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Income Tax Appellate Tribunal, KOLKATA BENCH ‘SMC’, KOLKATA
Before: Shri P.M. Jagtap, AM]
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘SMC’, KOLKATA [Before Shri P.M. Jagtap, AM] I.T.A. No. 2327/Kol/2017 Assessment Year: 2008-09 Shri Ritesh Kumar Boyed.................................………………………………………............Appellant C/o. Subash Agarwal & Associates, Siddha Gibson, 1, Gibson Lane, 2nd Floor, Suite 213, Kolkata – 700 069. [PAN: AEAPB 7186 C] ACIT CIRCLE 40...................……………………………………………....................................Respondent 3, Govt. Place, Kolkata – 700 001. Appearances by: Shri Subash Agarwal, Advocate appearing on behalf of the Assessee. Shri Robin Choudhury, Addl. CIT appearing on behalf of the Revenue. Date of concluding the hearing : May 28, 2018 Date of pronouncing the order : June 20, 2018 ORDER This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) – 13, Kolkata dated 18.07.2017.
The assessee in the present case is an individual who is engaged in the business of dealing in auto parts under the name and style of his proprietary concern M/s. Surendra Motors. The return of income for the year under consideration was filed by him on 29.09.2008 declaring a total income of Rs. 2,77,976/-. A survey under section 133A was carried out in the business premises of the assessee on 25.01.2008. As found from the documents impounded during the course of survey, sales were recorded to the tune of Rs. 2,46,23,315/- whereas sales reflected in the audited profit and loss account of the assessee were only to the tune of Rs. 2,07,65,620/-. Since this difference of Rs. 38,57,695/- could not be explained by the assessee
2 I.T.A. No. 2327/Kol/2017 Assessment Year: 2008-09 Ritesh Kumar Boyed to the satisfaction of the AO, the later treated the same as the suppressed sales of the assessee and made an addition of Rs. 6,55,808/- to the total income of the assessee being the gross profit calculated @17% on the suppressed sales. As noticed by the AO, the assessee had made a payment of Rs. 1,21,000/- on account of rent to one single party without deducting tax at source as required by section 194I. The A.O., therefore, invoked section 40(a)(ia) and made a disallowance of Rs. 1,21,000/-. During the course of survey, a negative cash balance of Rs. 4,74,933/- appeared in the computerised print out of cash book as on 24.01.2008. Since the explanation offered by the assessee in this regard was not found acceptable by the AO, the later made an addition of Rs. 4,75,053/- under section 69C by treating the cash expenses claimed by the assessee in the cash book to that extent as unexplained. Accordingly, after making some other small addition to the total income of the assessee, assessment was completed by the AO under section 143(3) vide an order dated 15.12.2010 on a total income of Rs. 15,64,492/-.
Against the order passed by the A.O. u/s 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) challenging the main three additions of Rs. 6,55,808/-, Rs. 1,21,000/- and Rs. 4,75,053/- made by the AO. The Ld. CIT(A) however did not find merit in the submission made by the assessee in support of his case on the issues relating to the said three additions and confirming the said additions made by the AO, he dismissed the appeal of the assessee.
Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal on the following grounds:
3 I.T.A. No. 2327/Kol/2017 Assessment Year: 2008-09 Ritesh Kumar Boyed “1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the action of the A.O. in making the addition of Rs. 6,55,808/- being income on suppressed sale of Rs. 35,21,472/-. 2. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in not adjudicating the ground relating to the addition of Rs. 1,21,000/- u/s 194I on account of TDS not being deducted on the rent paid. 3. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the action of the A.O. in making the addition of Rs. 4,75,053/- as unexplained expense being the difference between the cash balance as per regular books and impounded books of accounts.”
I have heard the arguments of both the sides and also perused the relevant material available on record. As regards ground no 2, the learned counsel for the assessee has submitted that the issue involved therein relating to the addition of Rs. 1,21,000/- for non-deduction of tax at source from the payment of rent was specifically raised by the assessee before the Ld. CIT(A) by way of ground no 3, but the same has not been decided by the Ld. CIT(A) vide his impugned order. He has contended that this issue may therefore be sent back to the Ld. CIT(A) for deciding the same on merit. The learned DR has also not raised any objection, I accordingly remit this issue to the file of the Ld. CIT(A) for deciding the same on merit after giving the assessee proper and sufficient opportunity of being heard. Ground No. 2 of assessee’s appeal is accordingly treated as allowed for statistical purpose.
Ground No. 1 raised by the assessee in this appeal relating to the addition of Rs. 6,55,808/- made by the AO and confirmed by the Ld. CIT(A) on account of income from suppressed sale is not pressed
4 I.T.A. No. 2327/Kol/2017 Assessment Year: 2008-09 Ritesh Kumar Boyed by the learned counsel for the assessee at the time of hearing before the Tribunal. He however has sought a telescoping benefit by submitting that the said income generated by the assessee from suppressed sale being available to him at the relevant time, the same can be treated as utilised to meet expenses of Rs. 4,75,053/- treated by the AO as unexplained, which is disputed in ground no 3. We find merit in this contention of the learned counsel for the assessee. The income of Rs. 6,55,808/- allegedly earned by the assessee from the sales made outside the books of account as found from the documents impounded during the course of survey can reasonably be treated as available with the assessee to explain the expenses of Rs. 4,75,053/- incurred during the relevant period especially when there is nothing on record to show that the said income was utilised by the assessee somewhere else and the benefit of telescoping can be given to the assessee as claimed. I accordingly delete the addition of Rs. 4,75,053/- made by the A.O. and confirmed by the Ld. CIT(A) on account of unexplained expenses and allow ground no 3 of the assessee’s appeal.
In the result, the appeal of the assessee is partly allowed. Order Pronounced in the Open Court on 20th June, 2018.
Sd/- (P.M. Jagtap) ACCOUNTANT MEMBER
Dated: 20/06/2018 Biswajit, Sr. PS
5 I.T.A. No. 2327/Kol/2017 Assessment Year: 2008-09 Ritesh Kumar Boyed Copy of order forwarded to: 1. Ritesh Kumar Boyed, C/o. Subash Agarwal & Associates, Siddha Gibson, 1, Gibson Lane, 2nd Floor, Suite 213, Kolkata – 700 069. 2. ACIT Circle 40, 3, Government Place, Kolkata – 01. 3. The CIT(A) 4. The CIT 5. DR True Copy, By order, Sr. P.S. / H.O.O. ITAT, Kolkata