ACIT,Circle-2, Durgapur, Durgapur V. Sri Ranjan Kumar Srivastava, Durgapur

ITA 1576/KOL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70425 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 26-10-2012
• Court: TRIBUNAL
• Department Lawyers: APURBA KR DAS
• Keywords: Business income; Non compliance
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE HONBLE SRI R.C.SHARMA, AM & HONBLE SRI GEORGE MATHAN, JM] ITA NO.1576/KOL/2012 ASSESSMENT YEAR : 2009-10 ( APPELLANT ) (RESPONDENT) A.C.I.T- CIRLE-2, -VS- . SRI RAJAN KUMAR SRIVAST AVA DURGAPUR DURGAPUR (PAN:AVZPS 3215 P) FOR THE APPELLANT: APURBA KR.DAS, JCIT, SR.DR FOR THE RESPONDENT: SHRI SOUMITRA CHOUDHURY, ADVOCATE DATE OF HEARING : 10.12.2013 DATE OF PRONOUNCEMENT : 10. 12.2013. ORDER PER SHRI GEORGE MATHAN, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. C.I.T.(A)- DURGAPUR IN APPEAL NO.239/CIT(A)/DGP/2011-12 DATED 24.08.2012 FOR ASSESSMENT YEAR 2009-10. 2. SHRI APURBA KR.DAS, JCIT,SR.DR REPRESENTED ON B EHALF OF THE REVENUE AND SHRI SOUMITRA CHOUDHURY, ADVOCATE APPEARED ON BEH ALF OF THE ASSESSEE. 3. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF SUPPRESSED PURCHASES AN D PROFIT OF SUCH PURCHASES FOR A TOTAL AMOUNT OF RS.3,12,845/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF CESSATION OF LIABILITY FOR A TOTAL AMOUNT OF RS.15,45,045/-. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.5,07,500/- MADE ON ACCOUNT OF 5% OF LABOUR CHARGES, LOADING AND UNLOADING EXPENSES. 4. THE APPELLANT MOST HUMBLY CRAVES LEAVE TO ADD, ALTER AND MODIFY OR DELETE ALL OR ANY GROUND OF APPEAL AT ANY STAGE DURING THE APPELLATE PROCEEDINGS. ITA NO.1576/KOL/2012 SRI R AJAN KUMAR SRIVASTAVA A.YR.2009-2010 2 4. IN RESPECT OF GROUND NO.1 IT WAS SUBMITTED BY T HE LD. DR THAT IN THE COURSE OF ASSESSMENT IT WAS NOTICED THAT THE ASSESSEE HAS PUR CHASED GOODS AND MATERIALS WORTH RS.5,89,643/- FROM M/S.HALDIA STEEL LTD. IN RESPONS E TO 133(6) M/S. HALDIA STEEL LIMITED HAS SHOWN A CLOSING BALANCE OF RS.15,45,045 /- SHOWING THAT NO PAYMENTS HAVE BEEN MADE BY THE ASSESSEE. IT WAS THE SUBMISSI ON THAT THERE WAS ALSO AN OPENING BALANCE SHOWN BY M/.S HALDIA STEEL LTD. AT RS.6,50, 007/-. IT WAS THE SUBMISSION THAT THE AO HAD MADE ADDITION OF RS.3,05,395/- AS UNDISC LOSED EXPENDITURE INCURRED TOWARDS OUT OF BOOK PURCHASES AND HAD ALSO MADE AN ADDITION OF RS.7,450/- TOWARDS PROFIT FROM OUT OF BOOK PURCHASE. IT WAS THE SUBMIS SION THAT ON APPEAL THE LD. CIT(A)HAD DELETED THE ADDITION HOLDING THAT THE ACC OUNTS HAD BEEN RECONCILED AND IF THE PURCHASES ARE ENHANCED THERE WOULD BE A CONSEQU ENT REDUCTION IN THE APPELLANTS GP LEADING TO FALL IN THE BUSINESS INCOME. IT WAS T HE SUBMISSION THAT ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. 4.1. IN RESPECT OF GROUND NO.2 IT WAS SUBMITTED BY THE LD. DR THAT IT WAS NOTICED THAT M/S.HALDIA STEEL LTD. HAD IN ITS BOOKS OF ACCO UNT SHOWN AN OUTSTANDING DEBIT BALANCE OF RS.15,45,045/- WHEREAS THE ASSESSEE HAS SHOWN LIABILITY IN RESPECT OF M/S. HALDIA STEEL LTD. AS NIL. CONSEQUENTLY THE AO HAD A DDED BACK RS.15,45,045/- AS CESSATION OF TRADE LIABILITY. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD DELETED THE ADDITION BY HOLDING THAT PROVISION OF SECTION 41(1) OF THE IT ACT DOES NOT APPLY AS THERE WAS NO CESSATION OF LIABILITY AS THE CREDITOR HAD NOT WITHDRAWN ITS CLAIM. IT WAS SUBMITTED BY THE LD. DR THAT ORDER OF THE LD. CIT(A ) WAS LIABLE TO BE REVERSED. 4.2. IN RESPECT OF GROUND NO.3 IT WAS SUBMITTED BY THE LD. DR THAT ON ACCOUNT OF NON PRODUCTION OF TDS CERTIFICATES AND NON COMPLIANCE O F THE PROVISION OF TDS, 5% OF THE LABOUR CHARGES AND LOADING AND UNLOADING CHARGES CL AIMED ARE DISALLOWED BY THE AO TO PLUG THE LEAKAGE OF THE REVENUE. THE LD. CIT(A) DELETED THE ADDITION. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(A) WAS LIABLE TO BE REVERSED. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO. ITA NO.1576/KOL/2012 SRI R AJAN KUMAR SRIVASTAVA A.YR.2009-2010 3 5. IN REPLY THE LD. AR VEHEMENTLY SUPPORTED THE ORD ER OF LD. CIT(A). IT WAS THE SUBMISSION THAT IN RESPECT TO GROUND NO.1 WHATEVER HAS BEEN PURCHASED HAS BEEN DISCLOSED IN HIS BOOKS AND THE PAYMENTS IN RESPECT OF THE PURCHASES HAVE ALSO BEEN DISCLOSED IN HIS BOOKS. NOTHING CONTRARY HAS BEEN F OUND. IT WAS THE SUBMISSION THAT IN RESPECT TO GROUND NO.2 THE SAME WAS CONNECTED TO GR OUND NO.1 AND THE TRANSACTIONS AS SHOWN BY M/S. HALDIA STEEL LIMITED HAS BEEN TAKEN A S TRUE AND CORRECT BY THE AO. IT WAS THE SUBMISSION THAT PAYMENTS MADE BY THE ASSESS EE HAS NOT BEEN TAKEN INTO CONSIDERATION. IT WAS THE SUBMISSION THAT IN REGARD TO GROUND NO.3 THE ACCOUNTS OF THE ASSESSEE HAVE NOT BEEN REJECTED AND THERE WAS NO LI ABILITY TO DEDUCT TDS IN RESPECT OF THE PAYMENTS MADE TOWARDS LABOUR CHARGES OR LOADING AND UNLOADING CHARGES. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(A) WAS LIA BLE TO BE SUSTAINED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER SHOWS THAT THE LD. AO HAS ISSUED NOTICE U/S 133(6) OF THE IT ACT TO M/S.HADIA STEEL LIMITED AND M/S.HALDIA STEEL LTD. HAS REPLIED TO TH E SAME AND GIVEN CERTAIN INFORMATION. A PERUSAL OF THE INFORMATION AS PROVID ED BY M/S. HALDIA STEEL LIMITED WHEN COMPARED TO THE LEDGER ACCOUNT MAINTAINED BY T HE ASSESSEE CLEARLY SHOW THAT ALL THE PURCHASES MADE BY THE ASSESSEE FROM M/S. HALDIA STEEL LIMITED IS A CONTINUOUS ACCOUNT. THE LEDGER ACCOUNT OF M/S.HALDIA STEEL LIM ITED ARE FOUND AT PAGES 33 AND 34 OF THE PAPER BOOK. THE PURCHASE ACCOUNT OF THE ASSE SSEE ALSO CLEARLY SHOWS THAT THE PURCHASES FROM M/S.HALDIA STEEL LIMITED ARE DULY RE FLECTED IN THE LEDGER OF M/S. HALDIA STEEL LTD. FURTHER A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT THE LD. CIT(A) HAS VERIFIED THE RECONCILIATION OF THE FIGUR ES AND NO DEFECT IN THE SAME ALLEGEDLY IN THE HANDS OF THE ASSESSEE HAS BEEN FOU ND. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE FINDINGS OF THE LD.CIT(A) IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 6.1. IN REGARD TO GROUND NO.2 IT IS NOTICED THAT TH IS GROUND IS CONNECTED TO GROUND NO.1 IN THE REVENUES APPEAL, IN SO FAR AS THE FIGU RES ADOPTED ARE FROM THE REPLY GIVEN U/S 133(6) OF THE IT ACT BY M/S. HALDIA STEEL LIMIT ED. HOWEVER, WHAT IS TO BE APPRECIATED IS THAT THE ASSESSEE IS THE CREDITOR IN RESPECT OF M/S. HALDIA STEEL LIMITED ITA NO.1576/KOL/2012 SRI R AJAN KUMAR SRIVASTAVA A.YR.2009-2010 4 AND HALDIA STEEL LIMITED IS NOT THE CREDITOR IN RES PECT OF THE ASSESSEE. OBVIOUSLY IN SUCH A SITUATION IT CAN NEVER BE SAID THAT HALDIA S TEEL LTD. HAS SURRENDERED ITS CLAIM AGAINST THE ASSESSEE. IN THE CIRCUMSTANCES WE ARE O F THE VIEW THAT THE FINDING OF LD. CIT(A) IN HOLDING THAT THE PROVISION OF SECTION 41( 1) OF THE IT ACT IN RESPECT OF CLOSING BALANCE OF ASSESSEE WOULD NOT APPLY, IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 6.2. IN RESPECT TO GROUND NO.3 IT IS NOTICED THAT N O DEFECT IN THE BOOKS OF ACCOUNT OR ACCOUNTS MAINTAINED BY THE ASSESSEE, IN RESPECT OF THE LABOUR CHARGES OR LOADING OR UNLOADING CHARGES HAVE BEEN POINTED OUT. IN THE ABS ENCE OF ANY DEFECT POINTED OUT WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS RIGHT IN DE LETING THE ESTIMATED ADDITION MADE BY THE AO. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.12.2013. SD/- SD/- [R.C.SHARMA] [ GEORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( ( ) )) ) DATE: 10.12.2013. R.G.(.P.S.) - COPY OF THE ORDER FORWARDED TO: 1. SRI RAJAN KUMAR SRIVASTAVA, 78, GAUTAM BUDDHA MARG, C-ZONE, DURGAPUR-5. 2 A.C.I.T., CIRCLE-2, DURGAPUR. 3 . CIT(A)-DURGAPUR 4. CIT - KOLKATA. 5. CIT(A)DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, !/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NO.1576/KOL/2012 SRI R AJAN KUMAR SRIVASTAVA A.YR.2009-2010 5