Daga Trading Co., Kolkata V. ACIT, Circle - 43, Kolkata, Kolkata

ITA 1136/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5885 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reassessment proceedings
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (A), KOLKATA [BEFORE SHRI P.M. JAGTAP, AM & SHRI S.S. VISWANETHRA RAVI, JM] I.T.A. NO. 1136/KOL/2016 ASSESSMENT YEAR: 2008-09 DAGA TRADING CO........................................................................APPELLANT 86, CANNING STREET, KOLKATA 700 001. [PAN: AACFD 1465 E] ACIT CIRCLE 43 KOLKATA........................RESPONDENT 3, GOVT. PLACE (WEST), KOLKATA 700 001. APPEARANCES BY: SHRI ANIL KOCHAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI SALLONG YADEN, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JUNE 20, 2018 DATE OF PRONOUNCING THE ORDER : JULY 27, 2018 ORDER PER P.M. JAGTAP, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) 13, KOLKATA DATED 27.02.2016 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS. 33,08,628/- MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF THE ALLEGED DIFFERENCE IN SERVICE TAX. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM. IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 01.07.2010, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS. 19,11,910/-. THEREAFTER, IT WAS NOTICED BY THE A.O. THAT AS PER THE RELEVANT TDS CERTIFICATE, TOTAL COMMISSION INCOME OF RS. 3,04,93,688/- WAS RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION FROM M/S. NATIONAL ENGINEERING INDUSTRIES LTD., JAIPUR AND AFTER DEDUCTING SERVICE TAX OF RS. 60,07,226/-, THE NET AMOUNT OF 2 I.T.A. NO. 1136/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. DAGA TRADING CO. RS. 2,44,86,462/- WAS CREDITED BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT. AS PER THE SERVICE TAX LEDGER OF THE ASSESSEE, AN AMOUNT OF RS. 30,23,156/- ONLY HOWEVER WAS COLLECTED BY THE ASSESSEE AS SERVICE TAX FROM M/S. NATIONAL ENGINEERING INDUSTRIES LTD. OUT OF THE AMOUNT SO COLLECTED ON ACCOUNT OF SERVICE TAX, A SUM OF RS. 3,26,106/- WAS DEPOSITED BY THE ASSESSEE TO CENTRAL GOVERNMENT ACCOUNT DURING THE F.Y. 2007-08 WHILE A FURTHER SUM OF RS. 23,72,492/- WAS ADJUSTED AGAINST INPUT SERVICE TAX. ACCORDING TO THE A.O., THE ASSESSEE THUS WAS ENTITLED FOR DEDUCTION ON ACCOUNT OF SERVICE TAX ONLY TO THE EXTENT OF RS. 26,98,598/- AND SINCE THE DEDUCTION ON ACCOUNT OF SERVICE TAX WAS ALLOWED TO THE EXTENT OF RS. 60,07,226/- IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3), THERE WAS ESCAPEMENT OF INCOME TO THE EXTENT OF RS. 33,08,628/-. HE, THEREFORE, REOPENED THE ASSESSMENT AND ISSUED A NOTICE UNDER SECTION 148 ON 20.08.2011 AFTER RECORDING THE REASONS. THE ASSESSEE DID NOT FILE THE RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED BY THE A.O. UNDER SECTION 148. THE EXPLANATION OFFERED BY THE ASSESSEE DURING THE COURSE OF REASSESSMENT PROCEEDINGS AS REGARDS THE DIFFERENCE IN SERVICE TAX WAS ALSO NOT FOUND ACCEPTABLE BY THE A.O. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME. HE, THEREFORE, ADDED SUCH DIFFERENCE OF RS. 33,08,628/- TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3)/147 VIDE AN ORDER DATED 04.02.2013. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID ADDITION. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED 3 I.T.A. NO. 1136/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. DAGA TRADING CO. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT OUT OF THE TOTAL AMOUNT OF RS. 33,08,628/- ADDED BY THE A.O. ON ACCOUNT OF DIFFERENCE IN SERVICE TAX AS SHOWN IN THE RELEVANT TDS CERTIFICATE, A SUM OF RS. 8,70,567/- WAS RELATED TO A.Y. 2007-08. HE HAS CONTENDED THAT THE SAID AMOUNT WAS ALREADY OFFERED BY THE ASSESSEE TO TAX IN A.Y. 2007-08 AND THE ADDITION OF THE SAME AGAIN BY THE A.O. FOR THE YEAR UNDER CONSIDERATION HAS RESULTED IN DOUBLE ADDITION. AS REGARDS THE BALANCE AMOUNT OF DIFFERENCE, HE HAS CONTENDED THAT TAX AT SOURCE WAS DEDUCTED AT LOWER RATE BY M/S. NATIONAL ENGINEERING INDUSTRIES LTD. IN A.Y. 2007-08 AND SINCE THE DEDUCTION TO THE EXTENT OF SUCH SHORTAGE WAS MADE IN THE YEAR UNDER CONSIDERATION, THE DIFFERENCE WAS REFLECTED IN THE RELEVANT TDS CERTIFICATE. HE HAS CONTENDED THAT THIS AMOUNT THUS WAS ALSO RELATED TO A.Y. 2007-08 AND THE ASSESSEE HAVING ALREADY OFFERED THE SAME TO TAX IN A.Y. 2007-08, THE ADDITION OF THE SAME AMOUNT AGAIN IN THE YEAR UNDER CONSIDERATION HAS RESULTED IN DOUBLE ADDITION. HE HAS CONTENDED THAT THE ASSESSEE NOW HAS SUFFICIENT DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE ITS EXPLANATION REGARDING THE DIFFERENCE IN SERVICE TAX AMOUNT AND URGED THAT THE MATTER MAY BE SENT BACK TO THE A.O. FOR GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUPPORT AND SUBSTANTIATE ITS EXPLANATION. THE LEARNED DR HAS NOT RAISED ANY OBJECTION IN THIS REGARD. HE HAS CONTENDED THAT IF THE RELEVANT EVIDENCE IS NOW AVAILABLE WITH THE ASSESSEE TO SUPPORT ITS EXPLANATION REGARDING THE DIFFERENCE IN SERVICE TAX AMOUNT, THE A.O. MAY BE DIRECTED TO VERIFY THE SAME. KEEPING IN VIEW THESE SUBMISSIONS MADE BY BOTH THE SIDES, WE FIND IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH AFTER GIVING ONE 4 I.T.A. NO. 1136/KOL/2016 ASSESSMENT YEAR: 2008-09 M/S. DAGA TRADING CO. MORE OPPORTUNITY TO THE ASSESSEE TO SUPPORT AND SUBSTANTIATE ITS EXPLANATION REGARDING THE DIFFERENCE IN SERVICE TAX AMOUNT. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2018. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27/07/2018 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. DAGA TRADING CO., 86, CANNING STREET, KOLKATA 700 001. 2. ACIT CIRCLE 43, 3, GOVT. PLACE (WEST), KOLKATA 01. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA