Shri Somenath Bhattacharjee, Kolkata V. ITO, Ward - 53(2), Kolkata, Kolkata

ITA 1528/KOL/2010

• Counselvise Citation: 152823514 RSA 2010
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2011
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 03-08-2010
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: M M SARKAR; K N KUNDU

Judgement Text

1 , A , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A , KO LKATA [ . . . . . .. . , ,, , . . . . . .. . !' !' !' !' , # ] BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI S.V.MEHROTRA, ACCOUNTANT MEMBER $ $ $ $ / I.T.A. NO. 1528 (KOL) OF 2010 %& '( / ASSESSMENT YEAR 2006-07 SRI SOMENATH BHATTACHARJEE, KOLKATA. (PAN-AEEPB9611A) INCOME-TAX OFFICER, WARD-53(2), KOLKATA. ( /APPLICANT ) - % - - VERSUS - ( -./0/ RESPONDENT ) /0 1 2 / FOR THE APPELLANT : S/SRI M.M.SARKAR & K.N.KUNDU -./0 1 2 / FOR THE RESPONDENT : SRI P.S. DUTTA. 3 / ORDER ( . . . . . .. . ), (B.R.MITTAL), JUDICIAL MEMBER : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST THE ORDER OF LD. C.I.T.(A)-XXXIII, KOLKATA DATED 30/06/ 2010. THE GROUNDS RAISED IN THIS APPEAL BY THE ASSESSEE READ AS UNDER :- 1. FOR THAT THE LEARNED INCOME TAX OFFIC ER AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ENHANCED THE INCOME FOR RS.2,0 0,000/- FOR A DISCREPANCY OF RS. 40,000/- TO THE STOCK ACCOUNT. 2. FOR THAT THE APPELLANT MAINTAINS HIS BOOKS AND REGISTERS WITH BILLS AND VOUCHERS FOR HIS JEWELLERY BUSINESS FOR A REGULAR VERIFICATI ON FROM THE SALES TAX DEPARTMENT. 2. THE ASSESSEE IS A JEWELLERY MANUFACTURER. ASSES SMENT FOR THE YEAR UNDER CONSIDERATION WAS MADE U/S.143(3) OF THE ACT DETERM INING THE TOTAL INCOME AT RS.10,49,670/- AS AGAINST RS.4,56,670/- RETURNED BY THE ASSESSEE, WHICH, INTER ALIA, INCLUDED ADDITION OF CLOSING STOCK TO THE EXTENT OF RS.2,00,000/-. ON PERUSAL OF CLOSING STOCK AS DISCLOSED IN THE ACCOUNTS, THE A.O . FOUND INVESTMENT IN DIAMOND OF RS.40,000/-, ALTHOUGH THERE WAS NO OPENING STOCK OF SUCH ITEM. THE ASSESSEE EITHER 2 COULD NOT PRODUCE ANY BILLS OR SUPPORTING DOCUMENTS IN SUPPORT OF PURCHASE OF DIAMOND OF THE VALUE OF RS.40,000/- OR STOCK REGIST ER IN RELATION THEREOF BEFORE THE A.O. THE A.O., THEREFORE, FOUND THE METHOD OF STOCK TRADING TO BE DEFECTIVE AND AS SUCH IN ABSENCE OF ANY PROPER EXPLANATION HE ADDED BACK ON AD-HOC BASIS RS. 2,00,000/- TO THE CLOSING STOCK OF THE ASSESSEE AND ENHANCED THE RETURNED INCOME BY THAT FIGURE. 3. ON APPEAL, THE LD. C.I.T.