Partha Sarathi Mukherjee, Kolkata V. J.C.I.T (OSD) Cir - 51,kolkata, Kolkata

ITA 857/KOL/2013

• Counselvise Citation: 85723514 RSA 2013
• Duration Of Justice: 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 18-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ANUSA BANERJEE; SAURAV SENGUPTA
• Keywords: Revised return
• Section: 133(6); 194C

Judgement Text

I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA CORAM : SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO.: 857/KOL./ 2013 ASSESSMENT YEAR : 2009-2010 PARTHA SARATHI MUKHERJEE,......................... ......APPELLANT C/O. A. KAYES & CO., 231, KAMALALAYA CENTRE, 156A, LENIN SARANI, KOLKATA-700 013 [PAN : AFAPM 5527 R] -VS.- JOINT COMMISSIONER OF INCOME TAX (OSD),............ ......RESPONDENT CIRCLE-51, KOLKATA, UTTARAPAN BUILDING, UTTARAPAN COMPLEX, MANICKTALA CIVIC CENTRE, ULTADANGA, KOLKATA-700 054 APPEARANCES BY: SMT. ANUSA BANERJEE AND SHRI SAURAV SENGUPTA, A.R., FOR THE ASSESSEE SHRI SANJAY MUKHERJEE, JCIT, SR. D.R, FOR THE DEPAR TMENT DATE OF CONCLUDING THE HEARING : JANUARY 28, 2014 DATE OF PRONOUNCING THE ORDER : FEBRUARY 06, 2014 O R D E R PER ABRAHAM P. GEROGE : 1. IN THIS APPEAL FILED BY THE ASSESSEE, DIRECTED A GAINST AN ORDER DATED 13.03.2013 OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-XXXII, KOLKATA, IT HAS RAISED FOUR GROUNDS, OF WHICH GROUND NO. 4 I S GENERAL, NEEDING NO ADJUDICATION. 2. VIDE HIS GROUND NO. 1, ASSESSEE IS AGGRIEVED THA T LD. CIT(APPEALS) CONFIRMED AN ADDITION OF RS.46,19,645/- MADE FOR CE RTAIN DIFFERENCES BETWEEN THE INCOME RETURNED BY ASSESSEE AND DATA CO MING OUT OF ANNUAL INFORMATION REPORT (IN SHORT AIR). I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 2 3. FACTS APROPOS ARE THAT ASSESSEE ENGAGED IN STRUC TURAL ENGINEERING AND CONSTRUCTION, HAD FILED A RETURN ON 30.09.2009 DECLARING INCOME OF RS.16,05,850/-. THOUGH IN THE ASSESSMENT ORDER IT I S STATED AS REVISED RETURN, NOTHING IS MENTIONED AS TO WHY THE RETURN W AS REVISED AND WHAT WAS THE ORIGINALLY RETURNED INCOME. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTED FROM DATA COMP ILED FROM AIR THAT ASSESSEE HAD RECEIVED A SUM OF RS.40,01,224/- FROM ONE M/S. KOHINOOR STEEL PVT. LTD. ON WHICH SUM, SUCH PARTY HAD DEDUCT ED TAX AT SOURCE UNDER SECTION 194C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). SINCE THIS WAS NOT APPEARING IN THE ACCOUNT STATEMENT FILED BY ASSESSEE, ASSESSING OFFICER REQUESTED THE ASSESSEE TO EXPLAIN. ASSESSEE EXPLAINED THAT THERE WERE NO SUCH RECEIPTS DURING THE RELEVANT PREVIOUS YEAR FROM M/S. KOHINOOR STEEL PVT. LTD. ASSESSING OFFICER THEREAFT ER ISSUED NOTICE TO M/S. KOHINOOR STEEL PVT. LTD. UNDER SECTION 133(6) OF TH E ACT. NO REPLY WAS RECEIVED FROM M/S. KOHINOOR STEEL PVT. LTD. ASSESSE E COULD NOT FILE ANY CONFIRMATION FROM THE SAID PARTY. 4. SIMILAR TO THE ABOVE, AIR DATA ALSO SHOWED A REC EIPT OF RS.5,80,000/- FROM ONE M/S. MAITHON ALLOYS LTD. WHI CH AMOUNT WAS ALSO NOT INCLUDED BY ASSESSEE IN HIS INCOME. ASSESSING O FFICER, THEREFORE, MADE AN ADDITION OF RS.45,81,224/-, CONSIDERING THE ABOV E TWO AMOUNTS AS CONTRACT RECEIPTS FROM TWO PARTIES, WHICH WERE NOT ACCOUNTED BY THE ASSESSEE. 5. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE LD. C IT(APPEALS). AS PER ASSESSEE, RECEIPTS FROM M/S. KOHINOOR STEEL PVT. LT D. WERE FOR A WORK DONE IN PREVIOUS YEAR ENDING 31.03.2007 AND SUCH RE CEIPTS WERE DULY SHOWN IN THE SAID YEAR. AS PER ASSESSEE, ONLY A SUM OF RS.23,79,665/- WAS RECEIVED BY IT FROM M/S. KOHINOOR STEEL PVT. LTD. D URING FINANCIAL YEAR 2007-08. THIS WAS CORRECTLY SHOWN BY IT IN ITS RETU RN OF INCOME FOR ASSESSMENT YEAR 2008-09. ASSESSEE POINTED OUT THAT THE ESTIMATED I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 3 CONTRACT VALUE FOR THE WORK DONE BY M/S. KOHINOOR S TEEL PVT. LTD. WAS RS.26,00,000/-, OF WHICH 20% COMING TO RS.5,20,000/ - WAS RECEIVED ON 19.02.2008. FURTHER AS PER THE ASSESSEE, A SUM OF R S.5,99,020/- RECEIVED ON 11.03.2008 AND FURTHER SUM OF RS.11,38,136/- WAS RECEIVED ON 26.03.2008, ON PROFORMA INVOICES RAISED ON THE PART Y. BY THE END OF FINANCIAL YEAR 31.03.2008, ASSESSEE HAD ALREADY REC EIVED RS.22,57,356/- FROM M/S. KOHINOOR STEEL PVT. LTD. FURTHER AS PER T HE ASSESSEE, AFTER FINAL INSPECTION M/S. KOHINOOR STEEL PVT. LTD., AGREED TO PAY AT RS.21,73,527/- ONLY. EXCESS OF RS.83,829/-, AS PER THE ASSESSEE WA S REFUNDED DURING THE RELEVANT PREVIOUS YEAR, ON 19.04.2008. AS PER THE A SSESSEE, THE SUM OF RS.90,668/- DEDUCTED BY M/S. KOHINOOR STEEL PVT. LT D. AS TAX AT SOURCE ON AGGREGATE AMOUNT OF RS.40,01,224/- WAS BASED ON WRO NG FIGURES SINCE THE TOTAL AMOUNT PAID BY THEM TO THE ASSESSEE WAS ONLY RS.21,73,527/-. 6. VIS-A-VIS ADDITION MADE IN THE CASE OF MAITHAN A LLOYS LTD., SUBMISSION OF ASSESSEE BEFORE THE LD. CIT(APPEALS) WAS THAT A SUM OF RS.5,80,000/- WAS RECEIVED AS ADVANCE FROM M/S. MAI THAN ALLOYS LTD, ON 25.02.2009. CHEQUE GIVEN BY THE PARTY TO THE ASSESS EE WAS RS.5,66,857/- AFTER DEDUCTING TAX OF RS.13,143/- AT SOURCE. ASSES SEE POINTED OUT THAT THE SUM OF RS.5,80,000/- WAS CORRECTLY SHOWN IN HIS BANK ACCOUNT AS ADVANCE. SINCE IT WAS AN ADVANCE, AS PER THE ASSESS EE, IT COULD NOT BE TREATED AS PART OF HIS INCOME OF THE RELEVANT PREVI OUS YEAR. 7. LD. CIT(APPEALS) SOUGHT A REMAND REPORT FROM ASS ESSING OFFICER ON THE SUBMISSIONS MADE BY ASSESSEE. SUBMISSION OF THE ASSESSING OFFICER WAS THAT M/S. KOHINOOR STEEL PVT. LTD. HAD DEDUCTED TAX OF RS.90,668/- ON A TRANSACTION VALUE OF RS.40,01,224/-. FINAL SETTLE MENT WITH M/S. KOHINOOR STEEL PVT. LTD. WAS ONLY IN APRIL, 2008 WH ICH FELL WITHIN THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT Y EAR. IT SEEMS ASSESSING OFFICER DID NOT MAKE ANY COMMENTS ON THE SUBMISSIONS MADE BY ASSESSEE, VIS-A-VIS THE CLAIM OF ADVANCE OF RS.5 ,80,000/- RECEIVED FROM M/S. MAITHAN ALLOYS LTD. I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 4 8. LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIO NS OF ASSESSEE AS WELL AS THE REMAND REPORT OF ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE HAVING CLAIMED CREDIT FOR THE TAX OF RS.90 ,668/- DEDUCTED BY M/S. KOHINOOR STEEL PVT. LTD. AT SOURCE, DURING THE RELEVANT PREVIOUS YEAR, COULD NOT SAY THAT CONTRACT AMOUNTS WERE NOT RECEIV ED. BY MAKING A CLAIM FOR TAX CREDIT, AS PER LD. CIT(APPEALS), ASSESSEE W AS ACCEPTING THE TRANSACTIONS WITH M/S. KOHINOOR STEEL PVT. LTD. VIS -A-VIS THE CLAIM OF ADVANCE STATED TO HAVE BEEN RECEIVED FROM M/S. MAIT HAN ALLOYS LTD. ALSO, LD. CIT(APPEALS) HELD THE SAME VIEW. ACCORDING TO H IM ASSESSEE HAVING CLAIMED CREDIT FOR TDS COULD NOT SAY THAT CORRESPON DING INCOME WOULD NOT BE RECOGNIZED. HE, THEREFORE, CONFIRMED THE ADD ITION MADE BY THE ASSESSING OFFICER. 