ITO,Ward-1(4), Hooghly, Hooghly V. Smt Shaswati Bhattacharya, Hooghly

ITA 1402/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83233 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2012
• Court: TRIBUNAL
• Department Lawyers: D BANERJEE
• Assessee Lawyers: SOMNATH GHOSH ADVOCTAE
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE HON BLE SRI MAHAVIR SINGH, JM& HON BLE SRI SHAMIM YAHYA , A M ] ITA NO.1402 /KOL/2012 ASSESSMENT YEAR : 2008 - 09 ( A PPELLANT ) (RESPONDENT) I.T.O., W ARD - 1(4 ) - VS - SMT.SHASWATI BHATTACHARYA HOOGHLY HOOGHLY (PAN: AHPPB 3729 F) FOR THE APPELLAN T SHRI D.BANERJEE, JCIT FOR THE RESPONDENT SRI SOMNATH GHOSH, ADVOCTAE DATE OF HEARING : 10 .12.2014 DATE OF PRONOUNCEMENT : 11.12.2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF L D. C.I.T - (A) - XXXVI, KOLKATA DT. 23.07 .2012 AND PERTAIN S TO ASSESSMENT YEAR 2008 - 09. 2. THE GROUNDS OF APPEAL READ AS UNDER : - 1. LD.CIT(A) HAS ERRED ON F ACTS AS WELL AS IN CIRCUMSTANCES IN DELETING THE ADDITION OF RS.21,12,721/ - . 2. LD.CIT(A) HAS ERRED ON FACTS AS WELL AS IN LAW IN NOT RECORDING THE FAILURE OF THE ASSESSEE TO ATTEND HEARING BEFORE THE AO FOR A SINGLE OCCASION PARTICULARLY WHEN THERE WAS A PALPABLE DISAGREEMENT BETWEEN THE AO AND THE ASSESEE OVER EXPLANATION OF ACCOUNTS. 3. LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT RECOGNIZING THAT THE ASSESSEE SHOULD HAVE GOT HER ACCOUNTS AUDITED FOR SEASONAL BUSINESS TOO AND CANNOT BE SELECTIVE U/S 44 AB AS REPORTED IN CITATION 295 ITR 314 (2007) (RAJASTHAN HIGH COURT). 4. THE APPELLANT CRAVES LEAVE TO ADD, MODIFY, DELETE ANY OR MORE GROUNDS OF APPEAL. 3. THE ASSESSEE IN THIS C ASE IS DEALING IN PETROL AND DIESEL ALONG WITH LUBRICANTS AS AUTHORIZED DE ALER OF HINDUSTHAN PETROLEUM CORPORATION LIMITED (HPCL) AND ALSO CARRIED ON BUSINESS IN SEASONAL AGRO - PRODUCT (POTATO). IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT BOOKS OF ACCOUNT WERE NOT PRODUCED FOR VERIFICATION ITA.NO.1402 /K/2012 SMT.SHASWATI BHATTACHARYA A.YR. 2008 - 09 2 ALONG WITH THE DOCUMENT S. ON THE IMPUGNED ISSUE AO MADE ADDITION BY OBSERVING AS UNDER : - IT IS FURTHER EVIDENT FROM YOUR RETURN OF INCOME FOR THE ASST.YEAR 2008 - 09, THAT YOU HAVE MADE A TOTAL PURCHASE OF RS.3,30,62,663/ - AND THERE EXISTS SUNDRY CREDITORS OF RS.7,90,387/ - . SINC E YOU HAVE NOT MAINTAINED ANY BANK A/C OTHER THAN THE ONLY CC A/C, THE PAYMENTS MADE AGAINST PURCHASES AS PER YOUR CASH BOOK (AS FURNISHED BY YOU DATED 15.12.10) REFLECTS ONLY RS.3,01,59,555/ - THROUGH YOUR CC A/C MAINTAINED IN THE S.B.I., ARAMBAGH BR . HENC E, WHY THE DIFFERENCE OF R S.21,12,721/ - WILL NOT BE TREATED AS YOUR UNDISCLOSED EXPENDITURE MADE FROM UNDISCLOSED SOURCES. IN THIS CONTEXT, YOUR REJOINDER DATED 28 - 12 - 2010, CLAIMING TO TREAT THE CASH BOOK FILED WITH THE REJOINDER DATED 15 - 12 - 2010 WITHOUT A NY SUPPORTING EVIDENCE, CANNOT TANTAMOUNT TO PRODUCTION OF BOOKS OF A/CS FOR MY VERIFICATION WITH THE ORIGINAL. THEREBY YOU HAVE FAILED TO ESTABLISH YOUR ACTUAL BUSINESS ACTIVITIES. YOUR CONTENTION IN THIS POINT IS NOT TENABLE. HENCE, I ADDED THE TOTAL DIF FERENCE TO THE AMOUNT OF RS.21,12,721/ - AS UNDISCLOSED EXPENDITURE MADE FROM UNDISCLOSED SOURCES. 4. AGAINST THE ABOVE THE ASSESSEE APPEALED BEFORE LD. CIT(A). THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE BY HOLDING THAT ADDITION MADE BY THE AO WAS ONLY ON ADHOC BASIS AND IT WAS NOT GROUNDED IN FACTS. THE OPERATIVE PART OF THE LD. CIT(A) ORDER IS AS UNDER : - THE ARGUMENTS CANVASSED ON BEHALF OF THE APPELLANT HAS BEEN CONSIDERED CAREFULLY IN LIGHT OF THE MATERIALS PLACED BEFORE ME. I FIND THAT THE ASSESS EE IS CARRYING OUT HER ACTIVITIES AS AN AUTHORIZED DEALER OF HPCL UNDER THE TRADE NAME AND STYLE OF M/S. MADHUJA SERVICE STATION . THE ENTIRE PURCHASES FROM HPCL WERE ALL MADE THROUGH BANKING CHANNELS AND DELIVERY OF GOODS WERE ONLY MADE THEREAFTER. THE B OOKS OF ACCOUNT OF THIS BUSINESS IS DULY AUDITED U/S 44AB OF THE ACT AND THE COPIES OF THE REPORT AND FINANCIAL STATEMENTS WERE PRODUCED BEFORE ME. THE APPELLANT ALSO CONDUCTED A BUSINESS OF SEASONAL AGRO - PRODUCTS I.E. POTATO. THE APPELLANT MAINTAINS SEPAR ATE ACCOUNTS FOR THIS BUSINESS WHICH SHE HAD FILED BEFORE THE AO. IT IS OBSERVED THAT THE APPELLANT HAD MADE PURCHASES FROM HPCL OF RS.3,12,34,341/ - THE DETAILS OF WHICH IS FILED WITH THE AO. FURTHER, THE APPELLANT HAD MADE PURCHAS ES OF POTATO OF RS.18,28, 322/ - IN FACT, THIS FACT WAS ACKNOWLEDGED BY THE AO HIMSELF IN HIS NOTICE DATED 19.10.2010 WHEREIN HE HAD DESIRED CERTAIN INFORMATION FROM THE APPELLANT. THUS, THERE WAS NO DISAGREEMENT BETWEEN THE PURCHASES MENTIONED BY THE AO AND THAT SHOWN BY THE APPELLA NT. IN FACT, IT FURTHER OBSERVED THAT THE APPELLANT IN HER REPLY DATED 28.12.2010 HAS EXPLAINED THE IMPUGNED DISCREPANCY TO THE AO WHO MERELY REJECTED THE REPLY OUT OF HAND. HIS MAIN CONTENTION WAS THAT THE APPELLANT HAD NOT PRODUCED THE ORIGINAL BOOKS OF ACCOUNTS ALONG WITH VOUCHERS FOR HIS VERIFICATION. IN THIS RESPECT, IT IS OBSERVED THAT THE AO IN HIS ASSESSMENT ORDER HAS HIMSELF ADMITTED THAT THE CASH BOOK OF THE MADHUJA SERVICE STATION WAS FILED BEFORE HIM. FURTHER, THE AO HAD OBSERVED THAT THEREBY , YOU HAVE FAILED TO ESTABLISH YOUR ACTUAL BUSINESS ACTIVITIES . THE AO IN THE CAUSE TITLE OF ASSESSMENT ORDER AND FURTHER IN THE SAME PAGE 2 ND PARA, HAD ADMITTED THAT THE APPELLANT IS AN AUTHORIZED DEALER OF HPCL AND SEASONAL AGRO PRODUCT BUSINESS. THER EFORE, THERE IS A THROUGH CONTRADICTION IN THE CONCLUSION REACHED BY THE AO. THERE IS NO DOUBT OR DISPUTE THAT THE APPELLANT WAS CONDUCTING BUSINESS OF DEALING IN PRODUCTS OF HCPL AS ITS AUTHORISED AGENT AS WELL AS IN SEASONAL AGRO - PRODUCT. FURTHER, THE AO ALSO HAVE NOT ITA.NO.1402 /K/2012 SMT.SHASWATI BHATTACHARYA A.YR. 2008 - 09 3 GIVEN ANY THE DETAILS OF THE FIGURE OF RS.3,01,59,555/ - WHICH HE CITED AS CULLED FROM THE CASH - CREDIT ACCOUNT MAINTAINED IN THE STATE BANK OF INDIA, ARAMBAGH BRANCH. HE HAS NOT MENTIONED ANY SINGLE ITEM OF PURCHASES WHICH WAS NOT ROUTED THR OUGH THE BOOKS OF ACCOUNT NOR DID HE MENTION ANY ITEM WHICH WAS NOT RECORDED IN THE BOOKS. THE BOOKS OF ACCOUNTS WERE AUDITED AND NO SPECIFIC DEFECT WAS FOUND THEREIN OR MENTIONED BY THE AO. THE PURCHASE FIGURE ACCORDING TO THE AO IS THE SAME AS DISCLOSED BY THE APPELLANT IN THE BOOKS OF APPELLANT. THE SAME WAS ALSO EXPLAINED WITH EVIDENCE BEFORE THE AO. IN ABSENCE OF ANY EVIDENCE THAT ANY ITEM OF PURCHASE WAS NOT PAID FOR THROUGH THE BOOKS OF ACCOUNT, THE CONCLUSION OF THE AO IS MERELY ON AN ADHOC BASIS NO T GROUNDED IN FACTS. AS THERE IS NO EVIDENCE THAT ANY UNDISCLOSED PURCHASES WERE MADE OR THAT PURCHASES MADE WERE NOT PAID FOR THROUGH THE BOOKS, THE ALLEGED DIFFERENCE OF RS.21,12,721/ - ARRIVED AT LACKS ANY BASIS. ACCORDINGLY, THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED EXPENDITURE MADE FROM UNDISCLOSED SOURCES BY THE AO IS DELETED. APPELLANT GETS RELIEF OF RS.21,12,721/ - . AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THA T THE AO IN THIS CASE IS SIMPLY MAKING THE ADDITION BY HOLDING THAT SINCE THE PURCHASES OF RS.21,12,721/ - WAS NOT ROUTED THR OUGH CC A/C MAINTAINED IN SBI T HE SAME WAS UNDISCLOSED EXPENDITURE MADE FROM UNDISCLOSED SOURCES. NOW THE PURPORTED PURCHASES THROUG H BANK ACCOUNT AMOUNTING TO RS.3,01,59,555/ - WHICH THE AO HAS CONSIDERED AS ALLOWABLE WAS ALSO ROUTED THROUGH THE CASH BOOK. ASSESSEE S EXPLANATION IN THIS REGARD THAT THE OTHER PURCHASES DISPUTED BY THE AO IS ALSO REFLECTED IN THE CASH BOOK FILED ALONG WI TH THE REJOINDER HAS BEEN SUMMARILY DISMISSED BY THE AO WITHOUT ANY RHYME OR REASON. THE REASONING GIVEN BY THE AO FOR MAKING THE IMPUGNED ADDITION IS TOTALLY UNJUSTIFIED. HE HAS NOT DISPUTED THE SALES BUT HE HAS DISPUTED THE PURCHASES ONLY ON THE GROUND T HAT THE IMPUGNED PURCHASES WAS NOT ROUTED THROUGH THE CASH BOOK WHICH REFLECTED THE CC A/C MAINTAINED IN SBI. THERE IS NO FINDING WHATSOEVER AS TO WHY THE IMPUGNED PURCHASES SHOULD HAVE BEEN ROUTED THROUGH THAT ACCOUNT IN ORDER TO BE JUSTIFIED . THUS THE AD DITION MADE BY THE AO IS TOTALLY ON FLIMSY GROUND AND NOT AT ALL SUSTAINABLE. THE L D. CIT(A) HAS PASSED A REASONED ORDER. HE HAS NOTED THAT BOOKS OF ACCOUNT OF THE ASSESSEE WERE DULY AUDITED AND COPIES OF THE RETURN AND THE FINANCIAL STATEMENTS WERE PRODUC ED BEFORE HIM. THE LD. CIT(A) HAS DISCUSSED THE ISSUE AND FOUND T HAT THERE IS NO EVIDENCE THAT ANY ITE M WAS PURCHASED OUTSIDE THE BOOKS OF ACCOUNT AND HENCE THE CONCLUSION OF AO WAS ITA.NO.1402 /K/2012 SMT.SHASWATI BHATTACHARYA A.YR. 2008 - 09 4 MERELY ON ADHOC BASIS. THE LD. CIT(A) HAS ALSO NOTED THAT THERE IS NO EVI DENCE THAT ANY UNDISCLOSED PURCHASES WERE MADE OR THAT PURCHASES MADE WERE NOT PAID THROUGH THE BOOKS. IN THESE CIRCUMSTANCES IN OUR CONSIDERED OPINION THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY WE UPHOLD THE SAME. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE DISMISSED. O RDER PRONOUNCE D IN THE COURT ON 1 1/12/2014. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 11/12/2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . SMT.SHASWATI BHATTACHARYA, VILL. & P.O. GOURHATI, P.O.ARAMBAG H, DIST.HOOGHLY, PIN - 712603. 2 I.T.O., WARD - 2(4 ) , HOOGHLY. 3 . CIT(A) - XXX VI , KOLKATA 4. CIT - KOLKATA CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, A SST. REGISTRAR , ITAT, KOLKATA BENCHES