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Income Tax Appellate Tribunal, “SMC” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM]
For the Appellant: Shri Manish Tiwari, Advocate For the Respondent: Shri David Z. Chowngthu, Addl. CIT ORDER This appeal by assessee is arising out of order of CIT(A)-11, Kolkata vide Appeal No. 40/CIT(A)-11/38(2)/14-15/Kol dated 13.02.2015. Assessment was framed by ITO, Wd-38(2), Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2004-05 vide his order dated 29.12.2006.
The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in making addition of bogus liability of Rs.76,466/- in the name of M/s. Chandni timber and adding the same u/s. 41(1) of the Act.
I have heard rival submissions and gone through facts and circumstances of the case. I find that the assessee is dealing in plywood and veener etc. During the course of assessment proceedings, the AO noticed that there is discrepancy in the closing balance as shown by the assessee at Nil as against the closing balance shown by the sundry creditor M/s. Chandni Timber at Rs.76,466/-. Aggrieved, assessee preferred appeal before CIT(A), who also confirmed the action of the AO. Aggrieved, now assessee is in second appeal before Tribunal.
I find from the facts of the case that the AO made addition in response to enquiry report u/s. 133(6) of the Act wherein the party replied that there is nil balance in the account of the assessee whereas in the party’s account the balance outstanding shown by assessee is at Rs.76,466/-. Ld. Counsel for the assessee now before me argued that this liability was cleared during the period ending 31.03.2004 relevant to AY 2005-06 and as such there is no liability outstanding as on 31.03.2005. I find that this fact has not been considered by the lower authorities. Hence, on this issue, I remit the matter back to the file of AO for fresh adjudication of the fact that the assessee has repaid the liability during FY 2004-05 relevant to Ay 2005-06.
2 Smt. Lalita Devi Musaddi, AY 2004-05 Accordingly, this issue is set aside to the file of the AO. This ground of appeal of assessee is allowed for statistical purposes.
5. The next issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in making the addition of difference in debtor’s account i.e. M/s. Timber Agency as unexplained money u/s. 69A of the Act amounting to Rs.4,43,104/-.
6. I have heard rival submissions and gone through facts and circumstances of the case. I find that the AO issued notice u/s. 133(6) of the Act to M/s. Timber Agency, who confirmed that amount payable to the assessee is at Rs.2,40,576/- as against the amount appearing in the books of the assessee in the name of M/s. Timber Agency at Rs.6,83,678/-. The AO made differential addition of Rs.4,43,104/- and CIT(A) also confirmed the action of AO. Aggrieved, assessee is in second appeal before Tribunal. I find that the assessee claimed before me now that the remaining dues of Rs.4,43,104/- was paid and this fact is clear from the remand report dated 25.06.2010 of the AO. Ld. Counsel for the assessee filed complete comparative chart before the CIT(A) in relation to opening and closing balance as on 31.03.2005, 31.03.2006, which reads as under: F.Y. 2004-05 & 2005-06 01.04.2004 Opening Balance 6,83,678.00 Payment received 3,15,000.00 31.03.2005 Closing balance 3,68,678.00 6,83,678.00 6,83,678.00 01.04.2005 Opening balance 3,68,678.00 02.12.2005 Indian Bank 48,000.00 02.12.2005 Indian Bank 49,000.00 02.12.2005 Indian Bank 48,000.00 02.12.2005 Indian Bank 49,000.00 31.03.2006 Closing balance 1,74,678.00 3,68,678.00 3,68,678.00
I find that the difference is only to the extent of Rs.1,74,678/- due from M/s. Timber Agency is appearing outstanding in the books of the assessee even in AY 2010-11. It means that proper reconciliation is required. Hence, matter is referred to the file of the AO for re- adjudicating after considering the payments made by the assessee. Accordingly, this issue of assessee’s appeal is also set aside to the file of AO. This ground of appeal of assessee is allowed for statistical purposes.
3 Smt. Lalita Devi Musaddi, AY 2004-05 8. The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition of liability appearing in the name of M/s. Das Brothers as unexplained cash credit u/s. 68 of the Act amounting to Rs.1,67,440/-.
I have heard rival submissions and gone through facts and circumstances of the case. I find that the AO in the absence of any reply from creditors made addition of this amount of Rs.1,67,440/-. The CIT(A) also confirmed the same. I find from the facts of the case that the assessee before the lower authorities submitted ledger copy of M/s. Das Brothers for FY 2003- 04 and 2004-05 from where it appears that there was no regular transaction between the party and the assessee except payment of old liabilities and these are old liabilities the assessee has detailed these old liabilities as under: 01.04.2003 Opening Balance 6,40,440.18 Cash Payments 4,73,000.00 31.03.2004 Closing balance 1,67,440.18 6,40,440.18 6,40,440.18 01.04.2004 Opening balance 1,67,440.00 Payment during the year 1,67,440.00 1,67,440.18 1,67,440.00