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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy]
Mangilal Sethia…..…….……………………….…..………………………………………….…….……...Appellant C/o Basana Stores Vill.-Moanbati P.O.+ P.S. Raiganj Dist. Uttar Dinajpur – 733 134 [PAN : ACPPJ 8966 R] I.T.O. Ward-1, Raiganj……..………………………………………...……..……………………..…. Respondent SBI Building Karnojora, Raiganj Dist.-Uttar Dinajpur – 733 134 Appearances by: Shri S.M. Surana, Advocate, appeared on behalf of the assessee. Shri Sailen Samaddar, JCIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : January 16th, 2018 Date of pronouncing the order : March 14th, 2018
O R D E R Per J. Sudhakar Reddy :-
These appeals are filed by the assessee and are directed against the order of the ld. Commissioner of Income Tax (Appeals)-Jalpaiguri, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 08/01/2016.
There is a delay of 364 days, in filing of the appeal. After going through the petition for condonation of delay, I find that the assesse was prevented by sufficient cause from filing this appeal before the Tribunal in time. Under these circumstances we condone the delay and proceed to dispose of these appeals on merits.
Assessment Year: 2005-06 Assessment Year: 2006-07 & I.T.A. No. 343/Kol/2017 Assessment Year: 2007-08 Mangilal Sethia 3. The assessee is an individual and is in the business of trading in cloth. A survey was conducted at the business premises of the assessee on 03/11/2006 u/s 133A of the Act. The Assessing Officer found unaccounted purchases during the course of survey. He also found that the assessee has debited excess salary in the bank accounts. He accordingly made additions. On appeal the ld. First Appellate Authority, for the Assessment Year 2005-06, rejected the contention of the assessee that the material found during the course of survey in the form of loss leaves do not pertain to the assessee. He held that these are not tampered documents and they were found and impounded from the assessee’s business premises and the assessee failed to discharge the onus that these documents do not pertain to him. Thus, he held that the purchases recorded in these papers are unaccounted purchases of the assessee. He was of the opinion that the entire unrecorded purchases should not be taken as income. He assessed the income at 5.82 per cent of the estimated sale pertaining to these unaccounted purchases. He further held that the seed capital utilized for making these unexplained purchases to be brought to tax. On the issue of inflation of salary expenses, he confirmed the addition.
Aggrieved, the assessee is before us for the Assessment Year 2005-06.
4.1. Similarly, for the Assessment Year 2006-07, a similar order was passed by the ld. CIT(A), on similar facts and the same is disputed by the assesse before us.
4.2. For the Assessment Year 2007-08, the ld. CIT(A) at para 8 stated that the assessee could not produce the books of accounts during post survey proceedings and reconciled the discrepancies found in the accounts. He further held that the assessee has not maintained stock register, sale memos, etc. He estimated the income at 8 per cent of the turnover clear off expenses excluding depreciation.
Aggrieved, the assessee is before us.
Assessment Year: 2005-06 Assessment Year: 2006-07 & I.T.A. No. 343/Kol/2017 Assessment Year: 2007-08 Mangilal Sethia
After hearing rival submissions, I hold as follows:-
For the Assessment Year 2005-06, I find no infirmity in the order of the ld. CIT(A). In case of unrecorded purchases, the seed capital utilized for making such unrecorded purchase and the percentage of the corresponding sale as gross profit earned was held as taxable by the ld. CIT(A). Similarly, on inflated salary expenses, I find no infirmity in the order of the ld. CIT(A), thought the assessee states that the salary was paid as per Shop Establishment Act, as evidence to this effect could be produced.
In the result, appeal of the assessee for the Assessment Year 2005- 06, is dismissed.
For the Assessment Year 2006-07, I uphold the order of the ld. CIT(A) for the same reasons as we have upheld the order for the Assessment Year 2005-06. In the result, appeal of the assessee for the Assessment Year 2006-07 is dismissed.
For the Assessment Year 2007-08, the only issue is percentage of estimation of profits. For the earlier years, the ld. CIT(A) has estimated the profit at 5.82 per cent of the turnover. I direct the same be adopted in this year also.
In the result, this appeal of the assessee for Assessment Year 2007- 08, is allowed in part.