Santi Ranjan Biswas, Kolkata V. I.T.O. Wd-36(3)/Kolkata, Kolkata

ITA 1425/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74973 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 08-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A P RAY SRDR
• Assessee Lawyers: A K DUTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI, P.K BANSAL, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 1425 / KOL / 2012 ASSESSMENT YEAR :2007-08 SANTI RANJAN BISWAS ESARBI ENTERPRISES, 12A, N.S. ROAD, KOLKATA 700 001 [ PAN NO.ADJPB 0876 B ] V/S . INCOME TAX OFFICER, WARD-36(3), PODDAR COURT, 18, RABINDRA SARANI, KOLKATA 700 001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI A.K. DUTA, AR /BY RESPONDENT SHRI A.P.RAY, SR-DR /DATE OF HEARING 16-01-2014 /DATE OF PRONOUNCEMENT 17-01-2014 / // / O R D E R PER P.K.BANSAL, ACCOUNTANT MEMBER:- THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XX, KOLKATA DA TED 26-07-2012 PERTAINS TO ASSESSMENT YEAR 2007-08 BY TAKING FOLLO WING EFFECTIVE GROUNDS OF APPEAL:- 1. FOR ON THE FATS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION AMOUNTING T O RS.228173/- TO GROSS PROFIT MADE BY THE A.O WARD-36(3)/KOL. ITA NO.1425/KOL/2012 A.Y. 2007-08 SANTI RANJAN BISWAS V. ITO WD-36(3) KOL. PAGE 2 2. FOR THE FACT THAT THE ORDER PASSED BY THE LEARNE D CIT(A)XX WAS NOT A SPEAKING ORDER AND IT FAILED TO CONSIDER THE SUBMIS SION MADE BY THE APPELLANT AND THE ORDER WAS CASUAL. 2. THE ONLY ISSUE RELATES TO THIS ADDITION OF GROSS PROFIT (GP). THE BRIEF FACTS ARE THAT THE ASSESSING OFFICER NOTED THAT ASS ESSEE HAS TAKEN THE LIMIT FROM THE BANK ON PLEADING OF THE STOCK. THE AO FOUN D THE DIFFERENCE TO THE CLOSING STOCK AS PER THE PROFIT AND LOSS ACCOUNT AN D THE CLOSING STOCK AS PER THE STATEMENT FURNISHED TO THE BANK IS TO THE EXTEN T OF RS.5,78.473/- AND HE ADDED THE SAID SUM. WHEN THE MATTER WENT BEFORE CIT (A) AND BEFORE CIT(A), THE ASSESSEE SUBMITTED THAT THE SUM OF RS.3.5 LAKH STANDS DOUBLE ADDED THE SAME AMOUNT WAS ALSO PART OF THE RAW MATERIAL AND A GAIN BE TAKEN IN THE CLOSING STOCK AS SHOWN BY THE BANK. THE CIT(A) AFTE R VERIFYING THE FACT REDUCED THE ADDITION TO RS.2,28,173/-. 3. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CON SIDERED THE SAME ALONG WITH ORDERS TAX AUTHORITIES BELOW. WE NOTED T HAT ASSESSEE HAS GOT THE LIMIT FROM THE BANK BY HYPOTHECATION OF THE STOCK B UT THE AO OBSERVED THAT LIMIT IS AGAINST PLEDGE OF THIS STOCK. THE ASSESSEE WAS REQUIRED TO FURNISH THE STOCK STATEMENT WITHIN SEVEN DAYS OF EACH MONTH TO THE BANKER. THE ASSESSEE SUBMITTED THE STATEMENT TO THE BANKER AND THE PLEA OF LD. AR IS THAT THE STOCK IS BASED MERELY ON ESTIMATE, IN FACT, THE ASSESSEE WAS NOT HAVING THIS MUCH STOCK. THE CORRECT STOCK WAS ONLY AT RS.7,64,027/-. THIS ALSO THE FACT THAT AO DID NOT REJECT THE BOOKS OF ACCOUNT BUT TO MAKE THE ADDITION IN THE GP OF THE ASSESSEE, THE ASSESSEE HAS EXPLAINED THE REASONS TH AT IN THE MANUFACTURING THE ACCOUNT, THE AO DID NOT INCLUDE THE DIRECT COST OF RS.5,03,716/- AND POWER AT RS.66,484/- WHICH RESULTED IN FANTASTIC RATIO OF GP @ 25.89% IF IT IS CONSIDERED GP WILL FALL DOWN. THE PLEA TAKEN BY THE LD. AR, IN OUR OPINION, GOES TO THE ROOT OF THE ADDITION AND WILL AFFECT TH E GP RATE. SINCE THE QUANTUM OF THE ADDITION IS LESS SIGNIFICANT. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND ITA NO.1425/KOL/2012 A.Y. 2007-08 SANTI RANJAN BISWAS V. ITO WD-36(3) KOL. PAGE 3 FAIR PLAY BOTH THE PARTIES, SUSTAIN THE ADDITION TO THE EXTENT OF RS.1,28,173/- AND DELETE THE ADDITION OF RS.1 LAKH. THUS, THE GRO UND TAKEN BY THE ASSESSEE IS PARTLY ALLOWED. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 17/ 01/2014 SD/- SD/- (GEORGE MATHAN) (P.K.BANSAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 17/01/2014 , , , , -, -, -, -, / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT SANTI RANJAN BISWAS ESARBI ENTERPRISES, 12A, N.S. ROAD, KOLKATA 70 0 001 2. / RESPONDENT INCOME TAX OFFICER, WARD-36(3), PODDAR COURT, 18, RABINDRA SARANI KOLKATA 700 001 3. 2 / CONCERNED CIT 4. 2- / CIT (A) 5. , , , / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,