ACIT, Circle-42, Murshidabad, Murshidabad V. M/s Eastern Dimension, Murshidabad

ITA 1588/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1372 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: M K DUTTA
• Section: 69

Judgement Text

ITA NO.1588/KOL/2016 M/S. EASTERN DIMENSION A.Y.201 1-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & SHRI S.S.VISWANETHRA RAVI, JM ] ITA.NO.1588/KOL//2016 ASSESSMENT YEAR : 2011-12 A.C.I.T., CIRCLE-42, -VERSUS- M/S EASTERN DIMENSION MURSHIDABAD KOLKATA (PAN: AACFE3108P) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.DASGUPTA, ADDL. CIT(D R) FOR THE RESPONDENT: SHRI M.K.DUTTA, FCA DATE OF HEARING : 04.01.2018. DATE OF PRONOUNCEMENT : 14.03.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-12, KOLKATA RELATIN G TO A.Y.2011-12 ON THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS & THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS U/S 69 OF THE I .T. ACT,1961 MADE UNDER THE HEAD 'PURCHASE OF BROKEN GOLD FOR RS.L,56,13,456/-' , 'UNACCOUNTED BROKEN GOLD FOUND IN THE PREMISES FOR RS.7,08,351/-', 'UNACCOUN TED STONES FOUND IN THE PREMISES FOR RS.1,19,035/-' AND TOTALING TO RS.L,64 ,40,842/-. 2. THAT ON THE FACTS & THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE ASSESSING OFFICER S OBSERVATIONS THAT THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT IN WHICH THE PURCHASED BROKEN GOLD AND THE BROKEN GOLD & STONES FOUND IN T HE PREMISES WERE ACCOUNTED. 3. THE APPELLANT CRAVES LEAVE TO AMEND, MODIFY AND ALTER ANY GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THIS CASE. 2. THERE IS A DELAY OF 19 DAYS IN FILING THE REVE NUES APPEAL. WE CONDONE THE SAME. ITA NO.1588/KOL/2016 M/S. EASTERN DIMENSION A.Y.201 1-12 2 3. THE ASSESEE IS A PARTNERSHIP FIRM AND IS A SALE S AGENT ON BEHALF OF M/S P.C.CHANDRA JEWELLERS APEX PVT. LTD.. THE ASSESSEE FILED RETURN OF INCOME ON 29.09.2011 DECLARING TOTAL INCOME OF RS.17,59,385/- . THE AO COMPLETED THE ASSESSMENT ON 21.03.2014 DETERMINING THE TOTAL INCO ME OF RS.1,82,00,230/- INTER-ALIA MAKING THE ADDITION OF THE GOLD PURCHASE AND BROKEN GOLD FOUND AS UNACCOUNTED AS PER THE LD. AO. THE ASSESSEE CARRIED THE MATTER TO THE APPEAL. THE LD. CIT(A) DELETED THE ADDITION. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4. AFTER HEARING THE RIVAL CONTENTIONS AND PERUSED THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE FIND THAT THE ASSESSEE IS A SALE AGENT APPOINTED FOR THE PURPOSE OF MANAGING BE RHAMPUR BRANCH OF M/S P.C.CHANDRA JEWELLERS APEX PVT. LTD.. AND FOR SELLI NG THE PRODUCTS AT THE BRANCH. 5. BOTH THE PARTIES HAVE ENTERED INTO AGREEMENT AND A COPY OF THE SAME IS FURNISHED BEFORE US BY WAY OF PAPER BOOK. CLAUSE 1.2. OF THE AGREEMENT STATES AS FOLLOWS :- 1.2. THE PRINCIPAL SHALL AT ALL TIMES BE THE ABSOL UTE OWNER OF THE SAID PRODUCTS DELIVERED TO THE SALES AGENT, FOR THE PURPOSE OF CU STODY OF THE SAID PRODUCTS AND SELLING THROUGH THE BRANCH OUTLET. CLAUSE 5.9 OF THE AGREEMENT STATES AS FOLLOWS :- 5.9. THE SALES AGENT SHALL PROMINENTLY DISPLAY AT A CONSPICUOUS PLACE A BOARD AND WITHIN THE BRANCH OUTLET AS UNDER : PRODUCTS IN THE BRANCH OUTLET ARE OIWNED BY AND AR E ABSOLUTE PROPERTY OF P.C. CHANDRA JEWELLERY APEX PR IVATE LIMITED. CLAUSE 6.1 AND 6.7 STATE S FOLLOWS :- 6.1 IT IS SPECIFICALLY UNDERSTOOD AND AGREED BY AN D BETWEEN THE PARTIES THAT AT ALL TIME THE PRINCIPAL SHALL BE THE SOLE AND EXCLUSIVE OWNER OF THE PRODUCTS KEPT IN CUSTODY OF THE SALES AGENT UNDER THIS AGREEMENT AND FOR IN THE POSSESSION OF THE SALES AGENT OR IN TRANSIT. NOTHING HEREIN CONTAINED SHALL BE DEEMED OR INTENDED TO CREATE ANY PROPRIETARY RIGHTS IN THE PRODUCTS IN FAVOUR OF THE SALES AGENT. THE PRODUCTS SHALL ALWAYS BELONG TO AND REMAIN IN THE J UDICIAL CUSTODY OF THE PRINCIPAL. ITA NO.1588/KOL/2016 M/S. EASTERN DIMENSION A.Y.201 1-12 3 6.7. THE PRINCIPAL SHALL BE ENTITLED TO CONDUCT PHY SICAL STOCK VERIFICATION OF THE PRODUCTS AND/OR THE BOOKS OF ACCOUNTS MAINTAINED BY THE SALES AGENT EITHER BY ITS OWN EMPLOYEES OR BY THE AUDITORS OR THROUGH ANY OTH ER PERSON, PERIODICALLY OR AT ANY TIME AS MAY BE CONVENIENT DURING A WORKING DAY. IN THE EVENT OF THERE BEING ANY DIFFERENCE BETWEEN THE PHYSICAL STOCK AND THE S TOCK AS PER THE BOOKS OF THE PRINCIPAL, THEN THE VALUE OF SUCH STOCKS SHALL BE C OMPENSATED TO THE PRINCIPAL BY THE SALES AGENT IMMEDIATELY, FAILING WHICH THE AMOU NT INVOLVED SHALL BE RECOVERED FROM THE COMMISSION PAYABLE TO THE SALES AGENT BY THE PRINCIPAL. 6. A PERUSAL OF THIS AGREEMENT DEMONSTRATES THAT TH E ASSESSEE WAS NEVER THE OWNER OF THE GOLD ORNAMENTS AND THE GOLD FOUND IN ITS PRE MISES. THE AO IN THIS CASE HAS INVOKED THE PROVISION OF SECTION 69A OF THE ACT. TH E LD. CIT(A) HAS DELETED THE ADDITION BASED ON THIS AGREEMENT HOLDING THAT THE A SSESSEE IS NOT THE OWNER OF THIS BROKEN GOLD AND JEWELLERY AND HENCE THE ADDITION CA NNOT BE MADE U/S 69A OF THE ACT. THE LD. CIT(A) HELD THAT THE ASSESSEE WAS HOLDING T HE SAID GOLD ON BEHALF OF M/S P.C.CHANDRA JEWELLERS APEX PVT. LTD.., TO WHICH IT IS AN AGENT. WE FIND NO INFIRMITY IN THE SAME. THE AO HAS NOT MADE ANY ENQUIRIES WHATSOE VER WITH M/S P.C.CHANDRA JEWELLERS APEX PVT. LTD.. ON THE CLAIMS OF THE ASS ESSEE. THE ASSESSEE SUBMITS THAT M/S P.C.CHANDRA JEWELLERS APEX PVT. LTD.. HAS DEDUCTED TAX AT SOURCE FOR THE COMMISSION PAID TO THE ASSESSEE AND THAT THE DETAILS WERE BEFO RE THE AO AND THIS DEMONSTRATES THE NATURE OF RELATIONSHIP BETWEEN THE ASSESSEE AND M/S P.C.CHANDRA JEWELLERS APEX PVT. LTD.. 7. IN VIEW OF THE ABOVE DISCUSSION WE UPHOLD THE OR DER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THE APPEAL OF THE REVENUE. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. O RDER PRONOUNCED IN THE COURT 14.03.2018. SD/- SD/- [S.S.VISWANETHRA RAVI] [ J.SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14.03.2018. [RG SR.PS] ITA NO.1588/KOL/2016 M/S. EASTERN DIMENSION A.Y.201 1-12 4 COPY OF THE ORDER FORWARDED TO: 1.M/S EASTERN DIMENSION, 119, R.N.TAGORE ROAD, LALD IGHI, P.O.BERHAMPORE, DIST. MURSHIDABAD-742101. 2. A.C.I.T., CIRCLE-42, KOLKATA. 3. C.I.T.(A)- 12, KOLKATA 4. C.I.T-14, KOLKAT A 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES