Income Tax Officer -2(1) , Kanpur V. M/s. Ess Kay Polymers , Kanpur

ITA 553/LKW/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5154 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-12-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: P K KAPOOR
• Keywords: Unexplained cash credit; Tax effect
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.553/LKW/2012 A.Y.:2001 - 02 INCOME TAX OFFICER - 2(1), KANPUR. VS. M/S ESS KAY POLYMERS, F - 5/6, PANKAJ INDUSTRIAL ESTATE, SITE NO.II, KANPUR. PAN:AAAFE3508P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D.R. RESPONDENT BY SHRI P. K. KAPOOR, C.A. DATE OF HEARING 19/12/2013 DATE OF PRONOUNCEMENT 2 7 /12/2013 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - II, KANPUR DATED 27/08/2012 FOR ASSESSMENT YEAR 2001 - 2002. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN NOT APPRECIATING THAT THE ASSESSEE FIRM HAD AGREED TO THE ADDITION OF THE AMOUNT OF RS. 6.80 LAKHS TO THE FIRM'S INCOME, BEING UNEXPLAINED ACCRETIONS TO THE PA RTNERS' CAPITAL ACCOUNTS APPEARING IN THE BOOKS OF THE FIRM. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW IN HOLDING THAT ACCRETIONS TO THE 2 PARTNERS' CAPITAL ACCOUNTS WOULD ENTAIL ADDITIONS IN THE PARTNERS' HANDS, WHILE OVERLOOKING THE FACT THAT ANY UNEXPLAINED CASH CREDIT IN THE PARTNERS' CAPITAL ACCOUNTS MAINTAINED IN THE FIRM'S BOOKS SHOULD MORE CORRECTLY BE TREATED AS UNEXPLAINED CASH CREDIT IN THE BOOKS OF THE ASSESSEE FIRM UNDER THE DEEMING FICTION OF SEC. 68 OF TH E I.T. ACT. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW IN DISREGARDING THE WELL SETTLED LAW THAT SIMPLY BECAUSE THE AMOUNT IS CREDITED IN THE BOOKS OF THE FIRM IN THE PARTNERS' CAPITAL ACCOUNT, IT CANNOT BE SAID THAT IT IS NOT THE UNDISCLOSED INCOME OF THE FIRM AND THAT IN ALL CASES IT HAS TO BE ASSESSED AS UNDISCLOSED INCOME OF THE PARTNERS ALON E (CIT VS KISHORILAL SANTOSHILAL (1995) 216 ITR 9 (RAJ.) . 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN IGNORING THE FACT THAT ASSESSEE , VIDE ITS WRITTEN SUBMISSION DATED 19.12.2006, HAD READILY AND WITHOUT ANY COERCION AGREED TO SURRENDER THE SAID AMOUNT OF RS. 6.80 LAKHS IN THE HANDS OF THE FIRM AND HENCE NO APPEAL COULD HAVE BEEN ENTERTAINED AGAINST SUCH ADDITIONS IN VIEW OF THE DECISIONS OF VARIOUS COURTS, INCLUDING THE JURISDICTIONAL HIGH COURT. 5. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR DATED 27. 08.2012 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 27.12.2006 TO BE RESTORED. 6. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND/OR TO ADD ANY FRESH GROUNDS AS A ND WHEN IT IS REQUIRED TO DO SO. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT AS PER BOARDS INSTRUCTION NO. 3 OF 2011 DATED 09/02/2011. HE SUBMITTED THAT AS PER THIS BOARD INSTRUCTION, THE REVENUE IS NOT SUPPOSED TO FILE ANY APPEAL BEFORE THE TRIBUNAL IF THE TAX EFFECT DOES NOT EXCEED RS.3 LAC. HE FURTHER SUBMITTED THAT IN 3 THE PRESENT CASE, THE ONLY DISPUTE, AS PER GROUNDS OF APPEAL, IS REGARDING ADDITION OF RS.6.80 LAC MADE BY THE ASSESSING OFFICER BUT DELETED BY LEARNED CIT ( A). HE SUBMITTED THAT TAX EFFECT IN THIS APPEAL IS MUCH BELOW RS.3 LAC S AND HENCE, THIS APPEAL IS NOT MAINTAINABLE. 4. IN REPLY, LEARNED D.R. OF THE REVENUE HA D NOTHING TO SAY. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN THE FACTS OF THE PRESENT CASE, WE FIND THAT THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT AND HE NCE, THE SAME IS DISMISSED ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 T H DECEMBER, 2013. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR