What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal, finding that the Rs. 2,80,80,000/- was indeed double-counted. The Tribunal partly allowed the assessee's cross-objection, directing that only the gross profit element of the remaining Rs. 57,32,418/- should be added.

The Revenue added alleged unaccounted sales of Rs. 2,80,80,000/- to the assessee's income. The assessee argued that this amount was double-counted in the DGCEI's calculation. The CIT(A) reduced the addition to Rs. 57,32,418/-.

What were the issues?

Whether the addition of alleged unaccounted sales was justified, and if so, whether it should be the entire sales amount or only the profit element.

ACIT vs Smt. Anita Biswas | ITAT Kolkata 2018

Income Tax Appellate Tribunal, KOLKATA BENCH “A” KOLKATA

Before: Shri S.S.Godara & Shri, M. Balaganesh

Heard together (2 matters)

ITA No.2285/Kol/2016

C.O.No.54/Kol/2018

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R

PER S.S.Godara, Judicial Member:

- This Revenue’s appeal and assessee’s cross-objection for assessment year 2012-13 arise from Commissioner of Income Tax (Appeals)-15, Kolkata’s order dated 19.09.2016 passed in case No.04/CIT(A)-15/15-16/DCIT, cir- 51/Kol involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case files perused.

We advert to rival pleadings first of all. The Revenue’s sole substantive grievance raised in instant appeal seeks to revive the Assessing Officer’s action adding the alleged unaccounted sales of ₹2,80,80,000/- in the course of CO No.54/Kol/2018 A.Y. 2012-13 ACIT Cir-51(1) Kol. Vs. Smstd. Anita Biswas Page 2 assessment framed on 18.03.2015 restricted to ₹57,32,418/- lower appellate proceedings. The assessee’s cross objection supports the CIT(A)’s action granting the above relief. Her further case is that CIT(A) has erred in law as well as on facts in adding the entire unaccounted sales of ₹57,32,418/- instead of gross profit element only. The CIT(A)’s detailed discussion qua the above sole issues reads as under:- “3.4 Ground of appeal No.6: In the assessment order it is mentioned that office of The Director General of Central Excise Intelligence (DGCEI), Kolkata, conducted ‘Search and Seizure’ operation on 17.01.2014. Bills and other documents impounded by DGCEI were called u/s. 133(6). As per these seized bills and documents, turnover of the assessee was Rs.10,96,21,636/- but assessee had shown only Rs.7,58,09,278/- in the return of income. Hence, the difference of Rs.3,38,18,418/- was added to the total income. It is mentioned that all the expenses against the undisclosed sales were already claimed in the return of income. Hence, entire amount of undisclosed sales was added to the income. In appeal proceedings, assessee has submitted that the amounts mentioned at Sl.No.1 to 8 of the table at page 12 of the assessment order, are in respect of sales made to the Commissionarate of Health, Government of Gujarat. Total amount of these bills are Rs.2,80,80,00/--. At Sl. No.11 of the table, final consolidated bill was made in respect of the eight transactions at Sl.No.1 to 8 of the table. In support appellant has submitted copies of bills at Sl.No.1 to 8 which was issued in the name of Joint Director, NVBDCP, Gandhinagar, Gujarat. Bill at Sl. No.11 is issued to Sub-Committee, State Health Society, Gandhinagar, Gujarat. Assessee has also submitted copy of letter dated 21.07.2014, addressed to Superintendent, O/o DGCEI by Additional Director (Health), Gandhinagar. Additional Director (Health) Gandhinagar has enclosed the details of year-wise purchases from the assessee. Additional Director (Health) has also enclosed copy of cheque of Rs.2,80,80,000/- issued in the name of the assessee’s propritory concern by Chairman/Member-Secretary, NVBDCP-sub- committee, State Health Society, Gandhinagar. I have carefully considered the facts of the case and the submissions of the assessee. Perusal of the letter issued by Additional Director (Health) says that Government of Gujarat had purchased 30,000 lts. Of the insecticides from the assessee during the year. On bill at Sl. No.11, total quantity of 30,000 Ltd. is mentioned. Total quantity in bill at Sl.No.1 to 8 is also 30,000 Lts. Beside on bills at Sl. No.1 to 8 and at Sl. No.11, same batch descriptions have been given. All these evidences clearly establish that while computing turnover on the basis of the document received from the office of DGCEI, an amount of Rs.2,80,80,000/-- has been considered twice. Hence, this amount would get reduced from CO No.54/Kol/2018 A.Y. 2012-13 ACIT Cir-51(1) Kol. Vs. Smstd. Anita Biswas Page 3 Rs.3,38,12,418/-. Addition of Rs.57,32,418/- only is confirmed, on account of undisclosed sales.”

3. Learned Departmental Representative takes us to Revenue’s sole grievance first. He pleads that the instant lis has emanated from Director General Central Excise Intelligence’s search action in assessee’s manufacturing establishments on 17.01.2014 unearthing its unaccounted sales in order to avoid excise duty. All this resulted in the impugned addition made in the course of assessment. The Revenue vehemently contends that the assessee has shifted its stand qua the impugned sales by taking different names of its customers parties. Its further case is that the CIT(A) has erred in law as well as on facts in accepting assessee’s reconciliation of batch-wise customers which are mutually contradictory. We find no substance in Revenue’s instant argument. We make it clear that the impugned addition of ₹3,38,12,418/- made in the course of assessment has been deleted to the extent of ₹2,80,80,000/- in lower appellate proceedings. The assessee’s paper book forming part of record contains all details of reconciliation of sales (page 32 – 35), duplicate bills (37 – 34) as well as original bills (page 45 duly mention batch-wise particulars), its Gujarat based customer / government authority’s confirmation followed by the corresponding payments sufficiently reconciling its sales of ₹2,80,80,000/-. We therefore decline Revenue’s sole substantive grievance as well as its main appeal in this facts and circumstances.

4. We next come to assessee’s cross objection regarding the unaccounted sales addition of ₹57,32,418/-. Learned counsel is fair enough in not disputing correctness thereof in principle. His only case is that it is the profit element only rather than the entire sales which have to be added in such facts and circumstances. The Revenue fails to dispute the fact that lower authorities have not granted the corresponding expenses deduction qua the impugned sales. We therefore direct the Assessing Officer to assess the gross profit element only as is the rate in other similar business receipts as per law after CO No.54/Kol/2018 A.Y. 2012-13 ACIT Cir-51(1) Kol. Vs. Smstd. Anita Biswas Page 4 affording adequate opportunity of hearing to the assessee. This cross objection No.54/Kol/2018 is partly accepted in above terms therefore.

ACIT, CIR-51(1), KOLKATA, KOLKATA vs. SMT. ANITA BISWAS, KOLKATA

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