ITO, Ward - 12(3), Kolkata, Kolkata V. M/s. Bihar Rolling Mills Pvt. Ltd., Kolkata

ITA 1317/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59617 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 10-10-2011
• Court: TRIBUNAL
• Department Lawyers: AMITABHA ROY
• Assessee Lawyers: M SATNALIWALA
• Keywords: Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , ! ! ! ! /AND ' #!' ' #!' ' #!' ' #!' , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] !$ !$ !$ !$ / I.T.A NO. 1317/KOL/2011 #%& '( #%& '( #%& '( #%& '(/ // / ASSESSMENT YEAR : 2006-07 INCOME-TAX OFFICER, WD-12(3), KOLKATA. VS. M/S. B IHAR ROLLING MILLS PVT. LTD. (PAN:AABCB 1988 N) (*+ /APPELLANT ) (,*+/ RESPONDENT ) & C.O. NO.57/KOL/2011 IN !$ !$ !$ !$ / I.T.A NO. 1317/KOL/2011 #%& '( #%& '( #%& '( #%& '(/ // / ASSESSMENT YEAR : 2006-07 M/S. BIHAR ROLLING MILLS PVT. LTD. VS. INCOME-TAX OFFICER, WD-12(3), KOLKATA. (CROSS OBJECTOR) (,*+/ RESPONDENT ) FOR THE REVENUE: SHRI AMITABHA ROY FOR THE RESPONDENT: SHRI M. SATNALIWALA DATE OF HEARING: 14.02.2012 DATE OF PRONOUNCEMENT: 29.02.2012 - / ORDER PER MAHAVIR SINGH, JM ( ' #!' ' #!' ' #!' ' #!', , , , ) THIS APPEAL BY REVENUE AND CROSS OBJECTION BY ASSES SEE ARE ARISING OUT OF THE ORDER OF CIT(A)-XII, KOLKATA IN APPEAL NO. 243/XII/12(3)/10- 11VIDE DATED 04.07.2011. ASSESSMENT WAS FRAMED BY ITO, WD-12(3), KOLKATA FOR ASSESSMENT YEAR 2006-07 U/S.144/147 R.W.S. 145(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFE RRED TO AS THE ACT) VIDE HIS ORDER DATED 28.12.2010. 2. THE FIRST COMMON ISSUE IN THIS APPEAL OF REVENUE AND CROSS OBJECTION OF ASSESSEE IS AS REGARDS TO REJECTION OF BOOK RESULTS BY INVOKING TH E PROVISIONS OF SECTION 245(3) OF THE ACT AND THEREBY CIT(A) RESTRICTING THE ESTIMATION OF INCOME AT RS.4,12,500/- AS AGAINST ESTIMATION MADE BY ASSESSING OFFICER AT RS.14,47,368/-. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO. 1: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN ESTIMATING INCOME OF RS.4,12,500/- AS AGAINST ESTIM ATION OF INCOME OF RS.14,47,368/- BY THE ASSESSING OFFICER, WHILE OBSERVING THAT THE A.O . RIGHTLY REJECTED BOOKS OF ACCOUNTS U/S. 145(3) OF THE INCOME TAX ACT, 1961. 2 ITA 1317/K/2011 & CO 57/K/2011 BIHAR ROLLING MILLS (P) LTD. A.Y. 2006-07 THE ASSESSEE HAS ALSO RAISED THE FOLLOWING GROUND: THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ESTIMATIN G THE INCOME AT RS.4,12,500/- AS AGAINST NIL INCOME SHOWN BY THE ASSESSEE. 3. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSES SEE ALSO CHALLENGED THE REJECTION OF BOOK RESULTS. FOR THIS, HE HAS DRAWN OUR ATTENTION TO THE ASSESSMENT ORDER WHEREBY THERE IS NO REASON OR DEFECTS IN BOOKS OF ACCOUNT MENTIONED BY ASSESSING OFFICER FOR REJECTION OF BOOK RESULTS. LD. COUNSEL FOR THE ASSESSEE HAS ALSO DRA WN OUR ATTENTION TO THE FINDINGS OF THE ASSESSING OFFICER THAT HE HAS CONSIDERED THE FOLLOW ING THREE ISSUES FOR REJECTION OF BOOKS RESULTS: A) THE ASSESSEE HAS CLAIMED THAT IT DID NOT COMPLE TE THE JOB OF DISMANTLING AND THUS THE TOTAL PURCHASE HAD NOT BEEN MADE BY THEM. BUT IT H AS FAILED TO FURNISH ANY SUPPORTING EVIDENCE IN THIS REGARD. THE REPLY RECEIVED FROM M /S. AESSEN PVT. LTD. ALSO, DOES NOT SUPPORT THE CONTENTION OF THE ASSESSEE. B) THE ASSESSEE HAS ALSO FAILED TO FURNISH EVIDENCE S OF SALES E.G. NAME, COMPLETE POSTAL ADDRESS OF THE PARTIES INVOLVED ETC. THEREFORE, IT CANNOT BE SAID THAT THE SALE VALUE AND PURCHASE VALUE ARE SAME. THE MERITS OF THE CASE HA VE ALREADY BEEN DISCUSSED ABOVE IN DETAIL. C) THE OTHER EXPENDITURES CLAIMED HAVE NO RELATION TO THE INCOME EARNED. IN VIEW OF THE ABOVE THREE ISSUES THE ASSESSING OFF ICER HELD THAT CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNT IS NOT SATISFACTORY AND HEN CE, REJECTED BOOK RESULTS BY INVOKING THE PROVISION OF SECTION 145(3) OF THE ACT AND ASSESSED U/S. 144 OF THE ACT. THE ASSESSEE BEFORE CIT(A) CHALLENGED THE ISSUE OF REJECTION OF BOOK R ESULTS AND CIT(A) WITHOUT GOING INTO THE MERITS CONFIRMED THE ACTION OF ASSESSING OFFICER IN REJECTING THE BOOK RESULTS BY STATING THAT THE ASSESSEE HAS NOT DISCLOSED THE COMPLETE AND TRUE FA CTS REGARDING SALE OF DISMANTLED MACHINERY TO M/S. AESSEN PVT. LTD. HENCE, ACCORDING TO HIM T HE ASSESSING OFFICER HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECT ION 145(3) OF THE ACT AND MADE BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT. ON QUERY FROM THE BENCH, LD. DR COULD NOT BRING OUT ANYTHING FROM ORDERS OF LOWER AUTHORITIES THAT WHAT WAS THE DEFECT IN THE BOOKS OF ACCOUNT AND HOW THE ASSESSING OFFICER IS UNABLE TO DEDUCE CORRE CT PROFIT. 4. WE ARE OF THE VIEW THAT ACCOUNTS REGULARLY MAINT AINED IN THE COURSE OF BUSINESS HAVE TO BE TAKEN AS CORRECT UNLESS THERE ARE STRONG AND SUF FICIENT REASONS TO INDICATE THAT THEY ARE UNRELIABLE. THE DEPARTMENT HAS TO PROVE THAT BOOKS OF ACCOUNT ARE UNRELIABLE, INCORRECT OR INCOMPLETE BEFORE IT REJECT ACCOUNTS, WHICH CAN BE DONE BY SHOWING THAT PURCHASES ARE NOT RECORDED, PROPER PARTICULARS OR VOUCHERS ARE NOT FO RTHCOMING OR ACCOUNTS DO NOT INCLUDE ENTRIES RELATING TO A PARTICULAR CLASS OF BUSINESS ETC. BUT NONE OF THE FACTORS IS POINTED OUT BY AO IN HIS ASSESSMENT ORDER OR BY CIT(A) IN HIS APPELLATE ORDE R. SINCE THERE IS NO DEFECT IN THE BOOKS OF 3 ITA 1317/K/2011 & CO 57/K/2011 BIHAR ROLLING MILLS (P) LTD. A.Y. 2006-07 ACCOUNT POINTED OUT EITHER BY ASSESSING OFFICER OR BY CIT(A), WHICH IS CLEARLY EVIDENT FROM ASSESSMENT ORDER AND THE ORDER OF CIT(A), THE REJEC TION OF BOOK RESULTS CANNOT BE UPHELD. ONCE THE BOOKS ARE ACCEPTED AS CORRECT, THERE IS NO QUES TION OF ESTIMATING THE GROSS PROFIT OR NET PROFIT. HENCE, WE ARE OF THE VIEW THAT LOWER AUTHO RITIES ERRED IN REJECTING BOOK RESULTS. HENCE, WE ALLOW THIS ISSUE OF CROSS OBJECTION OF ASSESSEE AND DISMISS THIS GROUND OF REVENUES APPEAL. 5. THE SECOND ISSUE OF REVENUES APPEAL IS AS UNDER : THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DIRECTING TO MAKE SPECIFIC DISALLOWANCE OF RS.34,30 1/- ONLY AS AGAINST ESTIMATION OF INCOME OF RS.40,500/- ON ACCOUNT OF INTEREST RECEIV ED BY THE ASSESSING OFFICER BY REJECTING BOOKS OF ACCOUNTS U/S. 145(3) OF THE INCO ME TAX ACT, 1961. SINCE, WE HAVE ACCEPTED THE BOOK RESULTS IN THE IN THE ISSUE TAKEN UP BY ASSESSEE, AS THERE IS NO DEFECT POINTED OUT BY ASSESSING OFFICER IN THE BOOK S OF ACCOUNT, WE DISMISS THIS ISSUE OF REVENUES APPEAL ALSO. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED AN D CROSS OBJECTION OF ASSESSEE IS ALLOWED. 7. ORDER PRONOUNCED IN OPEN COURT ON 29.02.2012. SD/- SD/- , ' ' ' ' #!' #!' #!' #!' , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 29TH FEBRUARY, 2012 /0 #%12 #3 JD.(SR.P.S.) - 4 ##5 65'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT ITO, WD-12(3), KOLKATA 2 ,*+ / RESPONDENT, M/S. BIHAR ROLLING MILLS PVT. LTD.,30 8, CENTRAL PLZA, 2/6, SARAT BOSE ROAD, KOLKATA-700 020 3. #-% ( )/ THE CIT(A), KOLKATA 4. #-% / CIT, KOLKATA 5 . =#> #% / DR, KOLKATA BENCHES, KOLKATA ,5 #/ TRUE COPY, -%/ BY ORDER, ' !2 /ASSTT. REGISTRAR .