Jagannath Shankar Chowdhury, Kalna V. I.T.O.,Ward-1(2), Burdwan

ITA 1282/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2069 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-02-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J M THARD
• Keywords: Additional evidence; Non-deduction of tax; Set aside
• Section: 40(a)(ia)

Judgement Text

ITA NO. 1282/KOL/2019 ASSESSMENT YEAR: 2011-2012 JAGANNATH SHANKAR CHOWDHURY 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 1282/KOL/2019 ASSESSMENT YEAR: 2011-2012 JAGANNATH SHANKAR CHOWDHURY,....................... ....................APPELLANT SONAPATTI, FATAKDWAR, KALNA, DIST. BURDWAN-713409 [PAN: AFDPC0372D] -VS.- INCOME TAX OFFICER,................................ ................................RESPONDENT WARD-1(2), BURDWAN, AAYAKAR BHAWAN, COURT COMPOUND, BURDWAN-713101 APPEARANCES BY: SHRI J,M. THARD, ADVOCATE, FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, SR. D.R., FOR THE RESPON DEN T DATE OF CONCLUDING THE HEARING : FEBRUARY 20, 2020 DATE OF PRONOUNCING THE ORDER : MAY 04, 2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), BURDWAN DATED 08.03.2019 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE OF RS.3,92,864/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING IN MOBILE PHONE, ACCESSORIE S, CASH CARDS AND STATIONERY GOODS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 27.09.2011 DECLARING TOTAL INCO ME OF RS.6,81,403/-. IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE S AID RETURN, COMMISSION INCOME OF RS.18,60,040/- WAS CREDITED BY THE ASSESS EE. DURING THE COURSE ITA NO. 1282/KOL/2019 ASSESSMENT YEAR: 2011-2012 JAGANNATH SHANKAR CHOWDHURY 2 OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AS SESSING OFFICER THAT THE ASSESSEE HAS RECEIVED COMMISSION INCOME FOR PUR CHASING CASH CARDS AND OTHER GOODS FROM FOUR PARTIES, NAMELY M/S. P.K. INTERNATIONAL, M/S. VODAFONE ESSAR SOUTH LIMITED, M/S. VODAFONE SOUTH L IMITED AND M/S. PAUL BROTHERS & SONS AFTER DEDUCTING TAX AT SOURCE. HE ALSO FOUND THAT COMMISSION WAS PAID BY THE ASSESESE TO SIX PARTIES AGGREGATING TO RS.3,92,864/- WITHOUT DEDUCTING TAX AT SOURCE. ACCO RDING TO THE ASSESSING OFFICER, THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT S OURCE FROM THE COMMISSION SO PAID AS PER THE PROVISIONS OF SECTION 194H AND SINCE THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO COMPLY W ITH THE SAID REQUIREMENT, THE ASSESSING OFFICER INVOKED SECTION 40(A)(IA) AND MADE A DISALLOWANCE OF RS.3,92,864/- ON ACCOUNT OF COMMISS ION. 3. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER O N ACCOUNT OF COMMISSION UNDER SECTION 40(A)(IA) FOR NON-DEDUCTIO N OF TAX AT SOURCE WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE THE LD. CIT(APPEALS), IT WAS CONTENDED ON BEHALF OF THE ASS ESSEE THAT THE AMOUNT IN QUESTION REPRESENTED TRADE DISCOUNT ALLOWED BY T HE ASSESSEE AND SINCE THE SAME WAS NOT IN THE NATURE OF COMMISSION AS WRO NGLY TAKEN BY THE ASSESSING OFFICER, THERE WAS NO REQUIREMENT OF DEDU CTION OF TAX AT SOURCE FROM THE SAID PAYMENT AND THE QUESTION OF DISALLOWA NCE UNDER SECTION 40(A)(IA) COULD NOT ARISE. THIS CONTENTION OF THE A SSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) ON THE GROUND TH AT THERE HAD BEEN NO SALE AND PURCHASE OF GOODS MADE BY THE ASSESSEE WIT H THE CONCERNED TRADERS. HE ACCORDINGLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE AC T. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PRE FERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS ITA NO. 1282/KOL/2019 ASSESSMENT YEAR: 2011-2012 JAGANNATH SHANKAR CHOWDHURY 3 RAISED A NEW CONTENTION IN SUPPORT OF THE ASSESSEE S CASE ON THE ISSUE UNDER CONSIDERATION BY SUBMITTING THAT THE AMOUNT I N QUESTION REPRESENTED MANAGEMENT FEES PAYABLE BY VODAFONE TO THE CONCERNED PARTIES AS DISTRIBUTOR AND THE ROLE OF THE ASSESSEE WAS ONLY TO FACILITATE THE DISBURSEMENT /REIMBURSEMENT OF THE SAID AMOUNT TOWARDS MANAGEMENT FEES TO THE CONCERNED DISTRIBUTORS. IN S UPPORT OF THIS CONTENTION, HE HAS ALSO FILED THE ADDITIONAL EVIDEN CE IN THE FORM OF RELEVANT E-MAILS RECEIVED FROM VODAFONE AND SUBMITT ED THAT THE MATTER MAY BE SENT BACK TO THE ASSESSING OFFICE FOR VERIFY ING THE NEW PLEA RAISED ON BEHALF OF THE ASSESSEE IN THE LIGHT OF THE SAID ADDITIONAL EVIDENCE. ALTERNATIVELY HE HAS ALSO SUBMITTED THAT THE CONCER NED RECIPIENTS HAVING ALREADY DECLARED THE AMOUNT IN QUESTION AS THEIR IN COME AND HAVING PAID TAX THEREON, THE ASSESSEE, THEREFORE, CANNOT BE TRE ATED AS IN DEFAULT FOR NON-DEDUCTION OF TAX AT SOURCE ON THE SAID AMOUNT A ND NO DISALLOWANCE UNDER SECTION 40(A)(IA) CAN BE MADE. IN MY OPINION, BOTH THESE CONTENTIONS RAISED BY THE LD. COUNSEL FOR THE ASSES SEE FOR THE FIRST TIME BEFORE THE TRIBUNAL REQUIRE VERIFICATION AND EVEN T HE LD. D.R. HAS NOT RAISED ANY OBJECTION FOR SENDING THE MATTER BACK TO THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER PROPER VERIFICAT ION. I ACCORDINGLY SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPE ALS) CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 40(A)(IA) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 04, 2020. SD/- (P.M. JAGTAP) VICE- PRESIDENT) KOLKATA, THE 4 TH DAY OF MAY, 2020 ITA NO. 1282/KOL/2019 ASSESSMENT YEAR: 2011-2012 JAGANNATH SHANKAR CHOWDHURY 4 COPIES TO : (1) SHRI JAGANNATH SHANKAR CHOWDHURY, SONAPATTI, FATAKDWAR, KALNA, DIST. BURDWAN-713409 (2) INCOME TAX OFFICER, WARD-1(2), BURDWAN, AAYAKAR BHAWAN, COURT COMPOUND, BURDWAN-713101 (3) COMMISSIONER OF INCOME TAX (APPEALS), BURD WAN; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.