ITO, W-41(1), Nadia, Nadia V. Smt. Sima Saha, Nadia

ITA 2369/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1851 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2016
• Court: TRIBUNAL
• Assessee Lawyers: ALOK NAG

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM] I.T.A NO. 2369/KOL/20 16 ASSESSMENT YEAR : 2012-1 3 I.T.O., WARD-41(1) -VS.- SMT. SIMA SAHA NADIA NADIA. [PAN : AOQPS 6923 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ALOK NAG, JCIT FOR THE RESPONDENT : SHRI SOUMITRA CHOUD HURY, ADVOCATE DATE OF HEARING : 06.04.2017. DATE OF PRONOUNCEMENT : 12.04.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 07.09.2016 OF C.I.T.(A)-12, KOLKATA RELATING TO A.Y.2012-13. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS FOLLOWS :- THE TRADE DEPOSIT OF RS.43,74,312/- WAS NOT DISCLO SED IN BALANCE SHEET AS AN ASSET IN RESPECT OF FUTURE DISTRIBUTOR AND AN AMOUN T OF ONLY RS.93,991/- WAS SHOWN AS AN ASSET AGAINST THE PARTY. LD. CIT(A) HAS ERRED IN ALLOWING RELIEF WITHOUT PROPER VERIFICATION & REMAND TO THE AO. 3. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSIN ESS OF LOTTERY. IN THE COURSE OF ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 ( ACT), THE AO ISSUED A NOTICE U/S.133(6) OF THE ACT TO M/S.FUTURE PLUS ENTERPRISE PRIVATE LTD., WHO REPLIED TO THE AO THAT THE ASSESSEE HAD MADE A SECURITY DEPOSIT TO TH E TUNE OF RS.43,74,312/- TO M/S. FUTURE PLUS ENTERPRISE PRIVATE LTD. THE ASSESSEE WA S ISSUED A SHOW CAUSE LETTER ASKING AN EXPLANATION REGARDING THE SECURITY DEPOSIT. THE ASSESSEE VIDE ITS LETTER DATED NIL FILED IN THE OFFICE OF THE AO ON 27.3.2015 EXPLAINED THAT DURING THE FINANCIAL YEAR 2011-12, THE ASSESSEE HAD PURCHASED LOTTERY TICKETS FROM M/S .FUTURE DISTRIBUTOR FOR THE PERIOD 2 ITA NO.2369/KOL/2016 SMT. SIMA SAHA A.YR.2012-13 2 FROM 1.4.2011 TO 8.5.2011 AND FROM FUTURE PLUS ENTE RPRISES PVT.LTD. FOR THE PERIOD FROM 9.5.2011 TO 31.3.2011. THE ASSESSEE EXPLAINED THAT AS PER THE AGREEMENT WITH THE ABOVE MENTIONED PARTIES, THE ASSESSEE HAS TO PAY TR ADE DEPOSIT WITH THEM ON THE BASIS OF NUMBER OF TICKETS PURCHASED FROM THEM WHICH WOUL D BE ADJUSTED PERIODICALLY AGAINST PAYMENTS TO BE MADE BY THE ASSESSEE AFTER SALE OF L OTTERY TICKETS BY THE ASSESSEE. THE ASSESSEE WOULD IN TURN SELL LOTTERY TICKETS TO SUB- STOCKIST AND WOULD COLLECT SECURITY DEPOSITS FROM THE SUB-STOCKIST. THE ASSESSEE EXPLA INED IT PAID RS. 43,74,312 TO FUTURE PLUS ENTERPRISE PVT. LTD., AS TRADE DEPOSIT FROM AN D OUT OF 51,47,062, THE ASSESSEE HAD COLLECTED FROM ITS SUB-STOCKISTS. THE AMOUNT COLL ECTED BY THE ASSESSEE FROM ITS SUB- STOCKISTS AS SECURITY DEPOSIT AND OTHER BORROWINGS WERE TOTALLED AND THE AMOUNT ASSESSEE PAID FUTURE PLUS ENTERPRISE PVT. LTD WAS REDUCED AND THE NET LIABILITY FIGURE WAS SHOWN BY THE ASSESSEE IN THE BALANCE SHEET. TH E SECURITY DEPOSIT PAID TO FUTURE PLUS ENTERPRISE PVT.LTD., WAS THUS SHOWN IN THE BAL ANCE SHEET AND THE PRESUMPTION OF THE AO THAT THE SAME WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS WAS NOT CORRECT. THE FOLLOWING THE MANNER IN WHICH THE SECURITY DEPOSIT RECEIVED AND PAID AND THE NET SECURITY DEPOSIT PAYABLE WAS SHOWN IN THE BALANCE S HEET AS LIABILITY BY THE ASSESSEE. TRADE ADVANCE FROM PARTY . 