ITO, Ward - 42(2), Kolkata, Kolkata V. M/s. Roy Construction, Kolkata

ITA 1468/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54494 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 19-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: N O N E
• Keywords: Bogus purchase
• Section: 143(3); 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . . , !' # # # # /AND $# , !' ) [BEFORE HONBLE SHRI S. V. MEHROTRA, AM & HONBLE S RI MAHAVIR SINGH, JM] #% #% #% #% / I.T.A NO. 1468/KOL/2010 $&' () $&' () $&' () $&' ()/ // / ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WARD-42(2), KOLKATA VS. M/S. ROY CONSTRUCTION (PAN-AAHFR 0140 H) (+, /APPELLANT ) (-.+,/ RESPONDENT ) FOR THE APPELLANT: SHRI S. K. ROY FOR THE RESPONDENT: N O N E !/ / ORDER PER MAHAVIR SINGH, JM ( $# $# $# $#, , , , !' !' !' !' ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XII, KOLKATA IN APPEAL NO 643/XII/42(2)/08-09 DATED 21.04.2010. ASSESSMENT W AS FRAMED BY ITO, WARD-40(2), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) VIDE HIS ORDER DATED 31.12.2008. 2. THE INTER CONNECTED ISSUES IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) OF RS.1,35,000/- BEING DIFFERENTIAL AMOUNT OF SALE OF FLAT AND AN AMOUNT OF RS.6.22 LACS ON ACCOUNT OF BOGUS PURCHASES. FOR THIS, REVENUE HAS RAISED F OLLOWING TWO GROUNDS: 1) THE LD. A.R ERRED IN DELETING RS.1,35,000/- AS DIFFERENTIAL AMOUNT ON SALE OF FLAT. 2) THE LD. CIT(A) ERRED IN DELETING RS.6,22,000/- ON ACCOUNT OF BOGUS PURCHASE. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED, ON GOING THROUGH THE SALE DEED FILED, THAT SMT. ARATI BASU HAS PAID RS.11,35,000/- WHEREAS ASSESSEE HAS DECLARED RS.10 LACS AS ADVANCE UP TO 31.3.2006 AND ACCORDINGLY HAS EARNED UNDISCLOSED INCOME 2 ITA 1468/K/2010 M/S. ROY CONSTRUCTION A.Y.06-07 TO THE TUNE OF RS.1.35 LACS. AS THE ASSESSEE FAILED TO SHOW THIS INCOME IN HER RETURN OF INCOME, ASSESSING OFFICER ADDED DIFFERENTIAL AMOUNT OF RS.1 .35 LACS AS INCOME OF ASSESSEE. SIMILARLY, IN RESPECT OF UNACCOUNTED PURCHASES, AO ISSUED NOTI CE U/S. 133(6) OF THE ACT TO M/S. GOVIND HARDWARE FROM WHOM ASSESSEE CLAIMED TO HAVE PURCHAS ES BUILDING MATERIAL, WHO VIDE LETTER DATED 2.12.2008 STATED THAT NO TRANSACTION TOOK PLA CE WITH THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY WITH EVIDENCE. AS THE A SSESSEE COULD NOT EXPLAIN SATISFACTORILY, HE ADDED THIS DIFFERENTIAL AMOUNT OF RS.6.22 LACS AS U NACCOUNTED PURCHASE/BOGUS PURCHASES. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). WE FIND THAT CIT(A) HAS ONLY GIVEN DIRECTIONS IN RESPECT TO DIFFERENTIAL AMOUNT OF SAL E OF FLAT THAT THE FACTS WITH RESPECT TO SALE OF FLATS ARE NOT CLEAR AND THE ASSESSING OFFICER HAS D IRECTED TO TAKE INTO CONSIDERATION ONLY RECEIPTS RELATING TO FLATS SOLD/POSSESSION GIVEN DURING THE YEAR UNDER CONSIDERATION. GIVING THESE DIRECTIONS, THE CIT(A) UPHELD THE ACTION OF ASSESSI NG OFFICER BY GIVING FOLLOWING FINDING IN HIS APPELLATE ORDER AT PARA (7.II) AS UNDER: II) AS FAR AS MERITS ARE CONCERNED, THE A.O. IN HI S REMAND REPORT CATEGORICALLY STATED THAT VARIOUS PARTIES CONFIRMED OF TAKING POS SESSION OF THEIR RESPECTIVE FLATS WITHIN F.Y. 2005-06. AS SUCH, THE RIGHTS OF THE FLA TS HAVE BEEN TRANSFERRED TO THE BUYERS IN F.Y. 2005-06 ITSELF. THE APPELLANTS CLA IM THAT SAME HAVE BEEN ACCOUNTED FOR IN A.Y. 2008-09 DOES NOT HAVE MERIT SINCE THE A CCRUAL OF INCOME IN A.Y. 2006-07 CANNOT BE DEFERRED BY THE APPELLANT AT ONES OWN WIL L. AS PER THE A.O. THE PARTIES CONFIRMED OF GETTING POSSESSION OF FLATS/REGISTRATI ON IN F.Y. 2005-06 ARE DR. MADAN MOHAN DAS, SMT. ARATI BASU, SRI ANIL KUMAR SUR, SRI B. C. SAHA ROY AND SRI TAPANJIT JANA. THE SAID FINDING OF A.O. HAS NOT BEEN CONTRO VERTED BY THE APPELLANT. IN FACT THE APPELLANT STATED THAT THOUGH THE SALES ARE EFFECTED IN F.Y. 2005-06, THE RECEIPTS ARE SHOWN UNDER WORK-IN-PROGRESS ACCOUNT AS THE POSSESS ION OF THE SAID FLATS HAVE NOT BEEN HANDED OVER TO THE PURCHASERS. CONSIDERING THE FACTS OF THE CASE I AM OF THE VIEW THAT THE A.O. HAS RIGHTLY TAXED THE RECEIPTS RELATE D TO FLATS SOLD/POSSESSION GIVEN OR REGISTRATION DONE DURING THE YEAR UNDER CONSIDERAT ION CONSIDERING G.P. AT 10% OF THE SALE AMOUNT. HOWEVER AS PER THE RECORDS, THE FACT S RELATED TO SALE OF FLATS ARE NOT CLEAR. THE A.O. IS DIRECTED TO TAKE INTO THE FACTS RELATED TO SALE OF FLATS ARE NOT CLEAR. THE A.O. IS DIRECTED TO TAKE INTO CONSIDERATION ONL Y THOSE RECEIPTS RELATED TO FLATS SOLD/POSSESSION GIVEN DURING THE YEAR UNDER CONSIDE RATION. SUBJECT TO THIS OBSERVATION, THE ACTION OF THE A.O. IS UPHELD. WITH RESPECT TO BOGUS PURCHASES, CIT(A) DELETED THE ADDITION BY STATING THAT ASSESSING OFFICER HAS ALREADY ESTIMATED THE GROSS PROFIT AT 10% ON TH E SALE RECEIPTS AND FOLLOWINGS WERE DIRECTIONS VIDE PARA 7(III) OF HIS APPELLATE ORDER: III) AS REGARDS ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES, I AM OF THE OPINION THAT SEPARATE ADDITION ON THIS COUNT IS NOT REQUIRE D SINCE THE A.O. HAS ESTIMATED THE GROSS PROFIT AT 10% ON THE SALE RECEIPTS. THE PRAC TICE OF MAINTAINING SELF MADE VOUCHERS IS GENERALLY SEEN IN THIS LINE OF BUSINESS . MOREOVER THE BUILDING MATERIAL IS 3 ITA 1468/K/2010 M/S. ROY CONSTRUCTION A.Y.06-07 A MUST FOR A CONSTRUCTION ACTIVITY. AS SUCH THE AD DITION MADE SEPARATELY ON THIS COUNT NEEDS TO BE DELETED. IN RESPECT TO BOTH FINDINGS, WE FIND NO INFIRMITY I N THE ORDER OF CIT(A) AND ACCORDINGLY, WE CONFIRM THE SAME. THE APPEAL OF THE REVENUE IS DIS MISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 5. ORDER PRONOUNCED IN OPEN COURT ON 12.8.2011 SD/- SD/- . . , !' $# $# $# $# , !' (S. V. MEHROTRA (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0 ) )) ) DATED: 12TH AUGUST, 2011 12 $&34 $5 JD.(SR.P.S.) !/ 6 -$$ 7(8- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT ITO, WARD-42(2), KOLKATA. 2 -.+, / RESPONDENT, M/S. ROY CONSTRUCTION. 3,JOGIPARA ROA D, KOLKATA-700 028. 3 . $/& ( )/ THE CIT(A), KOLKATA 4. $/& / CIT, KOLKATA 5 . $> -$& / DR, KOLKATA BENCHES, KOLKATA . -$/ TRUE COPY, !/&?/ BY ORDER, #4 /ASSTT. REGISTRAR .