Shri Sanjay Agarwal , Siliguri V. ITO, Ward - 2(3) , Siliguri

ITA 2463/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2794 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-04-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained cash credit
• Section: 80C; 143(3)

Judgement Text

I.T.A. NO. 2463/KOL/2018 (ASSESSMENT YEAR: 2010-2011) SHRI SANJA Y AGARWAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) I.T.A. NO. 2463/KOL/2018 ASSESSMENT YEAR: 2010-2011 SHRI SANJAY AGARWAL,............................... ......................................APPELLANT C/O. ANAND GUPTA & ASSOCIATES, 42A, C.R. AVENUE, 3 RD FLOOR, NEAR YOGAYOG BHAWAN, KOLKATA-700 012 [PAN: AGRPA 5797 R] -VS.- INCOME TAX OFFICER,................................ ..............................RESPONDENT WARD-2(3), SILIGURI, AAYAKAR BHAWAN, PARIBAHAN NAGAR, SILIGURI-734 010 APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, FOR THE APPELLANT SHRI SANKAR HALDER, JCIT, SR. D.R., FOR THE RESPOND ENT DATE OF CONCLUDING THE HEARING : APRIL 11, 2019 DATE OF PRONOUNCING THE ORDER : JUNE 07, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI DATE D 07.09.2018 AND THE GROUNDS RAISED BY THE ASSESSEE THEREIN READ AS UNDE R:- (1) FOR THAT ASSESSMENT ORDER PASSED BY THE LD. AO IS BAD IN LAW AS WELL AS ON FACTS. (2) FOR THAT LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT OF CASH ADVANCES RECEIVED FROM VARIOUS CUSTOMERS AGGREGATING RS.4,45,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE, WHEREAS THE SAME WERE RECEI VED IN ORDINARY COURSE OF BUSINESS AND GOODS WERE ACTUA LLY SUPPLIED AND TAX INVOICES WERE ISSUED TO THE CUSTOM ERS. (3) FOR THAT LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT OF CASH ADVANCES RECEIVED FROM VARIOUS CUSTOMERS AGGREGATING RS.4,45,000/- AS UNDISCLOSED INCOME INSPITE OF THE FACT THAT THE REGULAR BOOKS O F I.T.A. NO. 2463/KOL/2018 (ASSESSMENT YEAR: 2010-2011) SHRI SANJA Y AGARWAL 2 ACCOUNT WERE MAINTAINED WHICH WERE DULY AUDITED AND NO DEFECT WERE FOUND IN SUCH BOOKS OF ACCOUNT. (4) FOR THAT LD. CIT(A) ERRED IN CONFIRMING IN DISALLOWANCE OF INTEREST RS.64,257/- PAID ON HOUSIN G LOAN. (5) FOR THAT LD. CIT(A) ERRED IN CONFIRMING IN DISALLOWANCE OF DEDUCTION OF RS.45,111/- CLAIMED U/ S 80C WHEREAS THE SAME REPRESENTED THE PRINCIPAL AMOUNT OF HOUSING LOAN REPAID DURING THE YEAR. 2. GROUND NO. 1 RAISED BY THE ASSESSEE IN THIS APPE AL IS GENERAL, WHILE GROUNDS NO. 4 & 5 ARE NOT PRESSED BY THE LD. COUNSE L FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE THE TRIBUNAL. THE SAME A RE ACCORDINGLY DISMISSED AS NOT PRESSED. 3. GROUNDS NO. 2 & 3 INVOLVE A COMMON ISSUE RELATIN G TO THE ADDITION OF RS.4,45,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF CASH ADVANCES RECEIVED B Y THE ASSESSEE FROM VARIOUS CUSTOMERS BY TREATING THE SAME AS UNEXPLAIN ED. 4. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF RETAIL TRADING OF MOTOR-PARTS AND A CCESSORIES UNDER THE NAME AND STYLE OF HIS PROPRIETARY CONCERN M/S. CAR DECORA. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y HIM ON 22.09.2010 DECLARING TOTAL INCOME OF RS.3,47,627/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS RECEIVED VARIOUS AMOUNTS IN CASH IN EXCESS OF RS.20 ,000/- AGGREGATING TO RS.4,45,000/-. IN THIS REGARD, IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAID AMOUNTS WERE RECEIVED BY HIM AS ADVANCES FROM THE CUSTOMERS AND THE SAID ADVANCES WERE SUBSEQUENTLY ADJUSTED AGAINS T THE GOODS SOLD TO THEM. LEDGER ACCOUNTS OF THE CONCERNED PARTIES SHOW ING THE RECEIPT OF ADVANCES IN CASH AND ADJUSTMENT OF THE SAID ADVANCE S AGAINST SALES MADE SUBSEQUENTLY WERE ALSO FURNISHED BY THE ASSESSEE. O N PERUSAL OF THE SAME, THE ASSESSING OFFICER FOUND THAT THE CASH ADVANCES WERE RECEIVED BY THE I.T.A. NO. 2463/KOL/2018 (ASSESSMENT YEAR: 2010-2011) SHRI SANJA Y AGARWAL 3 ASSESSEE FROM THE CUSTOMERS IN THE MONTH OF JULY TO OCTOBER, 2010, WHEREAS THE CORRESPONDING SALES WERE MADE TO THEM I N THE MONTH OF MARCH, 2011. THIS RAISED SUSPICION IN THE MIND OF T HE ASSESSING OFFICER AND HE REQUIRED THE ASSESSEE TO PROVIDE THE NAMES A ND ADDRESSES OF THE CONCERNED PARTIES FOR CROSS VERIFICATION. THE ASSES SEE, HOWEVER, EVEN FAILED TO GIVE COMPLETE ADDRESSES OF THE CONCERNED CUSTOMERS. IT WAS ALSO NOTICED BY THE ASSESSING OFFICER FROM THE RELEVANT INVOICES PRODUCED BY THE ASSESSEE THAT VAT NOS. OF THE CUSTOMERS WERE NO T MENTIONED IN THE SAID INVOICES. HE ACCORDINGLY HELD THAT THE EXISTEN CE AND GENUINENESS OF THE CONCERNED PARTIES AS WELL AS THE GENUINENESS OF THE RELEVANT TRANSACTIONS WAS NOT PROVED AND AN ADDITION OF RS.4 ,45,000/- WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE BY TREAT ING THE CASH ADVANCES AS UNEXPLAINED IN THE ASSESSMENT COMPLETED UNDER SE CTION 143(3) VIDE AN ORDER DATED 28.01.2016. 5. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SA ID ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THAT THE ASSESSE E COULD NOT CONTROVERT THE ADVERSE FINDINGS OF FACT RECORDED BY THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER WHILE TREATING THE CASH ADVANCES A S UNEXPLAINED. 6. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN THE CASE OF SAHA ENTERPRISES VS.- ITO CITED BY THE LD. COUNSEL FOR THE ASSESSEE, A SIMILAR ISSUE HAD COME FOR CONSIDERATION BEFORE THE TRIBUNAL INVOLVING ALM OST IDENTICAL FACTS AND WHILE DECIDING THE SAME VIDE ITS ORDER DATED 06.02. 2015 PASSED IN ITA NO. 2141/KOL/2014, THE TRIBUNAL HELD THAT THE ADVAN CES RECEIVED BY THE ASSESSEE BEING TRADE ADVANCES BY VERY NATURE OF ACT IVITY OF THE ASSESSEE AND THE SAME HAVING BEEN ADJUSTED AGAINST THE SALES MADE TO THE CONCERNED PARTIES, THE SAID ADVANCES COULD NOT BE T REATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68. IN THE CASE OF CRYSTA L NETWORKS (P) LIMITED VS.- CIT (ITA NO. 158 OF 2002 DATED 29.07.2010) CI TED BY THE LD. COUNSEL FOR THE ASSESSEE, TRADE ADVANCES GIVEN BY THE CREDI TORS/CUSTOMERS WERE FOUND TO BE ADJUSTED AGAINST THE SALE OF PRODUCTS M ADE BY THE ASSESSEE I.T.A. NO. 2463/KOL/2018 (ASSESSMENT YEAR: 2010-2011) SHRI SANJA Y AGARWAL 4 SUBSEQUENTLY TO THE CONCERNED CREDITORS/CUSTOMERS A ND IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT ON THESE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ADVANCES SO RECEIVED BY THE ASSESSEE COULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT. IN MY OPINION, THE RATIO O F THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SA HA ENTERPRISE (SUPRA) AND THAT OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CRYSTAL NETWORKS (P) LIMITED (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE AND EVEN THE LD. D.R. HAS NOT BEEN ABL E TO DISPUTE THIS POSITION. I, THEREFORE, RESPECTFULLY FOLLOW THE SAI D JUDICIAL PRONOUNCEMENTS CITED BY THE LD. COUNSEL FOR THE ASS ESSEE AND DELETE THE ADDITION OF RS.4,45,000/- MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UNEXPLAINED CA SH ADVANCES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 07, 2019 . SD/- (P.M. JAGTAP) VICE-PRESIDENT (KZ ) KOLKATA, THE 7 TH DAY OF JUNE, 2019 COPIES TO : (1) SHRI SANJAY AGARWAL, C/O. ANAND GUPTA & ASSOCIATES, 42A, C.R. AVENUE, 3 RD FLOOR, NEAR YOGAYOG BHAWAN, KOLKATA-700 012 (2) INCOME TAX OFFICER, WARD-2(3), SILIGURI, AAYAKAR BHAWAN, PARIBAHAN NAGAR, SILIGURI-734 010 (3) COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI , (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.