SMT. MIRA SHAW,HOWRAH vs. ITO, WARD - 46(2), KOLKATA , KOLKATA

The assessee in the present case is an individual, who is engaged in the business of manufacturing and re-selling of H.T. and I.T. Line material. The return of income for the year under consideration was filed by her on 30.09.2009 declaring total income of Rs.4,41,656/-. In the assessment completed under section 143(3) vide an order dated 15.11.2011, the total income of the assessee was determined by the Assessing Officer at Rs.5,90,620/- after making certain additions aggregating to Rs.1,25,950/-. Thereafter the Assessing Officer noticed Assessment Year: 2009-2010 certain mistakes in the figures of purchases and sales as declared by the assessee in the return of income. He found from the records that as per the details furnished by the assessee during the course of assessment proceedings, total purchases and sales were to the tune of Rs.1,20,85,991/- and Rs.1,53,32,018/-, whereas the purchases and sales shown in the return were to the extent of Rs.1,23,65,983/- and Rs.1,49,78,926/-. He, therefore, issued a notice under section 154 pointing out the said mistakes to the assessee and calling for her explanation in the matter. The assessee, however, did not offer any explanation. The Assessing Officer, therefore, proceeded to pass rectification order under section 154 on 31.03.2014, wherein he treated the difference in sales amounting to Rs.3,53,092/- as unexplained cash credits under section 68 and the difference in purchases amounting to Rs.2,79,992/- as unexplained expenditure under section 69C. He accordingly added the said two amounts to the total income of the assessee. On appeal, the ld. CIT(Appeals) confirmed the said two additions made by the Assessing Officer. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. As rightly contended by the ld. counsel for the assessee, the figure of sales of Rs.1,53,32,018/- taken by the Assessing Officer was more than the sales of Rs.1,49,78,926/- declared by the assessee. The difference amount of Rs.3,53,092/- thus was not recorded in the books of account of the assessee as per the case made out by the Assessing Officer himself and the same, therefore, could not be treated as unexplained cash credit under section 68. Similarly, the figure of purchases of Rs.1,23,65,983/- as declared by the assessee was more than the purchases of Rs.1,20,85,991/- taken by the Assessing Officer for making rectification. The expenditure incurred by the assessee on purchases as declared by her thus was more and I find merit in the contention of the ld. counsel for the assessee that the difference of Rs.2,79,992/- cannot be treated as unexplained expenditure under Assessment Year: 2009-2010 section 69C as the same was duly shown by the assessee in her return of income. I, therefore, find that both the additions made by the Assessing Officer under sections 68 and 69C and confirmed by the ld. CIT(Appeals) are not sustainable on merit and deleting the same, I allow this appeal of the assessee.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 23rd day of February, 2018. Sd/- (P.M. Jagtap) Accountant Member Kolkata, the 23rd day of February, 2018 Copies to : (1) Smt. Mira Shaw, Howrah Amta Road, Makali Industrial Estate, Baltikuri, Howrah-711 402 2) Income Tax Officer, Ward-46(2), Kolkata, 3, Govt. Place (West), Kolkata-700 001 (3) CIT(Appeals)-14, Kolkata, (4) CIT- , Kolkata, (5) The Departmental Representative (6) Guard File TRUE COPY By Order