ITO, WD-29(1), KOLKATA, Kolkata V. M/s Special Leather Industries, Kolkata

ITA 1505/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1770 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR CIT LD
• Assessee Lawyers: S M SURANA LD
• Keywords: Search and seizure
• Section: 40A(3); 143(3); 142(1); 133A; 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BE NCH, KOLKATA BEFORE : SHRI J. SUDHAKAR REDDY,ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1505/KOL/2015 A.Y 2008-09 I.T.O., WARD 29(1) VS. SPECIAL LEATHER INDUSTRIES KOLKATA PAN:AARFS3994E [APPELLANT ] [RESPONDENT ] C.O NO. 02/ KOL/2016 [ITA NO. 1505/KOL/2015 A.Y 2008-09] SPECIAL LEATHER INDUSTRIES VS. I.T.O., WARD 29(1) , KOLKATA [CROSS OBJECTOR-ASSESSEE ] [DEPARTMENT-RESPONDENT ] APPELLANT BY : SHRI SAURABH KUMAR, ADDL.CIT, LD. SR.DR RESPONDENT BY : SHRI S.M. SURANA, ADVOCATE, L D.AR DATE OF HEARING : 31-10-2017 DATE OF PRONOUNCEMENT : 24-01-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: ABOVE APPEAL AND CORRESPONDING CROSS OBJECTION B Y THE REVENUE AND ASSESSEE ARE AGAINST THE ORDER DT. 12-1 0-2015 PASSED BY THE CIT-A, 8, KOLKATA FOR THE A.Y 2008-09. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF LEATHER GOODS. THE ASSESSEE CONDUCTS ITS BUSINESS UNDER THE NAME AND S TYLE M/S. SPECIAL LEATHER INDUSTRIES. THE ASSESSEE FILED ITS RETURN O F INCOME DECLARING TOTAL INCOME AT RS.29,79,872/- ON 28-09-08. THE AO DETERMINED THE TOTAL INCOME AT RS.6,19,05,859/- AS AGAINST RS.29,7 9,872/- AND MADE VARIOUS DISALLOWANCES FOR VIOLATION OF SECTION 40A( 3) OF THE ACT UNDER THE HEADS PURCHASE OF RAW MATERIALS OF RS.5,30,5 2,747/-, WAGE & LABOUR CHARGES OF RS.11,11,329/-, BOGUS LIABILITY OF RS. 46,54,648/- VIDE HIS ORDER DT. 31-12-2010 PASSED U/ S. 143(3) OF THE ACT. ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 2 3. GROUND NO.1 RELATES TO DELETION OF ADDITION OF R S.5,30,52,747/- MADE U/S. 40A(3) OF THE ACT. 4. A SURVEY WAS CONDUCTED ON 21-08-2007 U/SEC. 133A OF THE ACT. NOTICES U/SEC 143(2) & 142(1) OF THE ACT WERE ISSUE D. IN RESPONSE, THE AR APPEARED AND PRODUCED BOOKS OF ACCOUNT, BILL S, VOUCHERS AND BANK BOOK. DURING THE SURVEY OPERATION A STATEMENT U/S. 131 OF THE ACT OF THE ASSESSEE WAS RECORDED, WHEREIN ACCORDING TO AO THE ASSESSEE ADMITTED THE PURCHASE OF RAW MATERIALS WA S ON CASH BASIS AND ALL SUCH TRANSACTIONS FOUND TO BE NOTED ON SMAL L SLIPS AND SMALL NEWS PAPER, WHICH WERE IMPOUNDED ALSO IN THE SURVEY OPERATIONS. TO CONFIRM THE SAME THE AO SENT LETTERS TO THE SUPPLIE RS OF RAW HIDES AND SKINS AND ALL THE LETTERS RETURNED UNSERVED WIT H AN ENDORSEMENT UNKNOWN, NOT COMPLETE ADDRESS ETC. THEREBY, THE P AYMENT IN CASH TO SUPPLIERS TO THE TUNE OF RS.5,30,52,747/- UNDER THE HEAD PURCHASE OF RAW MATERIALS WAS DISALLOWED FOR VI OLATION OF SECTION 40A(3) OF THE ACT AND ACCORDINGLY, ADDED THE SAME T O THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED, IN THE FIRST APPELLATE PROCEEDINGS BE FORE THE CIT-A THE ASSESSEE SUBMITTED THAT IT PURCHASED HIDES AND SKINS FROM MIDDLEMEN AND PAYMENT THEREOF WAS NOT COVERED UNDER RULE 6DD(F) & 6DD(H) OF INCOME TAX RULES 1962 AND QUESTION OF V IOLATION OF SECTION 40A(3) DOES NOT ARISE. THE ASSESSEE ALSO SU BMITTED THE DETAILS OF DEALERS I.E VAT, BILLS ALONG WITH LEDGER COPIES OF THE VENDORS AND EVIDENCES. FURTHER, THE ASSESSEE STATED THAT T HE PURCHASES TO AN EXTENT OF RS.4,50,09,654/- WERE FROM REGISTERED DEA LERS. OUT OF WHICH, RS.3,28,37,420/- WAS PAID BY ACCOUNT PAYEE C HEQUE AND THE OUTSTANDING BALANCE OF RS.1,21,72,234/- WAS CARRIED FORWARD TO THE NEXT YEAR. 6. CONSIDERING THE SUBMISSIONS OF ASSESSEE THE CI T-A DIRECTED THE AO TO GIVE THE DEDUCTION OF THE ENTIRE PURCHASE S AT RS.5,30,52,747/- BY STATING AS UNDER:- ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 3 6.1.2 WHEREAS, THE ADDL. CIT IN HIS ASSESSMENT ORDE R FROM PAGE 1 TO PAGE 4 HAS JUST CONCOCTED FARCICAL ALLEGATIONS AND THAT TOO ONLY BR IEFLY AT THE BEGINNING OF PARA 3 WHICH AT PAGE 1, AND THEREAFTER REMAINING PARAS AND PAGES HE HAS THEN ONLY MERELY CITED SE- LAWS, EMPHASIZED IN BOLD FONT FORMAT, THAT ARE AGAI NST THE ASSESSE AS REGARDS SECTION 40A(3) - SO AS TO MAKE THE ISSUE LOOK VERY GRAVE - WHEN THE FACTS ARE THAT THERE AS NO SUCH ISSUE FOR SECTION 40A(3) AT ALL. THE ADD. CIT HAS NOT SHOWN' A SINGLE INSTANCE OF APPLICABILITY OF SECTION 40A(3). THE ADDL. CIT HAS MALICIOUSLY MADE UP CONCOCTED SMEAR OF BASELESS ALLEGATIONS WITHOUT ANY IOTA OF FACT. 6.1.3 FURTHER, THE ACCOUNTS ARE STATUTORILY AUDITED AND THERE IS NO MENTION OF SECTION 40A(3) BEING ATTRACTED. 6.1.4 TO SUMMARIZE THE FACTS OF THE PURCHASES, IT I S HEREUNDER: SL. CATEGORY OF PURCHASES AMOUNT MODE OF PAYMENT (1) (2) (3) (4) A FROM VAT REGISTERED DEALERS 4,50,09,654/- BY ACCO UNT PAYEE CHEQUE RS.3,28,37,420/-. THE BALANCE RS.1,21,72,234/- BEING OUTSTANDING, CARRIED FORWARD TO NEXT YEAR B FROM OUTSIDE WEST BENGAL UNDER WAY BILLS ISSUED BY THE SALES TAX DEPARTMENT 28,56,890/- OUTSTANDING, CARRIED FORWARD TO NEXT YEAR C MISCELLANEOUS 51,86,203/- PAYMENT ON EACH DAY LES S THAN RS.20,000/- TOTAL 5,30,52,747 CONCLUSION: SE CTION 40A(3) NOT ATTRACTED 6.1.5 THE ADDL. CIT HAS, OBVIOUSLY WITH DEVIOUS. IN TENT, JUST CONCOCTED FARCICAL ALLEGATIONS ON THE APPELLANT WITHOUT A SINGLE IOTA OF FACT. IT IS ALSO UNHEARD, NAY UNBELIEVABLE, THAT ENTIRE PURCHASES ARE DISALLOWED IN ASSESSMENT, WHEN IT DEFINITELY IS THAT THE APPELLANT IS CARRYING ON BUSINESS. 6.1.6 I THUS HEREBY ALLOW THIS GROUND OF APPEAL NO. 4. THE PRESENT INCUMBENT AO IS HEREBY DIRECTED TO GIVE THE DEDUCTION OF THE ENTIRE PURCHASES AT RS. 5,30,52,747/-. ' 7. BEFORE US THE LD.DR SUBMITS THAT THE CIT-A HAS E RRED IN DIRECTING THE AO TO DELETE THE ADDITION OF RS.5,30, 52,747/- WITHOUT CONSIDERING THE STATEMENT U/SEC 131 OF THE ACT ADMI TTING THE PAYMENTS WERE MADE IN CASH AGAINST THE PURCHASES. N O EVIDENCE WAS BROUGHT ON RECORD TO SHOW THAT THE SUPPLIERS AR E ACTUALLY DEALERS OF RAW SKINS AND HIDES. HE OPPOSED TO THE ORDER OF THE CIT-A IN DIRECTING THE AO TO GIVE DEDUCTION AND RELIED ON TH E ORDER OF THE AO. 8. ON THE OTHER HAND, THE LD.AR SUBMITS THAT THE AS SESSEE PURCHASED RAW SKINS AND HIDES FROM REGISTERED DEALE RS HAVING VAT UNDER BILLS. THE PAYMENT OF RS.3,28,37,420 WAS MAD E BY A/C PAYEE CHEQUE. THE AMOUNT OF RS.1,21,72,234/- AND RS.28,56 ,890/- IS PART OF OUTSTANDING CARRIED FORWARD TO THE NEXT YEAR. TH E PAYMENT OF RS.51,86,203/- WAS PAID BY CASH LESS THAN RS.20,000 . HE ALSO SUBMITS THAT THE AO HAS MISTAKENLY OBSERVED THAT TH E ASSESSEE ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 4 PURCHASED HIDES AND SKINS FROM FARMERS AND THE ACTU AL FACT IS THAT THE SAID PURCHASES WERE FROM DEALERS AND NOT FROM FARMERS, WHO ARE REGISTERED UNDER VAT. THE LD.AR ARGUED THAT THE RE WAS NO VIOLATION OF SECTION 40A(3) OF THE ACT AND THE ADDI TION MADE BY THE AO IS NOT AT ALL MAINTAINABLE. THE CIT-A CONSIDERIN G THE EVIDENCES, LEDGER COPIES AND SUBMISSIONS OF THE ASSESSEE HAS R IGHTLY DIRECTED THE AO TO GIVE THE DEDUCTION. HE RELIED ON THE ORDE R OF THE CIT-A AND PRAYED TO DISMISS THE GROUND NO. 1 RAISED BY THE RE VENUE. 9. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CIT-A SUMMARIZED THE DETA ILS OF PAYMENT OF RS. 5,30,52,747/- IN HIS ORDER VIDE PARAS 6.1.4 AT PAGE 11 OF HIS ORDER, WHICH CLEARLY SHOWS THAT THE AMOUNT OF RS.3, 28,37,420/- WAS PAID BY ACCOUNT PAYEE CHEQUE AND THE AMOUNT OF RS.1 ,21,72,234/- & RS. 28,56,890/- WERE PART OF OUTSTANDING BALANCE CA RRIED FORWARD TO THE NEXT YEAR AND THE AMOUNT OF RS.51,86,203/- WERE PAID IN CASH BELOW RS.20,000/- EACH. THE PURCHASES WERE MADE FRO M DEALERS HAVING VAT REGISTRATION. WE FIND NO INFIRMITY IN T HE IMPUGNED ORDER OF THE CIT-A AND WE UPHOLD THE SAME. THE GROUND NO .1 RAISED BY THE REVENUE IS DISMISSED. 10. GROUND NO. 2 IS RELATING TO DELETION OF ADDITIO N OF RS.11,11,329/- UNDER THE HEAD WAGE & LABOUR CHARGE S. 11. THE AO FOUND THAT THE ASSESSEE PAID WAGES AND L ABOUR CHARGES TO THE TUNE OF RS.55,56,643/- AND PRODUCED SELF MAD E VOUCHERS IN SUPPORT OF THE CLAIM. THE AO WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND EVIDENCE THEREON AND MADE ADHOC DISALLOWANCE AT 20% I.E RS.11,11,329/- [ RS.55,56,643 @ 20%]. 12. BEFORE THE CIT-A THE ASSESSEE CONTENDED THAT TH E PAYMENTS WERE MADE TO ITS OWN LABOUR AND THE QUESTION OF SU BMITTING THE BILLS DOES NOT ARISE. THE CIT-A FOUND THAT THE AO DID NOT BRING ON RECORD ANYTHING TO SHOW THAT THE NAMES, FINGER PRINTS AND HANDWRITING ETC ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 5 ARE DEFECTIVE. CONSIDERING THE SUBMISSIONS OF ASSES SEE ALLOWED THE GROUND OF THE ASSESSEE. 13. THE LD.DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD.AR REITERATED HIS SUBMISSIONS AS MADE BEFORE THE CIT-A. 14. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE AGREE WITH THE FINDING OF THE CIT-A THAT THE AO DID NOT MAKE ANY ADVERSE REMARK IN THE BOOKS OF ACCOUNT AS FILED BY THE ASSESSEE BEFORE HIM. THE AO MADE AN ADHOC ADDITION OF RS.11,11,329/-, WHICH IS NOT SUSTAINABLE. THE CIT- A EXAMINED THE RECORD AND FOUND SATISFIED THAT THE ASSESSEE MADE P AYMENTS TOWARDS LABOUR CHARGES TO ITS OWN LABOUR. THUS, WE DO NOT F IND ANY INFIRMITY IN THE IMPUGNED ORDER OF THE CIT-A AND IT IS JUSTIFIED . THEREFORE, GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 15. GROUND NO. 3 IS RELATING TO DELETION OF ADDITIO N OF RS.2, 46,54,648/- MADE ON ACCOUNT OF SUNDRY CREDITORS. 16. THE AO FOUND THAT THE ASSESSEE SHOWN SUNDRY CRE DITORS OF RS.2,46,54,648/-. THE AO MADE THIS ADDITION BEING B OGUS AND FOR NOT PRODUCING THE DETAILS OF SUNDRY CREDITORS AND P OSTAL ADDRESS OF THE SAID CREDITORS. 17. BEFORE THE CIT-A THE ASSESSEE FILED LEDGER COPI ES OF SAID CREDITORS AND SUBMITTED THAT THE PAYMENTS WERE MADE TO 5 PARTIES BY A/C PAYEE CHEQUES. THE SAID LEDGERS WERE FILED BEFO RE THE AO. THE PURCHASES WERE MADE FROM THE SAID CREDITORS AGAIN ST WAY BILLS ISSUED BY THE SALES TAX AUTHORITIES IN THEIR NAMES AND THERE WAS OUTSTANDING OF ABOUT 1.50 CRORES FROM THE PURCHASE MADE DURING THE YEAR UNDER CONSIDERATION, WHICH WERE HELD TO BE GEN UINE BY THE AO. 18. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT-A DELETED THE IMPUGNED ADDITION, WHICH IS REPRODUCED HEREIN B ELOW:- ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 6 8.3 DISCUSSION AND APPELLATE DECISION: 8.3.1 IT WILL BE NECESSARY TO SEE AS TO WHAT IS TH E SHOW-CAUSE LETTER ISSUED BY THE ADDL. CIT. IT IS UNDER:- OFFICE OF THE ADDITIONAL COM MISSIONER INCOME T AX.RANGE-29 2. GARIAIAHAT ROAD (SOUTH), 4TH FLOOR KOLKATA.- 700068. NO. ADDL. CIT, R-29/ SHOW-CAUSE/L0-11/36 0 DATED: 08 /12/201O 09 TO M/S. SPECIAL LEATHER INDUSTRIES, 1B, TIJALA ROCD, PS TILJALA, KOLKATA - 700046 SIR, SUB:- SHOW CAUSE NOTICE/OR RETURN NOTICE 133(6) 0/ IT ACT, 61 ASSESSMENT YEAR 2008-09 -MATTER REGARDING- IT IS EVIDENT FROM THE RECORD THAT MOST OF THE NOTI CES U/S 133(6) HAS BEEN RETURNED FROM VARIOUS PARTIES ACCORDING TO ADD RESS SUBMITTED BY YOU BY SAYING UNKNOWN, NOT KNOWN. THE LIST HAS BEEN ENCLOSED 'FOR YOUR REF ERENCE. YOU ARE SHOW CAUSE TO EXPLAIN WHY THE SAID TRANSACT IONS CANNOT BE DISALLOWED AS PER LAWS AND ADD TO YOUR INCOME. YOU ARE REQUESTED TO SEND THE REPORT WITHIN 3( THRE E) DAYS FROM THE DATE OF RECEIPT OF THIS NOTICE. YOURS FAITHFULLY, SD/- ( V APPALA RAJU ) ADDL.CIT, RANGE-29/KOL LIST OF SUNDRY CREDITORS SL.NO. NAME ADDRESS 1. ALEEMS MARKETING PVT. LTD 563, PURBALOK, KALIKAP UR, KOLKATA-99 2. ALPHA TRADING 203, PARK STREET, KOLKATA-17 3. ARROWS TECHNOLOGIES 24, SARIFF LANE, KOLKATA-16 4. A S CHATTHA EXIM PVT. LTD 7, AMARATALLA ST., KOL -1 5. BAJAJ CHEMICALS 79A, DR. LAL MOHAN BHA.RD, KOLKA TA-14 6. BEE PEE ENTERPRISES 29D, CHRISTOPHER ROAD, KOLKA TA-46 7. B & M CHEMICALS 23A, NETAJI SUBHAS ROAD, KOLKATA -12 8. CALCUTTA COLOUR CO. 47, SOUTH TANGRA ROAD, KOLKA TA-46 9. CHEMGEMS (INDIA) PVT. LTD NORTH TANGRA, RAJARHAT , KOLKATA-39 10. CONTINENTAL CHEMICALS 203, PARK STR, KOLKATA-17 11. ELEGANT FASHION FIBR CHEMICALS LTD 75B, CHRISTO PHER ROAD, KOLKATA-46 12. JADE INTERNATIONAL 40B SHAMSUL HUDA RD, KOLKATA -17 13. JS ENTERPRISE 29D, CHRISTOPHER ROAD, KOLKATA-46 . 14. KALIA EXPORT PVT. LTD P-44, PHASE-II, KASBA IND USTRIAL ESTATE, KOL - 107 15. KAMAL CHEM 70/1, TOPSIA ROAD (S), KOLKATA-46. 16. LAXMI IMPEX P/52, SEC A, METROPOLITAN CO- OPERATIVE HOUSING SOCIETY, KOLKATA-105 17. LOTUS CHEM RAMCHANDRAPUR, P.O SONARPUR, 24 PGS( S) 18. NOVACHEMS NO.2, DHAPA ROAD, VIVEKANANDA, KOLKAT A-105 19. PERKIN DYECHM PVT. LTD 24/D, KUSTIA RD., KOLKAT A-39 20. RADIANT CHEMICALS 8/1 TOPSIA RD (S), KOLKATA-46 ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 7 21. RAKHI CHEMICALS 51A, MATHESWARTALA ROAD, KOLKAT A-46 22. RATHI CHEMPLES PVT. LTD RAJAR GHAT, NORTH TANGR A, KOLKATA 23. SS BJ ENTERPRISE 2A, GULAM JILANI KHAN ROAD, KO L-39. 24. TECHNICA 27/C RAJ CHARAN GHOSH LANE, KOLKATA-39 25. VIRGO INTERNATIONAL 29B, EAST RAJAPUR, KOLKATA- 75. 26. BALAJI SALT SUPPLIER 111, MD ROAD, KOLKATA-05 27. PUMPS & SPARES 37, RATU SARKAR LANE, KOLKATA-73 28. ROTAPIA INTERNATIONAL 100, MOUDA IBRAHIM ST, NA GAL KENI, CHENNAI- 600044 29. BADRUL ISLAM 11/1C, TOPSIA ROAD (S), KOLKATA-46 30. BLUE STAR FINISHERS 97/6 KAYASTHANA ROAD, KANPU R-208001. 31. GAYA PRASAD BASIRHAT, NORTH 24 PGS 32. GOLD STAR HIDE AGENCY 278D. DEFENCE COLONY, JAJ MAU, KANPUR 33. GOUTAM SAHA 16/2 GJ KHAN ROAD, KOLKATA-39 34. HARJEET SINGH 171 PADDA PUKUR ROAD, KOLKATA-14 35. LAXMI DAS 37 BAITHAK KHANA ROAD, KOLKATA-9 36. LIAQUAT ALI BARYATU RANCHI, JHARKHAND 37. MD. AMIN 39B, TOPSIA 2 ND LANE, KOLKATA-39. 38. AD ASLAM 7/2 GORA CHAND LANE, KOLKATA-14 39. MD. FAIYAZ 12 BED FORD LANE, KOLKATA-16 40. MD. JANE ALAM 43/6 GORA CHAND ROAD, KOLKATA-14 41. MD. KAFATULLAH 10 DARGA ROAD, KOLKATA-17 42. MD. MAROOF SHAHGANJ, PATNA, BIHAR 43. MD. MATIN 8C, TOPSIA 1 ST LANE, KOLKATA-39 44. MD. MUZAFFAR KANTA TOLI, RANCHI, JHARKHAND 45. MD. SABBIR ALAMGANJ, PATNA, BIHAR 46. SABBIR (WB) 45, TANGRA ROAD, (S), KOLKATA 15 47. MD. SAIFULA 11/1, HARSHI STREET, RAJABAZAR, KOL KATA-9 48. MD. SAMI AHMED 23, SARIF LANE KOLKATA-16. 49. MOITRUL HAQUE 38, MOFIDUL ISLAM LANE, KOLKATA-1 4 50. PARVEZ ALAM 2B, SAPGACHI 1 ST LANE, KOLKATA-39 51. PRATAP LAL MOGRA, HOWRAH 52. PREM DAS DANAPUR, PATNA, BIHAR 53. PRITAM DAS 12, BALAI DUTTA ST., KOLKATA-73 54. QUAMRUL HODA KANTA TOLI RANCHI, JHAKHAND 55. SADHU SARKAR 33D, GOBINDA KHATIK ROAD, KOL-46 56. TOTA RAM 5, TILJALA ROAD, KOL-46 57. AFTAB HIDES 11/1, HARSHI ST., RAJABAZAR, KOL-09 58. HIDE & SIN SUPPLIER ARKHALI PURBA PARA, PO ARKH ALI, AMDANGA, 24 PGS NORTH 59. PLEDGE 76/A, BIDHAN PALLY P.O GARIA, KOL-84 60. KVA PROCESS & ENGINEERING 61. RAHAMAN LEATHER B/11/2/H/2, HARSHI STREET, KOL- 9 62. AHMAD HIDE R-137, SA FAROOQUIE RD, KOLKATA-24 63. ALAM HIDE CO. R-138, SA FAROOQUIE RD, KOLKATA-2 4 64. HOQUE TRADERS MILKITOLA ENAYETPUR MANIK CHAK MA LDA ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 8 65. KAZIM ENTERPRISE F-35, MEHAR MANZIL LANE, KOLKA TA-24 66. MATALEATHER CORPORATION 135G, TILJALA ROAD, KOLKATA-46 67. REHAN INTERNATIONAL 2A, SHAKESPEARE SARANI, KO LKATA-71 68. SHARA TRADERS 9F, TOPSIA ROAD, KOLKATA-39 69. S N LEATHER ARKHALI, AMDANGA, NORTH 24 PGS 70. ABDUL QADIR INBA, RANCHI JHAKKHAND 71. ABDUL HAMEED KANTA TOLI, RANCHI, JHARKHAND 72. ASHOK RAM SAGUNA MORE DANAPUR, PATNA, BIHAR 73. IQBAL ALI KANTA TOLI, RANCHI, JHARKHAND 74. SARFARAZ ALAM BULAND SAHAR ROAD, HAPUR, UP 75. MOIN AKHTAR PHULWARI, DIST WEST GARO HILLS, MEG HALAYA 76. SHAHID NAZAR RAMPUR ROAD, HAPUR, UP 77. S PANDIT BARYATU, RANCHI, JHARKHAND 78. UMESH RAM MANER PATNA BIHAR 79. CLC TANNERS ASSOCIATION CALCUTTA LEATHER COMPLEX, KARAIDANGA, 24PGS(S) 80. CONTINENTAL ENGINEERING COR. 1010, JESSORE ROAD, GREEN PARK, BLOCK A, KOL- 55. 81. DESH RANJAN MAITY 20/4, SODE PUR, 1 ST LANE, HARIDEVPUR, KOL-55. 82. HIBID 79 TOPSIA ROAD SOUTH, KOL-46 83. MD. KARMRUJJAMAN SATULIA,KRISHNOMATI, KASHIPUR, 24 PGS (S) 84. M L DALMIYA & CO. 32, SHAKESPEARE SARANI, KOLKA TA-17 85. MONDAL ENGG WORKS 47, DHAPA ROAD, KOLKATA-105 86. RELIANCE COMMUNICATION LTD P5, CIT ROAD, SCHEME-52, KOLKATA-14 87. UNITED HYDRONIC SERVICE 129, SOUTH TANGRA ROAD, KOLKATA-46 8.3.2 FOREMOST, FROM PERUSING THE SHOW CAUSE NOTICE DATED 08.12.2010, FROM THE OPENING SENTENCE ITSELF THAT 'IT IS EVIDENT FROM TH E RECORD THAT MOST OF THE NOTICES U/S 133(6) HAS BEEN RETURNED FROM VARIOUS PARTIES..' - IS JUST A GENERAL ALLEGATION STATEMENT - IT IS OBVIOUS THAT THE ADDL. CIT IS MAK ING BLUFF. IT IS BUT JUST A GENERAL VAGUE ALLEGATION. HE HAS NOT EVEN MADE NOT EVEN A SINGLE REFERENCE OF EVEN A SPECIFIC INSTANCE. THE ADDL. CIT IS YET AGAIN FABRICATING THE WHOLE IS SUE - TO CREATE FALSE DRAMA. THEN THE LIST RUNS TO 3 PAGES AND CONTAINS 87 NAMES !!! IT IS OBVIOUS THAT THE LISTS ARE BUT THE LIST OF ALL THE CREDITORS THAT HA D BEEN SUBMITTED BY THE APPELLANT. I FIND IT ALSO UNBELIEVABLE THAT WHEN MOST OF THESE 87 NAMES HAVE QUITE ADEQUATE APPROPRIATE ADDRESS, THEN HOW IS IT THAT THE ADDL. CIT ALLEGES THAT THE NOTICES HAVE BEEN RETURNED. THERE ARE MANY PARTIES WHOSE ADDRESS ARE AT KOLKATA ITSELF, AND THESE COULD HAVE BEEN ENQUIRED VERIFIED; BUT THIS DOES NOT SEEM TO BE THE CASE. THEN, THE ADDL. CIT GIVES TIME OF ONLY 3 DAYS! IS I T HUMANLY POSSIBLE TO COMPLY TO THE LIST CONTAINING 87 PARTIES ?? SO SURELY, IT IS NOT THE INTENTION OF THE ADDL CIT THAT HE WOULD AWAIT THE REPLY/REPORT OF THE APPELLANT. I T IS A FARCICAL SHOW-CAUSE NOTICE - AS IT JUST CANNOT BE COMPLIED IN SUCH SHORT A TIME. THEN OUT OF THE LIST OF 87 NAMES, THE ADDL. CIT ONL Y HAND PICKS 19 NAMES. WHAT IS THE BASIS - IS KNOWN ONLY TO HIM. THEN THE ALLEGATION THAT THE OUTSTANDINGS ARE BEYON D 6 MONTHS - THIS ALLEGATION HAS BEEN REBUTTED BY THE FACTS STATED IN THE SUBMIS SIONS OF THE LD. AR. THE SUBMISSIONS OF THE LD. AR ARE FACTUAL AND EXPLA NATORY. THE SELECTIVE ADDITION MADE BY THE ADDL. CIT IS WHIMSICAL, MALICI OUS, AND WITHOUT FACTUAL BASIS. THUS, I HEREBY ALLOW GROUND NO. 6. ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 9 19. THE LD.DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD.AR OF THE ASSESSEE REITERATED THE SAME SUBMISSIO NS AS MADE BEFORE THE CIT-A AND REFERRED TO PAGES 15-16 OF THE ORDER OF THE CIT- A. 20. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT THE ASSESSEE SUBMITTED A LIST OF SUNDR Y CREDITORS AND DEBTORS BEFORE THE AO. BUT, AO MADE THE ADDITION ON LY ON THE BASIS OF THAT ADDRESSES OF FEW CREDITORS WERE NOT GIVEN B Y THE ASSESSEE TO HIM FOR VERIFICATION. THE CIT-A EXAMINED THE DETAIL S, NAMES AND ADDRESSES OF THE PARTIES. WE ALSO FIND THAT THE ASS ESSEE FILED LEDGER COPIES OF THE CREDITORS AND PAYMENT MADE THEREOF WA S BY A/C PAYEE CHEQUE, WHICH IS NOT DISPUTED BY THE AO IN HIS REMA ND REPORT. MOREOVER, THE PURCHASES MADE FROM THE PARTIES WAS A GAINST THE WAY BILLS ISSUED BY THE SALES TAX AUTHORITIES IN THEIR NAMES, IN OUR OPINION, THE AO WAS NOT JUSTIFIED IN TREATING THE S UNDRY CREDITORS AS INGENUINE AND THE SAID TRANSACTIONS WERE BOGUS. IN THE REMAND REPORT THE AO HAS NOT CONTROVERTED THE SUBMISSION O F ASSESSEE. THUS, WE AGREE WITH THE FINDING OF THE CIT-A IN DEL ETING THE ADDITION. THUS, GROUND NO.3 RAISED BY THE REVENUE IS DISMISSE D. 21. THE APPEAL OF THE REVENUE IN ITA NO.1505/KOL/20 15 FOR THE A.Y 2008-09 IS DISMISSED. 22. C.O NO. 20/KOL/2016 ARISING OUT OF ITA NO. 1505 /KOL/2015 FOR THE A.Y 2008-09 BY THE ASSESSEE. 23. WE FIND THAT THE CROSS OBJECTION OF THE ASSESSE E WAS FILED IN SUPPORT OF THE ORDER OF THE CIT-A, WHICH WE HAVE AL READY UPHELD ON THE ISSUES RAISED BY THE REVENUE. THEREFORE, THE CR OSS OBJECTION OF THE ASSESSEE IS DISMISSED BEING INFRUCTUOUS. THE C. O OF THE ASSESSEE IS DISMISSED. ITA NO. 1505/KOL/2015 & CO NO.02/KOL/2016 SPECIAL LEATHER INDUSTRIES 10 24. IN THE RESULT, THE APPEAL (ITA NO. 1505/KO L/2015 AND CROSS OBJECTION (C.O NO. 02/KOL/2016) FILED BY THE REVENU E AND ASSESSEE FOR THE A.Y 2008-09 BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4-01-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24-01-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/REVENUE : INCOME TAX OFFICER, WARD 29(1), AAYKAR BHAVAN DAKSHIN, 2 GARIAHAT ROAD (S), KOLKATA-68. 2 RESPONDENT/ASSESSEE: M/S. SPECIAL LEATHER INDUSTRIE S, 1B TILJALA ROAD, TANGRA, KOLKATA-46. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR.P.S, HEAD OF OFFICE ITAT KOLKATA