9. NOW BEFORE US, LD. A.R. STRONGLY ASSAILING THE O RDER OF AUTHORITIES BELOW SUBMITTED THAT M/S. KOHINOOR STEEL PVT. LTD. HAD FILED A LETTER DATED 02.05.2012, ADDRESSED TO THE ASSESSING OFFICE R, COPY OF WHICH HAS BEEN PLACED AT PAPER BOOK PAGE 101. ACCORDING TO HE R, IT WAS CLEARLY MENTIONED THEREIN THAT THE TOTAL AMOUNT PAID TO THE ASSESSEE WAS ONLY RS.22,57,356/-. IT WAS UNFAIR TO MAKE AN ADDITION O F RS.40,01,224/- SIMPLY BASED ON AIR INFORMATION, WHEN ASSESSEE COUL D SHOW THAT HE HAD RECEIVED NOTHING MORE THAN RS.22,57,356/-. EVEN SUC H RECEIPTS WERE IN THE PRECEDING PREVIOUS YEAR AND DULY SHOWN IN THE R ETURN FOR ASSESSMENT YEAR 2008-09. ASSESSEE COULD NOT BE PUT ON PERIL FO R AN ERROR COMMITTED BY M/S. KOHINOOR STEEL PVT. LTD. THEY HAD MADE AN E XCESSIVE DEDUCTION OF TAX COMING TO RS.90,668/- BASED ON AN IMAGINARY FIG URE OF RS.40,01,224/-. M/S. KOHINOOR STEEL PVT. LTD. HAD ALSO CONFIRMED TH AT EXCESS TDS WAS DEDUCTED BY THEM. SUCH EXCESS TDS THOUGH CLAIMED BY THE ASSESSEE, WAS REIMBURSED BY ASSESSEE TO THEM LATER. 10. AS FOR THE ADDITION IN RELATION TO ALLEGED RECE IPTS FROM M/S. MAITHAN ALLOYS LTD. LD. A.R. TOOK US THROUGH A COPY OF LEDG ER WHICH PLACED AT PAPER I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 5 BOOK PAGE 143. ACCORDING TO HER, WHAT WAS RECEIVED FROM M/S. MAITHAN ALLOYS LTD. WAS AN ADVANCE BASED ON A WORK ORDER. A DVANCE AMOUNT RECEIVED WAS RS.5,80,000/-. CHEQUE ISSUED BY M/S. M AITHAN ALLOYS LTD. ON 02.03.2009, WAS FOR RS.5,66,857/- AFTER DEDUCTING T AX AT SOURCE. ACCORDING TO HER, SUCH ADVANCE AMOUNT WAS CORRECTLY SHOWN IN THE BALANCE SHEET OF ASSESSEE. IN THE VERY NEXT YEAR, W HEN THE WORK WAS DONE ASSESSEE HAD CORRECTLY SHOWN INCOME THEREFROM. RELY ING ON THE WORK ORDER ISSUED BY M/S. MAITHAN ALLOYS LTD. ON 25.02.2 009, COPY OF WHICH HAS BEEN PLACED AT PAPER BOOK PAGES 32 TO 37, LD. A R SUBMITTED THAT IT CLEARLY MENTIONED ADVANCE PAYMENT OF RS.5,80,000/-. THEREFORE, ACCORDING TO HER, SAID SUM COULD NOT BE PART OF THE INCOME OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. ASSESSEE HAD NOT COMMENCED WORK BASED ON THE WORK ORDER. CREDIT FOR TAX DEDUCTED WA S CLAIMED BY ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR, BUT THIS WOULD NOT BY ITSELF, ACCORDING TO THE LD. A.R., MEAN THAT ADVANCE A RECEIVED WAS P ART OF TAXABLE INCOME. 11. PER CONTRA, LD. D.R. STRONGLY SUPPORTING THE OR DERS OF AUTHORITIES BELOW SUBMITTED THAT THE ADDITIONS WERE MADE BASED ON DATA DERIVED FROM THE ANNUAL INFORMATION REPORT. ASSESSEE HAVING CLAIMED CREDIT FOR TAX DEDUCTED AT SOURCE, COULD NOT SHY AWAY FROM ITS DUTY TO SHOW THE CORRESPONDING INCOME. IF ITS INCOME WAS IN A SUCCEE DING YEAR OR IN EARLIER YEAR, CREDIT OF TAX OUGHT NOT HAVE BEEN CLAIMED FOR THE IMPUGNED ASSESSMENT YEAR. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN RESPECT OF ADDITION MADE FO R ALLEGED CONTRACT RECEIPTS FROM M/S. KOHINOOR STEEL PVT. LTD. CONSIDE RABLE RELIANCE HAS BEEN PLACED BY ASSESSEE ON A LETTER DATED 2.5.2012 ISSUED BY THE SAID PARTY. THE LETTER IS REPRODUCED HEREUNDER:- DATED 2 ND MAY, 2012 TO THE JOINT COMMISSIONER OF INCOME TAX (OSD) CIRCLE-51, KOLKATA, I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 6 BLOCK DS-2& 3, MANIKTALA CIVIC CENTRE, UTTARAPAN, KOLKATA-700 054 SUB.: INFORMATION U/S 133(6) IN THE CASE OF M/S. CO NCEPT PROJECT & CONSULTANCY SERVICES HAVING PAN : FAPM 5527 R FOR AY 2009-10 SIR, WE ARE IN RECEIPT OF YOUR LETTER NO. JCIT (OSD)- CIR.51/133(6)/11-12/KOL/559 DATED 12/12/11 ON THE S UBJECT MATTER. PLEASE NOTE IN THE CONTEXT THAT WE HAD ISSUED ONE O RDER ON M/S. CONCEPT PROJECT & CONSULTANCY SERVICES FOR SUPPLY & ERECTION OF PREFABRICATED SHEDS AT OUR STEEL PLANT IN JHARKHAND . THE ORDER WAS WORTH RS.26.00 LACS TOWARDS SUPPLY OF SHEDS WEIGHIN G APPX. 51 MT @ RS.51,000/- PER TON. THE PAYMENT OF RS.22,57,356/ - WERE MADE AGAINST VARIOUS PROFORMA INVOICES BEFORE THE DISPAT CH OF MATERIALS IN FY 2007-08. ON COMPLETION OF SUPPLY, THE SHEDS W ERE WEIGHED AT 41.63 MT ONLY AND ACCORDINGLY THEY RAISED FINAL BIL LS AMOUNTING RS.21,73,527/- INCLUSIVE OF CST THEREON IN APRIL08 I.E. IN FY 2009- 10. AS SUCH, A SUM OF RS.83,029/- WAS PAID IN EXCESS TO THEM, WHICH WAS REFUNDED BY THEM VIDE CHEQUE NO. 042178 O N CENTRAL BANK OF INDIA, WHILE, RECORDING THE BILLS IN OUR BO OKS, IT WAS OBSERVED THAT THE TDS WAS ALSO TO BE DEDUCTED ON TH E SAME AS THE CONTRACT WAS INCLUSIVE OF SUPPLY & ERECTION. ACCORD INGLY, TDS AMOUNTING TO RS.90.668/- (RUPEES NINETY THOUSAND SI X HUNDRED SIXTY EIGHT ) ONLY WAS DEDUCTED AND DEPOSITED INTO GOVERN MENT A/C THE AMOUNT OF TDS SO DEDUCTED HAS BEEN REIMBURSED TO US LATER. HOPE, THE SUPPLIED INFORMATION SERVES YOUR PURPOSE, THANKING YOU, YOURS FAITHFULLY, FOR KOHINOOR STEEL PRIVATE LTD. DIRECTOR 13. LD. CIT(APPEALS) HAD SOUGHT A REMAND REPORT FRO M THE ASSESSING OFFICER ON THE SUBMISSIONS MADE BY ASSESSEE. REMAND REPORT WHICH HAS BEEN REPRODUCED BY THE LD. CIT(APPEALS) IN HIS ORDE R READS AS UNDER:- THE UNDERSIGNED HAS GONE THROUGH THE DETAILS SUBMI TTED BY THE ASSESSEE INCLUDING COPY OF A LETTER FROM KOHINOOR STEEL PRIV ATE LTD. FINAL A/C. OF THE ASSESSEE, RELEVANT LEDGER A/C ETC. AND GROUND OF AP PEAL SUBMITTED BY THE ASSESSEE TO THIS OFFICE. APPARENTLY MAIN ISSUE IS THE ADDITION OF RS.40,01,2 24/- UNDER THE HEAD SALES TO KOHINOOR STEEL PVT. LTD. THE ABOVE AMOUNT WAS APPARENTLY NOT DISCLOSED IN THE A/CS. OF THE ASSESSEE FOR THE AY 2009-10, WH ICH FINDS SUPPORT IN THE LIST OF PARTIES (TO WHOM GOODS HAVE BEEN SOLD) SUBMITTED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE INFORMATION REGARDIN G ASSESSEES TRANSACTION WITH KOHINOOR STEEL WAS RECEIVED AS AIR INFORMATION BY THE AO WHICH PROMOTED HIM TO TAKE SUBSEQUENT ACTION. IT IS ALSO NOTED THA T TDS OF RS.90,668/- WAS DEDUCTED ON THE BASIS OF TRANSACTION VALUE OF RS.40 ,01,224/-. THOUGH THE ASSESSEE I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 7 DENIED EXISTENCE OF ANY TRANSACTION WITH KOHINOOR S TEEL PVT. LTD. DURING THE AY 2009-10 (FY 2008-09) IT HAS NO COMPUTATION IN CLAIM ING TDS OF RS.90,668/- FOR THE AY 2009-10 ON THE BASIS OF SAME TRANSACTION. TH IS FACT RENDERS ASSESSEES CLAIM DOUBTFUL AND UNACCEPTABLE. FURTHER ATTENTION IS INVITED TO THE LETTER DATED 28.05.2012 OF KOHINOOR STEEL PVT. LTD. ( COPY OF WH ICH IS A PART OF THE PAPER BOOK) VIDE WHICH KOHINOOR STEEL PVT. LTD. STATED TH AT FINAL BILL ON ACCOUNT OF WORK ORDER ISSUED TO CONCEPT PROJECT & CONSULTANCY SERVICE, PROP. SHRI PARTHA SARATHI MUKHERJEE WAS RAISED BY M/S. CONCEPT PROJEC T IN APRIL, 2008, I.E. IN FY 2009-10. THIS FURTHER INDICATED EXISTENCE OF TRANSA CTION WITH KOHINOOR STEEL DURING THE FY 2008-09. IN VIEW OF THE ABOVE, ASSESSEES SUBMISSION ON THIS ISSUE CANNOT BE TREATED AS RELIABLE AND SUPPORTED BY FACTS. WHAT THE ASSESSING OFFICER STATES IS THAT CLAIM OF ASSESSEE WAS DOUBTFUL AND UNACCEPTABLE. HE HAS NOT QUESTIONED THE VERACIT Y OR CORRECTNESS OF THE LETTER SENT BY M/S. KOHINOOR STEEL PRIVATE LTD. IT HAS BEEN UNEQUIVOCALLY CONFIRMED BY THE SAID PARTY THAT PAYM ENTS EFFECTED TO ASSESSEE WERE DURING FINANCIAL YEAR 2007-08 RELEVAN T TO ASSESSMENT YEAR 2008-09 AND SUCH PAYMENTS TOTALLED TO RS.22,57,356/ -. THEY HAD ALSO CONFIRMED THAT AFTER FINAL WEIGHMENT THE AMOUNT DUE TO THE ASSESSEE WAS ONLY RS.21,73,527/- AND EXCESS PAYMENT WAS REFUNDED BY ASSESSEE TO THEM. THIS BEING THE CASE, IN OUR OPINION, IT IS VE RY CLEAR THAT THE CONTRACT AMOUNT WAS NOT MORE THAN RS.21,73,527/-. FOR AN ERR OR COMMITTED BY M/S. KOHINOOR STEEL PRIVATE LTD. BY COMPUTING A HIG HER AMOUNT FOR DEDUCTION OF TAX AT SOURCE, ASSESSEE CANNOT BE TAXE D. JUST BECAUSE THEY HAD DEDUCTED A TAX OF RS.90,668/-, IT CANNOT BE PRE SUMED THAT PAYMENTS OF RS.40,01,224/- WERE EFFECTED TO THE ASSESSEE. IN FORMATION COMPUTED FROM AIR, IN OUR OPINION, HAS BEEN EFFECTIVELY REBU TTED BY THE ASSESSEE BY SHOWING THAT WHAT WAS RECEIVED BY THEM FROM M/S. KO HINOOR STEEL PRIVATE LTD WAS ONLY RS.21,73,527/-, THAT TOO IN AN EARLIER PREVIOUS YEAR. NO DOUBT ASSESSEE HAD CLAIMED CREDIT FOR TAX OF RS. 90,668/- DEDUCTED BY M/S. KOHINOOR STEEL PRIVATE LTD IN THE IMPUGNED ASS ESSMENT YEAR. M/S. KOHINOOR STEEL PRIVATE LTD ALSO ACKNOWLEDGED THAT T HE EXCESS TDS DEDUCTED AND CLAIMED BY THE ASSESSEE WAS REIMBURSED TO THEM LATER. IF THE REVENUE IS OF THE OPINION THAT ASSESSEE HAD CLA IMED TDS IN EXCESS OF WHAT WAS LEGITIMATELY AVAILABLE TO IT, IT IS FREE T O PROCEED TO CORRECT SUCH I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 8 ERROR. NEVERTHELESS THERE IS NO REASON TO MAKE AN A DDITION OF RS.40,01,224/- SOLELY BASED ON INFORMATION TAKEN FR OM AIR, WHEN ASSESSEE COULD EFFECTIVELY SHOW THAT SUCH INFORMATI ON WAS INCORRECT. 14. COMING TO THE SUBMISSION OF THE ASSESSEE THAT T HE SUM OF RS.5,80,000/- WAS RECEIVED FROM M/S. MAITHAN ALLOYS LTD. ONLY AS ADVANCE, COPY OF THE WORK ORDER DATED 25.02.2009 PL ACED BY THE SAID PARTY APPEARING AT PAGE 32 OF THE PAPER BOOK IS VER Y MATERIAL. PERTINENT PART OF THE WORK ORDER IS REPRODUCED HEREUNDER:- TO M/S. CONCEPT PROJECT & CONSULTANCY SERVICES, 25B, CAMAC STREET, 2B, CAMAC COURT, KOLKTA-700 016. ATTN. : MR. P.S. MUKHERJEE, CHIEF EXECUTIVE OFFI CER . SUB.: CONSTRUCTION OF TUBULAR STRUCTURE SHED AT OUR FERRO ALLOYS PLANT AT BYRNIHAT . REF, OUR LETTER OF INTENT NO. MAL/BYR/019/08-09/32 28 DATED 9.2.2009, YOUR LETTER NO. CPCS/MAL/6305/2008- 09 DT. 23.02.09 AND SUBSEQUENT TELECON. DEAR SIR, WITH REFERENCE TO ABOVE, WE ARE PLEASED TO PLACE TH IS WORK ORDER ON YOU AS PER TERMS AND CONDITIONS MENTIONED BELOW. SCOPE OF WORK : CONSTRUCTION OF TUBULAR STRUCTURE MEASURING : 54M X 66M X 6.5HT. COMMERCIAL TERMS AND CONDITIONS TOTAL PRICE FOR ABOVE STRUCTURE IS AS FOLLOWS : SHED 63.612 MT X 42,058.00 RS.26,75,400.00 (APPROX.) ERECTION CHARGE 63.612 MT X 3,012.00 RS.1,91,626. 00 (APPROX.) SHEET FIXING CHARGE RS.4.00 PER SQ.FT. TOTAL WEIGHT OF THE STRUCTURES : 63.612 MT (APPROX.) IN CASE OF ANY DEVIATION OF MORE THAN 3% PRORATE DEDUCTION SHALL BE MADE. TAXES AND DUTIES : CST & SERVICE TAX WILL BE EXTRA AS APPLICABLE. DELIVERY : EX-WORKS, KOLKATA TERMS OF PAYMENTS : (1) ENCLOSED PLEASE FIND CHEQUE NO. 706748 DT. 25.02.09 FOR RS.5,66,857/- BEING APPROX. 20% ADVANCE AFTER DEDUCTING TDS @ 2.2 66% ON RS.5,80,000. (2) 70% PAYMENT WILL BE MADE AGAINST DISPATCH. (3) BALANCE 10% PAYMENT WILL BE MADE AFTER SUCCESSFUL E RECTION. I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 9 THAT WORK ORDER WAS DATED 25.02.2009 AND THE SUM OF RS.5,80,000/- WAS BEING PAID AS AN ADVANCE IS CLEAR FROM THE ABOVE NA RRATION. ASSESSEE HAD RECEIVED THE ADVANCE SUM ON 02.03.2009 FROM M/S MAI THAN ALLOYS LTD. AFTER TAX DEDUCTION OF RS.13,143/-. THIS IS CLEAR F ROM THE RELEVANT LEDGER PAGE OF THE SAID PARTY APPEARING IN ASSESSEES BOOK S, COPY OF WHICH HAS BEEN PLACED AT PAPER BOOK PAGE 143. IN OUR OPINION, THERE IS NOTHING ON RECORD TO SHOW THAT ASSESSEE HAD EXECUTED ANY WORK BASED ON THIS WORK ORDER DURING THE RELEVANT PREVIOUS YEAR. THEREFORE, IF THE ASSESSEE TREATED SUCH SUM AS AN ADVANCE IN ITS BOOKS OF ACCO UNTS, IT CANNOT BE FAULTED. NO DOUBT, AS NOTED BY LD. CIT(APPEALS) ASS ESSEE HAD CLAIMED CREDIT FOR TAX OF RS.13,143/- DEDUCTED AT SOURCE BY M/S. MAITHAN ALLOYS LTD. IN THE IMPUGNED ASSESSMENT YEAR. AS MENTIONED BY US IN THE PRECEDING PARAS, REVENUE IS FREE TO TAKE APPROPRIAT E ACTION IF IT IS OF THE OPINION THAT ASSESSEE HAD CLAIMED AND WAS ALLOWED E XCESS TAX DEDUCTION OVER AND ABOVE WHAT WAS LEGITIMATELY DUE. HOWEVER, THIS WOULD NOT BE A REASONABLE GROUND TO HOLD THAT THE SUM RECEIVED AS AN ADVANCE IS AN INCOME. THERE IS NO DISPUTE THAT THE ADVANCE AMOUNT WAS SHOWN BY ASSESSEE IN ITS BALANCE SHEET AS ON 31.03.2009. WE ARE OF THE OPINION THAT NEITHER SUM OF RS.40,01,224/- NOR SUM OF RS.5,80,00 0/- COULD BE CONSIDERED AS PART OF INCOME OF THE ASSESSEE FOR TH E IMPUGNED ASSESSMENT YEAR. GROUND NO. 1 IN SO FAR AS IT RELATES TO THE A LLEGED CONTRACT RECEIPTS FROM M/S. KOHINOOR STEEL PVT. LTD. AND M/S. MAITHAN ALLOYS LTD. ARE ALLOWED AND ADDITIONS MADE FOR THESE TWO ARE DELETE D. FOR THE BALANCE AMOUNT OF RS.38,421/- OUT OF RS.46,19,645/-, NO ARG UMENTS WERE ADVANCED BY THE ASSESESES COUNSEL. GROUND NO. 1 IS , THEREFORE, PARTLY ALLOWED. 15. VIDE HIS GROUND NO. 2, GRIEVANCE RAISED BY THE ASSESSEE IS THAT LD. CIT(APPEALS) CONFIRMED AN ADDITION OF RS.1,00,176/- BEING DIFFERENCE IN CREDITORS ACCOUNT. I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 10 16. FACTS APROPOS ARE THAT ASSESSING OFFICER BASED ON CONFIRMATION RECEIVED FROM M/S. MAHALAXMI TRADING COMPANY, M/S. NATIONAL PIPE FITTINGS AND M/S. BANSAL STEEL, NOTED THAT THERE WA S A DIFFERENCE OF RS.1,00,176/-, VIS-A-VIS AMOUNTS SHOWN IN THE BOOKS OF ASSESSEE. AN ADDITION OF SUCH AMOUNT WAS MADE. 17. IN ITS APPEAL BEFORE LD. CIT(APPEALS), ARGUMENT OF THE ASSESSEE WAS THAT IT HAD PURCHASED IRON AND STEEL CONSUMABLES F ROM M/S. MAHALAXMI TRADING COMPANY. AS PER ASSESSEE THOUGH INVOICES WE RE RAISED BY THE SAID PARTY, IT WAS ACCOUNTING SUCH INVOICES AFTER R EDUCING THE DISCOUNTS/ADJUSTMENTS, BASED ON ORAL COMMUNICATION FROM THE SAID PARTY. THEREFORE, ACCORDING TO HIM DIFFERENCE WAS ONLY DUE TO THE NON- ADJUSTMENT OF DISCOUNT BY THE SUPPLIER. SIMILAR CON TENTION WAS MADE, VIS- A-VIS THE DIFFERENCE ARISING IN THE ACCOUNT OF NATI ONAL PIPE FITTINGS. IT SEEMS NO ARGUMENTS WERE ADVANCED ON THE DIFFERENCE IN THE ACCOUNT OF M/S. BANSAL STEEL. LD. CIT(APPEALS) WAS NOT APPRECI ATIVE OF THESE CONTENTION. ACCORDING TO HIM, IF THERE WAS A DISCOU NT FROM M/S. MAHALAXMI TRADING COMPANY AND M/S. NATIONAL PIPE FI TTINGS, ASSESSEE SHOULD HAVE ACCOUNTED IT SO. HE HELD THAT THE ADDIT IONS WERE RIGHTLY MADE BY THE ASSESSING OFFICER. 18. NOW BEFORE US, LD. DR PLACING RELIANCE ON THE P APER BOOK PAGE NO. 58 SUBMITTED THAT THE DIFFERENCE IN ACCOUNT OF M/S. MAHALAXMI TRADING COMPANY WAS ALL RECONCILED. IT SHOWED THAT DIFFEREN CE OF RS.93,768/- WAS ONLY DUE TO DISCOUNT RECEIVED FROM THE SAID CONCERN . ACCORDING TO THE LD. A.R., DISCOUNTS COULD NOT BE CONSIDERED FOR AN ADDI TION, ESPECIALLY WHEN ASSESSEE HAD CONCEALED THE AMOUNT. SIMILAR ARGUMENT S WERE ADVANCED IN RESPECT OF THE OTHER TWO PARTIES. 19. PER CONTRA, LD. D.R SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 11 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADDITION OF RS.1,00,176/- MADE BY ASSESSING OFFICER WERE ON ACCOUNT OF DIFFERENCE IN THE ACCOUNTS OF TH E FOLLOWING THREE PARTIES :- (I) MAHALAXMI TRADING COMPANY - RS.93,768/- (II) NATIONAL PIPE FITTINGS - RS. 6,062/- (III) BANSAL STEEL - RS. 346/- AS PER ASSESSEE, THE DIFFERENCE AROSE ON ACCOUNT OF DISCOUNT RECEIVED FROM THE CONCERNED PARTIES. A RECONCILIATION VIS-A- VIS M/S. MAHALAXMI TRADING COMPANY HAS ALSO PLACED BY THE ASSESEE AT P AGE 58 OF THE PAPER BOOK. FOR EVERY BILL RAISED BY M/S. MAHALAXMI TRADI NG COMPANY, ASSESSEE HAD IN ITS BOOKS SHOWN A LOWER FIGURE THAN THE BILL ED AMOUNT. THERE WERE 33 TRANSACTIONS WITH M/S. MAHALAXMI TRADING COMPANY . IN EACH OF THESE TRANSACTIONS WHAT WAS ACCOUNTED BY THE ASSESSEE WAS LESS THAN THE AMOUNT BILLED BY THE SAID PARTY. CLAIM OF THE ASSES SEE IS THAT THE DIFFERENCE WAS ON ACCOUNT OF DISCOUNT. HAD IT BEEN SO, ASSESSEE SHOULD HAVE ACCOUNTED THE PURCHASES CORRECTLY AND THEREAFT ER CHARGED DISCOUNT. THE RATE OF DISCOUNT VARIED FROM PURCHASE TO PURCHA SE. THERE WAS NO STANDARD NOR A REASONABLE BASIS, ON WHICH THE SO-CA LLED DISCOUNTS WERE WORKED OUT. ON PURCHASE OF RS2,50,820/- DATED 13.09 .2008 DISCOUNT WAS ONLY RS.208.20. ON ANOTHER PURCHASE OF RS.1,36,266/ - ON SAME DAY, WHAT WAS SHOWN BY THE ASSESSEE AS DISCOUNT WAS RS.2,236/ -. ASSESSEE SIMPLY WORKED OUT THE DIFFERENCE AND CLAIMED IT AS DISCOUN T. BY NO STRETCH OF IMAGINATION, IT CAN BE CONSIDERED AS DISCOUNT. THER E WAS NO BASIS FOR THE WORK-OUT NOR ANY STANDARDS FOLLOWED. CLAIM OF THE A SSESSEE THAT THE DISCOUNTS WERE WORKED OUT BASED ON ORAL COMMUNICATI ON IS NOT SUPPORTED BY ANY EVIDENCE. COMING TO THE CASE OF NATIONAL PIP E FITTINGS, THE DIFFERENCE WAS NOT AT ALL EXPLAINED BY THE ASSESSEE . AS FOR M/S. BANSAL STEEL, THERE WAS NO EXPLANATION WHATSOEVER COMING F ROM THE ASSESSEE. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ADDITION OF RS.1,00,176/- WAS RIGHTLY DONE BY THE ASSESSING OFF ICER AND CONFIRMED BY LD. CIT(APPEALS). GROUND NO. 2 OF THE ASSESSEE IS D ISMISSED. I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 12 21. VIDE ITS GROUND NO. 3, GRIEVANCE OF THE ASSESSE E IS THAT LD. CIT(APPEALS) CONFIRMED AN ADDITION FOR SALE OF SCRA P DONE BY THE ASSESSING OFFICER. 22. FACTS APROPOS ARE THAT ASSESSEE HAD DURING THE RELEVANT PREVIOUS YEAR MADE CASH DEPOSIT OF RS.13,75,230/- IN A SAVIN GS BANK ACCOUNT. THIS INFORMATION WAS TAKEN BY THE ASSESSING OFFICER FROM ANNUAL INFORMATION REPORT. EXPLANATION OF THE ASSESSEE WAS THAT THE DE POSITS WERE MADE OUT OF SALE PROCEEDS OF SCRAP. ASSESSING OFFICER DECLIN ED TO ACCEPT THIS EXPLANATION. ACCORDING TO HIM, ASSESSEE COULD NOT F ILE DETAILS AS TO WHOM THE SALE OF SCRAP WERE AFFECTED, EXCEPT FOR FILING SOME SELF-MADE VOUCHERS. HE MADE AN ADDITION OF RS.10,77,983/-. 23. IN ITS APPEAL BEFORE LD. CIT(APPEALS), ARGUMENT OF THE ASSESSEE WAS THAT THE SALE OF SCRAP WAS DULY SUPPORTED BY SALES BILLS. PARTIES TO WHOM THE SCRAP WAS SOLD HAD CONFIRMED THE SALES. THE AMO UNT WAS DULY ACCOUNTED FOR IN ITS BOOKS AND, THEREFORE, ADDITION OF RS.10,77,983/- WOULD AMOUNT TO DOUBLE TAXATION OF THE SAME AMOUNT. 24. LD. CIT(APPEALS) WAS NOT APPRECIATIVE ABOVE CON TENTIONS. ACCORDING TO HIM, IN THE NATURE OF BUSINESS OF THE ASSESSEE, THERE WAS NO SCOPE FOR SCRAP GENERATION. SALE OF SCRAP WAS SHOWN IN THE MO NTH OF MAY AND JUNE. LD. CIT(APPEALS) WAS OF THE OPINION THAT ASSESSEE W AS SIMPLY COMING OUT WITH A STORY TO JUSTIFY THE CASH DEPOSITS IN THE BA NK. IN THIS VIEW OF THE MATTER, HE CONFIRMED THE ADDITION. 25. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE OR DER OF LD. CIT(APPEALS) SUBMITTED THAT SALE OF SCRAP WAS ACCOU NTED IN THE BOOKS AND THE DEPOSITS MADE IN THE BANK ACCOUNT WERE OUT OF M ONEY RECEIVED ON SALE OF SCRAPS. ADDITION MADE ON SUCH DEPOSIT RESUL TED IN A DOUBLE TAXATION OF SAME AMOUNT. ACCORDING TO HER, LOWER AU THORITIES IGNORED THE I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 13 CONFIRMATION FILED FROM THE PARTIES FOR THE SALE OF SCRAPS. PER CONTRA, LD. DR SUPPORTED THE ORDER OF AUTHORITIES BELOW. 26. WE HAVE HEARD THE RIVAL CONTENTIONS. ARGUMENT OF THE ASSESSEE IS THAT DEPOSITS IN THE BANK WERE MADE OUT OF SALE OF SCRAPS. ASSESSING OFFICER MENTIONS IN HIS ORDER THAT THE DEPOSITS WER E MADE IN THE SAVINGS BANK ACCOUNT. HOWEVER, THE BALANCE SHEET OF THE ASS ESSEE AS ON 31.03.2009 DOES NOT SHOW ANY BALANCE IN SAVINGS BAN K ACCOUNT. NEVERTHELESS IF THE ASSESSEE HAD SOLD SCRAP AND DRE W SUCH MONEY FROM HIS BUSINESS AND USED SUCH DRAWINGS FOR DEPOSITING IN BANK ACCOUNT, THE SOURCE WOULD STAND EXPLAINED. WE ARE UNABLE TO ASCE RTAIN AS TO WHETHER THE SCRAPS SALES WERE ACCOUNTED IN THE BOOKS OF ACC OUNTS, AND WHETHER THE DRAWINGS FOR MAKING THE DEPOSITS IN THE BANK AC COUNT WERE ALSO SHOWN IN THE BOOKS OF ACCOUNTS. CONCLUSION OF THE L D. CIT(APPEALS) THAT IN THE NATURE OF BUSINESS OF THE ASSESSEE, HE HAD NO S COPE OF SCRAP GENERATION, IS IN OUR OPINION IS INCORRECT. ASSESSE E WAS IN THE BUSINESS OF STRUCTURAL ENGINEERING AND CONSTRUCTION AND IN SUCH A BUSINESS SCRAP CAN BE GENERATED. IN THE FITNESS OF THINGS, WE ARE OF T HE OPINION THAT THE MATTER REQUIRES A FRESH LOOK BY THE ASSESSING OFFIC ER. IF THE ASSESSEE IS ABLE TO SHOW THAT DEPOSIT IN THE BANK WAS OUT OF MO NEY DRAWN FROM HIS BUSINESS THEN THE SAME CANNOT BE DOUBTED. WE, THERE FORE, SET ASIDE THE ORDER OF AUTHORITIES BELOW AND REMIT THE ISSUE REGA RDING ADDITION MADE FOR DEPOSITS IN SAVINGS BANK ACCOUNT BACK TO THE FI LE OF ASSESSING OFFICER FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. GR OUND NO. 3 OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. 27. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH DAY OF FEBRUARY, 2014. SD/- SD/- GEORGE MATHAN ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 6 TH DAY OF FEBRUARY, 2014 I.T.A. NO.: 857/KOL./201 3 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 14 14 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT(APPEALS) (4) CIT (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.