ACIT, Circle - 31, Kolkata, Kolkata V. M/s. Shree Balaji Trading Co., Kolkata

ITA 1715/KOL/2011

• Counselvise Citation: 171523514 RSA 2011
• Duration Of Justice: 3 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR PANDE
• Assessee Lawyers: V N DATTA
• Keywords: Unexplained investment; Depreciation; Additional evidence
• Section: 69

Judgement Text

I.T.A. NO . 1715 / KOL ./20 1 1 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 1715 / KOL / 20 1 1 ASSESSMENT YEAR : 200 8 - 20 0 9 ASSISTANT COMMISSIONER OF INCOME TAX, .... ........ . APPELLANT CIRCLE - 31, KOLKATA, 10B, MIDDLETON ROW, 4 TH FLOOR, \ KOLKATA - 700 071 - VS. - M/S. SHREE BALAJI TRADING CO.,... ....... .. ....... ..... . RESPONDE NT 7, GANESH CHANDRA AVENUE, KOLKATA - 700 013 [PAN : A ARFS 4288 D ] APPEARANCES BY: SHRI ANIL KU MAR PANDE, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI V.N. DATTA , ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JUNE 30 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JU LY 03 , 201 5 O R D E R PER P.K. BANSAL : THIS A PPEAL HA S BEEN FILED BY THE REVENU E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - XI X , KOLKATA D ATED 1 9 . 0 9 .20 1 1 FOR THE ASSESSMENT YEAR 200 8 - 0 9 BY TAKING THE FOLLOWING EFFECTIVE GROUND OF APPEAL: - THAT THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE AMOUNTING TO RS.18,81,575/ - BY ACCEPTING THE OPENING VALUE OF THE LAND AT RS.4,70,000/ - WHICH WAS ACTUALLY NOT REFLECTED IN THE BALANCE - SHEET OF THE ASSESSEE AS AT 31.03.2007 AS WELL AS BY ACCEPTING ADDITIONAL EVIDENCE WITHOUT GETTING THOSE VERIFIED BY THE AO THROU GH REMAND . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SUBMITTED THE RETURN SHOWING AN INCOME OF RS.22,36,566/ - . THE ASSESSMENT WAS COMPLETED BY MAKING AN ADDITION OF RS.22,51,575/ - UNDER SECTION 69 AND THE ADDITION OF RS.72,730/ - ON ACCOUNT OF THE PAYMENT OF SALES TAX. THE ASSESSEE WENT I.T.A. NO . 1715 / KOL ./20 1 1 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 2 OF 4 IN APPEAL BEFORE THE CIT(APPEALS) . T HE CIT(APPEALS) ALLOWED A RELIEF OF RS.18,81,575/ - OUT OF RS.22,51,575/ - ADDED UNDER SECTION 69 OF THE INCOME TAX ACT BY OBSERVING AS UNDER: - IT IS AN ADMITTED FACT THAT IN THE CO URSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAS FILED A COPY OF LEDGER A/C OF 'LAND ALWAR GODOWN CONSTRUCTION' BEFORE THE A O . AS PER THE LEDGER A/C THERE WAS OPENING BALANCE OF LAND AS ON 01 - 04 - 2007 AMOUNTING TO RS .4 ,70,000/ - AND THEREAFTER, THERE ARE EN TRIES MAKING PAYMENTS FOR PURCHASE OF MS PLATES & ANQLES, SHEETS, RIVER SAND, BRICKS, CEMENT AND LABOUR SUPPLY ETC. AS PER SAID LEDGER A/C, THE APPELLANT HAD MADE PAYMENT OF RS.8,86,960/ - IN CASH AND PAYMENTS OF RS.9,94,615/ - BY CHEQUES. THUS, THE APPELLAN T HAS INCURRED EXPENDITURE OF RS.18,81,575/ - ON CONSTRUCTION OF GODOWN. THE EXPENDITURE IS DULY REFLECTED IN THE CASH BOOK OF APPELLANT AND THE CHEQUES PAYMENTS IN BANK BOOK/BANK STATEMENT OF THE RELEVANT PREVIOUS YEAR. THE A O , NOWHERE, HAS DOUBTED THE PAY MENTS AGGREGATING TO RS.18,81/575/- REFLECTED IN THE APPELLANT'S BOOKS OF ACCOUNT. IF, THE A O WAS OF THE VIEW T HAT SAID EXPENSES WERE INCURRED FOR ANY OTHER PURPOSE THAN THE CONSTRUCTION OF THE GODOWN, THE ONUS WAS ON HIM TO BRING SOME MATERIAL ON RECORD T O PROVE THAT THE APPELLANT'S CONTENTION WAS WRONG. HOWEVER, THERE IS NOTHING ON RECORD IN THIS REGARD. IN THE ASSESSMENT ORDER THE AO HIMSELF HAS MENTIONED THAT IN THE COURSE OF HEARINGS THE BOOKS OF ACCOUNTS, BANK STATEMENTS, VOUCHERS, PARTNER'S DETAILS, DETAILS OF TDS ETC WERE REQUISITIONED AND EXAMINED AND ENTRIES APPEARING THEREIN WERE TEST CHECKED. IT IS NOT KNOWN THAT ONCE EXPENSES AGGREGATING TO RS.18,81,575/ - ARE APPEARING IN THE BOOKS OF ACCOUNTS, HOW THE ADDITION COULD BE MADE U/S.69 OF THE ACT AS UNEXPLAINED INVESTMENT. FURTHER, IN THE ASSESSMENT ORDER THE AO HAS MENTIONED THAT EXPENDITURE INCURRED ON ADDITION ON LAND BEFORE AND AFTER 30 - 09 - 2007 AS PER SCHEDULE TO FIXED ASSETS DID NOT TALLY WITH THE LEDGER A/C FILED BY THE APPELLANT. THOUGH, THE O BSERVATION OF THE AO IS CORRECT IN THIS REGARD, BUT, I AM OF THE OPINION THAT IT IS NOT OF MUCH MATERIAL IN THE PRESENT CASE BECAUSE THE APPELLANT HAS NOT CLAIMED DEPRECIATION ON THE SAID ASSET AND IN ANY CASE BOTH AS PER SCHEDULE TO THE FIXED ASSETS AND L EDGER A/C THE TOTAL AMOUNT OF EXPENDITURE IS RS.18,81,575/ - . I FIND FORCE IN SUBMISSION OF THE APPELLANT THAT THE AO WAS NOT CORRECT IN DOUBTING THE EXISTENCE OF GODOWN AT ALWAR, BECAUSE THE APPELLANT HAS LET OUT THAT GODOWN. IN THE YEAR UNDER APPEAL, RENT OF RS.L,26,OOO/ - WAS CREDITED TO THE PROFIT & LOSS A/C AND IN SCHEDULE TO THE FIXED ASSETS AND LEDGER A/C. THE TOTAL AMOUNT OF EXPENDITURE IS RS.18,81,575/ - . I FIND FORCE IN SUBMISSION OF THE APPELLANT THAT THE AO WAS NOT CORRECT IN DOUBTING THE EXISTENCE OF GODOWN AT ALWAR, BECAUSE THE APPELLANT HAS LET OUT THAT GODOWN. IN THE YEAR UNDER APPEAL, RENT OF RS.1,26,000/ - WAS CREDITED TO THE PROFIT AND LOSS A/C. AND IN SUBSEQUENT YEARS ALSO THE APPELLANT HAS DECLARED INCOME FROM SAID GODOWN. I.T.A. NO . 1715 / KOL ./20 1 1 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 3 OF 4 (6.2) ON PERUSAL OF SUBMISSION OF THE APPELLANT AS WELL THE CASH BOOK ETC FOR THE YEAR UNDER APPEAL, IT IS OBSERVED THAT THE APPELLANT HAD INCURRED EXPENDITURE OF RS.18,81,575/ - ON CONSTRUCTION OF GODOWN AND SAME IS DULY REFLECTED IN THE BOOKS OF ACCOUNT, BUT, IT IS ALSO A FACT THAT EVEN DURING THE APPELLATE PROCEEDINGS, THE APPELLANT COULD NOT EXPLAIN THE SOURCE OF ACQUISITION OF LAND OF RS .4 ,70,OOO/ - . HENCE, THE SOURCE OF INVESTMENT TO THE EXTENT OF RS .4 ,70,OOO/ - REMAINED UNEXPLAINED IN THE HANDS OF APPELLANT WHICH IS LI ABLE TO BE ADDED TO THE TOTAL INCOME OF THE APPELLANT. IN VIEW OF ABOVE, IT IS HELD THAT THE APPELLANT HAD ACQUIRED LAND FOR RS .4 ,70,OOO/ - AND INCURRED EXPENDITURE OF RS.18,81,575/ - ON CONSTRUCTION OF GODOWN AT ALWAR, BUT HE HAS FAILED TO PROVE THE SOURCE TO THE EXTENT OF RS .4 ,70,OOO/ - . THE A O IS DIRECTED TO RESTRICT THE ADDITION ON UNEXPLAINED INVESTMENT TO THE EXTENT OF RS .4 ,70,OOO/ - . THE APPELLANT GETS RELIEF OF RS.18,81,575/ - . THE GROUND NO. 1 IS PARTLY ALLOWED . 3. WE HAVE HEARD THE RIVAL SUBMISSIONS A ND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. WE NOTED THAT IN THIS CASE THE ASSESSEE HAS DULY PRODUCED THE BOOKS OF ACCOUNT , WHICH WERE TEST CHECKED BY THE ASSESSING OFFICER AND IT IS ONLY FROM THE EXAMINATION OF THE BALA NCE - SHEET OF THE FIRM, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN THE LAND AMOUNTING TO RS.4,70,000/ - UNDER SCHEDULE E OF FIXED ASSETS BROUGHT FORWARD FROM THE EARLIER YEAR. BUT NO SUCH LAND WAS SHOWN IN THE EARLIER YEAR WHILE THE ASSESSEE C LAIMED THAT THE BALANCE OF RS.6,01,682/ - INCLUDE S OPENING COST OF LAND RS.4,70,000/ - . THE ASSESSING OFFICER, THEREFORE, MADE THE ADDITION OF RS.4,70,000/ - . 4 . SO FAR THE BALANCE ADDITION OF RS.18,81,575/ - , WE NOTED THAT THIS IS A FACT THAT ASSESSEE PURCHA SED MS PLATES & ANGLES, SHEETS, RIVER SAND, BRICKS, CEMENT AND LABOUR SUPPLY, ETC. FOR THE SUM OF RS.18,81,575/ - , OUT OF WHICH PAYMENTS OF RS.8,86,960/ - WERE MADE ON DIFFERENT DATES IN CASH, WHILE PAYMENTS OF RS.9,94,615/ - WERE MADE THROUGH CHEQUES. THUS T HE ASSESSEE HAS INCURRED THESE EXPENSES WHICH ARE DULY NOTED IN THE BOOKS OF ACCOUNT AND THOSE BOOKS WERE PRODUCED BEFORE THE ASSESSING OFFICER. COPY OF THE SAID LEDGER ACCOUNT OF LAND AND CONSTRUCTION OF GODOWN WAS FILED BEFORE THE CIT(APPEALS). THIS, IN OUR OPINION, CANNOT BE REGARDED TO BE ADDITIONAL OR FRESH EVIDENCE. THE CIT(APPEALS), IN OUR OPINION, HAS I.T.A. NO . 1715 / KOL ./20 1 1 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 4 OF 4 RIGHTLY DELETED THE ADDITION OF RS.18,81,575/ - AS THE ASSESSEE HAS DULY PROVED THE GENUNITY OF THE EXPENDITURES INCURRED BY THE ASSESSEE. NO COGENT MA TERIAL EVIDENCE HAS BROUGHT BEFORE US. LD. D.R. RELIED ON THE ORDER OF ASSESSING OFFICER, WHICH MAY PROVE THAT THE EXPENDITURE INCURRED BY THE ASSESSEE IS NOT GENUINE. IN VIEW OF THIS FACT, IN OUR OPINION, THE CIT(APPEALS) HAS RIGHTLY DELETED THE ADDITION OF RS.18,81,575/ - . THIS IS NOT A CASE WHICH WARRANTS OUR INTERFERENCE. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(APPEALS) . 5 . IN THE RESULT, THE APPEAL FILED BY THE REVENU E STAND S DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON JU LY 3 , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 3 RD D AY OF JU LY , 201 5 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 31, KOLKATA, 10B, MIDDLETON ROW, 4 TH FL OOR, \ KOLKATA - 700 071 (2) M/S. SHREE BALAJI TRADING CO., 7, GANESH CHANDRA AVENUE, KOLKATA - 700 013 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .