Sanjay Majumder, Kolkata V. ITO, WD-1(3), HOOGHLY, Hooghly

ITA 1288/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1631 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 40A(3); 143(3); 154

Judgement Text

I.T.A. NO. 1288/KOL./2016 ASSESSMENT YEAR: 2009 -2010 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI S.V. MEHROTRA, VICE-PRESIDENT(KZ) I.T.A. NO. 1288/KOL/ 2016 ASSESSMENT YEAR : 2009-2010 SANJAY MAJUMDER,................................... ..........APPELLANT C/O. D.J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA-700 020 [PAN : AHYPM 3371 P] -VS.- INCOME TAX OFFICER,................................ ........................RESPONDENT WARD-1(3), HOOGHLY, AAYAKAR BHAWAN, 2 ND FLOOR, ROOM NO. 209, G.T. ROAD, CHINSURAH, HOOGHLY-712 101 APPEARANCES BY: SHRI MIRAJ D. SHAH, ADVOCATE, FOR THE ASSESSEE SHRI ALOKE NAG, ADDITIONAL CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 26, 2017 DATE OF PRONOUNCING THE ORDER : JUNE 08, 2017 O R D E R PER SHRI S.V. MEHROTRA, V.P.(KZ): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-6, KOLKATA DAT ED 17.03.2016 FOR THE ASSESSMENT YEAR 2009-10. 2. SHRI MIRAJ D. SHAH, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE AND SHRI ALOKE NAG, LD. ADDL. CIT, D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WA S, IN THE RELEVANT ASSESSMENT YEAR, ENGAGED IN THE MARKETING BUSINESS OF MEDICINE. HE HAD FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME O F RS.3,57,575/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON TH E RETURNED INCOME I.T.A. NO. 1288/KOL./2016 ASSESSMENT YEAR: 2009 -2010 PAGE 2 OF 4 VIDE ORDER DATED 20.05.2011. SUBSEQUENTLY THE ASSES SING OFFICER PASSED AN ORDER UNDER SECTION 154/143(3) OBSERVING THAT DU RING THE PERIOD UNDER CONSIDERATION, THE ASSESSEE MADE CASH PAYMENT S (EXCEEDING RS.20,000/-) ON VARIOUS OCCASIONS AGGREGATING TO RS .5,58,826/- AS ENUMERATED AT PAGE 1 OF HIS ORDER GIVING DETAILS OF DATE OF PAYMENT, AMOUNT PAID AND VOUCHER NO. HE ACCORDINGLY ISSUED N OTICE TO THE ASSESSEE ON 15.02.2013 UNDER SECTION 154 BUT SINCE THE ASSES SEE DID NOT APPEAR BEFORE HIM, HE MADE AN ADDITION OF RS.5,58,826/- DI SALLOWING THE PAYMENTS UNDER SECTION 40A(3). THE LD. CIT(APPEALS) DECIDED THE ASSESSEES APPEAL EX-PARTE CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 4. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E THE TRIBUNAL AND HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLATE ORDER PASSED WAS IN VIOLATION OF PRINCIPA LS OF NATURAL JUSTICE HENCE IS BAD IN LAW AND BE QUASHED. 2. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. COMMISSIONER OF INCOME TAX APPEALS PASSED THE APPEL LATE ORDER WITHOUT GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER U/S 154 OF THE I.T. ACT 1961 WAS BEYOND JURISDICTIO N & BAD IN LAW AND HENCE THE SAME BE QUASHED. 4. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. COMMISSIONER OF INCOME TAX APPEALS ERRED IN UPHOLDI NG THE DISALLOWANCE OF RS.5,58,826/- ON ACCOUNT OF PAYMENT OF EXPENSES IN CASH U/S 40A(3) OF THE I.T. ACT 1961. T HE DISALLOWANCE IS NOT CALLED FOR HENCE THE SAME BE RE VERSED. 5. FOR THAT THE INTEREST COMPUTED U/S. 234A/B/C/D O F THE I.T. ACT 1961 IS OVER CHARGED AND WRONGLY CALCULATED AND OR IS NOT APPLICABLE TO THE ASSESSEES CASE IT BE DIRECTED TO RE-COMPUTE THE INTEREST AS PER LAW. 5. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE ORIGINAL ASSESSMENT ORDER, WHEREIN AT PAGE 2 THE ASSESSING OFFICER, AFT ER CONSIDERING THE ASSESSEES DETAILED SUBMISSIONS AS REGARDS THE DEPO SITS MADE IN THE BANK I.T.A. NO. 1288/KOL./2016 ASSESSMENT YEAR: 2009 -2010 PAGE 3 OF 4 ACCOUNT, ACCEPTED THE SAME AND DID NOT MAKE ANY DIS ALLOWANCE. HE FURTHER SUBMITTED THAT SINCE IT WAS A CASE OF DEPOS IT PERTAINING TO REIMBURSEMENT OF EXPENSES, THEREFORE, THE PROVISION S OF SECTION 40A(3) WERE NOT ATTRACTED. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF ITAT, CHENNAI BENCH IN TH E CASE OF ITO VS.- SMT. N. PADMA [2008] 25 SOT 35 (CHENNAI)(URO) IN I.T. AP PEAL NO. 682(MAD.) OF 2005 DATED APRIL 21, 2006, WHEREIN IT HAS BEEN, INTER ALIA , HELD THAT UNDER SECTION 40A(3), ONLY AN EXPENDITURE CAN BE DI SALLOWED. HE SUBMITTED THAT THE REIMBURSEMENT DOES NOT FALL IN C ATEGORY OF EXPENDITURE. 6. THE LD. D.R. SUBMITTED THAT THE ASSESSING OFFICE R HAS GIVEN SPECIFIC VOUCHER NO. IN THE ASSESSMENT ORDER AND, THEREFORE, IT PERTAINED TO DISALLOWANCE OF EXPENDITURE. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTED LY BEFORE BOTH THE LOWER AUTHORITIES ORDERS WERE PASSED EX-PARTE AND, THEREFORE, THE ASSESSEES PLEA REGARDING PAYMENTS BEING IN THE NAT URE OF REIMBURSEMENT HAS NOT AT ALL BEEN CONSIDERED. THE LD. COUNSEL HAS ALSO DEMONSTRATED THAT THE IMPUGNED AMOUNT HAS NOT BEEN DEBITED IN THE PRO FIT & LOSS ACCOUNT SO THERE WAS NO QUESTION OF SECTION 40A(3) BEING AT TRACTED. ALL THESE ASPECTS NEED TO BE CONSIDERED BY ASSESSING OFFICER AND IF THE ASSESSEES PLEA IS FOUND TO BE CORRECT, THEN NO DISALLOWANCE I S CALLED FOR. ACCORDINGLY, THE MATTER IS RESTORED BACK TO THE FIL E OF THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.06.2017. SD/- S.V. MEHROTRA (VICE-PRESIDENT) DATED: 08.06.2017 I.T.A. NO. 1288/KOL./2016 ASSESSMENT YEAR: 2009 -2010 PAGE 4 OF 4 COPIES TO : (1) SHRI SANJAY MAJUMDER, C/O. D.J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA-700 020 (2) INCOME TAX OFFICER, WARD-1(3), HOOGHLY, AAYAKAR BHAWAN, 2 ND FLOOR, ROOM NO. 209, G.T. ROAD, CHINSURAH, HOOGHLY-712 101 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-6, KOLKA TA (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO, INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.