I.T.O Wd - 3(2),Purulia, Purulia V. M/s Chandra Oil Industries, Purulia

ITA 2071/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4461 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 05-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: PINAKI MUKHERJEE
• Keywords: Assessment record
• Section: 133(6); 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI WASEEM AHMED, AM & SHRI S.S.VISWANETHRA RAVI, JM ./ ITA NO.2071/KOL/2013 ( / ASSESSMENT YEAR :2009-2010) INCOME TAX OFFICER, WARD-3(2), PURULIA AT INCOME TAX OFFICE, SOUTH LAKE ROAD, P.O.&DIST- PURULIA, PIN-723101 VS. M/S CHANDRA OIL INDUSTRIES, N.C.DASGUPTA ROAD, PO&DIST-PURULIA, PIN- 723101 ./ ./PAN/GIR NO. : AAEFC 1501 A ( /APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI S. DASGUPTA /ASSESSEE BY : SHRI PINAKI MUKHERJEE / DATE OF HEARING : 01/06/2016 /DATE OF PRONOUNCEMENT 15/07/2016 / O R D E R PER WASEEM AHMED (A.M) : THE REVENUE HAS PREFERRED THIS APPEAL AGAINST THE ORDER DATED 1-5- 2013, PASSED BY LD. CIT(A), ASANSOL, RELATING TO AS SESSMENT YEAR 2009- 2010. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN GROUNDS OF APPEAL IS THAT THE LD. CIT(A), ASANSOL HAS ERRED IN LAW AND ON FAC TS BY ALLOWING THE RELIEF OF RS.35,58,548/- DISALLOWED BY THE AO U/S. 68 ON A CCOUNT OF BOGUS SUNDRY CREDITORS AS THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE THAT THE PAYMENTS WERE MADE THROUGH BROKER AGENTS. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM AND ENGAGED IN THE MANUFACTURING B USINESS OF MUSTARD OIL. THE ASSESSEE FILED ITS E-RETURN DECLARING AN I NCOME OF RS.41,880/-. ITA NO.2071/KOL/13 M/S CHANDRA OIL INDUSTRIES 2 THEREAFTER, NOTICES WERE ISSUED U/S 143(2), & 142(1 ) OF THE ACT ALONG WITH QUESTIONNAIRE FOR MAKING SCRUTINY ASSESSMENT. THE A SSESSEE HAS SHOWN SUNDRY CREDITORS OF RS.35,58,548/- AS ON 31-3-2009 IN ITS BALANCE SHEET. THE DETAILS OF WHICH ARE AS UNDER :- SL.NO. NAME OF THE PARTIES AMOUNT (IN RS.) 1. M/S RACHNA DALL UDYOG 6,94,194 2. M/S AMAN TRADING CO. 4,48,239 3. M/S GOURAV TRADING CO. 3,29,460 4. SURANA BROTHERS 3,92,523 5. M/S SHANTI UDYOG 3,64,790 6. M/S NABNEET BROTHERS 3,12,120 7. M/S KISHANLAL SAHU PARTIES 3,58,591 8. M/S JITENDRA KR & CO. 3,23,324 9. M/S GHANSHYAM DAS GUPTA 3,35,307 THE AO DURING THE ASSESSMENT PROCEEDINGS ISSUED NOT ICE U/S.133(6) OF THE ACT BUT NONE REPLIED EXCEPT ONLY ONE PARTY I.E. M/S JITENDRA KR & CO. COMPLIED TO THE NOTICE WITH THE SUBMISSION THAT THE PAYMENT FOR RS.3,32,324/- WAS RECEIVED FROM ASSESSEE THROUGH RT GS ON 9-3-2009. ACCORDINGLY, THE AO OPINED THAT THE LIABILITIES TOW ARDS THE SUNDRY CREDITORS SHOWN BY THE ASSESSEE ALONG WITH JITENDRA KR & CO. FOR RS.3,23,324/- ARE BOGUS. HOWEVER, THE ASSESSEE SUBMITTED TO THE AO TH AT ALL THE PAYMENTS HAVE BEEN MADE FOR THE AFORESAID LIABILITY AMOUNTIN G TO RS.35,58,548/- DURING THE SUBSEQUENT FINANCIAL YEAR 2009-2010 AND FURNISHED THE DETAILS OF THE PAYMENT MADE TO THE AFORESAID PARTIES THROUG H BANKING CHANNEL OF CENTRAL BANK OF INDIA, PURULIA BRANCH KOLKATA. THE AO ISSUED NOTICE TO THE CENTRAL BANK OF INDIA U/S 133(6) OF THE ACT FOR CONFIRMING THE PAYMENT AS CLAIMED BY THE ASSESSEE. ON REPLY, IT WAS REVEAL ED THAT THE PAYMENTS WERE MADE TO THE FOLLOWING PARTIES :- ITA NO.2071/KOL/13 M/S CHANDRA OIL INDUSTRIES 3 AS A RESULT, THE AO OBSERVED THAT THE CREDITORS SHO WN IN THE BOOKS OF ACCOUNT AND THE PARTIES TO WHOM PAYMENTS WERE MADE WERE NOT MATCHING AT ALL. ACCORDINGLY, THE AO SOUGHT CLARIFICATION FR OM THE ASSESSEE. IN COMPLIANCE TO THE NOTICE THE ASSESSEE SUBMITTED ALL THE PURCHASES FROM THE AFORESAID PARTIES AS DISCLOSED IN TABLE-1 ARE M ADE THROUGH THE AGENT. THE LIST OF THE AGENTS IS FURNISHED AFORESAID IN TA BLE NO.2. THE ASSESSEE USED TO MAKE PAYMENT TO THESE AUTHORISED AGENCIES F OR THE PURCHASE OF THE GOODS FROM THE SUPPLIERS. HOWEVER, THE AO DISRE GARDED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT ASSESSEE FAILED TO FURNISH THE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM, AND, THEREFORE, GENUINENESS OF THE TRANSACTION FOR THE SUNDRY CREDI TORS WAS NOT ESTABLISHED. ACCORDINGLY, THE AO DISALLOWED A SUM O F RS.35,58,548/- ITA NO.2071/KOL/13 M/S CHANDRA OIL INDUSTRIES 4 SHOWN AS CREDITORS IN THE BALANCE SHEET AND ADDED T O THE TOTAL INCOME OF THE ASSESSEE AS CASH CREDIT IN THE BOOKS OF ACCOUNT S U/S 68 OF THE ACT. AGGRIEVED ASSESSEE PREFERRED APPEAL TO LD. CIT(A), WHO HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER :- 6. I HAD CONSIDERED ALL MATERIALS BROUGHT TO RECORD . THE FOREMOST POINT TO BE CONSIDERED IS THAT THE CREDITORS ARE TR ADE CREDITORS AND NOT LOAN CREDITORS. THE FIGURE IS NOT THE ENTIRE TR ANSACTION THAT HAS BEEN MADE WITH THESE PERSONS. THE MAIN FACT TO BE C HECKED IS HOW SUMS ARE PAID TO TRADERS. THE TRANSACTION WITH THEM IS NOT TO BE CONFIRMED WITH DISCHARGE OF THESE CREDITS BUT WITH DISCHARGE OF ALL PURCHASE TRANSACTIONS. I HAD MADE VERIFICATION RAND OMLY OF TRANSACTIONS FROM THE PURCHASE LEDGER AND BANK STAT EMENT (ALREADY WITH ASSESSING OFFICER IN THE ASSESSMENT RECORDS). IT EMERGES THAT :- A. ON 20.11.2008 AND 03.12.2008 TWO CHEQUES FOR RS. 2,50,000/- AND RS.2,24,198/- WAS CLAIMED AS PAYMENT IN ACCOUNT OF M/S RACHANA DALL UDYOG. IT CAN BE SEEN FROM BANK STATEM ENT THAT THESE ARE CLEARED IN NAME OF SHREE MAHABIR ENTERPRISES RE SPECTIVELY. B. TO M/S AMAN TRADING CO. RS.2,00,000/-, RS.2,66,3 95/-, RS.2,00,000/- AND RS.2,00,000- WAS RESPECTIVELY PAI D AS PER PURCHASE LEDGER ON 27.01.2009, 09.02.2009, 18.03.20 09 AND 26.03.2009. THE LAST TWO ARE REFLECTED IN BANK STAT EMENT ON RESPECTIVE DAYS AS CLEARED TO SHREE MAHABIR ENTERPR ISES. THE FIRST TWO ARE TRANSFER ENTRIES, DETAILS NOT ENTERED BY BA NK, AND DEBIT MADE BY CHEQUE. FROM THE ABOVE IT EMERGES CLEARLY THAT PAYMENTS ARE INDEED MADE TO BROKERS. THIS IS THE METHOD OF CONDUCT OF BUSINE SS. ANY SUSPICION ON THE SUNDRY CREDIT SHOULD NATURALLY SHO ULD HAVE LEAD TO SUSPICION ON OTHER TRADE TRANSACTION. WHEN OTHER TR ANSACTION ONE TAKEN CORRECT BY THE ASSESSING OFFICER AND SINCE PA TTERN OF ACCOUNTING D TRANSACTION OF BUSINESS IS TRANSPARENT , THERE IS NO GROUND TO SUSTAIN THE ADDITION. I ACCORDINGLY DIREC T THE ASSESSING OFFICER TO DELETE THE ADDITION SINCE I HOLD THAT TH E SUM PAID TO MAHABIR TRADERS AND RAM ENTERPRISES REPRESENTS DISC HARGE OF PAYMENT TO TRADING PARTNERS. THE GROUND IS ALLOWED. ITA NO.2071/KOL/13 M/S CHANDRA OIL INDUSTRIES 5 BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 4. LD. DR BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF AO AND SUBMITTED THAT THE LD. AR HAS FILED FRESH EVIDENCE FOR CLAIMING THE BENEFIT AND, THEREFORE, IT SHOULD BE RESTORED BACK TO THE A O FOR FRESH ADJUDICATION. 5. ON THE OTHER HAND, LD. AR SUPPORTED THE ORDER OF LD. CIT(A) AND FILED A PAPER BOOK COMPRISING THE PAGES FROM 1 TO 67. LD. AR DREW OUR ATTENTION ON PAGE 10 & 11 OF THE PAPER BOOK WHERE T HE DETAILS OF SUPPLIERS/SELLERS/SUNDRY CREDITORS ALONG WITH THEIR RESPECTIVE AGENTS WERE PLACED. THE ASSESSEE ALSO SUBMITTED THE DETAILS OF PAYMENT ALONG WITH THE DATE AND AMOUNT WHICH WAS PAID TO THE AGENTS ON BEHALF OF THE SUNDRY CREDITORS. IN SUPPORT OF HIS CLAIM LD. AR HAS ALSO SUBMITTED THE CONFIRMATION FROM THE SUNDRY CREDITORS WHICH ARE PL ACED ON PAGES 32 OF THE PAPER BOOK. LD. AR ALSO DREW OUR ATTENTION ON P AGE 32 TO 67 WHERE THE SIMPLE COPIES OF THE BILLS, CONSIGNMENT, SALES BILLS/ ROAD PERMIT WERE PLACED. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT THE AO HAS MADE THE ADDITION ON SUNDRY CREDITORS AS BOGUS LIABILITY U/S 68 OF THE IT ACT ON THE GROUND THAT N OTICE ISSUED U/S.133(6) OF THE ACT WERE NOT RESPONDED AND THE CONFIRMATION OBT AINED FROM THE BANK OF THE ASSESSEE U/S.133(6) OF THE IT ACT WERE NOT M ATCHING. HOWEVER, LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT PAYM ENTS WERE MADE THROUGH BANKING CHANNEL AND THROUGH THE AGENTS OF T HE SUPPLIER/SUNDRY ITA NO.2071/KOL/13 M/S CHANDRA OIL INDUSTRIES 6 CREDITORS. NOW, THE QUESTION BEFORE US ARISES SO AS TO WHETHER THE DELETION MADE BY LD. CIT(A) IN THE AFORESAID FACTS AND CIRCUMSTANCES IS JUSTIFIED. WE FIND THAT THE ASSESSEE HAS PRODUCED A LL THE SUPPORTING DOCUMENTS IN SUPPORT OF THE PURCHASES MADE FROM THE SUPPLIERS, CONFIRMATION ABOUT THE BROKERS APPOINTED BY THE SUP PLIERS AND THE PAYMENT BASED ON BANKING CHANNEL. WE FIND NO INFIRM ITY IN THE ORDER OF LD. CIT(A) AND WE UPHOLD. HENCE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15/07/2 016. SD/ - (S.S.VISWANETHRA RAVI) SD/ - (WASEEM AHMED) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER KOLKATA ; %& DATED 15/07/2016 . .()/PKM/*DKP , . / PS #$% &% / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, KOLKATA 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 0 ( ) / THE CIT(A), KOLKATA 4. 0 / CIT 5. 123 4 , 4 , / DR, ITAT, KOLKATA 6. 35 / GUARD FILE. 1 //TRUE COPY//