Mr. Biswanath Shaw, Howrah V. JCIT, Range-48, Kolkata, Kolkata

ITA 2119/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1753 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 22-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 03-11-2016
• Court: TRIBUNAL
• Keywords: Bogus purchase; Corroborative evidences
• Section: 143(3); 133(6)

Judgement Text

I.T.A. NO. 2119/KOL./2016 ASSESSMENT YEAR: 2010 -2011 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA BEFORE SHRI S.V. MEHROTRA, VICE-PRESIDENT(KZ) I.T.A. NO. 2119/KOL/ 2016 ASSESSMENT YEAR : 2010-2011 MR. BISWANATH SHAW,................................ .....................APPELLANT ICHAPUR, HIT ROAD, HOWRAH-711 104 [PAN : AKRPS 9571 M] -VS.- JOINT COMMISSIONER OF INCOME TAX,.................. ...................RESPONDENT RANGE-48, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 APPEARANCES BY: SHRI SANJAY BHATTACHARYA, F.C.A., FOR THE ASSESSEE SHRI SAURAV KUMAR, ADDL. CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 22, 2017 DATE OF PRONOUNCING THE ORDER : MAY 24, 2017 O R D E R PER S.V. MEHROTRA, V.P.(KZ): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-14, KOLKATA DA TED 29.07.2016 FOR THE ASSESSMENT YEAR 2010-11. 2. SHRI SANJAY BHATTACHARYA, F.C.A., APPEARED ON BE HALF OF THE ASSESSEE AND SHRI SAURAV KUMAR, LD. ADDL. CIT, D.R. REPRESEN TED ON BEHALF OF THE REVENUE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED ITS RETURN OF INCOME SHOWING TOTAL INCOME OF RS.5,72,442/-, WHICH CONSISTS OF PROFIT FROM THE PROPRIETARY CONCERN M/S. LAKSHMI STEEL TRA DERS DEALING IN IRON AND STEEL ITEMS. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AT RS.19,00,897/-, INTER ALIA, MAKING THE FOLLOWING ADDITIONS:- I.T.A. NO. 2119/KOL./2016 ASSESSMENT YEAR: 2010 -2011 PAGE 2 OF 5 (A) BONUS LIABILITY (AS DISCUSSED IN PARA (1) THE ORDER RS.4,81,028/ - (B) BOGUS PURCHASES (AS DISCUSSED IN PARA 2) OF THE ORDER RS.3,53,766/ - (C) DISCREPANCY IN CLOSING BALANCE WITH M/S. CHOWDHURY ENTERPRISES (AS DISCUSSED IN PARA 3 OF THE ORDER) RS.4,21,897/ - 4. WITH REGARD TO BOGUS LIABILITY ON ACCOUNT OF CRE DITORS, THE ASSESSEE HAD SHOWN LIABILITY FOR RS.17,89,387/- ON ACCOUNT O F CREDITORS AS ON 31.03.2010 IN RESPECT OF THE CREDITORS NAMELY (A) M /S. VAID ENTERPRISE AMOUNTING TO RS.1,24,248/-, (B) M/S. SUREKHA COMMER CIAL CO. LIMITED AMOUNTING TO RS.5,06,504/-, (C) M/S. FESTO MARKETIN G AMOUNTING TO RS.2,34,981/-, (D) M/S. TESTEELS AMOUNTING TO RS.8, 95,196/- AND (E) M/S. STAINLESS EMPORIUM AMOUNTING TO RS.28,458/-. BUT AS PER THE INFORMATION GATHERED UNDER SECTION 133(6) FROM THOSE PARTIES, T HE AMOUNT OF CREDITORS WAS MUCH LESSER THAT WHAT HAD BEEN CLAIME D BY THE ASSESSEE. THE ASSESSEE WAS REQUESTED TO EXPLAIN THE DISCREPAN CY WITH SUPPORTING EVIDENCE AND PAPERS. THE ASSESSEE FINALLY APPEARED ON 07.11.2012 BEFORE THE ASSESSING OFFICER AND EXPLAINED INABILITY TO EX PLAIN THE DISCREPANCY. THE ASSESSING OFFICER, THEREFORE, TREATED THE DISCR EPANCY OF LIABILITY OF CREDITORS AMOUNTING TO RS.4,81,028/- AS CONCEALED I NCOME AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. WITH REGARD TO PURCHASES MADE AS PER ASSESSEES BOOK FROM M/S. OSWAL STEEL CORPORATION AMOUNTING TO RS.4,07,866/-, M/S. VAIL ENTERPRISES, AMOUNTING TO RS.8,93,593/- AND FROM M/ S. SUREKHA COMMERCIAL (P) LIMITED AMOUNTING TO RS.5,69,829/- W AS QUITE DIFFERENT AS PER PARTIES BOOK. THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY IN RESPECT OF TRANSACTION WITH OTHER PARTIES. THE A/R EXPRESSED THEIR TOTAL INABILITY TO EXPLAIN THE DISCREPANCY. HOWEVER, ASSE SSEES EXPLANATION REGARDING DISCREPANCY FOR RS.1,25,830/- IN RESPECT OF TRANSACTION WITH M/S. SUREKHA COMMERCIAL CO. (P) LTD. WAS ACCEPTED B UT THE AMOUNT OF DISCREPANCY IN RESPECT OF TRANSACTION WITH M/S. VAI L ENTERPRISES AND M/S. OSWAL STEEL CORPORATION AMOUNTING TO RS.1,03,078/- AND RS.2,50,688/- I.T.A. NO. 2119/KOL./2016 ASSESSMENT YEAR: 2010 -2011 PAGE 3 OF 5 AGGREGATING TO RS.3,53,766/- WAS TREATED AS BOGUS B Y THE ASSESSING OFFICER AND ADDED THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE BECAUSE OF THE REASON THAT THE ASSESSEE DID NOT FURNISH PARTY- WISE QUANTITY OF GOODS PURCHASED AND SOLD. 6. WITH REGARD TO DISCREPANCY IN CLOSING BALANCE WI TH M/S. CHOWDHURY ENTERPRISE, THE ASSESSEE CLAIMED THAT A SUM OF RS.1 0,53,814/- WAS PAYABLE TO IT AS ON 31.03.2010 BUT ON ENQUIRY CONDU CTED UNDER SECTION 133(6), IT WAS OBSERVED THAT A SUM OF RS.14,75,711/ - WAS PAYABLE TO THE SAID PARTY FROM THE ASSESSEE AS ON 31.03.2010. THE ASSESSEE WAS REQUESTED TO EXPLAIN THE DISCREPANCY IN CLOSING BAL ANCE. THE ASSESSEE HIMSELF AND HIS A/R APPEARED ON 07.12.2012 AND FILE D A LETTER DATED 07.12.2012 EXPLAINED THAT THE DISCREPANCY WAS DUE T O PAYMENT MADE TO M/S. CHOWDHURY ENTERPRISES, WHICH WAS MERELY A ROUT INE NATURE AND CASUAL ONE, WHICH WAS NOT SUPPORTED BY ANY SORTS OF EVIDENCE/PAPERS. NOT BEING SATISFIED THE ASSESSING OFFICER REJECTED THE SAID EXPLANATION AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 7. IN APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE AD DITIONS MADE BY THE ASSESSING OFFICER. 8. BEING AGGRIEVED WITH THE ORDER OF THE LD. CIT(AP PEALS), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ASSAILING ON THE T HREE ADDITIONS. 9. AT THE TIME OF HEARING BEFORE ME, THE LD. COUNSE L FOR THE ASSESSEE FILED A STATEMENT SHOWING RECONCILIATION OF DIFFERE NCES IN ACCOUNTS AS NOTED IN THE ASSESSMENT ORDER, WHICH IS AS UNDER:- I.T.A. NO. 2119/KOL./2016 ASSESSMENT YEAR: 2010 -2011 PAGE 4 OF 5 HE SUBMITTED THAT THE DIFFERENCES AROSE BECAUSE OF DISCOUNTS OFFERED NOT ACCOUNTED FOR, MATERIAL RETURN, ETC. FURTHER AS REG ARDS M/S. VAID ENTERPRISES, THE LD. COUNSEL FOR THE ASSESSEE REFER RED TO PAGE 12 OF THE PAPER BOOK, WHEREIN THE LEDGER ACCOUNT OF M/S. VAID ENTERPRISE WAS SHOWN IN HIS BOOKS OF ACCOUNT TO DEMONSTRATE THAT T HERE WAS A DEBIT BALANCE OF RS.1,24,247.52 BUT THE ASSESSING OFFICER ACCEPTED THE SAME AS CREDIT BALANCE BY OBSERVING THAT M/S. VAID ENTERPRI SE WAS THE CREDITOR OF THE ASSESSEE. HE SUBMITTED THAT IN OTHER CASES ALSO , THE ADDITION HAS BEEN MADE BECAUSE OF VARIOUS ASPECTS, WHICH WAS NOT CONS IDERED BY THE ASSESSING OFFICER. HE, THEREFORE, ARGUED THAT THE M ATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-EX AMINING THE ISSUE AFRESH I.T.A. NO. 2119/KOL./2016 ASSESSMENT YEAR: 2010 -2011 PAGE 5 OF 5 IN REGARD TO THESE ADDITIONS. THE LD. D.R. ALSO AGR EED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF ASSESSING OFFICER F OR RE-EXAMINATION. 10. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE LEDGER ACCOUNT OF M/S. VAID ENTERPRISE, I FIND THAT THERE WAS A DEBIT BALA NCE OF RS.1,24,247.52, WHEREAS THE ASSESSING OFFICER HAS TREATED THE SAME AS SUNDRY CREDITOR AND, THEREFORE, THE OBSERVATION OF THE ASSESSING OF FICER IS NOT CORRECT. LD. COUNSEL CLAIMING THAT SIMILAR DIFFERENCES ALSO OCCU RRED IN OTHER CASES ALSO WHICH HAS BEEN EXPLAINED IN THE RECONCILIATION STAT EMENT FILED. I, THEREFORE, RESTORE THE MATTER TO THE FILE OF THE AS SESSING OFFICER FOR RE- EXAMINATION OF THE ENTIRE FACTS IN REGARD TO THESE ADDITIONS DE NOVO AS AGREED BY BOTH THE PARTIES. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24.05.2017. SD/- S.V. MEHROTRA (VICE-PRESIDENT) KOLKATA, THE 24 TH DAY OF MAY, 2017 COPIES TO : (1) MR. BISWANATH SHAW, ICHAPUR, HIT ROAD, HOWRAH-711 104 (2) JOINT COMMISSIONER OF INCOME TAX, RANGE-48, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-14, KOLK ATA (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO, INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.