(A) HELD THAT THE DEFE CTS POINTED OUT BY THE A.O. IN THE CLOSING STOCK OF DIAMOND REMAINED UNEXPLAINED. HE, THEREFORE, UPHELD THE ADDITION OF RS.2,00,000/- MADE BY THE A.O. BY OBSERVING AS U NDER :- 4.2. IN SUPPORT OF ITS CONTENTION THE APPELLANT SUBMITTED COPY OF BILL FOR PURCHASES OF DIAMOND JEWELLERY AND DETAILS OF SALE OF DIAMOND JEWELLERY, AND PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR ITS JEW ELLERY BUSINESS. IT IS OBSERVED FROM THE MANUFACTURING ACCOUNT THAT OPENING STOCK C OMPRISES GOLD AND SILVER ONLY WHEREAS CLOSING STOCK SHOWS GOLD, SILVER AND D IAMOND. PURCHASES OF DIAMOND HAS BEEN CLAIMED TO BE MADE IN THE PRECEDIN G PREVIOUS YEAR AND THEREFORE THIS SHOULD REFLECT IN THE OPENING STOCK AS WELL. FURTHER THE CLOSING STOCK OF DIAMOND IS SHOWN AT RS.40,000/- WHEREAS VALUE OF DIAMOND AS PER BILL SUBMITTED WAS ONLY RS.32,960/- AND PART OF IT HAS B EEN SOLD TO DIFFERENT CUSTOMERS. THEREFORE THE PURCHASE BILL SUBMITTED CA NNOT JUSTIFY THE QUANTITY OF DIAMOND IN THE CLOSING STOCK. FURTHER NO PURCHASES OF THE DIAMOND OR DIAMOND JEWELLERY HAVE BEEN MADE DURING THE YEAR. THIS SHOW S THAT ACCOUNTS OF THE APPELLANT ARE NOT PROPERLY MAINTAINED AND THERE ARE DEFICIENCIES. THE APPELLANT DOES NOT MAINTAIN ANY STOCK REGISTER. THE DEFECTS R EMAIN UNEXPLAINED AND THEREFORE THE ADDITIONS MADE BY THE ASSESSING OFFIC ER HAVE TO BE UPHELD. THIS GROUND OF THE APPELLANT FAILS. HENCE THIS APPEAL BY THE ASSESSEE. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL PLACED BEFORE US. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE OBSERVE THAT THE DISCREPANCY WAS ONLY OF RS.40,000/- WHICH THE ASSESSEE COULD NOT EX PLAIN. HOWEVER, THE A.O. ESTIMATED AN ADDITION OF RS.2,00,000/- ON AD-HOC BA SIS. SINCE THE ASSESSEE COULD NOT EXPLAIN THE INVESTMENT TO THE EXTENT OF RS.40,000/- , WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION OF ONLY RS.40,000/- IS JUSTIFIED AS AGAINST RS.2,00,000/- MADE BY THE A.O. AND CONFIRMED BY LD. C.I.T.(A). IN VIEW OF AB OVE, WE RESTRICT THE ADDITION TO 3 RS.40,000 AND DELETE THE BALANCE ADDITION OF RS.1,6 0,000/- BY ALLOWING THE GROUND OF APPEAL TAKEN BY THE ASSESSEE IN PART. WE ORDER ACC ORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ! 3 #4 5 4% 6 !7 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 12/7/2011. SD/- SD/- ( . . . . . .. . !' !' !' !' ,) # ( . . . . . .. . ) (S.V.MEHROTRA) ACCOUNTANT MEMBER (B.R.MITTAL) JUDICIAL MEMBER ( (( (8# 8# 8# 8#) )) ) DATE: 12 -07-2011 3 1 -9 : 9';- COPY OF THE ORDER FORWARDED TO: 1. /APPLICANT : SOMENATH BHATTACHARJEE, PADAMPUKUR, KULPI ROAD, BARUIPUR, KOLKATA- 700 144. 2 -./0 / THE RESPONDENT : I.T.O., WARD-53(2) KOLKATA 3. 3% () : THE CIT(A)- XXXIII, KOLKATA. 4. 3%/ THE CIT, KOL-XVIII, KOLKATA. 5 . >6 -% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 . GUARD FILE . .9 -/ TRUE COPY, 3%4/ BY ORDER, (DKP) ASSTT. REGISTRAR .