ITO, WD-29(3), KOLKATA, Kolkata V. M/s Maakali Enterprise, Kolkata

ITA 1412/KOL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6395 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 24-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: S K SAHA; D BHAUMIK
• Keywords: Bogus purchase; Corroborative evidences
• Section: 143(3); 194C

Judgement Text

ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI P.M.JAGTAP, AM & SHRI S.S.VI SWANETHRA RAVI, JM ] ITA NO.1412/KOL/2015 ASSESSMENT YEAR : 2008-09 I.T.O., WARD-29(3) -VERSUS- M/S.MAAKALI ENT ERPRISE KOLKATA KOLKATA (PAN: AAIFM 5349 Q) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.DASGUPTA, ADDL. CIT ( DR) FOR THE RESPONDENT: SHRI D.BHAUMIK, ADVOCATE & SHRI S.K.SAHA, FCA DATE OF HEARING : 02.04.2018. DATE OF PRONOUNCEMENT : 18.05.2018. ORDER PER P.M.JAGTAP, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 22.09.2010 PASSED BY THE COMMISSIONER OF INCOME TAX-(A)-8, KO LKATA FOR A.Y.2008-09. 2. THE FACTS OF THIS CASE IS THAT THE ASSESSEE M/S MAA KALI ENTERPRISES IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CIVIL C ONSTRUCTION. IT FILED ITS RETURN OF INCOME AND FRINGE BENEFIT TAX FOR A.Y.2008-09 ON 30 .09.2008 DECLARING TOTAL INCOME OF RS.7,59,070/-. THE CASE WAS SELECTED FOR SCRUTI NY UNDER CSS. NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (ACT) WAS ISSUED TO APPEAR ON 08.11.2010. THE MATTER WAS ADJOURNED ON THE SAID DATE AND SUBSEQUENTLY REFIXED ON 29.12.2010. ULTIMATELY THE SAME WAS FINALISED AND THE ORDER OF ASSESSMENT WAS PASSED U/S 143(3) OF THE ACT ON 29.12.2010. THE AO IN THE SAID ORDER DATED 29.12.20 10 DISALLOWED AS BOGUS PURCHASES TO THE TUNE OF RS.10,37,732/-, LABOUR CHARGES TO TH E TUNE OF 71,81,150 AND BOGUS SUNDRY CREDITORS TO THE TUNE OF RS.53,15,886/-. BEI NG AGGRIEVED BY THE ORDER PASSED BY THE AO THE ASSESSEE PREFERRED AN APPEAL BEFORE CIT( A)-8, KOLKATA WHICH WAS DISPOSED OFF ON 22.09.2015 BY ALLOWING THE SAME. BE ING AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE PREFERRED INSTANT APPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS :- ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 2 1. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE A DDITION OF RS.10,37,732/- ON ACCOUNT OF MATERIALS PURCHASED WHEN THE ASSESSEE WA S UNABLE TO SUBSTANTIATE THE PURCHASE NEITHER AT THE ASSESSMENT STAGE, NOR AT TH E REMAND STAGE, IN SPITE OF BEING GIVEN AMPLE OPPORTUNITY TO DO SO. 2. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION OF RS.71,81,150/- ON ACCOUNT OF LABOUR CHARGES WHEN THE ASSESSEE WAS UNA BLE TO PRODUCE EVEN A SINGLE LABOURER NEITHER AT THE ASSESSMENT STAGE, NO R AT THE REMAND STAGE, IN SPITE OF BEING GIVEN AMPLE OPPORTUNITY TO DO SO, THOUGH E ACH AND EVERY OF THE 83 LABOURERS WERE PRESENT FOR WORK FOR EACH AND EVERY DAY OF THE YEAR AS PER THE WEEKLY PAYMENT REGISTER PRODUCED BY THE ASSESSEE. 3. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION OF RS.53,15,886 / - ON ACCOUNT OF SUNDRY CREDITORS WHEN THE ASSESSEE WAS U NABLE TO SUBSTANTIATE THE PURCHASE NEITHER AT THE ASSESSMENT STAGE, NOR AT TH E REMAND STAGE, IN SPITE OF BEING GIVEN AMPLE OPPORTUNITY TO DO SO. 4. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITIONS MADE, ON GROUNDS OF THE ASSESSMENT ORDER BEING CRYPTIC, WHEN AS PER SUP REME COURT IN THE CASE OF KANPUR COAL SYNDICATE [53 ITR 225 (SC)], THE POWERS OF CIT(A) IS CO-TERMINUS WITH THAT OF THE AO 'HE CAN DO WHAT THE ITO CAN DO AND CAN ALSO DIRECT HIM TO DO WHAT HE FAILED TO DO'. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, M ODIFY, DELETE OR INCLUDE ANY OF THE GROUNDS OF APPEAL. 3. GROUND NO.1 RELATES TO THE DELETION OF ADDITION OF RS.10,37,732/- ON ACCOUNT OF MATERIALS PURCHASED. ACCORDING TO THE AO DURING THE SCRUTINY PROCEEDINGS THE ASSESSEE WAS ASKED TO FURNISH SUPPORTING EVIDENCES/ BILLS AND VOUCHERS ON ACCOUNT OF MATERIALS PURCHASED. THE ASSESSEE DID NOT FURNISH A NY SUPPORTING EVIDENCES/BILLS AND VOUCHERS IN THAT RESPECT. CONSIDERING THIS FACT 20% OF THE SAID EXPENSES OF RS.51,88,662/- CLAIMED ON ESTIMATE BASIS HAD BEEN T REATED AS BOGUS TO THE TUNE OF RS.,10,37,732/- AND THE SAME IS ADDED BACK TO THE T OTAL INCOME OF THE ASSESSEE. 4. ON APPEAL THE CIT(A) WHILE DEALING WITH THE PART ICULAR GROUND OPINED THAT THE AO HAS JUST ABRUPTLY MADE ADHOC DISALLOWANCE AT 20% . HE HAS ALSO MENTIONED THAT SUCH ASSESSMENT WAS IN A LAST MOMENT HURRIED ASSESS MENT. IN THE REMAND PROCEEDINGS THE AO EMBARKED TO MAKE ENQUIRIES ON 19 PARTIES TO WHICH IT WAS A QUEER PROCESS OF ASSESSMENT DONE IN REVERSE. ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 3 5. IN THE REMAND REPORT DATED 27.7.2011 IT WAS MENT IONED THAT ONE NOTICE SENT TO ONE OF THE PARTIES WAS RETURNED UNSERVED EXISTENCE OF WHICH THE ASSESSEE CLARIFIED FROM THE REGISTER AND FURTHER SUBSTANTIATED THE SAM E BY SUBMITTING THE VAT REGISTRATION CERTIFICATE OF THE SAID PARTY AND IN O THER TWO CASES THERE WERE SOME PETTY AMOUNT DIFFERENCES. LD. CIT(A) FURTHER ASSERTS THA T THOSE PARTIES EXIST AND THEY HAD TRANSACTIONS WITH THE ASSESSEE AND THE PURCHASE WAS SUBSTANTIATED. HE DELETED THE ADHOC DISALLOWANCE. 6. THE LD. DR ARGUED THAT FROM THE VERY INITIATION OF THE PROCEEDING THERE WAS NO COOPERATION ON THE PART OF THE ASSESSEE. HE RELIED UPON THE REMAND REPORT DATED 22.07.2011 WHERE FROM IT APPEARS THAT THE ASSESSEE HAS GIVEN A LIST OF 19 PARTIES FOR THE TOTAL PURCHASE AMOUNT . NOTICES WERE ISSUED TO 15 PARTIES BY THE AO , OUT OF WHICH 6 PARTIES DID NOT GIVE ANY REPLY THOUGH CONSIDERAB LE TIME WAS GIVEN TO THEM. BY A LETTER DATED 11.07.2011 THE ASSESSEE WAS ASKED TO P RODUCE LEDGER, BILL, VOUCHER AND CASH BOOK TO SUBSTANTIATE HIS CLAIMS OF PURCHASE. T HESE DOCUMENTS WERE PRODUCED BY THE AR ON 21.07.2011 FOR VERIFICATION PURPOSE. THER E WAS NO REPLY FROM THE SELLER PARTIES. HE FURTHER POINTED OUT THAT NOTICE WAS SEN T TO M/S BHADRAK BUILDERS AND THE SAME WAS RETURNED UNSERVED WITH THE POSTAL REMARK NOT KNOWN. SUBSEQUENTLY THE AR PRODUCED THE LEDGER OF ONE PARTY M/S. B.BUILDERS AND CLAIMED THAT BY MISTAKE THE SAME WAS GIVEN AS M/S. BHADRAK BUILDERS. SUCH INFOR MATION WAS GIVEN ONLY AFTER CONFRONTING WITH THE FACTS MENTIONED ABOVE. HOWEVER , THE GENUINENESS OF THE CLAIM COULD NOT BE VERIFIED. ACCORDING TO HIM THE CIT(A) HAS PICKED UP AND SHOWN SOME OF THE PARTIES AND DELETED THE ADDITION MADE BY THE A O. 7. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSES SEE SUBMITTED THAT THE RETURN FOR A.Y.2008-09 WAS DULY FILED IN TIME AND THE AO H AS NOT POINTED OUT ANY DISCREPANCY IN THE BOOKS OF ACCOUNT. HE ALSO RELIED UPON THE REMAND REPORT DATED 22.07.2011 WHERE IT APPEARS THAT A LIST OF 19 PART IES WAS PROVIDED VIDE LETTER DATED 28.04.2011 OUT OF WHICH 15 WERE ISSUED NOTICES BY T HE AO. THE REQUIRED DOCUMENTS BEING THE LEDGER AS WELL AS THE VAT REGISTRATION CE RTIFICATE OF M/S. BHADRAK BUILDERS ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 4 WAS PRODUCED BEFORE THE AO TO PROVE THE EXISTENCE O F B.BUILDERS AND THEREFORE THE ADDITION OF RS.10,37,732/- IS UNJUST AND LIABLE TO BE DELETED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE RECORDS OF THE CASE. WE ARE OF THE OPINION THAT THE DETAILS OF THE SE PARTIES WERE PROPERLY PROVIDED BEFORE THE AO AND THE EXISTENCE OF THOSE PARTIES CA NNOT BE QUESTIONED. THE STATEMENT MADE BY THE AO IN THIS REGARD THAT THE ASSESSEE DI D NOT FURNISH THE EVIDENCE/BILLS AND VOUCHERS IN RESPECT OF MATERIALS PURCHASED IS NOT TENABLE. IN FACT WHEN THE DETAILS OF THE REQUIRED DOCUMENTS WERE FURNISHED THE DISALLOWA NCE OF 20% OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE CONSIDERING THIS AS BOGUS E XPENSES IS NOT JUSTIFIED. WE UPHOLD THE OBSERVATION MADE BY THE LD. CIT(A) IN THIS REG ARD. CONSEQUENTLY THE EXPENSES CLAIMED TO THE TUNE OF RS.10,37,732/- CANNOT BE TRE ATED AS BOGUS. THUS WE DISMISS THE GROUND NO.1 RAISED BY THE REVENUE AND CONFIRM THE O RDER OF CIT(A). 9. GROUND NO.2 RELATES TO THE DELETION OF ADDITION OF RS.71,81,150/- ON ACCOUNT OF LABOUR CHARGES. FROM THE TRADING ACCOUNT IT IS SEE N THAT AN AMOUNT OF RS.51,88,662/- WAS DEBITED ON ACCOUNT OF LABOUR CHARGES. DURING TH E SCRUTINY PROCEEDINGS THE ASSESSEE WAS ASKED TO PRODUCE SUPPORTING EVIDENCE W HETHER TDS HAS BEEN DEDUCTED IN RESPECT OF LABOUR CHARGES CLAIMED. THE AO HAS ALSO MENTIONED THAT THE ASSESSEE DID NOT FURNISH ANY SUPPORTING EVIDENCE NEITHER EXPLAIN ED WHETHER TDS WAS MADE ON LABOUR CHARGES. AO CONCLUDED THAT THE ASSESSEE HAS NOT MADE ANY TDS ON LABOUR CHARGES AND THEREBY VIOLATED THE PROVISION OF SECTI ON 194C OF THE ACT R.W. S. 40(A)(IA) OF THE ACT AND ULTIMATELY DISALLOWED THE SAID EXPEN SES CLAIMED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 10. THE CIT(A) IN HIS ORDER HELD THAT SECTION 194C IS NOT APPLICABLE IN THE INSTANT CASE. HE FURTHER ADDED THAT THE ASSESSEE IS ENGAGED IN CIVIL CONSTRUCTION ACTIVITY AND THUS OBVIOUSLY LABOUR IS REQUIRED AND IS A MAJOR FA CTOR. SINCE THE ASSESSEE ITSELF IS DOING CIVIL CONSTRUCTION ACTIVITY IT IS THE ASSESSE E WHO ENGAGES THE LABOURERS. THEREFORE THERE WAS NO CONTRACT. THE LAOUR PAYMENTS ARE MADE RESPECTIVELY TO THE RESPECTIVE LABOURS WHICH IS APPEARING FROM THE RECO RDS AND NOT DISBELIEVED BY THE CIT(A). HE DID NOT JUSTIFY THE ACTION OF THE AO OF DISBELIEVING THE LABOUR CHARGES AS A ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 5 RESULT OF UNSERVED LETTERS THOSE WERE SENT TO AL L THE 83 LABOURERS. THE CIT(A) FURTHER ADDED THAT THE LABOURERS ARE ON THE MOVE AND WORKI NG IN DIFFERENT CITIES/DIFFERENT PROJECTS/DIFFERENT HIRERS AND ALSO ARE ILLITERATE/L OW LITERACY. THEREFORE SENDING OF LETTERS IS JUST PERFUNCTORY INFRUCTUOUS MODE AS THA T ENQUIRY HAS BEEN CONDUCTED. IN THE PRACTICAL REAL LIFE OF BUSINESS IT IS NOT THE ASSES SEES PRIME REQUIREMENT/RESPONSIBILITY TO ACT AS A CENSUS AGENT AND VERIFY THE RESIDENTIAL ADDRESS WHEN IN MAJORITY OF CASES WILL BE THAT LABOURERS DO NOT HAVE LONG ENOUGH PERI OD OF RESIDENTIAL ADDRESS. THE ASSESSEE ITSELF PAYS THE WAGES TO THE LABOURERS. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE RELEVANT RECORDS. IT IS EVIDENT FROM THE REMAND REPORT DATED 22.07.2011 THAT THE AR BY A LETTER DATED 03.06.2011 SUBMITTED THAT NO SUB CONTRACT WAS GIVEN FOR LABOUR EXPENSES AND ALL PAYMENTS WAS MADE TO THE DAILY LABOURS AND THEREFOR E NO TDS WAS DEDUCTED. THE AR FURTHER PROVIDED THE NAMES, ADDRESS AND AMOUNT-WISE BREAK UP OF A TOTAL NUMBER OF 83 LABOURERS. NOTICE WAS DULY SERVED UPON 83 LABOURERS BY THE THEN AO BUT NO REPLY FROM ANY OF THE LABOURERS CAME TO THE HAND OF THE AO, 24 NOTICES WERE RETURNED UNSERVED WITH THE POSTAL REMARK NOT KNOWN OR NOT CLAIMED . THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE AND THE AR WAS ASKED TO SUBS TANTIATE BY PRODUCING BILLS, VOUCHERS, CASH BOOK IN SUPPORT OF THESE EXPENSES. B Y A LETTER DATED 21.07.2011 THE AR STATED THAT DAILY LABOURERS ARE OF MIGRATORY IN NAT URE AND MIGHT HAVE SHIFTED FROM THE EARLIER ADDRESS. THE WEEKLY PAYMENT REGISTER OF LAB OURERS WAS PRODUCED. HE FURTHER ADDED THAT THE TOTAL PAYMENTS MADE TO ALL THE LABOU RERS IN A WEEK ARE ENTERED IN THE REGISTER AND SUBSEQUENTLY IN CASH BOOK. BOTH THE LE DGER AND CASH BOOK WERE PRODUCED BEFORE THE AO. THE DOCUMENTS AND ACCOUNTS WERE TEST CHECKED AT THAT END. FROM THE VERIFICATION OF THE WEEKLY PAYMENT REGISTER, IT IS FOUND THAT NAME AND ADDRESS OF ALL 83 LABOURERS WERE WRITTEN SERIALLY IN THE REGISTER AND ALL HAVE ACKNOWLEDGED RECEIPT OF MONEY BY PUTTING THUMB IMPRESSION ON REGISTER. 12. THE LD. DR SUPPORTED THE ORDER PASSED BY THE AO AND FURTHER CONTENDED THAT THE PRESENCE OF THE NAMES OF 83 LABOURERS IN THE RE GISTER BY ITSELF CANNOT JUSTIFY THAT THEY WERE GIVEN WAGES. ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 6 13. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSE SSEE ARGUED IN DETAIL. HE TOOK US THROUGH THE DETAILS OF LABOUR CHARGES PAID, BEI NG PART OF THE RECORD IN THE PAPER BOOK. HE FURTHER ADDED THAT THE AO HAS FAILED TO ES TABLISH THAT ANY SUB-CONTRACT WAS ENGAGED IN THE PAYMENT OF LABOUR CHARGES. IT IS THE ASSESSEE, WHO IS ENGAGED IN THE CIVIL CONSTRUCTION WHERE LABOUR CHARGES CONSTITUTE THE SIGNIFICANT PART OF THE COST OF SUCH CONSTRUCTION. THE DISALLOWANCE OF HIS CLAIM OF EXPENSES ON LABOUR CHARGES FOR VIOLATION OF SECTION 40(A)(IA) OF THE ACT BY THE AO IS UNLAWFUL. SINCE THERE IS NO CONTRACT OR SUB-CONTRACT, THE CASE NEITHER FALLS UNDER THE PURVIEW OF SECTION 194C OF THE ACT. ACCORDING TO HIM, THE DISALLOWANCE OF THE EXPENSES CLAIMED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE BY THE AO IS NO T TENABLE AND LIABLE TO BE SET ASIDE. 14. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR DS PLACED IN THE PAPER BOOK BEFORE US. WE HAVE GONE THROUGH THE DETAILS OF THE LABOUR CHARGES PAID IN THE YEAR UNDER CONSIDERATION. WE HAVE ALSO SEEN THE WEEKLY REGISTER OF WAGES WHICH IS MAINTAINED BY THE ASSESSEE. WE HAVE SEEN THE LEDGER AND THE CASH BOOK WHICH HAVE BEEN PLACED BEFORE THE AO. IT APPEARS FROM THE REGI STER THAT THE NAMES AND ADDRESSES OF ALL 83 LABOURERS ARE WRITTEN SERIALLY IN THE REG ISTER AND ALL HAVE RECEIVED THE MONEY BY PUTTING THUMB IMPRESSION ON THE SAME. IT IS A FA CT THAT THE LABOURS ARE PAID BY THE ASSESSEE DIRECTLY AND NOT THROUGH CONTRACT OR SUB-C ONTRACT. THEREFORE SECTION 194C OF THE ACT IS NOT ATTRACTED. WE HAVE ALSO PERUSED THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2008 AND THE AMOUNT OF WORKS BILL IS OF RS.1,37,60,588/- OUT OF WHICH LABOUR CHARGES ARE TO THE TUNE OF RS.71,81,150/-. T HEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND CONFIRM THE SA ME. THUS GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 15. GROUND NO.3 RELATES TO THE DELETION OF ADDITION OF RS.53,15,886/- ON ACCOUNT OF SUNDRY CREDITORS. WHILE DISALLOWING THE AMOUNT OF R S.53,15,886/- UNDER THE HEAD SUNDRY CREDITORS BY THE AO IT IS OBSERVED THAT DUR ING THE SCRUTINY PROCEEDINGS THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS I.E. NAME AND ADDRESS OF THE SUNDRY CREDITORS WHICH WAS NOT FURNISHED. CONSIDERING THIS FACT THE AO CAME TO THE CONCLUSION THAT THE ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 7 SUNDRY CREDITORS OF RS.53,15,886/- CLAIMED BY THE A SSESSEE IS BOGUS AND DISALLOWED THE SAME AND ADDED TO THE TOTAL INCOME OF THE ASSES SEE. 16. ON THE CONTRARY THE CIT(A)WHILE DEALING WITH TH IS PARTICULAR ASPECT OF THE MATTER SPECIFICALLY FORMED AN OPINION THAT THE AO I S EXPECTED TO SHOW WHICH OF THE PURCHASES/.EXPENSES ARE DOUBTFUL/BOGUS AND ONLY THE REAFTER CAN PROCEED TO DISALLOW SUCH PURCHASE/EXPENSE. THERE CANNOT BE A BLANKET DI SALLOWANCE OF THE ENTIRE SUNDRY CREDITORS WHICH TANTAMOUNTS TO DISBELIEVING THAT T HE ASSESSEE EVER CARRIED ON BUSINESS. HE FURTHER ADDED THAT THE AO HAD ISSUED LETTERS TO THE CREDITORS AND IT WAS REPORTED THAT IN TWO CASES THE LETTERS WERE RETURNED UNSERVED AND IN THREE CASES WERE SOME BALANCE DIFFERENCES. THE EXISTENCE OF THE PARTY WAS PROVED BY THE VAT REGISTRATION NUMBER PROVIDED BY THE ASSESSEE LATER ON. THE OTHER PARTY IS AN INDIVIDUAL AND AFTER CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE HE FOUND NO JUSTIFICATION FOR DISBELIEVING THE ASSESSEE JUST BECAUSE IT HAS CLAIM ED THAT LETTERS CAME UNSERVED. IN REGARD TO THE OTHER ISSUE WHERE THE BALANCE DIFFER ENCES IS CONCERNED IT IS A VERY PETTY AMOUNT OF A FEW THOUSAND RUPEES ONLY. 17. THE LD. DR SUPPORTED THE ORDER OF THE AO DATED 29.12.2010 IN THIS REGARD. HE REITERATED THAT THERE WAS NO COOPERATION ON THE PAR T OF THE ASSESSEE WHILE HE WAS ASKED TO FURNISH THE NAMES AND ADDRESS OF THE SUNDRY CRED ITORS. NEITHER ANY RECONCILIATION WAS FILED DURING THE ASSESSMENT PROCEEDINGS PENDING BEFORE THE AO. HE FURTHER ADDED THAT WHATEVER THE ASSESSEE COULD NOT PLACE ON RECOR D BEFORE THE AO THE SAME WAS PLACED BY HIM DURING THE REMAND PROCEEDINGS FOR IMP ROVING THE CASE IN HIS FAVOUR. THE DETAILS OF THESE CREDITORS ACCORDING TO HIM WAS PROVIDED BEFORE THE CIT(A). 18. THE AR IN SUPPORT OF HIS CASE SUBMITTED THAT T HE REASONS FOR DIFFERENCES IN BALANCE PAYABLE TO THE CREDITORS IN THE CASE OF M/S RAY FO RUN, M/S SANITARY SALES, M/S. SOUTH SANITARY SALES ARE DUE TO NON RECONCIL IATION OF THE BALANCE FOR A LONG PERIOD AND WRONG ENTRIES IN THEIR BOOKS. THEREFORE THE LIABILITIES CANNOT BE CONSIDERED AS BOGUS. HE RELIED UPON THE REMAND REPORT WHEREUP ON IT APPEARS THAT THE ASSESSEE HAS GIVEN A LIST OF 14 PARTIES FOR TOTAL PURCHASE AMOUN T. THE AO ISSUED NOTICES TO 11 PARTIES OUT OF WHICH FOUR PARTIES DID NOT GIVE ANY REPLY TO THE NOTICE. BY LETTER DATED ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 8 11.07.2011 THE ASSESSEE WAS ASKED TO PRODUCE LEDGER IN SUPPORT OF HIS CLAIM. THE DOCUMENTS WERE PRODUCED BY THE AR ON 21.07.2011 FO R VERIFICATION PURPOSE. FURTHER THAT THE EXISTENCE OF ONE OF THE PARTIES NAMELY B.B UILDERS WAS ALSO PROVED BY THE ASSESSEE BY PRODUCING THE LEDGER & VAT REGISTRATIO N CERTIFICATE. THE OTHER UNSERVED PARTY IS AN INDIVIDUAL AND THE BALANCE DIFFERENCES IN RESPECT OF THE OTHER 3 PARTIES ARE PETTY AMOUNT WHICH WAS SUBSTANTIATED BY THE ASSESSE E AS DUE TO NON RECONCILIATION OF BALANCE. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT T HE AMOUNT OF SUNDRY CREDITORS IN QUESTION WAS TREATED BY THE AO AS THE INCOME OF THE ASSESSEE BY HOLDING THE RELEVANT CREDITORS AS BOGUS SINCE THE ASSESSEE HAD FAILED TO FURNISH THE RELEVANT DETAILS CALLED FOR BY THE AO IN RESPECT OF THE SAID CREDITORS. DUR ING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A), IT WAS CONTENDED ON BEHALF OF THE ASSESEE THAT PROPER AND SUFFICIENT OPPORTUNITY WAS NOT GIVEN BY THE AO TO FURNISH THE SAID DETAILS AND BEING SATISFIED WITH THE SAME, THE LD. CIT(A) ALLOW ED THE ASSESSEE TO FURNISH THE RELEVANT DETAILS IN RESPECT OF THE CONCERNED CREDIT ORS. THE SAID DETAILS WERE ALSO FORWARDED BY THE LD. CIT(A) TO THE AO FOR VERIFICAT ION. ACCORDINGLY NOTICES WERE ISSUED BY THE AO TO SOME OF THE CREDITORS IN ORDER TO CROSS VERIFY THE CLAIM OF THE ASSESSEE AND SINCE THE RESPONSE TO THE SAID NOTICES FROM THE CONCERNED CREDITORS WAS NOT TO THE SATISFACTION OF THE AO, HE SUBMITTED ADV ERSE REMAND REPORT TO THE LD. CIT(A) ON THIS ISSUE. WHEN THIS ADVERSE REMAND REPORT OF T HE AO WAS CONFRONTED TO THE ASSESSEE BY THE LD. CIT(A), THE ASSESSEE FILED HIS REJOINDER AND ON THE BASIS OF THE SAME, THE LD. CIT(A) TREATED THE SUNDRY CREDITORS A S GENUINE AFTER HAVING FOUND THAT THE EXISTENCE OF THE SAID CREDITORS WAS DULY ESTABL ISHED BY THE ASSESSEE BY FILING THE RELEVANT DETAILS SUCH AS VAT REGISTRATION ETC. HE A LSO FOUND THAT THE DIFFERENCE IN THE BALANCE OF THREE CREDITORS AS POINTED OUT BY THE AO WAS VERY SMALL AND THE SAME WAS DUE TO UNRECONCILED ACCOUNTS AS POINTED BY THE ASS ESSEE. HE ALSO FOUND THAT THE GENUINENESS OF CORRESPONDING PURCHASES MADE BY THE ASSESSEE FROM THE SAID CREDITORS WAS NOT DOUBTED BY THE AO. ACCORDING TO THE LD. CIT (A), THE AO WAS NOT JUSTIFIED IN TREATING THE CONCERNED CREDITORS AS BOGUS WITHOUT D OUBTING THE GENUINENESS OF THE ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 9 CORRESPONDING PURCHASES MADE BY THE ASSESSEE FROM T HE SAID CREDITORS. ON THE BASIS OF ALL THESE FINDINGS OF FACT RECORDED BY HIM, THE LD. CIT(A) TREATED THE CONCERNED CREDITORS AS GENUINE AND DELETED THE ADDITION MADE BY THE AO BY TREATING THE SAME AS BOGUS. AFTER HAVING CONSIDERED ALL THE FACTS OF THE CASE AS FOUND BY THE LD. CIT(A) AND REMAINED UNCONTROVERTED BY THE REVENUE, WE FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A) GIVING RE LIEF TO THE ASSESSEE ON THIS ISSUE AND UPHOLDING THE SAME, WE DISMISS GROUND NO.3 OF T HE REVENUES APPEAL. 20. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. O RDER PRONOUNCED IN THE COURT ON 18.05.2018. SD/- SD/- [S.S.VISWANETHRA RAVI] [ P.M.JAGTAP ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S MAAKALI ENTERPRISE, 21/1, TOLLYGUNGE ROAD, K OLKATA-700026. 2. I.T.O., WARD-29(3), KOLKATA. 3. C.I.T.(A)- 8, KOLKATA 4. C.I.T-8,, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.1412/KOL/2015 M/S MAAKALI ENTERPRISE A.Y.200 8-09 10