M/s Candida Enterprise, Guwahati V. Joint Commissioner of Income Tax, Range-2, Guwahati

ITA 266/GTY/2013

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9189 (ITAT-GUWAHATI)
• Duration Of Justice: 6 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN JCIT SRDR
• Assessee Lawyers: D K BISWAS
• Section: 143(3); 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH E COURT AT KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L.SAINI, ACCOUNTANT MEMBER ITA NO. 185 & 266 / GAU / 201 3 ASSESSMENT YEARS :2005-06 & 2006-07 M/S CANDIDA ENTERPRISE KALIRAM MEDHI ROAD, RANIBARI, PAN BAZAR, GUWAHATI-781001 [ PAN NO.AADFC 9880 N ] V/S . JCIT,RANGE-2, AAYAKAR BHAWAN, G.S. ROAD, CHRISTIAN BASTI, GUWAHATI- 781005 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI D.K.BISWAS, ADVOCATE /BY RESPONDENT SHRI M.C OMI NINGSHEN, JCIT SR-DR /DATE OF HEARING 11-12-2019 /DATE OF PRONOUNCEMENT 18-12-2019 / O R D E R PER BEMCH:- THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEARS 2005-06 & 2006- 07 ARISE AGAINST THE COMMISSIONER OF INCOME TAX (AP PEALS)-GUWAHATIS SEPARATE ORDERS DATED 02.01.2013 AND 14.02.2013 PAS SED IN CASE NO.GUWA- 400/07-08 AND GUWA-200/2008-09 INVOLVING PROCEEDIN GS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. THE SOLE SUBSTANTIVE ISSUE CANVASSED IN ASSESSEE S FORMER APPEAL ITA NO.185/GAU/2013 CHALLENGES BOTH THE LOWER AUTHORITI ES ACTION DISALLOWING / ADDING THE AMOUNT OF 16,57,539/- UNDER THE HEAD COMMISSION ACCOUNT IN ITA NO.185& 266/GAU/2013 AS SESSMENT YEARS: 05-06 & 06-07 M/S CANDIDA ENTERPRISE. VS. JCIT, RG-2,GUWA PAGE 2 THE COURSE OF ASSESSMENT AS AFFIRMED IN THE LOWER APPELLATE PROCEEDINGS. THE CIT(A)S DETAILED DISCUSSION TO THIS EFFECT READS A S UNDER:- 5. THE SECOND GROUND OF APPEAL IS AGAINST ADDITION OF RS.16,57,539/- TO COMMISSION INCOME ACCOUNT OUT OF NET CREDIT BALANCE OF RS.4,298,124/-. THE RELEVANT PORTION OF THE ASSESSMENT ORDER IS AT PARA GRAPHS 2.1 TO 2.10 OF THE ASSESSMENT ORDER ( PAGES 1-5 ) AND TO AVOID REPETITION, FACTS ARE NOT BEING REPRODUCED. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED THAT THE CREDIT BALANCE IN THE NAMES OF PRINCIPALS REPRE SENTED PAYMENT MADE TO ASSESSEE BY THE PRINCIPALS TO MEET SPECIFIC EXPENSE S FOR THE PRINCIPALS AND, THEREFORE, THEY WERE NOT ADJUSTED AGAINST COMMISSIO N RECEIVABLE. THE AO REJECTED THE CONTENTION BY OBSERVING THAT HAD IT BE EN FOR SPECIFIC PAYMENTS, THE SUM SHOULD HAVE REMAINED INTACT AND, THEREFORE, IT SHOULD HAVE BEEN LYING AS CASH-IN-HAND OR AS BALANCE IN THE BANK ACCOUNT; WHEREAS CASH AND BANK BALANCE WAS ONLY RS.8,40,989/- ( FAR LESS THAN CREDIT BALANCES IN THE NAMES OF THE PRINCIPALS ). THE AO TREATED THE CREDIT BALANCES LYING IN THE ACCOUNT OF THE PRINCIPALS AS ASSESSEES COMMISSION SINCE TO TH E EXTENT OF COMMISSION DUE FROM THE RESPECTIVE PRINCIPALS. THE TOTAL ADDIT ION WAS RS.16,57,539/-. 5.1 DURING THE APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THAT ALL THE EXPENSES FOR AND ON BEHALF OF PRINCIPAL WERE PAID T IMELY AND NO SCARCITY OF FUND WAS EVER FACED AND HENCE NO ADVERSE VIEW SHOUL D BE TAKEN ON THE BASIS THAT ADVANCES RECEIVED FROM PRINCIPALS WERE NOT KEP T AS CASH / BANK BALANCES. 5.2 I FIND THE ADDITION MADE BY THE ASSESSING OFFIC ER TO BE QUITE REASONABLE. IT IS NOT DISPUTED THAT COMMISSION WAS DUE TO THE APPE LLANT. IT IS NOT DISPUTED THAT MONEY WAS RECEIVED BY THE APPELLANT AND THERE IS NO EVIDENCE TO PROVE THAT MONEY RECEIVED WAS ONLY TOWARDS ADVANCES FOR E XPENSES. THERE IS NO DISPUTE THAT AMOUNT REPRESENTED BY CREDIT BALANCES WERE NOT FULLY KEPT IN THE FORM OF CASH / BANK BALANCE. THERE IS NO DISPUTE TH AT APPELLANT MAINTAINS CASH SYSTEM OF ACCOUNTING. UNDER THESE CIRCUMSTANCES; AN D WHEN THE AMOUNT OF ADDITION MADE BY AO REPRESENTED BOTH COMMISSION DU E AND MONEY ACTUALLY RECEIVED; THE ADDITION IS SUSTAINED. THE SECOND GRO UND OF APPEAL IS DISMISSED . 3. BOTH THE LEARNED COUNSEL VEHEMENTLY REITERATED T HEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMPUGNED COMMISSION A MOUNT. THE FACT HOWEVER REMAINS THAT NEITHER THE ASSESSEE HAS BEEN ABLE TO PROVE EACH AND EVERY COMMISSION RECEIVED OR RECEIVABLE NOR THE ASSESSING OFFICER AND THE CIT(A) HAVE ASKED IT TO PROVIDE FOR LIST OF PRAYER FOR NEC ESSARY FACTUAL VERIFICATION. WE THEREFORE DEEM IT APPROPRIATE IN THESE PECULIAR FAC TS THAT A LUMP SUM ADDITION OF 1,57,539/- ON ESTIMATION BASIS WOULD MEET THE LARGE R INTEREST OF JUSTICE. ITA NO.185& 266/GAU/2013 AS SESSMENT YEARS: 05-06 & 06-07 M/S CANDIDA ENTERPRISE. VS. JCIT, RG-2,GUWA PAGE 3 CONSEQUENTIAL NECESSARY COMPUTATION SHALL FOLLOW AS PER LAW. THE ASSESSEE GETS PART RELIEF TO THE ABOVE LIMITED EXTENT. 4. SAME REASONING TO FOLLOW IN LATTER APPEAL ITA NO.266/GAU/2013 IN ASSESSMENT YEAR 2006-07. WE RESTRICT THE IMPUGNED A DDITION OF 357,431.51 TO A LUMP SUM AMOUNT OF 57431.51 ONLY. IT IS MADE CLEAR THAT OUR INSTANT ESTIMATION SHALL NOT BE TREATED AS PRECEDENT IN ANY ASSESSMENT YEAR IN ASSESSEES CASE. 5. THESE ASSESSEES APPEALS ITA NO.185 & 266/GAU/20 13 ARE PARTLY ALLOWED IN ABOVE TERMS. A COPY OF THE INSTANTS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILE . ORDER PRONOUNCED IN THE OPEN COURT 18/ 12/2019 SD/- SD/- (A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) JUDICIAL MEMBER) KOLKATA, *DKP '- 18 / 12 /201 9 / / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE -M/S CANDIDA ENTERPRISE, KALIRAM MEDHI R OAD, RANIBARI, PAN BAZAR GUWAHATII-781001 2. /REVENUE-JCIT, RANGE-2,AAYAKAR BHAWAN,G.S. ROAD, CH RISTIAN BASTI GUWAHATI-7810 05 3. - / / CONCERNED CIT GUWAHATI 4. /- / CIT (A) GUWAHATI 5. 2 55-, -, / DR, ITAT, GUWAHATI 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO -,