DCIT, Circle - 49, Kolkata, Kolkata V. Shri Partha Majumder, Kolkata

ITA 1906/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78444 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 06-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 08-10-2010
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU CITSR
• Assessee Lawyers: K M ROY
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI GEORGE MATHAN, JM] ITA NO.1906/KOL/2010 ASSESSMENT YEAR : 2007-08 ( APPELLANT ) - (RESPONDENT) D.C.I.T., CIRCLE-49, SHRI PARTHA MAJUMDER KOLKATA -VERSUS- KOLKATA (PAN : AIUPM 2519 E) FOR THE APPELLANT: SHRI DAVID Z.CHAWNGTHU, ADDL.CIT,SR.DR FOR THE RESPONDENT: SHRI K.M.ROY, DATE OF HEARING : 22.07.2014 DATE OF PRONOUNCEMENT : / ORDER PER SHRI P.K.BANSAL, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-XXXII, KOLKATA DATED 24.06.2010 FOR A.YR.2007-08 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A), HAS ERRED IN DELETING THE DISALLOWANCE OF RS.36,15,581/ - ON ACCOUNT OF CESSATION OF LIABILITY U/S 41(1) OF THE ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF BOGUS PURCHASE OF A GRICULTURAL PRODUCE OF RS.38,02,568/-. LD.CIT(A) RELIED ON THE INSPECTORS REPORT WHO MET SOME PERSONS AND TREATED THEM AS FARMERS. BUT IT IS NOT THE INSPECTO R; IT IS THE A.O. TO DECIDE AS TO WHETHER THE PERSONS INTERVIEWED ARE FARMERS. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE ON ACCOUNT OF AGRICULT URAL EXPENSES OF RS.3,79,879/-. 2. GROUND NO.1 RELATES TO THE DELETION OF ADDITION BY THE LD. CIT(A) AMOUNTING TO RS.36,15,581/- MADE BY THE AO U/S 41(1) OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE SAME. IN OUR OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE ONUS IS ON THE REVENUE TO PROVE THAT THE LIABILITY IN RESPECT OF THE CARRY FORWARD FROM THE EARLIER YEAR HAD BEEN REMITTED OR CEASED DURING THE YEAR. IT IS NOT A CASE WHERE THE ASSESSEE HAS ITA NO.1906/KOL/2010 SHRI PARTHA MAJUMDER A.YR.2007-08 2 WRITTEN BACK THE LIABILITY IN ITS BOOKS OF ACCOUNT. WE THEREFORE CONFIRM THE ORDER OF THE LD.CIT(A) ON THIS GROUND BY DISMISSING THE GROUND T AKEN BY THE REVENUE. 4. GROUND NO.2 RELATES TO THE DISALLOWANCE OF BOGU S PURCHASE OF AGRICULTURAL PRODUCE AMOUNTING TO RS.38,02,568/-. 5. THE BRIEF FACTS OF THIS GROUND ARE THAT THE ASS ESSEE HAS PURCHASED CERTAIN AGRICULTURAL GOODS FROM THE FARMERS. A LIST OF SUND RY CREDITORS ON THAT ACCOUNT WAS SUBMITTED BEFORE THE AO BY THE ASSESSEE. THE AO CAR RIED OUT THE VERIFICATION OF THE CLAIM OF SUCH PURCHASES THROUGH THE INSPECTOR, WHO NOTED THAT THE FARMERS FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE RELATING TO PRODUC TION OF AGRICULTURAL GOODS LIKE USE OF FERTILIZERS, SEEDS, PESTICIDES ETC. NOTICE U /S 133(6) OF THE ACT ISSUED TO 10 PARTIES WAS RETURNED DUE TO INCOMPLETE ADDRESSES. THE AO TH EREFORE TREATED THE CLAIM OF PURCHASE OF AGRICULTURAL PRODUCE AS BOGUS. 6. THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A). C IT(A) HAD VERIFIED THE REPORT OF THE INSPECTOR AND NOTED THAT THE INSPECTOR HAD P ERSONALLY VISITED SOME OF THE PARTIES. IN HIS REPORT THE INSPECTOR HAD STATED THA T THESE PARTIES ARE MERELY FARMERS AND THEY ADMIT THAT THEY HAD SOLD THEIR ENTIRE PRODUCTS TO THE ASSESSEE. THEY HAD NOT MAINTAINED BOOKS OF ACCOUNT BUT THEY HAD KEPT ROUGH RECORD OF THEIR PAYMENTS AND RECEIPTS. THESE PERSONS ALSO ADMITTED THAT THEY HAV E COLLECTED THE AGRICULTURAL PRODUCE FROM CERTAIN OTHER FARMERS AND DELIVERED THE SAME T O THE ASSESSEE. THE INSPECTOR ALSO REPORTED THAT THE FARMERS HAVE AVERAGE LAND HOLDING OF 4 TO 6 BIGHAS.. ON THE BASIS OF THE INSPECTORS REPORT ON RECORD THE CIT(A) DELETED THE ADDITION BY HOLDING THAT THE AO WAS NOT CORRECT IN TREATING THESE PURCHASES TO B E BOGUS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) AS THE CIT(A) HAD DELETED THE ADDITION AFTER APPRECIATING THE FACTS O N RECORD AS WELL AS THE INSPECTORS REPORT. NO CONTRARY COGENT MATERIAL OR EVIDENCE WAS PLACED BEFORE US BY THE LD. DR EVEN THOUGH HE HAD VEHEMENTLY RELIED ON THE ORDER O F AO WHICH MAY COMPEL US TO ITA NO.1906/KOL/2010 SHRI PARTHA MAJUMDER A.YR.2007-08 3 ADVERSE THE FINDINGS OF THE LD. CIT(A). CITA) HAS G IVEN A CORRECT FINDING ON THIS ISSUE. WE, THEREFORE DISMISS GROUND NO.2 TAKEN BY THE REVE NUE. 8. GROUND NO.3 RELATES TO THE DELETION OF DISALLOWA NCE ON ACCOUNT OF AGRICULTURAL EXPENSES AMOUNTING TO RS.3,79,879/-. THIS EXPENDITU RE HAD BEEN DISALLOWED BY THE AO BECAUSE HE TREATED THE AGRICULTURAL PURCHASES BY THE ASSESSEE TO BE BOGUS. WHEN THE MATTER WENT BEFORE CIT(A) THE LD. CIT(A) DELETE D THE ADDITION. 9. AFTER HEARING THE RIVAL SUBMISSIONS WE HAVE ALRE ADY CONFIRMED THE ACTION OF THE LD. CIT(A) BY DELETING THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE OF AGRICULTURAL PRODUCE. IN CONSEQUENCE THEREIN, IN OUR OPINION, TH E LD. CIT(A) HAS RIGHTLY DELETED THIS ADDITION ALSO. WE ACCORDINGLY CONFIRM THE ACTION OF THE LD. CIT(A). GROUND NO.3 TAKEN BY THE REVENUE IS DISMISSED. 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22.7.2014. SD/- SD/- [GEORGE MATHAN ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 22.7.2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. SHRI PARTHA MAJUMDER, C/O HOTEL KINGS CROWN, RAGHUN ATHPUR, VIP ROAD, KOLKATA-700059. 2 D.C.I.T., CIRCLE-49, KOLKATA 3 . CIT KOLKATA 4 . CIT(A)- XXXII, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES