ACIT, BALASORE CIRCLE, BALASORE vs. SHIV KUMAR PODDAR, BALASORE

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No.26/CTK/2016: Assessment Year : 2009-2010 ITA No.25/CTK/2016: Assessment Year : 2011-2012

Shiv Kumar Poddar, Vs. ITO, Ward-2, Balasore, B.C.Sen Road, Balasore. Odisha.

PAN/GIR No.AFVPD 2778 Q (Appellant) .. ( Respondent)

ITA No.17/CTK/2016: Assessment Year : 2011-12

ITO, Ward-2, Balasore, Vs. Shiv Kumar Poddar, Odisha. B.C.Sen Road, Balasore.

PAN/GIR No.AFVPD 2778 Q (Appellant) .. ( Respondent)

Assessee by : Shri Amarendra Mohapatra, AR Revenue by : Shri S.K.Bandyopadhyay, DR

Date of Hearing : 11/12/ 2017 Date of Pronouncement : 13/12/ 2017

O R D E R Per Pavan Kumar Gadale, JM

The cross appeals have been filed by the assessee and revenue for

the assessment year 2011-12 against the order dated 30.10.2015 of the

CIT(A), Cuttack and the assessee has filed appeal for the assessment

year 2009-2010 against the order dated 18.6.2015 of the CIT(A),

Cuttack.

First, we take up the appeals for the assessment year 2011-2012.

sufficient opportunity of hearing to the assessee while allowing part relief

to the assessee.

restricting the disallowance by relying on the comparative chart of the

turnover expenses claimed for the assessment year 2010-2011 as

substantial discrepancy was found in survey operations conducted

u/s.133A of the Act on 23.3.2011.

engaged in the business of trading in KAMCO Branch Power Tiller and

Reaper, Honda Pumps in Eastern Enterprises at Bhubaneswar and

Balasore and retail trading in Airtel vouchers, Sims in Premier World at

Balasore. The assessee filed the return of income declaring income of

Rs.20,73,660/- on 30.9.2011 . The case was selected for scrutiny under

CASS. Notice u/s.143(2) was issued on 7.9.2012. In response, the

assessee filed hard copy of I.T.Return, acknowledgement of E-filed return,

computation of income and copy of bank statement. the assessee case

exceeded Rs.15,00,000/- and the case was transferred to JCIT, Balasore

Range, Balasore. Notices u/s.142(1)/143(2) were issued to the assessee

. In compliance, Sri A.Mohapatara, C.A, attended for the assessee and

filed reply to the questionnaire and case was discussed. In this case,

survey u/s.133A of the Act was carried out at the assessee’s business

premises on 23.3.2011 and during the survey, no cash book was found.

The statement was recorded from the brother of the assessee, who

evidenced that no proper cash book is maintained. Before the Assessing

Officer, the assessee produced the cash book, ledger, bank book,

purchase register, sales register and hand made vouchers, etc. The

Assessing Officer noted that on one occasion the assessee was not

maintaining proper books of account and on the other hand, the assessee

was debiting heavy expenditure to the profit and loss account. On going

through the details, the Assessing Officer opined that the vouchers have

been prepared by the Accountant of the assessee, who joined the service

of the assessee at a date subsequent to the survey. Therefore, he

observed that the books of account and bills, vouchers, etc, produced are

not reliable and, accordingly, rejected the same u/s.145(3) of the Act and

determined the income of the assessee at Rs.1,70,73,660/- as against the

returned income of Rs.20,73,660/- , inter alia, by disallowing various

expenses claimed in the profit and loss account of the assessee, as under:

i) Carriage outward expenses : Rs.20,00,000/- ii) Turnover discount : Rs.60,00,000/- iii) Oil & lubricant for PDI : Rs.25,00,000/- iv) Repair, maint, fuel & insurance: Rs. 5,00,000/- v) Installation charges of Tiller and reaper:Rs.15,00,000/- vi) Travelling & conveyance : Rs.10,00,000/- vii) Salary : Rs.15,00,000/-

matter in appeal before the CIT(A).

statement of the turnover, G.P., and N.P. rate of the assessee for the

assessment years 2009-2010, 2010-2011 and 2011-12 and submitted

that the turnover of the assessee for the year under consideration is

164% compared to immediate preceding financial year and the assessee

had shown net profit at 0.64% of the turnover.as against disclosed at

0.32% in the immediate preceding year. It was also submitted that no

adverse findings such as excess/suppression of stock, debtors, cash and

receivable etc, were made by the survey team.

of the Assessing Officer that books of account were not available at the

time of survey and the same were prepared later on and, therefore, he

upheld the rejection of books of account by the Assessing Officer.

However, based on the comparative chart of the turnover and expenses

claimed by the assessee for the precedent assessment year i.e. 2010-

2011 and for the assessment year under consideration i.e. 2011-12, the

CIT(A) directed the Assessing Officer to restrict the disallowance under

various heads as under:

i) Carriage outward expenses : Rs.10,00,000/- ii) Turnover discount : Rs.40,00,000/- iii) Oil & lubricant for PDI : Rs.15,00,000/- iv) Repair, maint, fuel & insurance: Rs. 1,00,000/- v) Installation charges of Tiller and reaper:Rs.10,00,000/- vi) Travelling & conveyance : Rs.5,00,000/- vii) Salary : Rs.10,00,000

before us.

was substantial increase in the turnover of the assessee during the year

under appeal than that of the previous year. He also submitted that no

adverse findings were made during the survey operation u/s.133A of the

Act. Therefore, the CIT(A) was not justified in restricting the

disallowance.

Officer.

authorities and materials available on record. In the instant case, a

survey u/s.133A was conducted at the business premises of the assessee

and it was found that no cash book was maintained. It was further

evidenced by the brother of the assessee on a statement recorded at the

time of survey. However, the assessee produced the cash book, ledger,

bank book, purchase register, sales register and hand made vouchers,

etc, which were prepared post survey operation. Therefore, both the

authorities were justified in rejecting the books of account. It was also

submitted that the turnover of the assessee for the year has substantial

increased to 164% than of the preceding year. We also find that the

CIT(A) based on the comparative chart furnished by the assessee for the

immediate preceding year and that of the present year under

consideration, wherein, the assessee has shown net profit at 0.64% as

against 0.32% shown in the preceding year, restricted the disallowances.

Before us, ld A.R. could not bring any positive material on record to show

that the restriction of disallowance out of expenditures claimed by the

assessee was excessive. Ld A.R. also could not explain with evidence the

reason of increase in salary to more than 50% of the claim from that of

the immediate previous year. Similarly, ld D.R. also could not point out

any specific error to interfere with the order of the CIT(A). Therefore, we

do not find any reason to interfere with the order of the CIT(A), which is

hereby confirmed and grounds of appeal of the assessee and the grounds

of appeal taken by the revenue are dismissed.

are dismissed.

Now we take up the appeal of the assessee for the assessment year 2009-10. 13. The appeal filed by the assessee is barred by 122 days. The

assessee has filed condonation affidavit supported by prescription of

treating doctor explaining the reason for delay in filing the appeal before

the Tribunal and praying to condone the delay. After perusing the

condonation affidavit and considering the submissions of the parties, we

are satisfied that there was reasonable cause for not filing the appeal

within the time before the Tribunal. Therefore, we condone the delay and

proceed to dispose of the appeal on merits.

“1. That the order passed by the CIT(A) is arbitrary excessive and bad in law. 2. That the CIT(A) has not applied his mind to the facts submitted during the assessment proceedings. 3. That the CIT(A) has not given sufficient opportunity to the assesse before passing the order. 4. That the CIT(A) has erred in assuming the advance from customers outstanding at the end of the year to whom the sales have been made during subsequent year as the income of the assessee. 5. That the CIT(A) has erred in assuming the loan from the loan creditor carried from earlier year and outstanding at the end of the year as the income of the assessee although the same has been paid to the loan creditor in subsequent year. 6. That the CIT(A) should have allowed an opportunity to the assessee to explain the difference in receipt if any from Bharati Airtel Limited and Honda Siel Power Products Ltd. 7. The CIT(A) should have allowed an opportunity to the assessee to explain the errors committed by the AO in passing the order. 8. That the CIT(A) has erred in not allowing the expenses disallowed by the AO. 9. That the other grounds if any shall be urged at the time of hearing of appeal.”

from sale of power tiller in retail as well as wholesaling basis and income

from mobile voucher telecom services. The assessee filed the return of

income on 30.9.2009 showing total income of Rs.6,51,820/-, which was

processed u/s 143(1) on 28.10.2010. Subsequently, the case was

selected for scrutiny and notice u/s.143(2) was issued and served on the

assessee. In response to the notices, ld A.R. of the assessee appeared

from time to time and produced particulars/documents and the case was

discussed.

that the assessee has shown Rs.4,68,000/- under the head “ advance

from parties” in schedule-3 of “other creditors” in the balance sheet as on

31.3.2009 in respect of Premier World. However, on details furnished by

the assessee, it is revealed that the assessee has taken advance of

Rs.4,68,000/- from Meena Poddar, Bhaskarganj, Balasore having Income

tax particulars. Ld A.R. submitted the declaration from Meena Poddar in

respect of the advance made. The Assessing Officer on perusal of the

assessment records of the Meena Poddar found that there is no entry of

Rs.4,68,000/- in her account and also presumed that Meena Poddar has

not given any advance to the assessee. Since, the assessee could not

produce any material evidence in support of payment/acceptance of

advance such as bank statement in respect of advance from Meena

Poddar, the Assessing Officer made addition of Rs.4,68,000/- as bogus

advance.

from parties in Schedule-4 under the head “other creditors” in the balance

sheet as on 31.3.2009. The Assessing Officer called for the information

u/s.133(6) from 174 persons as per detailed postal address alongwith

advance amount outstanding against each name. The Assessing Officer

during the course of hearing found that 33 letters have been returned

back unserved with the postal remarks “no such addressee”, amounting

to Rs.25,19,617/-. 31 persons intimated that there has been no

outstanding advance as on 31.3.2009 with the assessee amounting to

Rs.23,14,203/-. It was in this backdrop that the Assessing Officer treated

Rs.48,33,720/- (Rs.25,19,617 + Rs.23,14,203) as undisclosed income of

the assessee.

from AST found that the assessee has receive d Rs.12,27,188/- as gross

commission from M/s. Bharati Airtel Limited, whereas the assessee has

shown Rs.9,69,271/- as commission on sales as per schedule-7 of profit

and loss account as on 31.3.209. Thus, there is a difference of

Rs.2,57,917/-. Therefore, the Assessing Officer added Rs.2,57,917/- to

the income of the assessee.

gross receipt from Honda Siel Power Products Ltd., during the previous

year 2008-09. Since the same has not been accounted for in the profit &

loss account as on 31.3.2009, the Assessing Officer added the same to

the income of the assessee.

u/s.40A(3) of the Act on the ground that the assessee has paid

Rs.25,000/- by cash towards decoration of gate and finally assessed the

taxable income at Rs.62,69,750/-.

appeal before the CIT(A). The CIT(A) called for a remand report from the

Assessing Officer and after considering the same, has confirmed the

addition and dismissed the assessee’s appeal.

before us.

maintaining regular books of account and the fact that the assessee is

receiving advance from various customers interested in purchase of Power

Tiller and Reaper, which are in huge demand as the purchasers are

eligible for State Government subsidy. In respect of advance of

Rs.4,68,000/-, from Meena Poddar, ld A.R. submitted that the amount is

received in earlier year and the assessee has discharged his duty by

giving evidence like PAN, address and creditworthiness of the creditor. Ld

A.R. submitted that both the Assessing Officer and ld CIT(A) have not

considered the fact that the assessee has furnished complete details and

also substantiated his arguments with paper book, containing details of

advance from customers, sample copy of money receipts, sales bills,

permits, photo ID, subsidy release letter from Government of Odisha,

affidavit of Meena Poddar. He submitted that although these documents

were furnished before the authorities below, same have not been

considered and prayed that matter may be restored back to the file of the

CIT(A) for fresh consideration.

that the evidences filed by the assessee before the Tribunal are additional

evidence and prayed for dismissal of the appeal.

record and orders of lower authorities below.

Poddar, ld A.R. submitted that Meena Poddar is related to the assessee

and assessed to tax in the same ward, where, the assessee is assessed to

tax and the amount has been disclosed. He submitted that these facts

were furnished before t he CIT(A) how the money was received. Ld A.R.

drew our attention to page 87 of PB, where, the assessee has written

letter to the CIT(A) that Rs.4,68,000/- is outstanding from financial year

2004-05 in the account of M/s. Premier World against the said loan

creditor and the same is repaid by account payee cheque on 16.3.2012.

These facts have not been considered by both the authorities below while

disallowing the claim of the assessee. Therefore, we consider it

appropriate to remand this issue to the CIT(A) for fresh adjudication.

that the assessee receives advances from the customers interested in

purchase of Power Tiller and Reaper and as these products were huge

demand as the same is eligible for Government subsidy, the assessee

effects sale by issuing sale bills to the customers. Though the assessee

has disclosed as per the assessment order that advance of

Rs.1,35,60,068/- was received from 174 persons, the Assessing Officer

during the course of hearing found that 33 letters have been returned

back unserved with the postal remarks “no such addressee”, amounting

to Rs.25,19,617/-. 31 persons intimated that there has been no

outstanding advance as on 31.3.2009 on the assessee amounting to

Rs.23,14,203/-. During remand proceedings, letters were again issued to

31 persons as per revised address submitted by the assessee and in 2

cases, there was no revised address. 19 out of 31 envolves returned as

unserved with the postal remark “not known/no such addressee”. Only

one person has confirmed having paid advance of Rs.86,000/- on

14.3.2009, whereas, the assessee has claimed the same at Rs.1,00,000/-

. Therefore, the Assessing Officer gave credit of Rs.86,000/- and treated

Rs.48,33,720/- (Rs.25,19,617 + Rs.23,14,203) as undisclosed income of

the assessee, which was confirmed in appeal by the CIT(A).

exparte as there was non-compliance on the part of the assessee on

several occasions. Ld A.R. before us submitted that he has complete set

of information and filed the same before the CIT(A), whereas ld CIT(A)

has not given adequate opportunity to the assessee. We are not able to

understand that how despite giving several opportunities by the CIT(A),

the assessee did not co-operate at the appellate stage. Having carefully

heard the submissions of the rival parties and perusing the material

available on record including the paper book filed by the assessee before

us containing details of advance from customers, sample copy of money

receipts, sales bills, permits, photo ID, subsidy release letter from

Government of Odisha, we are of the view that the assessee could not

substantiate its case before the CIT(A) as the order is passed exparte.

Therefore, in the interests of justice, we consider it fair and reasonable

that the matter should go back to the file of the ld. CIT(A) and

accordingly, we set aside the order passed by the ld. CIT(A) to his file to

decide the appeal of the assessee afresh and according to law after

providing reasonable opportunity of being heard to the assessee. The

assessee is directed to file the evidences as has been filed before the

Tribunal before the CIT(A) and co-operate with the CIT(A) for disposal of

the appeal. The grounds taken by the assessee are, therefore, allowed for

statistical purposes.

commission from Bharati Airtel Limited, Rs.33,290/- as gross receipt from

Honda Siel Power Products and Rs.25,000/- made u/s. 40A(3) of the Act,

ld A.R. of the assessee did not raise any objections against the above

additions. Therefore, we confirm the order of the CIT(A) on these issues.

statistical purposes.

Order pronounced on 13 /12/2017. Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Cuttack; Dated 13 /12/2017

B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Shiv Kumar Poddar, B.C.Sen Road, Balasore.

SR.PRIVATE SECRETARY ITAT, Cuttack