M/s Anjuna , Kolkata V. J.C.I.T.,Range -28, Kolkata

ITA 1856/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9127 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 06-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A K MANGLIK
• Keywords: Opportunity of being heard; Set aside
• Section: 40A(3); 133A

Judgement Text

ITA NO. 1856/KOL/2019 ASSESSMENT YEAR: 2011-2012 M/S. ANJUNA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 1856/KOL/2019 ASSESSMENT YEAR: 2011-2012 M/S. ANJUNA,....................................... .........................................APPELLANT 4B, ASPIRATIONS ENIGMA, 42A, RAFI AHMED KIDWAI ROAD, PARK STREET, KOLKATA-700016 [PAN: AALFA0685L] -VS.- JOINT COMMISSIONER OF INCOME TAX,.................. ........................RESPONDENT RANGE-28, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), 3 RD FLOOR, ROOM NO.3/8, KOLKATA-700068 APPEARANCES BY: SHRI A.K. MANGLIK, FCA, FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, SR. D.R., FOR THE RESPON DEN T DATE OF CONCLUDING THE HEARING : DECEMBER 16, 2019 DATE OF PRONOUNCING THE ORDER : JANUARY 10, 2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKATA DAT ED 23 RD MAY, 2019. 2. GROUND NO. 1 RAISED BY THE ASSESSEE IN THIS APPE AL RELATES TO THE ISSUE OF DISALLOWANCE OF RS.1,25,510/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 40A (3) OF THE INCOME TAX ACT, 1961. 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURIN G OF ALL KIND OF SAREES FABRICATION. THE RETURN OF INCOME FOR THE YEAR UNDE R CONSIDERATION WAS FILED BY IT ON 26.09.2011 DECLARING TOTAL INCOME OF RS.8,22,770/-. AS ITA NO. 1856/KOL/2019 ASSESSMENT YEAR: 2011-2012 M/S. ANJUNA 2 NOTICED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LABOUR CHARGES AGGREGATING TO RS.1,25, 510/- WERE PAID BY THE ASSESSEE TO THE TWO PARTIES IN CASH IN THE SUMS EXCEEDING RS.20,000/- ON A SINGLE DAY. HE, THEREFORE, INVOKED SECTION 40A (3) AND MADE A DISALLOWANCE OF RS.1,25,510/-.ON APPEAL, THE LD. CI T(APPEALS) CONFIRMED THE SAID DISALLOWANCE OBSERVING THAT THERE WAS FAIL URE ON THE PART OF THE ASSESSEE TO SHOW THAT THE PAYMENTS IN CASH AGAINST LABOUR CHARGES WERE MADE IN ANY EXCEPTIONAL CIRCUMSTANCES AS PRESCRIBED IN RULE 6DD OF THE INCOME TAX RULES, 1962. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. EVEN BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO SHOW ANY EXCEPTIONAL CIRCUMSTANCES AS PRESCRIBED IN RULE 6DD OF THE INCOME TAX RULES, 1962 UNDER WHICH THE ASSESSEE WAS REQUIRED T O MAKE THE PAYMENTS IN QUESTION AGAINST LABOUR CHARGES IN CASH. I, THER EFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE DISALLOWANCE OF RS.1,25,510/- MADE B Y THE ASSESSING OFFICER UNDER SECTION 40A(3) OF THE ACT AND UPHOLDI NG THE SAME, I DISMISS GROUND NO. 1 OF THE ASSESSEES APPEAL. 5. GROUND NO. 2 RAISED BY THE ASSESSEE RELATES TO T HE ISSUE OF THE ADDITION OF RS.6,11,628/- MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF THE ALLEGED SUPP RESSION OF SALES BY THE ASSESSEE. 6. DURING THE SURVEY CARRIED OUT IN THE BUSINESS PR EMISES OF THE ASSESSEE UNDER SECTION 133A OF THE ACT ON 21.03.201 1, STOCK OF THE FINISHED GOODS ON PHYSICAL VERIFICATION WAS FOUND T O BE WORTH RS.19,53,450/-. TAKING THE SAID STOCK INTO CONSIDER ATION AS WELL AS THE EXPENSES INCURRED BY THE ASSESSEE ON LABOUR CHARGES AND RAW MATERIAL CONSUMPTION AND THE CLOSING STOCK OF FINISHED GOODS AS DISCLOSED BY THE ITA NO. 1856/KOL/2019 ASSESSMENT YEAR: 2011-2012 M/S. ANJUNA 3 ASSESSEE AS ON 31.03.2011, THE COST OF GOODS SOLD F OR THE PERIOD 22.03.2011 TO 31.03.2011 WAS WORKED OUT BY THE ASSE SSING OFFICER AT RS.13,91,055/-. SINCE THE COST OF GOODS SOLD FOR TH E SAID PERIOD WAS SHOWN BY THE ASSESSEE AT RS.8,65,150/-, THE ASSESSE E WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN THE DIFFERENCE OF RS.5,25,905/- ON ACCOUNT OF GOODS SOLD. IN REPLY, RECONCILIATION WAS FILED BY THE ASSESSEE EXPLAINING THE SAID DIFFERENCE. THE ASSESSING OFFIC ER, HOWEVER, DID NOT FIND THE SAME TO BE ACCEPTABLE AND BY ADDING THE GR OSS PROFIT @ 16.30% AS DISCLOSED BY THE ASSESSEE, THE UNACCOUNTED SALE OF THE ASSESSEE WAS WORKED OUT BY THE ASSESSING OFFICER AT RS.6,11,628/ -. ACCORDINGLY AN ADDITION TO THAT EXTENT WAS MADE BY THE ASSESSING O FFICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF SUPPRESSION OF SALE. 7. THE ADDITION MADE BY THE ASSESSING OFFICER ON AC COUNT OF SUPPRESSION OF SALE WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF A PPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED ON BE HALF OF THE ASSESSEE THAT THE STOCK OF FINISHED GOODS FOUND DURING THE C OURSE OF SURVEY WAS VALUED AT MRP INSTEAD OF VALUING THE SAME AT COST. IT WAS CONTENDED THAT IF THE VALUE OF THE SAID STOCK WAS ADOPTED AT COST, THE SUPPRESSION OF SALE WOULD BE ONLY TO THE EXTENT OF RS.1,57,255/- AS AGA INST RS.6,11,628/- AS WORKED OUT BY THE ASSESSING OFFICER. THIS STAND OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) IN THE ABS ENCE OF RELEVANT DETAILS FILED BY THE ASSESSEE TO SUPPORT AND SUBSTA NTIATE THE SAME. HE ACCORDINGLY CONFIRMED THE ADDITION OF RS.6,11,628/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE ALLEGED SUPPRES SION OF SALE. 8. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED BEFORE ME THE STAND TAKEN B EFORE THE LD. CIT(APPEALS) THAT THE STOCK OF FINISHED GOODS AS FO UND DURING THE COURSE OF SURVEY WAS VALUED AT MRP AND NOT AT COST. HE HAS CONTENDED THAT IF THE ITA NO. 1856/KOL/2019 ASSESSMENT YEAR: 2011-2012 M/S. ANJUNA 4 COST OF THE SAID STOCK IS TAKEN INTO CONSIDERATION BY REDUCING THE GROSS PROFIT, THERE WOULD BE HARDLY ANY DIFFERENCE IN THE TRADING RESULTS SHOWN BY THE ASSESSEE FOR THE POST-SURVEY PERIOD. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THIS STAND TAKEN BY THE AS SESSEE BEFORE THE LD. CIT(APPEALS) AS WELL AS BEFORE THE TRIBUNAL WAS NEV ER TAKEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE CO URSE OF ASSESSMENT PROCEEDINGS AND THE SAME, THEREFORE, HAS REMAINED T O BE VERIFIED. KEEPING IN VIEW THE SUBMISSIONS MADE BY BOTH THE SI DES, I CONSIDER IT JUST AND PROPER TO SET ASIDE THE IMPUGNED ORDER OF THE L D. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER VERIFYING THE STAND OF THE ASSESSEE THAT THE STOCK OF FINISHED GOODS AS FOUND DURING THE COURSE OF SURVEY WAS VALUED AT MRP INSTEAD OF AT COST. THE ASSESSING OFFICER SH ALL VERIFY THIS FACTUAL ASPECT AND RE-COMPUTE THE ADDITION, IF ANY, WHICH I S LIABLE TO BE MADE ON ACCOUNT OF SUPPRESSION OF SALE AFTER GIVING THE ASS ESSEE A PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD. GROUND NO. 2 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATIS TICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 10, 2 020. SD/- (P.M. JAGTAP) VICE-PR ESIDENT) KOLKATA, THE 10 TH DAY OF JANUARY, 2020 COPIES TO : (1) M/S. ANJUNA, 4B, ASPIRATIONS ENIGMA, 42A, RAFI AHMED KIDWAI ROAD, PARK STREET, KOLKATA-700016 (2) JOINT COMMISSIONER OF INCOME TAX, RANGE-28, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), 3 RD FLOOR, ROOM NO.3/8, KOLKATA-700068 ITA NO. 1856/KOL/2019 ASSESSMENT YEAR: 2011-2012 M/S. ANJUNA 5 (3) COMMISSIONER OF INCOME TAX (APPEALS)-9, KO LKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.