Smt. Navdeep Kaur, Kolkata V. ITO Ward 40(1), Kolkata, Kolkata

ITA 80/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1401 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA
• Assessee Lawyers: MANISH TIWARI
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE HONBLE SHRI P.M. JAGTAP] I.T.A. NO. 80/KOL/2017 ASSESSMENT YEAR : 2010-11 SMT. NAVDEEP KAUR.............................APPELLANT 1/A BINDU BASINI STREET KOLKATA - 700027 [PAN : ALXPK0019K] INCOME TAX OFFICER..........................RESPONDENT WARD NO. 40(1), KOLKATA 3, GOVERNMENT PLACE WEST, KOLKATA - 700001 APPEARANCES BY: SHRI MANISH TIWARI, AR APPEARING ON BEHALF OF THE ASSESSEE. SHRI SOUMYAJIT DASGUPTA, JCIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : SEPTEMBER 05, 2017 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 27, 2017 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) 12, KOLKATA DATED 26.10.2016. 2. THE ISSUE RAISED IN GROUND NO 1 RELATES TO THE ADDITION OF RS. 25,56,104/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) ON ACCOUNT OF DISCREPANCIES FOUND IN THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH TWO PARTIES. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF TRANSPORTATION IN THE NAME AND STYLE OF HER PROPRIETARY CONCERN OF M/S. SAINI TRANSWAYS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HER ON 11.10.2010 2 I.T.A. NO. 577/KOL/2017 A.Y. 2010-11 ASHOK KUMAR JALAN DECLARING A TOTAL INCOME OF RS. 14,91,630/-. IN THE PROFIT AND LOSS ACCOUNT FILED ALONG WITH THE SAID RETURN, A TOTAL SUM OF RS. 4,24,32,684/- WAS CREDITED BY THE ASSESSEE ON ACCOUNT OF TRANSPORTATION AND HIRE CHARGES. IN ORDER TO VERIFY THE SAME, LETTERS U/S 133(6) WERE SENT BY THE AO TO SOME OF THE PARTIES. AS PER THE INFORMATION RECEIVED IN RESPONSE TO THE SAID LETTERS, THERE WERE SOME DISCREPANCIES AS NOTICED BY THE AO. WHEN THE SAID DISCREPANCIES WERE BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE AO, EXPLANATION WAS OFFERED BY THE ASSESSEE IN THE MATTER. THE SAID EXPLANATION HOWEVER WAS NOT FOUND SATISFACTORY BY THE AO IN RESPECT OF TWO PARTIES NAMELY M/S. PREMCO RAIL ENGINEERS LTD. AND M/S. OJHA EARTH MOVERS. ACCORDING TO THE AO, THE ASSESSEE HAD UNDERSTATED RECEIPTS FROM THE SAID TWO PARTIES TO THE EXTENT OF RS. 1,84,000/- AND RS. 23,72,104/-. HE THEREFORE MADE ADDITION OF RS. 25,56,104/- TO THE TOTAL INCOME OF THE ASSESSEE ON THIS ISSUE IN THE ASSESSMENT MADE UNDER SECTION 143(3) VIDE AN ORDER DATED 26.03.2013. 4. AGAINST THE ORDER PASSED BY THE AO UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT (A) AND SINCE THE SUBMISSION MADE BY THE ASSESSEE IN SUPPORT OF ITS CASE WAS NOT FOUND SATISFACTORY BY HIM, THE LD. CIT (A) PROCEEDED TO CONFIRM THE ADDITION OF RS. 25,56,104/- ON ACCOUNT OF UNDERSTATEMENT OF TRANSPORT RECEIPTS FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO 3.2 OF HIS IMPUGNED ORDER: I HAVE CONSIDERED THE ASSESSMENT ORDER, REMAND REPORT AS WELL AS THE SUBMISSIONS OF THE LD. AR OF THE APPELLANT. I FIND THAT THE AO HAS CONDUCTED REQUISITE ENQUIRIES U/S 133(6) OF THE ACT. IN RESPONSE TO SUCH ENQUIRIES AO OBSERVED DISCREPANCIES IN RESPECT OF OJHA EARTH MOVERS AND PREMCO RAIL ENGINEERS LTD. THE AR FAILED TO EXPLAIN SUCH DISCREPANCY 3 I.T.A. NO. 577/KOL/2017 A.Y. 2010-11 ASHOK KUMAR JALAN BEFORE THE AO. I FIND THAT ALTHOUGH EXPLANATION WAS FURNISHED BEFORE THE AO BUT THE EXPLANATION WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. IN RESPECT OF OJHA EARTH MOVERS THE AO VERIFIED THE CONTENTIONS OF THE ASSESSEE AND ACCEPTED THE CONTENTIONS TO THE EXTENT OF RS. 3,50,000/- WHICH WERE SUBSTANTIATED BY THE ASSESSEE. HOWEVER THE DISCREPANCY OF RS. 23,72,104/- REMAINED IN EXPLAINED. NEITHER BEFORE AO NOR BEFORE ME THE APPELLANT COULD SATISFACTORILY EXPLAIN THIS DISCREPANCY. THE AR HAD FILED A RECONCILIATION STATEMENT WHICH IS REPRODUCED ABOVE. HOWEVER, IN SUCH RECONCILIATION STATEMENT THE APPELLANT HAS CLAIMED THAT CERTAIN PAYMENTS WERE MADE BY OJHA EARTH MOVERS ON BEHALF OF THE APPELLANT. A ONE PAGE CONFIRMATION WAS ALSO FILED BEFORE ME. APART FROM THIS THERE WAS NO OTHER MATERIAL OR EVIDENCE BROUGHT ON RECORD TO ESTABLISH AS TO THESE PAYMENTS WERE ADJUSTED IN THE BOOKS OF RESPECTIVE PARTIES. WHETHER ANY TDS WAS DEDUCTED OR NOT. THEREFORE, CONSIDERING ALL THE FACTS AND CIRCUMSTANCES I FIND NO INFIRMITY IN THE ORDER OF THE AO AND THUS THIS GROUND IS DISMISSED. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE DIFFERENCE IN THE BALANCES OF TWO PARTIES NAMELY M/S. PREMCO RAIL ENGINEERS LTD. AND M/S. OJHA EARTH MOVERS WAS DULY EXPLAINED BY THE ASSESSEE BEFORE THE AO. IN THIS REGARD, HE HAS INVITED MY ATTENTION TO THE RECONCILIATION STATEMENT PLACED AT PAGE NO 12 OF THE PAPER BOOK AS WELL AS THE LEDGER ACCOUNTS OF BOTH THE PARTIES PLACED AT PAGE NO 13 AND 23 OF THE PAPER BOOK TO POINT OUT THAT THE SAID DIFFERENCE WAS DUE TO SEVERAL FACTORS INCLUDING THE DIFFERENCE IN THE OPENING BALANCE. HE HAS CONTENDED THAT THE AUTHORITIES BELOW HOWEVER FAILED TO APPRECIATE THE SAME AND MADE THE IMPUGNED ADDITION ONLY ON THE BASIS OF DIFFERENCE IN PAYMENTS WHICH IS NOT JUSTIFIED. HE HAD URGED THAT THIS MATTER MAY THEREFORE BY SENT BACK TO THE AO FOR VERIFICATION OF THE RECONCILIATION PREPAID AND FURNISHED BY THE ASSESSEE TO EXPLAIN THE DIFFERENCE IN THE BALANCE OF TWO PARTIES FROM THE RELEVANT RECORD. ALTHOUGH THE LEARNED DR HAS RAISED AN OBJECTION FOR SENDING THE MATTER BACK TO THE ASSESSING 4 I.T.A. NO. 577/KOL/2017 A.Y. 2010-11 ASHOK KUMAR JALAN OFFICER BY SUBMITTING THAT THE ASSESSEE HAS ALREADY BEEN GIVEN SUFFICIENT OPPORTUNITY TO EXPLAIN AND RECONCILE THE DIFFERENCE, I CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AND RECONCILE THE SAID DIFFERENCE KEEPING IN VIEW THE RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE AS WELL AS THE COPIES OF LEDGER ACCOUNTS OF THE CONCERNED PARTIES PLACED ON RECORD WHICH CLEARLY SHOW THAT THERE WAS A DIFFERENCE IN THE OPENING BALANCE ALSO. ACCORDINGLY I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT (A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH AFTER GIVING THE ASSESSEE ONE MORE OPPORTUNITY TO EXPLAIN AND SET ASIDE THE DIFFERENCE IN QUESTION. GROUND NO 1 OF THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. AS REGARDS THE ISSUE INVOLVED IN GROUND NO 2 OF THE ASSESSEES APPEAL RELATING TO THE DISALLOWANCE OF RS. 40,000/- MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) ON ACCOUNT OF PAYMENT MADE BY THE ASSESSEE TO HER FATHER IN LAW, THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE SAID DISALLOWANCE HAS BEEN MADE BY THE AO U/S 40A(2)(A) WITHOUT POINTING OUT AS TO HOW THE SAID PAYMENT WAS EXCESSIVE AND UNREASONABLE. HOWEVER, AS RIGHTLY POINTED OUT BY THE LEARNED DR FROM THE RELEVANT POTION OF THE ORDER OF THE LD. CIT (A), THE DISALLOWANCE MADE BY THE AO U/S 40A(2)(A) HAS BEEN CONFIRMED BY THE LD. CIT (A) ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE EXPENDITURE CLAIMED TO BE INCURRED ON ACCOUNT OF PAYMENT MADE TO HER FATHER IN LAW. SINCE THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO PROVE SUCH GENUINENESS EVEN AT THE TIME OF HEARING BEFORE THE TRIBUNAL I FIND NO INFIRMITY IN THE 5 I.T.A. NO. 577/KOL/2017 A.Y. 2010-11 ASHOK KUMAR JALAN IMPUGNED ORDER OF THE LEARNED CIT (A) ON THIS ISSUE AND UPHOLDING THE SAME, I DISMISS GROUND NO 2. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 27/09/2017 BISWAJIT COPY OF ORDER FORWARDED TO: 1. SMT. NAVDEEP KAUR, KOLKATA. 2. ITO, WARD 40(1) 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA