, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NO.1645/KOL/2012 $'( !)*/ ASSESSMENT YEAR : 2008-09 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) I.T.O., WARD-3(2) M/S. SHREERAJ METALLOYS PVT. LTD. KOLKATA . -VERSUS- KOLKATA (PAN : AAECS 5538 C) 1 23 /C.O.NO.150/KOL/2012 '& '& '& '& /A/O ITA NO.1645/KOL/2012 $'( !)*/ ASSESSMENT YEAR : 2008-09 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) M/S.SHREERAJ METALLOYS PVT. LTD. I.T.O., WARD-3( 2), KOLKATA. -VERSUS- KOLKATA (PAN : AAECS 5538 C) ,- 4 5 / FOR THE DEPARTMENT SHRI L.K.S.DEHIYA, CIT(DR) /0,- 4 5 / FOR THE ASSESSEE SHRI A.K.TIBREWAL, FCA '!6 4 7 /DATE OF HEARING : 18.04.2013 8) 4 7 /DATE OF PRONOUNCEMENT : 19.04.2013. 9 / ORDER PER SHRI K.K.GUPTA, AM THE REVENUE IS IN APPEAL ON THE SOLE ISSUE THAT THE LD. CIT(A) DELETED A SUM OF RS.1,93,09,500/- BROUGHT TO TAX BY THE AO AS UNDISC LOSED INCOME OF THE IMPUGNED ASSESSMENT YEAR IN THE BUSINESS OF THE ASSESSEE IN DISGUISE AS ADVANCE TAKEN FORM M/S DELHI IRON AND STEEL CO. THE REVENUE ALSO AGITATED THE DELETION OF ADDITION OF RS.14,24,621/- CONSIDERED BY THE AO UNDER THE PROVI SION OF SECTION 40(A)(IA) OF THE IT ACT. THE CROSS OBJECTION PREFERRED BY THE ASSESSEE RESPONDENT SUPPORTED THE ORDER OF THE LD. CIT(A) ON MERIT DELETIONS BUT HAS ALSO OBJE CTED TO THE LD. CIT(A) UPHOLDING THE RE-ASSESSMENT PROCEEDINGS INITIATED UNDER THE PROVI SION OF SECTION 147/148 OF THE ACT, ITA NO.1645/KOL/2012& C.O.150/KOL/2012 2 VALID. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESS EE RESPONDENT HAS PREFERRED TO WITHDRAW THIS CROSS OBJECTION AS NOT PRESSED WHICH IS DISMISSED AS NOT PRESSED. 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD A ND NOTED BY THE AUTHORITIES BELOW ARE THAT THE ASSESSEE HAD FILED RETURN OF INC OME AT NIL WHICH WAS SCRUTINIZED UNDER THE PROVISION OF SECTION 144/147 OF THE ACT W HEN DURING THE ASSESSMENT PROCEEDINGS THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE AMOUNT OUTSTANDING IN THE NAME OF M/S. DELHI IRON AND STEEL COMPANY WHICH HAD INCREASED FROM RS.8,01,000/- AS ON 31 ST MARCH, 2007 TO RS.1,67,29,398/- AS ON 31 ST MARCH, 2008. IT WAS SUBMITTED THAT THE ASSESSEE WAS HAVING A REGULAR TRANSACTIONS WITH THE SAID COMPANY WHEN THE SALES ARE MADE AGAINST THE ADVANCE RECEIPT ARE REND ERED TO TAX BY THE ASSESSEE ON DEALING WITH M/S. DELHI IRON AND STEEL CO. AS A TRA DER. HOWEVER, DECLINING THE CONTENTION OF THE ASSESSEE, THE AO HELD THAT MERE P AYMENTS BY CHEQUE DOES NOT INDICATE THAT THE ADVANCE WAS UNDER THE GUISE OF SA LES BROUGHT TO TAX THE SAME. HE ALSO CONSIDERED THE PAYMENTS TO M/S. J.C.BOSE AND SONS O N ACCOUNT OF CONTAINER CHARGES AMOUNTING TO RS.14,24,621/- NOT SUBJECTED TO TDS U/ S 194C OF THE ACT DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT. AGGRIEVED THE ASSESS EE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO CONSIDERED THE CASE OF THE ASSESSEE ON BOTH THE ACCOUNTS AFTER DELIBERATING THE CASE WITH RESPECT T O VALIDITY OF RE-ASSESSMENT U/S 147 OF THE ACT AGITATING THE MERIT OF ADDITIONS/DISALLOWAN CES IN THE CASE OF THE ASSESEE BY DELETING THE SAME. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND THE RESP ECTIVE PARTIES HERETO HAVE SUPPORTED THE ORDER OF THE LD. CIT(A) AS WELL AS AO ON THEIR PART. THE LD. CIT(A) ON THE ISSUE OF ADVANCE RECEIPT FROM M/S. DELHI IRON A ND STEEL CO. FOUND OUT THAT THE ASSESSEE WAS DEALING WITH THE SAID COMPANY BY MAKIN G SALES TO WHICH THE LEDGER COPY HAS BEEN FURNISHED INDICATING THAT THE ADVANCE HAVE BEEN RECEIVED BY WAY OF CHEQUE AND SALES HAVE BEEN MADE IN THE IMPUGNED ASSESSMENT YEAR WERE ACCOUNTED FOR AS THE DIFFERENCE AMOUNT AS ON 31 ST MARCH, 2008 AMOUNTING TO RS.1,93,09,500/- WAS TO B E CONSIDERED AGAINST THE SALE IN THE SUBSEQUENT YEAR. THEREFORE, IT WAS NOT THE CASE OF THE AO TO HOLD THE TRANSACTIONS TAXABLE U/S 68 OF THE A CT, IN SO FAR AS M/S. DELHI IRON AND STEEL CO. WAS A DEBTOR WHO HAD PAID ADVANCE IN ACC ORDANCE WITH THE TERMS OF ITA NO.1645/KOL/2012& C.O.150/KOL/2012 3 BUSINESS WHEN THE PURCHASES WERE MADE BY IT FROM TH E ASSESSEE. HAVING ESTABLISHED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF T HE THIRD PARTY THE LD. CIT(A) HELD THAT THE PROVISION OF SECTION 68 OF THE ACT WERE NO T APPLICABLE IN THE CASE OF THE ASSESSEE. ON THE ISSUE OF DISALLOWANCE U/S 40(A)(IA ) OF THE ACT THE LD. CIT(A)OBSERVED THAT THE AMOUNT HAD ALREADY BEEN PAID AND NOTHING W AS DISTINGUISHED AND IN VIEW OF THE SPECIAL BENCH DECISION BY ITAT IN THE CASE OF M ERLYN SHIPPING& TRANSPROTERS IN ITA NO.477/VIZAG/2008 HELD THAT THE SAME CANNOT BE CONSIDERED FOR RE-ASSESSMENT U/S 147/148 OF THE ACT IN SO FAR AS, HE CATEGORICAL LY OBSERVED THAT THESE TWO ADDITIONS OR DISALLOWANCES WERE NOT THE SUBJECT MATTER FOR RE ASONS RECORDED U/S 148(2) OF THE ACT. HE ALSO PLACED RELIANCE ON THE DECISION OF BOM BAY HIGH COURT IN THE CASE OF JET AIRWAYS LTD. REPORTED IN 331 ITR 236 (BOM) AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. VS C IT 336 ITR 136 (DELHI) IN COMPLIANCE TO DELETION OF THE SAID DECISION. IT HAS BEEN SUBMITTED THAT THE SPECIAL BENCH DECISION VIZ. MERILYN SHIPPING & TRANSPORTERS HAS BEEN CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT WHICH DECISION IS TO BE REPORTED. IN VIEW THEREOF WE RESTORE THIS ISSUE TO THE FILE OF THE LD. AO FOR RE CONSIDERATION AND TO GIVE EFFECT AS PER THEIR DIRECTION. THIS GROUND IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 4. AS MENTIONED ABOVE, THE LD. DR HAS SUPPORTED THE ORDER OF THE AO AND THE LD. COUNSEL FOR THE ASSESSEE RESPONDENT HAS SUPPORTED T HE ORDER OF THE LD. CIT(A). THE LD. CIT(A)S ORDER SUFFERS FROM NO INFIRMITY ON THE FIR ST ISSUE. THE CROSS OBJECTION BY THE ASSESSEE IS NOT PRESSED IS DISMISSED AS WITHDRAWN. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTL Y ALLOWED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 19.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (7 7 7 7) )) ) DATE: 19.04.2013. R.G.(.P.S.) ITA NO.1645/KOL/2012& C.O.150/KOL/2012 4 9 4 /$$2 :2);- COPY OF THE ORDER FORWARDED TO: 1. M/S. SHREERAJ METALLOYS PVT. LTD., 48-D, MUKTARAM B ABU STREET, KOLKATA-700007. 2 I.T.O., WARD-3(2), KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 02 /$/ TRUE COPY, 9'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES