Sri Debdas Bhowmick, Malda V. ITO,Ward(1), Malda, Malda

ITA 1337/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75056 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 08-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 17-09-2012
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY
• Assessee Lawyers: SUNIL SURANA ACA
• Keywords: Unexplained investment; Peak credit
• Section: 143(3); 260A

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1337/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2008-09 SHRI DEBDAS BHOWMICK VS. INCOME-TAX OFFICER, WD -1, MALDA (PAN: AHUPB4658G) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 13.02.2014 DATE OF PRONOUNCEMENT: 13.02.2014 FOR THE APPELLANT: SHRI SUNIL SURANA, ACA FOR THE RESPONDENT: SHRI P. K. CHAKRABORTY, JCIT , SR. DR $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), JALPAIGURI IN APPEAL NO. 14/MLD/CIT(A)/JAL/10-11 DATED 25.06.2012. ASSESSME NT WAS FRAMED BY ITO, WARD-1, MALDA U/S. 145(3) R.W.S. 143(3) OF THE INCOME-TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER D ATED 29.10.2010. 2. BY WAY OF THIS APPEAL THE ASSESSEE HAS CHALLENGE D THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF RS.6,72,806/- AS UNEXPLAINED INVESTMENT U/S. 69B OF THE ACT, RS.59,101/- AS PROFIT, ADDITION OF RS.5,03,972/- U/S. 69 OF THE ACT, ADDIT ION OF RS.2,87,112/- AS SUPPRESSED PROFIT AND ALSO A SUM OF RS.3,44,308/- AS SUPPRESSED PROFIT BY WAY OF FOLLOWING GROUND NOS. 2, 3 AND 4: 2.FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.6,72,806/- AS UNEXPLA INED INVESTMENT U/S. 69B AND RS.59,101/- AS CONCEALED INCOME OF THE ASSESSEE. 3. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,03,972/- U/S. 69 OF THE ACT AND FURTHER CONFIRMING THE ADDITION OF RS.2,87,112/- AND RS.3,44,308/- AS SUPP RESSED PROFITS OF THE ASSESSEE. 4. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER OF THE CIT(A) BE MODIFIED, EVEN IF SOME ADDITION RETAINED, TELESCOPI NG MAY BE GIVEN AND THE ASSESSEE BE GIVEN THE RELIEF PRAYED FOR. ABOVE ADDITIONS AE INTER-CONNECTED, HENCE WE HAVE T O TREAT THIS AS COMMON ISSUE. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A WHOLESALER CUM RETAILER IN UTENSILS AND PROPRIETOR OF M/S. ADI MALDA BASANALAYA. THE AO DU RING THE COURSE OF ASSESSMENT 2 ITA NO.1337/K/2012 DEBDAS BHOWMICK , AY:2008-09 PROCEEDINGS OBTAINED INFORMATION FROM BANK I.E. UC O BANK, MANGALBARI WHERE THE ASSESSEE HAS SUBMITTED SEPARATE SET OF AUDITED ACCOUNTS INCL UDING TRADING, P&L ACCOUNT AND BALANCE SHEET FOR THE FINANCIAL YEAR 2007-08 RELEVANT TO AY 2008-09. THE ASSESSEE HAS ALSO ENCLOSED AUDITED ACCOUNTS WITH THE RETURN OF INCOME. THE DI FFERENTIAL FIGURE HAS BEEN COMPARED AND THE RELEVANT DETAILS ARE AS UNDER: AS PER STATEMENT FILED WITH RETURN AS PER PROJECTED STATEMENT FILED WITH BANK REMARKS OPENING STOCK *2789669.50 1256141.60 *AS C/F FROM L/Y (ANNEXURE-B) PURCHASE **2455648.00 4985623.00 ** -DO- EXCESS DIRECT EXPENSES 153373.27 NIL - SALES 2756540.00 5541958.41 RS.2785418 WITH BANK CLOSING STOCK 3111885.50 1338461.54 - GROSS PROFIT 623180.00 485282.06 - NET PROFIT 198744.00 257845.00 - ACCORDING TO ABOVE, TWO STATEMENTS I.E. OBTAINED OU T OF THE ACCOUNTS OF THE ASSESSEE THERE IS DIFFERENCE IN FIGURES AS DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME AND AS DISCLOSED TO THE BANK I.E. THE TURNOVER, THE CLOSING STOCK AND PROFI T & LOSS ACCOUNT. THE ASSESSEES CONTENTION WAS THAT THE ASSESSEE GOT PREPARED A PROJECTED STAT EMENT OF ACCOUNT THROUGH CHARTERED ACCOUNTANT BASED ON ACTUAL PERFORMANCE OF LAST YEAR WHICH WAS FILED WITH UCO BANK FOR OBTAINING CC FACILITY UPTO 10,50 LACS. APART FROM THE ABOVE, DIFFERENCE IN TWO SETS OF ACCOUNTS THE AO ALSO NOTICED THAT THE ASSESSEE HAS NOT DISCL OSED ONE CURRENT ACCOUNT AND ONE SAVING BANK ACCOUNT MAINTAINED WITH ICICI BANK. BESIDES T HIS, CASH DEPOSIT OF RS.12,000/- MADE WITH UCO BANK ON 30.04.2007 FOR WHICH NO CORRESPONDING E NTRY WAS CARRIED OUT IN THE CASH BOOK AND SEVERAL OTHER IRREGULARITIES WERE FOUND IN THE BOOKS OF ACCOUNT, HE REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME ON ACCOUNT OF DIS CREPANCIES. THE FIRST DISCREPANCY WAS ON ACCOUNT OF TOTAL SALE AS SHOWN IN THE PROJECTED STA TEMENT OF ACCOUNT FILED WITH THE BANK WAS AT RS.55,41,958/- AS AGAINST THE SALES DECLARED IN THE NORMAL ACCOUNTS AT RS.27,56,540/-. THE AO COMPUTED THE EXCESS SALE AT RS.27,85,418/- AND ESTI MATED THE GROSS PROFIT AND REDUCED THE GROSS PROFIT DECLARED IN THE BOOKS OF ACCOUNT AND ADDED T HE DIFFERENCE OF RS.59,101/- AS INCOME OF THE ASSESSEE. APART FROM THAT THE AO COMPUTED THE ROLL OVER OF STOCK AT 4.1 TIMES IN ORDER TO ACHIEVE THE QUANTUM OF SALE AS DECLARED IN THE PROJ ECTED STATEMENT OF ACCOUNT AND THEREBY COMPUTED THE ESTIMATED CAPITAL AT RS.6,72,806/-. A S FAR AS THE NET PROFIT COMPUTATION THE ASSESSEE AGREED THAT THE SAME CAN BE SUSTAINED AT R S.59,101/- BUT STATED THAT THE ROLL OVER OF STOCK AND THEREBY COMPUTING THE CAPITAL INVESTED IN THE SAME AT RS.6,72,806/- HAVE NO BASIS. FOR THIS, THE ASSESSEE RELIED ON THE DECISION OF TH IS TRIBUNAL IN THE CASE OF DCIT VS. NAZRUL 3 ITA NO.1337/K/2012 DEBDAS BHOWMICK , AY:2008-09 HUSSAIN IN ITA NO.373/K/2011, WHICH WAS CONFIRMED B Y HONBLE JURISDICTIONAL HIGH COURT IN ITAT 123 OF 2012, GA NO.1502 OF 2012 DATED 04.09.20 12 BY OBSERVING AS UNDER: WE ARE UNABLE TO ADMIT THE APPEAL EVEN AFTER CONSI DERING FORCEFUL ARGUMENT OF MR. SARAF AS THE LEARNED TRIBUNAL AS WELL AS THE CIT (A PPEALS) ON 2 FACTS RECORDED THAT THE ASSESSING OFFICER HAS RELIED ON THE PREVIOUS AUDITE D BALANCE SHEET WITH GENERAL AUDIT REPORT DATED 8 TH MAY, 2006 WHICH WAS IMPLORED BY THE ASSESSEE TO TR EAT THE SAME AS BEING CANCELLED. INSPITE OF THIS THE ASSESSING OFFICER R ELIED ON THE SAME AUDITED BALANCE SHEET AND REPORT THEREOF. WE ARE IN COMPLETE AGREEMENT W ITH THE LEARNED TRIBUNAL AS WELL AS THE CIT(APPEALS) THAT THE APPROACH OF THE ASSESSING OFFICER WAS ABSOLUTELY UNFAIR. ON THE FACT FINDING OF ALL THE AUTHORITIES WE CANNOT E XERCISE DISCRETION UNDER SECTION 260A OF THE INCOME-TAX ACT. WE THUS DISMISS THE APPEAL WIT HOUT ANY ORDER AS TO COSTS. ALL PARTIES SHALL ACT ON A XEROX SIGNED COPY OF THIS ORDER ON U SUAL UNDERTAKINGS. 4. AS THE ISSUE OF TWO PROFIT AND LOSS ACCOUNTS THE PROFIT AND LOSS ACCOUNT WHICH HAVE HIGHER TURNOVER IS TREATED TO BE AS TRUE AND CORREC T IN THAT EVENTUALITY ONLY PROFIT CAN BE ADDED AND FOR WHICH ASSESSEE ALSO AGREED. HENCE, THE FIR ST ISSUE RAISED BY WAY OF GROUND NO.2 IS PARTLY ALLOWED DELETING THE ADDITION OF UNEXPLAINED INVESTMENT AT RS. 6,72,806/-. HOWEVER, ANOTHER REASON FOR DELETION OF THIS ADDITION IS THA T THIS AMOUNT COULD HAVE BEEN EARNED WHICH IS PART OF DEPOSITS MADE IN ICICI BANK I.E. CURRENT BA NK ACCOUNT AND SAVING BANK ACCOUNT. LD. COUNSEL FOR THE ASSESSEE PRODUCED THE DEPOSITS MADE IN SAVING BANK ACCOUNT AND CURRENT BANK ACCOUNT VIS--VIS COMPARATIVE EXCESS SALE AND STATE D THAT THESE ARE MATCHING. THE RELEVANT DETAILS ARE AS UNDER: EXCESS SALE SHOWN TO THE BANK WHICH HAS BEEN CONFIRMED BY THE AO AND CIT(A) DEPOSITS WITH UNDISCLOSED ICICI BANK (ACCOUNT NO. 047201000475) AS STATED IN AOS ORDER DEPOSITS WITH UNDISCLOSED ICICI BANK (ACCOUNT NO. 04720500010 ) AS STATED IN AOS ORDER RS.27,85,418/- RS.12,70,408/- RS.15,23,488/- 5. WITH REGARD TO ESTIMATION OF UNDISCLOSED SALES O UT OF THE DEPOSITS OF UNDISCLOSED BANK ACCOUNT THE TURNOVER WAS AT RS.27,97,896/- WHICH IS MORE OR LESS EQUAL TO THE CONCEALED TURN OVER FOUND BY THE AO AND THE PROFIT ON THE CONCEALE D TURNOVER IS ALREADY TAKEN INTO P&L ACCOUNT FILED BEFORE THE BANK AND SUCH PROFIT HAS B EEN CONFIRMED ABOVE, AS ESTIMATED BY ASSESSEE, AT RS.59,101/-. THEREFORE, THE ADDITION OF RS.2,87,112/- AND RS.3,44,308/- BEING SEPARATE PROFIT ON UNDISCLOSED SALES AT RS.22.6% ON THESE DEPOSITS WITH TWO UNDISCLOSED BANK ACCOUNT OF ICICI BANK WAS NOT JUSTIFIED BUT THE PEA K BALANCE IN BANK ACCOUNT NO. 047201000475 WITH ICICI BANK IS ADDED AT RS.5,03,97 2/- IS TO BE TREATED AS CAPITAL INVESTED TO CARRY OUT THESE TRANSACTIONS BECAUSE THE DEPOSITS M ADE AT RS.27,93,896/- IN NO WAY CAN BE SAID TO BE EXCESS DEPOSITS. BOTH THE ACCOUNTS ARE UNDIS CLOSED AND THE AO HAS RIGHTLY ADDED A SUM OF RS.5,03,972/-. ACCORDINGLY, WE CONFIRM THE ADDI TION. THIS ISSUE OF ASSESSEES APPEAL IS ALSO PARTLY ALLOWED. 4 ITA NO.1337/K/2012 DEBDAS BHOWMICK , AY:2008-09 6. IN NUT SHELL, ON BOTH THE ABOVE GROUNDS, WE CONF IRM THE ADDITION OF RS.59,101/- AS PROFIT IN RESPECT TO THE FIRST ISSUE I.E. THE EXCESS TURNO VER AND PEAK CREDIT OF RS.5,03,972/- OUT OF THE DEPOSITS IN THE BANK ACCOUNT I.E. ICICI BANK. THES E TWO ADDITIONS ARE CONFIRMED. HENCE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH FEBRUARY, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- SHRI DEBDAS BHOWMICK, PROP. OF M/S. ADI MALDA BAHANALAYA, N. S. ROAD, MALDA, WEST BENGAL-732101. 2 ./,- / RESPONDENT ITO, WARD-1, MALDA 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .