M/S. WINCOME INTERNATIONAL LIMITED,KOLKATA vs. ACIT, CIRCLE 1(1), KOLKATA

Shri S. K. Tulsiyan & Mita Rizvi, Advocates represented on behalf of the assessee and Shri Praveen Das Chowdhury, Sr. DR represented on behalf of the revenue.

It was submitted by the ld. AR that two issues are in the appeal. One is in regard to disallowance of the cash credit treating the same as unexplained income of the assessee in respect of three entities namely Jahangirabad Finance Co. Pvt. Ltd., Goodpoint Traders Pvt. Ltd. and Multiplier Enterprises Pvt. Ltd. The second issue is in regard to double disallowance of PF & ESI. It was submitted by the ld. AR that the assessee had an opening balance with Jahangirabad Finance Co. Pvt. Ltd. The ld. AR drew our attention to page 13 of the paper-book to show that the balance brought-forward was Rs.23251689/-. It was the submission that this had been repaid substantially during the impugned assessment year. It was not a case of cash credit. The said confirmation of account reads as follows:

Considering the submissions of both the sides and confirmation of account, the addition as made by the Assessing Officer in respect of loan alleged to have been taken from Jahangirabad Finance Co. Pvt. Ltd. stands deleted.

In regard to Goodpoint Traders Pvt. Ltd., the ld. AR drew our attention to page 12 of the paper-book with the confirmation of account which reads as follows:

In reply, the ld. Sr. DR accepted the said claim of the assessee.

Considering the facts of the case and confirmation of account, it is noticed that there was no fresh credit but the same is carry-forward balance. No addition is liable to be made during the impugned assessment year. Consequently, the addition made in respect of loan alleged to have been taken from Goodpoint Traders Pvt. Ltd. stands deleted.

In respect of third entity i.e. Multiplier Enterprises Pvt. Ltd., the ld. AR drew our attention to page 14 wherein the confirmation of account reads as follows:

We have considered the rival submissions. As it is admitted by the ld. AR on behalf of the assessee that he has no objection if the issue in respect of loan taken from Multiplier Enterprises Pvt. Ltd. now merged with Karamjyoti Sales Pvt. Ltd. on account of order of the NCLT dated 17.05.2019 is restored to the file of the Assessing Officer for verification and re-adjudication. Consequently, this issue is restored to the file of the Assessing Officer for verification after granting the assessee adequate opportunity of being heard. This issue is partly allowed for statistical purposes.

It was further submitted by the ld. AR that the Assessing Officer in the course of assessment has disallowed Rs.14182875/- by invoking the provisions of section 36(1)(va) of the Act in respect of PF & ESI belatedly paid. The ld. AR drew our attention to page 126 of the paper-book which is computation of total income of the assessee. It was the submission that the assessee in its account has made a disallowance and offered income u/s 2(24) to an extent of Rs.5911322/-, the computation reads as follows:

We have considered the rival submissions. A perusal of the computation of total income clearly shows that the assessee has made a disallowance of Rs.5911322/- and has offered the same as income u/s 2(24) of the Act whether it relates to PF & ESI needs to be examined. Consequently, this issue is restored to the file of the Assessing Officer to determine as to whether the amount was a part of the disallowance made by the Assessing Officer of Rs.14182875/-. If it is found that the said amount is part of the addition, then relief should be granted to the extent of income offered by the assessee for the said disallowance. The issue is partly allowed for statistical purposes.

In the result, the appeal of the assessee is partly allowed for statistical purposes.