ACIT, Circle - 2, Durgapur, Durgapur V. Sanat Kr. Sen. Prop. M/s. Sen Brothers, Durgapur

ITA 326/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54547 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

ITA NO.326/KOL/2011 SANAT KR. SEN. A.Y. 07-08 1 , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : K OLKATA BEFORE HONBLE SHRI MAHAVIR SINGH, JM & HONBLE SH RI C.D. RAO, AM ( ) , . . , ) / I.T.A NO.326/KOL/2011 !' #$ / ASSESSMENT YEAR : 2007-08 ASSISTANT COMMISSIONER OF INCOME-TAX VS. SANAT KR. SEN, PR/O M/S. SEN BROTHERS CIRCLE-2, DURGAPUR PAN: AJVPS 5044 C) ( %& /APPELLANT ) ( '(%& / RESPONDENT ) %& / FOR THE APPELLANT: ) / SHRI S. K. ROY '(%& / FOR THE RESPONDENT: ) / SHRI S.M. SURANA * * * * /ORDER , SHRI MAHAVIR SINGH, JUDICIAL MEMBER: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), DURGAPUR IN APPEAL NO 53/ CIT(A)/DGP/2009-10 DATED 24.11.2010. ASSESSMENT WAS FRAMED BY ADDL.C.I.T, RANGE-2, DURGAPUR U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.11.2009. 2. THIS APPEAL OF REVENUE IS DELAYED BY 16 DAYS AND REVENUE HAS FILED CONDONATION PETITION STATING THE REASON THAT DUE TO SUPERANNUAT ION OF REGULAR ADDL. CIT, THERE IS DELAY OF SIXTEEN DAYS AND HE REQUESTED FOR CONDONAT ION OF DELAY. THE LD. COUNSEL FOR THE ASSESSEE HAS NOT OBJECTED TO CONDONATION OF DEL AY. HENCE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE FIRST ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF RE PAYMENT OF CAR LOAN AMOUNTING TO RS.13,49,635/-, SUNDRY CREDITORS FOR GOODS RS.8,98, 821/- AND SUNDRY CREDITORS FOR EXPENSES AMOUNTING TO RS.10,33,604/-. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE IN RESPECT OF ADDIT IONS MADE BY THE A.O. ON ACCOUNT OF ITA NO.326/KOL/2011 SANAT KR. SEN. A.Y. 07-08 2 REPAYMENT OF CAR LOAN AMOUNTING TO RS.13,49,635/-, SUNDRY CREDITORS FOR GOODS OF RS.8,98,821/- AND SUNDRY CREDITORS FOR EXPENSE AMOU NTING TO RS.10,33,604/- IN SPITE OF THE FACT THAT THE ASSESSEE COULD NOT SUBSTANTIATE T HE SAME. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSING OFFICER MADE ADDI TION OF REPAYMENT OF CAR LOAN AMOUNTING TO RS.13,76,922/- ONLY ON ACCOUNT THAT IT HAD TWO V EHICLES LOAN ACCOUNT WITH ICICI BANK, DURGAPUR BRANCH OUTSTANDING FOR RS.3.81 LACS AND FO R RS.7 LACS AND AGAINST THESE TWO LOAN ACCOUNTS, ASSESSEE REPAID ONLY RS.9,760/- AND RS.17 ,527/- RESPECTIVELY TOTALING TO RS.27,287/- AS AGAINST CLAIM OF REPAYMENT OF VEHICLE LOANS OF A SSESSEE AT RS.13,76,922/-. ACCORDINGLY, ASSESSING OFFICER ADDED DIFFERENTIAL AMOUNT OF RS.1 3,49,635/-. BEFORE CIT(A) ASSESSEE EXPLAINED THAT AT THE BEGINNING OF F.Y 2006-07 RELE VANT TO THIS ASSESSMENT YEAR 2007-08 HE HAD TWO CAR LOANS AND THESE WERE DISPOSED OF DURING THE YEAR AND TWO NEW VEHICLES WERE ACQUIRED. THE OUTSTANDING LOAN ON DISPOSED OF MOTO R CAR WAS REPAID WHICH WAS SHOWN AS REPAID AND COSTS OF NEW VEHICLES WERE DEFRAYED FROM SALE PROCEEDS OF OLD VEHICLES AND NEW LOANS. THE ASSESSEE CONTENDED THAT THESE TWO LOANS I.E. REPAID AS WELL AS NEW LOAN TAKEN WERE FROM ICICI BANK AND TOTAL PRINCIPAL REPAID WAS AT R S.7,67,426/- AND INTEREST AT RS.96,888/-. BUT THE ASSESSING OFFICER HAS DERIVED THESE FIGURES AT RS.13,76,992/- WITHOUT ANY BASIS. LD. COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING, D REW OUR ATTENTION TO ASSESSEES PAPER BOOK PAGES 22 TO 33 WHERE ICICI BANK ACCOUNT DETAILS OF LOAN ARE PROVIDED. FURTHER ALSO DREW OUR ATTENTION TO LEDGER ACCOUNT WHERE DRAWINGS ARE FOR BANK LOAN I.E. AUTO DEBIT AND THE ASSESSING OFFICER COULD NOT UNDERSTAND THE NARRATION. IN VIE W OF ABOVE FACTS, WE ARE OF THE VIEW THAT THERE ARE NO UNEXPLAINED CREDIT FOUND IN THE ASSESS EES BOOKS OF ACCOUNT AND RATHER IT IS NOT A DEPOSIT OR LOAN FOR WHICH ASSESSING OFFICER HAS APP LIED PROVISIONS OF SECTION 68 OF THE ACT AND IT IS NEITHER A CREDIT ENTRY RATHER IT IS REPAY MENT OF LOAN AND THAT ALSO NOT RS.13,76,922/- BUT IT IS ONLY PRINCIPAL REPAYMENT OF RS.7,67,426/- . ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 5. THE NEXT ISSUE IS REGARDING SUNDRY CREDITORS FO R GOODS AT RS.8,98,821/- AND SUNDRY CREDITORS FOR EXPENSES AMOUNTING TO RS.10,33,604/-, WE FIND THAT ASSESSING OFFICER HAS MADE THESE ADDITIONS ONLY ON THE PREMISE THAT IN RESPECT OF SUNDRY CREDITORS FOR GOODS AMOUNTING TO RS.8,98,821/- THE ASSESSEE COULD NOT FILE PAPERS OR DOCUMENTS AND FOR SUNDRY CREDITORS FOR EXPENSES OF RS.10,33,604/- THE ASSESSEE COULD NOT S UBMIT THE DETAILS OF CASUAL LABOURS AND SALARY TO STAFF BUT THE CIT(A) DELETED THE ADDITION BY STATING THAT NO ENQUIRY IS CONDUCTED BY ITA NO.326/KOL/2011 SANAT KR. SEN. A.Y. 07-08 3 ASSESSING OFFICER AS PER RECORDS AND FACT THAT THE ASSESSEE HAS SUBMITTED BASIC DETAILS OF SUNDRY CREDITORS FOR GOODS AND SERVICES BEFORE ASSE SSING OFFICER, WHICH HE VERIFIED FROM THE RECORDS. WE FIND THAT EVEN NOW BEFORE US THE ASSES SEES COUNSEL HAS FILED DETAILS OF WORK-IN- PROGRESS AT RS.35,56,320/-, WHICH IS MAINLY ON ACCO UNT OF BILLS RECEIVABLE OF RS.10,04,000 AND SECURITY DEPOSIT OF RS.13,90,000/- OUTSTANDING AT T HE END OF THE YEAR AS ON 31.3.2007, WHICH CLEARLY PROVES THAT SUCH HUGE AMOUNT OF BUSINESS AS SETS WILL CARRY LIABILITIES WHICH ARE STAYED AS OUTSTANDING. THE ASSESSING OFFICER HAS NOT GONE INTO OR ENQUIRED INTO AS HOW THE OUTSTANDING LIABILITIES ARE NOT GENUINE. IT IS AN A DMITTED FACT THAT THESE ARE OUTSTANDING LIABILITIES ARISING OUT OF BUSINESS TRANSACTION AND ONCE THIS IS ESTABLISHED, ASSESSING OFFICER HAS NO RIGHT TO MAKE ADDITION AND ACCORDINGLY, WITH OUT MAKING ANY ENQUIRY ADDITIONS MADE IS RIGHTLY DELETED BY CIT(A). WE CONFIRM THE SAME. I N RESPECT TO SUNDRY CREDITORS FOR WAGES AND SALARIES, AS PER P&L ACCOUNT THERE ARE LABOUR P AYMENTS TO THE EXTENT OF RS.92 LACS, LABOUR INCENTIVE OF RS.25 LACS AND SALARY OF RS.9.60 LACS DURING THE YEAR AND ONLY PAYABLE OF LAST MONTHS EXPENSES CONSISTS OF PAYMENT TO CASUAL LABO UR OF RS.9.53 LACS AND STAFF SALARY OF RS.80,000/-. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT DISALLOWED IN EARLIER YEARS IN THE P&L ACCOUNT AND THIS IS MERELY A PAYABLE OF LAST MONTH I.E. FOR THE MARCH OF RELEVANT FINANCIAL YEAR. EVEN ASS ESSING OFFICER HAS NOT MADE ANY ENQUIRY WHICH IS VISIBLE FROM RECORDS AND IT IS ALSO NOT IN DISPUTE THAT THE LIABILITIES ARE NOT GENUINE, IN THE ABSENCE OF THE SAME, WE ARE OF THE VIEW THAT TH E CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE CONFIRM THE ORDER OF CIT(A). ACCORDINGLY, ON AL L THE THREE ASPECTS, THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 6. THE NEXT ISSUE IS REGARDING DELETION OF ADDITION MADE BY ASSESSING OFFICER AS REPAYMENT OF BANK LOAN FROM UNDISCLOSED SOURCE. FO R THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.2: 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE IN RESPECT OF ADDIT ION MADE BY THE A.O. AMOUNTING TO RS.56,722/- AS REPAYMENT OF BANK LOAN FROM UNDISCLO SED SOURCE OF INCOME IN SPITE OF THE FACT THAT THE ASSESSEE COULD NOT SUBSTANTIATE T HE SAME. 7. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT BEFORE THE ASSESSING OFFICER, C IT(A) AND EVEN NOW BEFORE US LD. COUNSEL FOR THE ASSESSEE FILED COPY OF BANK ACCOUNT WHEREBY THE ASSESSEE HAS PAID THIS INTEREST BY AUTO DEBIT IN HIS ICICI BANK ACCOUNT. A COPY OF STATEME NT OF ICICI BANK IS ENCLOSED IN ASSESSEES PAPER BOOK WHICH CLEARLY REVEALS THAT TH IS AMOUNT OF RS.56,722/- WAS PAID BY ITA NO.326/KOL/2011 SANAT KR. SEN. A.Y. 07-08 4 ASSESSEE. IT IS ALSO A FACT THAT THIS ICICI BANK A CCOUNT IS DISCLOSED IN THE ASSESSEES BOOKS OF ACCOUNT AND THIS AUTO DEBIT IS ACCOUNTED IN THE BOO KS OF ACCOUNT OF THE ASSESSEE, ONCE THIS IS THE POSITION THAT AUTO DEBIT ENTRY IS ACCOUNTED FOR AS INTEREST PAID, THERE IS NO QUESTION OF THIS AMOUNT BEING UNDISCLOSED. ACCORDINGLY, CIT(A) HAS RIGHTLY DELETED THIS ADDITION AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 8. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF 20% ON ACCOUNT OF MOTOR CAR EXPENSE S FOR PERSONAL USER. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.3: 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE IN RESPECT OF DISAL LOWANCE OF 20% OF EXPENSE AMOUNTING TO RS.1,56,114/- ON ACCOUNT OF PERSONAL USE OF MOTO R CAR. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSING OFFICER DURING TH E COURSE OF ASSESSMENT PROCEEDINGS MADE DISALLOWANCE OF 20% OF PROPORTIONATE VEHICLE EXPENS ES ON ACCOUNT OF PERSONAL USER. BUT THE ASSESSING OFFICER HAS NOT GIVEN ANY FINDING THAT HO W THE FAMILY MEMBERS HAVE USED THESE MOTOR CARS. THE CIT(A) DELETED THE ADDITION BY ACC EPTING THE PLEA OF THE ASSESSEE THAT THERE IS NO PERSONAL USER OF MOTOR CAR BY ASSESSEE OR HIS FA MILY MEMBERS. EVEN NOW BEFORE US, THE REVENUE COULD NOT BRING ANY THING THAT THE MOTOR CA R WAS USED FOR PERSONAL USER OR NO PLEA IN THIS RESPECT WAS MADE. ACCORDINGLY, WE HAVE NO HES ITATION IN CONFIRMING THE ORDER OF CIT(A) IN THIS REGARD. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. * + , +! - . 09 -09-2011 ORDER PRONOUNCED IN THE OPEN COURT ON 09- 09-2011 SD/- SD/- [ . . , ] [ , ] C.D. RAO, ACCOUNTANT MEMBER MAHAVIR SINGH, JUDICIAL MEMBER ( ) DATED 09-09-2011 *J.D/ /0 !12 3 /SR.P.S. ITA NO.326/KOL/2011 SANAT KR. SEN. A.Y. 07-08 5 * 4 '5 65#7 - COPY OF THE ORDER FORWARDED TO: 1. %& /APPELLANT- ACIT, CIRCLE-2, DURGAPUR 2 '(%& / RESPONDENT: SHRI SANAT KR. SEN, PR./O M/S. SEN BR OTHERS, ANGADPUR, DURGAPUR-15. 3. *! / THE CIT, DURGAPUR 4. *! ( )/ THE CIT(A), DURGAPUR 5. 8 - '! / DR, KOLKATA BENCHES, KOLKATA ( 5 ' / TRUE COPY, * !+ / BY ORDER, 2 /ASSTT. REGISTRAR