Kriti Electronics, Kolkata V. ITO, WD-56(2), KOLKATA, Kolkata

ITA 932/KOL/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7900 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: I BANERJEE F
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 133(6)

Judgement Text

I.T.A. NO . 932 / KOL ./201 4 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER I.T.A. NO. 932 / KOL / 20 1 4 ASSESSMENT YEAR : 200 7 - 20 0 8 KRITI ELECTRONICS,.. . .............................. ......... .... ............. .. .APP EL L ANT 1/1A, BIPLABI ANUKUL CHANDRA STREET, ELECTRONICS CENTRE, SHOP NO. A - 10, KOLKATA - 700 072 [PAN : A AGF K 8177 Q ] - VS. - INCOME TAX OFFICER , ........................... ................... ... . RESPONDENT WARD - 56 ( 2 ), KOLKATA , 3, GOVT. PLACE (WEST), KOLKATA - 700 001 APPEARANCES BY: SHRI I. BANERJEE, F.C.A , FOR THE ASSESSEE S MT. RANU BISWAS , J CIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 2 5 , 2 01 4 DATE OF PRONOUNCING THE ORDER : NOVEMBER 25 , 201 4 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - XX XVI , KOLKATA IN APPEAL NO. 669 / CIT(A) - XX XVI / KOL/ WD - 56 (2) /KOL. / 09 - 10 DATED 20 . 0 2 .201 4 FOR THE ASSESSMENT YEAR 200 7 - 0 8 . 2. SHRI I. BANE RJEE, F.C.A. , REPRESENTED ON BEHALF OF THE ASSESSEE AND SMT. RANU BISWAS, JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD. A.R THAT THE ASSESSEE IS A PARTNERSHIP FIRM WHICH IS DOING THE BUSINESS OF DEALING IN AUDIO CASS ETTES AND C.D. IT I.T.A. NO . 932 / KOL ./201 4 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 2 OF 4 WAS THE SUBMISSION THAT THE ASSESSEE HAD SHOWN ADVANCES FROM CUSTOMERS AT RS.8,50,000/ - IN IT S BALANCE - SHEET. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD ISSUED NOTICES UNDER SECTION 133(6) TO THE SAID CUSTOMERS. IT WAS THE SUBM ISSION THAT THERE WAS TOTAL OF 16 CUSTOMERS FROM WHOM SAID AMOUNT OF RS.8,50,000/ - HAD BEEN RECEIVED. IT WAS THE SUBMISSION THAT AS THE NOTICES SENT TO THREE OF THE PERSONS, NAMELY M/S. SANTI ELECTRONICS, SHRI SANJU CHOWDHURY AND M/S. CHINNER RADIO CAME BA CK WITH THE POSTAL REMARK NOT KNOWN , THE ASSESSING OFFICER HAD TREATED THE ADVANCES SHOWN AGAINST THE SAID THREE PERSONS AS UNEXPLAINED CASH CREDIT. IT WAS THE SUBMISSION THAT TOTAL OF THE THREE CREDITS WAS RS.2,03,000/ - . IT WAS THE SUBMISSION THAT ON AP PEAL BEFORE THE LD. CIT(APPALS), THE LD. CIT(APPEALS) HAD PROCEEDED TO VERIFY ALL THE CREDITORS FOR ADVANCE S . IT WAS THE SUBMISSION THAT THIS EXAMINATION WAS DONE BY THE LD. CIT(APPEALS) BY SENDING THE INSPECTOR IN AUGUST, 2013. IT WAS THE SUBMISSION THAT SOME OF THE CASES, THE PERSONS WERE FOUND TO BE DOING BUSINESS AND IN SOME OF THE CASES SUCH PERSONS WERE NOT FOUND. CONSEQUENTLY LD. CIT(APPEALS) HAD ENHANCED THE ASSESSMENT AND MADE THE ADDITION OF THE TOTAL OF THE ADVANCES FROM CUSTOMERS AT RS.8,50,000/ - . THIS SHOWS AS SUNDRY CREDITORS AS ON 31 ST MARCH, 2007. IT WAS THE SUBMISSION THAT THE SAID BALANCES WERE, IN FACT, OPENING BALANCES FOR WHICH THE LD. A.R. DREW OUR ATTENTION TO PAGE 65 OF THE PAPER BOOK WHICH WAS THE DETAILS OF THE PARTY - WISE ADVANCES M ADE AT PAGE 66 OF THE PAPER BOOK, WHICH WAS THE DETAILS OF THE TRANSACTIONS WITH EACH OF THE PERSONS. IT WAS THE SUBMISSION THAT THE CLOSING BALANCE FOR THE EARLIER ASSESSMENT YEAR WAS RS.35,13,563/ - AND THE BALANCE DURING THE RELEVANT ASSESSMENT YEAR WAS ONLY RS.8,50,000/ - . IT WAS THE SUBMISSION THAT THE TRANSACTION BETWEEN THE ASSESSEE AND THE SUNDRY CREDITORS WAS A CONTINUOUS TRANSACTION AND THE TRANSACTIONS HAVING BEEN ACCEPTED THE SUNDRY CREDITORS REPRESENTING THE ADVANCES FROM THE CUSTOMERS WAS NOT LI ABLE TO BE ADDED. IT WAS THE SUBMISSION THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS ENHANCED BY THE LD. CIT(APPEALS) WAS LIABLE TO BE DELETED. I.T.A. NO . 932 / KOL ./201 4 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 3 OF 4 4. IN REPLY, LD. SR. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(APPEALS). SHE DREW OUR ATT ENTION TO PAGE 24 AT PARA 8.3 OF THE ORDER OF THE LD. CIT(APPEALS) AND SUBMITS THAT MANY O F THE PARTIES HAVE ALSO DENIED THE TRANSACTION S WITH THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ADDITION AS CONFIRMED BY THE LD. CIT(APPEALS) WAS LIABLE TO BE UPHEL D. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY RESPONSES UNDER SECTION 133(6) HAVE BEEN RECEIVED FROM 13 PERSONS OUT OF 16 PERSONS IN THE SUNDRY CREDITORS LIST. ADMITTEDLY WHEN THE LD. CIT(APPEALS) THROUGH THE ASSESSING OFFICER HAD DONE VERIFIC ATION BY SENDING THE INSPECTOR, SOME OF THE SHOPS WERE AVAILABLE BUT IT IS NOTICED THAT NO STATEMENT SEEMS TO HAVE BEEN RECORDED FROM ANY OF THE PERSONS. THE INSPECTOR ALSO RECORD ED THAT SOME OF THE PERSONS WERE NOT AVAILABLE. ALL THESE HAVE BEEN DONE BEHI ND THE BACK OF THE ASSESSEE. IN FACT, THE REMAND REPORT SHOWS THAT THE VERIFICATION HAS BEEN DONE ONLY IN RESPECT OF THE FOUR PERSONS OUT OF THE 16 AND ONE OF THE PERSONS HAS BEEN VERIFIED BEING SHRI SANJU CHOUDH U RY IS THE SAME PERSON WHO HAS BEEN ADDED BY THE ASSESSING OFFICER. THE INSPECTOR S REPORT NOR THE INSPECTOR WAS PROVIDED THE ASSESSEE FOR CROSS EXAMINATION. IN THESE CIRCUMSTANCES , I AM OF THE VIEW THAT THE ENHANCEMENT MADE BY THE LD. CIT(APPEALS) IN RESPECT OF THE SUNDRY CREDITORS HAS BEEN DONE IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE AND THE SAME IS LIABLE TO BE DELETED AND I DO SO. THIS DELETION IS ALSO BEING DONE BECAUSE IN RESPONSE TO NOTICE SENT UNDER SECTION 133(6) RESPONSES HAD BEEN RECEIVED FROM 13 PERSONS. NOW COMING TO THE THREE P ERSONS WHO HAVE BEEN DISALLOWED BY THE ASSESSING OFFICER, IT IS NOTICED THAT SHRI SANJU CHOUDHURY WAS VERIFIED THROUGH THE INSPECTOR AND HE DID EXIST AT THE SAID PREMISES. HE WAS ALSO NOTICED TO BE CARRYING ON THE BUSINESS OF ELECTRONICS ITEMS. IN THESE CI RCUMSTANCES, IT HAS TO BE HELD THAT THE CREDIT IN RESPECT OF SHRI SANJU CHOUDHURY IS ALSO ACCEPTABLE AND CONSEQUENTLY THE SAME STANDS DELETED. I.T.A. NO . 932 / KOL ./201 4 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 4 OF 4 IN RESPECT OF M/S. SANTI ELECTRONICS AND M/S. CHINNAR RADIO, ADMITTEDLY NO EVIDENCE HAS BEEN FOUND NOR PRODUCED WHICH CAN SUBSTANTIATE THE SAID CLAIM OF SUNDRY CREDITORS. CONSEQUENTLY THE ADDITION REPRESENTING THE SUNDRY CREDITOR M/S. SANTI ELECTRONICS TO THE EXTENT OF RS.53,000/ - AND M/S. CHINNAR RADIO TO THE EXTENT OF RS.75,000/ - STANDS CONFIRMED. 6. IN THE RESU LT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH NOV EMBER , 2014. SD/ - GEORGE MATHAN ( JUDICIAL MEMBER) KOLKATA, THE 25 TH D AY OF NOVE MBER , 201 4 COPIES TO : (1) KRITI ELECTRONICS, 1/1A, BIPLABI ANUKUL CHANDRA STREET, ELECTRONICS CENTRE, SHOP NO. A - 10, KOLKATA - 700 072 (2) INCOME TAX OFFICER, WARD - 56(2),KOLKATA, 3, GOVT. PLACE (WEST), KOLKATA - 700 001 (3) COMMISSIONER OF INCOME - TAX (APP EALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES , KOLKATA LAHA/SR. P.S .