ITO, WD-5(1), KOLKATA, KOLKATA vs. M/S S. P. T. SECURITIES LTD., KOLKATA

The assessee is a company and had filed its return of income for the Assessment Year 2008-09 on 30/11/2008, declaring total income of Rs. 1,84,95,720/-. There was a survey in the premises of the company on 06/09/2007. Survey was also conducted at the premises of one Shri Narayan Chandra Roy, and statement u/s 131 of the Act, was recorded from him. In this statement, Sri Narayan Chandra Roy, allegedly stated that the Director of the assesse company Shri Surya Prakash Toshniwal, indulged in fraudulent activity of showing the 2 Assessment Year: 2008-09 M/s. S.P.T. Securities Ltd company’s income as that of Shri Narayan Chandra Roy’s, by way of making false sub-brokership etc. taking advantage of his limited education, knowledge, bad financial position and innocent trust. Based on this statement, the turnover shown by Shri Narayan Chandra Roy, in his books was added as undisclosed turnover of the assesse company. Hence the sales of Rs.7,84,60,000/- was treated as undisclosed sale of the assessee company. The assessee submitted that the assessment in the case of Shri Narayan Chandra Roy was completed after the said survey and the turnover in question was assessed in his hands. The tax audit reports, final accounts and assessment papers of Shri Narayan Chandra Roy were submitted. He further submitted that Shri Narayan Chandra Roy, was a registered sub-broker and does transactions as a sub-broker. Shri Narayan Chandra Roy, was a sub-broker much prior to becoming the sub-broker of the assessee company. It was submitted by Shri Narayan Chandra Roy, that the statement was recorded from Shri Narayan Chandra Roy, under duress. An opportunity was asked by the assessee company to cross-examine Shri Narayan Chandra Roy. A copy of the STT statement disclosing business transacted by Shri Narayan Chandra Roy, was submitted and the assessee company had paid brokerage of Rs. 6,20,575.94/- to the assessee through Shri Narayan Chandra Roy on a business of Rs.9,74,671.17/-. The transactions of Shri Narayan Chandra Roy, were covered in the assessee company’s turnover and the company had issue valid contract notes to Shri Narayan Chandra Roy, and the transactions were settled to bank accounts. The ld. CIT(A) considered all these evidences and deleted the addition.

Aggrieved the revenue is before us in appeal.

After hearing rival submission, we find that Shri Narayan Chandra Roy, is a registered by SEBI, as a sub-broker in SPT Securities Limited and all the transactions are covered in the companies turnover. The Assessing Officer of Shri Narayan Chandra Roy, has assessed the turnover of Shri Narayan Chandra Roy, in the hands of Shri Narayan Chandra Roy. The factual findings of the ld. CIT(A) could not be controverted by the ld. D/R. The same turnover cannot be assessed in two hands. The addition made by the Assessing Officer does not stand to logic. Under

In the result, appeal of the revenue is dismissed.