ACIT, CC-XXIII, KOLKATA, KOLKATA vs. M/S. ZENITH TIMBER PRODUCTS (P) LTD., KOLKATA

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ITA 2212/KOL/2010Status: DisposedITAT Kolkata10 December 2015AY 2004-053 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) should have examined the issue in greater detail. Since the assessee was not present, the matter was restored to the AO for fresh adjudication after verifying the details and allowing the assessee an opportunity to be heard.

What were the facts?

The Assessing Officer (AO) made an addition for undisclosed sales amounting to Rs. 4,76,13,159/- due to short credit of sales. The Commissioner (Appeals) deleted this addition based on a reconciliation statement and supporting documents provided by the assessee.

What were the issues?

Whether the CIT(A) erred in deleting the addition for undisclosed sales without proper verification, and if the matter requires further examination by the AO.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Before: Shri Mahavir Singh, JM & Shri Waseem Ahmed, AM]

Hearing: 10.12.2015Pronounced: 10.12.2015

Heard together (2 matters)

I.T.A No.2212/Kol/2010
C.O. No. 6/Kol/2011

Read from the judgment's own cause title. This page is filed under one of them.

ORDER

Per Shri Mahavir Singh, JM:

1.

This appeal by revenue and Cross Objection by assessee are arising out of order of CIT(A), Central-III, Kolkata in Appeal No.99/CC-XXIII/CIT(A)C-III/08-09 dated 22.09.2011. Assessment was framed by ACIT, CC-XXIII, Kolkata u/s. 147/143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2004-05 vide his order dated 03.09.2008.

2.

At the outset, it is noticed from the order sheet entries that this appeal came up for hearing for the first time on 27.03.2012 and since then none appeared from the assessee’s side despite the fact that there are total ten effective hearing took place. This is a matter of record. It seems that the assessee is not interest in prosecuting this appeal. Hence, we are deciding the appeal ex parte qua the assessee. 3. The only issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO being undisclosed sales due to short credit of sales amounting to Rs.4,76,13,159/-. For this, revenue has raised following ground no.1:

1. In the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs.4,76,13,159/- made on account of undisclosed amount of sales due to short credit of sales by relying on the statement of reconciliation in respect of the alleged short credit of sales produced by the assessee which the AO did not find tenable as no evidence in support of the said statement was produced.

4.

Briefly stated facts are that the AO noticed from the list of debtors that there is a short credit of sales amounting to Rs.4,76,13,158/- involving ten parties and the AO has given complete detail in the following chart:

Sl. Name of the Party Total bill amount Amount shown Difference No. as per Debtors as sales as per (short Credit List details of sales of sale) 1. Arbind Trading Co. 27270123 24591543.9 2678579.12 2. Chakraborty Saw Mill 621103 568775.84 52327.16 3. D. D. Enterprise 23406534 17406527.4 6000006.62 4. Eastern Timber Commo Trade 43773407 37573383.9 6200023.13 5. India Timber & Seasoning Plant 1006469 993062.25 13406.75 6. Naini Plywood (P) Ltd. 21258975 18708968 2550007 7. Rajputana General Comm. Corpn. (P) Ltd. 36964091 31759162 5204929 8. Shree Bhagwati Dayal Plyboard 43555234 35590284.7 7964949.27 9. Shree Dadu Ply House 6648921.96 699996 5948925.96 10. Timtech India Pvt. Ltd. 21226086 10226081.5 11000004.5 Total 225730944 178117785 47613158.51 As there was no compliance from the assessee, the AO in the absence of supporting evidence made addition of undisclosed sales due to short credit of sales. Aggrieved, assessee preferred appeal before CIT(A). Before CIT(A), assessee filed some reconciliation but CIT(A) simply taking the reconciliation filed by assessee without sending for verification or making enquiries deleted the addition by observing as under:

“From the above chart it is clearly seen that the difference stated in the reconciliation statement matches with the difference pointed out by the AO. The minor discrepancy of few rupees is the result of rounding off. From the reconciliation statement it is also noted that the cheque numbers and dates have been clearly mentioned. In support of this reconciliation statement party wise ledger accounts have been produced where these transactions have been duly reflected. He has also produced the confirmation of accounts by these parties. All these evidences, painstakingly collated by the appellant were before the AO who has not been able to point out even a single defect. In view of the above facts I am satisfied that the appellant has been able to reconcile the differences pointed out by the AO and also furnished evidence in support of the reconciliation statement. Therefore I hold that the addition made on this account is not justified and the AO is directed to delete the same.” Aggrieved, revenue is in appeal before us.

5.

We have heard Ld. Sr. DR and gone through facts and circumstances of the case. We find from the above facts and circumstances and argument of ld. Sr. DR, who requested that the issue needs reconsideration at the level of the AO for verification of reconciliation statement. We are of the view that the CIT(A) should have examined the 3 & C.O. No. 6/Kol/2011 Zenith timber Products (P) Ltd. AY 2004-05 issue in greater details so that entire fact comes on record. As the assessee is not representing before us, in the absence of the same, we have only one alternative but to restore back this issue to the file of AO and AO will examine the details filed before the CIT(A) and also allow opportunity of being heard to the assessee. In term of the above, the appeal of revenue is set aside to the file of AO for fresh adjudication. Appeal of revenue is allowed for statistical purposes.

6.

Cross Objection of assessee is in support of the order of CIT(A). Since we set aside the order of CIT(A) and restore the matter back to the file of AO for fresh adjudication, the cross objection filed by assessee is dismissed being infructuous.

7.

In the result, the appeal of revenue is allowed for statistical purposes and the Cross Objection of assessee is dismissed.

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