Manoj Kumar Singha Roy, Murshidabad V. ITO, Wd-4, Murshidabad, Murshidabad

ITA 585/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99852 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BUDDHADEB MUKHOP ADHYAY
• Assessee Lawyers: V N PUROHIT
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA (BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER) ITA NO. 585/KOL/2014 : AS STT. YEAR : 2009-2010 MANOJ KUMAR SINGHA ROY PAN: BEKPS 3121K VS ITO, WARD-4, NADIA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.N.PUROHIT, C.A. RESPONDENT BY : SHRI BUDDHADEB MUKHOP ADHYAY, JCIT, SR.DR DATE OF HEARING : 16.09.2015 DATE OF PRONOUNCEMENT : 07.10.2015 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XXXVI, KOL KATA DATED 28.01.2014 FOR THE ASSESSMENT YEAR 2009-10 AND IN THE SOLITARY GRO UND RAISED THEREIN, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS.10,10,000/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) BY WAY OF DISALLOWANCE UNDER SECTION 40A (3) ON ACCOUNT OF PURCHASES MADE IN CASH. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 22 .09.2009 DECLARING THE TOTAL INCOME OF RS.1,48,980/-. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO, ON VERIFICAT ION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THAT PURCHASES AMOUNTING TO RS.10,10,000/- WERE MADE BY THE ASSESSEE OTHERWISE THAN BY ACCOUNT PAYEE CHEQUES OR BANK DRAFTS. HE, THEREFORE, REQUIRED THE ASSESSEE T O EXPLAIN AS TO WHY 2 ITA NO.585/KOL/2014 MAN OJ KUMAR SINGHA ROY ASSESSMENT YEAR: 2009-10 THE SAID AMOUNT SHOULD NOT BE DISALLOWED AS PER THE PROVISIONS OF SECTION 40A(3). SINCE NO EXPLANATION WAS FORTHCOMIN G FROM THE ASSESSEE IN THIS REGARD, THE AO INVOKED THE PROVISI ONS OF SECTION 40A(3) AND DISALLOWED THE AMOUNT OF PURCHASES MADE BY THE ASSESSEE OTHERWISE THAN ACCOUNT PAYEE CHEQUES OR BANK DRAFTS . 3. THE DISALLOWANCE MADE BY THE AO UNDER SECTION 40 A(3) WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFO RE THE LD. CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(A), THE WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE ON T HIS ISSUE, WHICH, AS SUMMARIZED BY THE LD. CIT(A) IN HIS IMPUGNED ORDER, ARE AS UNDER: I) THE WHEAT WAS PURCHASED FROM FARMERS IN CASH THR OUGH AGENTS THUS NOT ATTRACTING PROVISIONS OF SECTION 40 A(3), DUE TO EXCEPTION PROVIDED IN RULE 6DD(K). II) INDIVIDUAL PAYMENTS WERE BELOW RS.20,000/- III) THE AUDITOR HAD CERTIFIED THAT THE PAYMENTS WERE BELOW RS.20,000/-, THUS NOT ATTRACTING PROVISIONS OF SECT ION 40A(3). THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE WERE FORWARDED BY THE LD. CIT(A) TO THE AO FOR VERIFICATION AND COMMENTS. ACC ORDINGLY, A REMAND REPORT WAS SUBMITTED BY THE AO TO THE LD. CI T(A) OFFERING HIS COMMENTS AS UNDER: I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY TO SUBMIT THE DETA IL STATEMENT OF PURCHASE INCLUDING MODE OF PAYMENTS OF EACH TRANSACTION. BUT THERE WAS NO COMPLIANCE ON THE PAR T OF THE ASSESSEE. HOWEVER, LETTERS WERE ISSUED TO ALL THE C OMMISSION AGENTS AS DESIRED BY YOUR HONOUR THROUGH SPEED POST . EXCEPT FIRU SK. OF BHARATPUR, MURSHIDABAD, LETTERS WERE RETURNED BACK WITH POSTAL DEPARTMENT REMARKS IN SUF FICIENT ADDRESS. BUT TILL DATE NO REPLY HAS BEEN RECEIVED F ROM FIRU SK. AS THE ASSESSEE DID NOT SUBMIT ANY PURCHASE STA TEMENT DURING THE ASSESSMENT PROCEEDINGS AND FROM THE BALA NCE SHEET AND P&L ACCOUNTS AVAILABLE IN THE RECORD COUL D NOT 3 ITA NO.585/KOL/2014 MAN OJ KUMAR SINGHA ROY ASSESSMENT YEAR: 2009-10 ASCERTAINED THAT THE PURCHASE WAS MADE FROM COMMISS ION AGENTS OR SMALL TRADERS. II) LETTER WAS ISSUED TO THE ASSESSEE VIDE NO. ITO /WD- 4/MSD./REPORT/2013-14/920 DATED 8.10.13 TO APPEAR B EFORE THE UNDERSIGNED ON 21.10.113 ALONG WITH CASH BOOK, PURCHASE LEDGER AND OTHER BOOKS OF ACCOUNTS. IN REPLY AIR OF THE ASSESSEE' VIDE HIS LETTER DATE D 10.10.13 PRAYED FOR ADJOURNMENT FOR ONE MONTH. ACCORDINGLY T IME WAS GIVEN AND ON 21.11.13 THE ASSESSEE, SRI MANOJ KUMAR SINGHA ROY ALONG WITH AIR SRI S. CHOWDHJURY APPEARED BEFOR E THE UNDERSIGNED AND FAILED TO PRODUCED ANY BOOKS OF ACC OUNTS AND OTHER RELATED DOCUMENTS FOR MY VERIFICATION. WH ILE ENQUIRY IT IS STATED BY THE ASSESSEE THAT DUE TO SO ME PROBLEM IN THE ACCOUNTING SOFTWARE WE ARE UNABLE TO PRODUCE THE BOOKS OF ACCOUNTS. ACCORDINGLY, IT COULD NOT BE EXA MINED WHETHER THE PURCHASE WERE BELOW RS. 20, 0001- OR NO T. III) DURING THE COURSE OF ASSESSMENT PROCEEDINGS T HE ASSESSEE WAS GIVEN EVERY OPPORTUNITY TO SUBMIT THE DETAILS STATEMENT OF PURCHASE INCLUDING MODE OF PAYMENTS OF EACH TRANSACTION. ON 4.11.11 THE ASSESSEE SRI MANOJ KUMA R SINGHA ROY APPEARED AND WAS ASKED HIM TO SUBMIT THE DETAILS STATEMENT OF PURCHASE INCLUDING MODE OF PAY MENTS AND THE CASE WAS ADJOURNED TO 9.11.11 STATING THAT NO FURTHER OPPORTUNITY WILL NOT BE POSSIBLE TO AFFORD BUT THER E WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE ON 9.11.11. ON 18.11.11, THE ASSESSEE APPEARED AGAIN AND FAILED TO SUBMIT ANY DETAILS OF PURCHASES. HE WAS REQUESTED TO APPEA R BEFORE THE UNDERSIGNED ON 22.11.11 AND TO PRODUCE THE SAME . BUT ONCE AGAIN THERE WAS NO COMPLIANCE ON THE PART OF T HE ASSESSEE AND THE CASE RE-FIXED FOR HEARING ON 19.12 .11. SRI MANOJ KUMAR SINGHA ROY, ASSESSEE HIMSELF APPEARED O N 19.12.11 AND FAILED TO PRODUCE SUBMIT ANY DOCUMENTS RELATED TO PURCHASES. ON GOING THROUGH THE BANK STATEMENT(S BI, ALURAM, MSD.) THAT A SUM OF RS.1 0.1 0 LAKH APPEARE D TO BE CASH TRANSACTION. HE WAS ASKED TO EXPLAIN WHY A SUM OF RS.1 0.1 0 LAKHS WILL NOT BE TREATED AS CASH PURCHASE AN D WILL NOT BE ADDED TO THE TOTAL INCOME AS PER PROVISION OF SE CTION 40A(3) OF THE IT ACT, 1961. HE COULD OFFER NO EXPLA NATION IN THIS REGARDS AND IT WAS ALSO STATED BY HIM THAT NO EXPLANATION WOULD BE GIVEN BY HIM BY 31.12.11. IN T HE ABSENCE OF THE DETAILS DOCUMENTS NO FURTHER VERIFIC ATION WAS 4 ITA NO.585/KOL/2014 MAN OJ KUMAR SINGHA ROY ASSESSMENT YEAR: 2009-10 NOT POSSIBLE. ACCORDINGLY A SUM OF RS.1 0.1 0 LAKHS WAS DISALLOWED AND A~11D BACK TO THE TOTAL INCOME OF TH E ASSESSEE AS PER PROVISION OF SECTION 40A(3). 4. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE BY THE ASSESSEE, THE REMAND REPORT SUBMITTED BY THE AO, TH E COUNTER-COMMENTS OFFERED BY THE ASSESSEE AS WELL AS THE OTHER MATERI ALS AVAILABLE ON RECORD, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE M ADE BY THE AO UNDER SECTION 40A(3) FOR THE FOLLOWING REASONS GIVE N IN PARAGRAPH NO.4.4. 4.4 APPEILANT'S SUBMISSION AND THE FACTS AVAILAB LE ON RECORD ARE CAREFULLY CONSIDERED. THE AO IN ORDER TO VERIFY IF THE AGRICULTURAL PRODUCE WERE PURCHASED FROM AGRICU LTURIST THROUGH AGENTS, ISSUED NOTICE IN THE ADDRESS GIVEN BY APPELLANT OF THE ALLEGED AGENTS. ALL THE NOTICES CA ME BACK UNSERVED EXCEPT ONE, WHO DID NOT COMPLY TO THE NOTI CE. THIS FACT WAS CONFRONTED TO THE ASSESSEE BY A.O. INSPITE OF IT, THE ASSESSEE DID NOT TAKE ANY STEPS TO SUBMIT THE CORRE CT ADDRESS OR PRODUCE THE PERSONS FOR VERIFICATION OF HIS CLAI M OF PURCHASE. AS THE CLAIM HAS BEEN MADE BY ASSESSEE OF PURCHASE FROM FARMERS THROUGH AGENTS, THE ONUS WAS ENTIRELY ON HIM TO PRODUCE THE NECESSARY VERIFIABLE EVIDENCE . IN THE PRESENT CASE THE EVIDENCE HAS BEEN FOUND TO BE FALS E AS THE LETTERS CAME BACK UNSERVED. FURTHER, INSPITE OF FUR THER OPPORTUNITY PROVIDED DURING REMAND PROCEEDING THE B OOKS OF ACCOUNTS AND OTHER RELEVANT EVIDENCE WERE NOT PRODU CED BEFORE THE AO, EVEN THOUGH THE NR AND THE APPELLANT APPEARED, UNDER THE PLEA OF PROBLEM IN ACCOUNTING S OFTWARE. THEREFORE, IT IS CLEAR THAT INSPITE OF ADEQUATE OPP ORTUNITY GRANTED, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THE PURCHASES WERE I N AMOUNT BELOW RS.20,000/- IN CASH FROM FARMERS. IN THE ABOVE CIRCUMSTANCES, AO WAS CORRECT IN CONCLUDING THAT THE WITHDRAWAL IN BEARER CHEQUES REPRESENTED PURCHASE FROM INDIVIDUAL TRADERS IN CAS H IN VIOLATION OF SECTION 40A(3) OF THE IT ACT. THEREFOR E, THE APPEAL ON THIS GROUND IS REJECTED. 5 ITA NO.585/KOL/2014 MAN OJ KUMAR SINGHA ROY ASSESSMENT YEAR: 2009-10 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE RELEVANT RECORDS. AS RIGHTLY SUBMITTED BY THE LD. D R, SUFFICIENT OPPORTUNITY WAS GIVEN BY THE AO EARLIER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND LATER DURING THE COURSE OF REMAND PROCEEDINGS TO SUPPORT AND SUBSTANTIATE HIS CASE TH AT THE PROVISIONS OF SECTION 40A(3) ARE NOT APPLICABLE TO THE IMPUGNED P AYMENTS MADE AGAINST THE PURCHASES, BUT THE ASSESSEE FAILED TO D O SO AND THIS POSITION IS CLEARLY EVIDENT FROM THE REMAND REPORT SUBMITTED BY THE AO TO THE LD. CIT(A). WHEN THE SAME WAS CONFRONTED BY ME TO THE L D. COUNSEL OF THE ASSESSEE AT THE TIME OF HEARING, HE HAS SUBMITTED T HAT A CD CONTAINING COMPUTERIZED BOOKS OF ACCOUNTS OF THE ASSESSEE WAS PRODUCED BEFORE THE AO DURING THE COURSE OF REMAND PROCEEDINGS BUT HE FAILED TO TAKE COGNIZANCE THEREOF. IT IS HOWEVER OBSERVED FROM THE COUNTER-COMMENTS FILED BY THE ASSESSEE ON THE REMAND REPORT OF THE A O BEFORE THE LD. CIT(A) IN WRITING THAT IT WAS ADMITTED BY THE ASSES SEE HIMSELF IN WRITING BEFORE THE LD. CIT(A) THAT HIS AUTHORIZED R EPRESENTATIVE DID NOT SHOW THE CD TO THE AO OR GOT A PRINT OUT THEREOF AN D PRODUCED THE SAME BEFORE THE AO. IT IS THUS CLEAR THAT THERE WAS A FA ILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND/OR OTH ER RELEVANT DOCUMENTARY EVIDENCE BEFORE THE AO EITHER IN THE AS SESSMENT PROCEEDINGS OR EVEN DURING THE COURSE OF REMAND PRO CEEDINGS TO ESTABLISH HIS CASE THAT THE PROVISIONS OF SECTION 4 0A(3) ARE NOT APPLICABLE TO THE IMPUGNED PAYMENTS. WHEN THE CASE WAS MADE OUT BY THE AO, ON VERIFICATION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE THAT THE IMPUGNED PAYMENTS MADE ON ACCOUNT OF PURCHASES OTHE RWISE THAN BY ACCOUNT PAYEE CHEQUES OR BANK DRAFTS WERE IN CONTRA VENTION OF THE PROVISIONS OF SECTION 40A(3), THE ONUS WAS ON THE A SSESSEE TO ESTABLISH 6 ITA NO.585/KOL/2014 MAN OJ KUMAR SINGHA ROY ASSESSMENT YEAR: 2009-10 ON EVIDENCE THAT THE SAID PAYMENTS WERE NOT HIT BY THE PROVISIONS OF SECTION 40A(3). IN MY OPINION, THE ASSESSEE HOWEVER HAD FAILED TO DISCHARGE THE ONUS IN SPITE OF SUFFICIENT OPPORTUNI TY ALREADY GIVEN. THIS BEING THE POSITION I FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE AO UNDER SECTION 40A(3) AND UPHOLDING THE SAME, I DISMISS TH E APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER, 2015. SD/- ( P.M.JAGTAP) ACCOUNTANT MEMBER DATED: 07/10/2015 TALUKDAR/SR.PS COPY OF ORDER FORWARDED TO: 1 SRI MANOJ KUMAR SINGHA ROY, C/O- V.N. PUROHIT & CO. , CHARTERED ACCOUNTANTS, DIAMOND CHAMBERS, UNIT-III, 4 TH FLOOR, SUIT NO.4G, 4, CHOWRINGHEE LANE, KOLKATA 700 016 2 ITO, WARD-4, MURSHIDABAD 3 THE CIT(A), 4 5 CIT, 5. D.R. TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA