M/s Goenka Brothers, Siliguri V. A.C.I.T.,Circle-1, Siliguri

ITA 2277/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4503 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 14-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68; 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ)] I.T.A. NO. 2277/KOL/2019 ASSESSMENT YEAR: 2016-17 M/S. GOENKA BROTHERS.........................................................................APPELLANT INTERNATIONAL MARKET, SEVOKE ROAD, SILIGURI 734 001. [PAN: AAEFG 1087 B] VS ACIT, CIRCLE 1, SILIGURI.......................................RESPONDENT SILIGURI. APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI JAYANTA KHANRA, JCIT, SR. DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JANUARY 16, 2020 DATE OF PRONOUNCING THE ORDER : FEBRUARY 26, 2020 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), SILIGURI DATED 23.08.2019 WHEREBY HE DISMISSED THE APPEAL OF THE ASSESSEE. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF WHOLESALE AND RETAIL TRADING OF ELECTRIC EQUIPMENTS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 07.11.2016 DECLARING A TOTAL INCOME OF RS. 7,28,810/-. IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 21.123.2018, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE AO AT RS. 36,38,056/- AFTER MAKING AN ADDITION OF RS. 29,09,246/- ON ACCOUNT OF DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID ADDITION MADE BY THE AO VIDE HIS APPELLATE ORDER DATED 23.08.2019 PASSED EX-PARTE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 2 I.T.A. NO. 2277/KOL/2019 ASSESSMENT YEAR: 2016-17 M/S. GOENKA BROTHERS 3. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE FROM THE COPY OF NOTICE DATED 07.07.2017 ISSUED BY THE AO U/S 143(2) OF THE ACT PLACED AT PAGE NO. 1 OF HIS PAPER BOOK, THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS TO EXAMINE THE ISSUE AS TO WHETHER THE STOCK HAD BEEN CORRECTLY VALUED BY THE ASSESSEE. HE HAS SUBMITTED THAT NO ADDITION HOWEVER WAS MADE BY THE AO ON THE SAID ISSUE AND THE IMPUGNED ADDITION WAS MADE BY HIM ON AN ALTOGETHER DIFFERENT ISSUE BY TREATING THE DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT U/S 68. BY RELYING ON THE INSTRUCTION NO. 5/2016 ISSUED BY THE CBDT ON 14 TH OF JULY, 2016, HE HAS CONTENDED THAT THE CASE OF THE ASSESSEE SELECTED FOR LIMITED SCRUTINY WAS NEVER CONVERTED BY THE AO INTO COMPLETE SCRUTINY BY FOLLOWING THE PROCEDURE OUTLINED IN THE SAID CIRCULAR. HE HAS CONTENDED THAT THE AO WAS REQUIRED TO FORM THE REASONABLE VIEW THAT THERE WAS A POSSIBILITY OF UNDER ASSESSMENT OF INCOME IF THE CASE WAS NOT EXAMINED UNDER COMPLETE SCRUTINY AND WHILE FORMING SUCH REASONABLE VIEW, THE ASSESSING OFFICER HAD TO ENSURE THAT THEIR EXISTED CREDIBLE MATERIAL OR INFORMATION AVAILABLE ON RECORD. HE HAS CONTENDED THAT THE AO WAS ALSO REQUIRED TO INTIMATE THE ASSESSEE REGARDING CONVERSION OF THE LIMITED SCRUTINY CASE INTO COMPLETE SCRUTINY. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT NONE OF THESE CONDITIONS SPECIFICALLY STIPULATED BY THE CBDT IN INSTRUCTION NO. 5/2016 (SUPRA), HOWEVER WAS SATISFIED BY THE AO IN THE PRESENT CASE TO GO BEYOND THE ISSUE IDENTIFIED FOR EXAMINATION IN LIMITED SCRUTINY AND THIS POSITION CLEARLY EVIDENT FROM THE RECORD IS NOT DISPUTED EVEN BY THE LD. DR, I, THEREFORE, FIND MERIT IN 3 I.T.A. NO. 2277/KOL/2019 ASSESSMENT YEAR: 2016-17 M/S. GOENKA BROTHERS THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE IMPUGNED ADDITION MADE BY THE AO BY TREATING THE DEPOSITS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT U/S 68 IS NOT SUSTAINABLE BEING BEYOND THE SCOPE OF LIMITED SCRUTINY AND THE LD. CIT(A) IS JUSTIFIED IN CONFIRMING THE SAME, I, THEREFORE, DELETE THE ADDITION AND ALLOW THIS APPEAL OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2020. SD/- (P.M. JAGTAP) VICE PRESIDENT DATED: 26/02/2020 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. GOENKA BROTHERS, INTERNATIONAL MARKET, SEVOKE ROAD, SILIGURI 734 001. 2. ACIT, CIRCLE 1, SILIGURI. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / H.O.O. ITAT, KOLKATA