M/s Bhalotia Wood Industries, Burdwan V. ITO, WD-3(1), KOLKATA, Asansol

ITA 761/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4369 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 03-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 29-05-2015
• Court: TRIBUNAL
• Department Lawyers: SITAL CHANDRA DAS
• Assessee Lawyers: V N PUROHIT
• Keywords: Depreciation; Additional evidence; Retraction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI K. NARASIMHA CHARY, JM & DR. A.L.SAINI , AM ./ ITA NO.761/KOL/2015 ( / ASSESSMENT YEAR :2010-2011) M/S BHALOTIA WOOD INDUSTRIES, 41, N.S.B.ROAD, P.O. RANIGANJ, DIST.BURDWAN-713347 VS. ITO-3(1), PARMAR BUILDING, 54 G.T.ROAD (WEST), ASANSOL-713304 ./ ./PAN/GIR NO. : AACFB 7410 M ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI V.N.PUROHIT, FCA /REVENUE BY : SHRI SITAL CHANDRA DAS / DATE OF HEARING : 06/10/2016 /DATE OF PRONOUNCEMENT 19/10/2016 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEAR 2010-2011, IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A), ASANSOL, IN APPEAL NO.159/CIT(A)/ASL/W-3(1) /ASL/12-13, DATED 16 TH MARCH, 2015, WHICH IN TURN ARISES OUT AN ORDER PAS SED BY THE ASSESSING OFFICER U/S.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), DATED 26-11-2012. 2. THE FACTS OF CASE; QUA THE ASSESSEE ARE THAT THE RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 WAS FILED BY THE ASSESS EE ON 29-09-2010. LATER ON THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER MADE THE ASSESSMENT BY MAKING VARIOUS ADDITIONS. IN ASSESSEES CASE UNDER CONSIDERATION A SURVEY U/S.133A OF THE INCOME TAX ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM O N 26-3-2010. DURING ITA NO.761/15 2 THE COURSE OF SURVEY AUTHORIZED OFFICER (AO) CARRIE D OUT THE SURVEY PROCEEDING IN PRESENCE OF SRI BHAKTI RAM BHALOTIA ( BEING THE 50% SHARE HOLDER), PARTNER OF THE FIRM. PAPERS AND DOCUMENTS WHICH WERE FOUND WERE INVENTORIED AND THE ASSESSING OFFICER USED THE MATERIAL WHICH WAS TAKEN BY THE SURVEY TEAM DURING THE SURVEY PROCEEDI NGS. THE ASSESSING OFFICER DID THE SMALL ADDITIONS; SUCH AS ADDITION OF RS. 20000/= RECEIVED BY THE ASSESSEE AS ADVANCE FROM T HE PARTY, ADDITION OF RS. 24,255/- PRESUMING UNACCOUNTED SALE, ADDITION OF RS.500,000/- AND ADHOC ADDITIONS BASED ON THE ESTIMATE ETC. 3.AGGRIEVED, FROM THE ORDER OF THE ASSESSING OFFICE R, THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A), WHO HAS ALSO CONFIR MED THE ACTION OF THE AO, BY OBSERVING THE FOLLOWINGS: 18.A DECISION IN THIS REGARD IS TO BE BY TAKING INTO ACCOUNT THE ASPECTS DISCUSSED ABOVE. THERE ARE INACCURACIES ON PART OF THE ASSESSEE. FURTHER A STATEMENT GIVEN IS NOT VALIDITY RETRACTED, INSTEA D TAX WAS PAID TO CEMENT THE STATEMENT. I FIND THAT THERE ARE SOME INACCURAC IES ON PART OF ASSESSING OFFICER IN THE MANNER COMPUTATION OF UNAC COUNTED STOCK. SINCE UNACCOUNTED TRADE IS CONFIRMED (DECISION ON GROUNDS 3 AND 4 CONFIRMS THE SAME) THE STOCK DISCLOSED CANNOT BE CORRECT. TH ERE IS AN ADMISSION OF UNACCOUNTED STOCK WHICH SUBSISTS ON ACCOUNT OF LACK OF RETRACTION. CONSIDERING ALL ASPECTS, I HOLD THAT A VIA MEDIA AP PROACH IS TO BE ADOPTED. AFTER WEIGHING CASES FROM BOTH SIDES, I HOLD THAT A N ADDITION OF RS. 5,00,000/- WILL BE SUFFICIENT TO ABSORB THE DEFICIE NCY NOTED. THE ASSESSING ITA NO.761/15 3 OFFICER IS DIRECTED TO MODIFY ASSESSMENT REPLACING ADDITION OF RS. 7,55,254/- BY RS. 5,00,000/-. THE GROUND IS PARTLY ALLOWED. 19.GROUND 4 IS AGAINST DISALLOWANCE OF 20% OF CAR E XPENSES INCLUDING DEPRECIATION. THE ASSESSING OFFICER MADE A CLEAR RE CORDING THAT LOG BOOK IS NOT MAINTAINED TO PROVE EXCLUSIVE USE FOR BUSINE SS. BEFORE ME IT WAS STATED AS UNDER: REGARDING CAR EXPENSES AND DEPRECIATION ON CAR WE WOULD LIKE TO MENTION THAT EXPENSES ON CAR AVERAGING RS.5000/- TO 6000/- PER MONTH IS VERY MEAGER AS OUR FACTORY IS SITUATED AROUND 10 KM S AWAY AND ALSO WE HAVE TO SEARCH FOR THE MARKETS TO SELL THE WOODS. I THINK EXPENSES IS NOT MUCH HIGH THE MATTER IS CONSIDERED. ON FACTS AND CIRCUMSTANCE S OF THE CASE, I HOLD THAT A DISALLOWANCE OF 12.5% WILL SUFFICE. HENCE AS SESSING OFFICER IS DIRECTED TO MODIFY ASSESSEE RESTRICTING DISALLOWANC E TO 12.5% IN PLACE OF 20%. THE GROUND IS PARTLY ALLOWED. THIS WAY, THE LD CIT(A) HAS ALSO DISALLOWED SOME OT HER SMALL EXPENSES. NOT BEING SATISFIED WITH THE ORDER OF CIT(A), THE A SSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- (1) THAT THE COMM. OF INCOME TAX (APPEAL)-ASANSOL [ C.I.T.(A)] HAS ERRED, BOTH IN LAW AND ON THE FACTS AND UNDER THE C IRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION TO TOTAL INCOME , A SUM OF RS. 20,000/- RECEIVED AS ADVANCE FROM A PARTY. (2) THAT LIKEWISE, THE C.I.T.(A) HAS FURTHER ERRED IN CONFIRMING THE ADDITION OF RS. 24,255/- AS UNACCOUNTED SALES. (3) THAT LIKEWISE, THE C.I.T.(A) HAS FURTHER ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.5.00 LACS (RS.5,00,000 1-) OUT OF TOTAL ADDITION MADE BY A.O. AT RS.7,55,254/-. ITA NO.761/15 4 (4) THAT LIKEWISE, THE C.I.T.(A) HAS FURTHER ERRED IN CONFIRMING AN ADHOC DISALLOWANCE OF RS.10,775/- BEING 12.5% OF RS . 86,203/- AGAINST ADDITION OF RS. 17,240/- MADE BY A.O.AT THE RATE 20% OF CAR EXPENSES RS.73.028/- AND DEPRECIATION ON CAR RS . 13,175/- (RS. 14,605/- PLUS RS.2,635/- TOTAL RS. 17,240/-). (5) THAT THE ASSESSEE, CRAVES LEAVE TO ADD, TO AMEN D OR WITHDRAW ANY GROUNDS ON OR BEFORE THE HEARING OF THE APPEAL. 4. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US SOME ADDITIONAL EVIDENCES BY WAY OF PAPER BOOK, IN RESPECT OF THE A BOVE SAID GROUNDS OF APPEAL TAKEN BY HIM, THESE ARE AS FOLLOWS: S.NO.1 OF PAPER BOOK: RECEIPTS, S.NO.2 OF PAPER BOOK:TAX INVOICE S.NO.5 OF PAPER BOOK:STOCK SUMMARY. S. NO. 33 TO 35 OF PAPER BOOK : JOURNAL VOUCHERS, S URESH KUMAR BHALOTIA ACCOUNT, AND LEDGER ACCOUNT OF CHATTRAJ CONSTRUCTIO N, R.N.COLONY ACCOUNT. ALL THESE ADDITIONAL EVIDENCES ARE CONNECTED AND R ELATED TO ALL THE GROUNDS TAKEN BY THE ASSESSEE BEFORE US, THEREFORE, WE ARE OF THE VIEW THAT THIS ENTIRE ISSUE REQUIRES FRESH EXAMINATION A T THE END OF THE ASSESSING OFFICER. 5. LD. DEPARTMENTAL REPRESENTATIVE HAS ALSO AGREED TO REMIT THE CASE BACK TO THE AO TO EXAMINE THE ADDITIONAL EVIDENCE S UBMITTED BY THE ASSESSEE. 6. HAVING HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THIS ISSUE REQUI RES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER, THEREFORE, WE SE T ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THIS ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER ITA NO.761/15 5 WITH THE DIRECTION TO ASCERTAIN THE ADDITION, IF AN Y, BY CONSIDERING THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19/10 /2016. SD/ - (NARASIMHA CHARY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 19/10/2016 & ()* /PRAKASH MISHRA , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//