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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
Assessment Year: 2010-11 M/s. Image Sign……………..……………………...........…………..………………………………..….…….......Appellant Avijit Mukherjee 24B, Harish Neogy Road Kolkata – 700 067 [PAN : AABFI 6986 L] Vs. Income Tax Officer, Ward-41(2), Kolkata.………………………………….…………..…..............Respondent Appearances by: Shri Soumitra Choudhury, Advocate, appeared on behalf of the assessee. Shri Biswanath Das, Addl. CIT, Sr. D/R. appearing on behalf of the Revenue. Date of concluding the hearing : September 4th , 2018 Date of pronouncing the order : September , 2018 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 13, Kolkata, (hereinafter the ‘Ld. CIT(A)’), dt. 18/01/2016, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), relating to Assessment Year 2010-11 on the following grounds:- “1. For that the Authorities below has erred in law and in fact by not examining the correct fact as recorded in the Audited Books of accounts including the supporting documents produced before the Ld. A.O as well as the Ld. CIT(A)-13/KOL and whereas without pointing out any specific defect in the books of accounts maintained rather much reliance has been placed on the figures of Debtors as well as Stock furnished before the Bank as on 2ib March, 2010, before the end of the Financial Year 2009-2010. Therefore the end result being the difference in between the figures of Sundry Debtors as on 31st March, 2010 of Rs. 24,49,053.79 and Rs. 4,94,980/-being the estimated figure prepared by the accountant as on 27th March, 2010 i.e. Rs. 19,54,073.79 added to the total income of the appellant on some flimsy ground which is very much arbitrary, unlawful and unjust. Similarly addition was also made in respect of the difference in the figure of Stock of Raw Materials as on 31st March, 2010 of Rs. 9,12,441/- and the estimated figure of Rs. 5,63,100/- as on 2ih March, 2010 submitted before the bank i.e. Rs. 3,49,341/- as income of the appellant without any basis Assessment Year: 2010-11 M/s. Image Sign whatsoever and confirmed such addition by the CIT(A)- 13/KOL which is also very much arbitrary, unlawful and unjust.
2. For that the Authorities below arbitrarily made addition on account of purchase of Digital Camera of Rs. 4,200/- and cost of Mobile Phone of Rs. 28,087/- both such expenses are supported by proper documents examined by the auditors and produced before the Authorities Below but unfortunately additions were made by the Ld. A.O and confirmed by the Ld. CIT(A)-13/KOL which is very much arbitrary, unlawful and unjust 3. For that the Authorities below had erred in law and in fact by disallowing a sum of Rs. 8,080/-being 20% of Rs. 40,402/- on estimate basis against Telephone Charges and the entire amount of Rs. 53,387/- on account of Mobile phone charges which is completely arbitrary, unlawful and unjust ”
There is a delay of 57 days in filing of the appeal by the revenue. After perusing the petition filed for condonation of delay, I am convinced that the revenue was prevented by sufficient cause from filing the appeal in time. Hence the delay is condoned and appeal admitted.
The additions made in this case, on the ground that there are variations in the figures of sundry debtors and the figures of closing stock submitted to the Bank, as compared to the balance sheet and profit and loss account of the assessee. To be more specific, in the audited balance sheet, the figure of sundry debtors as on 31st March, 2010, was disclosed at Rs.24,49,053.79/- and whereas in a statement furnished to the bank on 27/03/2010, the sundry debtors were reflected at Rs.4,94,980/-. The figure disclosed to the bank is much less than the actual figure disclosed in the balance sheet of the assessee. Similarly, stock in hand of raw material was disclosed at Rs.5,31,100/-, in a statement furnished to the bank on 27/03/2010 and whereas the audited balance sheet filed with the Income Tax Department, the figure was Rs.9,12,441/-. Here also the figure declared to the Income Tax Department, was much higher than the figure disclosed to the bank. The date on which the statement given to the bank was 27/03/2010 and the date on which the audited balance sheet was drawn up was 31/03/2010. The Assessing Officer added the difference without invoking any specific Section in the Act. On appeal the ld. First Appellate Authority, confirmed the addition but did not refer to any specific Section of the Act, under which the addition has been made.
Assessment Year: 2010-11 M/s. Image Sign 4. I fail to understand as to which is the Section in the Income Tax Act which empowers the Assessing Officer to made an addition when figures declared to the banks are much lesser than the figures declared to the Income Tax Department. In any event, sundry debtors cannot be added as income of the assessee. An addition would have been possible only in the case where the figures declared to the bank are higher than the figures declared to the Income Tax Department.
4.1. In view of the above discussion, I delete the addition made.
In the result, appeal of the assessee is allowed.