M/s The Raiganj Co-Operative Marketing Society Ltd., Uttar Dinajpur V. ACIT, MALDA RANGE, MALDA, Malda

ITA 11/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4705 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2016
• Court: TRIBUNAL
• Assessee Lawyers: S M SURANA
• Section: 201(1)

Judgement Text

I.T.A. NO. 11/KOL./2016 ASSESSMENT YEAR: 2011-2012 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 11/KOL/ 2016 ASSESSMENT YEAR: 2011-2012 M/S. THE RAIGANJ COOPERATIVE MARKETING SOCIETY LIMI TED,............APPELLANT LINE BAZAR, P.O. & P.S. RAIGANJ, UTTAR DINAJPUR-733 134 [PAN : AAAAR 1859 D] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. .........................RESPONDENT MALDA RANGE, MALDA, NETAJI COMMERCIAL MARKET, 1 ST FLOOR, MALDA-732 101 APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE SHRI PRABAL CHOWDHURY, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JUNE 06, 2016 DATE OF PRONOUNCING THE ORDER : AUGUST 05, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGUR I DATED 21.09.2015. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 35 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPAL BEFORE THE TRI BUNAL. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION SEEKING CONDONATI ON OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN, I AM SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TRIBUNAL. THE SAID DELAY IS, THEREFORE, CONDONED AND THIS APPEAL OF THE ASSESSEE IS BEING DISPOSED O F ON MERIT. 3. GROUNDS NO. 1, 4 & 5 RAISED BY THE ASSESSEE IN T HIS APPEAL ARE GENERAL, WHICH DO NOT CALL FOR ANY SPECIFIC ADJUDIC ATION. I.T.A. NO. 11/KOL./2016 ASSESSMENT YEAR: 2011-2012 PAGE 2 OF 5 4. THE ISSUE RAISED IN GROUND NO. 2 RELATES TO THE DISALLOWANCE OF RS.2,50,000/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF PROFESSIONAL CHARGES. 5. THE ASSESSEE IN THE PRESENT CASE IS A COOPERATIV E SOCIETY, WHICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 31.03.2012 DECLARING TOTAL INCOME OF RS.2,90,580/-. IN THE PRO FIT & LOSS ACCOUNT FILED ALONG WITH THE SAID RETURN, A SUM OF RS.2,50,000/- WAS DEBITED BY THE ASSESSEE ON ACCOUNT OF PROFESSIONAL FEES PAID TOWAR DS APPEAL PROCEEDINGS CHARGES, SCRUTINY PROCEEDING CHARGES AND RETURN SUB MISSION CHARGES. IN ORDER TO VERIFY THE GENUINENESS OF THE SAID EXPENDI TURE AND EXAMINE THE APPLICABILITY OF TDS PROVISIONS, THE ASSESSEE WAS C ALLED UPON BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF PROFESS IONAL FEES PAID ALONG WITH SUPPORTIVE DOCUMENTS. SINCE THE ASSESSEE COULD NOT PRODUCE THE DETAILS OR DOCUMENTS AS REQUIRED BY HIM, THE ASSESS ING OFFICER HELD THAT THE GENUINENESS OF EXPENDITURE IN QUESTION INCURRED TOWARDS PROFESSIONAL FEES WAS NOT ESTABLISHED BY THE ASSESSEE AND A DISA LLOWANCE OF RS.2,50,000/- WAS MADE BY HIM ON THIS COUNT. 6. THE DISALLOWANCE OF RS.2,50,000/- MADE BY THE AS SESSING OFFICER ON ACCOUNT OF PROFESSIONAL FEES WAS DISPUTED BY THE AS SESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURS E OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), IT WAS SUB MITTED BY THE ASSESSEE THAT THE AMOUNT OF RS.2,50,000/- IN QUESTION WAS PA ID TO THE PANEL OF ADVOCATES/TAX CONSULTANTS THROUGH SHRI SANJAY KUMAR SHARMA OF MALDA. THE DETAILS OF SUCH ADVOCATES AND TAX CONSULTANTS ( 9 IN NUMBERS) WERE ALSO FURNISHED BY THE ASSESSEE ALONG WITH THE CONFI RMATIONS OF 8 SUCH ADVOCATES/TAX CONSULTANTS. IT WAS CONTENDED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) THAT SINCE NONE OF THE PAYMENTS MA DE TO ANY PERSON TOWARDS PROFESSIONAL FEES WAS EXCEEDING RS.30,000/- , THERE WAS NO REQUIREMENT OF DEDUCTION OF TAX AT SOURCE AND THE D ISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE WAS NOT JUSTIFI ED. THIS CONTENTION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. CI T(APPEALS). ACCORDING TO HIM, THE AMOUNT IN QUESTION WAS ENTIRELY PAID BY THE ASSESSEE TO A I.T.A. NO. 11/KOL./2016 ASSESSMENT YEAR: 2011-2012 PAGE 3 OF 5 SINGLE PERSON, NAMELY SHRI SANJAY KUMAR SHARMA THRO UGH ACCOUNT PAYEE CHEQUE AND, THEREFORE, THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE FROM THE SAID AMOUNT AS PER THE PROVISION OF SECTIO N 194J. SINCE THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DO SO, H E CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF PROFESSIONAL FEES BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA ). 7. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE AT THE TIME OF HEARING HAS RAISED A LIMITED CONTENTION THAT ALL THE RECIPIENTS OF THE LEGAL/PROFESSIONAL FEES IN QUESTION HAVING O FFERED THE SAID AMOUNTS TO TAX IN THEIR RESPECTIVE RETURNS OF INCOME AND PA ID TAX THEREON, THE ASSESSEE CANNOT BE HELD TO BE IN DEFAULT FOR ITS FA ILURE TO DEDUCT TAX AT SOURCE AND THE QUESTION OF DISALLOWANCE UNDER SECTI ON 40(A)(IA) WOULD NOT ARISE AS PER THE 1 ST PROVISO TO SECTION 201(1) READ WITH 2 ND PROVISO TO SECTION 40(A)(IA). AS HELD IN THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE SAID PROVISIO NS ARE APPLICABLE TO THE YEAR UNDER CONSIDERATION HAVING RETROSPECTIVE EFFEC T AND THE CASE OF THE ASSESSEE ON THIS ISSUE IS REQUIRED TO BE RECONSIDER ED AFTER VERIFYING THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE SAID PROV ISIONS. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE ASSESSING OFFICER FOR DECIDI NG THE SAME AFRESH IN THE LIGHT OF THE FIRST PROVISO TO SECTION 201(1A) A ND SECOND PROVISO TO SECTION 40(A)(IA) AFTER VERIFYING THE CLAIM OF THE ASSESSEE THAT THE CONCERNED RECIPIENTS HAVE ALREADY OFFERED THE AMOUN TS IN QUESTIONS IN THEIR RESPECTIVE RETURNS AND ALSO PAID TAX THEREON. GROUND NO. 2 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 8. THE ISSUE RAISED IN GROUND NO. 3 RELATES TO THE ADDITION OF RS.3,00,000/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF THE DIFFERENCE IN BALANC E IN THE ACCOUNT OF ONE PARTY, NAMELY SHRI TAPASH PAUL. I.T.A. NO. 11/KOL./2016 ASSESSMENT YEAR: 2011-2012 PAGE 4 OF 5 9. IN ORDER TO VERIFY THE SUNDRY CREDITORS SHOWN BY THE ASSESSEE, ENQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER THRO UGH HIS INSPECTOR, WHICH REVEALED THAT THE AMOUNT OF RS.3,00,000/- IN QUESTION WAS ALREADY ADJUSTED BY ONE CREDITOR NAMELY SHRI TAPASH PAUL AG AINST THE PURCHASES CLAIMED TO BE MADE FROM THE ASSESSEE IN THE MONTH O F SEPTEMBER AND THE CLOSING BALANCE WAS SHOWN AT NIL AFTER SUCH ADJUS TMENT. THE ASSESSING OFFICER, THEREFORE, HELD THE CREDIT BALANCE OF RS.3 ,00,000/- SHOWN BY THE ASSESSEE IN THE NAME OF SHRI TAPASH PAUL AS BOGUS L IABILITY AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 10. THE ADDITION OF RS.3,00,000/- MADE BY THE ASSES SING OFFICER BY TREATING THE CREDIT BALANCE IN THE NAME OF SHRI TAP ASH PAUL AS BOGUS LIABILITY WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS). IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS) THAT THE AMOUNT IN QUESTION WAS RECEIVED BY IT FROM SHRI TAPASH PAUL AS ADVANCE ON 23.09.2010 AND THE SAME WAS ADJUSTED AGA INST GOODS SOLD TO THE SAID PARTY IN THE MONTH OF JUNE, 2012. IT WAS C ONTENDED THAT THE CREDIT BALANCE APPEARING IN THE NAME OF SHRI TAPASH PAUL, THEREFORE, WAS A GENUINE LIABILITY AND THE ASSESSING OFFICER WAS N OT JUSTIFIED TO TREAT THE SAME AS A BOGUS LIABILITY MERELY ON THE BASIS OF RE SULT OF SOME ENQUIRY MADE BY THE INSPECTOR OF THE SAID PARTY, WHICH WAS NOT EVEN CONFRONTED BY THE ASSESSING OFFICER TO THE ASSESSEE. THIS STAN D OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE TH E SAME AND RELYING ON THE FINDING OF THE ENQUIRY MADE BY THE INSPECTOR WITH SHRI TAPASH PAUL, HE CONFIRMED THE ADDITION OF RS.3,00,000/- MA DE BY THE ASSESSING OFFICER ON THIS ISSUE. 11. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT OF RS.3,00,000/- IN QUEST ION WAS ADJUSTED BY THE ASSESSEE AGAINST THE SALE MADE BY IT TO SHRI TA PASH PAUL IN THE MONTH OF JUNE, 2012 AND ALTHOUGH THIS CLAIM MADE BY THE A SSESSEE FOR THE FIRST I.T.A. NO. 11/KOL./2016 ASSESSMENT YEAR: 2011-2012 PAGE 5 OF 5 TIME BEFORE THE LD. CIT(APPEALS) IN THE ABSENCE OF ANY OPPORTUNITY GIVEN BY THE ASSESSING OFFICER WAS DULY SUPPORTED BY THE DOCUMENTARY EVIDENCE IN THE FORM OF BILL AND STATEMENT OF ACCOUNT OF THE CONCERNED PARTY, NO OPPORTUNITY WAS GIVEN BY THE LD. CIT(APPEALS) TO TH E ASSESSEE TO PRODUCE THE SAME IN ORDER TO SUPPORT AND SUBSTANTIATE ITS C LAIM. HE HAS URGED THAT THIS MATTER MAY, THEREFORE, BE SENT BACK TO THE ASS ESSING OFFICER FOR GIVING SUCH OPPORTUNITY TO THE ASSESSEE. I FIND MER IT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. ACCORDINGLY, THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE T O ESTABLISH THE GENUINENESS OF THE CREDIT BALANCE APPEARING IN THE NAME OF SHRI TAPASH PAUL. GROUND NO. 3 IS ACCORDINGLY TREATED AS ALLOWE D FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 05, 20 16. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 5 TH DAY OF AUGUST, 2016 COPIES TO : (1) M/S. THE RAIGANJ COOPERATIVE MARKETING SOCIETY LI MITED, LINE BAZAR, P.O. & P.S. RAIGANJ, UTTAR DINAJPUR-733 134 (2) ASSISTANT COMMISSIONER OF INCOME TAX, MALDA RANGE, MALDA, NETAJI COMMERCIAL MARKET, 1 ST FLOOR, MALDA-732 101 (3) COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGU RI; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.