. THESE DOCUMENTS ARE AVAILABLE IN PAGES 7 TO 19 OF THE PAP ER BOOK FILED BEFORE US. WE ALSO FIND THAT THE SAID SUPPLIER MR. JAHARLAL GHOSH IN R ESPONSE TO NOTICE ISSUED U/S 133(6) OF THE ACT HAD REPLIED BEFORE THE LD. AO VID E HIS LETTER DATED 15.11.2013 CONFIRMING THE FACT OF SUPPLY OF MATERIALS TO THE A SSESSEE DURING THE FINANCIAL YEAR 2010-11 AND HAD ALSO CONFIRMED THE FACT THAT SOME A MOUNT WAS RECEIVABLE FROM THE ASSESSEE FOR SUCH SUPPLY OF MATERIALS. THIS FACT IS EVIDENCED FROM PAGE 20 (BENGALI FONT) OF THE PAPER BOOK AND PAGE 21 (TRANSLATED FON T) OF THE PAPER BOOK FILED BEFORE US. WHILE THIS IS SO, IT IS FACTUALLY INCORR ECT ON THE PART OF THE LD. AO TO CONCLUDE THAT THE SAID TRADE CREDITOR HAD CONFIRMED NIL BALANCE AS ON 31.03.2011 AS AMOUNT RECEIVABLE FROM THE ASSESSEE. HENCE IT COULD BE SAFELY CONCLUDED THAT THE LD. AO HAD PROCEEDED TO MAKE AN ADDITION BY TREATIN G THE CONCERNED SUNDRY CREDITOR AS BOGUS BASED ON INCORRECT ASSUMPTION OF FACTS. IN ANY CASE, WE HOLD THAT NO ADDITION COULD BE MADE U/S 68 OF THE ACT IN RESP ECT OF A TRADE CREDITOR. WE FIND THAT THE LD. AO HAD NOT DISPUTED THE PURCHASE OF M ATERIALS MADE BY THE ASSESSEE FROM THE SAID SUNDRY CREDITOR AND HENCE THE CORRESP ONDING CREDIT ENTRY I.E. CREDIT TO THE ACCOUNT OF THE SUNDRY CREDITOR CANNOT BE DOUBTE D BY THE LD. AO. 4 ITA NO.1270/KOL/2016 SHRI BISHNU PADA GHOSH A.YR. 2011-12 4 4.1. IN VIEW OF THE AFORESAID OBSERVATIONS, WE DIRE CT THE LD. AO TO DELETE THE ADDITION MADE IN THE SUM OF RS. 9,30,625/- OF THE A CT. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 26.09.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BAL AGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 26.09.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. SHRI BISHNU PADA GHOSH, DREAM LAND COLONY, DIST. MALDA, PIN-732101, WEST BENGAL. 2. JCIT, MALDA RANGE, MALDA 3..C.I.T.(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S