ACIT, Circle-42, Murshidabad, Murshidabad V. M/s Kishan F.L. Bond House, Murshidabad

ITA 1587/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6142 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 05-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record; Non passing of speaking order
• Section: 143(3)

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH.P.M.JAGTAP, ACCOUNTANT MEMBER AND SH. S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1587/KOL/2016 [ASSESSMENT YEAR: 2011 - 12] APPELLANT BY SH. SALLONG YADEN , ADDL. CIT RESPONDENT BY SH. ANIL KOCHAR, ADV. DATE OF HEARING 09.05.2018 DATE OF PRONOUNCEMENT 18 .07.2018 ORDER PER S.S . VISWANETHRA RAVI , JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 0 5 . 04 .201 6 PASSED BY CIT(A) - 12, KOLKATA FOR AY 20 1 1 - 12 . 2. IT IS SUBMITTED BY THE LD.DR THAT THE APPEAL WAS FILED WITH THE DELAY OF 19 DAYS AND ON PERUSAL OF THE AFFIDAVIT DATED - 4.08.2016 FILED EXPLAINING THE SAID DELAY AND UPON HEARING BOTH THE PARTIES, WE FIND THAT THE REASONS STATED IN THE AFFIDAVIT ARE BONAFIDE AND DELAY OF 90 DAYS IS CONDONED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM , ENGAGED IN THE BUSINESS OF TRADING IN FOREIGN LIQUOR. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.79,95,918/ - . NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) WAS ISSUE D O N 19.09.2012. THE AO IN THE SCRUTINY PROCEEDINGS DETERMINED THE INCOME OF THE ASSESSEE AT RS.1,20,98,276/ - VIDE HIS ORDER DATED 26.03.2014 U/S 143(3) OF THE ACT WHEREIN HE ADDED AN AMOUNT OF RS.12,00,000/ - ON ACCOUNT OF UNSECURED LOANS FROM TWO PERSO NS OF RS. 6,00,000/ - ACIT, CIRCLE - 42, MURSHIDABAD. VS M/S. KISHAN F.L.BOND, 39, R.N.TAGORE ROAD, P.O - BERHAMPORE, DISTT. - MURSHIDABAD, PIN - 742101. PAN - AAFFK3629L (APPELLANT) (RESPONDENT) ITA NO. 1587/ KOL/201 6 [ASSESSMENT YEAR: 20 11 - 12 ] PAGE | 2 EACH AND AN AMOUNT OF RS.9,04,143/ - ; RS.7,71,291/ - ; AND 12,26,924/ - ON ACCOUNT OF BREAKAGE; REBATE; AND SALES SCHEME RESPECTIVELY. 4 . GROUND NO.1 IS RELATING TO DELETION OF RS.12,00,000/ - MADE ON ACCOUNT OF UNSECURED LOANS BY THE AO. AFTER HEARING BOTH THE PARTIES, WE FIND AO ADDED SAID SUMS EACH RS.6,00,000/ - STATED TO HAVE BEEN AVAILED FROM TWO PARTIES I.E. SHVRATRI SAHA AND SURJA SA HA FOR NON - VERIFICATION OF CREDITWORTHINESS, IDENTITY AND FOR GENUINENESS OF THE TRANSACTIONS. IT IS OBSERVED FROM THE IMPUGNED ORDER FROM PARA 3.2 THAT THE ASSESSEE SUBMITTED CONFIRMATIONS FROM TWO PARTIES BEFORE AO ON 25.03.2014 I.E. ONE D AY PRIOR T O PASSING OF ASSESSMENT ORDER I.E. 26.03.2014. THEREFORE, IT IS CLEAR THAT THE CONFIRMATIONS FOR THE SAID PARTIES HAVING ADVANCING SAID LOANS TO THE ASSESSEE W ERE THERE BEFORE THE AO , BUT , COULD NOT BE VERIFIED . WE FIND THAT CIT(A) EXAMINED THE SAID CONF IRMATIONS AND FOUND SATISFIED THE IDENTITY OF THE SAID TWO PARTIES AND T HE AMOUNT S IN QUESTION WERE OLD AMO U NT S AND THEY WERE ASSESSED TO TAX HAVING VALID PAN. IT IS PERTINENT TO NOTE THAT CIT(A) HAS CO - TERMINUS POWER WITH TH AT OF AO AND HAVING EXERCIS ING SUCH POWER EXAMINED THE RECORD AND CONFIRMATIONS WHICH WERE PART OF ASSESSMENT RECORD, FOUND SATISFIED REGARDING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THUS, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN DELETING THE ADDITIO N M ADE BY THE AO ON ACCOUNT OF TREATING US. GROUND NO.1 RAISED BY THE REVENUE FAILS AND IT IS DISMISSED. 5 . GROUND NO.2, 3 AND 4 ARE RELATING TO ISSUE S REGARDING DISALL OW ANCE MADE ON ACCOUNT OF EXPENSES RELATING TO BREAKAGE, REBATE AND SALES SCHEME EXPENS ES. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE AO DISALLOWED EXPENDITURE CLAIMED BY THE ASSESSEE ON ABOVE THREE HEADS FOR NON - VERIFICATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS W HEREAS WE FIND FROM THE IMPUGNED ORDER THAT CIT(A) EXAMINED BOOKS OF ACCOUNTS, RELEVANT LEDGER ACCOUNT AND AUDITED ACCOUNTS. THE CIT(A) HELD THAT ITA NO. 1587/ KOL/201 6 [ASSESSMENT YEAR: 20 11 - 12 ] PAGE |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| 4 DOCUMENTS FILED BY THE APPELLANT AND I FIND FORCE IN THEIR CONTENTION. THE AO HAS NOT MADE ANY OTHER INVESTIGATION AS TO WHY SUCH AN EXPENSE SHOULD BE DISALLOWED. THE SAME DETAILS AND EVIDENCES WERE TILED BEFORE THE AO BUT THE AO CHOSE TO IGNORE THE SUBMISSIONS SUCH AS AUDITED ACCOUNTS IN AN ARBITRARY MANNER. IT IS CLEAR THAT THE AO HAS NOT SUBSTANTIATED HIS ACTION WITH ANY CREDIBLE FINDINGS. HE HAS SIMPLY CONCLUDED THAT THESE EXPENSES ARE NOT ALLOWABLE WHEREAS IT HAS BEEN DULY DETAILED WITH REFERENCE TO THE NAMES OF THE PARTIES & VERY MUCH RELATED TO THE BUSINESS OF THE APPELLANT. FOR REASONS CITED ABOVE, THE ADDITION IS DELETED. 6 . IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND IT IS JUSTIFIED. THEREFORE, GROU ND NO.2, 3 & 4 RAISED BY THE REVENUE ARE DISMISSED. 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 . 07.2018. SD/ - SD/ - (P.M.JAGTAP) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 18 .07.2018 *AMIT KUMAR* COPY FORWARDED TO: 3. CIT - KOLKATA 4. CIT(APPEALS) - KOLKATA 5. DR: ITAT - KOLKATA BENCH SR.P.S./H.O.O ITAT, KOLKATA 1. APPELLANT - ACIT,CIRCLE - 42, MURSHIDABAD. 2. RESPONDENT - M/S. KISHAN F.L.BOND, 39, R.N.TAGORE ROAD, P.O - BERHAMPORE, DISTT. - MURSHIDABAD, PIN - 742101.