ACIT, Circle - 29, Kolkata, Kolkata V. M/s. Alexim Bags & Apparels, Kolkata

ITA 2043/KOL/2010

• Counselvise Citation: 204323514 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 03-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 12-11-2010
• Court: TRIBUNAL
• Department Lawyers: C K BHATTACHARYA
• Keywords: Assessment record
• Section: 154

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 2043/KOL/2010 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) A.C.I.T., CIRCLE-29, KOLKATA (,-*+/ RESPONDENT ) M/S.ALEXIM BAGS & APPARELS , KOLKATA (PAN : AAFFA 2661 Q) *+ . / '/ FOR THE APPELLANT: SHRI C.K.BHATTACHARYA ,-*+ . / '/ FOR THE RESPONDENT: NONE 0%1 . !# /DATE OF HEARING : 07.05.2012. 2' . !# /DATE OF PRONOUNCEMENT : 11.05.2012. '3 / ORDER . .. . ! ! ! !. .. . , '# PER SHRI C.D.RAO, AM THE ABOVE APPEAL IS FILED BY REVENUE AGAINST ORDER DATED 16.08.2010 OF THE LD. CIT-(A)-XVI, KOLKATA PERTAINING TO A.YR. 2005-06. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS RELATING TO DELETION OF RS.9,35,404/- ON ACCOUNT OF FDR OUT OF ADDITION MAD E BY AO OF RS.10,26,545/-. 3. NO ONE APPEARED ON BEHALF OF ASSESSEE AND WE CO NSIDER IT FIT TO DISPOSE OF THE SAME AFTER HEARING THE LD. DR. 4. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING THE SCRUTINY ASSESSMENT U/S 143(1)/154 OF THE I.T.ACT ASSESSING OFFICER HAS ADD ED AN AMOUNT OF INTEREST ON FDR TO THE EXTENT OF RS.10,26,545/- BY OBSERVING AS UN DER :- 2 IN THIS CASE, AUDIT POINTED OUT THAT ON SCRUTINY OF RELEVANT PROFIT AND LOSS A/C FOR THE ASSESSMENT YEAR 2005-06 REVEALED THAT AN AMOUNT OF RS.2,22,310.15 WAS CREDITED TOWARDS INTEREST ON FDRS. HOWEVER, THE RELEVANT TDS CERTIFICATE WAS SHOWING A PAYMENT OF RS.12,48,855/- ON THAT CONSENT PREVIOUS PROFITS AND LOSS A/C DID NOT CONSIDER SUCH INTEREST THOUGH ACCRUED. AS A RESULT, THERE HA D BEEN UNDER-ASSESSMENT OF INCOME FOR RS.10,26,545/-( 12,48,855 2,22,310) WITH CONS EQUENT UNDER-CHARGE OF TAX PLUS INTEREST VIA. 234-B FOR RS.3,86,162/- (35% OF 10265 45. S.C FOR 2.5%. THEREON AND 2% EDUCATIONAL CESS ON TOTAL AND INTEREST U/S.234DRS. 15,510/-. THEREFORE, NOTICE U/S 154 DATED 04-06-2007 WAS ISSUED AND SERVED ON THE ASSES SEE WITH. A PROPOSAL FOR RECTIFICATION OF THE SAID MISTAKE UNDER THE HEAD. I NTEREST ON FDRS. THE ASSESSEE NEITHER APPEARED NOR FILED ANY WRITTEN SUBMISSION AGAINST T HE NOTICE U/S. 154 OF THE INCOME TAX ACT, 1961. THEREFORE, AS THE MISTAKE IS APPARENT FR OM RECORDS AND AS POINTED OUT BY AUDIT, IT IS RECTIFIED U/S. 154 AND TAX IS REVISED AS UNDER: ADD : INTEREST ON FDR : AS PER TDS CERTIFICATE RS.12,48,855/- LESS : ALREADY CONSIDERED RS.2,22,310/- RS.10,26,5 45/- 4.1. ON APPEAL THE LD. CIT(A) AFTER DISCUSSING THE ASSESSEES SUBMISSIONS AND THE FACTS FROM THE ASSESSMENT RECORDS AND THE STATEMENT OF INTEREST OF RS.12,48,855/- ON FDR OF RS.35,00,000/- FOR THE ACCOUNTING YEARS 2001 -02, 2002-03, 2003-04 AND 2004-05 WHICH WAS RECORDED AT PARA NOS. 5 TO 10 OF THE IMPUGNED ORDER, THE LD. CIT(A) HAS SUSTAINED THE ADDITION OF RS.91,141/- AS AGAINST RS.10,26,545/- BY OBSERVING AS UNDER :- 11. I HAVE CONSIDERED THE SUBMISSION OF THE APPELL ANT AND PERUSED THE ORDER U/S 154 PASSED BY THE A.O. MAKING ADDITION OF RS.10,26,545/ - ON ACCOUNT OF INTEREST ON FDR. I HAVE ALSO GONE THROUGH THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2002, 31.03.2003, 31.03.2004 AND THE YEAR UNDER APPEAL AL ONG WITH COPIES OF LEDGER ACCOUNT OF BANK INTEREST AND THE COPIES OF BANK STATEMENT. THE REMAND REPORT SUBMITTED BY THE APPELLANT IS ALSO PERUSED AND CONSIDERED. ON PERUSA L OF ASSESSMENT RECORDS OF THE APPELLANT FOR A.Y. 2005-06, IT WAS OBSERVED BY THE A.O. THAT DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAD RECEIVED INTEREST O N FDR AMOUNTING TO RS.12,48,855/- AND THE TAX WAS DEDUCTED BY THE BANK. HOWEVER, AS P ER THE PROFIT AND LOSS ACCOUNT THE APPELLANT HAS CREDITED INTEREST OF RS.2,22,310/-. T HUS, THE A.O. WAS OF THE OPINION THAT THE APPELLANT HAS DECLARED LESS INCOME BY A SUM OF RS.10,26,545/- WHICH WAS ADDED BY HIM IN THE ORDER U/S 143(1)/154 OF THE ACT. DURING THE COURSE OF APPELLATE PROCEEDINGS, IT WAS CONTENDED BY THE APPELLANT THAT THE FDRS OF RS.35 LACS WERE TAKEN IN F.Y.2001- 02 AND SINCE THEN IT HAS PROVIDED THE INTEREST ON SUCH FDRS IN ITS FINANCIAL STATEMENT ON ACCRUAL BASIS. IT WAS FURTHER SUBMITTED BY THE APPE LLANT THAT IT HAS ALSO TAKEN LOAN FROM THE BANK FOR ITS BUSINESS PURPOSES AND THE INTEREST WAS PAID ON SUCH LOAN. THEREFORE, IN ITS BOOKS OF ACCOUNTS, THE APPELLANT HAS DEBITED TH E INTEREST PAID TO THE BANK AND CREDITED THE INTEREST RECEIVED/RECEIVABLE FROM THE BANK ON T HE FDRS. THE NET INTEREST WAS DEBITED TO THE PROFIT AND LOSS ACCOUNT IN THE RESPECTIVE YE ARS. ON PERUSAL OF COPY OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2002 AS WELL AS THE LEDGER ACCOUNT OF BANK INTEREST FOR THE FINANCIAL YEAR 2001-02, IT IS OBSERVED THAT INTEREST PAYABLE BY THE APPELLANT WAS RS.7,21,128/- AND INTEREST RECEIVABLE ON FDR WAS RS .2,53,344/-. THEREFORE, IN THE PROFIT 3 AND LOSS ACCOUNT, THE APPELLANT HAS DEBITED NET BAN K INTEREST OF RS.4,65,783/-. SIMILARLY, DURING THE FINANCIAL YEAR 2002-03, AS PER LEDGER AC COUNT THE GROSS INTEREST DEBITED WAS RS.11,04,140/- AND INTEREST PROVIDED AND CREDITED O N ACCOUNT OF INTEREST WAS OF RS.2,74,000/-. THUS, IN THE PROFIT AND LOSS ACCOUNT THE APPELLANT AHS DEBITED NET INTEREST OF RS.8,30,140/-. IN FINANCIAL YEAR 2003-04, THE IN TEREST PAYABLE WAS OF RS.11,71,097/- AND INTEREST PROVIDED ON ACCOUNT OF FDR WAS RS.4,06 ,059/-. THE NET INTEREST OF RS.7,65,038/- WAS DEBITED TO THE PROFIT AND LOSS AC COUNT. IN THIS MANNER ON ACCRUAL BASIS, THE APPELLANT HAS CREDITED INTEREST ON FDR AGGREGAT ING TO RS.9,35,404/- FROM FINANCIAL YEARS 2001-02 TO 2003-04. IN THE YEAR UNDER APPEAL 2003-04, THE INTEREST PAYABLE WAS OF RS.11,71,097/- AND INTEREST PROVIDED ON ACCOUNT OF FDR WAS RS.4,06,059/-. THE NET INTEREST OF RS.7,65,038/- WAS DEBITED TO THE PROFIT AND LOSS ACCOUNT. IN THIS MANNER ON ACCRUAL BASIS, THE APPELLANT HAS CREDITED INTEREST ON FDR AGGREGATING TO RS.9,35,404/- FROM FINANCIAL YEARS 2001-02 TO 2003-04. IN THE YEA R UNDER APPEAL THE APPELLANT AHS CREDITED INTEREST OF RS.2,22,310/- ON ACCOUNT OF IN TEREST ON FDR AND HAS DEBITED INTEREST OF RS.8,72,166/-. ON CAREFUL CONSIDERATION OF THE F ACTS AND PERUSAL OF PROFIT AND LOSS ACCOUNT AND COPIES OF LEDGER ACCOUNT, I AM OF THE O PINION THAT FROM FINANCIAL YEARS 2001-02 TO 2004-05 THE APPELLANT AHS CREDITED AND D ECLARED INTEREST ON FDR TO THE EXTENT OF RS.11,57,714/-. HOWEVER, AS PER THE TDS C ERTIFICATE THE TOTAL AMOUNT OF INTEREST WAS RS.12,48,855/-. THUS, IN THE YEAR UNDE R CONSIDERATION THE APPELLANT AHS DECLARED LESS INTEREST INCOME TO THE EXTENT OF RS.9 1,141/-. IN REMAND REPORT THE A.O. HAS DOUBTED THE CONTENTION OF THE APPELLANT THAT IT HAS PROVIDED THE INTEREST ON FDR IN ITS BOOKS OF ACCOUNTS ON ACCRUAL BASIS MAINLY FOR THE R EASON THAT IN THE AUDIT REPORT NOWHERE IT WAS MENTIONED THAT THE INTEREST DEBITED TO THE P ROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2002, 31.03.2003 AND 31.03.2004 WAS NET INTEREST FIGURE. THE A.O. WAS ALSO OF THE OPINION THAT IN THE YEAR UNDER CONSIDER ATION THE AUDITOR HAS TAKEN TWO SEPARATE FIGURES OF INTEREST IN THE PROFIT AND LOSS ACCOUNT BEING THE BANK INTEREST PAID AND THE INTEREST RECEIVED ON FDR AND HE HAS NOT TAKEN T HE NET FIGURE OF INTEREST AS CLAIMED BY THE APPELLANT FOR EARLIER YEARS. ON CAREFUL CONS IDERATION, I AM NOT INCLINED TO AGREE WITH THE A.O. BECAUSE HE AHS NOT MENTIONED THAT THE AMOUNT OF INTEREST DEBITED TO THE PROFIT AND LOSS ACCOUNT EARLIER YEARS WAS A GROSS A MOUNT OF INTEREST AND NOT THE NET AMOUNT AS CLAIMED BY THE APPELLANT. ON THE CONTRARY , ON PERUSAL OF COPIES OF LEDGER ACCOUNT, THE AMOUNT OF INTEREST DEBITED TO THE PROF IT AND LOSS ACCOUNT IN EARLIER YEARS WAS FOUND TO BE THE NET AMOUNT OF INTEREST. IN VIEW OF ABOVE, I CONFIRM THE ADDITION ON ACCOUNT OF INTEREST ON FDR TO THE EXTENT OF RS.91,1 41/- OUT OF THE TOTAL ADDITION OF RS.10,26,545/- MADE BY THE A.O. THE APPELLANT GETS RELIEF OF RS.9,35,404/-. THE GROUND NO.3 IS PARTLY ALLOWED. 4.2. AGGRIEVED BY THIS NOW THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING BEFORE US THE LD. DR APPE ARING ON BEHALF OF THE REVENUE RELIED ON ORDER OF AO. 6. AFTER HEARING THE LD. DR AND CAREFUL PERUSAL OF THE IMPUGNED ORDER AND MATERIALS AVAILABLE ON RECORD, WE FIND NO INFIRMITY IN THE ORDERS OF LD. CIT(A) WHO HAS ANALYSED THE ENTIRE FACTS OF INTEREST ACCRUED ON RS .35,00,000/- YEAR-WISE AND THEN GAVE 4 RELIEF TO ASSESSEE AND THE LD. DR ALSO COULD NOT CO NTRADICT THE OBSERVATIONS MADE BY LD. CIT(A) WHILE SUSTAINING THE ADDITION OF RS.91,141/- INSTEAD OF RS.10,26,545/-. THEREFORE WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) TO BE INTERFERED WITH. WE CONFIRM THE SAME AND DISMISS THE APPEAL OF REVENUE. 7. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 11.05.2012. SD/- SD/- , ,, , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 11.05.2012. R.G.(P.S.) '3 . ,4 5'4'6- COPY OF THE ORDER FORWARDED TO: 1. M/S.ALEXIM BAGS & APPARELS, 10A, TILJALA ROAD, KOLK ATA-700046. 2 A.C.I.T., CIRCLE-29, KOLKATA. 3. THE C.I.T. 4. CIT(A)-XVI, KOLKATA. 5. THE CIT(DR), KOLKATA BENCHES, KOLKATA -4 ,/ TRUE COPY, '3%0/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES