ANAND PRAKASH SINGH, Kolkata V. I.T.O.,WD-45(2), Kol, Kolkata

ITA 1464/KOL/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5498 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 21-08-2009
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Keywords: Bogus purchase; Capital asset converted into stock in trade; Principle of natural justice

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B , KO LKATA [ . . . . . .. . , ,, , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI C.D. RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO. 1464 (KOL) OF 2009 %& '( / ASSESSMENT YEAR 2003-04 ANAND PRAKASH SINGH , KOLKATA. (PAN-AJFPS5742K) INCOME-TAX OFFICER, WARD-45(2), KOLKATA. (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI GAURAV MATHUR /0+, 1 2 ' / FOR THE RESPONDENT: / SRI PIYUSH KOLHE '3 / ORDER ( . . . . . .. . ), (B.R.MITTAL), JUDICIAL MEMBER : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2003-04 AGAINST THE ORDER OF LD. C.I.T.(A)-XXX, KOLKATA DATED 24/03/2009. TH E FIRST GROUND RAISED IN THIS APPEAL BY THE ASSESSEE READS AS UNDER :- 1) LD. A.O. DISALLOWED A SUM OF RS.10,0 00/- RECEIVED BY THE APPELLANT FROM HIS FATHER, THE LD. A.O. TREATED THE PAID AMOUNT AS UNDISCLOSED INCOME AND LD. CIT(A)-XXX, KOLKATA ALSO UPHELD THE ADDITION WHICH IS UNJUSTIFI ED AND AGAINST THE NATURAL JUSTICE. 2. THE ASSESSEE CLAIMED TO HAVE RECEIVED UNSECURED LOAN OF RS.10,000/- IN CASH DURING THE YEAR UNDER APPEAL FROM HIS FATHER, SRI N ARAYANI SINGH. ACCORDING TO THE A.O., THE ASSESSEE COULD NOT PRODUCE THE SAID LOAN CREDITOR IN PERSON BEFORE HIM, OR ANY EVIDENCE LIKE CASH FLOW OR FUND FLOW OF THE LOAN CR EDITOR WAS FURNISHED BEFORE HIM TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CR EDITWORTHINESS OF THE LOAN CREDITOR. HE, THEREFORE, TREATED THE SAID SUM OF RS.10,000/- AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. ON APPEAL, TH E LD. C.I.T.(A) OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE PROPER EVIDENCE IN SUPPO RT OF THE RECEIPT OF THE UNSECURED LOAN. IN THE ABSENCE OF SATISFACTORY EVIDENCE, THE LD. C.I.T.(A) UPHELD THE ACTION OF THE 2 A.O. IN HAVING ASSESSED THE LOAN RELATING TO THE YE AR UNDER CONSIDERATION OF RS.10,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 2.1. BEFORE US ALSO, THE ASSESSEE WAS UNABLE TO PR ODUCE ANY EVIDENCE IN SUPPORT OF HIS GETTING UNSECURED CASH LOAN OF RS.10,000/- FROM HIS FATHER, EXCEPT FILING THE P/L ACCOUNT AND BALANCE OF HIS OWN PROPRIETARY CONCERN. THAT BEING SO, WE FIND NO INFIRMITY IN THE ACTION OF THE AUTHORITIES BELOW IN TREATING THE SAID CASH LOAN OF RS.10,000/- AS ASSESSEES UNDISCLOSED INCOME FOR TH E ASSESSMENT YEAR UNDER APPEAL. THE ORDER OF THE LD. C.I.T.(A), THEREFORE, ON THIS ISSUE IS UPHELD AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 3. THE ONLY OTHER GROUND RAISED BY THE ASSESSEE RE ADS AS UNDER :- 2) THE APPELLANT HAVE A RETAILS SEASONA L BUSINESS AND PURCHASED THE MATERIALS OF RS. 3,98,978/- ONLY IN CASH BUT THE LD. A.O. DISALLOWED THE 10% OF THE SAID PURCHASE I.E. 39,898/- WITHOUT GOING THROUGH FACTS AND CIRCUMSTAN CES OF THE CASE AND LD. CIT(A)- XXX, KOLKATA ALLOWED THE RELIEF OF RS.19,898/- OUT OF RS.39,898/- AND BALANCE AMOUNT OF RS.20,000/- SUSTAINED BY THE LD. CIT(A)-X XX WHICH UNJUSTIFIED AND AGAINST THE NATURAL JUSTICE. 3.1. THE ASSESSEE CLAIMED TO HAVE MADE CASH PURCHA SES OF MATERIALS OF RS.3,98,978/- FOR HIS PROPRIETARY CONCERN. ACCORDING TO THE A.O. , THE ASSESSEE FAILED TO PRODUCE PROPER EVIDENCE IN SUPPORT OF SUCH CASH PURCHASE. HE, THEREFORE, ON ESTIMATE DISALLOWED 10% OF THE TOTAL PURCHASE OF RS.3,98,978/- AS BOGUS PURCHASE, WHICH CAME TO RS.39,898/-. ON APPEAL, THE LD. C.I.T.(A) FOUND TH E DISALLOWANCE ON THE HIGHER SIDE. HE, THEREFORE, RESTRICTED THE DISALLOWANCE ON AD HO C BASIS TO THE EXTENT OF RS.20,000/- AND GAVE RELIEF OF RS.19,898/- TO THE ASSESSEE. 3.2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE IS A SMALL BUSINESSMAN AND DOING THE RETAIL BUSINESS IN SEASON AL ITEMS LIKE UMBRELLA, FIREWORKS AND BLANKETS. HE FURTHER SUBMITTED THAT DURING COURSE OF ASSESSMENT PROCEEDINGS, BOOKS OF ACCOUNT AND OTHER DETAILS WERE PRODUCED AND WITHOUT CONSIDERING THE SAME AND POINTING OUT ANY UNVERIFIABLE PURCHASE BEING MADE DURING THE YEAR UNDER APPEAL, RESORTED TO AD HOC DISALLOWANCE. HE FURTHER SUBMITTED THAT THE LD . C.I.T.(A) ALSO ERRED IN NOT DELETING THE ENTIRE DISALLOWANCE AND SUSTAINING A PART OF TH E DISALLOWANCE MADE BY THE A.O. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. C.I.T.(A). 3 3.3. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL PLACED BEFORE US. ON PERUSAL OF THE ASSESSMENT ORDER WE FIND THAT THE A.O. DID N OT POINT OUT ANY SPECIFIC ITEM OF PURCHASE WHICH, ACCORDING TO HIM, WAS INFLATED OR B OGUS IN NATURE. HE MADE AN AD HOC DISALLOWANCE OF RS.39,989/-, WHICH WAS 10% OF THE T OTAL CASH PURCHASES. THE LD. C.I.T.(A) ALTHOUGH FOUND THE SAID AD HOC DISALLOWAN CE MADE BY THE A.O. ON THE HIGHER SIDE, BUT UPHELD THE DISALLOWANCE TO THE EXTENT OF RS.19,898/-. WE FIND THAT THE AUTHORITIES BELOW FAILED TO BRING ON RECORD ANY INS TANCE OF BOGUS PURCHASE CLAIMED BY THE ASSESSEE. IN THAT VIEW OF THE MATTER, IN OUR CO NSIDERED OPINION, ON THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, NO AD HOC DISALLOWAN CE IS WARRANTED ALLEGING BOGUS PURCHASE. WE, THEREFORE, DELETE THE DISALLOWANCE SU STAINED BY THE LD. C.I.T.(A) AT RS.19,898/- AND THE GROUND OF APPEAL OF THE ASSESSE E IS ALLOWED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 4 '3 #5' 6 5% 7 48 THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.11.2010. SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( . . . . . .. . ) (C.D.RAO) , ACCOUNTANT MEMBER (B.R.MITTAL) , JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 30 -11-2010 '3 1 /9 :'9';- COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT : ANAND PRAKASH SINGH, 208, MAHATMA GANDHI ROAD, KOLKATA 7 00 007. 2 /0+, / THE RESPONDENT : I.T.O., WARD-45(2), KOLKATA. 3. 3% () : THE CIT(A)-XXX, KOLKATA. 4. 3%/ THE CIT, KOL- 5 ?7 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 GUARD FILE . 09 // TRUE COPY, '3%5/ BY ORDER, (DKP) @ A / DEPUTY REGISTRAR .