Sri Sitangshu Seth, Hooghly V. C.I.T -XX,kolkata, Kolkata

ITA 1068/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74997 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2013
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained expenditure
• Section: 69C; 143(3); 133(6); 263

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1068/KOL/2013 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2008-09 SRI SITANGSHU SETH (PROP. OF M/S. NEW VS. COMMIS SIONER OF INCOME-TAX- XX, KOL. A.S. ELECTRICS LTD.( (PAN: AWTPS2130A) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 29.01.2014 DATE OF PRONOUNCEMENT: 31.01.2014 FOR THE APPELLANT: SHRI S. M. SURANA, ADVOCATE FOR THE RESPONDENT: SHRI RAVI JAIN, CIT, DR $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER OF CIT-XX, KOLKATA IN M. NO.CIT-XX/KOL/REVISION U/S.263/28/2012-13/5611-13 D ATE 19.03.2013. ASSESSMENT WAS FRAMED BY ITO, WARD-1(4), HOOGHLY U/S. 143(3) OF TH E INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008- 09 VIDE HIS ORDER DATED 10.12.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE REVISION ORDER PASSED BY CIT-XX, KOLKATA U/S. 263 OF THE ACT. FOR THIS, ASSESSEE HA S RAISED FOLLOWING 3 GROUNDS: 1.FOR THAT THE ORDER PASSED BY THE LD. CIT-XX, KOL KATA U/S. 263 IS ARBITRARY, IRREGULAR AND BAD IN LAW AND WITHOUT JURISDICTION. 2. FOR THAT THE LD. CIT-XX, KOLKATA, IN CONSIDERATI ON OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ERRED IN INVOKING THE PROVISION ENVISAGED U/S. 263 IN THE ABSENCE OF ANY EVIDENCE THAT THE ORDER OF ASSESSMENT AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. FOR THAT THE LD. CIT-XX, KOLKATA IN CONSIDERATIO N OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IS NOT JUSTIFIED IN SETTING ASIDE THE ORDER O F ASSESSMENT IN THE ABSENCE OF CONDITIONS PRECEDENT ENVISAGED U/S. 263 OF THE INCOME TAX ACT, 1961. 3. BRIEFLY STATED FACTS ARE THAT THE ORIGINAL ASSES SMENT WAS COMPLETED U/S. 143(3) OF THE ACT BY ITO, WARD-1(4), HOOGHLY VIDE HIS ORDER DATED 10. 12.2010 FOR THE RELEVANT AY 2008-09. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE PRODUCED COMPLETE BOOKS OF 2 ITA NO.1068/K/2013 SRI SITANGSHU SETH, AY:2008-09 ACCOUNT, FURNISHED BANK STATEMENT AND OTHER DOCUMEN TS FROM TIME TO TIME. SUBSEQUENT TO COMPLETION OF ASSESSMENT, CIT-XX, KOLKATA ISSUED SH OW CAUSE NOTICE FOR REVISING THE ASSESSMENT FRAMED BY AO U/S. 263 OF THE ACT. IN TH E SHOW CAUSE NOTICE, THE CIT RAISED THE ISSUE THAT THE TRANSACTIONS OF MIRC ELECTRONICS LTD . WAS NOT VERIFIED AND HE NOTED THE RELEVANT OBSERVATIONS AS UNDER: AT THE TIME OF ASSESSMENT, THE DISCREPANCY WAS NOT RECONCILED. THIS DISCREPANCY POINTS TO AN UNEXPLAINED EXPENDITURE OF AN EQUAL AMOUNT HI T BY THE RIGOURS OF SECTION 69C OF THE ACT READ WITH THE PROVISO TO THAT SECTION. ACCORDING TO HIM, THERE IS DISCREPANCY AMOUNTING TO RS.2,41,767/- IN THE TRANSACTIONS AS DISCLOSED BY MIRC ELECTRONICS LTD. AND THE ASSESSEE IN HIS BOOKS OF ACCOUNT. SECONDLY, THE ASSESSEE HAS NOT DEDUCTED TDS ON COMMISSION. HENCE , THE EXPENDITURE ON ACCOUNT OF COMMISSION IS TO BE DISALLOWED BY INVOKING THE PROV ISIONS OF SECTION 40(A)(IA) OF THE ACT. THE CIT IN HIS NOTICE DATED 08.08.2012 HAS OBSERVED AS UNDER: IN THE FOLLOWING CASES, NO TDS WAS MADE OUT OF COM MISSION PAYMENT TO THE FOLLOWING PERSONS U/S. 194H OF THE ACT: . NAME OF THE RECIPIENTS DATE AMOUNT PAID/CR EDITED ______ OF THE COMMISSION ______ IN RUPEES__________ M/S. PAL ELECTRONICS 36010/- M/S. DOLUI ELECTRONICS 31/03/2008 40910/- M/S. MAYA ELECTRONICS 22010/- M/S. SHIBDURGA ELECTRONICS 35320/- THESE TOO PRIMA FACIE ATTRACT THE PROVISIONS OF SEC TION 40(A)(IA) OF THE ACT, BUT THIS ASPECT WAS OVERLOOKED BY THE ASSESSING OFFICER AT THE TIME OF REGULAR ASSESSMENT. AS A RESULT, NO ADDITION WAS MADE. IN VIEW OF THE ABOVE SHOW CAUSE NOTICE, THE CIT PAS SED REVISION ORDER ON BOTH THE ISSUES. AGGRIEVED AGAINST THE REVISION ORDER PASSED BY CIT- XX, KOLKATA U/S. 263 OF THE ACT, THE ASSESSEE PREFERRED THIS APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. AS REGARDS TO THE FIRST ISSUE, LD. COUNSEL FOR THE ASSESSEE BEFORE US EXPLAINED THAT THE ASSESSEE IN THE COURSE OF VERIFICATION BY THE AO, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS IN RELATION TO THE TRANSACTIONS ENTERED INTO BY AND BE TWEEN THE ASSESSEE AND MIRC ELECTRONICS LTD. SUBMITTED THE REQUISITE RECONCILIATION STATEMENT TO HIM, WHICH ARE MATERIALS ON RECORD. ACCORDING TO LD. COUNSEL, ON THE BASIS OF THE RECON CILIATION FIGURE DECLARED BY THE ASSESSEE WAS CORRECT AND AS PER LEDGER ACCOUNT OF MIRC ELECTRONI CS LTD. THE GROSS PURCHASE FIGURE AT RS.1,08,16,513/-. HOWEVER, ON ACCOUNT OF UN-CLEARE D GOODS, RETURN OF GOODS, BOUNCING OF 3 ITA NO.1068/K/2013 SRI SITANGSHU SETH, AY:2008-09 CHEQUES AND SOME WRONG ENTRIES IN THE PURCHASE FIGU RE STOOD REDUCED BY AN AMOUNT OF RS.19,48,652/-. HENCE, THE NET PURCHASE WORKED OUT BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT IS AT RS.88,67,867/- AND THE SAME WAS DEBITED BY THE A SSESSEE TO HIS P & L ACCOUNT. THE ASSESSEE BEFORE US NOW FILED A CLEAR RECONCILIATION AT PAGE 1 OF ASSESSEES PAPER BOOK WHICH IS SUPPORTED BY THE LEDGER COPY OF MIRC ELECTRONICS LTD. AND ENT IRE DETAILED ENTRIES ARE EXPLAINED. THE ASSESSEE HAS UN-CLEARED GOODS AND CHEQUE BOUNCING D ETAILS AND BY THIS HE HAS RECONCILED THE ENTIRE FIGURE. ANOTHER ASPECT OF THE REVISION ORDE R OF CIT IS THAT THIS NEEDS NO VERIFICATION. IT IS TO BE MENTIONED HERE THAT THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS ISSUED NOTICE U/S. 133(6) OF THE ACT CALLING FOR INFORMATI ON FROM MIRC ELECTRONICS LTD. AND MIRC ELECTRONICS LTD. IN TURN SUBMITTED LEDGER COPY OF A SSESSEES ACCOUNT WHEREBY COMPLETE PURCHASE, CHEQUE RETURN, GOODS RETURN ARE CLEARLY M ENTIONED. ONCE FACTUALLY THIS IS THE POSITION, THERE IS NO ISSUE OF REVISION OF THE ASSESSMENT FRA MED BY THE AO U/S. 143(3) OF THE ACT. ON MERIT ALSO THE ASSESSEE HAS A FULL PROOF CASE ON TH IS ISSUE AND THE OTHER ASPECTS OF THE REVISION ORDER OF CIT THAT THE REVENUE WANTS TO VERIFY THESE TRANSACTIONS, IT IS TO BE STATED THAT ONCE THE INFORMATION IS CALLED BY AO U/S. 133(6) OF THE ACT THERE IS NO FURTHER PURPOSE FOR VERIFICATION. HERE IT IS CLEAR THAT THE AO HAS VERIFIED THESE TRA NSACTIONS AND CAME TO RIGHT CONCLUSION. 5. THE ANOTHER ISSUE RAISED BY THE CIT IN HIS REVIS ION ORDER REGARDING COMMISSION PAID, LD. COUNSEL FOR THE ASSESSEE CATEGORICALLY STATED T HAT THESE ARE DISCOUNTS WHICH ARE ALLOWED TO VARIOUS PERSONS AND DETAILS WERE PROVIDED TO THE AO ALONG WITH NAMES AND ADDRESSES OF THE PERSONS TO WHOM THESE DISCOUNTS WERE PROVIDED. TH ESE COMPLETE DETAILS WERE AGAIN REITERATED BEFORE US VIDE PAGES 8 TO 13 OF PAPER BOOK, WHEREIN COMPLETE DETAILS OF DISCOUNT ARE PROVIDED. LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THE PO SITION THAT THE NOMENCLATURE USED BY THE ASSESSEE IN HIS STATEMENT FILED BEFORE AO AS COMMIS SION WHERE AS THIS IS ONLY DISCOUNT ON THE PURCHASES BY VARIOUS PARTIES. ACCORDING TO LD. COU NSEL, THESE DETAILS WERE FILED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ORIGINA LLY AND EVEN BEFORE CIT DURING THE COURSE OF REVISION PROCEEDINGS. HE REITERATED THAT EVEN B EFORE TRIBUNAL THE SAME IS BEING FILED. AS THE ASSESSEE HAS FILED COMPLETE DETAILS BEFORE THE AO D URING THE COURSE OF ASSESSMENT PROCEEDINGS AND CIT IN HIS REVISION ORDER HAS OBSERVED THAT THE AO NEEDS VERIFICATION OF THE SAME IS WITHOUT ANY PURPOSE. WE FIND NO DISCREPANCY IN THE ARGUMENTS OR SUBMISSIONS OF THE ASSESSEE. THE FACTUAL POSITION ALSO IS CLEAR. 4 ITA NO.1068/K/2013 SRI SITANGSHU SETH, AY:2008-09 I) HOWEVER, THE ORDER OF THE AO IS NOT A SPEAKING ORDE R BUT ALL THE DETAILS WERE AVAILABLE WITH HIM. THE ORDER OF THE AO MAY BE BRIEF AND CRYP TIC, BUT THAT BY ITSELF IS NOT SUFFICIENT REASON TO BRAND THE ASSESSMENT ORDER AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WRITING AN ORDER IN DETAIL MAY BE A LEGAL REQUIREME NT BUT THE ORDER NOT FULFILLING THIS REQUIREMENT CANNOT BE SAID TO BE ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF REVENUE. IT IS FOR THE CIT TO POINT OUT AS TO WHAT ERROR WAS COMMITTED BY THE AO IN HAVING REACHED THE CONCLUSION ACCEPTING THE RECONCILIATION STATEMENT F ILED BY THE ASSESSEE QUA THE BANK ACCOUNT OF THE ASSESSEE AND PURCHASES MADE. SECONDLY, THE COM MISSION DISCLOSED BY THE ASSESSEE IN A STATEMENT FILED BEFORE AO AND EXPLAINED THE SAME AS DISCOUNT HAS ALSO BEEN ACCEPTED. THE CIT HAVING FAILED TO POINT OUT ANY ERROR, NO ERROR CAN BE INFERRED FROM THE ORDER OF THE AO FOR THE SIMPLE REASON THAT THEY ARE BEREFT OF DETAILS. IN V IEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE REVISION ORDER PASSED BY CIT U/S. 263 OF THE ACT IS WITHOUT ANY BASIS AND DESERVES TO BE QUASHED. WE ORDER ACCORDINGLY. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.01.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31ST JANUARY, 2014 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT SHRI SITANGSHU SETH (PROP. OF M/S. NEW A. S. ELECTRICS LTD.), AT SATITALA, PO ARAMBAG, DIST. HOO GHLY, PIN 712 601. 2 ./,- / RESPONDENT CIT-XX, KOLKATA.. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .