I.T.O Wd - 7(2),kolkata, Kolkata V. Mr Adeel Hasan, Kolkata

ITA 1937/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4763 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 17-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAN SOM
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1937 / KOL / 2013 ASSESSMENT YEAR :2009-10 ITO WARD-7(2), P-7, CHOWRINGHEE SQUARE, 5TH FLOOR, KOLKATA-700 069 V/S . MR. ADEEL HASAN 38, MACLEOD STREET, KOLKATA-700 017 [ PAN NO.ABNPH 6827 J ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI NILOY BARAN SOM, JCIT- DR /BY RESPONDENT SHRI MIRAJ D SHAH, AR /DATE OF HEARING 18-05-2016 / DATE OF PRONOUNCEMENT 03-06-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOLKATA IN APPEAL NO.346/CIT(A) -VIII/KOL/11-12 DATED 26.03.2013. ASSESSMENT WAS FRAMED BY ITO WARD-7(2), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 28.12.2011 FOR ASSESSMENT YEAR 2009-10. 2. ONLY ISSUE RAISED BY REVENUE IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER OF RS.46,30,564/- ON ACCO UNT OF LEASED ASSETS LIABILITY U/S. 68 OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND ENGAGED IN THE BUSINESS OF PRINTING AND PUBLISHING. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, AO FOUND THAT ASSESSEE HAS SHOWN A LIABILITY FOR LEASE ASSETS UNDER HEAD CURRENT LIABILITIES ITA NO.1937/KOL/2013 A.Y.2009-10 ITO WD-7(2) KOL. V. MR. ADEEL HASAN PAGE 2 AND PROVISION IN ITS BALANCE-SHEET FOR AN AMOUNT O F RS 46,30,564/-. AT THE TIME OF HEARING ASSESSEE FILED REVISED BALANCE-SHEET WHERE SUCH LIABILITY WAS NOT RECORDED AND AO SOUGHT CLARIFICATION FROM THE ASSESSEE FOR THE A BOVE SAID DIFFERENCE OF RS.46,30,564/-. BUT THE ASSESSEE FAILED TO SUBSTANT IATE ITS CLAIM FOR THE SUCH ALLEGED DIFFERENCE. THEREFORE, AO TREATED IT AS BOGUS LIABI LITY AND TAXED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). BEFORE LD. CIT(A) THE ASSESSEE SUBMITTED THAT THE BALANCE SHEET FILED AT THE TIME OF ASSESSMENT PROCEEDINGS CONTAINED SOME WRONG FIGURE ABOUT THE L IABILITY FOR LEASE ASSETS DUE TO SOME SOFTWARE PROBLEM AND SOME ERRONEOUS FIGURE WAS INCORPORATED IN ITS BALANCE- SHEET. SUBSEQUENTLY, ASSESSEE ASKED THE AUDITOR TO RE-VERIFY THE ACCOUNT AND REQUESTED TO GIVE REVISED AUDITED ACCOUNTS. AS A RESULT THE F IGURE OF RS.46,30,564/- WHICH WAS ORIGINALLY SHOWN AS LIABILITY FOR LEASE ASSET IN AC TUALITY IT WAS NOT THE LIABILITY FOR LEASE ASSETS BUT THIS WAS THE FIGURE OF SUNDRY CREDITORS. CONSIDERING THIS, LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- .IN ITS ORIGINAL AUDITED ACCOUNTS THE ASSESSEE HA D SHOWN A LIABILITY OF RS.46,30,564.00 FOR LEASED ASSETS. HOWEVER THIS WAS FOUND TO BE BOGUS IN THE ASSESSMENT PROCEEDINGS. IN THE APPELLATE PROCEEDING S THE ASSESSEE HAS SUBMITTED ERRONEOUS FIGURES WERE INCORPORATED IN TH E BALANCE SHEET. THE ASSESSEE HAS FILED REVISED AUDITED ACCOUNTS. THE AU DITORS WERE ISSUED NOTICE AND HAVE CONFIRMED THE REVISED AUDITED ACCOUNTS. HO WEVER THE CONFIRMATION OF THE AUDITOR IS NOT SUFFICIENT TO EXPLAIN THE REVISE D ACCOUNTS. THE ASSESSEES EXPLANATION THAT DUE TO SOFTWARE GLITCH THE INCORRE CT FIGURES GOT WRONGLY REFLECTED AS THE AUDITED ACCOUNTS AND IN FACT THERE WAS NO LI ABILITY FOR LEASED ASSETS IS AN AFTERTHOUGHT. THOUGH THE ASSESSEE HAS DEMONSTRATED THAT THE ENTIRE PAYMENT OF RS.46,30,564.00 WAS MADE BY THE ACCOUNT PAYEE CHEQU ES AD NO AMOUNT WAS DUE THIS ITSELF DOES NOT EXPLAIN THE REVISION OF TH E ACCOUNTS. THE ASSESSEE PRODUCED THE REVISED ACCOUNTS AND THE SAME WERE EXA MINED. THIS COULD HAVE BEEN DONE IN THE ASSESSMENT STAGE BUT WAS NOT DONE, THE DEPARTMENT MISLED TO COMPLETE ASSESSMENT O THE AUDITED ACCOUNTS FILED BY THE ASSESSEE AND THEN THE ASSESSEE TURNED BACK TO SUBMIT THAT THE AUDITED ACC OUNTS SUBMITTED BY THEM ALONG WITH THE RETURN WAS INCORRECT. THE ASSESSEE H AS RELIED ON THE DECISION OF HE CALCUTTA HIGH COURT TO SUPPORT ITS STAND THAT TH ERE IS NO DOCTRINE OF ESTOPPELS IS APPLICABLE AGAINST THE STATUTE. IF A PARTICULAR INCOME IS EITHER LIABLE TO TAX UNDER THE TAXING STATUE OR IT IS NOT. THIS IS IN PRINCIPL E CORRECT HOWEVER THE ASSESSEE HAS FAILED TO EXPLAIN HOW THIS APPLIES TO ITS CASE. THU S THE REVISED ACCOUNTS SHOULD NOT BE ACCEPTED AND CONSIDERED AND THE ADDITION OF RS.46,30,564.00 SHOULD BE CONFIRMED. I FIND THAT THE APPELLANT HAD FILED REVISED AUDITE D ACCOUNTS. THE ASSESSING OFFICER HAD VERIFIED THE SAME AND ALSO CONFIRMED TH E SAME FROM AUDITOR. THE ITA NO.1937/KOL/2013 A.Y.2009-10 ITO WD-7(2) KOL. V. MR. ADEEL HASAN PAGE 3 REVISED ACCOUNTS SHOW NO LIABILITY FOR THE MACHINE. THE APPELLANT HAD DEMONSTRATED THAT PAYMENT FOR MACHINERY WAS DULY PA ID AND ONLY A SUM OF RS.1,80,000/- WAS DUE ON SUCH ACCOUNT. NO DEFECT IN THE REVISED ACCOUNTS HAS BEEN FOUND. THE CALCUTTA HIGH COURT IN THE CASE OF MODERN MALLEABLES LTD. VS CIT DATED 29 APRIL, 2011, ITA 112 OF 2004 HAS HELD THAT EVEN IF THERE WAS WRONG ENT5RIES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IT IS THE DUTY OF THE INCOME-TAX AUTHORITY TO FIND OUT THE REAL NATURE OF THE TRANSA CTIONS BEHIND THE SAID ENTRY AND TO PASS APPROPRIATE ORDER OF ASSESSMENT IN ACCORDAN CE WITH LAW. MERELY BECAUSE AN ASSESSEE AS MADE A WRONG OR EVEN FICTITIOUS ENTR Y IN THE ACCOUNTS, SUCH FACT CANNOT BE A GROUND FOR ACCEPTING SUCH WRONG OR FICT ITIOUS ENTRY. IT IS WELL-KNOWN THAT THE DOCTRINE OF ESTOPPELS IS NOT APPLICABLE AG AINST THE STATUE. IF A PARTICULAR INCOME IS NOT TAXABLE UNDER THE INCOME-TAX ACT, IT CANNOT BE TAXED ON THE BASIS OF ESTOPPELS OR ANY OTHER EQUITABLE DOCTRINE. EQUIT Y IS OUT OF PLACE IN TAX LAW; A PARTICULAR INCOME IS EITHER LIABLE TO TAX UNDER THE TAXING STATUTE OR IF IT IS NOT, THE INCOME TAX OFFICER HAS NO POWER TO IMPOSE TAX ON TH E SAID INCOME. THE RATIO OF THE CALCUTTA HIGH COURT I SQUARELY APPLICABLE TO TH E CASE OF THE APPELLANT. THE APPELLANT HAD FILED REVISED AUDITED ACCOUNTS AND IN THE SAID ACCOUNTS THE SAID LIABILITY OF RS.46,30,564/- OF LEASED ASSETS IS NOT SHOWN AND IN THE REMAND PROCEEDINGS NO DEFECT HAS BEEN FOUND IN THE SAME. I N VIEW OF THE SAID FACTS I HAVE NO HESITATION IN DELETING THE ADDITION OF RS.4 5,30,564/-. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. SHRI MIRAJ D SHAH, LD. AUTHORIZED REPRESENTATIVE AP PEARING ON BEHALF OF ASSESSEE AND SHRI NILOY BARAN SOM, LD. DEPARTMENTAL REPRESENTATI VE APPEARING ON BEHALF OF REVENUE. 5. BEFORE US LD. DR SUBMITTED THAT ASSESSEE FAILED TO SUBSTANTIATE THE DIFFERENCE BETWEEN THE LIABILITY SHOWN UNDER HEAD LEASE ASSET LIABILITY AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS IN THE ORIGINAL BALANCE SHEE T AND THE REVISED BALANCE-SHEET. THEREFORE THE REVISED BALANCE SHEET SHOULD NOT BE A CCEPTED FOR GRANTING THE RELIEF TO THE ASSESSEE. HE VEHEMENTLY RELIED ON THE ORDER OF AO A ND LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. ON THE OTHER HAND, LD. AR FILED BOTH ORIGINAL BALAN CE-SHEET AND REVISED BALANCE-SHEET DULY AUDITED BY CHARTERED ACCOUNTANT AND SUBMITTED THAT THERE WAS SOME TYPOGRAPHICAL ERROR IN THE FIGURE OF THE BALANCE SHEET. LD. AR SU BMITTED THE COPY OF INVOICE FOR THE LEASE ASSETS PURCHASED WHICH IS PLACED ON RECORD. T HE LD. AR ALSO SUBMITTED THAT ALL THE PAYMENTS FOR THE PURCHASE OF LEASE ASSET WERE PAID THROUGH BANKING CHANNEL AND IN ITA NO.1937/KOL/2013 A.Y.2009-10 ITO WD-7(2) KOL. V. MR. ADEEL HASAN PAGE 4 SUPPORT OF ITS CLAIM THE LEDGER COPY OF THE SUPPLIE R ALSO PLACED. THE LD. AR RELIED ON THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT SUNDRY CREDITORS FOR A VALUE OF RS.78, 04,800/- ARE REFLECTING BUT IN ORIGINAL BALANCE-SHEET SUNDRY CREDITORS ARE REFLECTING FOR R S.14,47,335/- AND LIABILITY FOR LEASE ASSET WAS AT RS.46,30,564/-. FROM THE AFORESAID DIS CUSSION, WE FIND THAT AO HAS TREATED THE LIABILITY FOR LEAST ASSET AS INCOME WHICH WAS N OT EXPLAINED AT THE TIME OF ORIGINAL ASSESSMENT. HOWEVER, LD. CIT(A) HAS DELETED THE SAM E AS THE LIABILITY FOR LEASE ASSET WAS NOT EXISTING ON THE DATE OF BALANCE-SHEET BUT I N ACTUALITY IT WAS TOWARDS THE SUNDRY CREDITORS. BEFORE LD. CIT(A) ASSESSEE HAS SUBMITTED REVISED BALANCE-SHEET WHERE THE MISTAKE WAS CORRECTED AND FOR THE ADDITIONAL EVIDEN CE THE REMAND REPORT WAS ALSO OBTAINED. IN REJOINDER LD. DR HAS NOT BROUGHT ANYTH ING TO CONTROVERT THE FINDINGS OF LD. CIT(A). THEREFORE, IN OUR CONSIDERED VIEW, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A), HENCE, THIS GROUND OF REVENUES APPEAL IS DISMISSED . 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 03/ 06/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 03 / 06 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-7(2), P-7, CHOWRINGHEE SQUARE, 5 TH FLOOR, KOLKATA-69 2. /RESPONDENT-MR. ADEEL HASAN,38, MAELEOD STREET, KOL KATA-17 3. ) *+ , , - / CONCERNED CIT KOLKATA 4. , , -- / CIT (A) KOLKATA 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,