Ravi Kumar Agarwal, Kolkata V. I.T.O.,Ward-46(1), Kolkata

ITA 403/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7534 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NICHALAS MURMU CITSRDR
• Assessee Lawyers: V K JAIN
• Keywords: Corroborative evidences; Assessment record
• Section: 271(1)(c); 40A(3); 143(3); 133(6); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.403/KOL/2019 ASSESSMENT YEAR:2014-15 RAVI KUMAR AGARWAL C/O RSVPC & COMPANY, DIAMOND PRESTIGE, 41A, AJC BOSE ROAD, SUITE NO.613, 6 TH FLOOR, KOLKATA-700017 [ PAN NO.ADEPA 7532 J ] / V/S . INCOME TAX OFFICER WARD-46(1), 3, GOVT. PLACE, KOLKATA- 700001 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI V.K.JAIN, FCA /BY RESPONDENT SHRI NICHALAS MURMU ADDL. CIT-SR-DR /DATE OF HEARING 18-07-2019 /DATE OF PRONOUNCEMENT 26-07-2019 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-14, KOLKATAS ORDER DATED 18.01.2019 PASSED IN CASE NO. CIT(A), KOLKATA-14/10619/2016-17, INVOL VING PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES FORMER SUBSTANTIVE GROUND SEEKS T O REVERSE BOTH THE LOWER AUTHORITIES FINDINGS INVOKING SEC. 40A(3) DISALLOWA NCE OF CARRIAGE INWARD EXPENSES ON ACCOUNT OF PAYMENTS MADE IN CASH. SUFFICE TO SAY, THE RELEVANT ASSESSMENT ORDER DATED 30.12.2016 CLEAR AS WELL AS CIT(A)S DETAILED DISCU SSION UNDER CHALLENGE REVELS THAT THE ASSESSEE HAD MADE THE IMPUGNED PAYMENTS TO ONE TRANSPORT NAMELY SRI PAPPU SINGH BY CHEQUE WHICH WAS DISHONORED FORMING ULTIMA TE REASON OF CASH PAYMENT IN ITA NO.403/KOL/2019 A.Y. 2014-1 5 RAVI KUMAR AGARWAL VS. ITO WD-46(1), K OL. PAGE 2 ISSUE. THE CIT(A) HOLDS THAT SUCH A REASON IS NOWHE RE PRESCRIBED IN RULE 6DD OF THE INCOME TAX RULES, 1962. I FIND NO REASON TO CONCUR WITH THE REVENUES ARGUMENT SUPPORTING THE IMPUGNED DISALLOWANCE / ADDITION. HO N'BLE GUJARAT HIGH COURTS DECISION IN CIT VS. ANAPAN TALLY SERVICES 364 ITR H OLDS THAT THE RELEVANT MITIGATING CIRCUMSTANCES CAN BEYONDTRAVEL THOSE SPECIFIC UNDER RULE 6DD OF THE IT RULES. HON'BLE JURISDICTIONAL HIGH COURTS DECISION IN CIT VS CRESCENT EXPORT SYNDICATE IN ITA NO. 202 OF 2008 DATED 30.7.2008 JURISDICTIONA L HIGH COURT DECISION HOLDS THAT THE IMPUGNED DISALLOWANCE IS NOT SUSTAINABLE IN AN INSTANCE OF OVERWHELMING GENUINE PAYMENT AS UNDER:- IT ALSO APPEARS THAT THE PURCHASES HAVE BEEN HELD TO BE GENUINE BY THE LEARNED CIT(APPEAL) BUT THE LEARNED CIT(APPEAL) HAS INVOKED SECTION 40A(3) FOR PAYMENT EXCEEDING RS.20,000/- SINCE IT IS NOT MADE BY CROSS ED CHEQUE OR BANK DRAFT BUT BY HEARER CHEQUES AND HAS COMPUTED THE PAYMENTS FALLIN G UNDER PROVISIONS TO SECTION 40A(3) FOR RS.78,45,580/- AND DISALLOWED @ 20% THER EON RS.15,69,116/-. IT IS ALSO MADE CLEAR THAT WITHOUT THE PAYMENT BEING MADE BY B EARER CHEQUE THESE GOODS COULD NOT HAVE BEEN PROCURED AND IT WOULD HAVE HAMPERED T HE SUPPLY OF GOODS WITHIN THE STIPULATED TIME. THEREFORE, THE GENUINENESS OF THE PURCHASE HAS BEEN ACCEPTED BY THE LD. CIT(APPEAL) WHICH HAS ALSO NOT BEEN DISPUTED BY THE DEPARTMENT AS IT APPEARS FROM THE ORDER SO PASSED BY THE LEARNED TRIBUNAL. I T FURTHER APPEARS FROM THE ASSESSMENT ORDER THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(APPEAL) HAS DISBELIEVED THE GENUINENESS OF THE TRANSACTION. THE RE WAS NO DISPUTE THAT THE PURCHASES WERE GENUINE. I GO BY THE SAID REASONING TO ACCEPT THE ASSESSEES INSTANT FORMER SUBSTANTIVE GROUND. 3. NEXT COMES BOTH THE LOWER AUTHORITIES ACTION TRE ATING THE ASSESSEES SUNDRY CREDITORS OF 2,55,565/- AS BOGUS. THE CIT(A)S DETAILED DISCUSSI ON QUA THE INSTANT LATTER ISSUE READS AS UNDER:- 5. GROUND NO. 3 RELATES TO ADDITION OF RS.2,55,565 /- ON ACCOUNT OF BOGUS SUNDRY CREDITORS. 5.1 THE AO IN HIS ASSESSMENT ORDER STATED AS FOLLOW S: DURING THE COURSE OF SCRUTINY PROCEEDINGS, ASSESSEE HAS FILED A LIST OF SUNDRY CREDITORS AS ON 3RRD MARCH, 2014. NOTICE U/S . 133(6) OF THE ACT HAS BEEN ISSUED TO THE VARIOUS PARTIES FOR VERIFY T HE TRANSACTION WITH THE ASSESSEE DURING THE FY 2013-14 AND ALSO THE CLOSIN G BALANCE AS ON 31 MARCH 2014. VARIOUS CASE DIFFERENCE OF CLOSING BALA NCE A SON 31/03/2014 HAS BEEN DETECTED AND THE A/R OF THE ASS ESSEE HAS RECONCILED THE SAME. BUT IN CASE OF M/S KAMARHATTY CO. LTD., D IFFERENCE FIGURE OF SUNDRY CREDITOR CAME TO NOTICE. IN THE PARTY-WISE L IST OF SUNDRY CREDITOR, ASSESSEE HAD RS.2,55,565 AS SUNDRY CREDITORS FIGURE AS ON 31/03/2014 ITA NO.403/KOL/2019 A.Y. 2014-1 5 RAVI KUMAR AGARWAL VS. ITO WD-46(1), K OL. PAGE 3 WHEREAS THE PARTY CONFIRMED THAT THERE WAS NO OUTST ANDING BALANCE AS ON 31 MARCH, 2014 AND THUS THE DIFFERENCE FIGURE OF SU NDRY CREDITORS BECOMES OF RS.2,55,565/-. WHEN THE ASSESSEE WAS REQ UESTED TO RECONCILE, THE A/R OF THE ASSESSEE HAS FILED TO REC ONCILE THE SAME. SINCE THE ASSESSEE HAS FAILED TO RECONCILE THE SAME, THER EFORE RS.2,55,565/- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS BOGUS SUNDRY CREDITORS. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IS IN ITIATED SEPARATELY FOR DELIBERATELY FURNISHING INACCURATE PARTICULARS. 5.2 THE A/R OF THE APPELLANT IN HIS WRITTEN SUBMISS ION HAS SUBMITTED AS FOLLOWS: GROUND NO.3- THE AO ERRED IN ADDING RS.2,55,565 AS BOGUS SUNDRY CREDITOR ARISING OUT OF DIFFERENCE IN CLOSING BALAN CE WITH A CREDITOR. WITHOUT CONSIDERING THE FACT THAT THE ACCOUNTS OF T HE ASSESSEE HAS TRULY REFLECTED THE TRANSACTIONS WITH SUCH PARTY. THE ACC OUNTS OF THE ASSESSEE ARE RELIABLE AND CORRECT. THE AO DID NOT CONSIDER T HE CLARIFICATION AND SUPPORTING FURNISHED BY THE ASSESSEE TO ARRIVE AT A JUDICIOUS DECISION. 1. THE AO DURING THE YEAR MADE THE ADDITION OF RS.2555 65 AS DIFFERENCE IN THE BALANCE WITH THE SUNDRY CREDITOR I.E. M/S KAMARTHATTY CO. LT., WHEREAS, THE DIFFERENCE WITH T HE PARTY WAS OF RS.255498 2. THE DIFFERENCE AROUSED THE SAID PARTY HAS NOT SHOWN THE SALE OF INVOICE NO. B/13-14/0383 DATED 21.10.2013 IN THEIR BOOKS, WHEREAS THE APPELLANT HAVE RECORDED THE CORRESPONDING PURCH ASE IN HIS BOOKS. 3. THE COPY OF SAID INVOICE AND THE COPY OF LEDGER ACC OUNTS IN OUR BOOKS AND THAT OF THE PARTY ARE ENCLOSED AS ANNEXUR E B. HENCE THE ADDITION MADE U/S. 37(1) BE DELETED. 5.3. I HAVE CONSIDERED THE SUBMISSION THE APPELLANT AND PERUSED THE RELEVANT ASSESSMENT RECORD. THE A/R OF THE APPELLANT HAD NOT TAKEN THE PLEA THAT ACCOUNTS OF ONE OF THE SUNDRY CREDITORS COULD NOT B E RECONCILED WITH THE ACCOUNTS OF THE APPELLANT. THE DIFFERENCE OF RS.2,5 5,656/- AROSE AS ONE OF THE PARTIES HAD NOT SHOWN THE SALE OF INVOICE B/13-14-0 38 DATED 21.10.2013 IN THEIR BOOKS, WHEREAS THE APPELLANT HAVE RECORDED TH E CORRESPONDING PURCHASE IN HIS BOOKS. HOWEVER, THE A/R OF THE APPELLANT COU LD NOT SUBMIT ANY CLARIFICATION FROM THE SUNDRY CREDITOR M/S KAMARHAT I COMPANY LTD., IN SUPPORT OF HIS SUBMISSION. THE ADDITION OF THIS GROUND AMOU NTING TO RS.2,55,565/- IS CONFIRMED. THIS GROUND OF APPEAL FAILS AND, THEREFO RE, IS NOT ALLOWED. 4. LEARNED COUNSELS ONLY CASE DURING THE COURSE O F HEARING IS THAT THE ASSESSEE HAS BEEN MAINTAINING ITS REGULAR LEDGER REGARDING I TS PURCHASES FROM M/S KAMARHATI COMPANY LTD. ONLY. HE FAILS TO DISPUTE THAT THE IMP UGNED SUNDRY CREDITORS FIGURES AS PER THE SPECIFY INVOICE (SUPRA) COULD NOT BE RECONC ILED DURING THE LOWER PROCEEDINGS. I THUS FIND NO REASON TO ACCEPT THE ASSESSEES VEHE MENT CONTENTIONS AGAINST THE ITA NO.403/KOL/2019 A.Y. 2014-1 5 RAVI KUMAR AGARWAL VS. ITO WD-46(1), K OL. PAGE 4 IMPUGNED DISALLOWANCE AS THE IMPUGNED LIABILITY HAS NOT BEEN PROVED BY THE SUPPORTING EVIDENCE. THIS LATTER SUBSTANTIVE GROUND IS THEREFORE REJECTED. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOV E TERMS. ORDER PRONOUNCED IN OPEN COURT ON 26/07/2019 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 26/07/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-RAVI KR. AGARWAL, C/O RSVPC & CO. DIAMON D PRESTIGE, 41A, AJC BOSE ROAD, SUITE NO.613, 6 TH FLOOR, KOLAKTA-17 2. /RESPONDENT-ITO WD-46(1), 3, GOVT. PLACE, KOLAKATA- 001 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ ',