M/s. Sampat Kumar Bang, Rajahmundry V. THE ACIT,CIRCLE - 1, Rajahmundry

CO 80/VIZ/2013

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3508 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 3 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI D J P ANAND
• Keywords: Additional evidence

Judgement Text

ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.166/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) ACIT, CIRCLE - 1, RAJAHMUNDRY M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY [PAN NO. AAIFS1217M ] ( ' / APPELLANT) ( ()' / RESPONDENT) C.O. NO.80/VIZAG/2013 (ARISING OUT OF I.T.A.NO.166/VIZAG/2013) ( / ASSESSMENT YEAR: 2009-10) M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY ACIT, CIRCLE - 1, RAJAHMUNDRY ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI SHRI D.J.P. ANAND, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 24.01.2018 / DATE OF PRONOUNCEMENT : 25.01.2018 ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 2 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11 {CIT(A)}, M UMBAI, CAMP AT VISAKHAPATNAM VIDE ITA NOS.518/11-12/ACIT,C-1/RJY/1 2-13 DATED 8.1.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. GROUND NOS.1, 3 & 5 ARE GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 3. GROUND NO.2 IS RELATED TO RULE 46A OF THE INCOME TAX RULES WITH REGARD TO ADDITIONAL EVIDENCE. DURING THE APPEAL H EARING, THE LD. D.R. DID NOT ESTABLISH THAT THE CIT(A) HAS CONSIDERED TH E FRESH EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE A.O. THE LD. A.R ., ON THE OTHER HAND, SUBMITTED THAT WITH REGARD TO THE ADDITION OF ` 53,39,842/-, THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT, AND AFTER CONSIDERING THE REMAND REPORT, THE LD. CIT(A) HAS PASSED THE APPEAL ORDER, HENCE, ARGUED THAT THERE IS NO CASE OF VIOLATION OF RULE 4 6AOF IT RULES, HENCE REQUESTED TO DISMISS THE GROUND. 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. AS PER THE RECORD, THERE IS NO CASE OF VIOLATION OF RULE 4 6A AND THE CIT(A) HAS ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 3 CALLED FOR THE REMAND REPORT AND AFTER CONSIDERING THE REMAND REPORT, THE LD. CIT(A) HAS PASSED THE ORDER. THEREFORE, TH E GROUND RAISED BY THE A.O. IS INFRUCTUOUS AND ACCORDINGLY DISMISSED. 5. GROUND NO.4 IS RELATED TO THE ADDITION OF ` 48,77,011/- IN RESPECT OF PAYMENTS MADE TO PERSONS SPECIFIED IN SECTION 40 A(2)(B) OF THE ACT. THE LD. D.R. DURING THE APPEAL HEARING HAS SUBMITTE D THAT GROUND NO.4 IS RELATED TO THE ADDITION OF ` 53,39,842/- PERTAINING TO COMMISSION AND BROKERAGE. THE LD. D.R. SUBMITTED THAT THE A.O. HA S MADE THE ADDITION OF ` 53,39,942/- ON ACCOUNT OF DIFFERENCE IN COMMISSION AND BROKERAGE AS PER THE TDS CERTIFICATE AND ADMITTED IN P&L ACCO UNT. THESE ARE PAYMENTS IN RESPECT OF THE PERSON SPECIFIED IN SECT ION 40A(2)(B) OF THE ACT BUT NEITHER THE CIT(A) NOR THE ASSESSING OFFICE R HAS EXAMINED THE GENUINENESS OF PAYMENTS AS WELL AS THE PAYMENTS SPE CIFIED U/S 40A(2)(B) OF THE ACT. THE A.O. EVEN IN REMAND REPO RT HAS NOT EXAMINED THE GENUINENESS OF PAYMENTS AND PAYMENTS MADE IN RE SPECT OF SPECIFIED PERSONS U/S 40A(2)(B) OF THE ACT, HENCE, REQUESTED TO SET ASIDE THE MATTER TO THE FILE OF THE A.O. FOR FRESH CONSIDERAT ION. 6. ON THE OTHER HAND, THE LD. A.R. ARGUED THAT THE CASE OF THE A.O. IS NOT THE PAYMENTS MADE TO THE SPECIFIED PERSONS U/S 40A(2)(B) OF THE ACT. THE CASE OF THE A.O. WAS NOT ACCOUNTING THE R ECEIPTS AS PER THE TDS CERTIFICATES. THE ASSESSEE HAS SUBMITTED ALL T HE EVIDENCES BEFORE ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 4 THE CIT(A) AND FILED RECONCILIATION STATEMENT WHICH WAS SCRUTINIZED AND VERIFIED BY THE A.O. AND SATISFIED WITH REGARD TO T HE GENUINENESS AS WELL AS THE CORRECTNESS OF THE EXPENDITURE AND SUBMITTED THE REMAND REPORT. AFTER VERIFYING THE ENTIRE MATERIAL, THE A.O. HAS S UBMITTED THE REMAND REPORT ACCEPTING THE INCOME ADMITTED BY THE ASSESSE E IS IN ORDER. HENCE ARGUED THAT THERE IS NO CASE FOR SETTING ASID E THE ISSUE TO THE FILE OF A.O. AND REQUESTED TO UPHOLD THE ORDER OF THE CI T(A). 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. ON VERIFICATION OF THE ASSESSMENT ORDER, WE FIND THAT THE A.O. HAS NOT MADE OUT ANY CASE FOR ADDITION U/S 40A(2)(B) OF THE ACT WITH REGARD TO THE PAYMENTS MADE TO SPECIFIED PERSONS. FOR READY REF ERENCE, WE EXTRACT THE RELEVANT PARA OF THE ASSESSMENT ORDER, WHICH RE ADS AS UNDER: ON VERIFICATION OF TDS CERTIFICATES ENCLOSED TO TH E RETURN OF INCOME, IT IS FOUND THAT THE ASSESSEE IS RECEIVED RS.54,72,747/- AS COMMISSION AND BROKERAGE ON WHICH TAX WAS DEDUCTED AT SOURCE AND C REDIT ALLOWED. VERIFICATION OF THE P&L ACCOUNT, AN AMOUNT OF RS.1, 32,885/- WAS ONLY OFFERED AS INCOME BY CREDITING THE P&L ACCOUNT; THU S LEAVING A DIFFERENCE OF RS.53,39,842/-. HENCE, THE SAME IS ADDED BACK T O THE INCOME RETURNED. 8. THEREFORE, GROUND RAISED BY THE REVENUE IS INFRU CTUOUS ACCORDINGLY DISMISSED. 9. THE CIT(A) HAS REFERRED THE ENTIRE ISSUE ALONG WITH THE EVIDENCES AND RECONCILIATION/STATEMENT FILED BY THE ASSESSEE TO THE A.O. FOR ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 5 SUBMISSION OF REMAND REPORT. THE A.O. HAS VERIFIED THE EVIDENCES AND THE RECONCILIATION FILED BY THE ASSESSEE AND SUBMIT TED THE REPORT ACCEPTING THE CORRECTNESS. THE LD. CIT(A) RELYING THE REMAND REPORT OF THE A.O. HAS DELETED THE ADDITION. FOR READY REFER ENCE, WE EXTRACT THE RELEVANT PARAGRAPHS OF THE ORDER OF THE CIT(A), WHI CH READS AS UNDER: 5. GROUND NO.1. ADDITION ON ACCOUNT OF COMMISSION AND BROKERAGE RS.53,39,842/- . THE FIRST GROUND OF THE APPEAL IS AGAINST THE ADDIT ION OF RS.53,39,842/- ON ACOUNT OF COMMISSION AND BROKERA GE FROM AP PAPER MILLS DUE TO NON RECONCILIATION. THE AO DURIN G THE ASSESSMENT PROCEEDINGS NOTED THAT THE COMMISSION RECEIVED FROM AP )PAPER MILLS IS RS.54,72,727/- AS PER TDS CERTIFICATES (WRONGLY TAKEN AS RS.54,72,747/- BY AO) WHEREAS IN THE P&L ACCOUNT ON LY A SUM OF RS.1,32,885/- HAS BEEN SHOWN AS COMMISSION INCOME. DURING THE COURSE OF HEARING THE ASSESSEE FILED RECONCILIATION STATEMENT OF ALL RECEIPTS AS PER TDS CERTIFICATES AND INCOME CREDITE D IN ITS BOOKS OF ACCOUNTS. BY WAY OF THIS RECONCILIATION, THE LD. AR HAS EXPLAINED THAT THE COMMISSION AND BROKERAGE INCOME RECEIVED AS PER THE TDS CERTIFICATES RS.54,72,727/- IS CREDITED IN THE BOOK S IN THREE DIFFERENT HEADS (VIZ., COMMISSION RS.1,72,793/-, DISCOUNT RS. 52,78,576/- AND SERVICE TAX RS.21,358/-. THESE ARE THE GROSS RECEIP TS WHICH HAVE BEEN CREDITED IN THE BOOKS OF ACCOUNT IN THE RESPECTIVE LEDGERS AND EXPENSES HAVE ALSO BEEN DEBITED. NET INCOME UNDER THE HEAD DISCOUNT AND COMMISSION RS.14,86,434/- AND RS.1,32, 885/- RESPECTIVELY TOTALING TO RS.16,19,319/- HAD BEEN CR EDITED TO THE P&L ACCOUNT. SERVICE TAX IS AN EXPENSE AND TREATED ACCO RDINGLY. THIS MATTER WAS SENT FOR REMAND TO THE AO FOR VERIFICATI ON. 5.1 IN THE REMAND REPORT DTD.22.02.2012, THE AO HAS MENTIONED THAT A SUM OF RS.1,32,885/- IS DEBITED IN THE COMMISSION A CCOUNT ON 31.03.2009 AS TRANSFER AND THE LD. AR EXPLAINED THAT THE IDENT ICAL AMOUNT HAS BEEN CREDITED IN THE P&L ACCOUNT BY WAY OF TRANSFER AS C OMMISSION. SO THERE IS NO ANOMALY REGARDING THE COMMISSION AMOUNT. 5.2 REGARDING THE DISCOUNT, THE LD. AR FURNISHED A COPY OF LEDGER ACCOUNT OF DISCOUNT WHEREIN TOTAL DISCOUNT CREDITED IS RS.52,78,576/- WHEREAS DISCOUNT INCOME TRANSFERRED TO P&L ACCOUNT BY WAY OF JOURNAL ENTRY DTD.31.03.2009 IS RS.14,65,486/-. THE AO IN H IS REMAND REPORT HAS MENTIONED THAT DISCOUNT PAID/ALLOWED TO VARIOUS CUSTOMERS IS RS.14,65,486/-. THE MATTER WAS FURTHER SENT FOR REM AND VIDE LETTER DTD.23.08.2012 AND THE AO WAS REQUESTED TO EXAMINE THE COPY OF THE ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 6 LEDGER ACCOUNTS OF COMMISSION, DISCOUNT, VOLUME DIS COUNT AND SERVICE TAX AND IN HIS REMAND REPORT DTD.19.11.2012 AO HAS STATED AS UNDER: (VI) REGARDING COMMISSION ASSESSEE, WHO HAD ALREAD Y SUBMITTED ACCOUNT COPY AND CONFIRMATION LETTER FROM PARTY THAT COMMISSION WAS PAID, TOLD TH AT THERE IS NOTHING LEFT UNACCOUNTED TO BE TAKEN ON ACCRUAL BASIS FOR F. Y 2008-09. AO VERIFIE D THE AMOUNT OF COMMISSION, CONFIRMATION LETTER AND TDS MADE ON THAT AND FOUND IN ORDER. (VI,) REGARDING DISCOUNT, FOUR PARTIES ARE THERE, AND NOTHING IS LEFT UNACCOUNTED TO BE TAKEN ON ACCRUAL BASIS FOR F. Y. 2008-09. AO VERIFIED THE AM OUNT OF DISCOUNT, CONFIRMATION LETTER AND TDS MADE ON THAT AND FOUND IN ORDER. (VIII) REGARDING VOLUME DISCOUNT, THERE ARE FOUR PARTIES A ND AR/ASSESSEE CONFIRMED THAT THERE IS NOTHING LEFT UNACCOUNTED TO BE TAKEN ON ACCRUAL BAS IS FOR F. V. 2008-09. A0 HAS VERIFIED THE VOLUME DISCOUNT, INDIVIDUAL PARTY LEDGER ACCOUNT AN D CONFIRMATION LETTER. A0 HAS FOUND THEM IN ORDER. (IX) REGARDING SERVICE TAX ACCOUNT, ASSESSEE PAID FOUR AM OUNT RS. 6,979/-, RS. 3,854/-, RS.5,400/ - 1 RS.2,002/- IN F V.2008-09, AND BALANCE AMOUNT OF R S.2,156/- PAID ON 04.07.2009. NOTHING IS LEFT UNACCOUNTED IN ACCOUNTI NG YEAR 2008-09. 5.3 IN THE ABOVE PARAGRAPHS, AO HAS CATEGORICALLY RE CORDED THE FINDING THAT COMMISSION, DISCOUNT, VOLUME DISCOUNT, ARE FOU ND IN ORDER WHEREAS THE SERVICE TAX IS PAID FOR THE YEAR TILL 04.07.200 9 AND NOTHING IS LEFT UNACCOUNTED IN THE ACCOUNTING YEAR 2008-09. THE LD. AR HAS FURTHER FILED WRITTEN SUBMISSION ON 07.01.2013 REGARDING THE ABOV E ADDITIONS AS UNDER: 5.4 CONSIDERING THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE LD. AR AND THE REPORTS OF THE AO IN REMAND, IT IS HEREBY H ELD THAT THE COMMISSION INCOME AS PER TDS CERTIFICATES HAS BEEN FULLY RECON CILED BY THE APPELLANT BEFORE THE AO AND HENCE THE ADDITION MADE ON THIS C OUNT IS DIRECTED TO BE DELETED. 10. SINCE THE CIT(A) HAS DELETED THE ADDITION RELYI NG ON THE REMAND REPORT AND AFTER RECONCILING THE ENTIRE DIFFERENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AN D THE SAME IS UPHELD. 11. IN THE RESULT, THE APPEAL FILED BY REVENUE IS D ISMISSED. ITA NO.166/VIZAG/2013 & CO NO.80/VIZAG/2013 M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY 7 CROSS OBJECTION NO.80/VIZAG/2013: (ITA 166/VIZAG/20 13) 12. THE C.O. IS SUPPORTIVE OF LD. CIT(A) ORDER. AL L THE GROUNDS OF CROSS OBJECTIONS ARE ADJUDICATED IN REVENUES APPEA L, HENCE, NO SEPARATE ADJUDICATION IS CONSIDERED NECESSARY AND THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 25 TH JAN18. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 25.01.2018 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-1, RAJAHMUNDRY 2. / THE RESPONDENT M/S. SAMPAT KUMAR BANG, 9-25-63 , GUNDUVARI STREET, RAJAHMUNDRY 3. + / THE CIT, RAJAHMUNDRY 4. + ( ) / THE CIT (A)-11, MUMBAI, CAMP AT VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM