Smt Lalita Devi Musaddi, Kolkata V. ITO, WD-37(2), KOLKATA, Kolkata

ITA 949/KOL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5120 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 29-06-2015
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHOWNGTHU ADD L
• Assessee Lawyers: MANISH TIWARI
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: K OLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.949/KOL/2015 ASSESSMENT YEAR: 2004-05 SMT. LALITA DEVI MUSADDI VS. INCOME-TAX OFFICER , WD-37(2), KOLKATA (PAN:AESPM2734B) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 03.02.2016 DATE OF PRONOUNCEMENT: 17.02.2016 FOR THE APPELLANT: SHRI MANISH TIWARI, ADVOCATE FOR THE RESPONDENT: SHRI DAVID Z. CHOWNGTHU, ADD L. CIT ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-11, KOLKATA VIDE APPEAL NO. 40/CIT(A)-11/38(2)/14-15/KOL DATED 13.02.2015. ASSE SSMENT WAS FRAMED BY ITO, WD-38(2), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 29.12. 2006. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS A GAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING ADDITION OF BOGUS LIABILITY OF RS.76,466/- IN THE NAME OF M/S. CHANDNI TIMBER AND ADDING THE SAME U/S. 41(1) OF THE ACT. 3. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE ASSESSEE IS DEALING IN PLYWOOD AND VE ENER ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THERE IS DISCREPAN CY IN THE CLOSING BALANCE AS SHOWN BY THE ASSESSEE AT NIL AS AGAINST THE CLOSING BALANCE SHOW N BY THE SUNDRY CREDITOR M/S. CHANDNI TIMBER AT RS.76,466/-. AGGRIEVED, ASSESSEE PREFERRED APPE AL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF THE AO. AGGRIEVED, NOW ASSESSEE IS IN SE COND APPEAL BEFORE TRIBUNAL. 4. I FIND FROM THE FACTS OF THE CASE THAT THE AO MA DE ADDITION IN RESPONSE TO ENQUIRY REPORT U/S. 133(6) OF THE ACT WHEREIN THE PARTY REPLIED TH AT THERE IS NIL BALANCE IN THE ACCOUNT OF THE ASSESSEE WHEREAS IN THE PARTYS ACCOUNT THE BALANCE OUTSTANDING SHOWN BY ASSESSEE IS AT RS.76,466/-. LD. COUNSEL FOR THE ASSESSEE NOW BEFO RE ME ARGUED THAT THIS LIABILITY WAS CLEARED DURING THE PERIOD ENDING 31.03.2004 RELEVANT TO AY 2005-06 AND AS SUCH THERE IS NO LIABILITY OUTSTANDING AS ON 31.03.2005. I FIND THAT THIS FAC T HAS NOT BEEN CONSIDERED BY THE LOWER AUTHORITIES. HENCE, ON THIS ISSUE, I REMIT THE MAT TER BACK TO THE FILE OF AO FOR FRESH ADJUDICATION OF THE FACT THAT THE ASSESSEE HAS REPAID THE LIABIL ITY DURING FY 2004-05 RELEVANT TO AY 2005-06. 2 ITA NO.949/KOL/2015 SMT. LALITA DEVI MUSADDI, AY 2004-05 2 ACCORDINGLY, THIS ISSUE IS SET ASIDE TO THE FILE OF THE AO. THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING THE ADDITION OF DIFFERENCE I N DEBTORS ACCOUNT I.E. M/S. TIMBER AGENCY AS UNEXPLAINED MONEY U/S. 69A OF THE ACT AMOUNTING TO RS.4,43,104/-. 6. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE AO ISSUED NOTICE U/S. 133(6) OF THE A CT TO M/S. TIMBER AGENCY, WHO CONFIRMED THAT AMOUNT PAYABLE TO THE ASSESSEE IS AT RS.2,40,576/- AS AGAINST THE AMOUNT APPEARING IN THE BOOKS OF THE ASSESSEE IN THE NAME OF M/S. TIMBER AGENCY A T RS.6,83,678/-. THE AO MADE DIFFERENTIAL ADDITION OF RS.4,43,104/- AND CIT(A) ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE TRIBUNAL. I FIND THAT THE ASSESSEE CLAIMED BEFORE ME NOW THAT THE REMAINING DUES OF RS.4,43,104/- WAS PAID AND THIS F ACT IS CLEAR FROM THE REMAND REPORT DATED 25.06.2010 OF THE AO. LD. COUNSEL FOR THE ASSESSEE FILED COMPLETE COMPARATIVE CHART BEFORE THE CIT(A) IN RELATION TO OPENING AND CLOSING BALANCE A S ON 31.03.2005, 31.03.2006, WHICH READS AS UNDER: F.Y. 2004-05 & 2005-06 01.04.2004 OPENING BALANCE 6,83,678.00 PAYMENT RECEIVED 3,15,000.00 31.03.2005 CLOSING BALANCE 3,68,678.00 6,83,678.00 6,83,678.00 01.04.2005 OPENING BALANCE 3,68,678.00 02.12.2005 INDIAN BANK 48,000.00 02.12.2005 INDIAN BANK 49,000.00 02.12.2005 INDIAN BANK 48,000.00 02.12.2005 INDIAN BANK 49,000.00 31.03.2006 CLOSING BALANCE 1,74,678.00 3,68,678.00 3,68,678.00 7. I FIND THAT THE DIFFERENCE IS ONLY TO THE EXTENT OF RS.1,74,678/- DUE FROM M/S. TIMBER AGENCY IS APPEARING OUTSTANDING IN THE BOOKS OF THE ASSESSEE EVEN IN AY 2010-11. IT MEANS THAT PROPER RECONCILIATION IS REQUIRED. HENCE, MATTER I S REFERRED TO THE FILE OF THE AO FOR RE- ADJUDICATING AFTER CONSIDERING THE PAYMENTS MADE BY THE ASSESSEE. ACCORDINGLY, THIS ISSUE OF ASSESSEES APPEAL IS ALSO SET ASIDE TO THE FILE OF AO. THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3 ITA NO.949/KOL/2015 SMT. LALITA DEVI MUSADDI, AY 2004-05 3 8. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF LIABILITY APPEARING IN THE NAME OF M/S. DAS BROTHERS AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT AMOUNTING TO RS.1,67,440/-. 9. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE AO IN THE ABSENCE OF ANY REPLY FROM C REDITORS MADE ADDITION OF THIS AMOUNT OF RS.1,67,440/-. THE CIT(A) ALSO CONFIRMED THE SAME. I FIND FROM THE FACTS OF THE CASE THAT THE ASSESSEE BEFORE THE LOWER AUTHORITIES SUBMITTED LED GER COPY OF M/S. DAS BROTHERS FOR FY 2003- 04 AND 2004-05 FROM WHERE IT APPEARS THAT THERE WAS NO REGULAR TRANSACTION BETWEEN THE PARTY AND THE ASSESSEE EXCEPT PAYMENT OF OLD LIABILITIES AND THESE ARE OLD LIABILITIES THE ASSESSEE HAS DETAILED THESE OLD LIABILITIES AS UNDER: 01.04.2003 OPENING BALANCE 6,40,440.18 CASH PAYMENTS 4,73,000.00 31.03.2004 CLOSING BALANCE 1,67,440.18 6,40,440.18 6,40,440.18 01.04.2004 OPENING BALANCE 1,67,440.00 PAYMENT DURING THE YEAR 1,67,440.00 1,67,440.18 1,67,440.00 I FIND FROM THE ABOVE THAT THESE LIABILITIES CANNOT BE ADDED U/S. 68 OF THE ACT FOR THE REASON THAT THESE ARE TRADING LIABILITIES AND NOT CASH LOANS. O NCE THE PURCHASES ARE ACCEPTED, THE LIABILITY CANNOT BE ADDED U/S. 68 OF THE ACT. ACCORDINGLY, T HE SAME ARE DELETED. 10. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF LIABILITY PAYABLE TO CESC U/S. 41(1) OF THE ACT AMOUNTING TO RS.2,18,768/-. I FIND FROM THE FACTS OF THE CASE T HAT THE AO MADE ADDITION OF THESE LIABILITIES OF CESC FOR EARLIER YEARS U/S. 68 OF THE ACT BUT CIT(A ) CONFIRMED THE SAME BY INVOKING THE PROVISIONS OF SECTION 41(1) OF THE ACT. I FIND THA T THESE ARE LIABILITIES FROM EARLIER YEARS AND THAT ALSO ON ACCOUNT OF CESC LTD. AND THESE ARE VERY MUC H OUTSTANDING. ONCE THE LIABILITIES ARE OUTSTANDING NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 41(1) OF THE ACT AND ACCORDINGLY, THE SAME ARE DELETED. 11. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.02.2016 SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 17TH FEBRUARY, 2016 JD. SR. P.S 4 ITA NO.949/KOL/2015 SMT. LALITA DEVI MUSADDI, AY 2004-05 4 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SMT. LALITA DEVI MUSADDI, 10C, HO-CHI-M INH SARANI, GROUND FLOOR, KOLKATA- 700 071 2. RESPONDENT ITO, WARD-37(2), KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .