ITO, Ward - 1(1), Kolkata, Kolkata V. M/s. Surana Trading Co. Pvt. Ltd., Kolkata

ITA 948/KOL/2010

• Counselvise Citation: 94823514 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJOY KUMAR SINGH
• Assessee Lawyers: MANJU L SHUKLA A R
• Keywords: Principle of natural justice; Additional evidence
• Section: 144

Judgement Text

, C , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( ) . . , , . . . . !' # !' # !' # !' # , , ) [BEFORE SRI S.V. MEHROTRA, A.M. & SHRI N. VIJAYA K UMARAN, J.M.] $ $ $ $ / I.T.A NO. 948/KOL/2010 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER, WARD-1(1), KOLKATA -VS.- M /S. SURANA TRADING CO. PVT. LTD., KOLKATA (PAN : AAECS 4331 B) ( %& /APPELLANT ) ( '(%& / RESPONDENT ) FOR THE APPELLANT : SHRI AJOY KUMAR SIN GH, CIT, D.R. FOR THE RESPONDENT : SHRI MANJU L. SHUKLA, A.R. # ) * + # ) * + # ) * + # ) * + /DATE OF HEARING : 20.10.2011 ,- * + ,- * + ,- * + ,- * + /DATE OF PRONOUNCEMENT : 20.10.2011 . / ORDER PER SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER/ . . , :- THE ASSESSEE-COMPANY IN THE RELEVANT ASSESSMENT YEA R WAS CARRYING ON THE BUSINESS OF TRADING IN SAREES, SALWAR SUITS AND EARNED INTEREST INCOME. IT HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,020/-. THE ASSESSING OFFICER IN COURSE OF ASSESSMENT PROCEEDINGS EXAMINED THE DETAILS AND CONDUCTED ENQU IRY THROUGH DEPARTMENTAL INSPECTOR. AFTER CONSIDERING THESE DETAILS, HE POINTED OUT VARIOUS D ISCREPANCIES IN REGARD TO LOAN DEBTORS, LOAN CREDITORS AND SUNDRY CREDITORS FOR GOODS. HE MADE A N ASSESSMENT OF RS.2,47,23,399/- UNDER SECTION 144 OF THE INCOME TAX ACT ON ACCOUNT OF NON -PRODUCTION OF BOOKS OF ACCOUNTS. 2. LD. CIT(APPEALS) ALLOWED THE ASSESSEES APPEAL A FTER CONSIDERING FRESH EVIDENCE IN FORM NO. 15G ALONGWITH PAN DETAILS AND FURTHER DETA ILS SUBMITTED BY LETTER DATED 09.11.2009, WHICH ARE AS UNDER :- (1 PAN DETAILS OF ABOVEMENTIONED PERSON; (2 CONFIRMATION OF ACCOUNT WITH M/S. TARA HOLDING P VT. LTD. AS ON 31.03.2006; (3 CONFIRMATION OF ACCOUNT WITH QUATECH METALS ARTS PVT. LTD. FOR THE YEAR ENDED ON 31.03.2006. (4) CONFIRMATION OF ACCOUNT WITH RANAUL TECHNOLOGY PVT. LTD. AS ON 31.03.2006. ITA NO. 948/KOL./2010 2 (5) CONFIRMATION OF ACCOUNT WITH M/S. NATIONAL TRAD ERS AS ON 31.03.2006. (6) STATEMENT OF SUNDRY CREDITORS AMOUNT AS ON 31.3 .2005 WITH NATIONAL TRADERS STATING THAT OPENING BALANCE AS ON 31.3.200 5 WAS RS.2,34,14,507/-. (7) COPY OF LETTERS SUBMITTED BEFORE AO ASKING FOR CERTIFIED COPY OF INSPECTORS REPORT, SEND BY HIS OFFICE ON 26.10.200 9. THE COPY OF REPORT IS YET TO BE RECEIVED. THESE PAPERS WERE ALSO AVAILABLE WITH THE ASSESSING OFFICER. ASSESSING OFFICER HAS POINTED OUT VARIOUS DISCREPANCIES. HE HAS, INTER ALIA, POINTED OUT AT PAGE 3 OF HIS ORDER THAT IN THE CASE OF LOAN CREDITOR, I.E. VIJAY CHAND PARAKH, THE ASSESSE E HAD CLAIMED INTEREST PAYMENT OF RS.2,00,380/- TO THE ABOVE LOAN CREDITOR. HOWEVER, AS THE INCOME OF THIS UNSECURED LOAN CREDITOR DID NOT FELL BELOW THE TAXABLE LIMIT, EVEN THAN THE ASSESSEE-COMPANY CLAIMED TO HAVE ACCEPTED FORM NO. 15G FROM IT. THUS, LD. CIT(APPEAL S) HAS SOLELY RELIED ON THE DOCUMENTS FURNISHED BY THE ASSESSEE AND HAS NOT EXAMINED THEM IN DETAIL. FURTHER, IN THE CASE OF SUNDRY CREDITOR, NAMELY, M/S. NATIONAL TRADERS, IT IS REVE ALED THAT IN THE BOOKS OF ASSESSEE-COMPANY, THE OPENING BALANCE AS ON 1.4.2005 HAD BEEN SHOWN A T RS.2,34,14,507/- AS PAYABLE BY THE ASSESSEE. ASSESSING OFFICER FURTHER NOTICED THAT DU RING THE RELEVANT YEAR, THE ASSESEE HAD SHOWN SALES OF TEXTILE OF RS.41,36,000/- AND UNQUOTED SHA RES OF RS.74,00,00/- TO THE ABOVE SUNDRY CREDITORS. THUS, THE ASSESEE-COMPANY HAD CLAIMED TO TAL SALE OF RS.1,15,36,000/- MADE TO THE ABOVE PARTY DURING THE ENTIRE PERIOD. ASSESSING OFF ICER NOTICED THAT TOTAL SALE WAS ADJUSTED WITH THE OPENING BROUGHT FORWARD BALANCE OF RS.2,34,14,5 07/- AND THE BALANCE AMOUNT OF RS.1,18,78,507.50 HAD BEEN SHOWN AS CLOSING OUTSTAN DING AS PAYABLE TO THE ABOVE PARTY ON 31.03.2006. THE ASSESSING OFFICER HAS FURTHER OBSER VED THAT ON EXAMINATION OF THE BALANCE- SHEET OF THE ASSESSEE-COMPANY, IT WAS NOTICED THAT THE ASSESSEE-COMPANY HAD SHOWN CLOSING BALANCE OF SUNDRY CREDITOR FOR GOODS AS ON 31.03.20 05 AT RS.2,01,82,507/-. WHEREAS IN THE COPY OF LEDGER ACCOUNT OF THE SAID PARTY (I.E. M/S. NATI ONAL TRADERS) FURNISHED BY THE ASSESSEE, IT HAD SHOWN OPENING BALANCE OF RS.2,34,14,507/- AS ON 01. 04.2005.THE ASSESSING OFFICER HAD REQUIRED TO RECONCILE THE DIFFERENCE AND PRODUCE BO OKS OF ACCOUNT BUT THE ASSESSEE FAILED TO AVAIL THE OPPORTUNITY. IN THE MEANTIME ASSESSING OF FICER, AFTER CARRYING OUT VARIOUS INQUIRIES THROUGH DEPARTMENTAL INSPECTOR, MADE AN ADDITION OF RS.1,18,78,507/- FOR THE DETAILED REASONS GIVEN AT PAGE 4 OF THE ORDER. HE ALSO REJECTED THE ASSESSEES CLAIM IN REGARD TO VARIOUS SUNDRY ITA NO. 948/KOL./2010 3 DEBTORS, INTER ALIA, ON ACCOUNT OF NON-PRODUCTION O F BOOKS OF ACCOUNTS. LD. CIT(APPEALS), HOWEVER, OBSERVED THAT THE ASSESSING OFFICER SHOULD HAVE FORWARDED THE COPY OF THE ENQUIRY REPORT TO THE ASSESSEE TO REBUT AND RECONCILE THE F INDING OF THE INSPECTOR, WHICH HAD NOT BEEN DONE CONTRADICTING OF BASIC PRINCIPLE OF NATURAL JU STICE. 3. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT THE LD. CIT(APPEALS) ACCEPTED THE RECONCILIATION WITHOUT GIVING ANY OPPORTUNITY TO TH E ASSESSING OFFICER. THEREFORE, THERE WAS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE WITHIN TH E MEANING OF RULE 46A OF THE INCOME TAX RULES, 1962. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. ADMITTEDLY, LD. CIT(APPEALS) HAS ALLOWED THE ASSESS EES APPEAL BY ACCEPTING THE RECONCILIATION STATEMENT FURNISHED BEFORE HIM WITHOUT PROVIDING AN Y OPPORTUNITY TO THE ASSESSING OFFICER. HE, THUS, ADMITTED ADDITIONAL EVIDENCES IN VIOLATION TO THE PRINCIPLES OF NATURAL JUSTICE WITHIN THE MEANING OF RULE 46A. WE, THEREFORE, RESTORE THE MAT TER BACK TO THE FILE OF ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH AFTER GIVING DUE OPPORTUN ITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20/10/2011. SD/- SD/- [N. VIJAYA KUMARAN / . . . . !' # !' # !' # !' # ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 20/ 10/ 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. SURANA TRADING CO. PVT. LTD., 48, DOBSON ROAD, 309, SHYAMA SADAN, HOWRAH-711 101 2 ITO, WARD-1(1), KP;LATA. P-7, CHOWRINGHEE SQUARE, 7 TH FLOOR, KOLKATA-69 3. CIT(APPEALS)- ,KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.