Pankaj Kumar Agarwal, Kolkata V. I.T.O Wd - 48(4),kolkata, Kolkata

ITA 457/KOL/2013

• Counselvise Citation: 45723514 RSA 2013
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MADHU MALATI GHOSH
• Assessee Lawyers: SUBASH AGARWAL
• Keywords: Unexplained investment; Unexplained expenditure
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC , KOLKATA ( BEFORE SHRI P.K.BANSAL , A . M . ) ITA NO. 457 /KOL/201 3 : ASSTT. YEAR : 2008 - 09 PANKAJ KUMAR AGARWAL PAN: A CVPA 5298F V S ITO, WARD - 48(4 ), KOLKATA (APPELLANT) (RESPONDENT) A PPELLANT BY : SHRI SUBASH AGARWAL, ADVOCATE RESPONDENT BY : SMT. MADHUMALATI GHOSH, JCIT, SR.DR DATE OF HEARING : 02 .06 .2015 DATE OF PRONOUNCEMENT : 02 .06 .2015 ORDER TH I S APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 29 .11 .2012 OF LD. CIT(A) - XX X , KOLK AT A FOR THE ASSESSMENT YE AR 2008 - 09 BY TAKING THE FOLLOWING GROUNDS OF APPEAL . 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WA S NOT JUSTIFIED TO AFFIRM THE ADDITION OF RS.7,73,371/ - . 2. THAT THE DISALLOWANCE TELEPHONE EXPENSES OUT OF TOTAL EXPENSES OF RS.2,845/ - AND THE DISALLOWANCE GENERAL EXPENSES RS.950/ - THE ARBITRARY AD HOC RATE OF 20% IS ARBITRARY AND NOT SUSTAINABLE. 2. GROUND NO.1 RELATES TO THE SUSTENANCE OF ADDITION OF RS.7,73,371/ - ON ACCOUNT OF UNDISCLOSED PURCHASE. BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE AO BY REQUISITION UNDER SECTION 133(6) OBTAINED THE INFORMATION FROM THE ASSESSEE S SUPPLIERS AND FOU ND THAT THE PURCHASE VALUE OF THE SUPPLIES IN THEIR BOOKS OF ACCOUNTS IS IN EXCESS OF THE PURCHASES SHOWN BY THE ASSESSEE. THE DIFFERENCE WAS TO THE EXTENT OF RS.8,51,321/ - . THE AO THAT THE DIFFERENCE OF RS.77,950/ - WAS ON ACCOUNT I TA NO. 457 /KO L/2013 PANKAJ KUMAR AGARWAL 2 OF DOUBLE ENTRY DUE TO BO UNCING OF THE CHEQUE AND THEREFORE, HE REDUCED THE SAME OUT OF THE SUM OF RS.8,51,321/ - BUT MADE THE ADDITION FOR THE BALANCE SUM OF RS.7,73,371/ - IN THE INCOME OF THE ASSESSEE AS UNDISCLOSED PURCHASE WHILE THE AO MADE A SEPARATE ADDITION IN RESPECT OF PRO FIT EARNED ON THIS PURCHASE AMOUNTING TO RS.13,118/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) SUSTAINED THE ADDITION OF RS.7,73,371/ - AND REDUCED THE ADDITION ON ACCOUNT OF THE PROFIT TO 1% OF THESE PURCHASES. 3. I HEARD THE RIVAL SUBMIS SIONS AND CAREFULLY CONSIDERED THE SAME. I NOTED THAT THE AO MADE THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE GUISE OF UNRECORDED PURCHASES BY REJECTING THE PLEA OF THE ASSESSEE THAT THE OMISSION HAS BEEN COMMITTED BY THE ACCOUNTS CLERK, WH O ENTERED SOME OF THE PURCHASES. ALL THESE PURCHASES WERE ON CREDIT AND THEREFORE, NO QUESTION OF INVESTMENT IN THESE PURCHASES ARISES. IN RESPECT OF PROFIT IN THOSE PURCHASES HAS SEPARATELY BEEN ADDED. THEREFORE, THERE SHOULD NOT BE ANY ADDITION ON THIS A CCOUNT. IN MY OPINION, THE ONUS IS ON THE ASSESSEE TO PROVE THAT THESE PURCHASES WERE MADE ON CREDIT AND SUBSEQUENTLY, THE PAYMENTS WERE MADE BY THE ASSESSEE IN SUBSEQUENT YEAR BUT NO SUCH EVIDENCE AS CONTENDED WAS PRODUCED, NEITHER BEFORE US NOR BEFORE TH E AUTHORITIES BELOW. IN VIEW OF THIS FACT , NATURE OF INFERENCE, IN MY OPINION, WILL BE THAT THE ASSESSEE HAS MADE THE INVESTMENT IN THESE PURCHASES. SINCE ALL THE PURCHASES HAVE NOT BEEN MADE IN ONE GO, THEREFORE, IT IS ONLY THE AVERAGE OF THE PURCHASES I TA NO. 457 /KO L/2013 PANKAJ KUMAR AGARWAL 3 WHICH CAN BE ADDED. FROM THE RESULT SHOWN BY THE ASSESSEE, IT APPEARS THAT THE ASSESSEE IS MAINTAINING THE CLOSING STOCK OF RS.2,76,264/ - AGAINST THE PURCHASE OF RS.1,49,03,369/ - DURING THE IMPUGNED ASSESSMENT YEAR. THUS, THE ASSESSEE WILL BE MAINTAINING, IN MY OPINION, STOCK OF AROUND .02% AND TO THE EXTENT THERE REMAINS STOCK. IT CAN BE SAID THAT THE ASSESSEE HAD MADE THE INVESTMENT BY APPLYING THE SAME RATIO BUT STOCK OF SUCH PURCHASES, IN MY OPINION, WILL BE AROUND RS.15,466/ - . IT IS NOT THE CASE OF TH E REVENUE THAT THEY HAVE MADE THE ADDITION AS UNEXPLAINED EXPENDITURE BUT THE ADDITION HAS BEEN MADE TOWARDS THE INVESTMENT IN UNACCOUNTED PURCHASES AND THAT THE INVESTMENT IN ANY CASE CANNOT BE MORE THAN THE AVERAGE STOCK, BEING CARRI ED OUT BY THE ASSESSE E, WHICH, IN THIS CASE, AS POINTED OUT BEFORE US, CAN BE ONLY RS.15,466/ - . I, THEREFORE, SUSTAIN THE ADDITION TO THAT EXTENT. THUS, GROUND NO.1 IS PARTLY ALLOWED. 4. GROUND NO.2 RELATES TO THE DISALLOWANCE OF RS.2,845/ - OUT OF TELEPHONE EXPENSES AND RS.95 0/ - OUT OF GENERAL EXPENSES ON THE GROUND THAT THE PERSONAL USE IN TELEPHONE EXPENSES CANNOT BE RULED OUT AND IN RESPECT OF GENERAL EXPENSES OF RS.4,751/ - , THE SAME ARE NOT FULLY VOUCHED. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) SUSTAINED THE ADD ITION. BEFORE ME, THE LD. AR EVEN THOUGH APPEARED ARGUED BUT HE HAS NOT DENIED PERSONAL USE OF THE TELEPHONE. I, THEREFORE, SUSTAIN THE ADDITION OF RS.950/ - . SO FAR, THE GENERAL EXPENSES IS CONCERNED, I NOTED THAT THE AO JUST MADE THE ADDITION ON I TA NO. 457 /KO L/2013 PANKAJ KUMAR AGARWAL 4 AD HOC BA SIS. I, THEREFORE, DELETE THE SAME. THUS, THE GROUND NO.2 IS PARTLY ALLOWED. 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED . ORDER PRON OUNCED IN THE OPEN COURT ON 02 /06 /2015 . SD/ - ( P. K. BANSAL ) ACCOUNTANT MEMBER DATED: 02 /06 /2015 TALUKDAR/SR.PS 1 . PANKAJ KUMAR AGARWAL, 64B, G.T. ROAD (NORTH), PILKHANA, SALKIA, HOWRAH - 711103 2 ITO, WARD - 48 ( 4 ) , KOLKATA 3 . THE CIT(A), 4. 5 . CIT, DR TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA