Case Law Details

Case Name : D.C.I.T. Vs Sachidananda Ojha (ITAT Kolkata)
Appeal Number : ITA No.1469/Kol/2011
Date of Judgement/Order : 25/06/2012
Related Assessment Year : 2008-09
Courts : All ITAT (7336) ITAT Kolkata (592)

Diffrence in B/S submitted with Bank & as per Books of Account  (BOA) – Just because there is a difference addition should not be made

At the outset, what is evident is that a perusal of the order of the ld.CIT(A) shows that the ld. CIT(A) has accepted the balance sheet as filed before the bank whose finding of the ld. CIT(A) has not been challenged by the assessee. Obviously the finding of ld. CIT(A) and the balance sheet filed with the bank stands good. Once the difference found with the balance sheet filed before the bank authorities and the reconciliation of the same with the books of accounts would have to be done. How the assessee has arrived at the figures as shown in the balance sheet with the bank would have to be reconciled with the bank as maintained by the assessee. For this purpose we are of the view that the issue in this appeal must be restored to the file of AO for re-adjudication. The AO shall give assessee adequate opportunity to reconcile the difference. It is further directed that just because there is a difference addition should not be made if there are positive difference or negative which can be considered also. In the circumstances and with this direction in this appeal this issue is restored to the file of AO for re-adjudication after granting an opportunity to substantiate its claim.

INCOME TAX APPELLATE TRIBUNAL, KOLKATA

ITA No.1469/Kol/2011 – Assessment Year: 2008-09

D.C.I.T. V.  Sachidananda Ojha

Date of Pronouncement: 25.06.2012.

ORDER

Per Bench

This is an appeal filed by the revenue against order of the ld.CIT(A)-XXXVI, Kolkata in Appeal No.306/CIT(A)-XXXVI/Kol/R-1,Mid./10-11/289 dated 01.08.2011 for Assessment Year 2008-09.

2. Shri Ajoy Kumar Singh, ld.DR appeared on behalf of the revenue and Shri V.N.Purohit, ld.AR appeared on behalf of the assessee.

3. In the revenue’s appeal the revenue has raised the following grounds:-

“1. (i) “That in a case were the assessee has filed two sets of audited accounts one before the assessing officer and the other before the Bank for which loans were taken. The CIT(A), erred both in the Laws and in Facts in not invoking the provisions under clause of 4 of Sec. 250 of the I,T.Act, 1961,. in directing the A.O. to make further enquiry on the second set of accounts filed by the assessee before the Banking Authority and to determine the correct income after such enquiry”

2. (ii) “That on the facts and circumstances of the case, the CIT(A), erred in taking the net profit disclosed in the second set of accounts filed before the Banking Authority ignoring the difference in various items amounting to Rs. 1,95,83,754/- which was disallowed by the A.O,”

3 As a result, the reduction of demand in the instant case is Rs. 93,80,919/-, in the light of Board’s Instruction No. 3/2011, dated 9-2-2011, the monetary limit for filing Second appeal before the ITAT is Rs. 3 Lakhs. Considering the involvement of highness of the demand, a “Second Appeal” is strongly suggested.”

4. It was submitted by the ld. DR that the assessee is an individual who is a dealer in wholesale of rice and rice bran. It was the submission that in the course of assessment it was noticed that the assessee has given a separate set of accounts to the State Bank of India, Midnapore branch and the accounts as maintained by the assessee were different. It was the submission that consequently the AO had asked the assessee to reconcile the difference between the audited accounts as presented to the bank and as furnished along with the return. It was the submission that as the assessee was unable to reconcile the difference the difference between the accounts as submitted to the bank and as submitted along with the income tax return it was treated as undisclosed income of the assessee. It was the submission that on appeal the ld. CIT(A) had reduced the addition by holding that the accounts submitted to the bank was for the purpose of obtaining a higher credit facility and that the net profit as shown in the balance sheet filed with the bank showed the net profit of Rs.9,71,135.69 as against the net profit shown in the Profit and loss account filed along with the return which showed an amount of Rs.9,28,045/-. It was the submission that consequently the ld. CIT(A) had held that the profit and loss account are shown in the balance sheet filed with the bank was liable to be considered. It was the submission that all other additions had been deleted. It was the submission that the ld. CIT(A) failed to appreciate that the assessee had not reconciled the difference between the accounts statement as filed with the bank and as filed along with the return and consequently the order of the ld. CIT(A) was liable to be reversed. It was the submission that he had no objection if the issue is restored to the file of AO for readjudication.

5. In reply, the ld. AR submitted that the account statement given to the bank was only for the purpose of obtaining a higher bank credit. It was the submission that most of the figures as shown to the bank represent an adhoc increase of a round sum to that of the one as shown in the accounts submitted with the return of income. It was the submission that the accounts submitted to the bank were adhoc figures and were not supported in the books of account. It was the submission that he had no objection if the issue is restored to the file of AO.

6. We have considered the submissions. At the outset, what is evident is that a perusal of the order of the ld.CIT(A) shows that the ld. CIT(A) has accepted the balance sheet as filed before the bank whose finding of the ld. CIT(A) has not been challenged by the assessee. Obviously the finding of ld. CIT(A) and the balance sheet filed with the bank stands good. Once the difference found with the balance sheet filed before the bank authorities and the reconciliation of the same with the books of accounts would have to be done. How the assessee has arrived at the figures as shown in the balance sheet with the bank would have to be reconciled with the bank as maintained by the assessee. For this purpose we are of the view that the issue in this appeal must be restored to the file of AO for re-adjudication. The AO shall give assessee adequate opportunity to reconcile the difference. It is further directed that just because there is a difference addition should not be made if there are positive difference or negative which can be considered also. In the circumstances and with this direction in this appeal this issue is restored to the file of AO for re-adjudication after granting an opportunity to substantiate its claim.

7. In the result the appeal of the revenue is allowed for statistical purposes.

Order dictated and pronounced in the open court on 25.06.2012.

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