Calcutta High Court
Commissioner Of Income Tax vs Crescent Export Syndicate on 30 July, 2008
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
ITA No. 202 of 2008
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ/Civil Appellate/Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX, KOLKATA-XI Plaintiff/Petitioner/Applicant
Versus
CRESCENT EXPORT SYNDICATE Defendant/Respondent
BEFORE:
The Hon'ble JUSTICE PINAKI CHANDRA GHOSE The Hon'ble JUSTICE SANKAR PRASAD MITRA Date : 30th July, 2008.
The Court :- We have perused the order passed by the learned Tribunal. It appears that the facts of the case as narrated by the learned Tribunal are as follows:
The learned Counsel appearing for the appellant argued that the assessee is 100% export oriented firm, exporting leather goods viz. Wallets and different types of bags. The total export turnover during the year (FOB value) Rs.19,81,73,720/- and purchases shown at Rs.11,65,97,523/-. Out of the said purchase, the purchase from 15 parties amounting to Rs.83,44,822/- and the seller could not be produced in assessment, hence the A.O. disallowed the entire purchase and added Rs.83,44,822/-. In appeal, before the ld. CIT(A)-XIX, Kolkata the appellant submitted that it maintains stock book inventorised the purchase of leather, leather issued for cutting, and issued to fabricator finally for finishing the goods as per export 1 order. The ld. CIT(A) directed the A.O to examine those books and to submit the remand report. In the remand report the A.O. has admitted 'on verification of the purchase details, it is seen that the purchases amounting to Rs.83,44,822/- made from different parties are entered in the stock register and put to the various stages of manufacturing process. The assessee also produced bills in respect of all purchase made from these 15 parties and finally the ld. CIT(A) has held 'as regards the purchase, it is seen that these were recorded in the stock register, their consumption is also recorded therein, up to the stage of final production. All these records are audited. They are produced before the Assessing Officer for examination who had not been able to point out any defect in it. Under the circumstances the purchases are considered to be genuine'. So the purchases have been held to be genuine.
It also appears that the purchases have been held to be genuine by the learned CIT (Appeal) but the learned CIT(Appeal) has invoked Section 40A(3) for payment exceeding Rs.20,000/- since it is not made by crossed cheque or bank draft but by hearer cheques and has computed the payments falling under provisions to Section 40A(3) for Rs.78,45,580/- and disallowed @ 20% thereon Rs.15,69,116/-. It is also made clear that without the payment being made by bearer cheque these goods could not have been procured and it would have hampered the supply of goods within the stipulated time. Therefore, the genuineness of the purchase has been accepted by the ld. CIT (Appeal) which has also not been disputed by the department as it appears from the order so passed by the learned Tribunal. It further appears from 2 the assessment order that neither the Assessing Officer nor the CIT (Appeal) has disbelieved the genuineness of the transaction. There was no dispute that the purchases were genuine.
Accordingly, in our opinion, the learned Tribunal has correctly came to the conclusion by deleting the addition of Rs.15,69,116/- under section 40A(3) of the Act. On the other ground as it appears that the CIT (Appeal) has been directed to reconsider the matter. In view of that we do not think that any substantial question of law is involved in this matter. Hence the appeal being ITA NO. 202 of 2008 is dismissed.
All parties concerned are to act on a signed xerox copy of the minutes of this order on the usual undertakings.
Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(PINAKI CHANDRA GHOSE, J.) (SANKAR PRASAD MITRA, J.) dg/ 3