MAA TRANSPORT AGENCY,BURDWAN vs. I.T.O WD - 2(2),ASANSOL, BURDWAN

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ITA 657/KOL/2013Status: DisposedITAT Kolkata11 December 2015AY 2005-062 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the unsecured loan repayment is part of business transactions. Since the income was already estimated by applying a gross profit rate after rejecting book results, a separate addition for this expenditure was not justified.

What were the facts?

The Assessing Officer (AO) added Rs. 4,57,135/- to the assessee's income as undisclosed deposit for repayment of unsecured loan. The assessee's claim of repayment differed from bank statements, leading to the addition.

What were the issues?

Whether a separate addition can be made for unsecured loan repayment when the income has already been estimated based on a gross profit rate after rejecting book results.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” “B” BENCH: KOLKATA

Before: Shri Mahavir Singh, JM]

Hearing: 07.12.2015Pronounced: 11.12.2015

For the Appellant: Shri Kanchan Sadhu, Advocate For the Respondent: Shri Rajendra Prasad, JCIT, Sr. DR ORDER

This appeal by assessee is arising out of order of CIT(A), Asansol vide Appeal No. 288/CIT(A)/Asl/W-2(2)/Asl/10-11 dated 24.01.2013. Assessment was framed by ITO, Wd-2(2), Asnasol u/s. 143(3)/263 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2005-06 vide his order dated 03.12.2010.

2.

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in making addition of repayment of loan amounting to Rs.4,57,135/-.

3. I have heard rival submissions and gone through facts and circumstances of the case. I find from the records that the AO during the course of assessment proceedings noticed from the statement received from Indus Ind Bank that it had received an amount of Rs.8,57,373/- during the period 27.09.2004 to 25.03.2005 fall in the relevant financial year, but the Balance Sheet shows that the total repayment is made by assessee at Rs.9,38,281/-. But as per copy of bank statement of Oriental Bank of Commerce, Current Account No. CD-1661, the details of payment made to Indus Ind Bank are at Rs.7,31,000/- as against the claim of the assessee at Rs.9,38,231/-. But the AO noted that the total repayment comes to Rs.4,81,146/-. According to the AO, this quantum of undisclosed deposit of draft and cash for repayment of unsecured loan is at Rs.4,57,135/- and added to the total income of the assessee. Similar was the plea before CIT(A) but before CIT(A) it was further pleaded that once the turnover and the income was estimated and profit is also estimated at 5.35%, this unexplained expenditure related

2 Maa Transport Agency AY 2005-06 to business should not have been assessed separately. I find that originally the CIT(A) after rejecting the book result estimated gross profit at 5.35% assessing the total income at Rs.5,72,358/- against the gross turnover of Rs.1,06,98,282/-. This unsecured repayments and unsecured loan is a part of business transaction and no separate addition can be made with income as assessed by applying gross profit rate and after rejecting the book result. Accordingly, we delete this addition and allow this issue of assessee’s appeal.

3.

In the result, appeal of assessee is allowed.

4.

Order is pronounced in the open court on 11.12.2015. Sd/- (Mahavir Singh) Judicial Member

Dated : 11th December, 2015 Jd.(Sr.P.S.) Copy of the order forwarded to:

APPELLANT – Maa Transport Agency, C/o Shri Kanchan Sadhu, 1. Advocate, Vivekananda Park, P.O. Ramkrishna Mission, Pin-713305, Dist. Burdwan. Respondent – ITO, Wd-2(2), Asansol. 2 The CIT(A), Asansol 3. 4. CIT , Asansol. 5. DR, Kolkata Benches, Kolkata

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