Income Tax Appellate Tribunal - Kolkata
Panna International, Kolkata vs Department Of Income Tax
आयकर अपीलीय अधीकरण,
अधीकरण, Ûयायपीठ "ए", कोलकाता
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH : KOLKATA
सम¢ ौी एन.
[सम¢ एन. ǒवजयकुमारन,
मारन, Ûयायीक सदःय एवं ौी सी. डȣ.
डȣ राव,
सी .डȣ राव लेखा सदःय]
[Before Shri N. Vijaya Kumaran, J.M. & Shri C. D. Rao, A.M.]
आयकर अपील संÉया / I.T.A No.530/Kol/2011
िनधॉरण वषॅ/Assessment Year : 2007-08
Asstt. Commissioner of Income Tax -vs.- M/s. Panna International
Circle-44, Kolkata. Kolkata [PAN : AADFP 9592 P].
अपीलाथȸ /Appellant]]
[अपीलाथȸ ू×यथȸ/
ू×यथȸ/Respondent]]
[ू×यथȸ
अपीलाथȸ/
अपीलाथȸ For the Appellant : Shri S. K. Roy
ू×यथȸ/
ू×यथȸ For the Respondent : Shri S. Bandyopadhyay
सुनवाई कȧ तारȣख/Date
तारȣख of Hearing : 15.11.2011
घोषणा कȧ तारȣख/Date
तारȣख of Pronouncement : 18.11.2011
आदे श/ORDER
एन.
एन. ǒवजय कुमारन, Ûयायीक सदःय Per N. Vijaya Kumaran, J. M. This appeal by the Department is directed against order of Ld. CIT(A)-XXX, Kolkata dated 11.01.2011 for Assessment Year 2007-08.
2. The grounds urged by the Department are as under :-
A second appeal is strongly recommended against the said order of the CIT(A),XXX, Kolkata on the following grounds :-
(i) that the Ld. CIT(A) erred in law and on the facts and circumstances of the case to deleting the addition of Rs.62,68,486/- without appreciating the fact that the assessee failed to explain rapid fall in the G.P. rate.
(ii) that the Ld. CIT(A) erred in law and on the facts and circumstances of the case in deleting the addition of Rs. without the addition of Rs.7,50,000/-
without appreciating the cogent reasons the A.O. mentioned in the body of order.
2[ITA No.530/Kol/2011]
3. The first ground relates to deletion of addition of Rs.62,68,486/-.
4. We have heard the rival submissions and perused the material available on record including the precedents.
5. Ld. Departmental Representative advanced his arguments in support of the findings of the Assessing Officer and the grounds urged before us.
6. On the other hand, Ld. Counsel for the Assessee submitted that assessee is a food grain trader and also an exporter of food grains to Bangladesh. Originally, assessee has shown a gross loss on sale of grains and particularly during the year assessee had purchased Masoor Dal, Dunpeas. All the payments were made by cheque as evidence by assessee's paper book at pages 62 & 63. The same rate of G.P. also almost same and while making the addition Assessing Officer never rejected the books. No defects found in the book result and most of the purchases were local and vouched. These details were available at assessee's paper book at pages 91 to 93. Based on the above facts and on perusal of the same, Ld. CIT(A) found that Assessing Officer's estimation on G.P. of Masoor Dal & Dunpeas had no basis whatsoever and estimation of profit by him was mere guess work. It is settled law that estimation of income should be with relevance to evidence on record and it should not be on presumption, surmises and conjecture. Further, in this case the ultimate result is positive of income as the assessee has got the benefit of foreign trade policy VISHESH KRISHI UPAJ YOJANA (Speical Agricultural Produce Scheme) to promote export of fruits vegetables etc. and their value added products by incentivising exporters on such products. In other words, exporters of such products were entitled to duty credit scrip equivalent to 5% of FOB value of exports. Based on this, assessee sold it for 95%. Taking into incentive of 5% FOB and added with the exchange rate of fluctuation and the net result is positive profit. The comparative figure of G.P. as available at assessee's paper book at page 87 will clearly show that there is no requirement to change the rate of G.P. for this assessment year without any valid reason. Under the above facts and circumstances, we reject the arguments of Ld. Departmental Representative and we accept the contention of the Ld. Counsel that it is prudent decision of the assessee to purchase goods at a rate higher than the minimum price prescribed by the Government as held in the case of Godavari Sugar Mills Ltd. vs. CIT [1992] 193 ITR 756 (Bom.). Further, in the absence of evidence to show that the sales made below the market price were sham transactions or that the market prices were in fact paid by the purchasers, the mere fact that the goods were sold at a concessional rate would not 3 [ITA No.530/Kol/2011] entitle the Income Tax Department to assess the difference between the market price and the price paid by the purchaser. The decision of Hon'ble jurisdictional High Court in the case of CIT vs. Smt. Nandini Nopany [1998] 230 ITR 679 (Cal.) will support the case of the assessee. The assessee is an exporter and he has to comply the requirement of exports so as to avail the benefit and all the payments were made by cheque is also not disputed by the Ld. Departmental Representative. Ld. Counsel invited our attention that the Assessing Officer accepted cash payments in other grains whereas he is not accepting the cheque payments with respect to Masoor Das & Dunpeas which are only at cheque transaction. Hence, we have no hesitation in confirming the order of Ld. CIT(A) under the given set of facts and circumstances.
7. Coming to the second ground, it is another addition of Rs.7,50,000/-. It is an adhoc addition on estimate on account of purchase and transport expenses
8. After considering the rival submissions and on perusal of the material available on record, the Assessing Officer did not doubt in the books of accounts. The assessee has also filed full details of purchase and transport expenses. The assessee amply proved that the goods were not only purchased but also received by the assessee and in the absence of any other material to discredit the fact that the goods were not only purchased but also received by the assessee. Further, the material filed clearly gives full details of purchase and transport expenses and the decision of I.T.A.T., Calcutta Bench in the case of Sagar Bose vs. ITO [1996] 56 ITD 561 which the Ld. CIT(A) relied will also support the case of the assessee. Hence, we have no hesitation in confirming the findings of the Ld. CIT(A) on this second ground which relates to deletion of addition of Rs.7,50,000/-.
9. In the result, revenue appeal is dismissed.
आदे श खुले Ûयायालय मɅ सुनाया गया है तारȣख
Order pronounced in the Court on 18.11.2011
Sd/- Sd/-
[एस.
एस. भी.
भी.मेहरोऽा, लेखा सदःय]
सदःय एन.
एन. ǒवजय कुमारन,
[एन मारन, Ûयायीक सदःय]
सदःय
[ C. D. Rao ] [ N. Vijayakumaran ]
Accountant Member Judicial Member
Dated : 18th November, 2011.
4
[ITA No.530/Kol/2011]
आदे श कȧ ूितिलǒप अमेǒषत/Copy of the order forwarded to:
1. अपीलाथȸ /Appellant : Asstt. Commissioner of Income Tax, Circle-44, 3, Govt. Place (West), Kolkata-700 001.
2. ू×यथȸ/ Respondent : M/s. Panna International, 2, R.C. Roy Street, Kolkata-700007.
3. आयकर किमश-नर/ CIT,
4. आयकर किमशनर (अपील)/CIT(A), Kolkata.
5. वभािगय ूितनीधी/DR, Kolkata Benches, Kolkata [स×याǒपत ूित/True Copy] आदे शानुसार/ By order, पंजीकार/Asstt. Registrar [kkc वǐरƵ िनǔज सिचव/Sr.PS]