ITO, Ward-45(3),Kolkata, Kolkata V. Manik Lal Dey, Kolkata

ITA 2343/KOL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3575 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 14-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: MIHIR BANDHYOPADHYAY
• Section: 68; 271(1)(c)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2436, 2343 - 2344 / KOL / 20 16 ASSESSMENT YEAR :2011-12 INCOME TAX OFFICER, WARD-45(3), 3, GOVERNMENT PLACE (WEST), KOLKATA-700001 V/S . MANIK LAL DEY 2/3, RAJA JANMENJOY ROAD, KOLKATAT-700010 [ PAN NO.BAKPD 3030 J ] /APPELLANT .. / RESPONDENT /BY ASSESSEE MIHIR BANDHYOPADHYAY, AR /BY REVENUE SHRI ROBIN CHOUDHURY, ADDL.CIT-DR /DATE OF HEARING 05-02-2019 /DATE OF PRONOUNCEMENT 20-02-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THESE THREE CASES FOR ASSESSMENT YEAR 2011-12 PERTA IN TO A SINGLE ASSESSEE, SHRI MANIK LAL DEY. THE REVENUES FORMER TWO QUANTUM APPEAL(S) ITA NO.2436 & 2343/KOL/2016 ARISE FROM COMMISSIONER OF INCOME TAX (APPEALS)-13 KOLKATAS COMMON ORDER DATED 12.08.201 6 PASSED IN CASE NOS.38/CIT(A)-13/KOL/W-45(3)/2014-15, IN PROCEEDING S U/S. 147/144 OF THE INCOME TAX, 1961; IN SHORT THE ACT. ITS LAST APPE AL ITA NO.2344/KOL/2016 CONSEQUENTIAL IS PENALTIES DIRECTED AGAINST THE VER Y CIT(A)S ORDER DATED 25.09.2014 IN CASE NO.37/CIT(A)-13/W-45(3)/2014-15, IN PROCEEDINGS U/S 271(1)(C) OF THE ACT. HEARD BOTH THE PARTIES IN QUANTUM AS WELL AS PENALT Y PROCEEDINGS. CASE FILE(S) PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE REVENUES F ORMER TWO QUANTUM APPEALS RAISE ON IDENTICAL ISSUE THAT THE CIT(A) HA S ERRED IN LAW AS WELL AS ON ITA NO.2436, 2343-2044/KOL/2016 A.Y. 2011-12 ITO WD-45(3), KOL. VS. MANIK LAL DEY PAGE 2 FACTS IN NOT CONSIDERING THE CAPITAL INVOLVED FOR P URCHASE OF 1,08,96,000/- IN THE NATURE OF ASSESSEES UNDISCLOSED SOURCE OF INCO ME RESULTING IN ALLEGED UNDISCLOSED SALE OF 1,13,50,000/-. THE CIT(A)S DETAILED DISCUSSION ON THIS ISSUE READS AS FOLLOWS:- DECISION:- 5. I HAVE GONE THROUGH THE CONTENTION OF THE ASSESS EE, THE ORDER PASSED BY THE AO AND THE SUBMISSIONS MADE BY THE APPELLANT. THE DECI SION OF THIS APPEAL IS GIVEN AS UNDER:- IN THIS CASE ADDITION OF RS.1,13,00,000/- HAS BEEN MADE BY THE AO. WHILE ADDING SO THE AO HAS OBSERVED THAT THE ASSESSEE HAD SHOWN GROSS SALES OF RS.36,50,000/- IN IS RETURN. BUT DURING THE COURSE OF SURVEY ASSESSEE HIMSELF DISCLOSED ON OATH DATED 07-01-2012 THAT HIS TURNOVE R WAS RS.1.5 CR FOR THE ASSESSMENT YEAR 2011-12. ON THE BASIS OF ABOVE THE AO WORKED OUT SUPPRESSED DALE OF RS.1,13,50,00/- (RS.1,50,00,000/ - - RS.36,50,000/-) AND ENTIRE SUPPRESSED TURNOVER WAS MADE AS AN INCOME OF THE APPELLANT UNDER SECTION 68 OF THE IT ACT. HERE IT IS MENTIONED THAT THOUGH IN THE BODY OF THE ORDER THE AO HAS CALCULATED THE ADDITION TO THE TUN E OF RS.1,13,50,000/- BUT IN THE COMPUTATION HE HAS ADDED ONLY RS.1,13,00,000/-. THIS MISTAKE IS TAKEN INTO CONSIDERATION WHILE DECIDING THIS GROUND OF AP PEAL. DURING THE COURSE OF APPELLATE PROCEEDING THE AR OF THE APPELLANT HAS SUBMITTED THAT THE ESTIMATED UNDISCLOSED TURNOVER O F RS.1,13,50,000/- HAS BEEN FULLY TAXED BY THE AO WHEREAS ONLY NET COMMISS ION SHOULD HAVE BEEN ASSESSED BY THE AO AS THE AO HIMSELF HAS ASSESSED T HE NET PERCENTAGE OF COMMISSIONS AT 4% FOR OTHER YEAR; THE SAME SHOULD H AVE BEEN APPLIED TO THE UNDISCLOSED TURNOVER OF THE APPELLANT. I AGREE WITH THE VIEW OF THE APPELLANT THAT TURNOVE R CANNOT BE THE INCOME OF THE APPELLANT. TURNOVER INCLUDES COST OR PURCHASE A ND GROSS PROFIT. ONLY GROSS PROFIT CAN BE TERMED AS INCOME OF THE APPELLANT. TH E ACTION OF THE AO FOR ADDING ENTIRE TURNOVER IS BASELESS. THEREFORE, THE ENTIRE ADDITION OF RS.1,13,00,000/- IS HEREBY DELETED AND ONLY 4% PROF IT AS ACCEPTED BY THE AO IN EARLIER YEAR IS UPHELD AND ESTIMATION OF PROFIT IS MADE ON ENTIRE TURNOVER OF RS.1,13,50,000/- WHICH COMES TO RS.4,54,000/=-. THE APPELLANT HAS ALREADY SHOWN IN ITS RETURN OF INCOME GROSS SALE OF RS.36,5 0,000/- AND PROFIT ON IT AT RS.1,49,917/-. THEREFORE, THE ADDITION MADE BY THE AO UNDER SECTION 68 ON SALE OF RS.1,13,50,000/- IS HEREBY DELETED AND ESTI MATED PROFIT @4% ON UNDISCLOSED SALES OF RS.1,13,50,00/- I.E. RS.4,54, 000/- IS HEREBY CONFIRMED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY S UBMITS DURING THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD RI GHTLY MADE THE IMPUGNED ADDITION OF 1,13,00,000/- REPRESENTING ASSESSEES ENTIRE TURNOV ER INCLUDING CAPITAL DISCLOSED DURING THE COURSE OF SURVEY. THER E IS NO DISPUTE THAT THIS ASSESSEE IS A COMMISSION AGENT / WHOLESALER IN ONIO N AGRICULTURAL PRODUCE. THE ARGUMENT RAISED AT THE DEPARTMENTS BEHEST IS T HAT OF TREATMENT OF ENTIRE TURNOVER AMOUNTING TO 1,13,00,000/- AS UNDISCLOSED INCOME OF THE TAXPAYERS. WE FIND NO MERIT TO AGREE WITH THE REVE NUES INSTANT SOLE ITA NO.2436, 2343-2044/KOL/2016 A.Y. 2011-12 ITO WD-45(3), KOL. VS. MANIK LAL DEY PAGE 3 SUBSTANTIVE GROUND. THE FACT REMAINS THAT THIS ASSE SSEE DEALS WITH VERY HIGHLY UNORGANIZED BUSINESS SECTOR IS AN ADMITTED FACT. AN D ALSO THAT THE IMPUGNED TURNOVER REPRESENTS BOTH COST OF MATERIAL AS WELL A S INCOME COMPONENT. THE REVENUE FAILS TO REBUT THE FACT THAT THE ASSESSEES ACCEPTED PROFIT MARGIN AS PER RECORDS IS @ 4% ONLY. THE CIT(A) HAS PRECISELY ADOPTED THE SAID MARGIN ONLY TO BE ASSESSEES UNDISCLOSED INCOME. WE HOLD I N THESE PECULIAR FACTS AND CIRCUMSTANCES THAT THE LEARNED LOWER APPELLATE AUTHORITY HAS NEITHER COMMITTED ANY ILLEGALITY NOR IRREGULARITY IN ADDING ONLY THE PROFIT ELEMENT IN UNDISCLOSED TURNOVER TO BE INCOME OF THE IMPUGNED A SSESSMENT YEAR. WE THEREFORE DECLINE REVENUES BOTH QUANTUM APPEALS IT A NO.2436 & 2343/KOL/2016. 4. THE REVENUES LATTER CONSEQUENTIAL PENALTY APPEA L ITA NO.2344/KOL/2016 ALSO FAILS AS THE ASSESSING OFFICE RS ACTION THEREIN HAD INVOKED SEC. 271(1)(C) QUA THE ENTIRE TURNOVER COMPONENT WHILE LEVYING PENALTY AMOUNT OF 33,66,864/-. WE THUS CONCLUDE THAT CIT(A) HAS RIGHT LY DELETED THE SAID PENALTY AS WELL. 5. THESE THREE REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 20/ 02/2019 SD/- SD/- ( ) (( ) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S )- 20 / 02 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-MANIK LAL DEY 2/3, RAJA JANMENJOY ROAD, KOL KATA-10 2. /REVENUE-ITO WARD-45(3), 3, GOVT. PLACE (WEST) KOLKA TA-700 001 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , / 4,