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Income Tax Appellate Tribunal, CUTTACK
Before: SHRI N.S SAINI
This is an appeal filed by the assessee against the order of CIT(A)-
1, Bhubaneswar dated 12.6.2015 for the assessment year 2009-2010.
The sole issue involved in this appeal is that the CIT(A) erred in
confirming the addition of 4,86,328/- as suppression of assets.
I have heard the rival submissions, perused the orders of lower
authorities and materials available on record. The undisputed facts of the
case are that the Assessing officer found that the Executive Engineer,
Cuttack PH Division paid an amount of Rs.5,22,830/- on 31.3.2009 to the
assessee, which was credited to the bank account after 31.3.2009.
According to him, the Executive Engineer was not shown as the debtor for
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the said amount but shown as a debtor only to the extent of Rs.36,502/-.
Accordingly, sundry debtor for Rs.4,86,328/- (Rs.5,22,830 – Rs.36,502)
was not reflected in the balance sheet, which was considered by
theAassessing Officer as suppression of assets in the balance sheet and
added to the income of the assessee.
On appeal before the CIT(A), the assessee submitted that the
assessee had supplied materials alongwith installing the same in the
department of Executive Engineer, PH Division, Bhubaneswar for an
amount of Rs.5,22,830/-, which was already reflected in sales account as
part of the business transactions in the audited account. The payment
has been materialised on 31.3.2009 at Rs.4,63,927/- after due deduction
of security deposit, VAT, income tax, SC & E.C. amounting to Rs.58,903/-
and balance amount of Rs.4,63,927/- was credited to the assessee’s bank
account by way of draft on 8.5.2009 for Rs.4,62,772/- after due
deduction of commission of Rs.1155/- out of total amount of
Rs.4,63,927/-. It was further submitted that the aforesaid transaction was
already included in the business turnover of the assessee as books of
account of the assessee has been maintained on mercantile basis and
necessary profit element of the said transaction was already included in
the gross profit as well as net profit and the books of account of the
assessee has not been rejected by the Assessing Officer. It was,
therefore, submitted that the addition should be deleted.
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The CIT(A) after considering the submission of the assessee held
that he found no merit in the assessee’s submission. The sundry debtor
has not been disclosed in the balance sheet and hence, to that extent the
asset has been suppressed.
Before me, ld A.R. of the assessee has filed in the paper book at
page 43 ledger account of sales for the period 1.4.2008 to 31.3.2009. He
pointed out from this account that on 31.3.2009, vide journal entry and
sales account was credited with an amount of Rs.5,22,830/-. Thereafter,
he referred page 44 of PB, wherein, ledger account of the Executive
Engineer of PH Division is placed for the period 1.4.2008 to 31.3.2009.
He submitted that a sum of Rs.5,10,982/- was debited on 31.3.2009 in
the name of Executive Engineer, PH Division and Rs.11,898/- was debited
to income tax deducted at source. He submitted that net debit of
Rs.36,502- was shown in the account at the year end on 31.3.2009 after
taking into account the opening brought forward debit balance on
1.4.2008 of Rs.54,743/- and credits for payment received on 6.5.2008 of
Rs.1,99,500/- and payment received of Rs.3,29,723/- on 1.7.2008. It
was this his submission that there was no suppression of assets by the
assessee as alleged by the Assessing Officer and confirmed by the CIT(A)
and, therefore, the addition made should be deleted.
Ld D.R. relied on orders of lower authorities.
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I find from the evidences filed that it is abundantly clearly that the
assessee has shown income of Rs.5,22,830/- by crediting the sales
account on 31.3.2009 being the amount of materials supplied alongwith
installing to the Executive Engineer, PH Division, Bhubaneswar. The
corresponding net debit was made to the account of Sr. Executive
Engineer, PH Division for an amount of Rs.5,10,982/- and Rs.11,848/-
was income tax deducted at source account. The net balance in the
ledger account of Executive Engineer was drawn as on 31.3.2009 at
Rs.36,502/-, which was reflected in the balance sheet which was arrived
at taking into consideration the opening debit balance on 1.4.2008 of
Rs.54,743/- and credits for payment received of an amount of
Rs.1,99,500/- on 6.5.2008 and Rs.3,29,723/- on 1.7.2009 through State
Bank of Travancore. Thus, I am of the considered view that the Assessing
Officer was not justified in holding that there was suppression of assets to
the tune of Rs.4,86,328/- and ld CIT(A) was not justified in confirming the
same. Hence, I set aside the order of the CIT(A) and delete the addition
of Rs.4,86,328/- and allow the ground of appeal of the assessee.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 18 /08/2017. Sd/- (N.S Saini) ACCOUNTANT MEMBER
Cuttack; Dated 18 /08/2017
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B.K.Parida, SPS Copy of the Order forwarded to : 1. The appellant : Rabindra Kumar Biswal, MIG-53, Udaya Vihar, Patrapada, Bhubaneswar 2. The Respondent. ITO, Ward 2(2), Bhubaneswar 3. The CIT(A) -1, Bhubaneswar 4. Pr.CIT, -1, Bhubaneswar 5. DR, ITAT, Cuttack BY ORDER, 6. Guard file. //True Copy// SR.PRIVATE SECRETARY ITAT, Cuttack