Rahul Jain, Kolkata V. I.T.O Wd - 51(4),kolkata., Kolkata

ITA 110/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4513 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 09-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2013
• Court: TRIBUNAL
• Department Lawyers: SHRIP K CHAKRAVARTHY
• Keywords: Additional evidence
• Section: 142(1); 194C

Judgement Text

ITA NO. 110/KOL/2013 RAHUL JAIN1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 110/KOL/ 2013 ASSESSMENT YEAR: 2008-2009 RAHUL JAIN, ............. ..................APPELLANT HB-89, SALT LAKE CITY, SECTOR-III, KOLKATA-700 091 [PAN: ACVPJ8849F] -VS.- INCOME TAX OFFICER, .............. ........RESPONDENT WARD-51-(4), BAMBOO VILLA, 169, AJC BOSE ROAD, KOLKATA-700014 APPEARANCES BY: SHRI SUBHASH AGARWAL, ADVOCATE., FOR THE ASSESSEE SHRIP.K.CHAKRAVARTHY, ADDL.CIT, DATE OF CONCLUDING THE HEARING : 09-05- 2016 DATE OF PRONOUNCING THE ORDER : 27 -07-2016 O R D E R PER SHRI S.S. VISWANETHRA RAVI :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, KOLKA TA DATED 06.11.2012 FOR THE ASSESSMENT YEAR 2008-09 ON THE F OLLOWING GROUNDS:- 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMIN G THE ITA NO. 110/KOL/2013 RAHUL JAIN2 ADDITION OF RS.12,80,000/- MADE BY THE AO ON ACCOUN T OF ALLEGED UNDISCLOSED RECEIPT OF RENT/HIRE CHARGES. 2. FOR THAT THE LD. CIT(A) ERRED IN REJECTING THE ASSESSEES CONTENTION THAT TDS WAS DEDUCTED TWICE O N RS.12,80,000/-, ONCE AS PAYMENT OF STITCHING CHARGE S AND AGAIN AS PAYMENT OF RENT/HIRE CHARGES ON THE SAME AMOUNT. 2. THE ONLY ISSUE IN THIS APPEAL TO BE DECIDED IS A S TO WHETHER THE CIT-A JUSTIFIED IN CONFIRMING THE ADDITION OF RS.12,80,00 0/- MADE ON ACCOUNT OF UNDISCLOSED RECEIPTS OF TOWARDS MACHINE RENT/HIRE C HARGES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS, SALARY, H.P, CAPITAL GAINS AND OTHER SOURCES. THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE A.Y . 2008-09 ON 29.09.2008 DECLARING A TOTAL INCOME AT RS.10,620/-. UNDER SCRU TINY, NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED TO THE ASSESS EE. IN RESPONSE TO THE SAID NOTICES, LD. A.R. OF THE ASSESSEE APPEA RED AND SUBMITTED SUPPORTING DOCUMENTS AND EXPLAINED THE RETURN. 4. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF GARMENTS MANUFACTURING AND EMBRO IDERY WORKS ON JOB WORK. IN THE COURSE OF ASSESSMENT PROCEEDINGS T HE AO CALLED UPON ASSESSEE TO PRODUCE DETAILS OF EVIDENCES TOWAR DS EMBROIDERY AND STICHING CHARGES RECEIPTS, DETAILS OF RENT RECE IVED, BANK STATEMENTS, DETAILS OF EXPENSES CLAIMED IN THE PROF IT AND LOSS ACCOUNT. ON PERUSAL OF THE SAME THE AO NOTICED FROM THAT THE CERTIFICATE ISSUED BY PRATEEK APPARELS PVT LTD SHOW ED THE ASSESSEE HAS RECEIVED RS.1,69,65,591/- ON ACCOUNT OF CONTRAC TUAL RECEIPT AND RS. 12,80,000/- ON ACCOUNT OF RENT. THE AO OBSERVE D THAT THE ASSESSEE HAS ITA NO. 110/KOL/2013 RAHUL JAIN3 SHOWN RECEIPT OF RS.57,62,485.40 ON ACCOUNT OF EMBR OIDERY CHARGES AND RS.93,21,693.45 ON ACCOUNT OF STITCHING CHARGES FRO M PRATEEK APPARELS PVT. LTD, BUT DID NOT INCLUDE THE RECEIPT OF RS.12,80,0 00/- ON ACCOUNT OF RENT. THE ASSESSEE ALSO CLAIMED TDS ON TOTAL RECEIP T TO THE TUNE OF RS.1,82,45,591/- FROM PRATEEK APPARELS PVT.LTD. ACC ORDING TO THE AO THE ASSESSEE HAD RECEIVED TOTAL AMOUNT OF RS. 1, 82,45,591/- FROM PRATEEK APPARELS PVT. LTD ON CONTRACTUAL RECEI PT AND RENT BUT OFFERED RS.1,50,84,178.85 AS HIS INCOME, ACCORDING TO AO THE ASSESSEE WAS ASKED TO RECONCILE THE SUCH DISCREPANC Y AND THE ASSESSEE DID NOT RECONCILE THE SAME, THEREBY, THE A O TREATED RS.31,61,412/- (THE DIFFERENCE BETWEEN RS.1,82,45,5 91- RS.1,50,84,178.85) AS INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF AO, IN APPEAL BEFORE T HE CIT-A THE ASSSESSEE FILED ADDITIONAL EVIDENCE ON 15-11-2011 W HICH IS REPRODUCED HEREIN UNDER: 'WITH REFERENCE TO ABOVE PLEASE NOTE THAT DURING TH E RELEVANT A.Y 2008-09 WE HAVE MADE A TOTAL TURNOVER OF RS.1,56,69,678/- OUT OF WHICH WE HAVE MADE A SALE O F RS.1,50,84,179/- TO PRATEEK APPARELS PVT. LTD THIS SALES IS INCLUSIVE OF RS.12,80,000/-, TREATED BY THE PARTY A S MACHINE HIRE CHARGES. THEY HAVE MADE A PAYMENT OF RS.L,69,65.591/- DURING THE YEAR. ON THESE PAYMENTS THEY HAVE DEDUCTED TDS U/S. 194C ON THE ENTIRE PAYMENT WHICH IS INCLUSIVE OF PAYMENT OF RS.12,80, 000/-. HOWEVER IN ADDITION TO THAT THE PA RTY HAVE BEEN AGAIN DEDUCTED TDS ON RS. 12,80,000/- U/S.194 I AT THE TIME OF MAKING ENTRY IN THE BOOKS OF ACCOUNTS (RS.1 , 60, 000/-) ITA NO. 110/KOL/2013 RAHUL JAIN4 THUS THEY HAVE MADE A DOUBLE TAXATION ON RS.12,80,0 00/- ONCE U/S.194C AT THE TIME OF PAYMENT AND SECONDLY U /S.194I AT THE TIME OF MAKING ENTRY IN THE BOOKS OF ACCOUNT S. 6. THE CIT-A HAS SOUGHT REMAND FROM THE AO AND CONS IDERING THE SAME OBSERVED AS UNDER: I HAVE DULY CONSIDERED THE ASSESSMENT ORDER, SUBMISSION OF THE A/R ADDITIONAL EVIDENCE, REMAND R EPORT OF THE ASSESSING OFFICER AND ITS REJOINDER OF THE A PPELLANT. IN THE SUBMISSION THE APPELLANT TRIED TO RECONCILE THE RECEIPTS AND HE FILED STATEMENT WHICH IS AS UNDER: - INCOME DECLARED RS.15,084,179/- OLD BALANCE RS.14,40,874/- T.D.S DEDUCTED ONE AT THE TIME OF PAYMENT MADE (U/S. 194C) AND ONE RS.12,80,000/- AT THE TIME OF BILLING U/S.194I DEBIT NOTE OF STICHING CHARGE RS. 1,50,494/- POWER & FUEL CHARGE RS. 1,98,150/- TOTAL RECEIPTS AS PER BOOKS OF ACCOUNTS RS.1,81,5 3,697/- TOTAL CREDIT AS PER TDS CERTIFICATE RS.1,82,45,591/- ON PERUSAL OF THE ABOVE STATEMENT OF THE APPELLANT I FOUND THAT THERE IS SOME WEIGHTAGE IN THE SUBMISSION. TH E APPELLANT SHOWN OPENING BALANCE OF RS.14,40,874/- O F PAREEK APPARELS PVT. LTD. THE OPENING BALANCE OF RS.14,40,874/- IS ALREADY OFFERED FOR TAXATION IN L AST YEAR BECAUSE THE APPELLANT IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING IF THIS AMOUNT INCLUDED IN THIS YEAR THUS THIS IS DOUBLE TAXATION OF THE SAME INCOME. THE AO DID NOT COMMENT ANY SINGLE WORD ON THIS ISSUE IN THE REMAN D REPORT. SIMILARLY DEBIT NOTES OF STICHING CHARGES O F RS.1,50,494/- AND POWER AND FUEL CHARGES OF RS.1,98,150/-, THE AO DID NOT CONSIDER THESE DEBIT NOTES IN THE ASSESSMENT ORDER AS WELL AS IN HIS REMAND REPOR T. THE AO IS SILENT ON THIS ISSUE IN HIS REMAND REPORT. ON GOING THROUGH THE RECORD I FOUND THAT RS.14,40,874/- IS RELATED TO THE LAST YEAR RECEIPTS AND DEBIT NOTES ON STICHI NG ITA NO. 110/KOL/2013 RAHUL JAIN5 CHARGES OF RS.1,50,494/- AND RS.1,98,150/- OF POWE R AND FUEL SHOULD BE DEDUCTED FROM THE RECEIPTS. HENCE, T HE ACTION OF THE ASSESSING OFFICER IS NOT AS PER LAW T O CONSIDER THE ABOVE THREE ITEMS IN THE RECEIPT OF TH E APPELLANT FOR THIS YEAR. THE THIRD ISSUE OF THE RECONCILIATION IS RS.12,80,000/- THAT THE TDS DEDUCTED TWICE OF THE S AME AMOUNT. THIS CONTENTION OF THE APPELLANT IS NOT ACC EPTABLE BECAUSE THE DEDUCTOR DEDUCTED TDS U/S. 194I OF RS.12,80,000/- AS RENT/HIRE CHARGES AND TDS DEDUCTE D U/S. 194C ON RS.12,80,000/- AS STICHING CHARGES. THESE A RE TWO SEPARATE RECEIPT HEAD OF THE APPELLANT. HE ALSO CLA IMED THE TDS ON BOTH THE RECEIPTS. HIS PLEA IS THAT HE D ID NOT RECEIVED THE AMOUNT FROM THE DEDUCTOR IS NOT TENABL E AND WITHOUT ANY BASIS. THE APPELLANT DID NOT BRING THIS FACT IN THE NOTICE OF THE DEPARTMENT BEFORE ASSESSMENT PROCEEDINGS CONSIDERING THE ABOVE FINDING AND FACTS OF THE CA SE, I AM OF THE VIEW THAT THE ADDITION MADE BY THE AO O F RS. 12,80,000/- AS RECEIPT NOT SHOWN AS RENT/HIRE CHARG ES ARE AS PER LAW AND I CONFIRM THE AMOUNT OF RS.12,80,00 0/- AS UNDISCLOSED RECEIPT OF RENT/HIRE CHARGES. THE BALAN CE AMOUNT OF RS.12,89,518/-, WHICH INCLUDES THE OPENIN G BALANCE OF THE PAREEK APPARELLS PVT. LTD OF RS.14,4 0,874/- AND DEBIT NOTES OF STICJHING CHARGES OF RS.1,50,494 /- AND RS.1,98,150/- AS POWER AND FUEL CHARGES. I DO NOT A GREE WITH THE ACTION OF THE AO. HENCE, I DELETE THE ADDI TION OF RS.17,89,518/-. THIS GROUND IS PARTLY ALLOWED. 7. THE ASSESSE CHALLENGING THE ORDER OF CIT-A FILED ADDITIONAL EVIDENCE BEFORE US WHICH IS REPRODUCED HEREIN BELOW : 3. THE ADDITIONAL EVIDENCE SUBMITTED HEREWITH (MARKED AS ANNEXURE: A) IS A CLARIFICATORY LETTER FROM M/S. PRATEEK APPARELS (P) LTD CLARIFYING THE VALUE OF SERVICES RECEIVED FROM THE APPELLANT ASSESSEE AND THE AMOUNT OF TDS DEDUCTED BY THE SAID PARTY. ITA NO. 110/KOL/2013 RAHUL JAIN6 8. WE HAVE HEARD BOTH PARTIES AND ADMIT THE ADDITIO NAL EVIDENCE. THE CONTENTION OF THE ASSESSE IS THAT THE ADDITION INVOLVING OF RS.12,80,000/- WAS DEDUCTED TWICE U/SEC 194I AND 1 94C OF THE ACT BY THE PRATEEK APPARELS PVT LTD WHILE MAKING PAYMEN TS FOR RENT/HIRE CHARGES FOR MACHINES AND STITCHING CHARGE S RESPECTIVELY. WE FIND, THAT IN THE LETTER ISSUED BY THE SAID PRAT EEK APPARELS PVT LTD STATING THAT THEY WRONGLY ENTERED UNDER THE HEA D MACHINERY HIRE CHARGES AT THE TIME OF ENTRY IN THE BOOKS OF ACCOUN T INSTEAD OF EMBROIDERY AND STITCHING CHARGES AND DEDUCTED TDS U /S 194I AND 194C OF THE ACT. WE ARE CONSCIOUS OF THE FACT THAT THE SAID LETTER WAS UNDATED AS RIGHTLY POINTED OUT BY THE LD.DR, BU T, IN THE CIRCUMSTANCES STATED IN THE PETITION AND AS WELL AS IN THE SAID UNDATED LETTER PRATEEK APPARELS PVT LTD, WE REMAND THE CASE TO THE FILE OF AO FOR VERIFICATION OF SAID DETAILS FROM TH E RECORDS OF PRATEEK APPARELS PVT LTD BY AFFORDING AN OPPORTUNIT Y OF BEING HEARD AND THE ASSESSE SHALL HAVE THE LIBERTY TO FILE EVID ENCE BEFORE THE AO, IF ANY, AND SHALL NOT SEEK ANY ADJOURNMENTS, AC CORDINGLY, THE GROUNDS RAISED BY THE ASSESSE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON.27-07-2016. SD/- SD/- P.M.JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 27-07/2016 ITA NO. 110/KOL/2013 RAHUL JAIN7 COPY OF THE ORDER FORWARDED TO: 1) THE APPELLANT: 2) THE RESPONDENT: 3) CIT 4) CIT(A) 5) DR,ITAT,KOLKATA TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT, KOLKATA