Shri Gobinda Gopal Paul, Nadia V. ITO, WD-2, NADIA, Nadia

ITA 767/KOL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5129 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VARSHA JALAN
• Keywords: Source of fund; Corroborative evidences
• Section: 143(3); 133(6)

Judgement Text

I.T.A. NO. 767/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 767/KOL/ 2015 ASSESSMENT YEAR: 2009-2010 SHRI GOBINDA GOPAL PAUL,........................... ..........................APPELLANT VILLAGE- BABLA GOBINDPUR, P.S. SANTIPUR, DIST. NADIA-741 404 [PAN : AFIPP 9234 N] -VS.- INCOME TAX OFFICER,................................ ............................RESPONDENT WARD-2, NADIA, ANANT MITRA ROAD, NADIA, WEST BENGAL-741 101 APPEARANCES BY: SMT. VARSHA JALAN, ADVOCATE, FOR THE ASSESSEE SHRI PINAKI MUKHERJEE, JCIT, SR. D.R., FOR THE DEPA RTMENT DATE OF CONCLUDING THE HEARING : DECEMBER 14, 2015 DATE OF PRONOUNCING THE ORDER : JANUARY 06, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-12, KOLKAT A DATED 25.03.2015. ALTHOUGH THE ASSESSEE HAS RAISED TOTAL THREE GROUND S THEREIN, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED GROUNDS NO . 1 & 2 AT THE TIME OF HEARING BEFORE ME, THE SAME ARE ACCORDINGLY DISMISS ED AS NOT PRESSED. 2. THE ONLY ISSUE THAT NOW SURVIVES FOR MY CONSIDER ATION AS RAISED IN GROUND NO. 3 OF THE ASSESSEES APPEAL RELATES TO TH E ADDITION OF RS.6,86,898/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF UNDISCLOSED PURCHASES. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF RUNNING A PETROL PUMP. THE RETURN O F INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 30.09.2009 DECLARING TOTAL I.T.A. NO. 767/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 5 INCOME OF RS.3,64,667/-. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, A NOTICE UNDER SECTION 133(6) OF THE ACT WAS ISSUED B Y THE ASSESSING OFFICER TO HPCL IN ORDER TO CONFIRM THE PURCHASE OF PETROL, DIESEL, ETC. CLAIMED TO BE MADE BY THE ASSESSEE FOR HPCL. IN THE CONFIRMATI ON ISSUED BY HPCL, TOTAL PURCHASES MADE BY THE ASSESSEE WERE SHOWN AT RS.8,24,31,644/- AS AGAINST PURCHASES FROM HPCL SHOWN BY THE ASSESSEE A T RS.8,17,44,745/-. WHEN THE ASSESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN THIS DIFFERENCE OF RS.6,86,898/-, THE ASSESSEE ACCE PTED THE MISTAKE IN RECORDING THE PURCHASES TO THE EXTENT OF RS.6,86,89 8/-. HE, HOWEVER, SUBMITTED THAT THE ENTIRE AMOUNT AGAINST PURCHASES MADE FROM HPCL WAS PAID THROUGH BANK AND THERE WAS NO ILL-MOTIVE ON HI S PART NOT TO RECORD THE PURCHASES TO THE EXTENT OF RS.6,86,898/-. THIS SUBMISSION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE AMOUNT OF UNDISCLOSED PURCHASES OF RS.6,86,898/- WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE ADDITION OF RS.6,86,898/- MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF UNDISCLOSED PURCHASES WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND THE FO LLOWING SUBMISSIONS IN WRITING WERE MADE BY HIM BEFORE THE LD. CIT(APPEALS ) IN SUPPORT OF HIS CASE THAT THE SAID ADDITION MADE BY THE ASSESSING O FFICER WAS NOT SUSTAINABLE:- IN THIS REGARD THE APPELLANT SUBMIT THAT DIFFERENC E IN PURCHASE AROSE PURELY DUE TO OVERSIGHT AND IS UNINTENTIONAL IN NATURE. HOWEVER, IT HAS BEEN SUBMITTED BEFORE THE LEARNED I NCOME TAX OFFICER THAT THE PAYMENT OF SUCH PURCHASE WAS MADE VIDE CHEQUE NO.837381 DATED 25-07-2008 FOR RS.5,04,207.90 THE B ANK STATEMENT REFLECTING SUCH PAYMENT HAS BEEN PLACED O N RECORD BEFORE THE LEARNED INCOME TAX OFFICER IN THE COURSE OF ASSESSMENT. WHEN THE PAYMENT HAS BEEN MADE BY CHEQU E FROM THE BANK ACCOUNT OF THE BUSINESS, IT IS SUFFICIENT PROOF THAT THE SOURCE OF INCOME IS THE APPELLANT WORKING CAPITAL W HICH IS GENERATED DURING THE NORMAL COURSE OF BUSINESS. EVE N IN WILDEST IMAGINATION THE OMISSION TO RECORD THE PURCHASE OF RS.6,86,898.90 CANNOT BE SAID TO BE MADE UNDISCLOSE D SOURCE OF INCOME. I.T.A. NO. 767/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 5 HENCE, THE APPELLANT SUBMIT THAT THE ORDER PASSED B Y LEARNED INCOME TAX OFFICER U/S. 143(3) HAS NO LEGAL BASIS A ND THE DEMAND RAISED NEEDS TO BE DROP. WITHOUT PREJUDICE TO THE ABOVE SUBMISSION IT MAY AL SO BE STATED THAT IF HIGHER PURCHASE OF RS.6,86,898.57 IS CONSID ER AND WOULD HAVE BEEN DEBITED TO PROFIT AND LOSS ACCOUNT THE RE TURNED TOTAL NET PROFIT WOULD HAVE BEEN REDUCED BY RS.6,86,898.5 7. ACCORDINGLY THE TAX LIABILITIES ALSO WOULD HAVE RED UCED. HOWEVER, THE INCOME TAX OFFICER WHILE COMPUTING THE INCOME O F THE APPELLANT ALTHOUGH ADDED UNDISCLOSED PURCHASE BUT CORRESPONDINGLY DID NOT REDUCED THE TOTAL INCOME AS EXPLAINED ABOVE'. 5. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE S UBMISSIONS MADE BY THE ASSESSEE AND PROCEEDED TO CONFIRM THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE FOR THE FOLLOWING R EASONS GIVEN IN PARAGRAPH NO. 6.2 OF HIS IMPUGNED ORDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE AP PELLANTS SUBMISSION. DURING THE ASSESSMENT PROCEEDINGS, IT W AS STATED THAT THE ENTIRE DIFFERENCE OF RS.6,86,898/- HAD BEE N ENTERED IN THE STOCK REGISTER AND PAID FOR BY CHEQUE. DURING T HE APPELLATE PROCEEDINGS, A SIMILAR SUBMISSION WAS MADE IN RESPE CT OF PURCHASES WORTH RS.5,04,208/-, WITHOUT SPECIFYING O R ACTUALLY SHOWING AS TO WHICH PURCHASES HAD BEEN ACTUALLY REC ORDED IN THE STOCK REGISTER BUT NOT IN THE LEDGER AND FOR WHICH PAYMENT HAD BEEN MADE. IN OTHER WORDS, THE APPELLANT HAS MADE A GENERAL SUBMISSION WITHOUT ANY CORROBORATIVE EVIDENCES, OR WITHOUT EXPLAINING THE EXACT ENTRIES IN THE LEDGER/STOCK REGISTER/PURCHASE REGISTER OR PRODUCING THE RELEVAN T INVOICE. IN FACT, IT HAS BEEN ADMITTED THAT THE PURCHASES AMOUN TING TO RS.6,86,898/- HAVE NOT BEEN ACCOUNTED FOR. IT HAS B EEN CLAIMED THAT PAYMENT OF RS.5,04,208/- HAS BEEN ACCOUNTED FO R WITHOUT CORRELATING THE PAYMENTS IN ANY MANNER WITH THE IMP UGNED UNDISCLOSED PURCHASES WHICH WERE RECORDED IN THE ST OCK REGISTER BUT NOT THE LEDGER/BOOKS OF ACCOUNT. THE APPELLANT S CONTENTION THAT THE PURCHASES WOULD GO TOWARDS REDUCING THE PR OFIT ALSO CANNOT BE ACCEPTED AS THE CORRESPONDING SALES CAN A LSO BE SAFELY INFERRED TO BE NOT ACCOUNTED FOR. HENCE, THE ADDITI ON OF RS.6,86,898/- IS CONFIRMED. IN VIEW OF THE UNEXPLAI NED DIFFERENCE IN THE PURCHASES MADE BY THE APPELLANT, THE FOURTH GROUND OF APPEAL REGARDING PROPER MAINTENANCE OF BOOKS OF ACC OUNT AND ABSENCE OF ANY MATERIAL DEFECTS OR SPECIFIC DISCREP ANCY IN THE BOOKS OF ACCOUNT, IS ALSO REJECTED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 767/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 5 6. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE MAIN CON TENTION RAISED BY THE LD. COUNSEL FOR THE ASSESEE BEFORE ME IS THAT IF TH E CORRESPONDING SALES MADE BY THE ASSESESE OUT OF THE UNDISCLOSED PURCHAS ES ARE ALSO ACCOUNTED FOR BY THE ASSESSEE AS INFERRED BY THE LD. CIT(APPE ALS) IN HIS IMPUGNED ORDER, ONLY THE GROSS PROFIT FROM SUCH SALES CAN BE ADDED TO THE TOTAL INCOME OF THE ASSESESE AND NOT THE ENTIRE AMOUNT OF UNDISCLOSED PURCHASES. HOWEVER, AS RIGHTLY CONTENDED BY THE LD. D.R., IF THE PURCHASES TO THE EXTENT OF RS.6,86,898/- ARE NOT ADMITTEDLY A CCOUNTED FOR BY THE ASSESSEE, THE ENTIRE AMOUNT OF UNDISCLOSED PURCHASE S HAS TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED EXP ENDITURE, IF THE ASSESSEE HAS FAILED TO DISCLOSE THE SOURCE OF FUNDS UTILIZED FOR MAKING SUCH PURCHASES. IN THIS REGARD, HE HAS POINTED OUT FROM THE RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. CIT(APPEAL S) THAT THE ASSESSEE CLEARLY FAILED TO CORRELATE ANY PAYMENT MADE TO HPC L WITH THE UNDISCLOSED PURCHASES. THE LD. COUNSEL FOR THE ASSE SSEE HAS SUBMITTED THAT THE ACCOUNT OF HPCL IS A RUNNING ACCOUNT WITH TOTAL PURCHASES EXCEEDING RS.8,00,00,000/- AND PAYMENTS ARE MADE FR OM TIME TO TIME AGAINST SUCH PURCHASES. HE HAS CONTENDED THAT IT IS , THEREFORE, DIFFICULT TO CORRELATE ANY SPECIFIC PAYMENT DIRECTLY WITH THE UN DISCLOSED PURCHASES. IN MY OPINION, EVEN IF THERE IS SOME MERIT IN THE C ONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, IT SHOULD NOT BE DIFFICUL T FOR THE ASSESSEE TO ESTABLISH FROM THE RUNNING ACCOUNT THAT THE PAYMENT AGAINST UNDISCLOSED PURCHASES WAS MADE THROUGH BANK AND SUCH PAYMENT WA S DULY REFLECTED IN HIS BOOKS OF ACCOUNT. MOREOVER, IF AT ALL THE CL AIM OF THE ASSESSEE OF HAVING MADE THE PAYMENT AGAINST UNDISCLOSED PURCHAS ES OF RS.6,86,898/- THROUGH BANK IS FACTUALLY CORRECT, THE SAME CAN BE PROVED BY OBTAINING CONFIRMATION FROM HPCL. I, THEREFORE, CONSIDER IT F AIR AND PROPER AND IN THE INTEREST OF JUSTICE TO RESTORE THIS MATTER TO T HE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AFRESH AFTER GIVING THE ASSESSEE AN OPPORTUNITY TO ESTABLISH HIS CLAIM OF H AVING PAID THE AMOUNT AGAINST UNDISCLOSED PURCHASES THROUGH BANK, WHICH I S DULY REFLECTED IN I.T.A. NO. 767/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 5 HIS BOOKS OF ACCOUNT. GROUND NO. 3 OF THE ASSESSEE S APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 06, 2016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 6 TH DAY OF JANUARY, 2016 COPIES TO : (1) SHRI GOBINDA GOPAL PAUL, VILLAGE- BABLA GOBINDPUR, P.S. SANTIPUR, DIST. NADIA-741 404 (2) INCOME TAX OFFICER, WARD-2, NADIA, ANANT MITRA ROAD, NADIA, WEST BENGAL-741 101 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-12, KOLKA TA (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.