ACIT, Range-9, Kolkata, Kolkata V. M/s. Kamdhenu Polymers(P)Ltd, Kolkata

ITA 1251/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75087 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUCHETA CHATTOPADHYAY SRDR
• Assessee Lawyers: SUNIL SARANA F; S M SARANA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER ITA NO. 1251 / KOL / 2012 & C.O. NO.72/KOL/2013 (A/O ITA NO. 1251/KOL/2012) ASSESSMENT YEAR :2008-09 ACIT, RANGE-9, P-7, CHOWRINGHEE SQUARE, AAYKAR BHAWAN, 5 TH FLOOR, ROOM 14, KOLKATA 700 069 KAMDHENU POLYMERS PVT. LTD., 42, SHIVTOLLA STREET, 3 RD FLOOR, KOLKATA 700 007 [ PAN NO.AABCK 3379 E ] V/S . V/S . M/S KAMDHENU POLYMERS (P) LTD., 132, COTTON STREET, KOLKATA 700 007 INCOME TAX OFFICER, WARD-9(4), 5 TH FLOOR, KOLKATA 700 007 / APPELLANT .. / RESPONDENT) /BY ASSESSEE SHRI S.M. SARANA, ADVOCATE AND SHRI SUNIL SARANA (F.C.A) /BY REVENUE SMT. SUCHETA CHATTOPADHYAY, SR-DR /DATE OF HEARING 06-03-2014 /DATE OF PRONOUNCEMENT 13-03-2014 / // / O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY REVENUE AND CROSS OBJECTION BY ASSE SSEE ARE ARISING OUT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS )-VIII, KOLKATA IN APPEAL NO.146/CIT(A)-VIII/KOL/10-11 DATED 19-10-2011. ASSE SSMENT WAS FRAMED BY ACIT, RANGE-9, KOLKATA U/S. 143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008- 09 VIDE HIS ORDER DATED 27- 12-2010. ITA NO.1251/KOL/2012 & C.O. 72/KOL/2013 A.Y. 2 008-09 ACIT, R-9 KOL V. KAMDHENU POLYMERS (P) LTD. PAGE 2 2. THE FIRST COMMON ISSUE IN THIS APPEAL OF REVENUE AND CO OF ASSESSEE IS AS REGARDS TO THE DISALLOWANCE MADE BY ASSESSING OFFICER IN RESPECT TO CLEARING EXPENSES U/S.40(A)(IA) OF THE ACT.. FOR TH IS, REVENUE HAS RAISED FOLLOWING GROUND NO.1:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LD. CIT(A) HAS ERRED ON FACT AND IN LAW IN DELETING THE DISALL OWANCE OF RS.9,48,474/-- MADE U/S. 40(A)(IA) OF THE INCOME TA X ACT, 1961. THE ASSESSEE HAS ALSO RAISED FOLLOWING GROUND NO.2, WHICH IS SUPPORTIVE OF THE ORDER OF CIT(A):- 2. FOR THAT THE APPEAL FILED BY THE DEPARTMENT IS BAD IN LAW IN VIEW OF THE FACT THAT THE LD. CIT(A) HAS ALSO HELD THAT ON PAYMENT FOR REIMBURSEMENT TAX WAS NOT DEDUCTIBLE AND THEREFORE THE PROVISION OF SECTION 40(A)(IA) WERE NOT APPLICABLE WHICH FINDING IN NOT DISPUTED BY THE AO. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORTS AND SALE OF PLAS TIC GRANULES AND WOVEN FABRICS. THE ASSESSEE IMPORTS MAJOR ITEMS THROUGH C HENNAI PORT. THE ASSESSEE PAYS CLEARING EXPENSES, BONDING EXPENSES A ND SERVICE CHARGES. THE AO NOTICED FROM THE DETAILS SUBMITTED BY ASSESS EE THAT IT HAS DEDUCTED TDS ON SERVICE CHARGES AND BONDING CHARGES ONLY BUT NO TDS DEDUCTED ON CLEARING EXPENSES, WHICH THE ASSESSEE CLAIMED TO HA VE REIMBURSEMENT OF EXPENSES, BUT THE AO DISALLOWED THE ENTIRE CLEARING EXPENSES OF RS.9,48,474/-- FOR NON-DEDUCTION OF TDS AND ADDED B ACK TO THE RETURN OF INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS O F SECTION 40(A)(IA) OF THE ACT. WE FIND THAT CIT(A) DELETED THE DISALLOWANCE I N RESPECT TO REIMBURSEMENT OF SERVICE CHARGES. AGGRIEVED, REVENUE PREFERRED APPEAL BEFORE US AGAIN ST THE DELETION OF DISALLOWANCE AND CO WAS FILED BY ASSESSEE IN SUPPOR T OF THE ORDER OF CIT(A). ITA NO.1251/KOL/2012 & C.O. 72/KOL/2013 A.Y. 2 008-09 ACIT, R-9 KOL V. KAMDHENU POLYMERS (P) LTD. PAGE 3 4. WE FIND THAT CIT(A) HAS DELETED THE ADDITION IN RESPECT TO CLEARING PAYMENT MADE TO CLEARING AGENTS WHERE SERVICE CHARG ES WERE PAID AFTER DEDUCTING TDS. THE CIT(A) HAS ALSO DELETED THE DISA LLOWANCE ON OTHER PAYMENTS AS THERE WERE ADMITTEDLY REIMBURSEMENT AND CIT(A) RECORDED THE FOLLOWING FINDING:- I HAVE CAREFULLY CONSIDERED THE FACTS DISCUSSE D BY THE A.O AND THE SUBMISSIONS OF THE APPELLANT. WITH REGARD TO TH E PAYMENT MADE TO THE CLEARING AGENTS WITHOUT DEDUCTION OF TAX THERE IS ON DISPUTE THAT TAX HAS DULY BEEN DEDUCTED ON THE SERVICE CHARGES PAID TO CLEARING AGENTS. THE OTHER PAYMENTS MADE WERE ADMITTEDLY FOR REIMBUR SEMENTS. NOW, REVENUE HAS NOT DISPUTED THAT THESE CLEARING C HARGES ARE NOT REIMBURSED TO THE PARTIES AND IN ABSENCE OF THE ADV ERSE ARGUMENT, WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF REVENUES APP EAL IS DISMISSED AND CO OF ASSESSEE BEING SUPPORTIVE IS DISMISSED AS ACADEMIC. 5. NEXT ISSUE IN THE APPEAL OF REVENUE IS AS REGARD S THE ORDER OF CIT(A) DELETING THE EXPENSES. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.2:- 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN DIRECTING TO TAKE DIFFERENCE BETWEEN T HE TOTAL OF EXPENSES AS PER VOUCHERS AND TOTAL OF EXPENSES AS PER BOOKS. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ASSESSING O FFICER MADE THE DISALLOWANCE OF EXPENSES IN THE ABSENCE OF BILLS AN D VOUCHERS AMOUNTING TO RS.2,09,861/-. THE CIT(A) DELETED THE ADDITION BY O BSERVING AS UNDER:- AS REGARD THIS ISSUE OF APPEAL WHEREBY THE DIS ALLOWANCE OF RS.209861/- WAS MADE, IT IS SEEN THAT THE CLAIM OF THE APPELLANT WAS BASED ON THE BASIS OF ACCOUNTS PREPARED AND FILED W ITH THE RETURN WHICH WERE DULY AUDIT. THE EXPENSES AS SUCH WERE FULLY VO UCHED. IT WAS ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE AP PELLANT SUBMITTED ITEM WISE PURCHASE DETAILS AND THE MISTAKE CROPPED UP. HOWEVER, IT IS NOTICED THAT THE MISTAKE WAS OF THE APPELLANT WHILE PREPARING THE DETAILS FOR WHICH NO RECONCILIATION WAS FILED. THE ADDITION ON PRINCIPLE IS THEREFORE JUSTIFIED. HOWEVER, I FIND THAT THE A.O H AS MADE THE ADDITION OF THE DIFFERENCE WHETHER NEGATIVE OR POSITIVE. HE SHO ULD HAVE TAKEN THE TOTAL OF THE EXPENSES CLAIMED IN THE PROFIT AND LOS S UNDER THESE THREE ITA NO.1251/KOL/2012 & C.O. 72/KOL/2013 A.Y. 2 008-09 ACIT, R-9 KOL V. KAMDHENU POLYMERS (P) LTD. PAGE 4 HEADS AND THEN SHOULD HAVE TAKEN THE TOTAL OF THE E XPENSES AS PER DETAILS SUBSEQUENTLY FILED. SUCH DIFFERENCE AS PER THE APPELLANT WAS ONLY OF RS.26511/-. THE A.O SHALL VERIFY THE SAME AND MA KE ADDITION FOR THE EXACT AMOUNT OF DIFFERENCE ONLY. THE A.O IS, THUS, DIRECTED ACCORDINGLY AND THIS GROUND OF APPEAL IS PARTLY ALLOWED . AS THE ASSESSEE HAS FILED COMPLETE DETAILS ALONG WI TH VOUCHERS BEFORE CIT(A) AND ALSO FILED RECONCILIATION FOR THE REASONS THAT BEFORE THE ASSESSING OFFICER SOME MISTAKE CROPPED UP WHILE PREPARING THE DETAILS IN RESPECT OF EXPENSES INCURRED PURCHASE-WISE. THE CIT(A) VERIFIED THE DET AILS AND THE REVENUE NOW COULD NOT POINT OUT ANY DISCREPANCY IN THE ORDER OF CIT(A). IN VIEW OF THIS MATTER, WE CONFIRM THE ORDER OF CIT(A). 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED AND T HAT OF ASSESSEES CO IS DISMISSED AS SUPPORTIVE. ORDER PRONOUNCED IN THE OPEN COURT ON 13/ 03/2014 SD/- SD/- (ABRAHAM P GORGE) ( MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP #- 13/03/2014 . . . . /. /. /. /. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. 3 / CONCERNED CIT 4. 3- / CIT (A) 5. . , , / DR, ITAT, KOLKATA 6. : / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,