Purna Chandra Sahoo, Kolkata V. ITO, Ward-44(1), Kolkata, Kolkata

CO 50/KOL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 4130 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 10-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AKASH BANSAL
• Assessee Lawyers: S DASGUPTA
• Keywords: Retrospective amendment
• Section: 143(3); 133(6); 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1344/KOL/2016 ( [ [ / ASSESSMENT YEAR: 2007-08) ITO, WD-44(1), KOLKATA 3, GOVERNMENT PLACE (WEST), KOLKATA VS. PURNA CHANDRA SAHOO 43/A, BHUPEN BOSE AVENUE, KOLKATA 700 004. ./ ./PAN/GIR NO. : ARKPS 6458 F (APPELLANT) .. (RESPONDENT) CROSS OBJECTION NO.50/KOL/2016 ARISING OUT OF ITA NO.1344/KOL/2016 ( [ [ / ASSESSMENT YEAR: 2007-08) PURNA CHANDRA SAHOO 43/A, BHUPEN BOSE AVENUE, KOLKATA 700 004. VS. ITO, WD-44(1), KOLKATA 3, GOVERNMENT PLACE (WEST), KOLKATA ./ ./PAN/GIR NO. : ARKPS 6458 F (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI S. DASGUPTA, ADDL. CIT(DR) RESPONDENT BY : SHRI AKASH BANSAL, FCA / DATE OF HEARING : 31/05/2018 /DATE OF PRONOUNCEMENT : 13/08/2018 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE REVENUE, AND CROSS OBJECTIONS FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2007-08, IS DIRECTED AGAINST AN ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKATA IN APPEAL NO.1073/CIT(A)-13/KOL/CIR-41/44/2014-15 DATED 26.02.2016, WHICH IN TURN ARISES PURNA CHANDRA SAHOO ITA NO.1344/KOL/2016 CO. NO. 50/KOL/2016 ASSESSMENT YEAR: 2007-08 PAGE | 2 OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), DATED 27.11.2009. 2. THE GRIEVANCES RAISED BY THE REVENUEARE AS FOLLOWS: 1 THE LD. CIT(A)-13, KOLKATA ERRED IN LAW BY ALLOWING THE EXPENSES ON ACCOUNT OF HIRE CHARGES, PAID TO DIFFERENT PARTIES BY THE ASSESSEE, THOUGH TDS HAS NOT BEEN DEDUCTED ON THE SAME, AS SUCH, NOT ALLOWABLE U/S 40(A)(IA) OF THE I.T. ACT, 1961. 2. THE LD. CIT(A)-13, KOLKATA ERRED IN LAW BY DELETING THE ADDITION MADE U/S 69B OF THE I.T. ACT, 1961 NOT CONSIDERING THE INFORMATION RECEIVED IN RESPONSE TO NOTICE U/S 133(6) OF THE I.T. ACT, 1961. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE REQUESTED THE BENCH, TOSEEK PERMISSION TO WITHDRAW THE CROSS OBJECTION NO.50/KOL/2016. THE LD COUNSEL SUBMITTED THAT DUE TO SMALLNESS OF THE AMOUNT INVOLVED IN THE VARIOUS GROUNDS RAISED IN THE CROSS OBJECTIONS, THE ASSESSEE DOES NOT WANT TO PRESS THE CROSS OBJECTIONS. THE LD DR FOR THE REVENUE DOES NOT HAVE ANY OBJECTION IF THE ASSESSEE WITHDRAWS THE CROSS OBJECTIONS. HAVING HEARD BOTH THE PARTIES, THE PERMISSION IS GRANTED AND THE CROSS OBJECTION IS DISMISSED AS WITHDRAWN. 4. NOW WE SHALL TAKE GROUND NO.1 RAISED BY THE REVENUE WHICH RELATES TO EXPENSES ON ACCOUNT OF HIRE CHARGES, PAID TO DIFFERENT PARTIES BY THE ASSESSEE, THOUGH TDS HAS NOT BEEN DEDUCTED ON THE SAME, AS SUCH, NOT ALLOWABLE U/S 40(A)(IA) OF THE ACT. 5. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 05.10.2016, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2734/KOL/2013 FOR THE ASSESSMENT YEAR 2009-10 WHEREBY THE ISSUE OF TDS ON HIRE CHARGES HAS BEEN DEALT WITH.THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE PRESENT APPEAL IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH. PURNA CHANDRA SAHOO ITA NO.1344/KOL/2016 CO. NO. 50/KOL/2016 ASSESSMENT YEAR: 2007-08 PAGE | 3 6. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT HAVE MUCH TO SAY BUT HE NEVERTHELESS RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 7. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 05.10.2016 (SUPRA). IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: 7. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT THE AMENDMENT IN SEC. 201(1) OF THE ACT HAS BEEN BROUGHT BY THE FINANCE ACT , 2012 WHICH IS CURATIVE IN NATURE. THEREFORE, IT SHOULD BE EFFECTIVE FROM THE RETROSPECTIVE DATE. IN THIS CONNECTION, WE RELY ON THE ORDER OF THIS HON'BLE TRIBUNAL IN THE CASE OF SANTOSH KUMAR KEDIA VS. ITO IN ITA NO.1905/KOL/2014 DATED 04.03.2015 AND THE RELEVANT OPERATIVE PORTION IS REPRODUCED BELOW:- '... FROM THE ABOVE, JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEERLEESHOSPITAX HOSPITAL AND RESEARCH CENTRE LTD. KOLKATA (SUPRA) IT IS CLEAR THAT HON'BLE JURISDICTIONAL HIGH COURT HAS NOT CONSIDERED THAT THE SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT AS INSERTED BY THE FINANCE ACT , 2012 IS RETROSPECTIVE OR PROSPECTIVE. 9. IT WOULD THUS APPEAR THAT NO SUBMISSION WAS MADE BEFORE HON'BLE CALCUTTA HIGH COURT THAT THE SECOND PROVISO WAS CURATIVE OR RETROSPECTIVE IN OPERATION. ON THE OTHER HAND, SUBMISSION WAS THAT THE SECOND PROVISO EFFECTIVE FROM APRIL 1, 2013 WENT TO SHOW THAT THE LEGISLATURE WAS NOT IN FAVOUR OF CREATING UNDUE HARDSHIP FOR ASSESSEE AND THAT CLAUSE (IA) SHOULD NOT BE CONSTRUED AS CREATING SUCH HARDSHIP. THE SAID LIMITED SUBMISSION OF THE ASSESSEE WAS DEALT WITH BY THE HON'BLE HIGH COURT IN PARAGRAPH 21 OF ITS JUDGMENT. THE QUESTION BEFORE HON'BLE CALCUTTA HIGH COURT WAS AS TO, WHETHER CLAUSE (IA) ONLY APPLIED TO AMOUNT OUTSTANDING AT THE END OF THE YEAR AND NOT IN RESPECT OF PAYMENTS ACTUALLY MADE DURING THE PREVIOUS YEAR OR NOT? HON'BLE CALCUTTA HIGH COURT WAS PLEASED TO HOLD THAT CLAUSE (IA) WAS APPLICABLE NOT ONLY IN RESPECT TO OUTSTANDING AMOUNTS BUT ALSO AMOUNTS PAID. IN DECIDING THE SAID CONTROVERSY, THE HON'BLE CALCUTTA HIGH COURT WAS PLEASED TO REJECT THE SUBMISSION ON BEHALF OF THE ASSESSEE THAT THE OBJECT BEHIND THE INSERTION OF THE SECOND PROVISO WITH EFFECT FROM APRIL 1, 2013 SHOULD ALSO GUIDE THE INTERPRETATION OF THE PARENT CLAUSE (IA). IT WAS ARGUED BY LD. COUNSEL FOR THE ASSESSEE THAT THE OBSERVATIONS OF THE HON'BLE HIGH COURT IN PARAGRAPH 21 OF ITS JUDGMENT DEALT WITH THE LIMITED ARGUMENT MADE ON BEHALF OF THE ASSESSEE RECORDED IN PARAGRAPHS 5 AND 6 OF THE JUDGMENT AND CANNOT BE READ AS DECIDING THE QUESTION AS TO WHETHER THE SECOND PROVISO IS CURATIVE AND CLARIFICATORY OF THE LAW FROM ITS INCEPTION. THE QUESTION WHETHER THE SECOND PROVISO IS CURATIVE AND CLARIFICATORY DID NOT ARISE FOR CONSIDERATION IN CRESCENT'S CASE, WAS NOT DEBATED BEFORE THE HON'BLE CALCUTTA HIGH COURT. HON'BLE SUPREME COURT IN THE CASE OF IN STATE OF HARYANA V. RANBIR , (2006) 5 SCC 167, HAS DISCUSSED THE CONCEPT OF THE BITER DICTUM THUS: 'A DECISION, IT IS WELL SETTLED, IS AN AUTHORITY FOR WHAT IT DECIDES AND NOT WHAT CAN LOGICALLY BE DEDUCED THEREFROM. THE DISTINCTION BETWEEN A DICTA AND OBITER IS WELL KNOWN..OBITER DICTA IS MORE OR LESS PRESUMABLY UNNECESSARY TO THE DECISION. IT MAY BE AN EXPRESSION OF A VIEWPOINT OR SENTIMENTS WHICH HAS NO BINDING EFFECT.' 10. SECONDLY, I AM OF THE VIEW THAT THE INSERTION OF SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT IS CURATIVE AND IT HAS RETROSPECTIVE EFFECT W.E.F. 1ST APRIL, 2005, BEING A DATE FROM WHICH SEC. 40(A)(IA) OF THE ACT WAS INSERTED BY THE FINANCE (NO.2) ACT , 2004. IN VIEW OF THIS, I AM OF THE VIEW THAT MATTER NEEDS FRESH ADJUDICATION IN THE LIGHT OF THE FACT THAT THE AO WILL CARRY OUT NECESSARY VERIFICATION IN REGARD TO RELATED PAYMENTS HAVING BEEN TAKEN INTO ACCOUNT BY THE RECIPIENT IN COMPUTATION OF ITS INCOME AND VERIFICATION OF PAYMENT OF TAXES IN RESPECT OF SUCH INCOME AND ALSO FILING OF INCOME TAX RETURN BY THE RECIPIENT. IN TERM OF THE ABOVE, THE SECOND ASPECT ARGUED BY LD. COUNSEL IS RESTORED BACK TO THE FILE OF THE AO AND ASSESSEE WILL PROVIDE ALL THE DETAILS IN TERMS OF SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT.' PURNA CHANDRA SAHOO ITA NO.1344/KOL/2016 CO. NO. 50/KOL/2016 ASSESSMENT YEAR: 2007-08 PAGE | 4 FROM THE ABOVE PRECEDENTS, WE FIND THAT THE AMENDMENT HAS COME INTO EFFECT WITH RETROSPECTIVE DATE AND AS PER THE AMENDED PROVISION IF THE PAYEE HAS INCLUDED THE RECEIPT IN ITS BOOKS OF ACCOUNT AND HAS OFFERED FOR TAXES THEN THE DISALLOWANCE ON ACCOUNT OF NON-DEDUCTION OF TDS WILL NOT ARISE. IN THIS VIEW OF THE MATTER, WE CONCUR WITH THE VIEW OF THE LD. CIT(A) WHERE IT WAS HELD THAT THE ASSESSEE IS NOT DEFAULT FOR NON-DEDUCTION OF TDS. 8. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH IN ITA NO.2734/KOL/2013 FOR ASSESSMENT YEAR 2009-10 (SUPRA) AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS AND THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE LD. CIT(A) AND HIS ORDER ON THIS ISSUE IS HEREBY UPHELD AND THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 9. GROUND NO.2 RAISED BY THE REVENUE RELATES TO ADDITION MADE U/S 69B OF THE ACT NOT CONSIDERING THE INFORMATION RECEIVED IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT. 10. THE BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE HAD DISCLOSED SUNDRY CREDITORS AND DEBTORS OF RS. 73,28,628/- AND RS. 71,34,153/- RESPECTIVELY FOR THE YEAR ENDING 31.03.2007. THE ASSESSING OFFICER, IN ORDER TO VERIFY THESE ASSETS AND LIABILITIES, INFORMATION U/S 133(6) OF THE ACT WAS COLLECTED FROM CERTAIN PARTIES. IN CASE OF SUNDRY CREDITORS, THREE PARTIES NAMELY, SHRI GURUDEO SINGH, PRAHALAD KUMAR AND RAMESH DUBEY HAD CONFIRMED THAT THERE WAS NO OUTSTANDING DUES TO RECEIVE FROM THE ASSESSEE AS ON 31.03.2007. IN OTHER CASES NO INFORMATION WAS RECEIVED, THEREFORE, LD AO CONCLUDED THAT ASSESSEE HAD CLAIMED BOGUS LIABILITY OF RS.39,56,778/-. IN RESPECT OF SUNDRY DEBTORS, THE ASSESSEE HAD DISCLOSED BILL RECEIVABLE TO THE TUNE OF RS.71,34,153/- AGAINST ACTUAL AMOUNT OF RS.62,90,591/-. THE LD AO NOTED THAT ASSESSEE HAD CREDITED BILL RECEIVABLE IN EXCESS OF RS.8,43,562/- ( RS.71,34,153 - RS.62,90,591) AND SHOWN AS AN ASSET IN THE BALANCE SHEET. SINCE THE ASSESSEE NEITHER MADE ANY RECONCILIATION NOR OFFERED ANY EXPLANATION THEREFORE, LD AO MADE ADDITION UNDER SECTION 69B OF THE ACT TO THE TUNE OF RS.8,43,562/- PURNA CHANDRA SAHOO ITA NO.1344/KOL/2016 CO. NO. 50/KOL/2016 ASSESSMENT YEAR: 2007-08 PAGE | 5 11. ON APPEAL, LD CIT(A) DELETED THE ADDITION MADE BY LD AO. AGGRIEVED BY THE ORDER OF THE LD CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 12. THE LD. COUNSEL FOR