I.T.O Wd - 1(4),kolkata, Kolkata V. M/s Sobha Rice Mills Pvt Ltd, Kolkata

ITA 528/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100036 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 13-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UDAY KR SARKAR A
• Assessee Lawyers: J M THARD
• Keywords: Business income; Income from undisclosed sources; Opportunity of being heard
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 528 / KOL / 2013 ASSESSMENT YEAR :2003-04 ITO WARD-1[4], P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069 V/S . M/S SOBHA RICE MILLS PVT. LTD., ROOM NO. 24, 3 RD FLOOR, P-103, PRINCEP STREET, KOLKATA 700 072 [ PAN NO. AADCSS 5534 R ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI UDAY KR. SARKAR, ACIT-DR /BY RESPONDENT SHRI J.M. THARD, ADVOCATE /DATE OF HEARING 12-10-2015 /DATE OF PRONOUNCEMENT 06-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, KOLKATA IN APPEAL NO.118 9/CIT(A)-XXIV/W- 1(4)/12-13 DATED 31.12.2012. ASSESSMENT WAS FRAMED BY ITO WARD-1(4), KOLKATA U/S 147/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2008 FOR ASSE SSMENT YEAR 2003-04. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PRIV ATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING OF PADDY AND RIC E. DURING THE COURSE OF ITA NO.528/KOL/2013 A.Y. 2003-04 ITO WD-1(4), KOL. V. M/S. SOBHA RICE MILLS PVT. LTD. PAGE 2 ASSESSMENT PROCEEDINGS, ASSESSING OFFICER FOUND THA T THE TAX DEDUCTED AT SOURCE (TDS) CERTIFICATES WERE FURNISHED WITH THE R ETURN OF INCOME SHOWN THAT CONTRACT PROCEEDS AMOUNT OF 22,94,895/- WAS PAID OR CREDITED BY THE DEDUCTEE BUT ON PERUSAL OF PROFIT AND LOSS ACCOUNT ALONG WITH SCHEDULES, IT IS SEEN THAT CONTRACT PROCEEDS WERE NOT ACCOUNTED BY A SSESSEE. THE AO CALLED UPON ASSESSEE TO EXPLAIN THE JUSTIFICATION FOR NOT ACCOUNTING THE CONTRACT RECEIPT OF THE ABOVE SAID AMOUNT IN ITS BOOKS OF AC COUNT. LD. AR SUBMITTED THAT THE SUM OF RS.31,88,740/- WAS ACCOUNTED DURING THE RELEVANT AY AND WHICH WAS SHOWN IN PROFIT AND LOSS ACCOUNT. FURTHER , AO REQUESTED THE AR TO PROVIDE BIFURCATION OF THE TOTAL SALES CLAIMED IN T HE BOOKS OF ACCOUNT OF ASSESSEE FOR AN AMOUNT OF 31,88,740/-. HOWEVER, ASSESSEE COULD NOT GIVE THE DETAILS OF THE SALES OF PARTY-WISE BUT ASSESSEE SUBMITTED THAT THE DETAILS ARE NOT AVAILABLE WITH THEM. ACCORDINGLY, AO DISALL OWED THE PLEA OF ASSESSEE AND TREATED THE SUM OF 22,94,895/- AS UNACCOUNTED SALE AND ADDED IT TO THE INCOME OF ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED A PPEAL BEFORE LD. CIT(A). BEFORE LD. CIT(A), LD. AR SUBMITTED THE WRITTEN PLE A WHICH REPRODUCED AS UNDER:- THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF RICE MILLING. THE ASSESSEE MILLS RICE OUT OF ITS OWN BOUGHT OUT P ADDIES AND ALSO DO CONTRACT JOBS OF MILLING STATE GOVERNMENT SUPPLIED PADDIES. ALONG WITH THE I.T. RETURN, THE ASSESSEE HAS SUBMITTED ALL TDS CERTIFICATES AMOUNTING TO RS.50,067/- AND ALL TDS CREDIT WAS ALS O ALLOWED. SUBSEQUENTLY THE A.O HAS REOPENED THE ASSESSMENT FO R THE REASON THAT SOME INCOME HAS BEEN ESCAPED FROM ASSESSMENT. THE A.O HAS STATED THAT AS PER THE TDS CERTIFICATES FILED WITH THE INCOME TAX RETURN, TOTAL AMOUNT OF INCOME PAID/CREDITED IS RS.22,94,895/- BUT THIS AMOUNT IS NOT FOUND TO BE CREDITED IN THE PROF IT AND LOSS ACCOUNT; AND SO THERE IS AN UNDERSTATEMENT OF INCOME. ACCORD INGLY THE LD. A.O MADE AN ADDITION OF RS.22,94,895/- AS CONCEALED INC OME, AND DETERMINED TAX THEREON. DURING THE YEAR FOLLOWING TDS CERTIFICATES WERE REC EIVED: RECEIVED FROM AMOUNT CREDITED AS PER TDS CERTIFICATE AMOUNT TDS AS PER TDS CERTIFICATE NATURE OF PAYMENT AS STATED IN TDS CERTIFICATE CHATTISGARH 1419411 31225 PAYMENT TO ITA NO.528/KOL/2013 A.Y. 2003-04 ITO WD-1(4), KOL. V. M/S. SOBHA RICE MILLS PVT. LTD. PAGE 3 STATE CIVIL SUPPLIES CORP. LTD., RAJGARH CONTRACTOR M.P. STATE CIVIL SUPPLIES CORPN, C.G. STATE CIVIL SUPPLIES CORPN. LTD., JANJGIR 164559 3620 CONTRACTOR -DO- 407880 8555 -DO- -DO- 303045 6667 -DO- TOTAL 2294895 500067 THE ASSESSEE MAINTAIN BOOKS OF ACCOUNT ON MERCANTIL E BASIS AND THIS FACT HAS BEEN DULY REFLECTED IN POINT 1-A TO SCHEDU LE 21 OF THE BALANCE SHEET. DURING THE YEAR THE ASSESSEE HAS MADE TOTAL BILLING OF RS.31,88,740/- TOWARDS MILLING OF STATE GOVT. PADDI ES AND ACCORDINGLY ACCOUNTED THE WHOLE AMOUNT AS CUSTOM MILLING CHARGE S AND DULY CREDITED TO PROFIT AND LOSS ACCOUNT. OUT OF THE BIL LS AMOUNT OF RS.31,88,740/- THE STATE GOVT. AGENCIES I.E. CHATTI SGARH STATE CIVIL SUPPLIES CORP. LTD., AND MP STATE CIVIL SUPPLIES CO RPN, HAS PAID THE ABOVE STATED AMOUNT OF RS.22,94,895/- AND ACCORDINGLY DED UCTED TDS OF RS.50,067/- THE A.O, IN HIS ASSESSMENT PROCEEDING HAS CONCLUDED THAT NO INCOME AMOUNTING TO RS.22,94,895/- HAS BEEN DIRECTLY CREDI TED TO PROFIT AND LOSS ACCOUNT, AND NO INCOME IN THE NAME OF CONTRACT PROCEEDS WERE ACCOUNTED AND CREDITED TO PROFIT AND LOSS ACCOUNT. ACCORDINGLY THE AO TREATED THE AMOUNT OF RS.22,94,894/- AS UNACCOUNTED INCOME AND ADDED TO TOTAL INCOME. OUT OF THIS TOTAL BILLED AMOUNT OF RS.31,88,740/-, WHICH ARE DULY CREDITED TO PROFIT AND LOSS ACCOUNT AS CUSTOM MILLING CHARGES ONLY A PART OF THE SAME HAS BEEN PAID TO THE ASSESSEE AND TDS HAS BEEN DEDUCTED BY THE PARTY ON THAT PART AMOUNT ONLY. THE ASSESSEE IS NOT REQUIRED TO AGAIN ACCOUNT FOR THE RECEIPT AS ITS INCOME SINCE T HE SAME AMOUNT ARE ALREADY CREDITED TO ITS INCOME. ON BEING ASKED, LED GER ACCOUNTS AND BOOKS WERE ALSO FILED BEFORE THE A.O THE LD. AO IN HIS ORDER STATED THAT IN THE SAID LEDGER, THE VARIOUS INGREDIENTS OF BIFU RCATION FOR THE AMOUNTS STATED IN THE TDS CERTIFICATES ARE NOT STATED AND S O THERE IS A CONCEALMENT OF INCOME. IN THE CURRENT YEAR, CREDIT TO INCOME ON CUSTOM MIL LING CHARGES IS RS.31,88,740/- WHICH IS MORE THAN THE AMOUNT OF RS. 22,94,895/- STATED IN THE TDS CERTIFICATE AND THUS IT IS PROVED THAT T HE AMOUNT APPEARING IN THE TTDS CERTIFICATES ARE ALREADY INCLUDED IN THE I NCOME OF RS.31,88,740/-. SO IT IS IMPRUDENT TO DETERMINE THA T JUST BECAUSE THE ITA NO.528/KOL/2013 A.Y. 2003-04 ITO WD-1(4), KOL. V. M/S. SOBHA RICE MILLS PVT. LTD. PAGE 4 EXACT AMOUNT IS NOT CREDITED TO ASSESSEES INCOME A CCOUNT, A CONCEALMENT OF INCOME BY THE AMOUNT THAT APPEARS IN THE TDS CERTIFICATE HAS HAPPENED. THE LD. AO FAILED TO APPR ECIATE THE ASSESSEES PLEADING THAT WHATEVER AMOUNT APPEARS IN TDS CERTIFICATES ARE ALREADY ACCOUNTED AS ASSESSEES INCOME AT THE T IME OF RAISING BILLS AND ACCOUNTING THE BILLS AND THE PARTY HAS ISSUED T HE TDS CERTIFICATE ON PAYMENT BASIS AND STATED THEREIN THAT AMOUNT WHICH THEY PAY ONLY AND NOT ALL OTHER BILL AMOUNTS WHICH ARE STILL OUTSTAND ING FOR PAYMENT. ON THE BASIS OF THE ABOVE SUBMISSION MADE BY LD. AR , LD. CIT(A) DELETED THE ADDITION MADE BY AO. 3. AGGRIEVED BY THIS ORDER, NOW REVENUE IS IN APPEA L BEFORE THE TRIBUNAL. SHRI J.M. THARD, LD. AUTHORIZED REPRESENTATIVE APPE ARING ON BEHALF OF ASSESSEE AND SHRI UDAY KR. SARKAR, LD. DEPARTMENTAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 4. WE HAVE HEARD RIVAL PARTIES AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. BEFORE US LD. DR RELIED ON THE ORDER OF AO WHEREAS LD. AR RELIED ON THE ORDER OF LD. CIT(A). BEFORE US THE LD. AR SUBMI TTED THAT ASSESSEE HAS DONE A JOB WORK FOR AN AMOUNT OF .22,94,895/- FOR THE CHATTISGARH STATE CIVIL SUPPLIES CORPORATION LTD. RAJGARH AND M.P. STATE CI VL SUPPLIES CORPORATION, AND CHATTISGARH STATE CIVIL SUPPLIES CORPORATION LT D., JANJGIR AND ALL THE RECEIPTS WERE SUBJECT TO TDS. HOWEVER, THESE ARE GO VERNMENT DEPARTMENTS FOR WHICH ASSESSEE HAD WORKED AND ASSESSEE WAS NOT GIVEN THE LEDGER OF THE SALES FOR THE PURPOSE OF VERIFICATION. IT IS ALSO S UBMITTED BY LD. AR THAT AO HAS NOT TAKEN THE CONFIRMATION U/S. 133(6) OF THE ACT F OR THE TOTAL JOB WORK AS CLAIMED BY ASSESSEE IN ITS BOOKS OF ACCOUNT. FURTHE R, FROM THE SUBMISSION OF LD. AR WE FIND THAT BEFORE COMPLETING THE ASSESSMEN T PROCEEDING, IT WAS EASY TO OBTAIN THE REPORT U/S 133(6) OF THE ACT. BUT AO DID NOT EXERCISE HIS AUTHORITY BY COLLECTING THE DETAILS FROM THE PARTY CONCERN TO ASCERTAIN THE AMOUNT OF INCOME BY WAY OF JOB WORK DONE BY ASSESSEE OF THE A BOVE STATE GOVERNMENTS. SO IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE SET ASIDE THE ORDER OF AO AND ITA NO.528/KOL/2013 A.Y. 2003-04 ITO WD-1(4), KOL. V. M/S. SOBHA RICE MILLS PVT. LTD. PAGE 5 REMIT BACK THE FILE TO HIM WITH A DIRECTION TO OBTA IN A REPORT FROM THE ABOVE STATE GOVERNMENT DEPARTMENTS U/S 133(6) OF THE ACT SO THAT THE ACTUAL SUPPRESSION OF SALE COULD BE BROUGHT TO TAX. ACCORD INGLY, THIS APPEAL OF ASSESSEE IS REMITTED BACK TO THE FILE OF AO FOR FRE SH ADJUDICATION AS PER LAW AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 5. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 06/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 06 /1 1 /2015 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT-ITO WARD-1(4), P-7, CHOWRINGHEE SQUARE , KOLKATA-69 2. / RESPONDENT-M/S SOBHA RICE MILLS PVT. LTD. ROOM 2 4, 3 RD FLOOR. P-103, PRINCEP STREET, KOLKATA - 72 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,