Itat/166/2018 Of Principal Comm Of Income Tax 1, Kolkata v. M/S Inland Road Transport Ltd

Form No. (J2) IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTIONORIGINAL SIDE P R E S E N T: THE HON’BLE JUSTICE T.S. SIVAGNANAMA N D THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA ITAT/166/2018IA NO. GA/2/2018 (OLD NO. GA/1207/2018) PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL -1,KOLKATAVS. M/S INLAND ROAD TRANSPORT LTD. For the appellant : Mr. Smarajit Roychowdhury, Adv. Mr. Arunava Ganguly, Adv. For the respondent : Mr. J.P. Khaitan, Sr. Adv. Mr. Pratyush Jhunjhunwala, Adv. Mr. Siddharth Das, Adv. Heard on : 21[st] February, 2022. Judgment on : 21[st] February, 2022. T.S. SIVAGNANAM, J. : This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (the ‘Act’ for brevity) isdirected against the composite order dated 29.06.2016 passed by theIncome Tax Appellate Tribunal “B” Bench Kolkata (Tribunal) in ITANo. 1179/Kol/2012, ITA No. 1225 & 1226/Kol/2012, ITA No. 1426 & 1427/Kol/2012, ITA No. 1480 & 1481/Kol/2012 for the assessmentyears 2004-05 to 2010-11. The revenue has raised the following substantial questions of law for consideration : 1.Whether on the facts and in the circumstances of thecase, the Learned Tribunal erred in law in not acceptingthe contention of the Assessing Officer as to theauthenticity of the books of accounts produced by theassessee in the course of search and survey operationswho rejected the contention of the assessee that therecords were destroyed by fire and that the whole of thecontents of the books of accounts were audited by theauthorised representative cum auditor of the assessee?case, the Learned Tribunal erred in law in not acceptingthe contention of the Assessing Officer as to theauthenticity of the books of accounts produced by theassessee in the course of search and survey operationswho rejected the contention of the assessee that therecords were destroyed by fire and that the whole of thecontents of the books of accounts were audited by theauthorised representative cum auditor of the assessee? 2.Whether on the fact and the circumstances of the case,the Learned Tribunal erred in law in not concurring withthe findings of the Assessing Officer rejecting the booksof accounts of the assessee on not being satisfied withthe correctness or completeness of the accounts of theassessee and resorted to estimation of profits of thebusiness of the assessee under section 145 (3) of theIncome Tax Act?the Learned Tribunal erred in law in not concurring withthe findings of the Assessing Officer rejecting the booksof accounts of the assessee on not being satisfied withthe correctness or completeness of the accounts of theassessee and resorted to estimation of profits of thebusiness of the assessee under section 145 (3) of theIncome Tax Act? 3.Whether on the fact and the circumstances of the casethe Learned Tribunal erred in law in relying on theretracted statement of the authorised representative ofthe company and not accepting the initial statementmade by him admitting the inflation of expenses onaccount of lorry hire charges paid and totally ignoringthe judicial pronouncements on the issue that retractioncan only be valid if the earlier statement is proved to bemade under duress or coercion?the Learned Tribunal erred in law in relying on theretracted statement of the authorised representative ofthe company and not accepting the initial statementmade by him admitting the inflation of expenses onaccount of lorry hire charges paid and totally ignoringthe judicial pronouncements on the issue that retractioncan only be valid if the earlier statement is proved to bemade under duress or coercion? 4.Whether on the fact and the circumstances of the casethe Learned Tribunal erred in law in deleting thethe Learned Tribunal erred in law in deleting the addition of Rs.68,50,000/- on account of unsecuredloans on the basis of the retraction made by theauthorised representative of the assessee at a muchlater stage which has no value at all in the eye of law? 4.Whether on the fact and the circumstances of the casethe Learned Tribunal erred in law in deleting thethe Learned Tribunal erred in law in deleting the addition of Rs.68,50,000/- on account of unsecuredloans on the basis of the retraction made by theauthorised representative of the assessee at a muchlater stage which has no value at all in the eye of law? 5.Whether the Hon’ble Tribunal erred in Law in deletingthe addition toward immovable property overlooking thefact that loan paper or any supporting documents werenot produced during the assessment which may relatethe loan or advances to the payment toward immovableproperty?the addition toward immovable property overlooking thefact that loan paper or any supporting documents werenot produced during the assessment which may relatethe loan or advances to the payment toward immovableproperty? 6.Whether the Hon’ble ITAT erred in law in setting asidethe addition made on account of cash payment noted inseized document ILRT-I and ILRT-2 for deciding thisissue afresh without appreciating the facts discussed inthe assessment order that there was no material onrecord to suggest the actual nature of the utilization ofcash and whereas assessee failed in establishing thatthe cash payments were actually came from the regularcash book as clearly discussed in assessment order?the addition made on account of cash payment noted inseized document ILRT-I and ILRT-2 for deciding thisissue afresh without appreciating the facts discussed inthe assessment order that there was no material onrecord to suggest the actual nature of the utilization ofcash and whereas assessee failed in establishing thatthe cash payments were actually came from the regularcash book as clearly discussed in assessment order? We have heard Mr. Smarajit Roychowdhury, learnedstanding counsel duly assisted by Mr. Arunava Ganguly, learnedadvocate for the appellant/revenue and J.P. Khaitan, learned seniorcounsel assisted by Mr. Pratyush Jhunjhunwal and Mr. SiddharthDas, learned advocate for the respondent/assessee. The substantial questions of law no. 1 to 3 arises for all theassessment years 2004-05 to 2010-11. Substantial question of law no.4 is for the assessment year 2007-08 and substantial question of lawno. 5 is for the assessment year 2010-11 and substantial question of law no. 6 pertains to the assessment year 2008-09, 2009-10 and2010-11. So far as the question no. 6 is concerned, the Tribunal hadremanded the matter to the assessing officer for fresh considerationand the assessing officer by order dated 19[th] September, 2017 hasverified the books of accounts and deleted the entire deduction.Therefore, question no. 6 as suggested does not arise for considerationand stands rejected.With regard to substantial question nos. 1 to 3, which arecommon for all the assessment years, namely 2004-05 to 2010-11, wehave noted the findings recorded by the Tribunal. In fact the Tribunalhas done a thorough factual exercise while considering thecorrectness of the order passed by the CIT(A), which had allowed theappeal filed by the assessee. The Tribunal on noting the facts foundthat in the course of search which commenced on November 5, 2009,the survey team had seized electronic data and other records.However, there was no finding that any entry therein was false orfabricated. Further the CIT(A) had set aside the findings of theassessing officer which had disbelieved the fire accident which tookplace in the office premises of the assessee at Strand Bank Road,Kolkata. Noting the facts, the Tribunal found that the assessee wasable to substantiate with official records to show that there was a fireaccident in the said premises which had destroyed the records. Thelearned department representative who appeared before the Tribunalcould not controvert the said fact. Apart from that the other factual findings rendered by the CIT(A) were also considered and approved bythe Tribunal. Thus we find there is no question of law much lesssubstantial question of law arising on these issues, which have beenraised in question Nos. 1 to 3. Accordingly, the same stand rejected. With regard to substantial question no. 4 is concernedwhich arises for the assessment year 2007-08, the Tribunal afterconsidering the factual submissions made by the assessee has verifiedthe correctness of the finding rendered by the CIT(A) and held that thedepartment could not controvert any of the facts which were recordedby the CIT(A) while allowing the assessee’s appeal. Thus, we find thereis no question of law arising for consideration on this issue as welland the same stands rejected. With regard to substantial question no. 5 is concernedwhich arises for the assessment year 2010-2011, the Tribunal foundthat the payments made during the financial year 2006-07 and in thesubsequent years were all through banking channel and reflected inthe balance sheet for the assessment year 2007-08 and subsequentyears. Further the investment was financed to the extent of Rs.1.15crore by ICICI Bank which was explained at the assessment stage.Furthermore, the total investment made by the assessee was alsofound to be recorded in the books of accounts. These factual findingswhich were recorded by the CIT(A) could not be controverted by thedepartment when the appeal was heard by the Tribunal. Thus, we findno substantial question of law arising for consideration on this issueas well. In the result, the appeal filed by the revenue is dismissed onthe ground that no substantial question of law arises forconsideration. Connected application also stands dismissed. (T. S. SIVAGNANAM, J.) I agree. (HIRANMAY BHATTACHARYYA, J.) GH/RS/As/S.Das