ACIT,CIR-8, Nagpur V. SHRI ROSHANLAL RAMDEO JAISWAL, Gondia

ITA 11/NAG/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9664 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: M K M AGRAWAL
• Keywords: Tangible material
• Section: 40A(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.11/NAG./2014 ( ASSESSMENT YEAR : 200910 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE8, NAGPUR APPELLANT V/S SHRI ROSHANLAL RAMDEO JAISWAL MANOHAR CHOWK, GONDIA PAN ABNPJ5222D .... RESPONDENT CROSS OBJECTION NO. 3/NAG./2014 (ARISING OUT OF ITA NO. 11/NAG./2014 ) ( ASSESSMENT YEAR : 200910 ) SHRI ROSHANLAL RAMDEO JAISWAL MANOHAR CHOWK, GONDIA PAN ABNPJ5222D CROSS OBJECTOR (ORIGINAL RESPONDENT) V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE8, NAGPUR .... RESPONDENT (ORIGINAL APPELLANT) ASSESSEE BY : SHRI M.K.M. AGRAWAL REVENUE BY : SHRI A.R. NINAWE DATE OF HEARING 28.06.2017 DATE OF ORDER 29.06 .2017 O R D E R PER AMARJIT SINGH, J.M. THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 15 TH OCTOBER 2013, 2 SHRI ROSHANLAL RAMDEO JAISWAL PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NA GPUR, FOR THE ASSESSMENT YEAR 200910. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION MA DE BY AO ON A/C OF DISALLOWANCE U/S 40A(3) BY HOLDING THAT THE RELATIONSHIP BETWEEN BSNL AND THE ASSESSEE WAS PRINCIPAL AND AGE NT? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (APPEALS) HAS ERRED IN HOLDING THAT T HE RELATIONSHIP BETWEEN BSNL AND THE ASSESSEE WAS PRINC IPAL AND AGENT AND HENCE THERE WAS NO SALE AND PURCHASE BETWEEN THE TWO? 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29 TH SEPTEMBER 2010, DECLARING TOTAL INCOME TO THE TUNE OF ` 10,66,770. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TA X ACT, 1961 (FOR SHORT THE ACT ). THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY U NDER CASS. NOTICE UNDER SECTION 143(2) DATED 20H AUGUST 2010, WAS ISSUED AND SERVED UPON THE ASSESSEE. SUBSEQUENTLY, THE NOT ICE UNDER SECTION 142(1) FO THE ACT WAS ALSO ISSUED AND SERVED UPON T HE ASSESSEE. THE ASSESSEE WAS DERIVING HIS INCOME FROM WHOLESALE TRA DING OF COUNTRY LIQUOR, PETROL PUMP (INDIAN OIL CORP.), BSNL FRANCHI SE, RETAIL LIQUOR SHOP. THE BOOKS OF ACCOUNT WERE MAINTAINED AND WERE AUDITED AS REQUIRED UNDER SECTION 44AB OF THE ACT. A COPY OF AU DIT REPORT ALONG WITH BALANCE SHEET, PROFIT & LOSS ACCOUNT AND OTHER DETAILS WERE ALSO 3 SHRI ROSHANLAL RAMDEO JAISWAL FILED. THE ASSESSMENT WAS COMPLETED AFTER MAKING VA RIOUS DISALLOWANCES AND ASSESSING THE INCOME TO THE TUNE OF ` 1,39,05,095. THE ASSESSEE WAS NOT SATISFIED, THEREFORE, THE ASSE SSEE FILED AN APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) WHO DELET ED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCE UNDER SECTION 40A(3) OF THE ACT. THEREFORE, THE REVENUE H AS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 AND 2 3. UNDER THESE ISSUES, THE REVENUE HAS RAISED THE SOLE POINT IN CONNECTION WITH THE DELETION OF THE ADDITION MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40 A(3) OF THE ACT. THE LEARNED COMMISSIONER (APPEALS) HAS HELD THE RELATIO NSHIP BETWEEN THE ASSESSEE AND BSNL AS PRINCIPAL AND AGENT , THEREFORE, HE WAS OF THE VIEW THAT THE PROVISIONS OF SECTION 40A(3) OF THE A CT WAS NOT APPLICABLE TO THE CASE OF THE ASSESSEE. BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE LEARNED COMM ISSIONER (APPEALS) ON RECORD ON THESE ISSUES. 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND WRITTEN SUBMISSION OF THE APPELLANT. THE ISSUE OF DISALLOWA NCE U/S 40A(3) IN RESPECT OF PURCHASES MADE FROM BSNL HAVE BEEN TH E SUBJECT MATTER OF APPEAL IN THE IMMEDIATELY PRECEDING YEAR IN THE CASE OF THE APPELLANT. THE APPELLANT HAS SUBMITTED A COPY O F ORDER PASSED BY THE CIT(A)-II, NAGPUR VIDE ORDER NO. CIT(A)-11/5 64/10-11 DATED 12-03-2012 WHEREIN THE DISALLOWANCE U/S 40A(3 ) ON IDENTICAL FACTS WAS DEALT BY MY PREDECESSOR. THE RE LEVANT PORTION OF THE ORDER OF CIT(A) IS REPRODUCED AS UNDER:- 4 SHRI ROSHANLAL RAMDEO JAISWAL 'HOWEVER, APPELLANT HAS CLAIMED THAT THERE IS RELAT IONSHIP OF PRINCIPAL AND AGENTS AND BETWEEN APPELLANT AND BSNL AND HENCE APPELLANT CAN GIVE CASH COLLECTED ON BEHALF OF PRIN CIPAL AND SECTION U/S.40A(3) IS NOT ATTRACTED. APPELLANT HAS PLACED R ELIANCE ON THE JUDGMENT OF KERALA HIGH COURT IN CASE OF VODAFONE E SSAR CELLULAR LTD. VS. ASSTT. CIT IN IT A NO. 1742, 1759, 1761 TO 1764, 1773 & 1780 OF 2009 DT. 17.08.2010 AND ITAT, COCHIN BENCH 127 ITD 440 (2011). I FIND THAT RELATIONSHIP OF PRINCIPAL / AGENT IS THERE AND APPELLANT IS GETTING ONLY COMMISSION OUT OF IT. HENCE, THERE IS NO SALE PURCHASE AND SECTION 40A(3) IS NOT ATTRACTE D. HENCE, ADDITION ON THIS ACCOUNT IS DELETED. 4. ON APPRAISAL OF THE ABOVE MENTIONED FINDINGS, WE OB SERVE THAT THE LEARNED COMMISSIONER (APPEALS) DELETED THE ADDI TION RAISED IN VIEW OF THE PROVISIONS UNDER SECTION 40A(3) OF THE ACT ON THE BASIS OF FINDING OF THE LEARNED COMMISSIONER (APPEALS)-II, N AGPUR, IN WHICH ON THE BASIS OF IDENTICAL FACTS THE ADDITION DELETED B Y THE SAID APPELLATE AUTHORITY RAISED IN VIEW OF SECTION 40A(3). THE ADD ITION WAS DELETED ON THE BASIS OF THE JUDGMENT PASSED IN THE CASE OF VOD AFONE ESSAR CELLULAR LTD. VS. ASSTT. CIT IN ITA NO.1742, 1759, 1761 TO 1764, 1773 & 1780 OF 2009 DATED 17 TH AUGUST 2014 AND ALSO RELIED UPON THE FINDINGS OF THE CO-ORDINATE BENCH OF THE ITAT, COCHI N BENCH, IN THE CASE OF S. RAHUMATHULLA V/S ACIT,[2010] 127 ITD 440 (COCHIN). THE HONBLE HIGH COURT OF KERALA AND THE TRIBUNAL, COCH IN BENCH, HAVE HELD THAT THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE BSNL IS PRINCIPAL AND AGENT IN NATURE, THEREFORE, THE PROVISIONS UNDER SECTION 40A(3) HAS NOT BEEN ATTRACTED AND ACCORDINGLY THE L EARNED COMMISSIONER (APPEALS) ALSO DELETED THE ADDITION MA DE BY THE 5 SHRI ROSHANLAL RAMDEO JAISWAL ASSESSING OFFICER TO THE TUNE OF ` 7,62,692. NO DISTINGUISHABLE MATERIAL HAS BEEN PRODUCED BEFORE US TO DEVIATE FROM THE FIN DINGS OF THE LEARNED COMMISSIONER (APPEALS) IN QUESTION. THE MAT TER OF CONTROVERSY HAS BEEN ADJUDICATED EARLIER IN THE ABO VE MENTIONED CASE AND THE CASE OF THE ASSESSEE HAS DULY BEEN COVERED WITH THE CASE RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE MENTIONED ABOVE. FINDING NO TANGIBLE MATERIAL OR ANY OTHER LAW CONTR ARY TO THE LAW RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE, WE AR E OF THE VIEW THAT THE LEARNED COMMISSIONER (APPEALS) HAS PASSED THE O RDER IN QUESTION JUDICIOUSLY AND CORRECTLY WHICH IS NOT REQUIRED TO BE INTERFERED WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THESE ISSUES ARE DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THUS, THE GR OUNDS RAISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS ORDERED TO BE DI SMISSED. C.O. NO.3/NAG./2014 6. THE ASSESSEE HAS FILED THE CROSS OBJECTION IN CONNE CTION WITH THE CONTROVERSY WHICH HAS BEEN RAISED BY THE REVENUE IN ITS APPEAL IN ITA NO.11/NAG./2014. SINCE THE MATTER OF CONTROVERSY HA S BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE WHILE DECIDIN G THE ISSUES NO.1 AND 2 IN REVENUES APPEAL BEING ITA NO.11/NAG./2014 , THEREFORE, THE 6 SHRI ROSHANLAL RAMDEO JAISWAL CROSS OBJECTION FILED BY THE ASSESEE IS HEREBY DISM ISSED IN VIEW OF THE ABOVE STATED TERMS. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED AND AS SESSEES CROSS OBJECTION IS HEREBY DISMISSED BEING INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 29.06.2017 SD/ - P.K. BANSAL VICE PRESIDENT SD/ - AMARJIT SINGH JUDICIAL MEMBER NAGPUR, DATED: 29.06.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, NAGPUR