DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Jayantika Tea Co. Ltd, Kolkata

ITA 2091/KOL/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7881 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 19-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KALYAN NATH
• Assessee Lawyers: B K CHATURBEDI
• Keywords: Unexplained cash credit
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER ITA NO. 2091 /KOL/ 2010 ASSESSMENT YEAR: 2005 - 06 DCIT, CIRCLE - 4, P - 7, CHOWRINGHEE SQUARE, 8 TH FLOOR, KOLKA T A 700 069 / V/S . M/S. JAYNTIKA TEA CO. LTD. 4, INDIA EXCHANGE PLACE, KOLKATA 700 001 [ PAN NO.AAACJ 9738 P ] / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI KALYAN NATH, JCIT, DR / BY RESPONDENT SHRI B.K. CHATURBEDI, FCA / DATE OF HEARING 04 - 12 - 2014 / DATE OF PRONOUNCEMENT 04 - 12 - 2014 / O R D E R PER SHAMIM YAHYA , ACCOUNTANT M EMBER : - THIS A PPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - IV, KOLKATA ( CIT(A) FOR SHORT) DATED 27 - 01 - 2010 AND PERTAINS TO ASSESSMENT YEAR 2005 - 06. GROUND OF APPEAL IS AS UNDER: - 1. THAT TON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A), KOLKATA HAS ERRED IN LAW IN DIRECTING THE AO TO DELETE THE AD DITION OF RS.90,97,200/ - UNDER THE HEAD INCOME FROM OTHER SOURCE S ALLOWING THIS TO BE THE RECEIPT FROM SALE OF JEWELLERY WITHOUT APPRECIATING THE FACT THA T SO CALLED PURCHASER OF THE JEWELLERY REPEATEDLY FAILED TO PRODUCE THE BOOKS OF ACCOUNT PARTICULARLY PURCHASE REGISTER AND STOCK REGISTER WHEREIN SUCH PURCHASES ARE COMPLETELY TO BE ENTERED AND ALSO DISREGARDING THE FACT THAT MEMBERS OF THE FAMILY OF THE PURCHASER ARE ALSO INVOLVED IN THE TRANSACTION. ITA NO.2091/KOL/2010 A.Y. 2005 - 06 DCIT CIR - 4, KOL. V. M/S JAYANTIKA TEA CO. PAGE 2 2. AT THE THRESHOLD IT IS NOTED THAT THERE IS A DELAY OF 32 DAYS IN FILING THE APPEAL BY THE REVENUE. THE REVENUE HAS FILED A CONDONATION PETITION IN THIS REGARD STATING THE REASONS THAT THE DELAY IS OCCU RRED DUE TO HUGE PENDENCY OF WORK - LOAD. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT CONSIDERING THE SMALL DELAY HE SHALL NOT BE HAVING ANY OBJECTION TO THE BENCH CONDONING THE DELAY. CONSIDERING THIS, IN OUR CONSIDERED OPINION, ON THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE SMALL DELAY IN THIS CASE DESERVES TO BE CONDONED AND THE SAME IS CONDONE D AS SUCH. 3. BRIEF FACTS OF THE CASE ARE AS UNDER: - THE ASSESSEE HAD ACQUIRED THE JEWELLERY IN THE YEAR 1986 - 87 WHICH WAS DISCLOSED BY THEM UNDER THE VDIS SC HEME 1997 WORTH RS.15,18,000/ - . THE SAID JEWELLARY WAS SOLD TO M/S SRIML INTERNATIONAL, 54, BURTOLLA STREET, KOLKATA - 700007 AND THE ASSESSEE RECEIVED A SUM OF RS.92,01,818/ - BEING THE SALE VALUE OF JEWELLERY AMOUNTING TO RS.90,97,200/ - AND SALES TAX THEREO N RS.1,04,618/ - . IN COURSE OF ASSESSMENT PROCE E DIN G S, THE LEARNED ASSESSING OFFICER MADE ENQUIRY BY ISSUING NOTICE U/S 131 OF THE INCOME - TAX ACT, 1961. 4. THE ASSESSING OFFICER WAS NOT SATISFIED IN THIS REGARD, HE HELD AS UNDER: - THE ASSESSEE COMPANY HAS ALLEGEDLY SOLD JEWELLERY TO THE SAID M/S SRIMAL INTERNATIONAL. FROM THE LIST OF PURCHASE BY THE SAID SRIMAL INTERNATIONAL FURNISHED WITH LETTER DATED 20/12/2007 BY THEM, IT SEEM THAT NONE OF THE PURCHASES WERE MADE FROM PARTIES WHO ARE CONNECTED TO THE JE WELLERY/BUSINESS. THE PURCHASES ARE FROM 15 PARTIES ONLY AND OTHER THAN THE ASSESSEE COMPANY, ALL OTHERS ARE AGAINST NAME OF INDIVIDUALS. TWO OF SUCH NAMES ARE NIRMALA SRIMAL & RICHA SRIMAL WHO ARE IN ONE WAY OF THE OTHER, APPEAR TO BE RELATED TO THE FIRM NAMELY M/S. SRIMAL INTERNATIONAL. THE BILLS & VOUCHERS OF PURCHASE / SALE AND OTHER DOCUMENTS WERE NOT PRODUCED BY SUCH CONCERN FOR VERIFICATION OR TALLYING. NEITHER THE SALE REGISTER OR SALE BILLS WERE PRODUCED. THE PURCHASE OF ITA NO.2091/KOL/2010 A.Y. 2005 - 06 DCIT CIR - 4, KOL. V. M/S JAYANTIKA TEA CO. PAGE 3 THE JEWELLERY BY SRIMAL INT ERNATIONAL FROM THE ASSESSEE COMPANY IS NOT FULLY VERIFIABLE AND SUBSTANTIATED. MERELY RAISING BILLS AND RECEIVING CHEQUES DOES NOT ESTABLISH THAT JEWELLERY WAS SOLD BY THE ASSESSEE COMPANY. THE ASSESSEE FAILED TO ESTABLISH THAT THE AMOUNT OF CHEQUES RECEI VED WAS ACTUALLY ON ACCOUNT OF SALE OF JEWELLERY. NO PURCHASE REGISTER/S T OCK REGISTER WAS PRODUCED BY THE FIRM M/S SRIMAL INTERNATIONAL TO WHOM THE ASSESSEE COMPANY ALLEGEDLY SOLD JEWELLERY. THUS THE GENUINITY OF THE ALLEGED TRANSACTION IS NOT PROVED TO B E IN ORDE R . THE PHYSICAL DELIVERY OF SUCH JEWELLERY IS ALSO NOT ESTABLISHED. THEREFORE THE CREDIT OF CHEQUES IN THE BOOKS OF THE ASSESSEE COMPANY IS NOT IN RELATI O N TO THE SALE OF JEWELLERY AND THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT S A TISFACTORY IN VIEW OF THE ABOVE DISCUSSION. THEREFORE SOME SO CREDI T ED AMOUNTING TO RS.90,97,300/ - IS CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE COMPANY FOR THE PREVIOUS YEAR UNDER OTHER SOURCE INCOME. 5. UPON ASSESSEE S APPEAL IN THIS REGARD, LD. CIT(A) NOTED THAT AO HAS MADE INQUIRY BY ISSUING NOTICE 131 OF THE INCOME TAX ACT, 1961 AND IN COMPLIANCE THERETO MR. UMESH KUMAR SRIMAL, PARTNER OF M/S SRIMAL INTERNATIONAL APPEARED AND FILED RELEVANT DETAILS. HE NOTED THAT AO HAS ADMITTED THAT M/S SRIMAL INTERNATIONAL HAD FURNISHED THE DETAILS OF PURCHASES, WHEREIN NAME OF ASSESSEE WAS INCLUDED AND S A L E OF JEWELLERY MADE BY THE ASSESSEE WAS REFLECTED THERE IN . LD. CIT(A) FURTHER NOTED THAT ALL THE PAYMENTS WERE RE CEIVED BY CHEQUE AND PAYMENTS RECEIVED BY THE ASSESSEE HAS NOT BEEN DISPUTE BY THE AO. LD. CIT(A) FURTHER NOTED THAT IDENTITY OF THE SELLER AND PURCHASER ARE NOT IN DISPUTE D , HENCE THE TRANSACTION IS GENUINE. HE FURTHER NOTED THAT SALES TAX RETURN AND SALE TAX ASSESSMENT ORDER WERE FURNISHED BY THE ASSESSEE S COUNSEL DURING THE COURSE OF HEARING BEFORE HIM. LD. CIT(A) GAVE A FINDING THAT ON VERIFICATION THEREOF IT WAS OBSERVED THAT THE RELEVANT S ALE OF JEWELLERY DULY DISCLOSED THEREIN AND APPROPRIATE AMOUNT OF SALES TAX WAS ALSO DEPOSITED. LD. CIT(A) FURTHER REFERRED T O CERTAIN CASE LAWS AS UNDER: - ITA NO.2091/KOL/2010 A.Y. 2005 - 06 DCIT CIR - 4, KOL. V. M/S JAYANTIKA TEA CO. PAGE 4 1) CIT VS. CARGO INTERNATIONAL HOLDING 244 ITR 422 2) CIT VS EMERALD COMMERCIAL LTD. 250 ITR 539 3) CIT VS KUNDAN INVESTMENT LTD. 263 ITR 626 4) CIT VS SHRI I NDER V. NANKANI IN ITA NO. 128 OF 2009 (BOMBAY HIGH COURT) LD. CIT(A) FURTHER OBSERVED THAT DEPARTMENT HAS ALREADY ACCEPTED THE DISCLOSURE OF VOLUNTARY DISCLOSURE OF INCOME SCHEME (VDIS FOR SHORT). HE HELD THAT ASSESSEE HAS GIVEN SATISFACTORY EXPLANATION WITH REGARD TO PURCHASE AND S A L E OF JEWELLERY. HE FURTHER HELD THAT ASSESSEE HAS RECEIVED CONSIDERATION WHICH WAS DULY ACCOUNTED FOR. ACCORDINGLY, HE DIRECTED THE AO TO DELETE THE ADDITION. 6. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 7. W E HAVE HEARD BOTH COUNSEL AND PERUSED THE RECORDS. WE FIND THAT IT IS UNDISPUTED FACTS OF THE CASE THAT ASSESSEE HAD DISCLOSED JEWELLERY UNDER VDIS AND THIS WAS DULY ACCEPTED BY THE DEPARTMENT. NOW ASSESSEE HAS SOLD TH E S E JEWELLERY AND RECEIVED THE PAYMENT S THEREOF BY CHEQUE FROM M/S SRIMAL INTERNATIONAL TO WHOM THE JEWELLERY WAS SOLD . THE PARTY HAS CONFIRMED THE TRANSACTION. THE PARTNER OF THE FIRM HAS ALSO APPEARED BEFORE THE AO AND ACCEPTED THE TRANSACTION . D ETAILS OF PURCHASE HAVE BEEN GIVEN BY THE PAR TY AND ASSESSEE S NAME DULY APPEARED THEREIN . FURTHERMORE, WE NOTE THAT LD. CIT(A) HAS ALSO GIVEN A FINDING THE SALES TAX RETURN AND SALE TAX ASSESSMENT ORDER WERE FURNISHED BY TH E ASSESSEE S COUNSEL BEFORE HIM. ON VERIFICATION THEREOF, LD. CIT(A) OBSERVED THAT RELEVANT S A L E OF JEWELLERY WERE DULY DISCLOSED AND APPROPRIATE AMOUNT OF SALES TAX WAS ALSO DEPOSITED. NOW, IN THESE CIRCUMSTANCES, WE F IND THAT BY SIMPL Y NOTING THAT M/S SRIMAL INTERNATIONAL S BOOK COULD NOT BE EXAMINED BY THE AO, THE A.O CANNOT LEA D TO THE CONCLUSION THAT THE TRANSACTION OF THE ASSESSEE WITH M/S SRIMAL INTERNATIONAL FOR SALE OF JEWELLERY WERE NOT CORRECT. T HE EXISTENCE OF JEWELLERY WITH THE ASSESSEE IS NOT IN ITA NO.2091/KOL/2010 A.Y. 2005 - 06 DCIT CIR - 4, KOL. V. M/S JAYANTIKA TEA CO. PAGE 5 DOUBT . T HE VALUE OF SALE REALIZATION IS ALSO NOT IN QUESTION . T HE PURCHASE R HAD ADMITTED AND REFLECTED THE PURCHASES IN ITS LIST O F PURCHASE . S ALES TAX RETURN HAS BEEN FILED AND THE RELEVANT SALES TAX HAS ALSO BEEN DEPOSITED. THE AO IS ALSO NOT DENYING THE RE CEIPT OF MONEY BY THE ASSESSEE. HE IS ONLY ASSESSING THE INCOME AS INC OME FROM OTHER SOURCES. IN OTHER WORDS, IT IS ALSO NOT THE CASE THAT IT IS AN UNEXPLAINED CASH CREDIT. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) AND ACCORDINGLY WE UPHOLD THE SAME. 8. IN THE RESULT , THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04 / 1 2 /2014 SD/ - SD/ - ( MAHAVIR SINGH ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEM BER KOLKATA, *DKP - 04 / 1 2 /2014 / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT DCIT, CIRCLE - 4, P - 7, CHOWRRINGHEE SQUARE, 8 TH FLOOR, KOLKATA - 69 2 . / RESPONDENT M/S JAYANTIKA TEA CO. 4, INDIA EXCHANGE PLACE, KOL - 01 3 . / CONCERNED CIT 4 . - / CIT (A) 5 . , / DR, ITAT, KOLKATA 6 . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,