DCIT, Circle - 1, Midnapore, Paschim Medinipur V. Sachidananda Ojha, Paschim Medinipur

ITA 1469/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62137 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2012
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-11-2011
• Court: TRIBUNAL
• Department Lawyers: AJOY KUMAR SINGH
• Assessee Lawyers: V N PUROHIT

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [ () . .. . . .. . , ,, , , !' ##$ %& ##$ %& ##$ %& ##$ %& ] ]] ] [BEFORE HONBLE SRI C.D.RAO, AM & HONBLE SRI GE ORGE MATHAN, JM] '( '( '( '( /ITA NO.1469/KOL/2011 )&* +,/ ASSESSMENT YEAR : 2008-09 (%. / APPELLANT ) - & - ( 01%. /RESPONDENT) D.C.I.T., CIRCLE-1, . SACHIDANANDA OJHA MIDNAPORE -VERSUS- MIDNAPORE (PAN:AADPO 3925 D) %. 2 3 / FOR THE APPELLANT: SHRI AJOY KUMAR SINGH 01%. 2 3 / FOR THE RESPONDENT: SHRI V.N.PUROHIT 4&5 2 /DATE OF HEARING : 25.06.2012. 6+ 2 /DATE OF PRONOUNCEMENT : 25.06.2012. 7 / ORDER 89 89 89 89 PER BENCH THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORDE R OF THE LD.CIT(A)-XXXVI, KOLKATA IN APPEAL NO.306/CIT(A)-XXXVI/KOL/R-1,MID./ 10-11/289 DATED 01.08.2011 FOR ASSESSMENT YEAR 2008-09. 2. SHRI AJOY KUMAR SINGH, LD.DR APPEARED ON BEHALF OF THE REVENUE AND SHRI V.N.PUROHIT, LD.AR APPEARED ON BEHALF OF THE ASSESS EE. 3. IN THE REVENUES APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. (I) THAT IN A CASE WERE THE ASSESSEE HAS FILED TWO SETS OF AUDITED ACCOUNTS ONE BEFORE THE ASSESSING OFFICER AND THE OTHER BEFORE THE BANK FOR WHICH LOANS WERE TAKEN. THE CIT(A), ERRED BOTH IN THE LAWS AND IN FACTS IN NOT INVOKING THE PROVISIONS UNDER CLAUSE OF 4 OF SEC. 250 OF THE I,T.ACT, 1961,. IN D IRECTING THE A.O. TO MAKE FURTHER ENQUIRY ON THE SECOND SET OF ACCOUNTS FILED BY THE ASSESSEE BEFORE THE BANKING AUTHORITY AND TO DETERMINE THE CORRECT INCOME AFTER SUCH ENQU IRY 2. (II) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A), ERRED IN TAKING THE NET PROFIT DISCLOSED IN THE SECOND SET OF ACCOUNTS FILED BEFORE THE BANKING AUTHORITY IGNORING THE DIFFERENCE IN VARIOUS ITEMS AMOUNTING TO RS. 1,95,83,754/- WHICH WAS DISALLOWED BY THE A.O, 2 3 AS A RESULT, THE REDUCTION OF DEMAND IN THE INST ANT CASE IS RS. 93,80,919/-, IN THE LIGHT OF BOARDS INSTRUCTION NO. 3/2011, DATED 9-2-2011, THE MONETARY LIMIT FOR FILING SECOND APPEAL BEFORE THE ITAT IS RS. 3 LAKHS. CONSIDERING THE INVOLVEMENT OF HIGHNESS OF THE DEMAND, A SECOND APPEAL IS STRONGLY SUGGESTED. 4. IT WAS SUBMITTED BY THE LD. DR THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS A DEALER IN WHOLESALE OF RICE AND RICE BRAN. IT WAS THE SUBM ISSION THAT IN THE COURSE OF ASSESSMENT IT WAS NOTICED THAT THE ASSESSEE HAS GIV EN A SEPARATE SET OF ACCOUNTS TO THE STATE BANK OF INDIA, MIDNAPORE BRANCH AND THE ACCOU NTS AS MAINTAINED BY THE ASSESSEE WERE DIFFERENT. IT WAS THE SUBMISSION THAT CONSEQUE NTLY THE AO HAD ASKED THE ASSESSEE TO RECONCILE THE DIFFERENCE BETWEEN THE AUDITED ACC OUNTS AS PRESENTED TO THE BANK AND AS FURNISHED ALONG WITH THE RETURN. IT WAS THE SUBM ISSION THAT AS THE ASSESSEE WAS UNABLE TO RECONCILE THE DIFFERENCE THE DIFFERENCE B ETWEEN THE ACCOUNTS AS SUBMITTED TO THE BANK AND AS SUBMITTED ALONG WITH THE INCOME TAX RETURN IT WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. IT WAS THE SUBM ISSION THAT ON APPEAL THE LD. CIT(A) HAD REDUCED THE ADDITION BY HOLDING THAT THE ACCOUNTS SUBMITTED TO THE BANK WAS FOR THE PURPOSE OF OBTAINING A HIGHER CREDIT FA CILITY AND THAT THE NET PROFIT AS SHOWN IN THE BALANCE SHEET FILED WITH THE BANK SHOW ED THE NET PROFIT OF RS.9,71,135.69 AS AGAINST THE NET PROFIT SHOWN IN THE PROFIT AND L OSS ACCOUNT FILED ALONG WITH THE RETURN WHICH SHOWED AN AMOUNT OF RS.9,28,045/-. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE LD. CIT(A) HAD HELD THAT THE PROFI T AND LOSS ACCOUNT ARE SHOWN IN THE BALANCE SHEET FILED WITH THE BANK WAS LIABLE TO BE CONSIDERED. IT WAS THE SUBMISSION THAT ALL OTHER ADDITIONS HAD BEEN DELETED. IT WAS T HE SUBMISSION THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD NOT RECO NCILED THE DIFFERENCE BETWEEN THE ACCOUNTS STATEMENT AS FILED WITH THE BANK AND AS FI LED ALONG WITH THE RETURN AND CONSEQUENTLY THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. IT WAS THE SUBMISSION THAT HE HAD NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF AO FOR RE- ADJUDICATION. 5. IN REPLY, THE LD. AR SUBMITTED THAT THE ACCOUNT STATEMENT GIVEN TO THE BANK WAS ONLY FOR THE PURPOSE OF OBTAINING A HIGHER BANK CRE DIT. IT WAS THE SUBMISSION THAT MOST OF THE FIGURES AS SHOWN TO THE BANK REPRESENT AN AD HOC INCREASE OF A ROUND SUM TO THAT OF THE ONE AS SHOWN IN THE ACCOUNTS SUBMITTED WITH THE RETURN OF INCOME. IT WAS THE 3 SUBMISSION THAT THE ACCOUNTS SUBMITTED TO THE BANK WERE ADHOC FIGURES AND WERE NOT SUPPORTED IN THE BOOKS OF ACCOUNT. IT WAS THE SUBMI SSION THAT HE HAD NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF AO. 6. WE HAVE CONSIDERED THE SUBMISSIONS. AT THE OUTSE T, WHAT IS EVIDENT IS THAT A PERUSAL OF THE ORDER OF THE LD.CIT(A) SHOWS THAT TH E LD. CIT(A) HAS ACCEPTED THE BALANCE SHEET AS FILED BEFORE THE BANK WHOSE FINDIN G OF THE LD. CIT(A) HAS NOT BEEN CHALLENGED BY THE ASSESSEE. OBVIOUSLY THE FINDING O F LD. CIT(A) AND THE BALANCE SHEET FILED WITH THE BANK STANDS GOOD. ONCE THE DIFFERENC E FOUND WITH THE BALANCE SHEET FILED BEFORE THE BANK AUTHORITIES AND THE RECONCILIATION OF THE SAME WITH THE BOOKS OF ACCOUNTS WOULD HAVE TO BE DONE. HOW THE ASSESSEE HA S ARRIVED AT THE FIGURES AS SHOWN IN THE BALANCE SHEET WITH THE BANK WOULD HAVE TO BE RECONCILED WITH THE BANK AS MAINTAINED BY THE ASSESSEE. FOR THIS PURPOSE WE ARE OF THE VIEW THAT THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE FILE OF AO FOR RE-AD JUDICATION. THE AO SHALL GIVE ASSESSEE ADEQUATE OPPORTUNITY TO RECONCILE THE DIFF ERENCE. IT IS FURTHER DIRECTED THAT JUST BECAUSE THERE IS A DIFFERENCE ADDITION SHOULD NOT B E MADE IF THERE ARE POSITIVE DIFFERENCE OR NEGATIVE WHICH CAN BE CONSIDERED ALSO . IN THE CIRCUMSTANCES AND WITH THIS DIRECTION IN THIS APPEAL THIS ISSUE IS RESTORE D TO THE FILE OF AO FOR RE-ADJUDICATION AFTER GRANTING AN OPPORTUNITY TO SUBSTANTIATE ITS C LAIM. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT ON 25.06.2012. SD/- SD/- [ .##$ %& , ] [ .., ] [ GEORGE MATHAN ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( ( ) )) ) DATE: 25.06.2012. R.G.(.P.S.) 4 7 2 0)): ;:+<- COPY OF THE ORDER FORWARDED TO: 1. SACHIDANANDA OJHA, PROP OF M/S.MUKUND ENTERPRISE, 3 21/1, STATION ROAD, P.O.MIDNAPORE, DIST.PASCHIM MEDINIPUR., PIN: 721 10 1. 2 THE D.C.I.T., CIRCLE-1,MIDNAPORE. 3. THE CIT- 4. THE CIT(A)- XXXVI, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 1: 0)/ TRUE COPY, 7&4/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES