ITO,Ward-2(3), Kolkata, Kolkata V. M/s. Happy e Zone Ltd, Kolkata

ITA 1301/KOL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5106 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 16-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 10-09-2012
• Court: TRIBUNAL
• Assessee Lawyers: S S GUPTA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.1301/KOL/2012 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER, WD-2(3), KOLKATA. VS. M/S. H APPY E ZONE LTD. (PAN: AABCH1755M) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 16.02.2016 DATE OF PRONOUNCEMENT: 16.02.2016 FOR THE APPELLANT: SHRI ASHOK KUMAR, JCIT FOR THE RESPONDENT: SHRI S. S. GUPTA, FCA ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-I, KOLKATA VIDE APPEAL NO. 448/CIT(A)-1/WD-2(3)/08-09 & 957/CIT(A)-1/WD-2(3)/1 1-12 DATED 22.06.2012. ASSESSMENT WAS FRAMED BY ITO, WD-2(3), KOLKATA U/S. 147/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006- 07 VIDE HIS ORDER DATED 28.12.2011. 2. AT THE OUTSET, IT IS NOTICED FROM THE ORDER OF CIT(A) THAT THE ORDER IS A COMBINED ORDER FOR ASSESSMENT FRAMED BY AO U/S. 143(3) AND REASSESSMEN T FRAMED U/S. 147/143(3) OF THE ACT. THIS WAS POINTED OUT BY LD. COUNSEL FOR THE ASSESSEE AND SUBSEQUENTLY HE ALSO DREW OUR ATTENTION TO THE REVISED GROUNDS FILED BY REVENUE WITHDRAWING FI RST GROUND PERTAINING TO ASSESSMENT FRAMED U/S. 143(3) OF THE ACT. NOW ONLY GROUND REMAINS TO BE ADJUDICATED IS AS REGARDS TO THE ADDITION MADE BY THE AO BUT DELETED BY THE CIT(A) IN RESPECT TO COMMISSION INCOME OF RS.5,75,87,065/- FOR THE REASON THAT THE ASSESSEE IS ABLE TO RECONCI LE THE RECEIPT OF COMMISSION. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE COMP ANY IS AUTHORIZED FRANCHISEE OF BSNL AND ALSO ENGAGED IN THE BUSINESS OF IT AND COMMISSION A GENCY. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT IT HAS CREDITED COMMISSION ACCOUNT BY A SUM OF RS.20,11,544/- BUT THE COMMISSION RECEIVED IS MUCH MORE THAN THAT AMOUNT. ACCORDING TO AO, THE ASSESSEE HAS RECEIVED COMMISSION FROM SUPER DIA MOND NIRMAN PVT. LTD. AMOUNTING TO RS.14,88,802/- AND ALSO REVELED FROM TDS CERTIFICAT ES ISSUED BY BSNL THAT THE TOTAL COMMISSION RECEIVED IS AT RS.5,81,34,307/-. THE FOLLOWING IS THE DETAIL OF COMMISSION RECEIVED FROM BSNL: 2 ITA NO.1301/KOL/2012 HAPPY E ZONE LTD., AY 2006-07 SL. NAME OF THE DEDUCTOR NATURE OF PAYMENT AMOUNT CREDITED RS. TDS MADE AMOUNT OF TDS RS. 1. 2. BIPLAB KR. DEY, SR. ACCOUNTS OFFICER (C/S), TELEPHONE BHAWAN, KOLKATA-1. TARA SHANKAR MUKHERJEE, SR. ACCOUNTS OFFICER (C/S II), TELEPHONE BHAWAN, KOLKATA-1. COMMISSION COMMISSION 4,33,88,768/- 1,47,45,539/- @ 0.24% @ 0.25% 1,08,471/- 36,948/- TOTAL RS. 5,81,34,307/- 1,45,419/- ACCORDINGLY, THERE IS DIFFERENCE IN COMMISSION RECE IVED AND DISCLOSED AT RS.5,75,87,065/- AND HE MADE ADDITION OF THIS TO THE RETURNED INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER TAKING REMAND REPOR T FROM THE AO AND ALSO CLARIFICATION LETTER ISSUED BY BSNL THAT THE COMMISSION CREDITED ON ACCO UNT OF ASSESSEE IS TO THE TUNE OF RS.1,92,08,841/-, HE DELETED THE ADDITION. AGGRIEV ED, REVENUE IS IN SECOND APPEAL BEFORE TRIBUNAL. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ORIGINALLY BSNL IN ITS TDS CERTIFICATE S DISCLOSED COMMISSION PAYMENT TO ASSESSEE AT RS.5,81,34,307/- BUT SUBSEQUENTLY, BSNL ISSUED T DS CERTIFICATE (REVISED) WITH A CLARIFICATION LETTER DATED 03.02.2012 STATING THAT THE TOTAL COMM ISSION PAID TO THE ASSESSEE WAS TO THE TUNE OF RS.1,92,08,841/-. THE RELEVANT CLARIFICATION BY VI RTUE OF WHICH IT WAS EXPLAINED THAT CORRECT AMOUNT OF PAYMENTS MADE BY BSNL VIDE LETTER DATED 0 3.02.2012, READS AS UNDER: SL. NO. NAME OF THE DEDUCTOR AMOUNT CREDITED RS. AM OUNT OF TDS RS. 1. RABINDRA NATH MONDAL (PREVIOUSLY BIPLAB KR. DEY) SR. ACCOUNT OFFICER (C/S), TELEPHONE BHAWAN, KOLKATA-1 44,63,302/- 1,08,471/- 2. TARA SHANKAR MUKHERJEE, SR. ACCOUNT OFFICER (C/S-II), TELEPHONE BHAWAN, KOLKATA-1. 1,47,45,539/- 36,948/- TOTAL 1, 92,08,841/- 1,45,419/- IT WAS EXPLAINED BEFORE US AND ALL THE DOCUMENTS WE RE FILED BEFORE AO DURING REMAND PROCEEDINGS BY THE ASSESSEE THAT THE ABOVE REFERRED COMMISSION AMOUNTING TO RS.1,92,08,841/- ARE IN THE NATURE OF DISCOUNT/REBATE ONLY, WHICH WA S ALLOWED BY BSNL IN THE SALE BILLS AND IT CARDS AND EXCEL CALL CARDS ISSUED RESPECTIVELY. HE EXPLAINED THE PROCEDURE THAT BSNL ARE IN SYSTEM OF RAISING THE SALE BILLS STATING FACE VALUE OF THEIR PRODUCTS AS GROSS AMOUNT OF SALE AND THE GROSS MARGIN ALLOWED AS COMMISSION. LD. COUNSE L FOR THE ASSESSEE DREW OUR ATTENTION TO ONE SUCH SALE BILL WHEREIN COMMISSION IS ONLY 10% AND B ALANCE IS SALE PRICE OF THE PRODUCT. THE NET 3 ITA NO.1301/KOL/2012 HAPPY E ZONE LTD., AY 2006-07 PAYABLE AMOUNT AFTER ADJUSTING THE COMMISSION AS RE FERRED ABOVE WAS PAID WHILE MAKING PURCHASE OF BSNL PRODUCTS. THE ASSESSEE SUBMITTED COPIES OF THESE BILLS IN ITS PAPER BOOK WHICH WERE AVAILABLE BEFORE THE LOWER AUTHORITIES A LSO. IN TERM OF THIS RECONCILIATION FILED BEFORE US, LD. COUNSEL FOR THE ASSESSEE STATED THAT THERE IS NO DISCREPANCY WHATSOEVER IN ITS ACCOUNTS QUA THIS COMMISSION AND HENCE, ACCORDING TO HIM, CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE FIND FROM THE FACTS AND CIRCUMSTANCES THAT AS PER TDS CE RTIFICATE ISSUED BY BSNL AND THE RECEIPTS SHOWN IN THE LEDGER ACCOUNT OF THE ASSESSEE AS WELL AS P&L ACCOUNT ARE TO THE TUNE OF RS.44,63,302/-. THE ASSESSEES DETAILED RECONCILIAT ION REGARDING PURCHASE DEBITED IN P&L ACCOUNT ARE TO THE EXTENT OF RS.37,09,83,965/- ON N ET ACCOUNT BASIS INCLUDING THE SALES MADE TO BSNL. ACCORDINGLY, WE ARE OF THE VIEW THAT CIT(A) HAS RIGHTLY DELETED THE ADDITION AND THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) AND HENCE, D ISMISS THIS APPEAL OF REVENUE. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 TH FEBRUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-2(3), KOLKATA 2. RESPONDENT M/S. HAPPY E ZONE LTD., 21, CAMAC STRE ET, HAPPY HOUSE, 7 TH FLOOR, KOLKATA-700 016. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .