Alok Kumar Das, Hooghly V. ITO, Ward - 1(3), Burdwan, Burdwan

ITA 1129/KOL/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5651 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A KOLKATA ( ) BEFORE . , ! SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER '#$ /AND 1 & ' , ! SHRI GEORGE MATHAN, JUDICIAL MEMBER $( / ITA NO. 1129/KOL/2011 A.Y 2008-09 R ALOK KUMAR DAS PAN: AGVPD 2230J - #' - VERSUS . I.T.O W 1(3), BURDWAN ( &* / APPELLANT ) ( +,&* / RESPONDENT ) &* .' / FOR THE APPELLANT / SHRI SOMNATH GHOSH, ADVOCATE,LD.AR +,&* .' / FOR THE RESPONDENT: / SHRI VIVEK VERMA, LD.JCIT/SR.DR /'#0 1 2 /DATE OF HEARING : 19-02-2014 34 1 2 /DATE OF PRONOUNCEMENT:21-02-2014 5 / ORDER 1 & ' , ! SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 1129/KOL/2011 IS AN APPEAL FILED BY THE AS SESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), A SANSOL IN APPEAL NO.94/CIT(A)/ASL/W-1(3)/ERST BWN/2010-11 DATED 04- 08-2011 FOR THE ASSESSMENT YEAR 2008-09. . 2. SHRI SOMNATH GHOSH, ADVOCATE, LEARNED AR REPRE SENTED ON BEHALF OF THE ASSESSEE AND SHRI VIVEK VERMA, LEARNED JCIT/SR.DR REPRESENTED ON BEHALF OF THE REVENUE. . 3. IN THE ASSESSEES APPEAL IN ITA NO. 1129/KOL/20 11 FOR THE A.Y 2008-09, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- I. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) ASANSOL FAILED TO APPRECIATE THAT NONE OF THE CONDITIONS PR ECEDENT FOR THE ASSUMPTION OF JURISDICTION U/S. 40A(3) OF THE INC OME TAX ACT, 1961 EXISTED AND/OR HAS BEEN COMPLIED WITH AND/OR FULFIL LED IN THE INSTANT CASE BY THE LD. INCOME TAX OFFICER, WARD 1(3), BURD WAN AND THE IMPUGNED DISALLOWANCE MADE IN THE SUM OF RS.47,9 8,141/- WITHOUT ANY INFRINGEMENT ON THAT BEHALF IS AB INITIO VOID, ULTRA VIRES AND EX-FACIE NULL IN LAW. ITA NO.1129/KOL/11-ALOK KR.DAS 2 2. FOR THAT UNDER THE CIRCUMSTANCES OF THE CASE, TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) ASANSOL ACTED UNLAWFULLY IN UPHOLDING THE IMPUGNED DISALLOWANCE RESORTED TO BY THE LD. INCOME TAX OFFICER, WARD 1(3), BURDWAN BY INVOKING THE PROVIS ION OF S.40A(3) OF THE INCOME TAX ACT, 1961 IN THE SUM OF RS.47,98,14 1/- INCURRED FOR MAKING PURCHASE OF COUNTRY SPIRIT ACTING AS A LICE NCEE OF THE GOVERNMENT WITHOUT CONSIDERING THE EXCEPTION CONT AINED IN RULE 6DD(B) READ WITH RULE 6DD(K) OF THE INCOME TAX RULE S 1962 AND HIS PURPORTED FINDING ON THAT BEHALF IS ALTOGETHER CAPR ICIOUS, UNWARRANTED AND ERRONEOUS. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) ASANSOL MISREAD EVIDENCES, CONSIDERED IMPROPER FACT S, FAILED TO CONSIDER PROPER POSITION IN LAW, MISPLACED ONUS OF PROOF AND CAME TO AN ERRONEOUS FINDING IN UPHOLDING THE ADDITION OF R S.47,98,141/- MADE BY THE LD. INCOME TAX OFFICER, WARD 1(3), BURDWAN I NVOKING THE PROVISIONS OF S.40A(3) OF THE INCOME TAX ACT, 1961. 4.. THE LEARNED AR FOR THE ASSESSEE HAS SUBMITTED T HAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ASHOK MONDAL VS. I.T.O, W 2(2), ASANSOL IN ITA NO.873/KO L/2012 DATED 06-02-2014 FOR THE ASSESSMENT YEAR 2009-10 AS ALSO THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. AMRAI PACHWAI & C.S SHOP VS. DCIT, CIR-1, DURGAPUR IN ITA NO.1251/KOL/2011 DATED 15-01-2014 FOR THE ASSESSMEN T YEAR 2008-09. 5. IN REPLY, IT WAS THE SUBMISSION BY THE LEARNE D JCIT/SR.DR THAT THE DISALLOWANCE WAS MADE BY THE AO OF THE CASH PURCHASES BY THE ASS ESSEE OF THE COUNTRY LIQUOR BY APPLYING THE PROVISIONS OF SECTION 40A(3) OF THE A CT. IT WAS THE SUBMISSION THAT BEFORE THE AO THE ASSESSEE HAD SUBMITTED THAT THE EXCEPTIO N CONTAINED IN RULE 6DD(A) WAS APPLICABLE. IT WAS FURTHER SUBMITTED THAT, HOWEVER, BEFORE THE LD.CIT(A) THE ASSESSEE HAD CLAIMED THAT THE PROVISIONS OF RULE 6DD(B) OF THE I T RULES WAS APPLICABLE. IT WAS THE SUBMISSION THAT AS THE PAYMENTS HAD BEEN MADE IN CA SH IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT, THE LD.CIT(A) WAS RIGHT IN UPHOLDING THE ACTION OF THE AO. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET A PERUSAL OF THE SUBMISSIONS OF THE LEARNED AR FOR THE ASSESSEE THAT THE ASSESSEE HAS RAISED HIS EXCEPTION CLAIMING UNDER RULE 6DD(B) R.W.R 6DD(K) OF THE I.T RULES AND THE TRIBUNAL HAS CONSIDERED THE RULE 6DD(B), WOULD NOT HOLD WATER I N SO FAR AS EXEMPTION PROVIDED IS IN RULE 6DD. THE VARIOUS CLAUSES OF THE SAID RULE W OULD HAVE TO BE CONSIDERED. EVEN OTHER WISE, THE SAID RULE IS NOT EXHAUSTIVE. FURTHE R, A PERUSAL OF THE DECISIONS OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASES OF ASH OK MONDOL (REFER TO SUPRA) AND M/S. ITA NO.1129/KOL/11-ALOK KR.DAS 3 AMRAI PACHWAI & C.S SHOP (REFER TO SUPRA) SHOWS THA T THE CO-ORDINATE BENCH OF THIS TRIBUNAL HELD AS FOLLOWS:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET A PERUSAL OF THE DECISION IN THE CASE OF SMT. PUSHPAL ATA MONDAL SHOWS THAT THE TRIBUNAL HAD DECIDED THE CASE BY FOLLOWING THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF K. ABDU & CO. REFERRED TO SUPRA WHEREIN THE ISSUE WAS IN RELATION TO RULE 6DD (A) OF IT RULES. THE ISSUE IN THE ASSESSEES CASE IS IN RESPECT OF THE P AYMENTS MADE UNDER THE RULES FRAMED BY THE GOVERNMENT AND SUCH PAYMENT WAS REQUIRED TO BE MADE IN LEGAL TENDER. A PERUSAL OF THE GOVERNME NT NOTIFICATION ISSUED BY THE GOVT. OF WEST BENGAL CLEARLY SHOWS TH AT THE DEALERS ARE AGENTS OF THE GOVERNMENT AND THE PAYMENTS MADE ARE TO THE GOVERNMENT. IT ALSO MAKES IT CATEGORICALLY REQUIRED THAT THE PAYMENT IS TO BE MADE BEFORE LIFTING OF THE COUNTRY SPIRIT. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/ S. AMRAI PACHWAI & C.S SHOP REFERRED TO SUPRA WHEREIN IT HAS BEEN HELD AS FOLLOWS:- . 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS RECOGNISED THE ASSESSEES BUSINESS IN TRADING OF C OUNTRY SPIRIT AND COUNTRY LIQUOR. COPY OF FORM OF LICENCE ISSUED BY D URGAPUR MUNICIPAL CORPORATION AND COPY OF FORM III ISSUED BY DEPARTME NT OF EXCISE, GOVT. OF W.B WERE ALSO FOUND AT PAGES 177 AND 179 OF THE ASSESSEES PAPER BOOK. IN ANY CASE THE VALIDITY OF LICENCE OF THE ASSESSEE TO TRADE IN COUNTRY SPIRIT AND COUNTRY LIQUOR IS NOT T HE ISSUE BEFORE US. THE ISSUE IS WHETHER THE PAYMENTS MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY SPIRIT FROM THE TERRITORIAL LIC ENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD, CITY CENTRE, DURGAPUR. FALLS W ITHIN THE EXEMPTION PROVIDED UNDER RULE 6DD(B) OF THE I.T RULES 1962. A DMITTEDLY, THE AO HAS RECOGNISED THAT THE PROVISION OF RULE 6DD(B) OF THE I.T RULES 1962 IS APPLICABLE IN CASE OF PAYMENTS MADE TO GOVERNMEN T DIRECTLY. THIS IS FOUND IN PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE KOLKATA GAZETTE TUESDAY DATED 20 TH SEPT 2005 SHOWS THAT THE GOVERNMENT OF WEST BENGAL, DEPARTMENT OF EXCISE HAS ISSUED A NOTI FICATION, WHEREIN THE WAREHOUSE HAS BEEN IDENTIFIED TO MEAN THE WAREH OUSE FOR SUPPLY OF COUNTRY SPIRIT TO THE RETAIL VENDORS, ESTABLIS HED AT CONVENIENT PLACES BY THE COMMISSIONER AT THE EXPENSE OF THE S TATE GOVERNMENT, OR AT THE EXPENSE OF A PERSON TO WHOM THE EXCLUSIV E PRIVILEGE OF SUPPLYING OR SELLING COUNTRY SPIRIT BY WHOLESALE H AS BEEN GRANTED U/S. 22 OF THE ACT OF A LICENSED WHOLESALE VENDOR OF COU NTRY SPIRIT. FURTHER, IT HAS BEEN SPECIFICALLY IDENTIFIED THAT THE AUTH ORISED REPRESENTATIVE OF THE WHOLESALE LICENSEE SHALL REALIZE THE NECESSAR Y AMOUNT OF DUTY, COST PRICE AND BOTTLING CHARGE, IF THERE BE ANY, A T THE PRESCRIBED RATE AND SUCH OTHER IMPOSITION, AS MAY BE PRESCRIBED BY LAW, FROM THE RETAIL VENDOR TO WHOM THE COUNTRY SPIRIT IS TO BE ISSUED FROM THE CONCERNED WAREHOUSE. IT IS ALSO SPECIFICALLY MENTIONED IN SE CTION (2) OF THE SAID ITA NO.1129/KOL/11-ALOK KR.DAS 4 NOTIFICATION THAT NO RETAIL VENDOR OF COUNTRY SPIRI T SHALL DEPOSIT DUTY DIRECT INTO THE LOCAL TREASURY FOR ISSUE OF COUNTR Y SPIRIT TO BE TAKEN BY HIM FROM THE WAREHOUSE CONCERNED, WHICH CLEARLY SHO WS THAT THE WAREHOUSE IS FOR THE SUPPLY OF THE COUNTRY LIQUOR, SPECIFICALLY, THE WAREHOUSE IS UNDER THE DIRECT CONTROL AND CUSTODY O F THE STATE GOVT. THE STATE GOVERNMENT HAS CLOSED ITS DOORS IN SO FAR AS THE LOCAL TREASURY IS CONCERNED AND THE PAYMENT FOR THE PURCH ASE OF COUNTRY SPIRIT OR COUNTRY LIQUOR HAS TO BE MADE TO THE WARE HOUSE, RUN BY THE GOVERNMENT. THIS SHOWS THAT ANY PAYMENT MADE TO THE WAREHOUSE, WHICH IS UNDER THE DIRECT CONTROL OF THE STATE GOVE RNMENT, IS A PAYMENT MADE DIRECTLY TO THE GOVERNMENT. ONCE, THIS IS ACCE PTED THEN THE PROVISIONS OF RULE 6DD(B) OF THE I.T RULES 1962 WHI CH CLEARLY SPELLS OUT THAT THE PAYMENT MADE TO THE GOVERNMENT IN LEGAL T ENDER UNDER THE RULES FRAMED BY THE GOVERNMENT, IS EXEMPTED FROM THE RIGOURS OF SECTION 40A(3) OF THE ACT. HERE, IT IS NOTICED THAT THE PAYMENTS MADE BY THE ASSESSEE FOR PURCHASE OF COUNTRY SPIRIT AND COU NTRY LIQUOR IS TO THE GOVERNMENT AS PER THE NOTIFICATION ISSUED BY THE GO VERNMENT AND IS IN LEGAL TENDER SPECIFIED BY THE NOTIFICATION. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE PAYMENT MADE BY THE ASSESSEE F OR THE PURCHASE OF COUNTRY LIQUOR AND COUNTRY SPIRIT FROM THE TERRITOR IAL LICENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD, CITY CENTRE, DURGAP UR IS PROTECTED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF THE I.T RU LES 1962. IN THE CIRCUMSTANCES, THE ADDITION AS MADE BY THE AO AND A S CONFIRMED BY THE LD.CIT(A) BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE I.T ACT 1961 STANDS DELETED. 6.1 AS IT IS NOTICED THAT THE ISSUE IS SQUARELY COV ERED BY THE SAID DECISIONS OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL, WHEREIN BOTH OF US ARE PARTY, RESPECTFULLY FOLLOWING THE SAID DECISIONS OF THE CO-ORDINATE BENCH OF THIS TRI BUNAL, THE FINDING OF THE LD.CIT(A) ON THIS ISSUE STANDS REVERSED. THE GROUNDS RAISED BY THE A SSESSEE ARE LIABLE TO BE ALLOWED. 7. IN THE RESULT, THE ASSESSEES APPEAL IN ITA NO. 1129KOL/2011 FOR THE ASSESSMENT YEAR 2008-09 STANDS ALLOWED AS STATED ABOVE. 5 / 6 /' 7 8 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 21/02 /2014 SD/- SD/- ( . , ! ) ( ABRAHAM P.GEORGE, ACCOUNTANTMEMBER) ( (( (2 2 2 2) )) ) DATE 21/2/2014 ** PRADIP SPS ( 1 & ' , ! ) ( GEORGE MATHAN, JUDICIAL MEMBER ) ITA NO.1129/KOL/11-ALOK KR.DAS 5 5 1 +..9 :94; / COPY OF THE ORDER FORWARDED TO: 1. . &* / THE APPELLANT : SHRI ALOK KUMAR DAS C/O SHRI SO MNATH GHOSH, ADVOCATE, SEVEN BROTHERS LODGE, CHINSURAH, DIST HO OGHLY PIN 712105 2 +,&* / THE RESPONDENT- I.T.O W 1(3) AAYKAR BHAWAN, BU RDWAN COURT COMPOUND PO & DIST BURDWAN PIN 713130. 3 4. . .5' / THE CIT, .5' ( )/ THE CIT(A) 5 . #<.7 +.' / DR, KOLKATA BENCH 6 . GUARD FILE . ,9 +./ TRUE COPY, 5'// BY ORDER, $ /ASSTT REGISTRAR