M/s. Vicky Agency, Kolkata V. ITO, Ward - 50(4), Kolkata, Kolkata

ITA 608/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78382 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 20-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KALYAN NATH
• Assessee Lawyers: SUBASH AGARWAL

Judgement Text

I.T.A. NO.: 608/KOL./2011 & I.T.A. NO. 606/KOL/2011 AS SESSMENT YEAR : 2006-2007 PAGE 1 TO 5 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA CORAM : SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO.: 608/KOL./ 2011 ASSESSMENT YEAR : 2006-2007 M/S. VICKY AGENCY,................................. ..............................APPELLANT 192, LAKE TOWN, BLOCK-B, KOLKATA-700 089 [PAN : AADFV 7674 A] -VS.- INCOME TAX OFFICER,...........................,.... ..........RESPONDENT WARD-50(4), KOLKATA, 169, AJC BOSE ROAD, 9 TH FLOOR, ROOM NO. 3, BAMBOO VILLA, KOLKATA-700 014 & I.T.A. NO.: 606/KOL./ 2011 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER,...........................,.... ...........APPELLANT WARD-50(4), KOLKATA, 169, AJC BOSE ROAD, 9 TH FLOOR, ROOM NO. 3, BAMBOO VILLA, KOLKATA-700 014 -VS.- M/S. VICKY AGENCY,................................. .................................RESPONDENT 192, LAKE TOWN, BLOCK-B, KOLKATA-700 089 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, FOR THE ASSESSEE SHRI KALYAN NATH, JCIT, SR. D.R., FOR THE DEPARTMEN T DATE OF CONCLUDING THE HEARING : JULY 09, 2014 DATE OF PRONOUNCING THE ORDER : JULY 09, 2014 O R D E R PER SHAMIM YAHYA: 1. THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE EMANATE OUT OF THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XXXII, KOLKATA DATED 27.10.2010 FOR THE ASSESSMENT YEAR 2006-07. I.T.A. NO.: 608/KOL./2011 & I.T.A. NO. 606/KOL/2011 AS SESSMENT YEAR : 2006-2007 PAGE 1 TO 5 2 2. GROUNDS OF ASSESSEES APPEAL ARE AS UNDER:- (1) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEAL) ERRED IN CONFIRMING THE ACTION OF THE AO IN REJECTING THE BOOKS OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145(3). (2) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2,26,028/- MADE BY THE AO TO THE TRADING RESULTS SHOWN BY THE ASSESSEE. 3. GROUND OF REVENUES APPEAL IS AS UNDER:- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)- XXXII, KOL. IS NOT JUSTIFIED IN DELETING THE ADDITI ON OF RS.11,35,072/- AS THE SAME WAS MADE AFTER REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) OF THE I.T. ACT, 1961 AND DU RING THE COURSE OF ASSESSMENT NO WHERE IT WAS FOUND REGARDIN G RECEIPT OF GOODS AND DETAILS OF RETURN OF SUCH GOODS TO THE PROCTOR AND GAMBLE. 4. IN THIS CASE, ASSESSEE IS CARRYING ON BUSINESS O F DISTRIBUTORSHIP OF PRODUCTS OF M/S. GILLETTE INDIA. ASSESSING OFFICER OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE BANK ACCOUNTS WERE EXAMINED AND IT WAS FOUND THAT DEPOSITS IN ASSESSEES BANK ACCOU NTS WERE MUCH MORE THAN SALES TURNOVER. ON EXAMINATION OF THE STATEMEN T AND DEPOSITS & WITHDRAWALS IN THE BANK ACCOUNT, THE ASSESSING OFFI CER OBSERVED THAT THE ASSESSEE HAS UNDER REPORTED THE BUSINESS. ASSESSING OFFICER OBSERVED THAT THERE WAS SUPPRESSION OF SALES MADE BY THE ASSESSEE . HE FURTHER OBSERVED THAT RECEIPT OF MONEY FROM M/S. GILLETTE INDIA WAS NOT OFFERED FOR TAXATION. ASSESSING OFFICER EXAMINED THE ABOVE FACT S AND CAME TO THE CONCLUSION THAT P & L A/C. WAS TO BE REJECTED UNDER SECTION 145(3). ASSESSING OFFICER COMPUTED TOTAL INCOME AT RS.13,80 ,901/- INSTEAD OF RS.19,792/- SHOWN BY THE ASSESSEE. 5. UPON ASSESSEES APPEAL, LD. CIT(APPEALS) OBSERVE D THAT THE FIGURES OF PURCHASES AND SALES AS PER THE PROFIT & LOSS A/C . AND AS PER THE RECONCILIATION SUBMITTED BY THE ASSESSEE ARE AT VAR IANCE WITH EACH OTHER. I.T.A. NO.: 608/KOL./2011 & I.T.A. NO. 606/KOL/2011 AS SESSMENT YEAR : 2006-2007 PAGE 1 TO 5 3 HE UPHELD THE ACTION OF THE ASSESSING OFFICER INVOK ING THE PROVISIONS OF SECTION 145(3). 6. LD. CIT(APPEALS) FURTHER NOTED THAT THE INCOME O F THE ASSESSEE HAS BEEN ENHANCED BY THE ASSESSING OFFICER BY MAKING AN ADDITION OF RS.13,61,110/-. THE ADDITION MADE OF RS.11,35,072/- WAS ON ACCOUNT OF THE AMOUNT REFUNDED BY GILLETTE INDIA LTD. TO THE A SSESSEE. LD. CIT(APPEALS) NOTED THE SUBMISSION OF THE ASSESSEE T HAT SINCE IT WAS REFUNDED BY GILLETTE INDIA LTD. ON ACCOUNT OF CERTA IN GOODS RETURNED BY THE ASSESSEE TO THAT COMPANY, THEREFORE, THE AMOUNT COULD NOT BE TREATED AS ASSESSEES INCOME. IN THIS REGARD, LD. CIT(APPEA LS) NOTED THAT M/S. GILLETTE INDIA LTD. ITSELF HAD CONFIRMED TO THE ASS ESSING OFFICER VIDE THEIR LETTER DATED 30.10.2008, WHICH WAS RECEIVED BY THE ASSESSING OFFICER HERSELF ON 14.11.2008 THAT THE SUM OF RS.11,35,702/ - WAS PAID BY THEM TO THE ASSESSEE IN FULL AND FINAL SETTLEMENT OF STOCKS WORTH THAT THE AMOUNT RETURNED TO THEM. LD. CIT(APPEALS) HELD THAT WHEN T HE AMOUNT WAS RECEIVED BY THE ASSESSEE ON ACCOUNT OF GOODS RETURN ED BY IT TO ITS PRINCIPAL, THAT AMOUNT CANNOT BE INCOME OF THE ASSE SSEE. THEREFORE, THE ADDITION OF THE SUM OF RS.11,35,072/- MADE BY THE A SSESSING OFFICER WAS DELETED. 7. AS REGARDS THE BALANCE ADDITION OF RS.2,26,028/- , LD. CIT(APPEALS) CONFIRMED THE SAME AS THAT FIGURE REMAINED UN-RECON CILED. 8. AGAINST THE ABOVE ORDER OF LD. CIT(APPEALS), ASS ESSEE AND REVENUE ARE IN CROSS APPEALS BEFORE THE TRIBUNAL. 9. AS REGARDS THE ISSUE OF REJECTION OF ACCOUNTS BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT, WE NOTE TH AT THE ASSESSING OFFICER HAS NOTED DIFFERENCE IN SALES AND PURCHASES. ON THA T ACCOUNT THE PROFIT & LOSS A/C WAS REJECTED. LD. CIT(APPEALS) HAS NOTED T HAT THE FIGURES OF PURCHASES AND SALES AS PER THE PROFIT & LOSS A/C. A ND AS PER THE I.T.A. NO.: 608/KOL./2011 & I.T.A. NO. 606/KOL/2011 AS SESSMENT YEAR : 2006-2007 PAGE 1 TO 5 4 RECONCILIATION SUBMITTED BY THE ASSESSEE WERE AT VA RIANCE WITH EACH OTHER. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF LD. CIT(APPEALS), WHERE HE FOUND MERIT IN INVOKING THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961. 10. AS REGARDS THE ADDITION OF RS.11,35,072/-, WE N OTE THAT THE SAME HAS BEEN ON ACCOUNT OF THE AMOUNT REFUNDED BY GILLE TTE INDIA LTD. THIS WAS ON ACCOUNT OF GOODS RETURNED. NECESSARY CONFIRM ATION IN THIS REGARD FROM M/S. GILLETTE INDIA LTD. HAS ALREADY BEEN RECE IVED BY THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES, LD. CIT(APPEALS) H AS RIGHTLY DELETED THE ADDITION. HENCE, WE UPHOLD THE ORDER OF LD. CIT(APP EALS). 11. AS REGARDS THE BALANCE ADDITION OF RS.2,26,028/ -, WE NOTE THAT LD. CIT(APPEALS) HAS CONFIRMED THE SAID ADDITION BY HOL DING THAT THIS AMOUNT WAS CONFIRMED AS THAT FIGURE REMAINED UN-RECONCILED . SINCE NO RECONCILIATION WAS PRODUCED BEFORE US, WE HAVE NO O THER ALTERNATIVE BUT TO UPHOLD THAT ADDITION. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED AND APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DAY OF JULY, 2014. SD/- SD/- GEORGE MATHAN SHAMIM YAHYA (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 9 TH DAY OF JULY, 2014 I.T.A. NO.: 608/KOL./2011 & I.T.A. NO. 606/KOL/2011 AS SESSMENT YEAR : 2006-2007 PAGE 1 TO 5 5 COPIES TO : (1) M/S. VICKY AGENCY, 192, LAKE TOWN, BLOCK-B, KOLKATA-700 089 (2) INCOME TAX OFFICER, WARD-50(4), KOLKATA, 169, AJC BOSE ROAD, 9 TH FLOOR, ROOM NO. 3, BAMBOO VILLA, KOLKATA-700 014 (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.