ALPANA PANDIT, V. ITO, WARD-46(1), KOLKATA, Kolkata

ITA 1842/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91970 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 10-06-2013
• Court: TRIBUNAL
• Department Lawyers: SANJAY SR DR
• Keywords: Business income
• Section: 133(6); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: KOLKATA [BEFORE HON BLE SHRI B.P.JAIN, AM] I.T.A NO.1842 /KOL/2013 ASSESSMENT YEAR: 2008 - 09 ALPANA PANDIT VS I.T.O., WARD - 46(1) KOLKATA . KOLKATA (APPELLANT) ( RESPONDENT) (P AN: AJWPP 2815 M) FOR THE APPELLANT : NONE FOR THE RESPONDENT : SHRI SANJAY, SR.DR, ADDL. C.I.T. DATE OF HEARING : 01.06 .2015. DATE OF PRONOUNCEMENT: 01.06 .2015. ORDER PER SHRI B.P.JAIN, AM : THIS APPEAL OF THE ASSESSEE A RISES FROM THE ORDER OF LD.CIT(A) - XX X , KOLKATA DATED 08.11 .2012 FOR ASSESSMENT YEAR 2008 - 09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) WAS NOT JUSTIFIED IN CONFI RMING DISALLOWANCE OF 5% OF PURCHASE OF THE APPELLANT AMOUNTING TO RS.5,63,603/ - ON MERE SUSPICION WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD FOR SUSTAINING DISALLOWANCE. 2. FOR THAT IN ANY EVENT THE ACTIONS OF THE AUTHORITIES BELOW ARE HARSH AND NOT S USTAINABLE IN LAW. 3. FOR THAT IN CASE THE BOOKS OF ACCOUNTS ARE FOUND TO BE UNRELIABLE, IT WAS INCUMBENT UPON THE AUTHORITIES BELOW TO APPLY NET PROFIT RATIO PREVAILING IN SIMILAR TRADE FOR DETERMINATION OF INCOME OF THE APPELLANT. 3. IT WAS POINTED O UT THAT THE APPEAL OF THE ASSESSEE HAS BEEN FILED LATE BY 19 DAYS AND THE ASSESSEE HAS MOVED A CONDONATION PETITION FOR DELAY FILING THE SAID APPEAL. THE SAID PETITION HAS BEEN PERUSED AND I FOUND THAT THERE WAS SUFFICIENT CAUSE FOR FILING THE PRESENT APPE AL LATE BY 19 DAYS AND ACCORDINGLY I CONDONE THE SAID DELAY. ITA NO. 1842/KOL/2013 ALPANA PANDIT A.YR. 2008 - 09 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. HAS MENTIONED IN PARA - 1 OF THE ASSESSMENT OR DER THAT NOTICES U/S 133 (6) WERE ISSUE D ON TEST CHECK BASIS TO 5 PERSONS FOR VERIFICATION OF THE PU RCHASES. HOWEVER, NOTICES TO 4 PERSONS WERE RETURNED UN - SERVED MARKED AS NOT FOUND OR NOT KNOWN AND NO REPLY WAS RECEIVED FROM THE FIFTH PERSON I.E. BHARAT SADHUKHAN. THE A.O. ASKED THE ASSESSEE TO EXPLAIN THE ABOVE IN RESPONSE TO WHICH IT WAS SUBM ITTED THAT IT COULD HAPPEN BECAUSE THE PERSON S FATHER NAME WAS NOT MENTIONED IN THE LETTER OR BEING LESS LITERATE THESE PERSONS AVOID RESPONDING TO INCOME TAX DEPARTMENT. THE A.O. THEREFORE ASKED THE ASSESSEE TO PRODUCE SOME OF THE PERSONS FROM WHOM PURCH ASES HAD BEEN SHOWN IN RESPONSE TO WHICH 2 PERSONS I.E. RAMESH SADHUKAHN AND SAIFUL SEPAI WERE PRODUCED BEFORE THE A.O. AND THEIR STATEMENTS RECORDED ON 10.12.2010 BEFORE THE A.R. OF THE ASSESSEE. THE A.O. WENT ON TO HOLD THAT THEIR STATEMENT WAS RECO RDED IN THE PRESENCE OF THE A/R. IN HIS STATEMENT, SHRI RAMESH SADHUKHAN CLEARLY RECORDED THAT HE HAD NOT SOLD SAREE OF MORE THAN RS.1,00,000/ - TO ALPANA P ANDIT DURING THE F.Y. 2007 - 08. WHILE THE ASSESSEE HAD SHOWN TOTAL PURCHASE OF RS.2,85,990/ - FROM HIM . ON THE SAME WAY, SHRI SAIFUL SEPAI CONFIRMED THAT HE DID NOT SELL SAREE OF MORE THAN RS.1.50 LAKHS TO SMT. ALPANA PANDIT, ON THE OTHER HAND, THE ASSESSEE HAD SHOWN TOTAL PURCHASE OF RS.3,08,620/ - FROM HIM. EVEN THOUGH, THE STATEMENT HAD BEEN RECORDED IN FRONT OF THE A/R, HE WAS REQUESTED TO CROSS EXAMINE THE PERSONS IF HE REQUIRED WHICH HE REFUSED. HENCE, IT WAS CLEAR THAT BOTH THE PERSONS WERE STATING THE TRUTH. IN VIEW OF THE STATEMENT GIVEN BY BOTH THE PERSONS, IT IS EVIDENT THAT THE ASSESSEE HAS INFLA TED HER PURCHASE TO REDUCE HER PROFIT. THE A.O. THEREFORE HELD THAT PURCHASES FROM THESE PERSONS HAD BEEN INFLATED TO THE EXTENT OF RS.3,44,610/ - AND HE DISALLOWED THE ABOVE AMOUNT. THE A.O. FURTHER HELD THAT IN RESPECT OF THE PURCHASES WHERE THE NOTICES ISSUED ON TEST CHECK BASIS U/S 133(6) REMAINED UNSERVED THE ASSESSEE WAS ASKED TO PRODUCE THESE PERSONS AND INVOICE/VOUCHERS RELATED TO THE PURCHASE. THE A.O. HELD THAT SINCE THE ASSESSEE FAILED TO DO SO A LETTER WAS SENT TO THE ASSESSEE ON 06.12.2010 PRO POSING A DISALLOWANCE OF 5% FROM THE TOTAL PURCHASES SINCE THE DESIRED EVIDENCE HAD NOT BEEN PRODUCED. IN RESPONSE TO THE SAME THE ASSESSEE PRODUCED TWO PERSONS RAMESH SADHUKHAN AND ITA NO. 1842/KOL/2013 ALPANA PANDIT A.YR. 2008 - 09 3 SAIFUL SEPAI WHOSE STATEMENTS WERE RECORDED IN THE PRESENCE OF THE A.R. T HE A.O. FURTHER HELD THAT SI NCE FOR REMAINING PURCHASES OF R S.1,06,77,454/ - THE ASSESSEE FAILED TO PRODUCE DOCUMENTARY EVIDENCE. IT WAS THEREFORE HELD BY HIM THAT IT WAS ALSO NOTICED FROM THE STATEMENT OF BOTH THE PERSONS THAT THEY HAVE SOLD MOST OF TH E SAREES IN THE RANGE OF RS.1200 - 1500. BUT IN THE BOOKS OF THE ASSESSEE NO SAREE OF THIS RANGE HAS BEEN SHOWN AS PURCHASE. THIS FACT HAS ALSO SUPPORTED BY THE INFORMATION SUBMITTED BY AMBIKA SAREES (P)LTD TO WHOM TOTAL SALES HAS BEEN MADE BY THE ASSESSEE. IT IS SEEN IN THE LEDGER OF AMBIKA SAREES (P) LTD THAT RARELY ANY SAREE BELOW RS.2,000/ - WAS PURCHASED BY THE COMPANY FROM THE ASSESSEE. WITH THE ABOVE DISCUSSIONS, THREE THINGS IS CLEAR THAT : ( A ) NOTICES SENT TO THE PURCHASE PARTIES OF THE ASSESEE RETURNED U NSERVED ( B ) THE TWO PERSONS, ASSESSEE PRODUCED, CONFIRMED THAT THE ASSESSEE WAS INFLATING HER PURCHASE. ( C ) THE ASSESSEE WAS NOT ABLE TO PRODUCE DOCUMENTARY EVIDENCE SUCH AS INVOICE, BILLS OR VOUCHER IN SUPPORT OF HIS PURCHASE. AS THE ASSESSEE FAILED TO PROVE HIS PURCHASE BY EVIDENCE, THE ENTIRE PURCHASE MAY NOT BE TREATED AS GENUINE AND POSSIBILITY TO DEFRAUD THE REVENUE BY CLAIMING, BOGUS EXPENDITURE MAY NOT BE IGNORED. THUS, THE ASSESSEE WAS ASKED WHY 5% OF THE PURCHASE SHOULD NOT BE DISALLOWED. THE ASSESSEE COU LD NOT FURNISH ANY SATISFACTORY EXPLANATION. A LAST OPPORTUNITY WAS GIVEN TO THE ASSESSEE ON 10 - 12 - 2010 TO REPLY THE SHOW - CAUSE, BUT IT COULD NOT BE EXPLAINED. THE A.O. THEREFORE DISALLOWED 5% OF THE PURCHASES FROM THE AMOUNT OF RS.1,06,77,554/ - (AFTER C ONSIDERING THE PURCHASES FROM RAMESH SADHUKHAN AND SAIFUL SEPAI DEALT BY HIM SEPARATELY) I.E. RS.5,33,873/ - . 4.1. THE LD. CIT(A) SUSTAINED THE ADDITION OF R S.5,63,603/ - BY ALLOWING A RELIEF OF RS.3,14,880/ - AFTER TAKING THE REMAND REPORT FROM THE AO IN PA RAS 2.1.2 AND 4.1.2 OF HIS ORDER. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE AND AFTER HEARING THE LD. DR AND PERUSING THE MATERIALS AVAILABLE ON RECORD I FIND THAT THE ASSESSEE HAD SUBMITTED BEFORE ITA NO. 1842/KOL/2013 ALPANA PANDIT A.YR. 2008 - 09 4 THE LD. CIT(A) THAT NO ADDITION CAN BE MADE ON ACCOUNT O F PURCHASES UNLESS THE AO INVOKES THE PROVISION OF SECTION 145 (3) OF THE ACT. TO THIS EXTENT I AM CONVINCED THAT THE ARGUMENT OF THE LD. AR BEFORE THE LD. CIT(A) WHICH IN FACT HAS NOT BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(A). ACCORDINGLY AS SUBMITTE D BEFORE THE LD. CIT(A) THE ASSESSEE HAS PRODUCED ALL THE BOOKS OF ACCOUNT WHICH HAS BEEN ACCEPTED AS SUCH AND THE SAME HAVING BEEN NOT REJECTED AND PROVISION OF SECTION 145(3) OF THE ACT HAVING NOT BEING INVOKED NO ADDITION ON ACCOUNT OF TRADING CAN BE MA DE BY THE AO. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE ,` THE ADDITIONS MADE BY THE AO IS DIRECTED TO BE DELETED AND ACCORDINGLY THE ADDITIONS SUSTAINED BY THE LD. CIT(A) ARE ALSO DIRECTED TO BE DELETED. THUS ALL THE GROUNDS OF APPEAL RAISED BY THE ASSES SEE ARE ALLOWED. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDE R PRONOUNCED IN THE OPEN COURT ON 01.06 .2015. SD/ - [ B.P.JAIN ] ACCOUNTANT MEMBER DATE: 01.06 .2015. R.G.(.P.S.) C OPY OF THE ORDER FORWARDED TO: 1 . ALPAN A PANDIT, VILL. SOUTH KOLORAH, P.S.DOMJUR, P.O.KOLORAH, HOWRAH - 711411 2 I.T.O., WARD - 46(1) , KOLKATA. 3 . CIT(A) - XXX , KOLKATA 4. CIT - KOLKATA. 5. CIT - DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES