Itat/202/2022 Ia No: Ga/2/2022 Principal Commissioner Of Income Tax 5, Kolkata v. M/S. Mankasia Steel Pvt. Ltd

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/202/2022IA NO: GA/2/2022PRINCIPAL COMMISSIONER OF INCOME TAX 5, KOLKATAVS. M/s. MANKASIA STEEL PVT. LTD. BEFORE : THE HON’BLE T.S. SIVAGNANAM ACTING CHIEF JUSTICE AndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 3[rd] April, 2023 Appearance :Mr. Tilak Mitra, Adv.…for appellant.Mr. Saurabh Bagaria, Adv.Mr. Rites Goel, Adv.…for respondent. The Court : - This appeal filed by the revenue under Section 260A of the IncomeTax Act (the Act) is directed against the order dated 12.6.2020 passed by the IncomeTax Appellate Tribunal “A” Bench, Kolkata in ITA/482/KOL/2018 for the assessmentyear 2010-2011. The revenue has raised the following substantial questions of law : a)Whether on the facts and in the circumstances of the case the explanationoffered by the assessee in respect of the expenditure for a sum ofRs.2,76,07,339/- was satisfactory as per under Section 69C of the said Act ?offered by the assessee in respect of the expenditure for a sum ofRs.2,76,07,339/- was satisfactory as per under Section 69C of the said Act ? b)Whether on the facts and in the circumstances of the case the Hon’ble AppellateTribunal was justified in upholding the calculation made by the Commissionerof Income Tax (Appeals) in respect of addition being restricted to Rs.32,87,573/-?Tribunal was justified in upholding the calculation made by the Commissionerof Income Tax (Appeals) in respect of addition being restricted to Rs.32,87,573/-? c)Whether on the facts and in the circumstances of the case Learned Income TaxAppellate Tribunal was justified in deleting the addition made by the assessingofficer in respect of unexplained expenditure for a sum of Rs.2,65,30,653/- ?Appellate Tribunal was justified in deleting the addition made by the assessingofficer in respect of unexplained expenditure for a sum of Rs.2,65,30,653/- ? We have heard Mr. Tilak Mitra, learned standing counsel for the appellant andMr. Saurabh Bagaria assisted by Mr. Rites Goel, learned Advocates for the respondent. The dispute in the instant case lies in a narrow campus. The assessee as per hisown admission had made undisclosed sales from undisclosed purchase. Thus, in theabsence of any material on record, the CIT[A] had to estimate the undisclosedinvestment in the undisclosed sale. The following facts were taken note of by the CIT[A]and relief was granted to the assessee. “Therefore, ld CIT(A) in the absence of any material on record, the entireundisclosed investment in undisclosed sales had been estimated. The ldCIT(A) noticed that assessee’s undisclosed sales as detected during searchand seizure operations carried out by the Officers of the Directorate Generalof Central Excise Intelligence amounts to Rs.2,76,07,339/- during theassessment year 2010-11. The average sales per month amounts toRs23,00,611/-. The average GP on sales as disclosed in the returns is3.90% which amounts to Rs.89,724/-. The average purchase per monthamounts to Rs.22,10,887/-. The undisclosed investment was, therefore,estimated at Rs.22,10,887/- (Rs23,00,611/ - 89,724/-) on disclosed salesof Rs.2,76,07,339/-. The said ld CIT(A) also computed the profit onundisclosed sales of Rs.2,76,07,339/- at the rate of 3.90% atRs.10,76,686/- [3.90% of Rs.2,76,07,339/-]. Therefore, addition wasrestricted to Rs32,87,573/- (Rs.22,10,887/- plus Rs10,76,686/-) instead ofRs.2,76,07,339/- as undisclosed income on undisclosed investment in salesand profit on undisclosed sales. The conclusions arrived at by the CIT(A)are, therefore, correct and admit no interference by us. We, approve andconfirm the order of the CIT(A)”. The learned tribunal tested the correctness of the order passed by the CIT[A] byre-examining the factual position and agreed with the view taken by the CIT[A]. We findthat the CIT[A] had obtained the gross profit on undisclosed sale at 3.90% and,accordingly, the addition was restricted to the decision being arrived on examination The learned tribunal tested the correctness of the order passed by the CIT[A] byre-examining the factual position and agreed with the view taken by the CIT[A]. We findthat the CIT[A] had obtained the gross profit on undisclosed sale at 3.90% and,accordingly, the addition was restricted to the decision being arrived on examination and re-examination of the factual position. We find that no question of law, much lesssubstantial question of law arises for consideration in this appeal.Accordingly, the appeal fails and the same is dismissed. (T.S. SIVAGNANAM)ACTING CHIEF JUSTICE) (HIRANMAY BHATTACHARYYA, J.) pkd/GH/As/S.Das