ACIT, Circle-3, Asansol, Asansol V. M/s Renshel Exports Pvt .Ltd., Purulia

ITA 1773/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1794 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1773/KOL/2014 ASSESSMENT YEAR:2010-11 ACIT,CIRCLE-3, PARMAR BUILDING54, G.T. ROAD, (WEST), ASANSOL / V/S . M/S RENSHEL EXPORTS PVT. LTD., BARAKAR ROAD, PURULIA-723101 [ PAN NO.AABCR 4001 N] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SALLONG YADEN, ADDL. CIT-DR /BY RESPONDENT SHRI SUNIL SURANA, FCA /DATE OF HEARING 28-03-2017 /DATE OF PRONOUNCEMENT 03-05-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-ASANSOL DATED 07.08.2014. ASSE SSMENT WAS FRAMED BY JCIT, RANGE-3, ASANSOL U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 12.03.2013 FOR ASSE SSMENT YEAR 2010-11. \ SHRI SALLONG YADEN, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE AND SHRI SUNSIL SURANA, LD. AUTHORIZED REPR ESENTATIVE APPEARED ON BEHALF OF ASSESSEE. 2. SOLITARY ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER FOR 41,13,394/- BEING 7% OF CASH PURCHASE OF 5,87,62,766/- ON ACCOUNT OF NON-AVAILABILITY OF RE QUISITE DOCUMENTS. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PRIV ATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORTING OF L AC & LAC PRODUCTS AND ALEURITIC ACID ITA NO.1773/KOL/2014 A.Y. 2010-11 ACIT CIR-3 ASL VS. M/S RENSHEL EXPORT S PVT. LTD. PAGE 2 AS OBSERVED BY THE AO IN HIS ORDER. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS CLAIMED PURCHASE FOR 18,80,73,945/- IN ITS PROFIT AND LOSS ACCOUNT. OUT OF SAID SUM, PURCHASE WORTH OF 5,87,62,766/- WERE MADE IN CASH WHICH WAS CLAIMED T O HAVE MADE FROM THE TRIBAL PEOPLE. HOWEVER, ASSESSEE FAILED TO FURNISH THE DETAILS OF THE TRIBAL PEOPLE SUCH AS NAME, ADDRESS AND DETAILS OF THE QUA NTITY PURCHASE, RATE OF PURCHASES AS WELL AS NO EVIDENCE FOR THE PURCHASE OF SUCH MATERI ALS WAS FURNISHED. THEREFORE, THE AO IN ABSENCE OF DOCUMENTARY EVIDENCE HAS DISALLOWE D THE PURCHASE FOR 41,13,394/- BEING 7% OF THE TOTAL PURCHASES AND ADDED TO THE TO TAL INCOME OF THE ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHO DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER:- 8. THE APPELLANT RELIES ON ASSESSMENT ORDER, ORDER OF CIT(APPEALS) AND HON'BLE ITAT IN ASSESSEES OWN CASE FOR A.Y. 2003-04. THE F ACTS AND CIRCUMSTANCES OF CASE IS IDENTICAL BEFORE ASSESSING OFFICER AND HE MADE A DI SALLOWANCE OF 2%. THE CIT(APPEALS)CONFIRMED THE SAME AND HON'BLE ITAT DEL ETED THE ADDITION HOLDING SINCE THE ADDITION IS AN AD HOC AND ESTIMATE BASIS WITHOUT POINTING BUSINESS ANY SPECIFIC INFIRMITIES IN THE AUDITED SETS OF ACCOUNT S, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT CORRECT, THEREFORE, THE SAME IS DELE TED. SINCE CIRCUMSTANCES ARE IDENTICAL AND FINAL DECISION IS ALSO IDENTICAL, I D IRECT ASSESSING OFFICER TO DELETE THE ADDITION. ACCORDINGLY GROUND 2 STANDS ALLOWED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- THAT THE LD. CIT(A), ASANSOL HAS ERRED IN LAW AND O N FACTS IN DELETING OF THE ADDITION ON A/C OF DISALLOWANCE OF 41,13,394/- BEING 7% OF CASH PURCHASES WORTH $5,87,62,766/- MADE BY THE AO DUE TO LACK OF VERIFI CATION. DURING THE COURSE OF SCRUTINY AS, THE ASSESSEE HAS SUBMITTED THAT CASH P URCHASE MADE OF STICLAC, MAIN RAW MATERIAL OF THE MANUFACTURING COMPANY AND THE CASH PAYMENT WERE MADE DIRECTLY TO TRIBAL WHO USED TO COLLECT STICLAC FROM FOREST. ON PERUSAL OF THE LEDGER A/C IT WAS DETECTED THAT CASH PURCHASES WORTH 5,87,62,766/- HAVE BEEN MADE AND PAYMENT ON VARIOUS DATES HAVE BEEN MADE IN EXCESS OF 20,000/-. THE ASSESSEE COULD NOT PROVIDE THE DETAILS OF THE PERSONS FROM WHOM PURCHASES WERE MADE. ALSO THE ASSESSEE COMPANY HAD NOT MAINTAINED ANY REGISTER REGARDING T HE DETAILS OF PURCHASES QUANTITY- WISE, RATE PER KG, DETAILS OF TRIBAL PEOPLE TO WHOM PAYMENTS HAVE BEEN MADE DATE- WISE . IN ABSENCE OF THE DETAILS AS ABOVE, PAYMENT MADE TO TRIBAL PEOPLE CANNOT BE ASCERTAINED ONLY FROM THE LEDGER A/C OF PURCHASE PR ODUCED DURING THE SCRUTINY ASSESSMENT LD. CIT(A), ASANSOL HAS FAILED TO CONSID ER THE MATERIAL FACT MENTIONED ABOVE WHILE ADJUDICATING THE ISSUE. 5. BEFORE US BOTH THE PARTIES RELIED ON THE ORDERS OF AUTHORITIES BELOW AS FAVOURABLE TO THEM. ITA NO.1773/KOL/2014 A.Y. 2010-11 ACIT CIR-3 ASL VS. M/S RENSHEL EXPORT S PVT. LTD. PAGE 3 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT SI MILAR ISSUE WAS ARISEN IN THE ASSESSMENT YEAR 2003-04 IN ASSESSEES OWN CASE IN ITA NO.1572/KOL/2007 DATED 14.09.2007 WHEREIN THE CO-ORDINATE BENCH OF THIS HO NBLE TRIBUNAL HAS DELETED THE ADDITION MADE BY ASSESSING OFFICER. THE RELEVANT EX TRACT IS REPRODUCED BELOW:- WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERI AL AVAILABLE IN RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER IN THIS CASE HAS ACCEPTED THE BUSINESS OF THE PURCHASE TO THE EXTENT OF 98%. THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE AUDITED AND THE ASSESS ING OFFICER HAS NOT POINTED OUT ANY INFIRMITIES IN THE AUDITED BOOKS OF ACCOUNT S BY THE ASSESSEE. SINCE THE ADDITION IS AN AD-HOC AND ALTERNATE BASIS WITHOUT P OINTING OUT ANY SPECIFIC INFIRMITIES IN THE AUDITED SETS OF ACCOUNTS, THE AD DITION MADE BY THE ASSESSING OFFICER IS NOT CORRECT AND, THEREFORE, THE SAME IS DELETED. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE FACTS IN THE PRESENT CASE ARE EXACTLY IDENTICAL AND TAKING A CONSISTENT VIEW OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE (SUPRA) WH ICH IS BINDING ON US, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CI T(A). WE DIRECT AO ACCORDINGLY. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 03/05/2017 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S ! - 03/05/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ACIT, CIRCLE-3, PARMAR BUILDING 54, G. T. ROAD (WEST) ASANSOL-713 304 2. /RESPONDENT-M/S RENSHEL EXPORTS PVT. LTD., BARAKAR ROAD, PURULIA-723101 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ , /TRUE COPY/ / '#,