D.C.I.T. Cir-34, Kolkata, Kolkata V. M/s. G. S. MARKETING ASSOCIATES, Kolkata

ITA 1180/KOL/2009

• Counselvise Citation: 118023514 RSA 2009
• Duration Of Justice: 2 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 23-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 18-11-2009
• Court: TRIBUNAL
• Department Lawyers: R K SAHA
• Assessee Lawyers: S L KOCHAR

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, KOLKATA () BEFORE . .. . , , , , !, SHRI N.VIJAYAKUMARAN, JUDICIAL MEMBER. ' ' ' ' /AND . .. .#$ #$#$ #$. .. . , %& ! SHRI C.D.RAO, ACCOUNTANT MEMBER '' '' '' '' / ITA NO .1180 /KOL/2009 () *+/ ASSESSMENT YEAR : 2005-06 (-. / APPELLANT ) D.C.I.T., CIRCLE-34, KOLKATA - - - VERSUS - . (01-./ RESPONDENT ) M/S.G.S.MARKETING ASSOCIATES, KOLKATA (PAN:AAEFG 6642C) -. 2 3 %/ FOR THE APPELLANT: SHRI R.K.SAHA 01-. 2 3 %/ FOR THE RESPONDENT: SHRI S.L.KOCHAR 4 2 $& /DATE OF HEARING : 24.11.2011. 5* 2 $& /DATE OF PRONOUNCEMENT : 9.12.2011. %6 / ORDER ( (( ( . .. .#$ #$#$ #$. .. . ) )) ), , , , %& ! PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY REVENUE AGAINST THE ORDER DATED 01.05.2009 OF THE CIT(A)-XX, KOLKATA PERTAINING TO A.YR. 2005-06. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE RE VENUE READS AS UNDER :- 1. THE LD. CIT(A)-XX, KOLKATA HAS ERRED ON FACT AN D IN LAW FOR DELETING THE ADDITION AMOUNTING TO RS.68,74,000/- U/S 40(A)(IA) IN RESPECT OF PAYMENT OF RS.60,00,000/- TO UNIQUE CREATION AND RS.8,74,000/- TO SINHA ELECTRIC. 2 3. THE BRIEF FACTS OF THE CASE OF THIS ISSUE ARE THAT WHIL E DOING THE SCRUTINY ASSESSMENT ASSESSING OFFICER HAS DISALLOWED AN AMOU NT OF RS.90,77,430/- BY APPLYING PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT BY OB SERVING THAT ASSESSEE HAS NOT DEDUCTED TDS FROM THE FOLLOWING EXPENSES : TDS NOT DEDUCTED FOR THE FOLLOWING EXPENSES 1. SINHA ELECTRIC RS.8,74,000/ - 2. ICE SKATING RING RS.2,87,622/- 3. MULTIMIX SYSTEM RS. 65,000/- 4. PROMOD KR. SUKLA RS. 93,713/- 5. SANKARI NAG RS. 48,525 /- 6. RAINBOW PRODUCTION RS. 53,200/- 7. UNIQUE CREATION RS.60,00,000/- 8. ROYALTY CHARGES RS.16,56,000/- R S.90,77,430/- 3.1. ON APPEAL THE LD. CIT(A) DELETED THE AN A MOUNT OF RS.68,74,000/- BY OBSERVING THAT THESE AMOUNTS ARE RELATING TO THE PU RCHASES MADE BY ASSESSEE AND THEREFORE NOT COVERED BY PROVISIONS OF SECTION 40(I )(IA) OF THE IT ACT. THE RELEVANT OBSERVATION OF THE LD. CIT(A) ARE AS UNDER :- 5.4. A COPY OF THE WRITTEN SUBMISSION FILED BY THE APPELLANT, ALONG WITH THE EVIDENCES ENCLOSED THEREWITH, WERE SENT TO THE ASSE SSING OFFICER AND A REMAND REPORT WAS CALLED FOR. THE ASSESSING OFFICER WAS AL SO AUTHORIZED U/S 250(4) OF THE I.T. ACT, 1961 TO ENABLE HIM TO CONDUCT NECESSARY I NQUIRIES. THE ASSESSING OFFICER SUBMITTED HIS REMAND. REPORT ON 30-01-2009. HE HAS, HOWEVER, ONLY REITERATED THE OBSERVATIONS ALREADY MADE IN THE ASSESSMENT ORDER. 5.5 1 HAVE PERUSED THE ASSESSMENT ORDER AND CONS IDERED THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO PERUSED THE DOCUMENTS FILED BY THE APPELLANT AND THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER. THE PAYM ENTS OF RS.60,00,000/- TO UNIQUE CREATION AND THOSE OF RS.8,74,000/- TO SINHA ELECTRIC RELATE TO PURCHASES MADE BY THE APPELLANT AND ARE THEREFORE NOT COVERED BY T HE PROVISIONS OF SECTION 40(A)(IA). SECONDLY, THE PAYMENTS OF RS.16,56,000/- TOWARDS RO YALTY ARE NOT COVERED, IN THE RELEVANT YEAR, UNDER THE PROVISIONS OF SECTION 40(A )(IA). THE ADDITIONS MADE ON ACCOUNT OF SUCH PAYMENTS ARE THEREFORE DELETED. AS REGARDS THE REMAINING PAYMENTS, THEY ARE CLEARLY COVERED UNDER THE PROVISIONS OF SE CTION 40(A)(IA) AND THE ADDITIONS MADE ON ACCOUNT OF SUCH PAYMENTS ARE THEREFORE CONF IRMED. THE APPEAL ON THIS GROUND IS PARTLY ALLOWED. THE APPELLANT GETS RELIEF OF RS,85,30,000/-. 3.2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING BEFORE US THE LD. DR APPEARING ON BEHALF OF THE REVENUE RELIED ON THE ORDERS OF ASSESSING OFFICER. 3 5. ON THE OTHER HAND, THE LD. COUNSEL APPEAR ING ON BEHALF OF ASSESSEE BY REFERRING TO PAGE NOS. 7 TO 9 OF THE PAPER BOOK WHICH IS THE REMAND REPORT OF ASSESSING OFFICER AND COPIES OF SALE INVOICES ISSUED BY UNIQUE CREATI ON AND BILLS ISSUED BY SINHA ELECTRIC WHICH WAS PLACED AT PAGES 12 TO 15 OF THE PAPER BOOK CONTENDED THAT THE ACTION OF THE LD. CIT(A) IS FAIR AND JUST IN THE FA CTS AND CIRCUMSTANCES OF THE CASE. THEREFORE HE REQUESTED TO UPHELD THE SAME. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF MATERIALS AVAILABLE ON RECORD INCLUDING THE SALE INVOICES ISSUED BY UNI QUE CREATION AS WELL AS SINHA ELECTRIC AND THE REMAND REPORT OF ASSESSING OFFICER WE ARE OF THE VIEW THAT THE AMOUNTS PAID TO UNIQUE CREATION AS WELL AS SINHA EL ECTRIC ARE AGAINST THE PURCHASED OF THE GOODS AND HENCE THE LD. CIT(A) HAS RIGHTLY OBSE RVED THAT PROVISION OF SECTION 40(A)(IA) OF THE IT ACT IS NOT APPLICABLE TO THE PA YMENTS. THEREFORE, WE UPHELD THE SAME ON THIS ISSUE AND DISMISS THE APPEAL OF REVENU E. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. 7 8 9: &7 ; <=> %6 ? @ : <= > %6 ? @ : <= > %6 ? @ : <= > %6 ? @ : <= > ORDER PRONOUNCED IN THE COURT ON 9.12.2011. SD/- SD/- ., ( ! .#$., %& ! N.VIJAYAKUMARAN, JUDICIAL MEMBER C.D.RAO, ACCOUNTA NT MEMBER DATED : 9.12.2011. RG(PS) %6 2 0(( A%*8- COPY OF THE ORDER FORWARDED TO: 1. M/S. G.S.MARKETING ASSOCIATES, 56/1, CANNING STREET , 2 ND FLOOR, KOLKATA-700001. 2 THE D.C.I.T., CIRCLE-34, KOLKATA 3. THE CIT, 4. THE CIT(A)-XX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 1 0(/ TRUE COPY, %6/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES 4