51,47,062 (CR) ADVANCE FROM HUSBAND 29,00,000 (CR) TOTAL ADVANCE - 80,47,062 (CR) LESS, TRADE ADVANCE TO FUTURE PLUS ENT PVT LTD : 4 3.74,312 (DR) ADVANCE FROM PARTY AS PER BALANCE SHEET : 36,7 2,750 (CR) 4. THE AO AFTER MAKING AN OBSERVATION IN THE ORDER OF ASSESSMENT THAT THE EXPLANATION AND CLARIFICATION, OFFERED BY THE ASSESSEE, IS NOT UPTO THE MARK AND DOES NOT CONTAIN ADEQUATE GROUNDS ADDED THE SUM OF RS.43, 74,312/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 3 ITA NO.2369/KOL/2016 SMT. SIMA SAHA A.YR.2012-13 3 5. BEFORE CIT(A), THE ASSESSEE REITERATED SUBMISSI ONS MADE BEFORE THE AO AND FURTHER SUBMITTED THAT THE AO WITHOUT INVESTIGATING THE STA ND TAKEN BY THE ASSESSEE HAS MADE THE ADDITION AND THE SAME SHOULD BE DELETED. 6. THE CIT(A) AGREED WITH THE SUBMISSIONS OF THE A SSESSEE AND DELETED THE ADDITION MADE BY THE AO, OBSERVING AS FOLLOWS: 4.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT AND THE FACTS OF THE CASE. THE AO ADDED BACK THE SECURITY DEPOSIT TO THE TUNE OF RS.43,74,312/- WHICH WAS PAID TO M/S. FUTURE PLUS ENTERPRISE PRIVATE LTD. TH E APPELLANT HAS POINTED OUT THE REASONS WHICH NECESSITATED TRADE ADVANCE . THIS IS PART OF THE LOTTERY TRADE AND THE APPELLANT PAYS TRADE ADVANCE TO ITS CREDITOR AN D OTHER PARTIES PAY TO THE APPELLANT . THIS SAFEGUARDS THE PARTIES INVOLVED IN THIS BUSINESS. THE APPELLANT HAS SUBMITTED THAT 'THE TOTAL AMOUNT OF TRADE DEPOSIT RECEIVED FROM MY SUNDRY DEBTORS AS ON 31S1 MARCH, 2012 IS RS. 51,47,062/--(CREDIT BALANCE ). DURING THE FINANCIAL YEAR 2011-12 YOU APPELLANT HAS DEBITED AD VANCE FROM PARTIES ACCOUNT BY A DEBIT BALANCE OF RS. 43,74,312/- WITH FUTURE PLUS ENTERPRISE PVT LTD AND HAS CREDITED RS. 51,47,063/- ON ACCOUNT OF TRADE ADVANCE TAKEN FROM SUB-STOCKISTS/AGENTS/ RETAILERS. FURTHER AN ADVANCE TAKEN FROM YOUR APPELLANT'S HUSBAND MR D. SAHA RS. 29,00,000 ( CR) /- WHICH I HAVE SHOWN UNDER ADVANCE FROM PARTY IN THE BALANCE SHEET AS AT 31.03.2012, THE NET ADVANCE FROM PARTY OF RS. 36,72,750/- SHOWN AS ADVANCE FROM PARTY IN THE BALANCE SHEET AS AT 31.03.2012 INCLUDE S DEBIT BALANCE OF TRADE DEPOSIT WITH FUTURE PLUS ENTERPRISE PVT LTD. BOOKS OF ACCOUNT ALONG WITH DETAILS FROM ADVANCE FROM PARTIES, CONFI RMATION FROM SUB- STOCKISTS/AGENTS/ RETAILERS SUPPORTING OUR CLAIMS W AS SUBMITTED BEFORE THE A. 0. APPELLANT IS DEPICTING THE GIST OF THE ACCOUNT ADVANCE FROM PARTIES FOR YOUR KIND NOTE AND RECORDS. TRADE ADVANCE FROM PARTY . 51,47,062 (CR) ADVANCE FROM HUSBAND 29,00,000 (CR) TOTAL ADVANCE - 80,47,062 (CR) LESS, TRADE ADVANCE TO FUTURE PLUS ENT PVT LTD : 4 3.74,312 (DR) ADVANCE FROM PARTY AS PER BALANCE SHEET : 36,7 2,750 (CR) THE DETAILS SUBMITTED HAVE BEEN VERIFIED AND CROSS CHECKED WITH THE BALANCE SHEET AND THUS I FIND FORCE IN THE CONTENTION OF TH E APPELLANT AND THE AMOUNT OF RS.43,74,312/- ADDED BACK BY THE AO IS DELETED . 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVEN UE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. I HAVE HEARD THE SUBMISSION O F THE LEARNED DR AND THE LEARNED 4 ITA NO.2369/KOL/2016 SMT. SIMA SAHA A.YR.2012-13 4 COUNSEL FOR THE ASSESSEE. THE LEARNED DR RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT THE DETAILS FILED BEFORE CIT(A) SHOULD BE LOOK ED INTO BY THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE DETAI LS THAT WERE BEFORE CIT(A) WERE ALL FILED BEFORE AO IN THE COURSE OF ASSESSMENT PROCEE DINGS AND THEREFORE THE GRIEVANCE PROJECTED BY THE LEARNED DR IS NOT CORRECT. 8. I HAVE GIVEN A VERY CAREFUL CONSIDERATION TO T HE RIVAL SUBMISSIONS. THE ADDITION MADE BY THE AO IS BY INVOKING THE PROVISIONS OF SEC .69 OR 69A OF THE ACT. IN BOTH THE AFORESAID PROVISIONS, THE REQUIREMENT IS THAT THE I NVESTMENTS OR UNEXPLAINED MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE SHOULD NOT HAVE BEEN FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. FROM THE EXPLAN ATION GIVEN BY THE ASSESSEE, WHICH HAS NOT BEEN SHOWN TO BE INCORRECT BY THE REVENUE, IT IS CLEAR THAT THE SECURITY DEPOSIT WITH M/S.FUTURE PLUS ENTERPRISE PVT.LTD., IS DULY R EFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN THE GROUNDS OF APPEAL, THE REVEN UE HAS CONTENDED THAT THE SECURITY DEPOSIT IN QUESTION OUGHT TO HAVE BEEN SHOWN IN THE ASSET SIDE OF THE BALANCE SHEET. AS WE HAVE ALREADY SEEN THIS HAS BEEN TAKEN INTO ACCOU NT BY REDUCTION IN THE LIABILITY SIDE OF THE BALANCE SHEET AND THEREFORE THE EFFECT IS ON E AND THE SAME. AS WE HAVE ALREADY STATED THE ADDITION CAN BE MADE ONLY WHEN THE INVES TMENT IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. SINCE THE INVESTMENT IS FOUND TO BE R ECORDED IN THE BOOKS OF ACCOUNTS, I AM OF THE VIEW THAT THERE WAS NO REASON TO INTERFER E WITH THE ORDER OF THE CIT(A) AND I HOLD THAT THE ADDITION WAS RIGHTLY DELETED BY THE C IT(A). I FIND NO MERITS IN THIS APPEAL BY THE REVENUE AND THEREFORE DISMISS THE SAME. 9. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 12.04.2017. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 12.04.2017. [RG PS] 5 ITA NO.2369/KOL/2016 SMT. SIMA SAHA A.YR.2012-13 5 COPY OF THE ORDER FORWARDED TO: 1. SMT SIMA SAHA, HATARPARA, 4 TH LANE, KRISHNANAGAR, NADIA-741101. 2. I.T.O., WARD-41(1), NADIA. 3. CIT(A)-12, KOLKATA. 4. C.I.T.-14, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES