M/s. New Panjabi Samrat, Kolkata V. ITO, Ward - 49(2), Kolkata, Kolkata

ITA 1422/KOL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100078 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TANUJ NIOGI
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Additional evidence
• Section: 40A(3)

Judgement Text

I.T.A. NO. 1422/KOL./2010 ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1422/KOL/ 2010 ASSESSMENT YEAR : 2006-2007 M/S. NEW PANJABI SAMRAT,........................... ......................APPELLANT M/S. D.J. SHAH & CO., 2, ELGIN ROAD, KOLKATA-700 020 [PAN : AAEFN 2187 P] -VS.- INCOME TAX OFFICER,................................ ............................RESPONDENT WARD-49(2), KOLKATA, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 APPEARANCES BY: SHRI MIRAJ D. SHAH, FCA , FOR THE ASSESSEE SHRI TANUJ NIOGI, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 18, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 20, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 18.02.2010 FOR THE ASSESSMENT YEAR 2006-07 AND THE SOLITARY IS SUE ARISING OUT OF THE SAME RELATES TO THE ADDITION OF RS.25,84,770/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) BY WA Y OF DISALLOWANCE OF EXPENDITURE INCURRED IN CASH EXCEEDING RS.20,000/- BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF TRADING OF PUNJABI AND P YJAMA. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 31.10.2006 I.T.A. NO. 1422/KOL./2010 ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 4 DECLARING TOTAL INCOME OF RS.33,650/-. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAS MADE PURCHASES OF RS.1,29,23,851/- FROM HOWRAH HUT, FOR WHICH NO BILLS COULD BE PRODUCED. IN THIS REGARD, THE EXPLANATION OFFERED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THE LIST OF P URCHASES MADE FROM HOWRAH HUT WAS ALREADY FURNISHED AND SINCE THE SAID PURCHASES WERE MADE FROM HOWRAH HUT, AN UNORGANIZED MARKET OF VILL AGERS, THERE WERE NO SUPPORTING BILLS/INVOICES ISSUED BY THE SELLERS. THE ASSESSEE, THEREFORE, EXPRESSED ITS INABILITY TO FILE THE COPI ES OF RELEVANT BILLS FOR THE VERIFICATION OF THE ASSESSING OFFICER. FROM THE PER USAL OF THE CASH BOOK OF THE ASSESSEE, IT WAS ALSO FOUND BY THE ASSESSING OF FICER THAT ALL THESE PURCHASES FROM HOWRAH HUT WERE MADE BY THE ASSESSEE IN CASH EXCEEDING RS.20,000/-. HE, THEREFORE, INVOKED THE PROVISIONS OF SECTION 40A(3) AND MADE A DISALLOWANCE OF RS.25,84,770/- BEING 20% OF THE PURCHASES MADE BY THE ASSESSEE IN CASH. 3. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U NDER SECTION 40A(3) OF THE ACT WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLAT E PROCEEDINGS BEFORE THE LD. CIT(APPEALS), COPIES OF BILLS FOR PURCHASES MADE FROM HOWRAH HUT WERE PRODUCED BY THE ASSESSEE AND A REQUEST WAS MAD E FOR ADMISSION OF THE SAME AS ADDITIONAL EVIDENCE ON THE GROUND THAT THE SAME COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER AS THE FILE C ONTAINING THE SAID BILLS WAS NOT TRACEABLE AT THE RELEVANT TIME. THE LD. CIT (APPEALS) ADMITTED THE PURCHASE BILLS FILED BY THE ASSESSEE AS ADDITIONAL EVIDENCE AND FORWARDED THE SAME TO THE ASSESSING OFFICER FOR HIS VERIFICAT ION AND COMMENTS. IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS) , THE ASSESSING OFFICER STATED THAT IN THE ABSENCE OF NAMES AND ADD RESSES REFLECTED IN THE PURCHASE BILLS, THE SAME WERE NOT OPEN FOR VERIFICA TION. BEFORE THE LD. CIT(APPEALS), IT WAS ALSO SUBMITTED ON BEHALF OF TH E ASSESSEE THAT ALL THE PAYMENTS AGAINST PURCHASES IN CASH WERE MADE IN AMO UNTS LESS THAN RS.20,000/- EACH TO DIFFERENT PERSONS AND, THEREFOR E, THE PROVISIONS OF SECTION 40A(3) WERE NOT APPLICABLE. THE LD. CIT(APP EALS) DID NOT FIND I.T.A. NO. 1422/KOL./2010 ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 4 MERIT IN THIS CONTENTION OF THE ASSESSEE AS ACCORDI NG TO HIM, THE PAYMENTS OF PURCHASES AS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE IN EXCESS OF RS.20,000/- ON EVERY DAY. HE, THEREFORE, PROCEEDED TO CONFIRM THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDE R SECTION 40A(3). AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF ONE DAY ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TR IBUNAL. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION SEEKING CONDO NATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN , WE ARE SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR THE DELAY OF ONE DAY ON THE PART OF THE ASSEESSEE IN FILING THE PRESENT APPEAL BEFORE THE T RIBUNAL. WE, THEREFORE, CONDONE THE SAID DELAY AND PROCEED TO DISPOSE OF TH IS APPEAL OF THE ASSESSEE ON MERIT AFTER CONSIDERING THE SUBMISSIONS MADE BY BOTH THE SIDES AND PERUSING THE RELEVANT MATERIAL ON RECORD. THE LIMITED CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESS EE IS THAT THE PURCHASE BILLS PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A PPEALS) WERE SUFFICIENT TO SHOW THAT NONE OF THE PAYMENTS AGAINST PURCHASES MADE FROM HOWRAH HUT WAS IN EXCESS OF RS.20,000/- IN ANY INSTANCE. H E HAS CONTENDED THAT THE RELEVANT ENTRIES MADE IN THE CASH BOOK OF THE A SSESSEE CAN CORROBORATE THIS POSITION BUT NEITHER THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS NOR THE LD. CIT(APPEALS) DURING THE COURSE OF APPELLATE PROCEEDINGS HAS GIVEN PROPER AND SUFFICIE NT OPPORTUNITY TO THE ASSESSEE TO SUPPORT AND SUBSTANTIATE ITS CASE. HE H AS CONTENDED THAT THIS MATTER MAY, THEREFORE, BE RESTORED TO THE FILE OF T HE ASSESSING OFFICER IN ORDER TO GIVE SUCH OPPORTUNITY TO THE ASSESSEE TO E STABLISH THAT THE PAYMENTS MADE IN CASH AGAINST THE PURCHASES MADE FR OM HOWRAH HUT ARE NOT HIT BY THE PROVISIONS OF SECTION 40A(3). THE LD . D.R. HAS NOT RAISED ANY OBJECTION FOR GIVING SUCH OPPORTUNITY TO THE ASSESS EE. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPP ORTUNITY TO ESTABLISH I.T.A. NO. 1422/KOL./2010 ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 4 ITS CASE THAT THE IMPUGNED CASH PAYMENTS MADE AGAIN ST PURCHASES FROM HOWRAH HUT ARE NOT HIT BY THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 20, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 20 TH DAY OF NOVEMBER, 2015 COPIES TO : (1) M/S. NEW PANJABI SAMRAT, M/S. D.J. SHAH & CO., 2, ELGIN ROAD, KOLKATA-700 020 (2) INCOME TAX OFFICER, WARD-49(2), KOLKATA, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 (3) COMMISSIONER OF INCOME-TAX (APPEALS)- XXXII, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.