ACIT, Circle-43, Kolkata, Kolkata V. Ashok Kumar Poddar, Kolkata

ITA 2020/KOL/2014

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2178 (ITAT-KOLKATA)
• Duration Of Justice: 7 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 02-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Proportionate interest; Assessment record
• Section: 68; 144; 14A; 133(6); 250; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA BEFORE SRI SANJAY GARG, JUDICIAL MEMBER & SRI GIRISH AGRAWAL, ACCOUNTANT MEMBER I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 ACIT, Circle-43, Kolkata..........................................Appellant Vs. Ashok Kumar Poddar...........................................Respondent [PAN: AFTPP 2389 D] Appearances by: Sh. Sudipta Guha, CIT(D/R), appeared on behalf of the Revenue. Sh. A.K. Tibrewal, FCA, appeared on behalf of the Assessee. Date of concluding the hearing : June 8 th , 2022 Date of pronouncing the order : July 28 th , 2022 ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the Revenue against the order of the Commissioner of Income Tax (Appeals) Central-III, Kolkata [hereinafter referred to as ld. ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’) dated 14.08.2014 for the AY 2001-02. 2. The Revenue in this appeal has taken the following grounds of appeal: “(i) That on the facts and in the circumstances of the case Ld. CIT(A) has erred in deleting the addition on unsecured loan as unexplained cash credit u/s 68, partially by Rs.1,23,68,883/-. I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 2 of 9 (ii) That on the facts and in the circumstances of the case Ld. CIT(A) erred in disallowing the interest @ 18% P.a. by accepting pro-rata basis. (iii) That on the facts and in the circumstances of the case Ld. CIT(A) has erred in deleting the entire disallowance of business loss of Rs.5,00,00,000/- when the Ld. CIT(A) was well aware about the facts of the case that the assessee failed to submit any Books of Accounts and documents. Without Books of Accounts and documents the LD. CIT(A) erred in allowing total business loss as claimed by the assessee. (iv) The Ld. CIT(A) erred in restricting the disallowance made u/s 14A of the interest expenditure to Rs. 15,41,200/- on the basis of calculation given by the assessee. (v) That the petitioner craves leave to add, amend and withdraw any ground of appeal at the time of hearing.” 3. Before proceeding to adjudicate the grounds taken in this appeal, it is pertinent to mention here that this Tribunal vide order dated 01.11.2019 has noted that page no. 2 of the assessment order was missing in the file. The Department was asked to supply the copy of the complete assessment order. However, the Ld. D/R vide letter dated 06.06.2022 has submitted that the issue was highlighted to the concerned authorities where from the concerned Assessing Officer has informed that the complete set of the assessment record for AY 2001-02 in the case of the assessee was not available in his office. It has been further stated that even the Ld. A/R in this case has stated that even the assessee does not have the complete assessment order in his possession. In view of this, we proceed to adjudicate the present appeal with the available records. Ground No. 1: 4. During the assessment proceedings, Ld. AO noticed that the assessee had taken unsecured loan of Rs. 50,92,49,136/-. On I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 3 of 9 being asked to explain the aforesaid loan transaction, the Ld. A/R showed his inability to produce the books of account and other details since the office of the assessee was under police seal. The assessee was declared as the defaulter by the Calcutta Stock Exchange. Since the assessee could not furnish the required details, the Ld. AO proceeded to frame the assessment u/s 144 of the Act on the basis of information available on record. 4.1. The Ld. AO, from the available record, found that the assessee during the year had taken fresh loan to the extent of Rs. 4,46,42,611/- and since the assessee could not verify the aforesaid loan transactions, therefore, the Ld. AO added the aforesaid loan amount as unexplained cash credit u/s 68 of the Act. 5. Being aggrieved by the above order of the Ld. AO, the assessee preferred appeal before Ld. CIT(A). During the appellate proceedings before the Ld. CIT(A), Ld. A/R of the assessee furnished the details of some of the loan creditors giving their names, addresses and PAN numbers etc. It was also submitted that the loan creditors were not cooperating in giving the confirmation etc. due to the fact that the police case was registered against the assessee. On the request of the assessee, the Ld. CIT(A) called for the remand report from Ld. AO in respect of the aforesaid loan credits. The Ld. AO issued notices u/s 133(6) of the Act to all the parties whose addresses, PAN etc. were furnished by the assessee. Notices could be served on a few of them and further, replies were received also from a few of them. In some cases, the assessee could not furnish the names and addresses of the parties, in some cases, no replies were received from the concerned parties I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 4 of 9 and in some cases, there was a difference of the confirmed amount as against the loan amount declared by the assessee. In some cases, the concerned parties confirmed the loan transaction and the amount of loan also tallied. The Ld. CIT(A) prepared a chart in this respect of all the loan confirmations, which for the sake of ready reference is reproduced as under: Sl. No. Name Amount Address whether furnished PAN whether furnished Remand Verification V Unexplained / Difference (l) (2) (3) (4) (5) (6) (7) 1 M/s Dalmia & Sons 8,13,829 Yes Yes Confirmed, and, amount matches. 0 2 M/s Narayan Kumar Dhanuka (HUF) 3,00,000 Yes Yes Confirmed, and, amount matches. 0 3 M/s R G Sales Pvt Ltd 50,00,000 Yes Yes No reply 50,00,000 4 M/s Rohan Trading Co Pvt Ltd 2,50,000 Yes Yes Confirmed, and, amount matches. 0 5 M/s Binod Kumar Bhartia 6,50,000 Yes Yes Confirmed, but amount is at 4,50,000. Difference accepted by appellant. 2,00,000 6 M/s. Dadi Ma Steels India Pvt. Ltd. 2,50,000 Yes Yes No reply 2,50,000 7 M/s. Anand Agency Pvt.Ltd. 2,00,000 Yes Yes No reply 2,00,000 8 M/s Rup Chand Saraf 9,00,000 Yes Yes Confirmed, and, amount matches. 0 9 M/s GoelCottex Ltd. 20,00,000 Yes Yes No reply 20,00,000 10 M/s Ram Narayan Singh 8,00,000 Yes Yes No reply 8,00,000 11 M/s Ispat Udyog 10,00,000 Yes Yes Denied 10,00,000 12 M/s Precot Dealcomm Pvt. Ltd. 5,00,000 Yes Yes Confirmed, and, amount matches. 0 13 M/s Shiva Enterprises 5,50,000 Yes Yes Denied 5,50,000 14 M/s Ajay Enterperises 9,00,000 Yes Yes No reply 9,00,000 15 M/s Narendra Kumar Bagaria 2,00,000 Yes Yes Denied 2,00,000 16 M/s Dinesh Kumar Gupta 5,00,000 Yes Yes No reply 5,00,000 17 M/s Biswanath Poddar 3,25,000 Yes Yes Denied 3,25,000 I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 5 of 9 18 M/s Bhagwati Prasad Agarwal 50,000 Yes Yes No reply 50,000 19 M/s Manish Kumar Agarwal 50,000 Yes Yes No reply 50,000 20 M/s Badri Prasad Lakkar (HUF) 25,20,000 Yes Yes Confirmed, and, amount matches. 0 21 M/s Prakash Chand Lakkar(HUF) 6,20,000 Yes No Confirmed, and, difference explained. 0 22 Prakash Chand Lakkar 21,00,000 Yes No Confirmed, and, difference explained. 0 23 Kanta Lakkar 6,10,000 Yes No Confirmed, and, amount matches. 0 24 Mnnju Lakkar 5,00,000 Yes No Confirmed, and, amount matches. 0 25 Sabita Lakkar 2,00,000 Yes No Confirmed, and, amount matches. 0 26 Kamal Kant Lakkar 14,80,000 Yes No Confirmed, and, amount matches. 0 27 Aravali Sales Pvt. Ltd. 2,50,000 Yes No No reply 2,50,000 28 Prasad Trading Co. Pvt. Ltd. 9,00,000 Yes No Confirmed, and, amount matches. 0 29 Pushpa Devi Poddar 2,25,000 Yes No Confirmed, and, amount matches. 0 30 PoddarStock Proking Pvt. Ltd. 3,47,087 Yes No No reply 3,47,087 31 Manoj Kumar Agarwal 2,00,000 Yes No No reply 2,00,000 32 Krishan Gopal Khaitan 9,60,000 No No - 9,60,000 33 Neelam Khaitan 9,75,000 No No - 9,75,000 34 Bina Rani Surekha 7,00,000 No No - 7,00,000 35 Bishwambhar Lai Saroagi 1,01,875 No No - 1,01,875 36 Rashmi Bharuka 1,50,000 No No [Address and PAN given later on in Rejoinder reply]. 1,50,000 37 Sarda Devi Gupta 5,00,000 No No [Address and PAN given later on in Rejoinder reply]. 5,00,000 38 Binod Kumar Bhartia(HUF) 1,00,000 No No - 1,00,000 39 Sushil Kumar Akash Kumar(HUF) 3,00,000 No No - 3,00,000 40 Shanti Devi Dhanuka 1,50,000 No No [Address and PAN given later on in Rejoinder reply]. 1,50,000 41 Ram Kishan Dhanuka 7,50,000 No No [Address and PAN given later on in Rejoinder reply]. 7,50,000 42 Sanjay Bidhawakta (HUF) 7,50,000 No No V 7,50,000 I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 6 of 9 43 BhawnaAgarwa; 5,00,000 No No [Address and PAN given later on in Rejoinder reply]. 5,00,000 44 Dipika Kedia 10,00,000 No No - 10,00,000 45 VanditaAgarwal 15,64,820 No No [Address and PAN given later on in Rejoinder reply]. 15,64,820 46 Banwari Lai Gangwal 20,00,000 No No - 20,00,000 47 Jugal kishore Bahete(HUF) 4,00,000 No No - 4,00,000 48 Chandrakala Baheti 3,00,000 No No - 3,00,000 49 Dhanpat Singh Lodha(HUF) 4,00,000 No No - 4,00,000 50 Rajendra Kumar Dalmia 10,00,000 No No - 10,00,000 51 Shiv Shankar Agarwal 2,50,000 No No - 2,50,000 52 K.G. Silk 20,00,000 No No - 20,00,000 53 Chidimar& Associates 21,00,000 No No - 21,00,000 54 Dibya Jyoti Ltd. 8,50,000 No No - 8,50,000 55 Rama Tibrewal 10,00,000 No No - 10,00,000 56 Savoy Enterprises Lid. 6,50,000 No No - 6,50,000 4,46,42,611 3,22,73,782 5.1. In view of the above chart, the Ld. CIT(A) deleted the addition in cases where the concerned parties had confirmed the transaction and the loan amount also matched. In other cases where there was a difference of the amount confirmed by the concerned parties as against the loan amount declared by the assessee, Ld. CIT(A) added the difference. In case where there was no reply or notice could not be issued for want of address etc., the Ld. CIT(A) confirmed the addition. After reconciliation of the entire figures, out of the total loan amount of Rs. 4,46,42,611/-, the Ld. CIT(A) confirmed the addition of Rs. 3,22,73,782/- and deleted the addition of the remaining amount as the same being confirmed by the concerned parties in the independent inquiries conducted by the Ld. AO by way of issuing summons u/s 133(6) of the Act. It is pertinent to note here, in some cases Ld. A/R had furnished the I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 7 of 9 PAN, address of the parties at a later stage in the rejoinder to the remand report which was rejected by the Ld. CIT(A). However, the assessee has not filed any appeal against the said order of the Ld. CIT(A). The Ld. D/R could not point out any defect or error in the order of the Ld. CIT(A) warranting our interference in this respect. Therefore, the order of the Ld. CIT(A) is upheld on this issue. Ground No. 2: 6. Vide ground no. 2, the Revenue has agitated the action of the Ld. CIT(A) in deleting the disallowance out of interest expenditure, made by the Ld. AO on the aforesaid loan amount. The Ld. CIT(A) has deleted the proportionate interest up to the extent the addition on account of the loan amount has been deleted. The Ld. CIT(A) has recomputed the interest on the addition confirmed at Rs. 3,22,73,728/- in respect of loan amount and accordingly restricted addition on account of interest to Rs. 5,69,693/-. There is no infirmity in the order of Ld. CIT(A) in this respect also. Ground No. 3: 7. Vide ground no. 3, the Revenue has agitated the action of the Ld. CIT(A) in deleting the ad hoc disallowance made by the Ld. AO out of the business loss claim to by the assessee. Ld. CIT(A) in the impugned order has observed that the Ld. AO had made the aforesaid ad hoc disallowance only on estimation basis without giving any reasoning in this respect. The Ld. CIT(A) has further noted that the disallowance has been made just on mere presumption only that there was neither material nor reason nor rational for the Ld. AO to make the aforesaid disallowance. He further noted that even the accounts of the assessee have been I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 8 of 9 audited as required u/s 44AB of the Act. He, therefore, deleted the disallowance so made by the Ld. AO. After hearing the Ld. representative of both the parties, we do not find any reason to interfere into the order of the Ld. CIT(A). Ground No. 4: 8. Vide ground no. 4, the Revenue is aggrieved by the action of Ld. CIT(A) restricting the disallowance made u/s 14A of the Act of interest expenditure to Rs. 15,41,200/- as against the disallowance of Rs. 1,06,03,866/- made by the Ld. AO. In this case, the Ld. AO had made the disallowance of entire interest expenditure whereas the Ld. CIT(A) has restricted the disallowance as per the working given by the assessee as per Rule 8D of the Income Tax Rules, 1962 for computing the disallowance u/s 14A of the Act. In view of this, we do not find any infirmity in the order of the Ld. CIT(A) on this issue also. 9. In view of the above discussion, we do not find any merit in the present appeal of the Revenue and the same is accordingly dismissed. 10. In the result, the appeal of the Revenue is, hereby, dismissed. Order is pronounced in the open court on 28.07.2022. Sd/- Sd/- [Girish Agrawal] [Sanjay Garg] Accountant Member Judicial Member Dated: 28.07.2022 Bidhan (P.S.) I.T.A. No. 2020/Kol/2014 Assessment Year: 2001-02 Ashok Kumar Poddar. Page 9 of 9 Copy of the order forwarded to: 1. ACIT, Circle-43, Kolkata. 2. Ashok Kumar Poddar, 6, Lyons Range, Kolkata-700 001. 3. CIT(A)- Central-III, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches, Kolkata