THE ASSESSEE BEGINS BY POINTING OUT THAT THE AFORESAID CONCLUSION OF THE ASSESSING OFFICER IS BASED ON HIS INFORMATION RECEIVED U/S 133(6) OF THE ACT, FROM ONE MR. PATEL. THE DETAILS OF INFORMATION SO COLLECTED BY THE ASSESSING OFFICER U/S 133(6) OF THE ACT, FROM THE THIRD PARTY HAD NOT PROVIDED TO THE ASSESSEE AND DUE TO THIS THE ASSESSEE FAILED TO RECONCILE THE FACTS DURING SCRUTINY ASSESSMENT. THE INFORMATION SO COLLECTED BY THE A.O. WAS IN EXCEL SHEET ANDNOT THE STATEMENT OF ACCOUNT OF MR. P. C. SAHOO, IN THE BOOKS OF ACCOUNT OF PATEL - KNR (JV) AND THIS TYPE OFSTATEMENT IS MANUFACTURED ONE AND THERE IS NO RELATION WITH THE BOOKS OF ACCOUNT.AS PER EXCEL SHEET STATEMENT OF ACCOUNT AS COLLECTED BY THE A.O, THE OPENINGBALANCE AS ON 01.04.2007 IS RS.1,90,104/- WHEREAS THE STATEMENT OF ACCOUNT OF MR. P.C. SAHOO INTHE BOOKS OF ACCOUNT OF PATEL - KNR (JV) OPENING BALANCE AS ON 01.04.2007 IS RS.3,05,801/-. IF PATEL - KNR (JV) FIND ANY ERROR IN E- TDS RETURN, CERTAINLY TDS RETURN SHOULD ALSO BE REVISED BUT THE ASSESSEE NOT RECEIVED ANY REVISED FORM 16A FROM PATEL - KNR (JV) FOR THEA.Y. 2007-08. THE A.O. IGNORED THIS FACT AND WITHOUT ANY PROPER SCRUTINY AND VERIFICATION OF THEINFORMATION AS COLLECTED BY THE A.O. U/S 133(6) OF THE INCOME TAX ACT, 1961 AND WITHOUTAPPLICATION OF MIND ERRONEOUSLY ADDED RS.8,43,562/- U/S 69B. 13. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 14. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT THE ASSESSEE CLAIMED THAT INFORMATION COLLECTED U/S 133(6) WAS NOT PROVIDED TO THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. THE INFORMATION SO COLLECTED BY AO FROM PATEL- KNR PURNA CHANDRA SAHOO ITA NO.1344/KOL/2016 CO. NO. 50/KOL/2016 ASSESSMENT YEAR: 2007-08 PAGE | 6 (JV) U/S 133(6) OF THE ACT, WAS SUPPLIED AT THE TIME OF APPELLATE PROCEEDINGS TO THE AR OF THE ASSESSEE. THE INFORMATION COLLECTED IN EXCEL WORKSHEET AND THOSE WERE NOT LEDGER COPY. AS PER E-TDS RETURN (FORM 16A) AMOUNT PAID RS.2,24,202/- U/S194I AND TDS AMOUNT RS.33,630/- AND ANOTHER AMOUNT OF RS.9,08,076/- PAID U/S194C AND TDS AMOUNT RS.18,162/-.WE NOTE THAT THE A.O. RELIED OVER THESTATEMENT OF PATEL - KNR (JV) ACCOUNTS BUT IGNORED INFORMATION'S OF E- TDSRETURN AND HAVE NOT MADE ANY FURTHER ENQUIRY INREGARD TO INCORRECT AMOUNT AND WRONG CLASSIFICATION OF SECTION 194C AND 194I OF THE ACT, FOR JUSTICE TO THE ASSESSEE. WE NOTE THAT THE ASSESSEE, HAS TDS CERTIFICATE ISSUED BY THE CONCERN AND CORRESPONDING INCOME HAS BEEN SHOWN. THAT IS, IF THE ASSESSEE HAS IN HIS POSSESSION TDS CERTIFICATES AND THE CORRESPONDING INCOME AGAINST THE TDS SO DEDUCTED HAS BEEN OFFERED FOR TAXATION, THERE SHOULD NOT BE ANY ADDITION. THAT BEING SO, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A), THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A) AND HIS ORDER ON THIS ISSUE IS HEREBY UPHELD AND THE GROUNDS OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.08.2018. SD/- ( S. S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 13/08/2018 (RS, SPS) / COPY OF THE ORDER FORWARDED TO : 1. /THE APPELLANT- ITO, WD-44(1), KOLKATA 2. / THE RESPONDENT- PURNA CHANDRA SAHOO 3. ( ) / THE CIT(A)-13 4. / CIT PURNA CHANDRA SAHOO ITA NO.1344/KOL/2016 CO. NO. 50/KOL/2016 ASSESSMENT YEAR: 2007-08 PAGE | 7 TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE.