Universal gears & Manufacturing Co., Kolkata v. Income Tax Officer-Ward-36(4), Kolkata, Kolkata

ITA 2679/KOL/2013 | 2007-2008
Pronouncement Date: 26-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 267923514 RSA 2013
Assessee PAN AABFU3484D
Bench Kolkata
Appeal Number ITA 2679/KOL/2013
Duration Of Justice 11 month(s) 27 day(s)
Appellant Universal gears & Manufacturing Co., Kolkata
Respondent Income Tax Officer-Ward-36(4), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 26-11-2014
Assessment Year 2007-2008
Appeal Filed On 29-11-2013
Judgment Text
I.T.A. NO . 2679 / KOL ./201 3 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH KOLKATA BEFORE SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO. 2679 / KOL / 20 1 3 ASSESSMENT YEAR : 200 7 - 20 0 8 UNIVERSAL GEARS & MANUFACTURING CO. .... ...... ............. .. .APP ELL ANT 137 B BLOC K LAKE TOWN KOLKATA - 700 089 [PAN : A A BFU 3484 D ] - VS. - INCOME TAX OFFICER ........................... ................... ... . RESPONDENT WARD - 36 ( 4 ) KOLKATA 110 SHANTI PALLY AAYAKAR BHAWAN POORVA 8 TH FLOOR KOLKATA - 700 107 APPEARANCES BY : SHRI R.M. JAIN C.A. AND SHRI S. JAIN ADVOCATE FOR THE ASSESSEE S MT. RANU BISWAS J CIT SR. D.R. FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 2 6 2 01 4 DATE OF PRONOUNCING THE ORDER : NOVEMBER 26 201 4 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - XX KOLKATA IN APPEAL NO. 406 / CIT(A) - XX/ WD. - 36(4)/2009 - 10/KOL. DATED 1 0 . 09 .2013 FOR THE ASSESSMENT YEAR 200 7 - 0 8 . 2. SHRI R.M. JAIN C.A. AND SHR I S. JAIN ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SMT. RANU BISWAS JCIT SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD. A .R. THAT THE ONLY ISSUE IN THIS APPEAL WAS AGAINST THE ACTION OF THE ASSESSING OFFICER I N MAKING THE ADDITION OF RS.3 53 53 0 / - REPRESENTING FREIGHT CHARGES DISALLOWED BY INVOKING THE I.T.A. NO . 2679 / KOL ./201 3 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 2 OF 4 PROVISIONS OF SECTION 40 (A)(IA) ON ACCOUNT OF NON - PRODUCTION OF TDS. IT WAS THE SUBMISSION THAT THE ARGUMENT OF THE ASSESSEE WAS THREE - FOLDS. IT WAS THE SUBMISSI ON THAT THE FIRST ARGUMENT WAS THAT THE ASSESSEE HAD RECEIVED RS.3 53 530/ - AND ACTUAL FREIGHT CHARGES PAID WAS ONLY RS.3 19 417/ - . IT WAS THE SUBMISSION THAT IF AT ALL THE DISALLOWANCE WAS CALLED THE SAME WAS LIABLE TO BE RESTRICTED TO RS.3 19 417/ - . FOR THIS PURPOSE HE DREW REFERENCE TO TRADING AND PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31.03.2007 AT PAGE 4 OF THE PAPER BOOK WHEREIN FREIGHT CHARGES HAS BEEN SHOWN AT RS.3 19 417/ - . IT WAS THE FURTHER SUBMISSION THAT THE SECOND LIMB OF THE ARGUMENT WAS THAT THE FREIGHT CHARGES WERE EFFECTIVELY REIMBURSEMENT RECEIVED FROM THE VARIOUS PURCHASERS. LD. A.R. DREW ATTENTION TO PAGES 20 TO 40 OF THE PAPER BOOK WHICH IS THE COPIES OF THE BILLS WHEREIN FREIGHT CHARGES HAS BEEN INCLUDED SEPARATELY. HE FURTHE R DREW ATTENTION TO PAGE 19 OF THE PAPER BOOK WHICH WAS THE IDENTIFICATION OF THE BILL NO. VALUE OF THE MATERIAL CST AND THE FREIGHT SEPARATELY. IT WAS THE SUBMISSION THAT THE TOTAL OF THE FREIGHT CHARGES WAS TO THE EXTENT OF RS.3 53 530/ - WHICH IS RE IMBURSED BY THE VARIOUS PURCHASERS. HE ALSO DREW ATTENTION TO PAGE 10 OF THE PAPER BOOK WHICH WAS THE COPY OF THE F IRM O RDER FROM M/S. SINGARENI COLLERIES CO. LTD. WHERE FREIGHT HAS BEEN SPECIFIED AS EXTRA PER EACH UNIT. IT WAS THUS THE SUBMISSION THAT T HE ASSESSEE WAS ONLY INCURRING THE FREIGHT ON BEHALF OF THE PURCHASERS AND THE PURCHASERS WERE REIMBURSING THE FREIGHT CHARGES AND CONSEQUENTLY NO TDS WAS LIABLE TO BE MADE. IT WAS THE FURTHER ARGUMENT BY THE LD. A.R. THAT THE THIRD ISSUE WAS THAT THE TOTA L FREIGHT OUT OF RS.3 19 417/ - AS ON THE YEAR ENDED 31.03.2007 ONLY AN AMOUNT OF RS.20 000/ - WAS PAYABLE AND IN VIEW OF THE DECISION OF THE HON BLE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MER I L Y N SHIPPING AS ALL THE OTHER AMOUNTS HAD BEEN PAID THE D ISALLOWANCE IF ANY WAS LIABLE TO BE RESTRICTED ONLY RS.20 000/ - . 4. IN REPLY LD. SR. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(APPEALS) AND THE ASSESSING OFFICER. SHE FURTHER DREW ATTENTION TO I.T.A. NO . 2679 / KOL ./201 3 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 3 OF 4 PAGE 4 OF THE PAPER BOOK WHICH WAS THE TRADING AN D PROFIT & LOSS A/C. FOR THE YEAR ENDED 31.03.2007. SHE SUBMITS THAT SALES INCLUDED THE FREIGHT CHARGES. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. COMING TO THE FIRST LIMB OF THE ARGUMENT OF THE LD. A.R. THAT THE FREIGHT PAYMENT WAS ONLY RS.3 19 417/ - A ND NOT RS.3 53 530/ - . IT IS NOTICED THAT THE ASSESSEE DOES HAVE A CASE IN SO FAR AS THE ACTUAL FREIGHT CHARGES PAID MORE SO CLAIMED IN THE TRADING AND PROFIT & LOSS ACCOUNT IS RS.3 19 417/ - . CONSEQUENTLY THE ASSESSING OFFICER IS DIRECTED TO RESTRICT THE DI SALLOWANCE BY INVOKING THE PROVISIONS OF SECTION 40 ( A ) (IA) OF THE ACT ON ACCOUNT OF NON - DEDUCTION OF TDS UNDER SECTION 194C TO THE EXTENT OF RS.3 19 417/ - . 6. COMING TO THE NEXT ARGUMENT THAT THE FREIGHT PAYMENTS HAVE BEEN MADE ON BEHALF OF THE PURCHASERS AND THE PURCHASERS HAVE REIMBURSED THE FREIGHT CHARGES. A PERUSAL OF THE BILLS CLEARLY SHOWS THAT THE ASSESSEE IS ENTITLED TO CLAIM THE COST OF TRANSPORTATION FROM THE PURCHASERS THAT IS ALSO VERY SPECIFIED AMOUNT. FOR EXAMPLE IN THE CASE OF M/S. SINGARE NI COLLIERIES CO. LTD. IT IS RS.20 000/ - FOR PARTICULAR MACHINERY AND RS.30 000/ - FOR PARTICULAR TYPE OF MACHINERY. IN RESPECT OF NEYVELI LIGNITE CORPORATION LIMITED IT VARIES BETWEEN RS.125/ - TO RS.290/ - PER PIECE OF ITEM. SIMILARLY ALL THESE ARE AGAINS T DOCUMENTARY EVIDENCE. THUS CLEARLY THE FREIGHT CHARGES ARE TO BE BORNE BY THE ASSESSEE THE SAME WAS INCLUDIBLE IN THE BILLS OF THE PURCHASERS. THEREFORE THE CLAIM OF THE ASSESSEE THAT THE FREIGHT HAS BEEN INCURRED ON ACCOUNT OF THE PURCHASERS DOES NOT SURVIVE. IN ANY CASE A PERUSAL OF THE TRADING AND PROFIT & LOSS ACCOUNT SHOWS THAT THIS AMOUNT OF SALES WHICH HAS BEEN RECORDED AT RS.1 15 60 808/ - IS INCLUSIVE OF THE FREIGHT CHARGES WHICH IS ALSO EVIDENCED BY THE PARTICULARS OF THE FREIGHT CHARGES FOUN D AT PAGE 19 OF THE PAPER BOOK. IN THESE CIRCUMSTANCES THIS ARGUMENT OF THE ASSESSEE STANDS REJECTED. I.T.A. NO . 2679 / KOL ./201 3 ASSESSMENT YEAR: 200 7 - 20 0 8 PAGE 4 OF 4 COMING TO THE THIRD ARGUMENT THAT ALL THE AMOUNTS HAVE BEEN PAID BEFORE 31.03.2007 AND THE OUTSTANDING BALANCES ONLY RS.20 000/ - IT IS NOTICED THAT THIS ISSUE WHICH IS COVERED BY THE DECISION DATED 19 TH MARCH 2012 IN ITA NO. 477/VIZ./2008 OF THE HON BLE SPECIAL BENCH VISHAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ADDITIONAL CIT REPORTED IN 136 ITD 23 CANNOT BE APPLIED IN SO FAR AS TH E DECISION OF THE HON BLE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT HAS BEEN REVERSED BY THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF C RESENT EXPORTS 33 TAXMANN.COM 50. IN THESE CIRCUMSTANCES THIS ARGUMENT OF THE ASSESESE ALSO DOES NOT SURVIVE. CONSEQUENTLY THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO RESTRICT THE DISALLOWANCE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) IN RESPECT OF THE FREIGHT CHARGES TO RS.3 19 417/ - AS AGAIN ST RS.3 53 530/ - . 7. IN THE RESULT THE APPEAL OF THE ASSESESE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOV EMBER 2014. SD/ - GEORGE MATHAN ( JUDICIAL MEMBER) KOLKATA THE 26 TH D AY OF NOVE MBER 201 4 COPIES TO : (1) UNIVERSAL GEARS & MANUFACTURING CO. 137 B BLOCK LAKE TOWN KOLKATA - 700 089 (2) INCOME TAX OFFICER WARD - 36(4) KOLKATA 110 SHANTI PALLY AAYAKAR BHAWAN POORVA 8 TH FLOOR KOLKATA - 700 107 (3) COMMISSI ONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE T RIBUNAL KOLKATA BENCHES KOLKATA LAHA/SR. P.S.