Pfitop International , Kolkata V. I.T.O.,Ward-22(2), Kolkata

ITA 1620/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3001 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-03-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 05-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus
• Section: 133(6); 264; 13

Judgement Text

ITA NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL,.............................. ..............................APPELLANT BLOCK-V, FLAT NO. 4, MANICKTALA HOUSING ESTATE, VIP ROAD, KOLKATA-700054 [PAN: AADFP4440J] -VS.- INCOME TAX OFFICER,................................ ................................RESPONDENT WARD-22(2), KOLKATA, 54/1, RAFI AHMED KIDWAI ROAD, KOLKATA-700016 APPEARANCES BY: SHRI ADITYA MADHOGARHIA, C.A., FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, SR. D.R., FOR THE RESPON DEN T DATE OF CONCLUDING THE HEARING : MARCH 11, 2020 DATE OF PRONOUNCING THE ORDER : MARCH 13, 2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-6, KOLKATA DAT ED 30.04.2019. 2. THE ISSUE RAISED IN GROUND NO. 1 RELATES TO THE ADDITION OF RS.1,66,735/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UNSECURED LOAN TAKEN FRO M STANDARD CHARTERED BANK BY TREATING THE SAME AS THE LIABILIT Y, WHICH WAS CEASED TO EXIST. 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING OF MED ICINES. THE RETURN OF ITA NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL 2 INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 28.09.2015 DECLARING TOTAL INCOME AT NIL. IN THE BALANCE-SHE ET FILED ALONG WITH THE SAID RETURN, UNSECURED LOAN OF RS.2,29,065/- TAKEN FROM STANDARD CHARTERED BANK WAS SHOWN BY THE ASSESSEE. IN RESPON SE TO THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 133(6 ) OF THE ACT, THE STANDARD CHARTERED BANK, HOWEVER, CONFIRMED THE OUT STANDING BALANCE PAYABLE BY THE ASSESSEE AT RS.62,330/-. SINCE THE A SSESSEE COULD NOT EXPLAIN THIS DIFFERENCE OF RS.1,66,735/-, THE ASSES SING OFFICER TREATED THE SAME AS THE BOGUS LIABILITY AND AN ADDITION OF RS.1 ,66,735/- WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION MADE BY THE ASSESSING O FFICER AS THE ASSESSEE FAILED TO RECONCILE THE DIFFERENCE OF RS.1,66,735/- IN THE BALANCE OF OUTSTANDING LOAN TAKEN FROM STANDARD CHARTERED BANK . 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED MY ATTENTION TO THE COPY OF ST ATEMENT ISSUED BY STANDARD CHARTERED BANK PLACED AT PAGE NO. 264 & 26 5 OF THE PAPER BOOK TO SHOW THAT THE LOAN LIABILITY OF RS.74,668/- REPR ESENTING MAINLY THE INTEREST AND PENAL INTEREST CHARGED BY STANDARD CHA RTERED BANK UPTO 01.09.2009 WAS SOLD TO M/S. SAHA FINLEASE PVT. LIMI TED. ON A QUERY RAISED BY THE ASSESSEE, HE, HOWEVER, FAILED TO EXPLAIN AS TO HOW THE SAID LIABILITY OF RS.74,668/- AS ON 01.09.2009 WAS INCREASED TO RS .2,29,065/- AS ON 31.03.2015 AS SHOWN BY THE ASSESSEE IN ITS BALANCE- SHEET. HE HAS ALSO FAILED TO POINT OUT ANY COMMUNICATION RECEIVED FROM M/S. SAHA FINLEASE PVT. LIMITED DURING THE PERIOD OF LAST MORE THAN 10 YEARS TO SHOW THAT THE LOAN LIABILITY IN QUESTION SOLD BY STANDARD CHARTER ED BANK WAS EVER CLAIMED BY M/S. SAHA FINLEASE PVT. LIMITED FROM THE ASSESSEE. THE ASSESSEE THUS HAS FAILED TO ESTABLISH THE EXISTENCE OF THE SAID LIABILITY AND HAVING REGARD TO ALL THE FACTS OF THE CASE, I AM OF THE VIEW THAT THE SAID LIABILITY CAN BE TREATED AS CEASED TO HAVE EXISTED. I, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED O RDER OF THE LD. ITA NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL 3 CIT(APPEALS) ON THIS ISSUE CONFIRMING THE ADDITION OF RS.1,66,735/- MADE BY THE ASSESSING OFFICER. GROUND NO. 1 IS ACCORDING LY DISMISSED. 5. THE ISSUE RAISED IN GROUND NO. 2 RELATES TO THE ADDITION OF RS.8,26,139/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UN-RECONCILED DIFFERENCE IN THE ACCOUNT OF CERTAIN SUNDRY CREDITORS AND DEBTORS. 6. AS NOTICED BY THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS FROM THE REPLIES RECEIVED TO THE NOTICE S ISSUED UNDER SECTION 133(6) OF THE ACT, THERE WAS A TOTAL DIFFERENCE OF RS.8,26,139/- IN THE CLOSING BALANCE OF THE FOLLOWING PARTIES:- (1) M/S. LIFE DRUG HOUSE PVT. LIMITED RS.2,33,954/ - (2) M/S. INDCHEMIE HEALTH SPECIALITIES PVT. LIMITED RS.5,15,230/ - (3) M/S. GOUTAM RS.39,628/ - (4) M/S. MAA PADMA MEDICAL RS.37,327/ - ALTHOUGH THE ASSESSEE FILED RECONCILIATION STATEMEN T EXPLAINING THE DIFFERENCE IN THE BALANCE OF M/S. LIFE DRUG HOUSE P VT. LIMITED AND M/S. INDCHEMIE HEALTH SPECIALITIES PVT. LIMITED, THE SAM E WAS NOT FOUND TO BE SATISFIED BY THE ASSESSING OFFICER. HE ACCORDINGLY TREATED THE DIFFERENCE OF RS.8,26,139/- AS THE INCOME OF THE ASSESSEE AND MAD E ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE. ON APPE AL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION MADE BY THE ASSESSING O FFICER OBSERVING THAT THE ASSESESE-FIRM FOLLOWING THE MERCANTILE SYSTEM O F ACCOUNTING SHOULD HAVE ACCOUNTED FOR THE CONCERNED CHEQUE PAYMENTS AS WELL AS BILLS IN THE YEAR UNDER CONSIDERATION ITSELF AND NOT IN THE IMME DIATELY SUCCEEDING YEAR AS CLAIMED TO HAVE BEEN DONE WHILE EXPLAINING THE DIFFERENCE IN THE BALANCES OF THE CONCERNED PARTIES. ITA NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL 4 7. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE ISSUE RELATING TO DIFFERENCE IN THE BALANCE OF THE CONCERNED FOUR PARTIES WAS REMANDED BY THE L D. CIT(APPEALS) TO THE ASSESSING OFFICER FOR VERIFYING THE EXPLANATION OF THE ASSESSEE OFFERED WHILE RECONCILING THE SAID DIFFERENCE AND IN THE RE MAND REPORT SUBMITTED TO THE LD. CIT(APPEALS), THE FOLLOWING COMMENTS WER E MADE BY THE ASSESSING OFFICER:- DIFFERENCE IN CLOSING BALANCE OF SUNDRY CREDITORS AND DEBTORS: (A) M/S. LIFE DRUG HOUSE PVT. LIMITED:_ CLOSING BALANCE DIFFERENCE OF RS.2,33,954/-. ON PERUSAL OF RECONCILIATION STATEMENT AND FURTHER VERIFICATION FROM BANK STATEMENTS, IT WAS FOUND THAT, THE DIFFERENT CHEQUES OF THE SAID AMOUNT WERE DEBITED FORM THE ASSESSEE ACCOUNT ON 04.04.2015 AND FURTHER DATES. IT APPEARS THAT CHEQUES WERE ISSUED BY THE ASSESSEE IN APRIL, 2015, BECAUSE IT TAKES ONLY ONE OR TWO DAYS TO CLEAR THE CHEQUES FROM THE BANK, THOUGH THE PARTY HAS SHOWN THE CHEQUES BEING RECEIVED IN F Y 2014-15. HENCE THE DIFFERENCE IN ACCOUNT HAVE BEEN EXPLAINED. (B) M/S. INDCHEMIE HEALTH SPECIALITIES PVT. LIMITED:- DIFFERENCE OF RS.5,15,230/-. DURING THE REMAND, ASSESSEE SUBMITTED RECONCILIATION STATEMENT, BILLS, PURCHASE LEDGER AND BANK STATEMENT. ON PERUSAL OF DOCUMENTS, IT IS CLEAR THAT THOUGH PARTY HAS RAISED THE PURCHASE BILLS IN FY 2014-15, ASSESSEE RECEIVED THE GOODS IN FY 2015-16 ALONG WITH THE BILLS AND ACCORDINGLY TAKEN INTO ITS ACCOUNT IN FY 2015-16. ASSESSEE SUBMITTED PURCHASE LEDGER OF FY 2014-15 & FY 2015-16 FOR CONFIRMATION. IT WAS ALSO SEEN FROM THE BANK STATEMENT THAT PAYMENT WERE MADE TO THE PARTY IN FY 2015-16. HENCE, THE DIFFERENCES IN ACCOUNT HAVE BEEN EXPLAINED. (C) M/S. MAA PADMA MEDICAL, M/S. GOUTAM & DR. ANIL CHANDRA DAS: NO DOCUMENTS WERE PRODUCED FOR EXPLANATION. ITA NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL 5 8. A PERUSAL OF THE COMMENTS MADE BY THE ASSESSING OFFICER AS ABOVE MAKES IT CLEAR THAT THE DIFFERENCE IN THE CLOSING B ALANCE OF M/S. LIFE DRUG HOUSE PVT. LIMITED AND M/S. INDCHEMIE HEALTH SPECIA LITIES PVT. LIMITED WAS SATISFACTORILY EXPLAINED BY THE ASSESSEE AND T HE SAID EXPLANATION WAS DULY ACCEPTED BY THE ASSESSING OFFICER AFTER VERIFI CATION OF THE RELEVANT RECORD. REGARDING THE DIFFERENCE IN CLOSING BALANCE OF OTHER TWO PARTIES NAMELY M/S. GOUTAM AND M/S. MAA PADMA MEDICAL, THE ASSESSEE, HOWEVER, COULD NOT OFFER ANY SATISFACTORY EXPLANATION AS CLE ARLY STATED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. KEEPING IN VIEW THIS CATEGORICAL FINDINGS RECORDED BY THE ASSESSING OFFICER IN HIS R EMAND REPORT, I AM OF THE VIEW THAT THE DIFFERENCE IN THE CLOSING BALANCE OF THE CONCERNED PARTIES TO THE EXTENT OF RS.7,49,184/- WAS SATISFAC TORILY EXPLAINED BY THE ASSESSEE AND THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSU E TO THAT EXTENT. I, THEREFORE, MODIFY THE IMPUGNED ORDER OF THE LD. CIT (APPEALS) ON THIS ISSUE AND RESTRICT THE ADDITION OF RS.8,26,139/- MA DE BY THE ASSESSING OFFICER TO RS.76,955/-. GROUND NO. 2 OF THE ASSESSE ES APPEAL IS THUS PARTLY ALLOWED. 9. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED GROUND NO. 3 RAISED BY THE ASSESSEE IN THIS APPEAL INVOLVING THE ISSUE OF ADDITION OF RS.33,408 /- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON ACCOUNT OF ALLEGED BOGUS DEBTORS. THE SAME IS ACCORDINGLY DISM ISSED AS NOT PRESSED. 10. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 4 R ELATING TO THE ASSESSEES CLAIM FOR GIVING EFFECT TO THE LOSS OF R S.44,723/- AS CERTIFIED BY THE AUDITORS, THE LD. COUNSEL FOR THE ASSESSEE HAS SOUGHT A LIMITED RELIEF BY WAY OF A DIRECTION TO THE ASSESSING OFFICER TO A LLOW THIS CLAIM AFTER NECESSARY VERIFICATION. I ACCORDINGLY DIRECT THE AS SESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE ON THIS ISSUE AND ALLOW T HE SAME IN ACCORDANCE ITA NO. 1620/KOL/2019 ASSESSMENT YEAR: 2015-2016 PFITOP INTERNATIONAL 6 WITH LAW. GROUND NO. 4 IS ACCORDINGLY TREATED AS AL LOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 13, 202 0. SD/- (P.M. JAGTAP) VICE-PR ESIDENT) KOLKATA, THE 13 TH DAY OF MARCH, 2020 COPIES TO : (1) PFITOP INTERNATIONAL, BLOCK-V, FLAT NO. 4, MANICKTALA HOUSING ESTATE, VIP ROAD, KOLKATA-700054 (2) INCOME TAX OFFICER, WARD-22(2), KOLKATA, 54/1, RAFI AHMED KIDWAI ROAD, KOLKATA-700016 (3) COMMISSIONER OF INCOME TAX (APPEALS)-6, KO LKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.