D.C.I.T., CC-1(2), Kolkata, Kolkata V. M/S. Pailan Park Development Authority Ltd., Kolkata

ITA 645/KOL/2022

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6408 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 15-11-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Set aside
• Section: 68; 69; 144; 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘A’, KOLKATA [Before Dr. Manish Borad, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 645/Kol/2022 Assessment Year : 2012-13 DCIT, CC-1(2), Kolkata Vs. M/s. Pailan Park Development Authority Ltd. PAN: AADCP 2087 Q Appellant Respondent Date of Hearing 10.10.2023 Date of Pronouncement 18.10.2023 For the Assessee None For the Revenue Shri B.K. Singh, JCIT, Sr. DR ORDER Per Sonjoy Sarma, JM: The present appeal has been preferred by the revenue against the order dated 30.09.2023 of Commissioner of Income Tax (Appeals) [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). The revenue has raised the following grounds of appeal: “1. Whether on facts of the case and in law, ld. CIT(A) erred in deleting the addition of unexplained cash credit u/s 68 of the I.T. Act, 1961 without appreciating the full facts and observation of the AO which was built on the basis material on record. 2. Whether on the facts and circumstances of the case, the CIT(A) erred in ignoring the facts that assessment was completed u/s 153A/144 as assessee company neither made any compliance nor submitted any details to substantiate its claim. 3. That department carves leave to add, alter or modify any or all grounds of appeal either before or during course of appellate proceedings.” 2 ITA No. 645/Kol/2022 AY: 2012-13 M/s. Pailan Park Development Authority Ltd. 2. Brief facts of the case are that the assessee filed its return of income on 29.03.2013 by declaring total income of Rs. 2,75,660/- for A.Y. 2012-13. However, in the case of assessee, a search and seizure operation u/s 132(1) of the Act was conducted on 09.06.2011 at the different places in which cash & jewellery was found in following manner at different premises of the assessee: Sl. No. Premises Cash found (Rs.)/dt. Jewellery found (Rs.)/dt. 1 127, Kankulia Road, Goalpark, Kolkata-700029 97980/- 09.06.2011 2 42A, Shakespeare Sarani, Express Tower, Kolkata-17 12100/- 09.06.2011 1636000/- 08.08.2011 3 Bengal Pailan Park Amgachia Road, Joka, Kolkata-700104 6,12,225/09.06.2011 4 Lalita Kunj, 1 st Floor, 6/1A, Middleton Street, Kolkata-71 5,88,000/09.06.2011 21,96,708/- 09.06.2011 5 Locker No. 82, Canara Bank, Bhowanipur Branch, Kol-25 5,31,722/- 06.08.2011 Besides above, the certain books of accounts and documents were also found and seized/impounded. 3. The case of the assessee was centralized vide order dated 02.11.2011. The ld. AO thereafter issued notices u/s 143(2) and 142(1) of the Act to the assessee. However, the assessee did not turn up in compliance to such notices issued by the AO. Therefore, the ld. AO had no other option but to pass the assessment order u/s 144 of the Act on the basis of material available on record. The ld. AO on the basis of statement of Chairman and other member of group which were recorded on such search and seizure operation. The ld. AO found that Rs. 97,980/- during search operation assessee could not explain and produce any evidence or books of account in support of such cash 3 ITA No. 645/Kol/2022 AY: 2012-13 M/s. Pailan Park Development Authority Ltd. accounted for. Therefore, the ld. AO treated the same as unaccounted cash and treated it as undisclosed income in the hands of assessee. Similarly, the ld. AO noticed that assessee has shown sundry creditors of Rs. 5,00,00,000/- on the total purchase of Rs. 6,96,69,806/- during the year under consideration. However, in the previous year i.e. A.Y. 2011-12, the assessee has shown sundry creditors of Rs. 2,88,329/- on the total purchase of Rs. 2,88,36,081/- which was 1% (approx) of the total purchases made by the assessee. From the facts of the case, the ld. AO found that assessee has shown sundry creditors @ 71.35% which was not only on higher side but not acceptable too. Since the assessee company did not offer any explanation in this regard nor made any endeavour to file any details of such creditors for verification to test their genuineness. The ld. AO viewed that the assessee was made purchase on a credit of one month then the creditors can be calculated @ 8.33% of the total purchases made by the assessee and which has comes to at Rs. 53,03,494/- consequent to that remaining balance amount of Rs. 4,41,96,506/- treated as bogus liability and unexplained cash credit in the books of accounts of the assessee u/s 68 of the Act and added to the total income of the assessee. 4. The ld. AO further noticed that the assessee has received an amount of Rs. 1,97,10,000/- and preference shares of Rs. 19,71,000/- respectively from the documents which were seized during the search operation from the same it was evident that the assessee company has paid huge commission to the various agents for collecting the alleged amount and rate of average 4 ITA No. 645/Kol/2022 AY: 2012-13 M/s. Pailan Park Development Authority Ltd. commission paid has taken as 25% by applying the same calculated at Rs. 49,27,500/-. Accordingly, the ld. AO disallowed sum of Rs. 49,27,500/- as unexplained expenditure u/s 69 of the Act and added to the total income of the assessee. Similarly, from the search document, the ld. AO found that the assessee company has issued mis-certificate for the value of Rs. 27,65,000/-. To collect the amount, assessee has to pay commission to the agents and rate of commission which has been arrived at 25% i.e. Rs. 6,91,250/- and added to the income of the assessee. the ld. AO further found that assessee has incurred expenses of Rs. 11,85,38,978/- since assessee has failed to produce any supporting document to prove the genuineness of such expenses, therefore, the ld. AO viewed that sum of Rs. 59,26,948/- which was come to 5% of the expenses and added to the income of the assessee. Ultimately, the ld. AO assessed the income of the assessee for the assessment year in question at Rs. 5,61,15,840/- in the hands of assessee. 5. Dissatisfied with the above order, assessee preferred an appeal before the ld. CIT(A) where the appeal of the assessee was partly allowed by deleting the addition of Rs. 4,41,96,506/- made by the AO in the hands of assessee. 6. Feeling aggrieved by the above order, revenue is in appeal before this Tribunal. At the outset, we would like to mention here that notices were issued time to time to assessee to appear before the Tribunal in connection with the above appeal. However, no one turned up before this Tribunal to represent the case of the 5 ITA No. 645/Kol/2022 AY: 2012-13 M/s. Pailan Park Development Authority Ltd. assessee nor file any written submission therefore the instant appeal decided to proceed ex-parte against the assessee. 7. In the instant appeal the main grievance of the revenue is that while passing the impugned order ld. CIT(A) did not look into the facts of the case passed an order by which simply delete the addition made in the case of assessee. Moreover, in the instant case, assessee has never appeared before the ld. AO and submits any single piece of paper, the ld. AO at the time of framing of assessment order and even before the ld. CIT(A), assessee has never appeared in order to controvert the fact in favour of the assessee. In such a situation without any supported document placed before the ld. CIT(A) therefore the claim of the assessee cannot be allowed and the view taken by the ld. CIT(A) is not in accordance with law. Accordingly, the ld. DR prays before the bench to set aside the order of the ld. CIT(A). 8. We after hearing the rival submission of the parties and going through the relevant facts of the case, we notice that the ld. AO while framing the assessment order consecutive notices were issued to the assessee. However, no one turned up on behalf of the assessee in response to the notices issued by the AO, therefore, the ld. AO has no other alternative but forced him to frame the assessment order u/s 144 of the Act on the basis of material available on record. While going through the impugned order, we find that assessee even before ld. CIT(A) has completely failed to appear in response to notice of hearing nor assessee has filed any supported document to substantiate its claim to 6 ITA No. 645/Kol/2022 AY: 2012-13 M/s. Pailan Park Development Authority Ltd. establish the fact that view taken by the AO by making the addition of Rs. 4,41,96,506/- was not correct. In such situation, the view taken by the ld. CIT(A) in the impugned order by deleting the addition of Rs. 4,41,96,506/- is not correct. Accordingly, we inclined to set aside the impugned order passed by the ld. CIT(A) by restoring the order passed by the ld. AO on this issue. In terms of the above, the appeal of the revenue is hereby allowed. 9. In the result, the appeal of the revenue is allowed. Order pronounced in the open court on 18.10.2023. Sd/- Sd/- (Manish Borad) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 18.10.2023 Biswajit Copy of the order forwarded to: 1. Appellant- DCIT, CC-1(2), Kolkata. 2. Respondent – M/s. Pailan Park Development Authority Ltd., 127, Kankulia Road, Golpark, Kolkata-700029. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata