S. K. Developers Private Ltd., Kolkata V. ITO, Ward-5(1), , Kolkata

ITA 169/KOL/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8774 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 09-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: MANISH TIWARI
• Keywords: TDS
• Section: 68; 69C; 13

Judgement Text

1 ITA No.169/Kol/2020, S. K. Developers Pvt. Ltd., AY 2012-13 आयकर अपील य अधीकरण, यायपीठ –“B” कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA [Before Shri P. M. Jagtap, Vice President (KZ) & Shri A. T. Varkey, Judicial Member ] I.T.A. No. 169/Kol/2020 Assessment Year: 2012-13 S. K. Developers Pvt. Ltd. (PAN: AAHCS9067P) Vs. Income-tax Officer, Ward-5(1), Kolkata Appellant Respondent Date of Hearing (Virtual) 28.10.2021 Date of Pronouncement 11.11.2021 For the Appellant Shri Manish Tiwari, AR For the Respondent Smt. Ranu Biswas, Addl. CIT ORDER Per Shri A. T. Varkey, JM: This is an appeal preferred by the assessee against the order of Ld. CIT(A)- 10, Kolkata dated 16.12.2019 for AY 2012-13. 2. The 1 st ground of appeal of assessee reads as under: “1a) That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in confirming the addition of Rs.1,39,00,000/- made by AO without properly considering the explanations and facts submitted by appellant. b) That on the facts and in the circumstances of the case Ld. CIT(A) erred in confirming the addition of Rs.1,39,00,000/- u/s. 69C even when identity, creditworthiness and genuineness of the creditor was established by appellant. c) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the addition of Rs.1,39,00,000/- by AO who was also confused as to how the addition can be made either u/s. 68 or u/s. 69C inspite of relevant details.” 3. Brief facts as noted by the AO are that while going through the Balance Sheet of the assessee company, the AO noted that Rs.1.39 cr. has been reflected under the sub-head “Advance to Customers” under the head “Other Current Liabilities” in Note 11 annexed to the Balance sheet. According to AO, this amount was reflected against the name of M/s. Sarada Construction Pvt. Ltd. (hereinafter referred to as “M/s. SCPL”) and on a query from the AO, the assessee replied that this amount was received as payment/advance for sale of property. 2 ITA No.169/Kol/2020, S. K. Developers Pvt. Ltd., AY 2012-13 According to AO, he asked the assessee to furnish the agreement or instrument to confirm such a transaction. However, according to AO, assessee failed to produce any such documents. Further, the AO notes that it has been brought to his notice that the credit amount reflected against this company (M/s. SCPL) has already been paid by virtue of the order of Justice Shyamal Kumar Sen committee. However, according to AO, there was no direct concurrence of such payments and the amount reflected as advance from customer M/s. SCPL and according to him the assessee failed to substantiate how and for which purpose the payments were received from this M/s. SCPL. Thereafter, he disallowed Rs.1.39 cr. u/s. 69C of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). Aggrieved the assessee preferred an appeal before the Ld. CIT(A), who was pleased to dismiss the same and observed that he is confirming the addition u/s. 68 or 69C of the Act. 4. We have heard rival submissions and gone through the facts and circumstances of the case. The main plea of the assessee is that this amount (credit of Rs.1.39cr.) lying in the name of M/s. SCPL under the head advance to customers was credited in the FYs 2008-09 to 2010-11, the details of which has been reproduced at pages 12 and 13 of the impugned order of Ld. CIT(A) is again reproduced for ready reference as under: 3 ITA No.169/Kol/2020, S. K. Developers Pvt. Ltd., AY 2012-13 5. According to Ld. AR, the aforesaid relevant ledger account would substantiate that the amount in question (Rs. 1.39 cr.) was not credited in the year under consideration (AY 2012-13) but it was only carry forwarded balance from past several years. Thus, according to Ld. AR, since the amount in question (Rs.1.39 cr.) was not credited in the year under consideration (AY 2012-13) and only represents carry forwarded balance from earlier years, the said sum cannot be added u/s. 68 (unexplained credit) or u/s. 69C of the Act (unexplained expenditure) and for that he cited the decision of the Hon’ble Calcutta High Court in the case of CIT Vs. J. J. Development (P) Ltd. in ITA No.519 of 2008 dated 16.06.2016 (which has been reproduced by the Ld. CIT(A) at pages 14 and 15 of the impugned order) and also he cited the decision of Hon’ble Calcutta High Court in the case of CIT Vs. Embicon Engineering Private Limited in ITA 687 of 2007 and ITO Vs. Anil Kumar Singh, ITA 968 of 2010 of Hon’ble Calcutta High Court wherein the ratio of the aforesaid decisions were that the credit appearing in the books of the assessee if carry forwarded from previous year and not pertaining to the relevant assessment year, then there cannot be any addition made u/s. 68 of the Act as done by Ld CIT(A). Further, according to Ld. AR, the AO erred in making the addition under section 69C of the Act because the case of the AO/CIT(A) was 4 ITA No.169/Kol/2020, S. K. Developers Pvt. Ltd., AY 2012-13 not that in this assessment year, the assessee had incurred any expenditure, source of which assessee could not explain, so section 69C of the Act cannot be attracted. So, the impugned action of the Ld. CIT(A) to confirm the erroneous addition of AO u/s. 69C of the Act was also patently erroneous. 6. Moreover, the Ld. AR also brought to our notice that the amount of Rs.1.20 cr. out of Rs.1.39 cr. has been refunded/repaid as per the order of the Justice Shyamal Sen Committee (Against M/s. SCPL, ED enquiry and due to some inquiry headed by Justice Shyamal Sen Committee pursuant to the orders assessee made payment) which fact is discernible from a perusal of page 9 to 13 of paper book wherein the bank statement of the assessee has been kept and we note that the assessee had made payments in five (5) installments of Rs.24.40 lacs each to the Justice Shyamal Sen Committee on various dates starting from 25.04.2014, 23.05.2014, 24.06.2014, 23.07.2014 and 29.08.2014 and thus total amount of Rs.1.22 cr. was repaid. Therefore, according to Ld. AR, looking from any angle, the addition made by the AO should not be sustained. 7. Per contra, the Ld. DR vehemently pleaded that the genuinity of the advance supposed to have been paid by M/s. SCPL is under suspicion because there was no agreement/instrument to support such a transaction as claimed by assessee. According to Ld. DR the assessee’s claim that it has made repayment of Rs.1.22 cr. to the Justice Shyamal Sen Committee also need to be verified. So, according to Ld. DR the matter may be sent back to AO for verification. 8. After hearing the rival submissions and on perusal of the record, we note that the amount in question have been credited in FYs 2008-09 to 2010-11 as seen from the ledger account (supra). The addition made by the AO in this relevant assessment year i.e. AY 2012-13 u/s. 69C of the Act cannot be sustained for the simple reason that it is not the case of the AO that this amount was unexplained expenditure incurred by the assessee in this year. Coming to the addition as observed by the Ld. CIT(A) u/s. 68 of the Act also cannot be sustained for the 5 ITA No.169/Kol/2020, S. K. Developers Pvt. Ltd., AY 2012-13 reason that the credit of Rs.1.39 cr. is opening balance of this year which is carried forward balance from the past several years. Therefore, addition u/s. 68 and 69C of the Act is illegal and, therefore, deleted. 9. Next ground is against the action of the Ld. CIT(A) in not adjudicating the issue of short TDS credit of Rs.1,60,644/- by the AO in the computation sheet. We direct that this issue should be verified by the AO since assessee disputes it factually. So the AO to verify the facts and is directed to hear the assessee and pass order in accordance to law on this issue of short TDS credit of Rs.1,60,644/-. The assessee may submit documents to substantiate its claim and the AO to decide in accordance to law. 10. In the result, the appeal of assessee is partly allowed for statistical purposes. Order is pronounced in the open court on 11 th November, 2021. Sd/- Sd/- (P. M. Jagtap) (A. T. Varkey) Vice President Judicial Member Dated: 11 th November, 2021 JD, Sr. PS Copy of the order forwarded to: 1. Appellant- M/s. S. K. Developers Pvt. Ltd., 23A, N. S. Road, 10 th floor, Room No. 45, Kolkata-700 001. 2. Respondent – ITO, Ward-5(1), Kolkata. 3. CIT(A)-10, Kolkata (sent through e-mail) 4. CIT, Kolkata. 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Senior Private Secretary/DDO ITAT, Kolkata Benches, Kolkata