Siddhartha Kandar, Kolkata v. ITO, WD-3, HALDIA, Haldia

ITA 1422/KOL/2015 | 2009-2010
Pronouncement Date: 28-09-2016

Appeal Details

RSA Number 142223514 RSA 2015
Assessee PAN APJPK5180R
Bench Kolkata
Appeal Number ITA 1422/KOL/2015
Duration Of Justice 9 month(s) 28 day(s)
Appellant Siddhartha Kandar, Kolkata
Respondent ITO, WD-3, HALDIA, Haldia
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 28-09-2016
Assessment Year 2009-2010
Appeal Filed On 30-11-2015
Judgment Text
I.T.A. NO. 1422/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A(SMC) BENCH KOLKATA BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER I.T.A. NO. 1422 /KOL/ 2015 ASSESSMENT YEAR: 2009-2010 SIDDHARTHA KANDAR ................................. ...............................APPELLANT C/O. D.J. SHAH & CO. KALYAN BHAVAN 2 ELGIN ROAD KOLKATA-700 020 [PAN : APJPK 5180 R] -VS.- INCOME TAX OFFICER ................................ ..............................RESPONDENT WARD-3 HALDIA-721 604 APPEARANCES BY: SHRI MIRAJ D. SHAH A.R. FOR THE ASSESSEE SHRI UDAY KUMAR SARDAR JCIT D.R. FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 26 2016 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 28 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-7 KOLKATA DATED 18.08.2015 FOR THE ASSESSMENT YEAR 2009-10 AND THE GROUNDS RAI SED BY THE ASSESESE THEREIN READ AS UNDER:- (1) FOR THAT THE LD. CIT APPEAL HAS PASSED THE ORDER WI THOUT CONSIDERING THE WRITTEN SUBMISSION ON RECORDS WHICH WAS FILED ON 10/06/2015. THUS THE ORDER OF THE LD. CIT(APPEALS) BE SET ASIDE. (2) FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLATE ORDER PASSED WAS IN VIOLATION OF PRINCIPALS OF NATU RAL JUSTICE HENCE IS BAD IN LAW AND BE QUASHED. (3) FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT APPEAL ERRED IN ADDING A SUM OF RS.1 75 200/- ON AC COUNT OF DISCLOSED SUNDRY DEBTORS. SUCH ADDITION IS UNWARRAN TED UNJUSTIFIED AND UNCALLED FOR HENCE THE SAME BE DELETED. I.T.A. NO. 1422/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 5 (4) FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT APPEAL ERRED IN ADDING A SUM OF RS.9 00 000/- ON AC COUNT OF BUS HIRE CHARGES AND OTHER EXPENSES REIMBURSEMENTS U/S. 40(A)(IA) OF THE IT ACT 1961 . SUCH ADDITION IS UNWARRANTED UNJ USTIFIED AND UNCALLED FOR HENCE THE SAME BE DELETED. 5. FOR THAT THE INTEREST COMPUTED U/S. 234B/C/D OF THE IT ACT 1961 IS OVER CHARGED AND WRONGLY CALCULATED AND OR IS NO T APPLICABLE TO THE ASSESSEES CASE HENCE THE INTEREST BE DELETED A ND OR CORRECTLY COMPUTED. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. GROUNDS NO. 1 & 2 RAISED BY THE ASSESSEE IN THIS APPEAL ARE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE ME. THE SAME ARE ACCO RDINGLY DISMISSED AS NOT PRESSED. 3. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 3 RE LATING TO THE ADDITION OF RS.1 75 200/- MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF THE ALLEGED BOGU S DAMAGES IT IS OBSERVED THAT IN THE BALANCE-SHEET FILED ALONG WITH HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION SUNDRY DEBTORS OF RS.1 75 200/- WERE SHOWN BY THE ASSESSEE. ON VERIFICATION THE ASSESSI NG OFFICER HOWEVER FOUND THAT THE SAID DEBTORS SHOWN BY THE ASSESSEE W ERE BOGUS AND THEREFORE HE MADE AN ADDITION OF RS.1 75 200/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF THE ALLEGED BOGUS SUNDRY DEB TORS. ON APPEAL THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION MADE B Y THE ASSESSING OFFICER OBSERVING THAT THE ASSESSEE MUST HAVE COLLE CTED THE AMOUNTS DUE FROM THE CONCERNED DEBTORS OUTSIDE THE BOOKS OF ACC OUNT. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THE FACT THAT THE AMOUNT IN QUESTION WAS SHOWN BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT AS SUNDRY D EBTORS BY ITSELF IS SUFFICIENT TO SHOW THAT THE SAID AMOUNT WAS BOOKED AS SALE BY THE ASSESSEE AND DULY OFFERED TO TAX AS HIS INCOME. AS FURTHER CONTENDED BY I.T.A. NO. 1422/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 5 THE LD. COUNSEL FOR THE ASSESSEE EVEN IF THE ALLEG ATION OF THE LD. CIT(APPEALS) THAT THE SAID AMOUNT MUST HAVE BEEN CO LLECTED BY THE ASSESSEE FROM THE CONCERNED PARTY OUTSIDE THE BOOKS OF ACCOUNT IS TAKEN TO BE TRUE SUCH COLLECTION FROM DEBTORS OUTSIDE TH E BOOKS OF ACCOUNT COULD NOT GIVE RISE TO ANY INCOME CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE. MOREOVER THE LD. COUNSEL FOR THE ASSESSE E HAS ALSO SUBMITTED THAT THE AMOUNT RECEIVED FROM THE CONCERNED DEBTORS AT THE FAG END OF THE YEAR UNDER CONSIDERATION WAS DULY ACCOUNTED FOR BY THE ASSESSEE IN THE BOOKS OF ACCOUNT OF THE NEXT YEAR. KEEPING IN VIEW ALL THESE FACTS OF THE CASE I AM OF THE VIEW THAT THE ADDITION OF RS.1 75 200/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON ACCOUNT OF ALLEGED BOGUS SUNDRY DEBTORS IS NOT SUSTAINABLE AND DELETING THE SAME I ALLOW GROUND NO. 3 OF THE ASSESSEES APPEAL. 5. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 4 RE LATING TO THE DISALLOWANCE OF RS.9 00 000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 40( A)(IA) ON ACCOUNT OF PAYMENTS OF BUS HIRE CHARGES IT IS OBSERVED THAT T HE PAYMENT ON ACCOUNT OF BUS HIRE CHARGES AGGREGATING TO RS.9 00 000/- WA S MADE BY THE ASSESSEE TO FIVE BUS OWNERS AMOUNTING TO RS.1 80 00 0/- EACH WITHOUT DEDUCTION OF TAX AT SOURCE. ACCORDING TO THE ASSESS ING OFFICER THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE FROM TH E SAID PAYMENTS AND SINCE THE ASSESSEE HAD FAILED TO DO SO HE INVOKED THE PROVISION OF SECTION 40(A)(IA) AND MADE A DISALLOWANCE OF RS.9 00 000/- ON ACCOUNT OF BUS HIRE CHARGES. ON APPEAL THE LD. CIT(APPEALS) CONFIRMED THE SAID DISALLOWANCE MADE BY THE ASSESSING OFFICER. 6. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LIMITED CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESESE BY RELYI NG ON THE SECOND PROVISO TO SECTION 40(A)(IA) IS THAT THE CONCERNED RECIPIEN TS HAVING BEEN INCLUDED THE AMOUNT IN QUESTION PAID BY THE ASSESSEE ON ACCO UNT OF BUS HIRE CHARGES IN THEIR TOTAL INCOME OFFERED TO TAX NO DI SALLOWANCE UNDER I.T.A. NO. 1422/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 5 SECTION 40(A)(IA) CAN BE MADE. IN SUPPORT OF THIS C ONTENTION HE HAS RELIED ON THE DECISION OF THIS TRIBUNAL RENDERED IN THE CA SE OF M/S. ABHOY CHARAN BAKSHI VS.- DCIT VIDE ITS ORDER DATED 06.04 .2016 PASSED IN ITA NO. 1492/KOL?2015 AND SUBMITTED THAT THIS MATTER MA Y BE SENT TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH IN THE LIGHT OF THE SAID DECISION OF THE TRIBUNAL AFTER NECESSARY V ERIFICATION. IN THE SAID DECISION THE EFFECT OF SECOND PROVISO INSERTED UND ER SECTION 40(A)(IA) WAS CONSIDERED BY THE TRIBUNAL AND IT WAS HELD AS U NDER:- 15. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. THE CIT(A) HAS HELD THAT THE SECOND PR OVISO TO SEC.40(A)(IA) OF THE ACT WILL APPLY IN THE PRESENT CASE AND THAT APPLICABILITY OF THE SECOND PROVISO TO SEC.40(A)(IA ) OF THE ACT WHICH WAS INTRODUCED BY THE FINANCE ACT 2012 W.E.F . 1.4.2013 WAS RETROSPECTIVE IN OPERATION AND WAS TO APPLY W.E .F. 1-4- 2005 BEING THE DATE FROM WHICH SUB-CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT 2004 . THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANS AL LAND MARK TOWNSHIP (I) PVT. LTD. IN ITA NO.16012015 JUDGMENT DATED 26.8.2015 HAS TAKEN THE VIEW THAT THE INSERTION OF THE SECOND PROVISO TO SEC 40(A)(IA) OF THE ACT IS RETROSPECTIV E AND WILL APPLY FROM 1.4.2005. ONCE IT IS HELD THAT THE ASSES SEE IS ENTITLED TO THE BENEFIT OF 2ND PROVISO TO SEC. 40(A)(IA) OF THE ACT THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO VERIFY WHET HER THE RECIPIENTS HAVE INCLUDED THE RECEIPTS PAID BY THE A SSESSEE IN THEIR RESPECTIVE RETURNS OF INCOME AND ALSO PAID TA XES ON THE SAME. TO THE EXTENT THE RECIPIENTS FROM THE ASSESSE E HAVE SO INCLUDED THE SUM IN THEIR RETURNS OF INCOME AND FIL ED THE SAME NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT OUGHT TO HAVE BEEN SUSTAINED BY THE CIT(A). THE CIT(A) OUGHT TO HAVE A LSO DIRECTED THE AO THAT IN CASE THE RECIPIENT PARTIES ARE NOT C OOPERATING IN PROVIDING DETAILS THE AO SHOULD CALL FOR THE INFOR MATION U/S. 133(6) OR 131 OF THE ACT FOR VERIFICATION OF THE S AME. IN THIS REGARD WE ALSO FIND THAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF ASSESSMENT PARTICULARS OF THE RECIPIENTS OF PAYMENT FROM THE ASSESSEE. THE AO THEREFORE SHOULD NOT HAVE ANY DIFFICULTY IN MAKING THE REQUIRED VERIFICATION. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) TO THE EXTENT TO WHIC H HE HAD SUSTAINED THE ORDER OF THE AO ON THE DISALLOWANCE U /S. 40(A)(IA) OF THE ACT AND REMAND THE ISSUE TO THE AO TO VERIFY WHETHER THE RECIPIENTS HAVE INCLUDED THE RECEIPTS P AID BY THE ASSESSEE IN THEIR RESPECTIVE RETURNS OF INCOME AND ALSO PAID TAXES ON THE SAME. TO THE EXTENT THE RECIPIENTS FRO M THE ASSESSEE HAVE SO INCLUDED THE SUM IN THEIR RETURNS OF INCOME AND FILED THE SAME NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT SHOULD BE MADE BY THE AO. IN CASE THE RECIPIENT PAR TIES ARE NOT COOPERATING IN PROVIDING DETAILS THE AO SHOULD BE DIRECTED TO CALL FOR THE INFORMATION U/S. 133(6) OR 131 OF THE ACT FOR VERIFICATION OF THE SAME. I.T.A. NO. 1422/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 5 I ACCORDINGLY RESTORE THE ISSUE RELATING TO THE D ISALLOWANCE OF RS.9 00 000/- UNDER SECTION 40(A)(IA) ON ACCOUNT OF PAYMENT OF BUS HIRE CHARGES TO THE FILE OF THE ASSESSING OFFICER FOR DE CIDING THE SAME AFRESH IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CA SE OF ABHOY CHARAN BAKSHI (SUPRA) AFTER VERIFYING THE CLAIM OF THE ASS ESSEE THAT THE CONCERNED RECIPIENTS OF THE BUS HIRE CHARGES HAVE A LREADY OFFERED TO TAX THE ENTIRE AMOUNT IN QUESTION IN THEIR RETURNS OF I NCOME. GROUND NO.4 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 7. THE ISSUE RAISED IN GROUND NO. 5 RELATING TO THE LEVY OF INTEREST UNDER SECTIONS 234B 234C AND 234D IS CONSEQUENTIAL AND THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO ALLOW CONSEQUENT IAL RELIEF TO THE ASSESSEE ON THIS ISSUE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 28 2016. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA THE 28 TH DAY OF SEPTEMBER 2016 COPIES TO : (1) SHRI SIDDHARTHA KANDAR C/O. D.J. SHAH & CO. KALYAN BHAVAN 2 ELGIN ROAD KOLKATA-700 020 (2) INCOME TAX OFFICER WARD-3 HALDIA-721 604 (3) COMMISSIONER OF INCOME TAX (APPEALS)-7 KOLKAT A; (4) COMMISSIONER OF INCOME TAX- (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES KOLKATA LAHA/SR. P.S.