Sri Haridas Maitra, Nadia V. I.T.O Wd - 4,Nadia, Nadia

ITA 684/KOL/2013

• Counselvise Citation: 68423514 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P S GUPTA; A K CHAKRABORTY
• Keywords: Unexplained investment; Business income; Valuation report
• Section: 143(3)

Judgement Text

I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 684/KOL/ 2013 ASSESSMENT YEAR : 2007-2008 SRI HARIDAS MAITRA,................................ .....................................APPELLANT C/O. P.S. GUPTA, ADVOCATE, 100, BANK LANE, HATER PARA, KRISHNANAGAR, DIST. NADIA-741101 [PAN : AEJPM 0519 H] -VS.- INCOME TAX OFFICER,................................ ...........................RESPONDENT WARD-4, NADIA, KRISHNANAGAR-741 101 APPEARANCES BY: SHRI A.K. CHAKRABORTY, ADVOCATE AND SHRI P.S. GUPTA , ADVOCATE, FOR THE ASSESSEE SHRI BUDHADEB MUKHOPADHYAY, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 14, 201 5 DATE OF PRONOUNCING THE ORDER : OCTOBER 7 TH , 2015 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA DATED 31.01.2013 FOR THE ASSESSMENT YEAR 2007-08, WHEREBY HE SUSTAIN ED THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER TO THE EXTE NT GIVEN HEREUNDER:- PARTICULARS ADDITION MADE BY THE A.O. ADDITION SUSTAINED BY THE CIT(APPEALS) UNDISCLOSED PURCHASES RS. 45,129/- RS. 16,866/ - DISALLOWANCE OF EXPENSES RS. 23,652/- RS. 10,00 0/- UNDISCLOSED INVESTMENT IN CONSTRUCTION OF HOUSE PROPERTY RS.1,85,906/- RS.1,85,906/- 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING OF COUNTRY SPRIT. THE RETUR N OF INCOME FOR THE I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 7 YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 29.10.2007 DECLARING TOTAL INCOME OF RS.3,10,590/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICE R THAT THE PURCHASES MADE BY THE ASSESSEE FROM M/S. BHATTACHARYYA BOTTLI NG PLANT PVT. LTD. AS RECORDED IN THE BOOKS OF ACCOUNTS WERE RS.97,76,726 /- WHILE THE TOTAL SALES MADE TO THE ASSESSEE AS PER BOOKS OF THE SAI D PARTY WERE TO THE TUNE OF RS.98,18,474/- SHOWING THE DIFFERENCE OF RS .41,748/-. SIMILARLY THERE WAS A DIFFERENCE IN THE PURCHASES CLAIMED TO BE MADE BY THE ASSESSEE FROM M/S. I.F.B. AGRO INDUSTRIES LTD. AMO UNTING TO RS.3,401/-. IN THIS REGARD, THE EXPLANATION OFFERED BY THE ASSESSE E FOR THE SAID DIFFERENCE WAS NOT FOUND ACCEPTABLE BY THE ASSESSIN G OFFICER AND TREATING THE AMOUNT OF DIFFERENCE AS UNDISCLOSED PURCHASES O F THE ASSESSEE, HE ADDED A SUM OF RS.45,149/- TO BE THE TOTAL INCOME O F THE ASSESSEE. FROM THE BALANCE-SHEET OF THE ASSESSEE, IT WAS ALSO NOTI CED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS INVESTED A SUM OF RS. 5,80,596/- IN THE CONSTRUCTION OF HOUSE BUILDING AT KARIMPUR, NADIA D URING THE YEAR UNDER CONSIDERATION. IN ORDER TO VERIFY THE CORRECTNESS O F THE SAID AMOUNT DISCLOSED BY THE ASSESSEE, COMMISSION UNDER SECTION 142A WAS ISSUED BY THE ASSESSING OFFICER TO THE DEPARTMENTAL VALUATION OFFICER, KOLKATA. IN HIS REPORT SUBMITTED TO THE ASSESSING OFFICER ON 21 .10.2009 THE COST OF CONSTRUCTION INCURRED BY THE ASSESSEE DURING THE YE AR UNDER CONSIDERATION WAS ESTIMATED BY THE DVO AT RS.7,66,8 62/-. WHEN THE DIFFERENCE OF RS.1,85,906/- WAS BROUGHT TO THE NOTI CE OF THE ASSESSEE BY THE ASSESSING OFFICER, VARIOUS OBJECTIONS/CONTENTIO NS WERE RAISED BY THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER, ALL T HESE CONTENTIONS/ OBJECTIONS HAD ALREADY BEEN RAISED BY THE ASSESSEE BEFORE THE DVO AND THE SAME HAVING BEEN CONSIDERED BY THE DVO, THE EXP LANATION OFFERED BY THE ASSESSEE FOR THE DIFFERENCE OF RS.1,85,906/- WA S NOT ACCEPTABLE. ACCORDINGLY, THE SAID DIFFERENCE AMOUNT WAS TREATED BY THE ASSESSING OFFICER AS UNDISCLOSED INVESTMENT MADE BY THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION AND ADDITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. IN THE PROFIT & LOSS A/C., VARIOUS EXPENSES I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 7 WERE CLAIMED BY THE ASSESSEE UNDER DIFFERENT HEADS. ON VERIFICATION OF THE SAME, THE ASSESSING OFFICER FOUND THAT THE SAME WER E NOT FULLY VERIFIABLE AND ALSO INVOLVED PERSONAL ELEMENT. HE, THEREFORE, DISALLOWED THE SAID EXPENSES PARTLY TO THE EXTENT OF RS.23,652/-. ACCOR DINGLY, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTIO N 143(3) VIDE AN ORDER DATED 29.12.2009 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.6,02,880/-. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) CHALLENGING ALL THE THREE ADDITIONS MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNDISCLOSED PURCHASES , ALLEGED UNDISCLOSED INVESTMENT IN CONSTRUCTION OF HOUSE AND DISALLOWANC E OUT OF VARIOUS EXPENSES. REGARDING THE UNDISCLOSED PURCHASES ALLE GED BY THE ASSESSING OFFICER ON THE BASIS OF DIFFERENCE NOTED IN THE AC COUNTS OF THE CONCERNED TWO PARTIES, SUCH DIFFERENCE TO THE EXTENT OF RS.28 ,283/- IN THE ACCOUNT OF M/S. BHATTACHARYYA BOTTLING PLANT PVT. LTD. WAS EXP LAINED BY THE ASSESSEE AS THE EXCESS AMOUNT REFUNDED BY THE SAID PARTY TO THE ASSESSEE. THIS EXPLANATION OF THE ASSESSEE WAS FOUND ACCEPTABLE BY THE LD. CIT(APPEALS). AS REGARDS THE BALANCE DIFFERENCE OF RS.13,465/- IN THE ACCOUNT OF THE SAID PARTY, THE EXPLANATION OF THE ASSESSEE THAT TH E SAME WAS OWING TO THE ADJUSTMENT OF COST OF BOTTLES RETURNED TO THE COMPA NY AT THE TIME OF PURCHASE OF COUNTRY SPIRIT, HOWEVER, WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) IN THE ABSENCE OF ANY EVIDENCE TO SUPP ORT AND SUBSTANTIATE THE SAME. SIMILARLY THE EXPLANATION OF THE ASSESSEE REGARDING THE DIFFERENCE OF RS.3,401/- IN THE ACCOUNT OF M/S. I.F .B. AGRO INDUSTRIES LIMITED WAS ALSO NOT FOUND ACCEPTABLE BY THE LD. CI T(APPEALS). HE ACCORDINGLY SUSTAINED THE ADDITION OF RS.45,149/- M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNDISCLOSED PURCHASES TO THE EXTENT OF RS.16,866/-. 4. AS REGARDS THE ALLEGED UNDISCLOSED INVESTMENT MA DE BY THE ASSESSEE IN THE CONSTRUCTION OF HOUSE, VARIOUS CONT ENTIONS WERE RAISED ON I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 7 BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS). ONE OF SUCH CONTENTIONS RAISED BY THE ASSESSEE WAS THAT THE CON STRUCTION EXPENSES HAVING BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT A ND NO DEFECT WHATSOEVER HAVING BEEN FOUND BY THE ASSESSING OFFIC ER IN THE SAID BOOKS OF ACCOUNT AS WELL AS THE SUPPORTING VOUCHERS PRODU CED FOR VERIFICATION BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF DVOS ALONE WAS NOT SUSTAINABLE IN LAW. IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED BY THE ASSESSEE ON THE DECISION OF THE HONBLE RAJASTH AN HIGH COURT IN THE CASE OF CIT VS.- PRATAPSINGH AMROSINGH RAJENDRA SI NGH & DEEPAK KUMAR REPORTED IN 200 ITR 788 (RAJ.). ALTHOUGH THIS PLEA SPECIFICALLY RAISED BY THE ASSESSEE ALONG WITH OTHER SUBMISSIONS MADE BEFO RE HIM WAS FORWARDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER FOR HIS COMMENTS, THE ASSESSING OFFICER DID NOT OFFER ANY C OMMENT ON THIS PLEA SPECIFICALLY RAISED BY THE ASSESSEE. THIS ASPECT, T HEREFORE, WAS SPECIFICALLY BROUGHT TO THE NOTICE OF THE LD. CIT(APPEALS) BY TH E ASSESSEE IN HIS COUNTER COMMENTS OFFERED ON THE REMAND REPORT OF TH E ASSESSING OFFICER. THE LD. CIT(APPEALS), HOWEVER, OVERLOOKED THE SAME AND PROCEEDED TO CONFIRM THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF HOUSE WITHOUT MAKING ANY OBSERVATION THEREON. AS REGARDS THE DISALLOWANCE OF RS.23,652/- MADE BY THE ASSESSING OFFICER OUT OF VA RIOUS EXPENSES, THE LD. CIT(APPEALS) HELD THAT SUCH DISALLOWANCE WAS CALLED FOR AS THE INVOLVEMENT OF PERSONAL ELEMENT IN THE EXPENSES CLA IMED BY THE ASSESSEE ON TELEPHONE, MISCELLANEOUS, ETC. COULD NOT BE RULE D OUT. HE, HOWEVER, HELD THAT THE DISALLOWANCE OF RS.23,652/- MADE BY T HE ASSESSING OFFICER WAS ON THE HIGHER SIDE AND FOUND IT FAIR AND REASON ABLE TO RESTRICT THE SAME TO RS.10,000/-. THE APPEAL FILED BY THE ASSESS EE BEFORE HIM THUS WAS PARTLY ALLOWED BY THE LD. CIT(APPEALS) BY HIS APPEL LATE ORDER DATED 31.01.2013, WHICH IS IMPUGNED BY THE ASSESSEE IN TH E PRESENT APPEAL FILED BEFORE THE TRIBUNAL. I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 5 OF 7 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT( APPEALS) PARTLY ON ACCOUNT OF UNDISCLOSED PURCHASES, IT WAS OBSERVED T HAT THE SAME WAS BASED ON THE DIFFERENCE NOTED BY THE ASSESSING OFFI CER IN THE TOTAL AMOUNT OF TRANSACTIONS MADE BY THE ASSESSEE WITH TWO PARTI ES. AS REGARDS THE DIFFERENCE IN THE ACCOUNT OF M/S. BHATTACHARYYA BOT TLING PLANT PVT. LTD. THE EXPLANATION OF THE ASSESSEE ON ACCOUNT OF SUCH DIFFERENCE TO THE EXTENT OF RS.23,283/- WAS FOUND ACCEPTABLE BY THE L D. CIT(APPEALS). THE BALANCE DIFFERENCE OF RS.13,465/- WAS EXPLAINED BY THE ASSESSEE AS OWING TO THE ADJUSTMENT OF COST OF BOTTLES RETURNED TO TH E COMPANY AT THE TIME OF PURCHASE OF COUNTRY SPIRIT, BUT THE SAME WAS NOT ACCEPTED BY THE LD. CIT(APPEALS) WITHOUT GIVING ANY COGENT REASON EXCEP T SAYING THAT THE DETAILED REPLY FILED BY THE ASSESSEE COULD NOT EXPL AIN THE SAID DIFFERENCE. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE ME, THERE IS A COMMON PRACTICE TO RETURN THE EMPTY BOTTLES OF COUNTRY SPIRIT AT THE TIME OF PURCHASE AND THERE BE ING NOTHING IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) OR EVEN BROU GHT ON RECORD BY THE LD. D.R. AT THE TIME OF HEARING TO CONTROVERT THE S AME, I DO NOT SEE ANY JUSTIFIABLE REASON FOR NOT ACCEPTING THIS EXPLANATI ON OF THE ASSESSEE FOR THE DIFFERENCE OF RS.13,465/-. AS REGARDS THE DIFFE RENCE OF RS.3,401/- IN THE ACCOUNT OF M/S. I.F.B. AGRO INDUSTRIES LIMITED, I, HOWEVER, FIND THAT THE SAME HAS NOT BEEN SATISFACTORILY EXPLAINED BY T HE ASSESSEE EITHER BEFORE THE AUTHORITIES BELOW OR EVEN BEFORE ME. I, THEREFORE, SUSTAIN THE ADDITION MADE ON THIS ISSUE TO THE EXTENT OF RS.3,4 01/-. 6. AS REGARDS THE ADDITION OF RS.1,85,906/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON AC COUNT OF ALLEGED UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF HOUSE, IT IS OBSERVED THAT THE SAME WAS BASED ON TH E VALUATION REPORT OF THE D.V.O. ESTIMATING THE COST OF CONSTRUCTION MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AT A HIGHER VAL UE THAN WHAT WAS DECLARED BY THE ASSESSEE. IN THIS REGARD, THE LD. C OUNSEL FOR THE ASSESSEE I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 6 OF 7 AT THE TIME OF HEARING BEFORE ME HAS REITERATED THE STAND TAKEN BEFORE THE AUTHORITIES BELOW THAT WHEN THE CONSTRUCTION EXPENS ES INCURRED BY THE ASSESSEE WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND THE SAID BOOKS OF ACCOUNT WERE NOT REJECTED BY THE ASSESSING OFFIC ER EVEN THOUGH THE SAME WERE PRODUCED BY THE ASSESSEE FOR VERIFICATION BEFORE HIM ALONG WITH THE SUPPORTING VOUCHERS, THE ADDITION CANNOT B E MADE ON ACCOUNT OF THE ALLEGED UNEXPLAINED INVESTMENT MADE IN THE CONS TRUCTION OF THE HOUSE MERELY ON THE BASIS OF VALUATION REPORT. THE LD. CO UNSEL FOR THE ASSESSEE HAS ALSO INVITED MY ATTENTION TO THE SUBMISSIONS MA DE BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS), WHEREIN THIS POINT WAS SPECIFICALLY RAISED. HE HAS ALSO TAKEN ME THROUGH THE REMAND REPORT OF THE ASSESSING OFFICER TO SHOW THAT NO ADVERSE COMMENT WAS OFFERED BY THE ASS ESSING OFFICER ON THIS ASPECT WHEN THE SAME WAS SPECIFICALLY CONFRONT ED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER FOR HIS COMME NTS. A PERUSAL OF THE ASSESSMENT ORDER AS WELL AS THE REMAND REPORT SHOWS THAT THE BOOKS OF ACCOUNT REGULARLY MAINTAINED BY THE ASSESSEE WERE P RODUCED BEFORE THE ASSESSING OFFICER FOR VERIFICATION AND THE SAME REF LECTING THE CONSTRUCTION EXPENSES INCURRED BY THE ASSESSEE WERE NOT REJECTED BY HIM. IN THE SIMILAR FACTS AND CIRCUMSTANCES INVOLVED IN THE CAS E OF PRATAPSINGH AMROSINGH RAJENDRA SINGH & DEEPAK KUMAR (SUPRA) CIT ED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE HONBL E RAJASTHAN HIGH COURT THAT THE ADDITION MADE ON ACCOUNT OF ALLEGED INVEST MENT IN CONSTRUCTION MERELY ON THE BASIS OF DVOS REPORT WITHOUT REJECTI NG THE BOOKS OF ACCOUNT REGULARLY MAINTAINED BY THE ASSESSEE IS NOT SUSTAINABLE. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE HON BLE RAJASTHAN HIGH COURT AND KEEPING IN VIEW THE FACTS OF THE CASE, I FIND MYSELF IN AGREEMENT WITH THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDI TION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN THE CONSTRUCTION OF HOUSE IS NOT SUSTAINABLE. I, ACCORDINGLY, DELETE THE SAME. I.T.A. NO. 684/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 7 OF 7 7. AS REGARDS THE DISALLOWANCE OF RS.23,652/- MADE BY THE ASSESSING OFFICER OUT OF VARIOUS EXPENSES, WHICH IS SUSTAINED BY THE LD. CIT(APPEALS) TO THE EXTENT OF RS.10,000/-, IT IS OB SERVED THAT NATURE OF SOME OF THE EXPENSES CLAIMED BY THE ASSESSEE UNDER DIFFERENT HEADS IS SUCH THAT THE INVOLVEMENT OF PERSONAL ELEMENT THERE IN CANNOT BE RULED OUT. I, THEREFORE, AGREE WITH THE LD. CIT(APPEALS) THAT SOME DISALLOWANCE ON ACCOUNT OF SUCH PERSONAL ELEMENT IS CALLED FOR I N THE FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THAT SUCH DISALLOWANCE SUSTAINED BY THE LD. CIT(APPEALS) TO THE EXTENT OF RS.10,000/- IS FAIR AND REASONABLE, I FIND NO INFIRMITY IN THE IMPUGNED ORD ER OF THE LD. CIT(APPEALS) CALLING FOR ANY INTERFERENCE ON THIS I SSUE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 7 TH , 2015. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 7 TH DAY OF OCTOBER, 2015 COPIES TO : (1) SRI HARIDAS MAITRA, C/O. P.S. GUPTA, ADVOCATE, 100, BANK LANE, HATER PARA, KRISHNANAGAR, DIST. NADIA-741101 (2) INCOME TAX OFFICER, WARD-4, NADIA, KRISHNANAGAR-741 101 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXXVI, K OLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.