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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA
Before: Hon’ble Shri S.S. Godara, JM]
This assessee’s appeal for assessment year 2010-11 is directed against the CIT(A)- XX, Kolkata’s order dated 04.07.2014 passed in case no. 108/CIT(A)-XX/Wd- 34(3)/2013-14/Kol upholding the Assessing Officer’s action disallowing / adding cash receipts of Rs. 23,13,286/-, labour charges of Rs. 3,31,000/- and remission and cessation of liability addition u/s 41(1) of Rs. 3,46,741/-; respectively in assessment order dated 26.03.2013, involving proceedings u/s 143(3) of the Act.
Heard both the parties. Case file perused.
It emerges at the outset that the assessee’s instant appeal suffers from 910 days delay in filing. The assessee has filed its condonation petition / affidavit dated 24.05.2018
2 ITA No.442/Kol/2018 M/s Hind Builders A.Yr. 2010-11 stating out various reasons thereof. It pleads to have come to know about the CIT(A)’s order only in section 271(1)(c ) penalty proceedings in the month of October, 2014 since its earlier accountant had not appeared. The Revenue is fairr enough in not disputing all these solemn averments. I accordingly condone the impugned delay in filing of the instant appeal as the same is neither deliberate nor intentional but attributable to some communication gap between the taxpayer and its accountant. The case is now taken up for adjudication on merits.
The assessee takes me to CIT(A)’s findings affirming the Assessing Officer’s action making section 68 addition of Rs. 23,13,286/- to be unexplained cash credits reading as under:
“2. Ground no. i(a) of appeal relates to addition of Rs. 23,13,286/- made by the AO u/s 68 of the I.T. Act. The fact of the case is that the AO found that in the books of account cash receipts of Rs. 23,13,286/-was shown in the name of various persons however no confirmation or other documents in support of the nature and source of the cash receipt was filed, therefore, the AO made the addition. The appellant submitted that the cheque receipts of Rs. 8,52,750/- was wrongly treated as cash receipts and further the cash was received from the sundry parties against working contract job. From the facts, it is gathered that so far claim of cheque receipts is concerned, the appellant did not file any supporting documents / details to substantiate their claim. Further, no source and nature of these receipts as well as cash receipts was explained by the appellant with the help of supporting documents / details. In the absence of supporting documents/ details, I do not find any infirmity in the AO’s order, hence, ground raised is dismissed.”
Mr. Surana vehemently contends during the course of hearing that these amounts have come through cheque mode rather than cash. Its case is both the lower authorities have erred in facts as well as and on law holding this sum to be unexplained cash credits in above facts and circumstances of the case. I find no force in the instant technical
3 ITA No.442/Kol/2018 M/s Hind Builders A.Yr. 2010-11 argument. The fact remains that the assessee has not even filed confirmation of the said parties either before the Assessing Officer or in lower appellate proceedings. The Learned Counsel states that the said confirmations are very much ready now which may be sent back to the Assessing Officer for necessary verification. I do not deem it fit case to exercise such a discretion since the assessee had been granted sufficient opportunities before the Assessing Officer as well as in lower appellate proceedings. There is no explanation forthcoming at its behest as to what prevented the said confirmation to be not placed on record during the lower authorities proceedings. I, therefore, affirm the impugned addition of Rs. 23,13,286/- made in the course of assessment as upheld in the lower appellate proceedings. This first substantive ground is declined therefore.
The assessee’s second grievance seeks to delete labour charges payments disallowance of Rs. 3,31,408/- made in the course of assessee @ 5% as upheld in lower appellate proceedings. Suffice to say, both the lower authorities have made this disallowance on adhoc basis without even a comparison of corresponding expenditure vis-à-vis the relevant figures in preceding or succeeding assessment years. I accept assessee’s instant second substantive ground on this count alone therefore.
The last addition of Rs. 3,46,711/- has been made by both the lower authorities u/s 41(1) of the Act invoking cessation/remission of outstanding trading liability/ unverified sundry creditors. It emerges from the case filed that there is no finding regarding the impugned remission / cessation so as to invoke the deeming fiction of income in the relevant previous year. Learned Counsel’s clinching plea that all these parties claim stood accepted in earlier assessment year has gone un resulted from Revenue’s side. I
4 ITA No.442/Kol/2018 M/s Hind Builders A.Yr. 2010-11 thus direct the Assessing Officer to delete the impugned addition for the subject matter of the instant third substantive ground.
The assessee’s appeal is partly allowed in above terms.
Order pronounced in the Court on 26.09.2018
Sd/- [ S.S.Godara ] Judicial Member
Dated : 26.09.2018
SB, Sr. PS
Copy of the order forwarded to: 1. M/s Hind Builders, C/O, A.Kayes & Co. Chartered Accountants, 231, Kamalalaya Centre, 156A, Lenin Sarani, Kolkata-700013. 2. ITO, Ward-34(3), Kolkata, Aayakar Bhawan Dakshin, 2, Gariahat Road (South), Kolkata-700068. 3..C.I.T(A).- 4. C.I.T.- Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.