I.T.O Wd - 41(2),kolkata, Kolkata V. Shri Ashok Kr Shaw, Kolkata

ITA 552/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100169 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 14-03-2013
• Court: TRIBUNAL
• Department Lawyers: SURJIT KUMAR DAS
• Assessee Lawyers: ABHAY NATH KESHARI
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO. 552/KOL/2013 ASSESSMENT YEAR: 2007-08 ITO WARD-41(2), KOLKATA. VS. SH. ASHOK KUMAR SHA W, PAN-ALYPS0683A (APPELLANT) ( RESPONDENT ) DATE OF HEARING: 01.12.2015 DATE OF PRONOUNCEMENT: 16.12.2015 FOR THE APPELLANT: SHRI SH. SURJIT KUMAR DAS, JCIT FOR THE RESPONDENT: SHRI ABHAY NATH KESHARI, FCA ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XII, KOLKATA IN APPEAL NO. 861/XII/41(2)/09-10 DATED 29.11.2012. ASSESSMEN T WAS FRAMED BY ITO, WARD- 41(2), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2007-08 VIDE ITS ORDER DATED 24.12.200 9. 2. AT THE OUTSET, IT IS NOTICED THAT THIS APPEAL FI LED BY REVENUE IS TIME BARRED BY 6 DAYS, AND REVENUE HAS FILED CONDONATION PETITION ST ATING REASONS THAT DUE TO TIME BARRING ASSESSMENTS THERE WAS HEAVY PRESSURE OF SCRUTINY WO RK AND THIS WAS DURING LAST DAYS, SMALL DELAY OF SIX DAYS OCCURRED. ON QUERY FROM THE BENCH LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT DUE TO SMALLNESS OF DELAY, THE APPEAL CAN BE ADMITTED. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUD ICATION ON MERITS. 3. THE FIRST ISSUE IN THIS APPEAL OF REVENUE, IS AG AINST THE ORDER CIT(A), IN DELETING THE ADDITION MADE BY AO BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT, ON CASH PAYMENTS EXCEEDING PRESCRIBED LIMIT. 4. BRIEFLY STATED FACTS ARE THAT THE RELEVANT ASSES SMENT YEAR INVOLVED IS 2009-10 AND ASSESSEE IS PROPRIETOR OF M/S A.K. STEEL INVOLVED I N TRADING OF IRON SCRAP. THE AO NOTED FROM THE BOOKS OF ACCOUNT THAT THE ASSESSEE HAD MAD E PAYMENT IN CASH TO ONE M/S M.K. STEEL ON 31.03.2007 AND ACCORDING TO HIM THIS IS IN VIOLATION OF SECTION 40A(3) OF THE ACT AND AS TO WHY THIS SHOULD NOT BE ADDED TO THE RETUR NED INCOME OF THE ASSESSEE. THE ASSESSEE EXPLAINED THAT A STATEMENT ISSUED BY PAYEE CLEARLY REVEALS THAT A LONG TRAIL OF PAYMENTS THROUGHOUT THE YEAR FOR AN AMOUNT NOT EXCE EDING 20,000/- ON EACH OF THE 2 ITA NO. 552/KOL/2013 SH.ASHOK KUMAR SHAW AY 2007-08 OCCASION FOR THE ENTIRE PAYMENT IS THERE BUT ASSESS EE DUE TO INADVERTENCE RECORDED ALL THE PAYMENTS AS TO HAVE BEEN MADE ONLY ON 31.03.2207. B UT, ACCORDING TO AO, THIS IS AN AFTERTHOUGHT AND HE MADE ADDITION BY INVOKING THE P ROVISIONS OF SECTION 40A(3) OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CI T(A). 5. THE CIT(A) DELETED THE ADDITION BY CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE AND ALSO CASE RECORDS, BY OBSERVING AS UNDER:- 5.APPEAL ON GROUND NO.2 AND 3 ARE AGAINST THE ADDI TION OF RS.16.76 LAKHS BY INVOKING SEC. 40A(3) OF THE I.T. ACT 1961 BEING PAYMENT MADE TO M /S M.K. STEEL. THIS ISSUE HAS BEEN DISCUSSED IN DETAIL BY MY PREDECESSOR IN APPEAL ORD ER FOR A.Y. 2007-08 IN APPEAL NO. 722/CIT(A)-XII/41(2)/09-10 DT.15-12-2010. HENCE, AP PEAL ON GROUND NO. 2 & AND 3 ARE ALLOWED AGGRIEVED, REVENUE CAME IN SECOND APPEAL BEFORE TRI BUNAL. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT(A) HAD RECORDED FACTUAL FINDING AFTER GOING THROUGH THE BOOKS OF ACCOUNT AND COPY OF ACCOUNT OF M/S M.K. STEEL TH AT ALL THE PAYMENTS WERE MADE ON DIFFERENT DATES DURING THE RELEVANT FINANCIAL YEAR AND ON EACH TIME THE PAYMENT MADE IN CASH DO NOT EXCEEDED THE PRESCRIBED LIMIER AS PRESC RIBED IN THE SECTION 40A(3) OF THE ACT. THE PAYMENT IN ONE GO ON ANY DAY NEVER EXCEEDED RS. 20,000/- AS PRESCRIBED. THIS WE CAN OBSERVE FROM THE ASSESSMENT ORDER AS UNDER:- IT SHOWED A LONG TRAIL (WRONGLY MENTIONED AS TRAI N) OF PAYMENT ALMOST THROUGHOUT THE YEAR FOR AN AMOUNT NOT EXCEEDING RS 20,000/- IN CAS H ON EACH DAY TO DEFEND THE INDEFENSIBLE. SUCH A TRANSACTION DOES NOT APPEAL TO THE COMMON SENSE. AS THE UNDERSIGNED HAS RELIED ON THE ENTRIES MADE BY THE ASSESSEE, THE RE IS NO QUESTION OF MAKING CROSS VERIFICATION TO OTHERS. IN VIEW OF THIS, THIS AMOUN T OF RS.16.76 LAKHS IS TO BE ADDED BACK. WE FIND THAT THE AO NEVER BOTHERED TO CROSS VERIFY FROM OTHERS BUT HE FULLY RELIED ON THE ENTRY RECORDED BY ASSESSEE IN HIS BOOKS OF ACCOUNT. BUT IS STRANGE THAT EVEN THOUGH HE WAS HAVING THE LEDGER ACCOUNT OF M/S M.K. STEEL, WH EREIN NO SINGLE PAYMENT WAS EXCEEDING RS. 20,000/- IN A SINGLE DAY. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE COORDINATE BENCH DECISION IN THE CASE OF ITO V M/S A.K. TRADING IN ITA NO.345/KOL/2011 ORDER DATED 27.05.2011. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT CIT(A) HAS RIG HTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 7. THE SECOND ISSUE IN THIS APPEAL OF REVENUE IS AG AINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO OF CASH PAYMENT ON ASSESSEE S BEHALF BY ONE OF THE SUPPLIERS 3 ITA NO. 552/KOL/2013 SH.ASHOK KUMAR SHAW AY 2007-08 M/S JAISWAL & SONS TO CESC LTD AMOUNTING TO RS.2.87 LACS BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 8. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS OF THE CASE THAT THE A SSESSEE MADE A PAYMENT OF RS.2.87 LACS BY WAY OF DEMAND DRAFT IN FAVOUR OF CESC LTD AT THE REQUEST OF CREDITOR FOR PURCHASE M/S JAISWAL & SONS. THIS FACT IS RECORDED IN THE AS SESSMENT ORDER AS WELL IN THE APPELLATE ORDER OF FIRST APPELLATE AUTHORITY. WE FI ND THAT AO WITHOUT BELIEVING THE EXPLANATION OF THE ASSESSEE MADE ADDITION BUT CIT(A ) ACCEPTED THE EXPLANATION. WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND HENCE THE S AME IS CONFIRMED. THIS ISSUE OF REVENUES APPEAL IS ALSO DISMISSED. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. 10. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.12. 2015 SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16TH DECEMBER, 2015 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO WARD-41(2), KOLKATA. 2 RESPONDENT SH. ASHOK KUMAR SHAW, 147A, SOUTH SINT HEE ROAD, KOLKATA-700050. 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .