IMC LIMITED, Kolkata V. DCIT, CIR-11, KOLKATA, Kolkata

ITA 1429/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1252 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR CIT LD
• Assessee Lawyers: PRATYUSH JHUNJHUNWALA LD
• Section: 143(3); 142(1)

Judgement Text

1 ITA NO. 1429/KOL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KO LKATA BEFORE: SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUD ICIAL MEMBER I.T.A NO. 1429/KOL/201 4 A.Y: 2007-08 M/S. I.M.C LIMITED VS. D.C.I.T, CIR-11, KOLKATA PAN: AAACI 6884R [APPELLANT] [RESPONDEN T] FOR THE APPELLANT : SHRI PRATYUSH JHUNJHUNWALA , ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI SAURABH KUMAR, ADDL. C IT, LD.SR.DR DATE OF HEARING : 18-09-2017 DATE OF PRONOUNCEMENT : 13-10-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D T. 13-01- 2014 PASSED BY THE CIT-A, XII, KOLKATA FOR THE ASSE SSMENT YEAR 2007-08. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY AND DEALING IN THE BUSINESS OF BULK LIQUID CARGO ST ORAGE & HANDLING, TRADING AND CONSTRUCTION OF STORAGE TANKS. THE ASSE SSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,58, 54,861/- FOR THE A.Y UNDER CONSIDERATION. THE AO COMPLETED THE ASSES SMENT U/S. 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF R S. 6,83,55,412/- ON 30-12-09. AGAIN THE TOTAL INCOME WAS REVISED TO RS. 5,54,94,650/- BY AN ORDER PASSED U/S. 154/143(3)/11 5JB DT. 24-06- 2010. SUBSEQUENTLY, THE AO NOTICED THAT THE ASSESSE E DID NOT PAY THE LEAVE ENCASHMENT AMOUNT BEFORE DUE DATE OF FILING O F RETURN, BUT CLAIMED DEDUCTION IN THE ORIGINAL PROCEEDINGS. THE REBY, THE AO ADDED AN AMOUNT OF RS.29,22,329/- ON ACCOUNT OF LEA VE ENCASHMENT TO THE TOTAL INCOME OF THE ASSESSEE. THE AO ALSO AD DED AN AMOUNT OF RS.8,89,925/- ON ACCOUNT OF ADVANCES WRITTEN OFF BY OBSERVING THAT THE SAID AMOUNTS WERE NOT OFFERED TO TAX IN THE PRE VIOUS YEAR. 2 ITA NO. 1429/KOL/2014 3. IN CHALLENGE BEFORE THE CIT-A, THE CIT-A CONFIRM ED THE ADDITION MADE ON ACCOUNT OF LEAVE ENCASHMENT AND RESTRICTED THE ADDITION TO RS.69,039/- ON ACCOUNT OF ADVANCES WRITTEN OFF. 4. BEFORE US THE ASSESSEE RAISED THE GROUNDS CHALLE NGING THE RE- OPENING PROCEEDINGS AS WELL AS THE GROUNDS CHALLENG ING IN SAID TWO ADDITIONS I.E. ON ACCOUNT OF LEAVE ENCASHMENT AND ADVANCES WRITTEN OFF. 5. THE LD.AR OF THE ASSESSEE SUBMITS THAT THE GROUN D NOS. 1 & 2 MAY BE TREATED AS PRELIMINARY ISSUE. AFTER HEARING BOTH THE PARTIES, WE DECIDED TO HEAR THE GROUND NOS. 1 & 2 AS PRELIMI NARY ISSUE. IN RESPONSE TO NOTICES ISSUED U/S. 143(2) AND 142(1) PLACED AT[ PAGES 67-78 OF THE PAPER BOOK THE ASSESSEE PRODUCED ALL T HE REQUIRED DOCUMENTS BEFORE THE AO AND CONSIDERING THE SAME HE FORMED AN OPINION AND DETERMINED THE TOTAL INCOME AT RS.6,83, 55,412/-. THEREAFTER, IT WAS REVISED TO RS.5,54,94,650/-. DUR ING THE ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED AUDI TED ACCOUNTS, TAX AUDIT REPORT TO THE AO. INSPITE OF HAVING EVERY THING BEFORE THE AO, HE INITIATED REOPENING PROCEEDINGS ON THE SAME SET OF FACTS AND CIRCUMSTANCES AND MADE THE SAID TWO ADDITIONS. THE AO ALSO DID NOT BRING ON RECORD ANY NEW MATERIAL TO SHOW THAT THE ASSESSEE WILLFULLY OR TRULY NOT DISCLOSED ANY DETAILS REGARDING THE SA ID TWO ADDITIONS AND PRAYED TO ALLOW THE GROUND OF APPEAL CHALLENGING TH E REOPENING PROCEEDING FILED BY THE ASSESSEE. 6. THE LD. DR RELIED ON THE ORDER OF THE AO. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE AO ISSUED NOTICE U/S. 142(1) OF TH E ACT ON 26-06-09, PLACED AT PAGES 67-68 OF THE PAPER BOOK, WHEREIN HE SOUGHT INFORMATION FROM THE ASSESSEE PARTICULARLY THE COPI ES OF AUDITED FINANCIAL ACCOUNTS, TAX AUDIT REPORT, TDS CERTIFICA TES AND LIST OF SUNDRY CREDITORS/DEBTORS. CONSIDERING THE INFORMATION AS S UPPLIED BY THE 3 ITA NO. 1429/KOL/2014 ASSESSEE, IT APPEARS THAT THE AO DID NOT MAKE ANY A DDITION IN THE ORIGINAL PROCEEDINGS. WE ALSO FIND FROM PAGE 24 OF THE PAPER BOOKS SHOWS THAT PROVISIONS FOR DOUBTFUL ADVANCES AND PR OVISIONS FOR LEAVE ENCASHMENT WAS MADE. ADMITTEDLY THE SAID AUDITED AC COUNTS WERE AVAILABLE BEFORE THE AO AND PROVISIONS INVOLVED IN SAID TWO ADDITIONS WERE REFLECTED IN THE SAID AUDITED ACCOUNTS. WE ALS O FIND THAT THE REASONS RECORDED BY THE AO FOR REOPENING OF ASSESSM ENT AT PAGE 74 OF THE PAPER BOOK, WHEREIN IT IS NOTICED THAT NO WH ERE THE AO OBSERVED THAT BASING ON NEW MATERIAL THE AMOUNTS IN VOLVED IN TWO ADDITIONS ESCAPED ASSESSMENT DURING THE ORIGINAL AS SESSMENT. THEREFORE, WE FIND FORCE IN THE ARGUMENTS OF THE LD .AR THAT ALL THE DOCUMENTS REQUIRED BY THE AO U/S. 142(1) OF THE ACT WERE PRODUCED BEFORE THE AO. THE AO DID NOT BRING ANY NEW TANGIBL E MATERIAL TO SHOW THAT THE ASSESSEE WILLFULLY NOT DISCLOSED THE SAID TWO AMOUNTS, WHICH ATTRACTS THE IMPUGNED ADDITIONS ON ACCOUNT OF LEAVE ENCASHMENT AND ADVANCES WRITTEN OFF, IN OUR OPINION ARE NOT MAINTAINABLE. THEREFORE, WE ARE OF THE VIEW THAT TH E AO BASING ON INFORMATION SUPPLIED BY THE ASSESSEE IN THE ORIGINA L PROCEEDINGS MADE THE SAID ADDITIONS, WHICH ARE NOT PERMISSIBLE IN THE EYE OF LAW. THEREFORE, THE AO WAS NOT JUSTIFIED IN INITIATING REOPENING PROCEEDINGS AND MAKING THE SAID ADDITIONS AND THERE BY THE CIT-A WAS NOT JUSTIFIED IN CONFIRMING THE SAME. THE PREL IMINARY ISSUE AS RAISED IN GROUND NOS. 1 AND 1.1 RAISED BY THE ASSES SEE ARE ALLOWED. 8. IN VIEW OF THE ABOVE, THE GROUND NOS. 2 AND 3 AR E NOT ADJUDICATED. GROUND NO. 4 IS GENERAL IN NATURE AND NEEDS NO ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13- 10-2017 SD/- SD/- WASEEM AHMED S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13-10-2017 4 ITA NO. 1429/KOL/2014 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT / ASSESSEE: M/S. I.M.C LIMITED 232/A, AJC BOSE ROAD, KOLKATA-20. 2 RESPONDENT / REVENUE : THE DEPUTY COMMISSIONER OF INCOME - TAX, CIR - 11, AAYKAR BHAWAN,P-7, CHOWRINGHEE SQUARE, KOLKATA-69. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/ H.O.O ITAT KOLKATA