I.T.O Wd - 30(1),kolkata, Kolkata V. Israfil Middya, Kolkata

ITA 638/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100249 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2013
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHO
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.638/KOL/2013 ASSESSMENT YEAR: 2009-10 INCOME-TAX OFFICER, WD-30(1), KOLKATA VS. ISRAFIL MIDDYA (PAN: AEVPM3302G) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 08.12.2015 DATE OF PRONOUNCEMENT: 11.12.2015 FOR THE APPELLANT: SHRI DAVID Z. CHAWNGTHO, ADDL. CIT, SR. DR FOR THE RESPONDENT: SHRI RIP DAS, FCA ORDER PER SHRI MAHAVIR SINGH, JM THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XIV, KOLKATA VIDE APPEAL NO. 913/CIT(A)-XIV/KOL/11-12 DATED 18.12.20 12. ASSESSMENT WAS FRAMED BY ITO, WARD-30(1), KOLKATA U/S. 143(3) OF THE INCOME -TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2009-10 VIDE HIS ORDER DATED 26.12.2011. 2. AT THE OUTSET, IT IS NOTICED THAT THIS APPEAL OF REVENUE IS TIME BARRED BY 17 DAYS AND REVENUE HAS FILED CONDONATION PETITION STATING THE REASONS. WHEN THESE REASONS WERE CONFRONTED TO LD. COUNSEL FOR THE ASSESSEE HE CONCE DED THAT DELAY CAN BE CONDONED DUE TO SMALLNESS OF THE DELAY. IN VIEW OF THE ABOVE, W E CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY AO BEING AMOUNTS OF CASH DEPOS IT IN ASSESSEES SAVINGS BANK ACCOUNT OF RS.32.38 LACS. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE AO NOTICED FROM ASSESSEES SAVINGS BANK ACCOUNT MAINTAINED WITH STATE BANK OF BIKANEER & JODHPUR, B RABOURNE ROAD BRANCH, KOLKATA WHEREIN THE AGGREGATE CASH DEPOSIT WAS TO THE TUNE OF RS.32.38 LACS. ACCORDING TO AO, THE ASSESSEE HAS EARNED COMMISSION INCOME OF RS.2,2 8,386/- FROM TATA STEELS LTD. THE ASSESSEE PRODUCED COMPLETE BOOKS OF ACCOUNT INCLUDI NG CASH FLOW STATEMENT FOR THE RELEVANT FY 2008-09 RELEVANT TO THIS AY 2009-10. T HE ASSESSEE ALSO FILED COMPLETE LIST 2 ITA NO.638/K/2013 ISRAFIL MIDDYA AY 2009-10 OF SUNDRY DEBTORS FOR THE FY 2008-09 NUMBERING TO 6 1 PERSONS. BUT THE AO ISSUED LETTERS U/S. 133(6) OF THE ACT TO 13 PERSONS OUT OF WHOM 2 PERSONS CONTRADICTED THE CLAIM OF ASSESSEE. TO REST OF THE PERSON THE LETTERS COUL D NOT BE SERVED. BEFORE THE AO ASSESSEE CLAIMED THAT THIS CASH DEPOSIT OF RS.32.38 LACS IS OUT OF SALE PROCEEDS OF SALT IN WHICH HE DEALS IN. THE AO HAS NOT BELIEVED THE EXP LANATION OF THE ASSESSEE AND HE MADE ADDITION OF THIS AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. THE CIT(A) DELETED THE ADDITION VIDE PARA 5 OF ITS APPELLATE ORDER AS UNDE R: 5. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT OR DER AND THE SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT IN ITS PROFIT & LOSS AC COUNT THE APPELLANT HAS CREDITED SALES OF RS. 34,07,308/- IN RESPECT OF SALT BUSINESS. THE AP PELLANT HAS ALSO DEBITED PURCHASE OF RS.18,05,205/- AND FREIGHT CHARGES 14,31,407/-. THE ASSESSING OFFICER HIMSELF HAS ALLOWED PURCHASES OF RS. 18,05,205/- AND FREIGHT CH ARGES OF RS.14,31,407/- IN RESPECT OF SALT BUSINESS. THESE FACTS ITSELF INDICATE THAT THE ASSESSING OFFICER HAS ACCEPTED THE FACT THAT THE APPELLANT HAS CARRIED OUT BUSINESS OF TRAD ING OF SALT. IT WAS EXPLAINED TO THE ASSESSING OFFICER THAT THE CASH DEPOSITED INTO BANK OF RS. 32,38,000/- IS PART OF CASH SALES OF RS. 34,07,308/-. ONCE THE ASSESSING OFFICER HAS ACCEPTED THE SALES AND ALLOWED DEDUCTION OF PURCHASES AND FREIGHT CHARGES, THE ACT ION OF ASSESSING OFFICER OF MAKING ADDITION OF PART OF THE SALES U/S. 68 OF THE INCOME -TAX ACT, 1961, IS NOT JUSTIFIED. THERE IS FORCE IN THE SUBMISSION OF THE APPELLANT THAT THE N ATURE OF BUSINESS IS SUCH THAT HE IS COMPELLED TO SELL THE GOODS AT LOCAL MARKETS OF BIR BHUM DISTRICT AND THE CUSTOMERS ARE FLOATING CUSTOMERS. IN SUPPORT, THE APPELLANT HAS A LSO PRODUCED THE PURCHASE REGISTER, SALES REGISTER, BANK BOOK AND CASH BOOK. THE APPELL ANT HAS DULY EXPLAINED THE SOURCE OF CASH DEPOSIT IN BANK FROM THE CASH BOOK AND SALES R EGISTER. THE APPELLANT HAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER AND BEFORE ME THE EVIDENCES OF TRANSPORTATION OF SALT IN RESPECT OF THE PURCHASES MADE. IT IS SEEN T HAT THE SALT WAS TRANSPORTED THROUGH INDIAN RAILWAYS. IT IS ALSO SEEN THAT THE CASH HAS BEEN DEPOSITED IN SEVERAL INSTALLMENTS INDICATING THAT IT REPRESENTS THE SALE PROCEEDS OF GOODS. IN LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED V IEW THAT ONCE THE APPELLANT HAS OFFERED TO TAX SALE PROCEEDS OF RS. 34,07,308/-, THE ASSESS ING OFFICER WAS NOT RIGHT IN LAW IN TAXING A PART OF SALES U/S 68 OF THE INCOME-TAX ACT , 1961. IN LIGHT OF EVIDENCES PRODUCED BEFORE ME WHICH WERE ALSO MADE AVAILABLE TO THE ASS ESSING OFFICER, IT IS HELD THAT THE ASSESSEE HAS DULY EXPLAINED THE SOURCE OF CASH DEPO SIT OF RS.32,38,000/-. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION OF RS.32,38,000/- MADE U/S. 68 OF THE INCOME-TAX ACT, 1961. ACCORDINGLY, GROUND NO. 2 OF THE APPEAL IS ALLOWED. 5. NOW BEFORE US, LD. COUNSEL FOR THE ASSESSEE CLAI MED THAT THE PURCHASES AS WELL AS SALES IN RESPECT TO TRADING IN SALT HAS NOT BEEN DO UBTED BY AO AND ACCEPTED AS IT IS. IT IS A FACT THAT THE TOTAL SALE PROCEEDS OF SALT IS TO THE TUNE OF RS.34,07,308/- I.E. CASH SALE TO DIFFERENT PERSONS AND THOSE ARE DECLARED AS SUNDRY DEBTORS. THE CASH RECEIVED IS ON ACCOUNT OF THESE CASH SALES AND ASSESSEE HAS PRODUC ED PURCHASE REGISTER, SALE REGISTER, BANK BOOK AND CASH BOOK BEFORE THE LOWER AUTHORITIE S, WHICH WERE EXAMINED AND FOUND NO INFIRMITY. THE ASSESSEE ALSO PRODUCED CASH FLOW STATEMENT WHICH CLEARLY REVEALS THAT THE CASH DEPOSIT IN THE BANK OF RS.32.38 LACS IS PA RT OF CASH SALES OF RS.34,07,308/-. WE 3 ITA NO.638/K/2013 ISRAFIL MIDDYA AY 2009-10 FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND HENCE, WE CONFIRM THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.12.2 015. SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11TH DECEMBER, 2015 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-30(1), KOLKATA. 2 RESPONDENT SHRI ISRAFIL MIDDYA, 10B, BRIGHT STR EET, BALLYGUNGE, KOLKATA-700 019. 3. THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .