M/s. Smt. Soma Ganguly, Murshidabad, Murshidabad V. I.T.O, Ward - 4, Murshidabad, Murshidabad

ITA 264/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2523 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 09-02-2010
• Court: TRIBUNAL
• Department Lawyers: A RAJHANS
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained investment; Unexplained expenditure
• Section: 69C

Judgement Text

, SMC (A) , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - SMC (A) , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND / I.T.A.NO. 264/KOL/2010 / ASSESSMENT YEAR 2006 - 07 M/S. SMT. SOMA GANGULY, 150, PILKHANA ROAD, BERHAMPORE, MURSHIDABAD. PAN AGIPG 7835 K - - - VERSUS - . INCOME - TAX OFFICER, WARD 4,MUSHIDABAD. ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APP ELLANT : / SHRI S.M.SURANA, AR / FOR THE RESPONDENT : / SHRI A.RAJHANS, DR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE ASSESSEE HAS FILED THIS APPEAL FOR THE ASSESSMENT YEAR 2006 - 07 AGAIN ST ORDER DT.23.12.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) XXXVI, KOLKATA. 2. IN GROUNDS NO.2 AND 3 OF THE APPEAL, THE ASSESSEE HAS DISPUTED THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION OF RS.2 LAKHS U/S.69C OF THE ACT. 3. THE FACTS RELEVANT ARE THAT THE ASSESSING OFFICER OBSERVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE PAID OUT OF HIS CASH CREDIT ACCOUNT WITH PUNJAB NATIONAL BANK, A SUM OF RS.2 LAKHS TO SRI P.S HASH . THE ASSESSING OFFICER HAS STATED THAT THE ASSE SSEE COULD NOT EXPLAIN THE PURPOSE OF THE ABOVE PAYMENT. THEREFORE, THE ASSESSING OFFICER TREATED THE SAID AMOUNT AS UNEXPLAINED INVESTMENT AND ADDED THE SAME TO THE TO TAL INCOME OF THE ASSESSEE U/S. 69C OF THE INCOME - TAX ACT,1961. AGGRIEVED, THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(A). 4. ON BEHALF OF THE ASSESSEE IT WAS CONTENDED BEFORE THE LEARNED CIT(A) THAT THERE WERE PURCHASES OF PADDY, WHEAT AND MUSTARD SEEDS ETC., MADE BEFORE THE DATE OF PAYMENT AND THE SAME WERE SOLD FOR RS.2,21,533. THEREFORE , THE SAID PAYMENT WAS MADE TO SHRI P.S H AH. THE LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT THE PURCHASING OF PADDY, WHEAT, MUSTARD SEEDS AND OTHER SEASONAL PRODUCTS ARE NOT CONNECTED WITH THE BUSINESS OF / I.T.A.NO. 264/KOL/2010 2 THE ASSESSEE AN D THEREFORE, HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING THE LEARNED AR OF THE ASSESSEE REFERRED TO PAGE 13 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSE E IN THE TRADING AND PROFIT & LOSS ACCOUNT HAS ALSO SHOWN THE OPENING STOCK OF RS.1,15,192 AND PURCHASES OF RS.5,12,726 UNDER THE HEAD SEASONAL BUSINESS. HE FURTHER SUBMITTED THAT THERE WAS GROSS PROFIT OF RS.69,071 ON ACCOUNT OF DEALING IN SEASONAL GOOD S APART FROM POULTRY FEED BUSINESS AND CHICKS BUSINESS. HE SUBMITTED THAT THE FINDINGS OF THE AUTHORITIES BELOW THAT THERE WAS NO PURCHASE OF SEASONAL GOODS BY THE ASSESSEE FROM P.SHAH IS NOT FACTUALLY CORRECT AS THE ASSESSEE WAS ALSO HAVING ONE OF THE BUS INESS IN DEALING IN SEASONAL GOODS. THEREFORE, THE SAID PAYMENT OF RS.2 LAKHS WAS MADE IN CONNECTION WITH THE BUSINESS ACTIVITIES TO SHRI P.SHAH AGAINST PURCHASES MADE BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE SAID PAYMENT WAS MADE OUT OF DISCLOSED BA NK ACCOUNT. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDER OF THE LEARNED CIT(A). 6. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. I HAVE ALSO PERUSED PAGE NO.13 OF THE PB AN D FIND SUBSTANCE IN THE SUBMISSION OF THE LEARNED AR OF THE ASSESSEE THAT THE ASSESSEE HAS SHOWN HIS BUSINESS IN THREE PARTS NAMELY, SEASONAL BUSINESS, POULTRY BUSINESS AND CHICKS BUSINESS. FURTHER, THE DEPARTMENT HAS NOT DISPUTED THE FACT THAT THE ASSESSE E HAS SHOWN IN RESPECT OF SEASONAL BUSINESS A GROSS PROFIT OFRS.69,071.THE DEPARTMENT HAS ALSO NOT DISPUTED THE FACT THAT THE ASSESSEE HAS SHOWN SALES OF RS. 2,21,533 AGAINST THE SAID PURCHASES OF RS.2 LAKHS. THEREFORE, THE FINDINGS OF THE AUTHORITIES BELO W THAT THE SAID PAYMENT OF RS.2 LAKHS TO SHRI P. SHAH IS UNEXPLAINED EXPENDITURE IS NOT FACTUALLY CORRECT. HENCE, I DELETE THE SAID ADDITION OF RS. 2 LAKHS BY ALLOWING GROUNDS NO.2 AND 3 OF THE APPEAL TAKEN BY THE ASSESSEE. 7. IN GROUND NO.4, THE ASSESSEE HAS DISPUTED THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION OF RS.6,890 ON THE GROUND THAT THE INTEREST PAID ON THE OVER DRAFT AMOUNT OF RS.2 LAKHS TAKEN BY THE ASSESSEE WAS NOT FOR THE PURPOSE OF BUSINESS. / I.T.A.NO. 264/KOL/2010 3 8. SINCE I HAVE HELD THAT THE SAID SU M OF RS.2 LAKHS WAS PAID TO SHRI P.SHAH FOR BUSINESS PURPOSE , CONSEQUENTLY THE INTEREST PAID TO BANK OF RS.6,890 IS ALSO IN CONNECTION WITH THE OVERDRAFT FACILITY TAKEN BY THE ASSESSEE FOR BUSINESS PURPOSE . THEREFORE, I DELETE THE SAID DISALLOWANCE/ADDITIO N OF R S.6,890.GROUND NO.4 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 30.06.2010 SD/ - ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE : 30.6.2010 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : M/S. SMT. SOMA GANGULY, 150, PILKHANA ROAD, BERHAMPORE, MURSHIDABAD. 2 / THE RESPONDENT - INCOME - TAX OFFICER, WARD 4,MUSHIDA BAD. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , / DEPUTY REGISTRAR . ( /) H.K.PADHEE / SNR.PRIVATE SECRETARY .