ACIT, Circle-35, Kolkata, Kolkata V. M/S. Kedia Pipes, Kolkata

ITA 2098/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1159 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: J P KHAITAN SR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL KOLKATA A BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER] I.T.A. NO. 2098/KOL/2014 ASSESSMENT YEAR: 2010-11 ACIT, CIRCLE-35, KOLKATA... ...APPELLANT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-35, KOLKATA AAYAKAR BHAWAN POORVA 8 TH FLOOR 110, SHANTI PALLI KOLKATA - 700107 M/S. KEDIA PIPES... ..RESPONDENT 33/1, NETAJI SUBHAS ROAD 277, MARSHALL HOUSE 2 ND FLOOR KOLKATA 700 001. [PAN : AADFK 1107 D] APPEARANCES BY: SHRI J.P. KHAITAN SR. COUNSEL, APPEARED ON BEHALF O F THE ASSESSEE. SHRI SALLONG YADEN, ADDL. CIT, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : AUGUST 24, 2017 DATE OF PRONOUNCING THE ORDER : OCTOBER 31, 2017 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XX, KO LKATA (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TA X ACT, 1961 (THE ACT), DT. 27/08/2014, FOR THE ASSESSMENT YEAR 201 0-11, ON THE FOLLOWING GROUNDS:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT CA) ERRED IN RESTRICTING THE ADDITION TO THE EXTENT OF 10% OF TH E EXPENDITURE CLAIMED THROUGH SELF MADE VOUCHERS FOR THE POST SURVEY PERI OD. 2 I.T.A. NO. 2098/KOL/2014 ASSESSMENT YEAR: 2010-11 M/S. KEDIA PIPES (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT CA) ERRED IN HOLDING THAT THERE WAS NO SPECIFIC DEFECT POINTED O UT BY THE AO WHILE REJECTING THE BOOKS OF ACCOUNT. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT CA) ERRED IN HOLDING THAT EXPENSES CLAIMED DURING POST SURVEY IN VESTIGATION WERE SUPPORTED WITH RELEVANT DOCUMENTS, WHEREAS NO SUCH BILLS/VOUCHERS WERE FOUND DURING THE COURSE OF SURVEY AND BILL PRODUCED WERE CONTRADICTORY OF THE STATEMENTS MADE BY THE PARTNERS. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT CA) HAD ERRED IN RELYING ON THE G.P/N.P DECLARED IN EARLIER YEARS , WHEREAS IN THE YEAR UNDER CONSIDERATION THE N.P WAS ESTIMATED ON THE BA SIS OF FACTS DEDUCTED AND ESTABLISHED DURING THE COURSE OF SURVEY. (V) THE APPELLANT CRAVES THE LEAVE TO MAKE ANY ADDI TION, ALTERATION, MODIFICATION OF GROUNDS AT THE APPELLATE STAGE. 2. FACTS IN BRIEF:- THE ASSESSEE IS A PARTNERSHIP FIRM AND IS IN THE B USINESS OF G.I. PIPES, HARDWARE. A SURVEY WAS CONDUCTED AT THE BUSI NESS PREMISES OF THE ASSESSEE ON 10/02/2010. THE ASSESSING OFFICER PASSE D AN ORDER U/S 143(3) OF THE ACT, ON 25/03/2013, WHEREIN, HE REJEC TED THE BOOKS OF ACCOUNTS U/S 145(3), AND ESTIMATED THE NET PROFIT A T 4 PER CENT OF THE TOTAL TURNOVER. HE HELD THAT TOTAL TURNOVER OF THE ASSESSEE WAS RS.2,69,68,320/- AND NOT RS.1,12,83,818/- , AS DECL ARED BY THE ASSESSEE. THE ADDITION OF RS.1,56,80,502/-, WAS MADE. 2.1. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN A PPEAL. THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. A GGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 3. AFTER HEARING THE RIVAL CONTENTIONS AND CONSIDER ING THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW, I HOLD AS FOLLOWS:- 3 I.T.A. NO. 2098/KOL/2014 ASSESSMENT YEAR: 2010-11 M/S. KEDIA PIPES 3.1. IT IS WRONG ON PART OF THE LD. CIT(A) TO COME TO THE CONCLUSION THAT NO SPECIFIC DEFECTS WERE POINTED OUT BY THE ASSESSI NG OFFICER WHILE REJECTING THE BOOKS OF ACCOUNTS. IN FACT, THE ASSES SING OFFICER HAS POINTED OUT THAT THE ASSESSEE HAD FAILED TO PRODUCE THE BOO KS OF ACCOUNTS AND OTHER RELEVANT DOCUMENTS IN RESPONSE TO SUMMONS DT. 16/02/2013. IT IS ALSO AN UNDISPUTED FACT THAT THE ASSESSEES BOOKS O F ACCOUNTS WERE INCOMPLETE. THE ASSESSING OFFICER HAS RECORDED THAT SELF-MADE VOUCHERS WERE FURNISHED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT BUT THE SAME WERE NOT FOUND DURING THE C OURSE OF SURVEY AND THAT AS THEY WERE SELF-MADE VOUCHERS, THE GENUI NENESS OF THESE EXPENDITURES COULD NOT BE ESTABLISHED. PURCHASE BIL L OF RS.51,89,580/- WAS NOT RECORDED IN THE STOCK REGISTER. THE ASSESSI NG OFFICER HAS AT PARA 10 OF THE ASSESSMENT ORDER HAS STATED THAT IT IS NO T EXPLAINED AS TO HOW SUCH HUGE AMOUNTS WERE LEFT OUT. THE ASSESSEE WAS U NABLE TO VERIFY THE ENTRIES IN HIS ANSWER TO QUESTION. ON RECORDING OF THESE FACTS, THE ASSESSING OFFICER HAS HELD THAT HE IS NOT SATISFIED WITH THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNTS OF THE FI RM. HENCE, HE REJECTED THE BOOKS OF ACCOUNT. UNDER THESE CIRCUMST ANCES, IT IS INCORRECT ON PART OF THE LD. CIT(A) TO HOLD THAT THE ASSESSIN G OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT AND EST IMATING THE PROFIT AT 4 PER CENT. 3.1.1. THE LD. CIT(A) HAS SUBSTITUTED HIS ESTIMATE IN PLACE OF THE ESTIMATE MADE BY THE ASSESSING OFFICER ON AD-HOC BASIS. IN O UR VIEW, THERE IS NO JUSTIFICATION MADE OUT BY THE LD. CIT(A), FOR SUCH AN ACTION. THESE ARE FACTUAL ISSUES. THE ORDER PASSED ON THE ISSUE OF ES TIMATION OF PROFIT BY THE LD. CIT(A), IS NON-SPEAKING. THUS, WE DEEM IT P ROPER TO RESTORE THIS MATTER TO THE FILE OF THE LD. FIRST APPELLATE AUTHO RITY FOR PASSING A SPEAKING ORDER ON THIS ISSUE. 4 I.T.A. NO. 2098/KOL/2014 ASSESSMENT YEAR: 2010-11 M/S. KEDIA PIPES 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. KOLKATA, THE 31 ST DAY OF OCTOBER, 2017. SD/- SD/- [S.S. VISWANETHRA RAVI] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED :31.10.2017 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. ACIT, CIRCLE-35, KOLKATA OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-35, KOLKATA AAYAKAR BHAWAN POORVA 8 TH FLOOR 110, SHANTI PALLI KOLKATA - 700107 2. M/S. KEDIA PIPES 33/1, NETAJI SUBHAS ROAD 277, MARSHALL HOUSE 2 ND FLOOR KOLKATA 700 001. 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES