Bidhan Chandra Biswas, Durgapur V. ITO, Ward - 1(1), Durgapur, Durgapur

ITA 130/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5634 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI P.K.BANSAL, A.M. & SHRI GEORGE MATHAN, J.M. ] I.T.A. NO.130/KOL/2012 ASSESSMENT YEAR : 2008-09 BIDHAN CHANDRA BISWAS, DURGAPUR -VS- ITO, WAR D-1(1), DURGAPUR ( APPELLANT ) PAN : AEMPB 2094M ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 09.01.2014 DATE OF PRONOUNCING THE ORDER : 15.01.2014 APPEARANCES : FOR THE APPELLANT : SHRI ARVIND AGARWAL : FOR THE RESPONDENT : SHRI RAJENDRA PRAS AD, JCIT, SR.DR O R D E R PER SHRI P.K.BANSAL, A.M. : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), DURGAPUR DATED 02.12.2011 FOR THE ASSESSMENT YEAR 2 008-09. 2. THE ONLY ISSUE INVOLVED IN ALL THE GROUNDS RELAT ES TO THE ADDITION AMOUNTING TO RS.15,49,403.29 ON ACCOUNT OF UNACCOUNTED PURCHA SES. 3. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE AO NOTED AS PER THE BALANCE- SHEET AS ON 31.03.2008 THAT THERE IS A VAT RECOVERA BLE TO BE CARRIED FORWARD AMOUNTING TO RS.1,28,133.48 BUT AS PER THE BOOKS, T HE VAT TO BE CARRIED FORWARD WAS RS.66,157.35.THUS, THERE WAS A DIFFERENCE OF RS .61,976.13. THE AO, THEREFORE, ESTIMATED THE PURCHASES TAKING THE INPUT VAT @4% AT RS.15,49,403.25 AND ADDED THE SAME AS THE UNEXPLAINED EXPENDITURE I N THE HANDS OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) BUT T HE CIT(A), WITHOUT DISCUSSING THE GROUNDS TAKEN BY THE ASSESSEE, CONFIRMED THE SA ID ADDITION ON THE BASIS OF THE EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. 2 I.T.A. NO.130/ KOL/2012 BIDHAN CHANDRA BISWAS A.Y. 2008-09 4. THE LD. A.R. BEFORE US VEHEMENTLY CONTENDED THAT THERE WAS CARRIED FORWARD INPUT VAT CREDIT FOR A SUM OF RS.61,976.13. THIS SU M WAS CARRIED FORWARD FROM THE ASSESSMENT YEAR 2007-08. THIS FIGURE WAS INCLUDED I N THE STOCK AND NOT BEING SHOWN SEPARATELY. THEREFORE, THE RECTIFICATION OF G ENERAL ENTRY WAS PASSED DEBITING THE INPUT VAT CREATED BY RS.61,976.13 AND CREATING THE OPENING STOCK SO THAT THE OPENING STOCK WAS REDUCED AND VAT COULD BE SHOWN SE PARATELY. IN THIS REGARD, ATTENTION WAS DRAWN TOWARDS PROFIT AND LOSS A/C. FO R THE YEAR ENDED 31.03.2007 AND BALANCE-SHEET FOR THE IMPUGNED ASSESSMENT YEAR. ATT ENTION WAS ALSO DRAWN TOWARDS THE VAT RETURN FOR THE QUARTER ENDED 31.05. 2007 AND THE VAT RETURN FOR THE QUARTER ENDED 31.03.2008. IT WAS ALSO POINTED O UT THAT WHEN THE AO RAISED THE QUERY, THE ASSESSEE HAS DULY EXPLAINED THE SAME TO THE AO VIDE HIS LETTER DATED 30.12.2010. THE AO, WITHOUT UNDERSTANDING THE FACTS , JUST ESTIMATED THE PURCHASE AND ADDED IN THE INCOME OF THE ASSESSEE, WHILE THE VAT WAS DULY RECONCILED. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF T HE AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME ALONG WITH THE ORDERS OF TAX AUTHORITIES BELOW AS W ELL AS THE PAPER BOOK AND THE DOCUMENTS ON WHICH THE LD. A.R. HAS RELIED BEFORE U S. WE NOTED THAT THIS IS A FACT THAT WE NOTED DURING THE ASSESSMENT YEAR 2007-08, T HE ASSESSEE HAS INCLUDED THE VAT IN THE CLOSING STOCK AND THEREFORE THE ASSESSEE HAS PASSED THE RECTIFICATION ENTRY ON 01.04.2007 DEBITING THE VAT CREDIT AND CRE ATING THE OPENING STOCK. THE FACT OF THE FAT AMOUNT IS ALSO APPARENTLY CLEAR FRO M THE VAT RETURN FILED BY THE ASSESSEE FOR THE QUARTER ENDED 31.03.2007 AND 31.03 .2008. THE EXPLANATION GIVEN BY THE ASSESSEE, IN OUR OPINION, IS A PLAUSIBLE ONE AND IF ANY, THE AO HAD LOOKED INTO THE VAT RETURN AND THE EXPLANATION OF THE ASSE SSEE, THE DIFFERENCE WOULD HAVE BEEN RECONCILED. UNDER THESE CIRCUMSTANCES, IN OUR OPINION, NO ADDITION ON ESTIMATE BASIS ON ACCOUNT OF SUPPRESSED PURCHASE CA N BE SUSTAINED AS THERE IS NO EVIDENCE ON RECORD, WHICH MAY PROVE THAT THE ASSESS EE HAS ACTUALLY SUPPRESSED THE 3 I.T.A. NO.130/ KOL/2012 BIDHAN CHANDRA BISWAS A.Y. 2008-09 PURCHASE. IN VIEW OF THIS, WE ALLOW THE GROUNDS TAK EN BY THE ASSESSEE AND DELETE THE ADDITION AMOUNTING TO RS.15,49,403.29 ON ACCOUN T OF SUPPRESSED PURCHASE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY, 2014. SD/- SD/- (GEORGE MATHAN) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH JANUARY, 2014 COPY OF THE ORDER FORWARDED TO: 1. BIDHAN CHANDRA BISWAS, M/S. BISWAS HARDWARE, BENACH ITY, DURGAPUR -13. 2. ITO, WARD-1(1), DURGAPUR 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)