Shib Shankar Ghosh, North 24 Parganas V. ITO, Ward -49(1), Kolkata, Kolkata

ITA 121/KOL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5009 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2012
• Court: TRIBUNAL
• Department Lawyers: AMITAVA BHATTACHARYA
• Assessee Lawyers: I BAN ERJEE
• Keywords: Retrospective amendment
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.121/KOL/2012 ASSESSMENT YEAR: 2008-09 SHIB SHANKAR GHOSH VS. INCOME-TAX OFFICER, WD-4 9(1), KOLKATA. (PAN: ALNPG3561A) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 10.03.2016 DATE OF PRONOUNCEMENT: 11.03.2016 FOR THE APPELLANT: SHRI I. BANERJEE, FCA FOR THE RESPONDENT: SHRI AMITAVA BHATTACHARYA, J CIT, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXII, KOLKATA VIDE APPEAL NO. 151/CIT(A)-XXXII/10-11/49(1)/KOL DATED 1 4.07.2011. ASSESSMENT WAS FRAMED BY ITO, WARD-49(1), KOLKATA U/S. 143(3) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE H IS ORDER DATED 22.12.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN DISALLOWING CHILLING COST OF RS .11,21,423/- AND PAYMENT OF FREIGHT AND DELIVERY CHARGES OF RS.46,85,600/- FOR NON-DEDUCTIO N OF TDS U/S. 194C OF THE ACT THEREBY THE AO APPLYING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF SUPPLY OF MILK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED FROM P&L ACCOUNT THAT FOR FY 2007-08 RELEVANT TO AY 2008-09 ASSESSEE HAS CLAI MED CHILLING EXPENSES OF RS.11,21,423/- AND FREIGHT AND DELIVERY CHARGES OF RS.46,85,600/-. ADMITTEDLY, THE ASSESSEE HAS NOT DEDUCTED TDS ON BOTH THE ITEMS U/S. 194C OF THE ACT AND HENCE, THE AO INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND MADE DISALLOWANCE . AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO ALSO CONFIRMED T HE ACTION OF AO. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE NOW RELI ED ONLY ON THE ISSUE THAT RECIPIENTS HAVE PAID THE TAXES IN BOTH THE CASES AND ACCORDING LY, IN ASSESSEES CASE 2 ND PROVISO TO 2 ITA NO.121/KOL/2012 SHIB SHANKAR GHOSH, AY 2008-09 SECTION 40(A)(IA) OF THE ACT WILL APPLY. FOR THIS, HE HAS RAISED FOLLOWING TWO ADDITIONAL GROUNDS: 1. WITHOUT PREJUDICE TO GROUND NO. 2 ABOVE, THE O RDER OF THE LD. CIT(A), UPHOLDING THE DISALLOWANCE, U/S. 40(A)(IA), OF THE CHILLING COST OF RS.1121423/- WOULD BE UNSUSTAINABLE AND THEREFORE WITHOUT ANY MERIT, WHEN THE PAYEE OF THE SAID SUM DULY CONSIDERS THE SAME IN THE DETERMINATION OF HIS TOTAL INCOME AND IS ASSESSED A CCORDINGLY, BY VIRTUE OF THE APPLICABILITY OF SECOND PROVISO TO SEC. 40(A)(IA), VIDE THE FINANCE ACT, 2012, THERETO. 2. WITHOUT PREJUDICE TO ADDITIONAL GROUND NO. 3 AN D 4 ABOVE, THE ORDER OF THE LD. CIT(A), UPHOLDING THE DISALLOWANCE U/S. 40(A)(IA) OF THE TR ANSPORT CHARGES OF RS.4685600/- WOULD BE UNSUSTAINABLE AND THEREFORE WITHOUT ANY MERIT, GIVE N THE CONSIDERATION OF THE RESPECTIVE PAYEES THEREOF, FOR THE PURPOSE OF THEIR OWN INCOME TAX COMPLIANCE WITH REGARD TO THE CORRESPONDING REVENUE AT THEIR, BY VIRTUE OF THE AP PLICABILITY OF SECOND PROVISO TO SEC. 40(A)(IA), VIDE THE FINANCE ACT, 2012, THERETO. LD. COUNSEL FOR THE ASSESSEE ALSO FILED REVISED GRO UNDS IN RESPECT TO THE ISSUE THAT THERE IS NO CONTRACT BUT HE HAS NOT ARGUED THIS ISSUE AND STATE D THAT HE IS NOT INTERESTED IN PROSECUTING THE SAME. HENCE, THE MAIN GROUND IS DISMISSED AS N OT PRESSED. 5. NOW, COMING TO THE ISSUE OF APPLICABILITY OF 2 ND PROVISO TO SECTION 40(A)(IA) OF THE ACT AS BROUGHT OUT BY FINANCE ACT, 2012 WHICH WAS H ELD TO BE RETROSPECTIVE BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., ITA NOS. 160 & 161/KOL/2015, WHEREIN IT HAS BEEN HELD AS UNDER: NO S. 40(A)(IA) DISALLOWANCE FOR FAILURE TO DEDUCT TDS ON PAYMENT IF PAYEE HAS OFFERED AMOUNT TO TAX. SECOND PROVISO TO S. 40( A)(IA) INSERTED BY FINANCE ACT 2013 W.E.F. 1.4.2013 SHOULD BE TREATED AS CURATIVE AND TO HAVE RETROSPECTIVE EFFECT FROM 1.4.2005. ITAT PRAISED FO R 'THOROUGH ANALYSIS' OF THE PROVISION ONCE THIS IS THE POSITION, THE ISSUE IS TO GO BACK TO THE FILE OF THE AO FOR VERIFICATION WHETHER THE RECIPIENTS HAVE INCLUDED THE PAYMENTS MADE BY A SSESSEE AND CLAIMED IN THE P&L ACCOUNT AS EXPENSES IN THEIR RESPECTIVE RETURNS OF INCOME AND PAID TAXES THEREON. TO VERIFY THIS FACT ASSESSEE WILL FILE THE INCOME TAX PARTICU LARS OF THESE PARTIES SO THAT THE AO CAN VERIFY AND EXAMINE THE SAME. IN TERM OF THE ABOVE, LD. SR. DR WAS REQUIRED TO ARGUE. HE STATED THAT HE HAS NO OBJECTION IN SETTING ASIDE TH E ISSUE TO THE FILE OF AO ON THE ABOVE ASPECT. HOWEVER, LD. COUNSEL FOR THE ASSESSEE ALSO STATED THAT THE ASSESSEE HAS OBTAINED FORM NO. 15-I FROM THE RESPECTIVE TRANSPORTERS IN T ERM OF SECTION 194C OF THE ACT AND IN CASE HE IS ABLE TO PRODUCE THE SAME BEFORE AO, THE AO WILL ALSO VERIFY THE SAME AND DECIDE THE ISSUE ACCORDINGLY. ON THIS ALSO, LD. SR. DR HA S NOT OBJECTED. IN TERM OF THE ABOVE, REMIT THE ISSUE BACK TO THE FILE OF THE AO TO VERIFY WHET HER THE RECIPIENTS HAVE INCLUDED THE 3 ITA NO.121/KOL/2012 SHIB SHANKAR GHOSH, AY 2008-09 RECEIPTS IN THEIR RESPECTIVE RETURNS OF INCOME AND PAID TAXES ON THE SAME. ACCORDINGLY, THE ASSESSEE WILL ALSO PRODUCE FROM NO. 15-I OBTAINED F ROM TRANSPORTERS AND AO WILL DECIDE AFTER VERIFYING THE SAME. IN TERM OF THE ABOVE, TH E APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2016. SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11TH MARCH , 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI SHIB SHANKAR GHOSH, CHANDIGARH, GA IGHATA, 24 PGS (N) -743249. 2. RESPONDENT ITO, WARD-49(1), KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .