Madhu Enterprises, Kolkata V. ITO, Ward - 45(2), Kolkata

ITA 1980/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2675 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2010
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 23-11-2009
• Court: TRIBUNAL
• Department Lawyers: P KOLHE
• Assessee Lawyers: O P BAID
• Keywords: Bogus purchase; Opportunity of being heard; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C . D. RAO, AM] I.T.A. NO.1980 /KOL/2009 ASSESSMENT YEAR: 2005-06 MADHU ENTERPRISES -VS- INCOME-TAX OFFICER, WD- 45(2), KOLKATA (PA NO.AAFFM 3006 M) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI O. P. BAID RESPONDENT BY : SRI P. KOLHE O R D E R PER D. K. TYAGI, JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 05.10.2009 FOR ASSESSMENT YEA R 2005-06. 2. GROUND NO. 1 RELATES TO SUSTENANCE OF ADDITION O F RS.20,000/- OUT OF RS.38,251/- ON ACCOUNT OF BOGUS PURCHASES, UNDISCLOSED SALES AN D UNDISCLOSED INCOME. THE FACTS OF THE CASE ARE THAT THE AO EXAMINED THE PURCHASES MAD E BY THE ASSESSEE WITH REFERENCE TO ACCOUNTS OF THREE PARTIES. THE AO NOTICED THAT IN THE CASE OF M/S. S. R. SARI EMPORIUM THE PURCHASE RECORDED BY THE ASSESSEE IS MORE BY RS .8838/- ON COMPARISON WITH THE PARTY. THEREFORE, HE HELD THAT THE ASSESSEE RECORD ED EXCESS PURCHASES AND MADE AN ADDITION OF RS.8838/- HOLDING THIS AS BOGUS PURCHAS ES. IN THE CASE OF LAKSHMI SARI EMPORIUM , THE AO HOLD THAT THE PARTY DISCLOSED SAL ES HIGHER BY RS.21,407/-. THE AO, THEREFORE, HELD THAT THE ASSESSEE FAILED TO RECORD THE PURCHASE MADE TO THIS EXTENT IN THE BOOKS OF ACCOUNT AND HELD THAT THE ASSESSEE SOLD TH IS UNRECORDED PURCHASES AND MADE AN ADDITION OF RS.21,407/- AS UNDISCLOSED SALES. IN T HE CASE OF M/S. GITA STORES THE SALE DISCLOSED BY THE ASSESSEE WAS HIGHER AND HE ASSESS ED THE DIFFERENCE OF RS.5306/- AS UNDISCLOSED INCOME SINCE THE SALES IS NOT CONFIRMED BY THE PARTY. IN APPEAL, THE LD. CIT(A) RESTRICTED THE ADDITION TO RS.20,000/- AND G AVE RELIEF OF RS.18,251/-. AGGRIEVED BY THIS ORDER, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT DESPITE THE FACT THAT RECONCILIATION STATEMENT WAS FILED BEFORE THE LD. CIT(A) IN RESPECT OF THE DISCREPANCY FOUND IN RESPECT OF THREE PARTIE S THE LD. CIT(A) SUSTAINED THE 2 ADDITION TO RS.20,000/-. SINCE THE RECONCILIATION STATEMENT FILED BEFORE HIM THE LD. CIT(A) SHOULD HAVE BEEN GIVEN FULL RELIEF TO THE AS SESSEE. 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LD. CIT(A). 5. AFTER HEARING BOTH THE PARTIES AND CAREFULLY PER USING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE LD. CIT(A) WHILE SUSTAININ G THE ADDITION TO RS.20,000/- HAS OBSERVED AS UNDER : THE APPELLANT SUBMITTED RECONCILIATION AND STATED THAT VARIATION IN THE ACCOUNT IS ON ACCOUNT OF DIFFERENCE IN ACCOUNTING OF DISCOUNT AND GOODS RETURNED. HOWEVER, THE APPELLANT FAILED TO FURNISH SUPPORTING EVIDENCE FOR THIS CONTENTION. CONSIDERING THE DISCREPANCIES NOTICED BY THE A.O IN THE ACCOUNTS, T HE ADDITION OF RS.20,000/- WOULD MEET THE ENDS OF JUSTICE. THE ADDITION TO THE EXTE NT OF RS.20,000/- IS SUSTAINED. THE APPELLANT GETS A RELIEF OF RS.18,251/-.} WE HOWEVER, FEEL THAT THE ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO FILE EVIDENCE IN SUPPORT OF ITS RECONCILIATION STATEMENT TO EXPLAIN THE DISCREPANCIES FOUND BY THE AO AND FOR THIS, THE MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER AFFORDING THE ASSESSEE REASONABL E OPPORTUNITY OF BEING HEARD. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO. 2 RELATES TO SUSTENANCE OF DISALLOWAN CES ON ACCOUNT OF CERTAIN EXPENSES AMOUNTING TO RS.64,000/-. FACTS IN BRIEF ARE THAT THE AO MADE THE ESTIMATED ADDITIONS ON ACCOUNT OF ELECTRICITY EXPENSES, TELEP HONE EXPENSES, DISCOUNT & BROKERAGE, GENERAL EXPENSES, DEWALI EXPENSES, TRAVELING EXPENS ES COOLIE & CARTAGE EXPENSES AS THE ASSESSEE EITHER FAILED TO FURNISH SUPPORTING EV IDENCE OR CLAIMED EXCESSIVE AND UNREASONABLE AND/OR THE EXPENSES WERE UNVERIFIABLE AND MAINTAINED SELF MADE VOUCHERS. IN APPEAL, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO RS.65,000/- AND GAVE RELIEF TO THE ASSESSEE A SUM OF RS.67,786/-. AGGRI EVED BY THE SAID ORDER, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE CLAIMED EXPENSES INCURRED IN COURSE OF BUSINESS ON ACCOUNT OF ELECTRICITY EXPENSES, TELEPHONE EXPENSES, DISCOUNT & BROKERAGE, GENERAL EXPENSES, DEWALI EXPENSES, TRAVELING EXPENSES COOLIE & CARTAG E EXPENSES. THE AO MADE THE ESTIMATED DISALLOWANCE IN ABSENCE OF PROPER EVIDENC E MAINTAINED BY THE ASSESSEE. THE LD. CIT(A) IN APPEAL, TO MEET THE ENDS OF JUSTICE, RESTRICTED THE DISALLOWANCE TO RS.65,000/- AS THE QUANTUM OF DISALLOWANCE MADE BY THE AO WAS ON HIGHER SIDE. AT 3 THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRODUCE ANY COGENT MATERIAL TO CONTROVERT THE ABOVE FINDING OF THE LD. CIT(A) AND IN ABSENCE OF THE SAME, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF THE ASSESSEE IS D ISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. 9. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23. 4.10 SD/- SD/- (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23RD APRIL, 2010 COPY TO : 1. M/S. MADHU ENTERPRISES, C/O BAID & CO., CHARTERED A CCOUNTANTS, 2, ROWLAND ROAD, FLAT GC, BLOCK F, GR. FLOOR, MANGALAM APARTM ENT, KOLKATA-20. 2. ITO, WARD-45(2), KOLKATA 3. CIT(A), KOLKATA. 4. CIT, KOLKATA. 5. D.R., ITAT, KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT., KOLKATA