DCIT, Circle-1, Siliguri, Siliguri V. M/s Cocetra Trade Link P Ltd, Siliguri

ITA 1716/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6457 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA CIT LD
• Keywords: Unexplained investment; Unexplained expenditure; Depreciation; Audit objection; Assessment record
• Section: 143(3); 147; 69; 148

Judgement Text

1 ITA NO.1716/KOL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUD ICIAL MEMBER I.T.A NO. 1716/K OL/2016 A.Y: 200 9-10 DCIT, CIRCLE-1, SILIGURI VS. M/S. COCETRA TRADE L INK P.LTD. PAN: AACCC 7423N [APPELLANT] [RESP ONDENT] FOR THE APPELLANT : SHRI S. DASGUPTA, ADDL.CIT , LD.SR.DR FOR THE RESPONDENT : NONE APPEARED DATE OF HEARING : 09-01-2018 DATE OF PRONOUNCEMENT : 09-04-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI DT. 23-06-2016 FOR THE A.Y 2009-10. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A IS JUSTIFIED IN DELETING THE IMPUGNED ADDITION MADE BY THE AO U/S. 69 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY AND DERIVES ITS INCOME FROM LETTING OUT OF GODOWN . THE ASSESSEE FILED ITS RETURN DECLARING A TOTAL INCOME OF RS. 16 ,74,620/- FOR THE A.Y 2009-10 I.E. UNDER CONSIDERATION, WHICH WAS ACCEPTE D U/S. 143(3) OF THE ACT. THE AO REOPENED THE SAID ASSESSMENT DETECT ING CERTAIN INCOME ESCAPED ASSESSMENT. NOTICE U/S. 148 OF THE A CT WAS ISSUED. IN RESPONSE TO WHICH, THE ASSESSEE FILED ITS E-RETU RN ON 11-11-2014 DECLARING THE SAME TOTAL INCOME I.E AT RS.16,74,620 /- AS DECLARED IN THE ORIGINAL RETURN OF INCOME. 2 ITA NO.1716/KOL/2016 4. IN THE SAID PROCEEDINGS, ON PERUSAL OF BALANCE S HEET AS ON 31- 03-09, THE AO FOUND THAT THE ASSESSEE MADE ADDITION IN FIXED ASSETS UNDER THE HEAD BUILDING OF RS. 3,27,76,071/- AND CLAIMED EXPENSES OF RS.1,36,94,103/-. THE ASSESSEE WAS ASKED TO PROD UCE RELEVANT DOCUMENTS REGARDING THE EXPENSES INCURRED ON THE BU ILDING DURING THE ASSESSMENT PROCEEDINGS, ACCORDING TO AO, ASSESS EE FAILED TO PRODUCE THE SAME. IN ABSENCE OF ANY BILLS AND VOUCH ERS, THE CLAIM OF EXPENSES OF RS.1,36,94,103/- TREATING THE SAME AS U NEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE AS U NEXPLAINED EXPENDITURE U/S. 69 OF THE ACT. 5. THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT- A AND CONTENDED BEFORE HIM THAT DURING THE COURSE OF RE-A SSESSMENT PROCEEDINGS U/S. 147 THE ASSESSEE FILED ALL LEDGER COPIES OF BUILDING ACCOUNT AND ITEM-WISE DETAILS OF PURCHASE AND OTHER EXPENSES. THE ASSESSEE MADE ALL PAYMENTS THROUGH BANK. THE AO EXA MINED THE SAME AND ADDED THE IMPUGNED AMOUNT AS UNEXPLAINED EXPENDITURE ONLY ON THE OBJECTIONS RAISED BY THE REVENUE AUDIT AND CONTENDED THAT THIS ACTION OF THE AO IS ARBITRARY AND UNCALLE D FOR. 6. THE CIT-A CONSIDERING THE ABOVE SUBMISSIONS, EXA MINING THE MATERIAL ON RECORD AND PARTICULARLY CONSIDERING THE OBSERVATION OF JCIT DELETED THE IMPUGNED ADDITION BY STATING AS UN DER:- 5.2. INTERESTINGLY, IT IS SEEN FROM THE ASSESSMEN T RECORDS THAT ON 27/05/2015, THE AO WROTE TO THE AAO, REVENUE AUDIT, GIVING HIS 'OBSERV ATION' TO THE AUDIT OBJECTION, WHICH IS REPRODUCED BELOW: ' AS PER SUBMISSION OF THE ASSESSEE RS.2,23,94 ,552/- WAS WIP AS ON 01/04/2008 WHICH INCLUDED LAND OF RS.33,12,584/- (NON-DEPRECIA BLE ASSETS) AND ADDITION OF RS. 1,36,94,103/- WAS MADE DURING THE CURRENT YEAR (F.Y . 2008-09). SO, AFTER TRANSFERRING THE AMOUNT OF RS.33,12,584/- TOWARDS THE BLOCK OF L AND, CLOSING BALANCE OF BUILDING AS ON 31103/2009 WAS RS.3,27,76,071/-. THIS FACT HAS B EEN VERIFIED FROM RECORDS AVAILABLE. A COPY OF THE RELEVANT PORTION OF BALANCE SHEET AND ITS ENCLOSURE INCLUDING DEPRECIATION SCHEDULE IS ENCLOSED FOR YOUR READY REFERENCE, WHIC H IS SELF EXPLANATORY. THIS OFFICE DOES NOT FIND ANY MERIT IN THE AUDIT OB SERVATION, AS SUCH THE IMPUGNED ADDITION OF FIXED ASSETS (BUILDING) AMOUNT ING TO RS.1 ,03,81 ,519/- REMAINS EXPLAINED AND TREATING IT AS UNEXPLAINED INVESTMENT U/S 69A OF THE ACT IS UNCALLED FOR.' ENDORSING AO'S OBSERVATION, THE JCIT, VIDE HIS LETT ER DATED 28/0512015, SUGGESTED FOR DROPPING THE AUDIT PARA. IT IS FOUND FROM THE ASSESSMENT RECORDS THAT ON THE BASIS OF THE REPLY OF THE AO AND JCIT, THE REVE NUE AUDIT 'SETTLED' THE AUDIT PARA, VIDE LETTER DATED 08/06/2015, RECEIVED IN THE OFFICE OF THE AO ON 31107/2015, I.E. AFTER PASSING THE INSTANT ASSESSMENT ORDER ON 23/07/2015. THUS, IT IS CLEAR THAT THE AO 3 ITA NO.1716/KOL/2016 THOUGH SATISFIED THAT THE ADDITIONS TO FIXED ASSET (BUILDING) WERE PROPERLY EXPLAINED BY THE ASSESSEE, BUT MADE THE ADDITION FOR THE REASON OF PENDING SETTLEMENT OF AUDIT PARA. 5.3. IN VIEW OF THE FOREGOING DISCUSSIONS, THE AO W AS NOT JUSTIFIED IN MAKING ADDITION OF RS.1,36,94,103/-. THE SAME IS ORDERED TO BE DELETED . 7. THE LD.DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD.AR REITERATED HIS SAME SUBMISSIONS AS MADE BEFOR E THE CIT-A. 8. HEARD LD. DR AND PERUSED THE MATERIAL ON RECOR D. ON PERUSAL OF IMPUGNED ORDER OF THE CIT-A, WE FIND THAT THE AO WROTE A LETTER TO THE AAO, REVENUE AUDIT, GIVING HIS OBSERVATION T O THE AUDIT OBJECTION. ACCORDING TO AO, THE IMPUGNED AMOUNT OF RS.1,03,81,519/- REMAINS EXPLAINED AND THE OPINION THAT THE SAME IS UNEXPLAINED INVESTMENT U/S. 69A OF THE ACT, BY THE AAO, REVENUE AUDIT) IS UNCALLED FOR. WE FIND THAT THE AO THOUGH SATISFIED THAT THE ADDITIONS TO FIXED ASSET (BUILDING) WERE PROPERLY E XPLAINED, BUT MADE THE SAID ADDITION FOR THE REASON OF PENDING SETTLEM ENT OF AUDIT OBJECTION. THE JCIT VIDE HIS LETTER DT. 28-05-2015 REQUESTED TO DROP AUDIT PARA AND BASING ON THEIR REPLIES OF AO & JCIT , THE AAO (REVENUE AUDIT) SETTLED THE AUDIT PARA VIDE ITS LET TER DT. 8-6-15, WHICH WAS RECEIVED BY THE AO ON 31-07-2015 I.E. AFT ER PASSING THE INSTANT ASSESSMENT ORDER ON 23-07-15 U/S. 143(3)/14 7 OF THE ACT. WE FIND THAT THE CIT-A CONSIDERING THE SUBMISSIONS OF ASSESSEE AND ON AN EXAMINATION OF RECORDS DELETED THE SAID ADDITION AND WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDING OF TH E CIT-A AND IT IS JUSTIFIED. THEREFORE, THE GROUND NOS. I, II & III R AISED BY THE REVENUE ON THIS ISSUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09- 04-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :09 - 04-2018 4 ITA NO.1716/KOL/2016 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/REVENUE: THE DCIT, CIR-1, SILIGURI, AAYKA R BHAWAN PARIBAHAN NAGAR, MATIGARA, SILIGURI-734010. 2 RESPONDENT /ASSESSEE:M/S. COCETRA TRADE LINK P.LTD NETAJI NAGAR, BEHIND: ORBIT MALL, SEVOKE ROAD, SILI GURI.-734001. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA