DCIT, Circle - 13(2), Kolkata , Kolkata V. M/s. Shradha Agencies Private Limited , Howrah

ITA 1362/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0702 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-01-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 22-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI ROY
• Assessee Lawyers: ANKITA MANEK ACA
• Keywords: Earning of tax free income; Deemed to accrue or arise in india; Bad and doubtful debts; Assessment record; TDS; Rule 8D; FORM 26AS
• Section: 43B; 143(3); 14A; 40(a)(ia); 194C; 201; 139(1); 40a(ia); 13; 22; 28; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1362/KOL/2018 ( / ASSESSMENT YEAR:2013-14) DCIT, CIRCLE-13(2), KOLKATA VS. M/S SHRADHA AGENCIES PVT. LTD. MOUZA-22, MOULANA ABDUL KALAM AZAD ROAD, HOWRAH-711110 ./ ./PAN/GIR NO.: AAHCS 6372 F (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI DHRUBAJYOTI ROY, JCIT RESPONDENT BY :ANKITA MANEK, ACA / DATE OF HEARING : 15/01/2020 /DATE OF PRONOUNCEMENT : 12/06/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTA INING TO ASSESSMENT YEAR 2013-14, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-5, KOLKATA, IN APPEAL NO. 174/CIT(A)-5/CIR -13(2)/16-17, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER U/S 144 / 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 31/03/2016. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN DELETING THE ADDITIO N OF RS. 19,85,240/- AS THE CLAIM OF DEDUCTION IS RELATED TO EMPLOYEES CONTRIBUTION TO WELFARE FUNDS AND NOT TO EMPLOYERS CONTRIBUTION. M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 2 22 2 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT (A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN DELETING THE ADDITIO N OF RS. 12,72,983/- AS THE LD. CIT(A) FAILED TO APPRECIATE THE PROVISO (I) OF SECT ION 36(2) OF THE ACT AS LAID DOWN BY BOARDS CIRCULAR NO. 12/2016 DATED 30.05.2016. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN DELETING THE ADDITIO N TO THE TUNE OF RS. 6,37,75,651/- AS THE ASSESSEE FAILED TO COMPLY WITH THE PROVISION OF SECTION 194C(7) THEREBY ATTRACTING THE PROVISION OF SECTION 40(A)(IA) OF TH E ACT. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN DELETING THE ADDITIO N OF RS. 56,57,052/- AS DURING THE COURSE OF ASSESSMENT THE ASSESSEE FAILED TO FURNISH NECESSARY DOCUMENTS/EXPLANATION REGARDING THE NATURE AND NECE SSITY OF EXPENSES THAT HAS BEEN INCURRED BY IT ON BEHALF OF ITS AGENCY IN RESP ECT OF WHICH THE REIMBURSEMENT IS MADE. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN DELETING THE ADDITIO N OF RS. 2,57,213/- AS THE ASSESSEE COULD NOT PROVE DURING THE COURSE OF ASSES SMENT THE NECESSITY OF THESE EXPENSES WITH REGARD TO HIS BUSINESS. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED AND GROSSLY ERRED IN DELETING THE ADDITION OF RS. 7 6,977/- WITHOUT CONSIDERING THE BOARDS CIRCULAR NO. 5/ 2014 DATED 11.02.2014 THAT PROVISION OF SECTION 14A READ WITH RULE 8D IS TO BE INVOKED EVEN IF THERE WE RE NO EXEMPT INCOME. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, M ODIFY, AMEND AND/ OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL ON OR DUR ING THE HEARING. 3. GROUND NO. 1 RAISED BY THE REVENUE RELATES TO AD DITION OF RS. 19,85,240/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DELAYED PAYM ENTS IN EMPLOYEES CONTRIBUTION TO WELFARE FUND. 4. BRIEF FACTS QUA THE ISSUE ARE THAT FROM THE TAX AUDIT REPORT, IT WAS NOTICED BY AO THAT THE ASSESSEE HAS MADE DELAYED PAYMENTS IN RESP ECT OF THE EMPLOYEES CONTRIBUTIONS TOWARDS PROVIDENT FUND AND OTHER STAF F WELFARE FUNDS AS DETAILED BELOW- AS PER THE PROVISIONS OF SECTION 36(1)( RECEIVED BY THE ASSESSEE FROM THE EMPLOYEES TOWARDS THEIR CONTRIBUTION TO PROVIDENT FUND. SUPERANNUATION FUND, FUNDS SET UP U NDER THE E.S.I ACT OR ANY OTHER EMPLOYEE WELFARE FUND SHALL BE ALLOWED ONLY I F SUCH SUM IS CRED ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND ON OR BEFORE THE DUE DATE AS PER THE RELEVANT LAWS REGARDING THAT FUND. TO CREDIT SUMS AMOUNTING TO RS. 19, B EFORE THE DUE DATE. THEREFORE, THIS AMOUNT ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION OBSERVING THE FOLLOWING: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A/R OF THE APPELLANT IN HIS SUBMISSION HAS HELD THAT IF STATUTORY LIABILITIES LIKE PF, ESI, EPF ETC. OF FILING OF RETURN AS STIPULATED U/S 139(1) OF THE INCOME ALLOWABLE. THE A/R OF THE APPELLANT HAD CITED A NUM BER OF CASE LAWS IN HIS FAVOUR AS FOLLOWS: I) ALOM EXTRUSION LTD VS CIT 319 ITR 306 (SUPREME COUR T). II) CIT VS VIJAY SHREE LTD III) CIT VS GUJARAT STATE ROAD TRANSPORT CORPORATION M/S SHRADHA AGENCIES PVT. LTD. ITA NO. ASSESSMENT YEAR: AS PER THE PROVISIONS OF SECTION 36(1)( VA) DEDUCTION ON ACCOUNT OF ANY SUM RECEIVED BY THE ASSESSEE FROM THE EMPLOYEES TOWARDS THEIR CONTRIBUTION TO PROVIDENT FUND. SUPERANNUATION FUND, FUNDS SET UP U NDER THE E.S.I ACT OR ANY OTHER EMPLOYEE WELFARE FUND SHALL BE ALLOWED ONLY I F SUCH SUM IS CRED ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND ON OR BEFORE THE DUE DATE AS PER THE RELEVANT LAWS REGARDING THAT FUND. THE AO NOTED THAT ASSESSEE HAS FAILED TO CREDIT SUMS AMOUNTING TO RS. 19, 85,240/- TO THE EMPLOYEES ACCOUNT ON OR EFORE THE DUE DATE. THEREFORE, THIS AMOUNT WAS ADDED TO THE TOTAL INCOME OF THE 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A/R OF THE APPELLANT IN HIS SUBMISSION HAS HELD THAT IF STATUTORY LIABILITIES LIKE PF, ESI, EPF ETC. A RE PAID BELATEDLY BUT BEFORE DUE DAT OF FILING OF RETURN AS STIPULATED U/S 139(1) OF THE INCOME - TAX ACT, THE SAME IS ALLOWABLE. THE A/R OF THE APPELLANT HAD CITED A NUM BER OF CASE LAWS IN HIS FAVOUR ALOM EXTRUSION LTD VS CIT 319 ITR 306 (SUPREME COUR T). CIT VS VIJAY SHREE LTD CIT VS GUJARAT STATE ROAD TRANSPORT CORPORATION M/S SHRADHA AGENCIES PVT. LTD. ITA NO. 1362/KOL/2018 ASSESSMENT YEAR: 2013-14 P PP PA AA AG GG GE EE E | || | 3 33 3 VA) DEDUCTION ON ACCOUNT OF ANY SUM RECEIVED BY THE ASSESSEE FROM THE EMPLOYEES TOWARDS THEIR CONTRIBUTION TO PROVIDENT FUND. SUPERANNUATION FUND, FUNDS SET UP U NDER THE E.S.I ACT OR ANY OTHER EMPLOYEE WELFARE FUND SHALL BE ALLOWED ONLY I F SUCH SUM IS CRED ITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND ON OR BEFORE THE DUE DATE ASSESSEE HAS FAILED TO THE EMPLOYEES ACCOUNT ON OR ADDED TO THE TOTAL INCOME OF THE 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY AO I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A/R OF THE APPELLANT IN HIS SUBMISSION HAS HELD THAT IF RE PAID BELATEDLY BUT BEFORE DUE DAT E TAX ACT, THE SAME IS ALLOWABLE. THE A/R OF THE APPELLANT HAD CITED A NUM BER OF CASE LAWS IN HIS FAVOUR ALOM EXTRUSION LTD VS CIT 319 ITR 306 (SUPREME COUR T). M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 4 44 4 THERE IS A CLEAVAGE OF JUDICIAL OPINION, ON THE TAX ATION OF EMPLOYEES CONTRIBUTION, DEPOSITED BEYOND THE DUE DATES SPECIF IED UNDER THE PF LAWS, BUT BEFORE THE DUE DATE OF FILING INCOME-TAX RETURN. IN COMMISSIONER OF INCOME TAX-II VS GUJARAT STATE ROAD TRANSPORT CORPORATION [2014] REPORTED IN 41TAXMANN.COM 100, THE HONBLE GUJARAT HIGH COURT HAS HELD THAT I F EMPLOYEES CONTRIBUTION RECEIVED BY THE ASSESSEE IS NOT CREDITED TO THE EMP LOYEES ACCOUNT IN THE RELEVANT FUND ON OR BEFORE THE DUE DATE MENTIONED IN THE EXP LANATION TO SECTION 36(1)(VA) [I.E., THE DUE DATES UNDER PF ACT, ESI ACT/OTHER LA W], THE ASSESSEE SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT IN COMPUTING T HE INCOME REFERRED TO IN SECTION 28 OF THE ACT EVEN IF CONTRIBUTIONS DEPOSIT ED ON OR BEFORE DUE DATE SPECIFIED UNDER SECTION, THE CALCUTTA HIGH COURT HA D IN THECASE OF CTT VS M/S VIJAY SHREE LIMITED (SUPRA) HELD THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AS TO WHETHER THE DELETION OF THE ADDITION BY ASSESSING OFFICER ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO ESI AND PF BY INVOKING THE PROVISION OF SECTION 36(1 )(VA) READ WITH SECTION 2(24)(X) OFTHE ACT WAS CORRECT OR NOT. IT APPEARS THAT THE TRIBUNAL BELOW, IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., REPORTED IN 2009 VOL.390 ITR 306, HELD THAT THE DELETION WAS JUSTIFIED. BEIN G DISSATISFIED, THE REVENUE HAS COME UP WITH THE PRESENT APPEAL. AFTER HEARING MR. SINHA, LEARNED ADVOCATE, APPEARING ON BEHALF OF THE APPELLANT AND AFTER GOIN G THROUGH THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., WE FIND THAT THE SUPREME COURT IN THE AFORESA ID CASE HAS HELD THAT THE AMENDMENT TO THE SECOND PROVISO TO THE SEC 43(B) OF THE INCOME TAX ACT, AS INTRODUCED BY FINANCE ACT, 2003, WAS CURATIVE IN NA TURE AND IS REQUIRED TO BE APPLIED RETROSPECTIVELY WITH EFFECT FROM 1ST APRIL, 1988. SUCH BEING THE POSITION, THE DELETION OF THE AMOUNT PAID BY THE EMPLOYEES C ONTRIBUTION BEYOND DUE DATE WAS DEDUCTIBLE BY INVOKING THE AFORESAID AMENDED PR OVISIONS OF SECTION 43(B) OF THE ACT. WE, THEREFORE, FIND THAT NO SUBSTANTIAL QU ESTION OF LAW IS INVOLVED IN HIS APPEAL AND CONSEQUENTLY, WE DISMISS THIS APPEAL. F URTHER, IN THE CASE OF COMMISSIONER OF INCOME TAX VS GEORGE WILLIAMSON(ASS AM) LTD [2006] REPORTED IN 284 ITR 619, THE HONBLE GAUHATI HIGH COURT INTE RPRETED(IV) CLAUSE (B) OF SECTION 43B OF THE ACT, READ WITH THE SECOND PROVIS O TO THE SAID SECTION AND CLAUSE (VA) OF SUB-SECTION (1) OF SECTION 36 OF THE SAID A CT TO HOLD THAT DEPOSIT OF CONTRIBUTIONS MADE TOWARDS PROVIDENT FUND, ETC., AF TER THE CLOSE OF THE ACCOUNTING PERIOD BUT BEFORE THE DUE DATE FOR FILLING OF THE R ETURN OF INCOME WOULD BE ENTITLED TO RELIEF UNDER SECTION 43B(B) OF THE ACT. THE MATTER HAS, HOWEVER, BEEN FINALLY DECIDED BY TH E SUPREME COURT IN THE CASE OF PCIT. JAIPUR VS RAJASTHAN STATE BEVERAGES CORPORATI ON LTD [2017) 84 TAXMAN.COM 185(SC) WHERE THE APEX COURT HAD CONFIRM ED THE DECISION OF THE RAJASTHAN HIGH COURT WHICH HELD THAT AMOUNTS CLAIME D ON PAYMENT OF PF AND ESI HAVING BEEN DEPOSITED ON OR BEFORE DUE DATE OF FILING OF RETURN, SAME COULD NOT BE DISALLOWED U/S 43B OR U/S 36(1)(VA). THE APE X COURT HAD DISMISSED THE SLP OF THE REVENUE FILED AGAINST THE DECISION OF THE RA JASTHAN HIGH COURT. AFTER A CAREFUL CONSIDERATION OF THE DECISIONS AS F OREGOING, AND IN PARTICULAR, THE BINDING DECISIONS OF THE HONBLE SUPREME COURT/HIGH COURT AS DISCUSSED, IT HAS TO BE HELD THAT EMPLOYEES CONTRIBUTION DEPOSITED B EYOND THE DUE DATES SPECIFIED UNDER THE RELEVANT PF LAWS, BUT BEFORE THE DUE DATE OF FILING INCOME-TAX RETURN AS SPECIFIED IN SECTION 43B OF THE ACT, CANNOT BE TREA TED AS THE DEEMED INCOME OF THE APPELLANT WITHIN THE MEANING OF SECTION 36(1)(VA) R EAD WITH SECTION 2(24)(X) OF THE M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 5 55 5 ACT. CONSEQUENTLY, THE ADDITION OF RS.19,85,240/- M ADE BY THE ASSESSING OFFICER IS TO BE DELETED. THE ASSESSING OFFICER IS DIRECTED AC CORDINGLY. THIS GROUND OF APPEAL SUCCEEDS AND IS, THEREFORE, ALLOWED. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE RE VENUE IS IN APPEAL BEFORE US. 7. THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERA TED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OU R EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON T HE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THELD CIT( A). 8. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GON E THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSION LTD., REPORTED IN 200 9 VOL.390 ITR 306. THEREFORE, EMPLOYEES CONTRIBUTION DEPOSITED BEYOND THE DUE DATES SPECIFIED UNDER THE RELEVANT PF LAWS, BUT BEFORE THE DUE DATE OF FILING INCOME-TAX RETURN AS SPECIFIED IN SECTION 43B OF THE ACT, CANNOT BE TREA TED AS THE DEEMED INCOME OF THE APPELLANT WITHIN THE MEANING OF SECTION 36(1)(VA) R EAD WITH SECTION 2(24)(X) OF THE ACT. THEREFORE, THE ADDITION OF RS.19,85,240/- MADE BY THE ASSESSING OFFICER HAS BEEN RIGHTLY DELETED BY LD CIT(A).THAT BEING SO, WE DECLINE TO INTERFERE WITH THE ORDER OF ID. C.I T.(A) IN DELETING THE AFORESAID AD DITION. HIS ORDER ON THIS ADDITION IS, THEREFORE, UPHELD AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 9. GROUND NO. 2 RAISED BY THE REVENUE RELATES TO AD DITION OF RS. 12,72,983/- U/S 36(2) PROVISO (I) OF THE ACT, PERTAINING TO BAD DEB TS. 10. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 12,72,983/- ON ACCOUNT OF BAD DEBTS AND OTHERS WRI TTEN OFF. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO F URNISH DETAILS OF SUCH DEBTS / M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 6 66 6 ADVANCE SPECIFYING THEIR NATURE AND YEARS IN WHICH SUCH DEBTS / ADVANCE WERE TAKEN INTO ACCOUNT IN COMPUTING INCOME, ALONG WITH COPY OF LEDGER ACCOUNTS OF THE RELEVANT PARTIES SINCE THE YEAR THEY WERE FIRST CRE DITED TILL THE CURRENT YEAR. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE HAD FILE D COPY OF LEDGER ACCOUNTS OF THE ABOVE SAID BAD DEBTS, BUT NO PROOF OR OTHER DETAILS WERE FURNISHED REGARDING WHETHER THESE DEBTS WERE AT ALL TAKEN INTO ACCOUNT IN COMPUTING INCOME IN ANY PREVIOUS YEAR. THUS, THE CONDITION LAID DOWN IN SEC TION 36(2) FOR WRITE OFF OF BAD DEBT HAS NOT BEEN SATISFIED BY THE ASSESSEE. UNDER THE CIRCUMSTANCES, THE WRITE OFF OF THE AFORESAID BAD DEBT AND ADVANCES AMOUNTING TO RS. 12,72,983/- WAS NOT ALLOWED BY AO. 11. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELE TED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A.O. HAD DISALLOWED BAD DEB TS AMOUNTING TO RS. 12,72,983/- ON THE GROUNDS THAT THE APPELLANT COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE BAD DEBTS. THE A.O. IN T HE ASSESSMENT ORDER HAS OBSERVED THAT THE APPELLANT COMPANY HAS DEBITED WRI TTEN OFF AN AMOUNT OF RS. 12,72,983/- ON ACCOUNT OF BAD DEBTS IN THEIR AUDITE D P&L A/C. AS HELD BY THE APEX COURT IN THE CASE OF TRF LTD VS CIT REPORTED IN (20 10) 323 ITR 397 (SC) THIS POSITION IN LAW IS WELL- SETTLED. AFTER 1ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. THEREFORE, AS THE APPELLANT COMPANY HAS WRITTEN OFF THE BAD DEBTS IN ITS ACCOUNT, THE DISALLOWANCE OF RS. 12,72,983/- ON ACCOUNT OF B AD DEBTS IS DELETED. THIS GROUND OF APPEAL SUCCEEDS AND IS THEREFORE ALLOWED. THE A.O. IS DIRECTED ACCORDINGLY. 12. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 13. THE LD. DR HAS PRIMARILY REITERATED THE STAND T AKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF LD CIT(A). 14. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. COMPANY HAS DEBITED WRITTEN OFF AN AMOUNT OF RS. 12 ,72,983/ DEBTS IN ITS AUDITED P ROFIT OF THE APEX COURT IN THE CASE OF TRF LTD VS CIT REPORT ED IN (2010) 323 ITR 397 (SC) , WHEREIN IT WAS HELD AS FOLLOWS: THIS POSITION IN LAW IS WELL ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACC OUNTS OF THE ASSESSEE WE NOTE THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND NO. 2 RAISED BY THE REVENUE I S DISMISSED. 15. G ROUND NO. 3 RAISED BY THE REVENUE RELAT 194C(7) READ WITH SECTION 40A(IA) OF THE ACT. 16. BRIEF FACTS QUA THE ISSUE ARE THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEES WAS ASKED TO FURNISH DETAILS OF TAX (T PAYMENTS MADE BY IT AND ALSO TO FURNISH REASONS FOR NOT DEDUCTING SUCH TAX, IF ANY. IN RESPONSE, THE ASSESSEE FILED A DETAIL OF SUCH TD S VIS DETAIL IT WAS NOTICED BY THE AO FROM A NUMBER OF EXPENSES / PAYMENTS AND HAS NOT FI LED ANY REASON FOR SUCH NON DEDUCTION AS DETAILED BELOW: M/S SHRADHA AGENCIES PVT. LTD. ITA NO. ASSESSMENT YEAR: 14. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT COMPANY HAS DEBITED WRITTEN OFF AN AMOUNT OF RS. 12 ,72,983/ - ON ACCOUNT OF BAD ROFIT &LOSS ACCOUNT. THE LD CIT(A) RELIED ON THE JUDGMENT THE APEX COURT IN THE CASE OF TRF LTD VS CIT REPORT ED IN (2010) 323 ITR 397 , WHEREIN IT WAS HELD AS FOLLOWS: THIS POSITION IN LAW IS WELL - SETTLED. AFTER 1ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACC OUNTS OF THE ASSESSEE . WE NOTE THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS UPHELD AND THE GROUND NO. 2 RAISED BY THE REVENUE I S DISMISSED. ROUND NO. 3 RAISED BY THE REVENUE RELAT ES TO ADDITION OF RS. 6,37,75,651/ 194C(7) READ WITH SECTION 40A(IA) OF THE ACT. 16. BRIEF FACTS QUA THE ISSUE ARE THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEES WAS ASKED TO FURNISH DETAILS OF TAX (T DS) DEDUCTED BY IT FROM EXPENSES/ PAYMENTS MADE BY IT AND ALSO TO FURNISH REASONS FOR NOT DEDUCTING SUCH TAX, IF ANY. IN RESPONSE, THE ASSESSEE FILED A DETAIL OF SUCH TD S VIS -- VIS EXPENSE WAS NOTICED BY THE AO THAT THE ASSESSEE HAS FA ILED TO DEDUCT TAX (TDS) FROM A NUMBER OF EXPENSES / PAYMENTS AND HAS NOT FI LED ANY REASON FOR SUCH NON DEDUCTION AS DETAILED BELOW: M/S SHRADHA AGENCIES PVT. LTD. ITA NO. 1362/KOL/2018 ASSESSMENT YEAR: 2013-14 P PP PA AA AG GG GE EE E | || | 7 77 7 14. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE FINDINGS OF THE LD WE NOTE THAT THE ASSESSEE ON ACCOUNT OF BAD THE LD CIT(A) RELIED ON THE JUDGMENT THE APEX COURT IN THE CASE OF TRF LTD VS CIT REPORT ED IN (2010) 323 ITR 397 SETTLED. AFTER 1ST APRIL, 1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE . WE NOTE THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS UPHELD AND THE GROUND NO. 2 RAISED BY THE REVENUE I S DISMISSED. TO ADDITION OF RS. 6,37,75,651/ - U/S 16. BRIEF FACTS QUA THE ISSUE ARE THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE DS) DEDUCTED BY IT FROM EXPENSES/ PAYMENTS MADE BY IT AND ALSO TO FURNISH REASONS FOR NOT DEDUCTING SUCH TAX, IF ANY. VIS EXPENSE S. FROM THE ILED TO DEDUCT TAX (TDS) FROM A NUMBER OF EXPENSES / PAYMENTS AND HAS NOT FI LED ANY REASON FOR SUCH NON - M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 8 88 8 THE AO HELD THAT, THE ASSESSEE HAS FAILED TO DEDUCT TAX ON EXPENSES AMOUNTING TO RS. 6,37,75,651/- AND THUS THE CONDITION FOR ALLOWA NCE OF SUCH EXPENSE AS LAID DOWN IN SECTION 40A(IA) WAS NOT SATISFIED. THEREFOR E, EXPENSES OF RS. 6,37,75,651/- WERE DISALLOWED IN TERMS OF PROVISIONS OF SEC. 40A( IA) OF THE ACT. 17. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWINGS: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A/R OF THE APPELLANT DURING APPELLATE PROCEEDING HAS STATED THAT NO TDS WAS DEDUCTED ON THE FREIGHT PAYM ENTS AS PAN CARDS WERE OBTAINED FROM THE TRANSPORTERS IN RESPECT OF THESE PAYMENTS. ON VERIFICATION FROM THE INVOICE ISSUED BY THE TRANSPORTER IT WAS FOUND THAT IN MOST CASES, THE PAN WAS MENTIONED. IN OTHER CASES, THE PAN OF THE TRANSPORT ERS HAD BEEN OBTAINED. AS REGARDS THE OTHER PAYMENTS, IT APPEARS THAT NO TDS IS TO BE DEDUCTED AS THEY HAVE NOT CROSSED THE THRESHOLD LIMIT. AS REGARDS INTERES T CHARGES TO TATA CAPITAL AMOUNTING TO RS.4,93,785/- WHICH HAS DISALLOWED FOR NON-DEDUCTION OF TDS, IT APPEARS THAT IT HAD DOUBLE ADDITION AS THE A.O. HAS ALREADY BEEN DISALLOWED THIS AMOUNT WHICH WAS NOT CONTESTED BY THE APPELLANT DUR ING APPEAL. IN THIS REGARD, REFERENCE MAY BE MADE TO THE DECISI ON OF THE JURISDICTIONAL ITAT IN THE CASE OF IN THE CASE OF RANI GHOSH VS. DCIT, I.T .A. NO. 1420 /KOL/ 2015 HAS HELD- 'I) IN THE CONTEXT OF SECTION 194C(1), PERSON UNDER TAKING TO DO THE WORK IS THE CONTRACTOR AND THE PERSON SO ENGAGING THE CONTRACTO R IS THE CONTRACTEE; II) THAT BY VIRTUE OF THE AMENDMENT INTRODUCED BY F INANCE ACT (NO.2) 2009, THE DISTINCTION BETWEEN A CONTRACTOR AND A SUB-CONT RACTOR HAS BEEN DONE AWAY WITH AND CL. (III) OF EXPLANATION UNDER 194C(7) NOW CLARIFIES THAT 'CONTRACT' SHALL INCLUDE SUB-CONTRACT; III) SUBJECT TO COMPLIANCE WITH THE PROVISIONS OF S ECTION 194C(6), IMMUNITY FROM TDS UNDER SEC. 194C(1) IN RELATION TO PAYMENTS TO TRANSPORTERS, APPLIES TO TRANSPORTER AND NON-TRANSPORTER CONTRACTEES ALIKE; IV) UNDER SEC. 194C(6), AS IT STOOD PRIOR TO THE AM ENDMENT IN 2015, IN ORDER TO GET IMMUNITY FROM THE OBLIGATION OF TDS, FILING OF PAN OF THE PAYEE- TRANSPORTER ALONE IS SUFFICIENT AND NO CONFIRMATION LETTER AS REQUIRED BY THE LEARNED CIT IS REQUIRED; M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 9 99 9 V) SECTIONS 194C(6) AND SECTION 194C(7) ARE INDEPEN DENT OF EACH OTHER, AND CANNOT BE READ TOGETHER TO ATTRACT DISALLOWANCE U/S 40(A)(IA) READ WITH SECTION 194C OF THE ACT; AND VI) IF THE ASSESSEE COMPLIES WITH THE PROVISIONS OF SECTION 194C(6), NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS PERMISSIBL E, EVEN THERE IS VIOLATION OF THE PROVISIONS OF SECTION 194C(7) OF THE ACT.' IT IS CLEAR THAT SECTIONS 194C(6) AND SECTION 194C( 7) ARE INDEPENDENT OF EACH OTHER, AND CANNOT BE READ TOGETHER TO ATTRACT DISAL LOWANCE U/S 40A(IA) READ WITH SECTION 194C OF THE ACT; AND IF THE ASSESSEE COMPLI ES WITH THE PROVISIONS OF SECTION 194C(6), NO DISALLOWANCE U/S 40A(IA) OF THE ACT IS PERMISSIBLE, EVEN THERE IS VIOLATION OF THE PROVISIONS OF SECTION 194C(7) O F THE ACT. AFTER A CAREFUL CONSIDERATION OF THE DECISIONS OF T HE JURISDICTIONAL ITAT THE ASSESSMENT RECORDS, AND THE SUBMISSION OF THE APPEL LANT, DISALLOWANCE OF RS. 6,37,75,651/- U/S 40A(IA) OF THE ACT IS TO BE DELET ED. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. THIS GROUND OF APPEAL SUCCEED S AND IS, THEREFORE, ALLOWED. 18. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSI NG OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS N OT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THELD CIT(A). 19. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY G ONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE ORDER OF LD CIT(A) AND NOTED THAT LD CIT(A) HAS REACHED O N A LOGICAL CONCLUSION, HENCE WE NOTE THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND NO. 3 RAISED BY THE RE VENUE IS DISMISSED. 20. GROUND NO. 4 RAISED BY THE REVENUE RELATES TO A DDITION OF RS. 56,57,052/- WHICH PERTAINS TO REIMBURSEMENT OF EXPENSES. 21. BRIEF FACTS QUA THE ISSUE ARE THAT AS PER FORM NO. 26AS, THE ASSESSEE HAS BEEN IN RECEIPT OF THE FOLLOWING SUMS DURING THE F.Y. 2012 DEDUCTORS HAVE MADE TDS: OUT OF THE ABOVE, THE INCOME ON ACCOUNT OF INTEREST FROM STATE BANK OF INDIA AND G.M PENS INTERNATIONAL PVT. LTD. AS WELL AS INCOME ON ACCOUNT OF COMMISSION FROM HEINZ INDIA PVT. LTD. ASSESSEE. HOWEVER, THE RECEIPTS ON ACCOUNT OF CONTRACT FROM KEVENTER AND HEINZ INDIA PVT. LTD. AMOUNTING TO RS. 27,83,257) IS NOT FOUND TO BE CREDITED BY THE ASSES SEE, WHICH IS EVIDENT FROM THE DETAIL OF RECEIPT FROM REVENUE OPERATION PROCEEDINGS. AS SUCH, THIS RECEIPT FROM CONTRACT JO BS AMOUNTING TO RS. 56,57,052/ WAS TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE AND T HE AMOUNT THE TOTAL INCOME OF THE ASSESSEE 22. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWINGS: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A.O. HAS ADDED BACK RS.56,5 7,052/ BETWEEN AMOUNT OF RECEIPTS SHOWN IN THE BALANCE SHE ET AND THAT REFLECTED IN FORM 26AS. IT APPEARS THAT THE WITHOUT REFERENCE TO THE BOOKS OF ACCOUNTS OF THE A PPELLANT. THE APPELLANT IS MAINLY GETTING INCOME FROM SALES AND ALSO INCOME FR OM C OTHER SOURCES. ON PERUSAL OF THE BALANCE SHEET APPELLANT, IT APPEARS THAT THE APPELLANT HAD RECEIV ED TOTAL PAYMENTS AMOUNTING TO RS.66,66,117/- FROM HEINZ INDIA AS AGAINST RS.53,36,441/ 26AS. THEREFORE, THE RECEIPTS FROM HEINZ INDIA IS M UCH MORE THAN TH M/S SHRADHA AGENCIES PVT. LTD. ITA NO. ASSESSMENT YEAR: 21. BRIEF FACTS QUA THE ISSUE ARE THAT AS PER FORM NO. 26AS, THE ASSESSEE HAS BEEN FOLLOWING SUMS DURING THE F.Y. 2012 - 13 FROM WHICH THE HAVE MADE TDS: OUT OF THE ABOVE, THE INCOME ON ACCOUNT OF INTEREST FROM STATE BANK OF INDIA AND G.M PENS INTERNATIONAL PVT. LTD. AS WELL AS INCOME ON ACCOUNT OF COMMISSION FROM HEINZ INDIA PVT. LTD. WERE FOUND TO HAVE BEEN TAKEN INTO ACCOUNT BY THE RECEIPTS ON ACCOUNT OF CONTRACT FROM KEVENTER AND HEINZ INDIA PVT. LTD. AMOUNTING TO RS. 56,57,052/- ( RS.28,73,795 + RS. 27,83,257) IS NOT FOUND TO BE CREDITED BY THE ASSES SEE, WHICH IS EVIDENT FROM THE DETAIL OF RECEIPT FROM REVENUE OPERATION (SALES) FILED BY A/R DURING ASSESSMENT PROCEEDINGS. AS SUCH, THIS RECEIPT FROM CONTRACT JO BS AMOUNTING TO RS. 56,57,052/ TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE AND T HE AMOUNT OF THE ASSESSEE . ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWINGS: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A.O. HAS ADDED BACK RS.56,5 7,052/ BETWEEN AMOUNT OF RECEIPTS SHOWN IN THE BALANCE SHE ET AND THAT REFLECTED IN FORM 26AS. IT APPEARS THAT THE ADDITION HAS BEEN MADE WITHOUT APPLICATION OF MIND AND WITHOUT REFERENCE TO THE BOOKS OF ACCOUNTS OF THE A PPELLANT. THE APPELLANT IS MAINLY GETTING INCOME FROM SALES AND ALSO INCOME FR OM C & F AGENCIES BESIDES OTHER SOURCES. ON PERUSAL OF THE BALANCE SHEET AND THE LEDGER ACCOUNT OF THE APPELLANT, IT APPEARS THAT THE APPELLANT HAD RECEIV ED TOTAL PAYMENTS AMOUNTING TO FROM HEINZ INDIA AS AGAINST RS.53,36,441/ - REFLECTED IN FORM 26AS. THEREFORE, THE RECEIPTS FROM HEINZ INDIA IS M UCH MORE THAN TH M/S SHRADHA AGENCIES PVT. LTD. ITA NO. 1362/KOL/2018 ASSESSMENT YEAR: 2013-14 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 21. BRIEF FACTS QUA THE ISSUE ARE THAT AS PER FORM NO. 26AS, THE ASSESSEE HAS BEEN 13 FROM WHICH THE TDS OUT OF THE ABOVE, THE INCOME ON ACCOUNT OF INTEREST FROM STATE BANK OF INDIA AND G.M PENS INTERNATIONAL PVT. LTD. AS WELL AS INCOME ON ACCOUNT OF COMMISSION FOUND TO HAVE BEEN TAKEN INTO ACCOUNT BY THE RECEIPTS ON ACCOUNT OF CONTRACT FROM KEVENTER AGRO LTD. ( RS.28,73,795 + RS. 27,83,257) IS NOT FOUND TO BE CREDITED BY THE ASSES SEE, WHICH IS EVIDENT FROM THE (SALES) FILED BY A/R DURING ASSESSMENT PROCEEDINGS. AS SUCH, THIS RECEIPT FROM CONTRACT JO BS AMOUNTING TO RS. 56,57,052/ - TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE AND T HE AMOUNT WAS ADDED TO ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE A.O. HAS ADDED BACK RS.56,5 7,052/ -AS A DIFFERENCE BETWEEN AMOUNT OF RECEIPTS SHOWN IN THE BALANCE SHE ET AND THAT REFLECTED IN FORM ADDITION HAS BEEN MADE WITHOUT APPLICATION OF MIND AND WITHOUT REFERENCE TO THE BOOKS OF ACCOUNTS OF THE A PPELLANT. THE APPELLANT IS F AGENCIES BESIDES AND THE LEDGER ACCOUNT OF THE APPELLANT, IT APPEARS THAT THE APPELLANT HAD RECEIV ED TOTAL PAYMENTS AMOUNTING TO REFLECTED IN FORM 26AS. THEREFORE, THE RECEIPTS FROM HEINZ INDIA IS M UCH MORE THAN TH AT REFLECTED IN M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 FORM 26AS AND THIS FACT WAS NOT APPRECIATED BY THE A.O. OUT OF THE ABOVE AMOUNT, THE APPELLANT HAS REFLECTED RS.28,09,952/- AS INCOME FROM C & F AGENCY RECEIVED FROM HEINZ INDIA. THE REIMBURSEMENT OF EXP ENDITURE BY HEINZ INDIA FOR EXPENDITURE INCURRED BY THE APPELLANT ON BEHALF OF HEINZ INDIA AMOUNTS TO RS.25,26,459/-. THE BALANCE AMOUNT IS ON ACCOUNT OF SERVICE TAX PAYABLE. THEREFORE, AS REGARDS THE ACCOUNT OF HEINZ INDIA, T HERE IS NO DISCREPANCY AS REGARD PAYMENTS RECEIVED. AS REGARDS, KEVENTER AGRO LTD, THE TOTAL PAYMENT RE CEIVED AMOUNTS TO RS.51,50,068/- AS AGAINST RS.28,73,795/- REFLECTED IN 26AS. THEREFORE,SIMILARLY AS IN THE CASE OF HEINZ INDIA, THE PAYMENTS RECEIVED W ERE MUCH MORE THAN REFLECTED IN FORM 26AS. OUT OF THE ABOVE AMOUNT, A SUM OF RS. 23,40,116/- HAS BEEN REFLECTED IN THE BOOKS AS INCOME FROM C & F AGENCY RECEIVED FROM KEVENTER AGRO LTD AND A SUM OF RS.28,09,952/- RELATE TO REIMBURSE MENT OF INCOME WHICH IS REFLECTED IN LEDGER ACCOUNT. AS DISCUSSED ALL THE E NTRIES ARE REFLECTED IN BOOKS OF ACCOUNTS WHICH HAS BEEN EXAMINED. THE APPELLANT HAD SHOWN TOTAL INCOME FROM C & F AGENCY AMOUNTING TO RS.52,30,474/- IN HIS RETUR N. THE A.O. HAS TREATED THE REIMBURSEMENT EXPENDITURE AS INCOME DUE TO THE FACT S THAT TDS WAS DEDUCTED. THESE REIMBURSEMENTS UNDER NO STRETCH OF IMAGINATIO N CAN BE CONSIDERED TO BE INCOME AT THE HANDS OF THE APPELLANT. THE DEDUCTION OF TDS ON EXPENDITURE REIMBURSED WOULD NOT CHANGE THE NATURE OF THESE PAY MENTS. THERE ARE NUMBER OF JUDICIAL DECISIONS WHICH HAVE HELD THE REIMBURSEMEN T OF EXPENDITURE DOES NOT CONSTITUTE INCOME ASSESSABLE TO TAX. THE DECISIONS ARE AS FOLLOWS: (I) CIT VS DUNLOP RUBBER COMPANY LTD (1983) 142 ITR 493 (CAL) (II) CIT VS EXPEDITORS INTERNATIONAL (INDIA) (P) LT D (2012) 24 TAXMANN.COM 76 (DEL) AFTER CAREFUL CONSIDERATION OF THE SUBMISSION OF TH E APPELLANT, PERUSAL OF THE RELEVANT ASSESSMENT RECORDS AND THE DECISIONS OF TH E HONBLE HIGH COURT, THE ADDITION OF RS.56,57,052/- IS THEREFORE DELETED. 23. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 24. THE LD. DR HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF LD CIT(A). 25. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) . THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORD NO. 4 RAISED BY THE REVENUE IS DISMISSED. 26. GROUND NO. 5 RAISED BY THE REVENUE RELATES TO A DDITION OF RS. 2,57,213/ PUJA AND SUBSCRIPTION EXPENSES DISALLOWED BY AO. 27. BRIEF FACTS QUA THE ISSU NOTICED THAT THE FOLLOWING EXPENSES THEREFORE WERE DISALLOWED: 28. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPE AL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWINGS: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BATA INDIA LTD. 201 ITR 884 HAS HELD IT IS NOTORIOUS FACT TH AT, IN THE FESTIVAL MONTHS, THE SHOPS IN THIS PART OF THE COUNTRY HAVE TO PAY CONTRIBUTIONS TOWARDS CO MMUNITY CELEBRATIONS TO KEEP THE YOUTHS IN THE NEIGHBOURHOO D OF THE SHOP HAPPY TO ENSURE SMOOTH CONDUCT OF THE BUSINESS. THE EXPENDITURE CAN BE SAID TO BE AN EXPENDITURE REQUIRED TO MAINTAIN THE BUSINESS. THE JURISDICTIONAL TRIBUNAL IN THE CASE OF DAS MAJU MDER CONSTRUCTION VS. ITO IN ITA NO. 1441/KOL/2009 AND ITO VS. ASIT MUKHERJEE IN ITA NO. 2209/KOL/2010 HAVE HELD AND ALLOWED SUCH TYPES OF EXPENDITURE BEING AFTER A CAREFUL CONSIDERATION OF THE DECISIONS AS F OREGOING INCLUDING THE BINDING DECISIONS OF THE JURISDICTIONAL HIGH COURT, AND ITA T, THE ASSESSMENT RECORDS AND THE SUBMISSION OF THE APPELLANT, ADDITION ON ACCOUN T OF DONATION A IS DELETED. THE ASSESSING OFFICER IS DIRECTED ACCOR DINGLY. 29. AGGRIEVED THE ORDER OF THE LD. CIT(A) THE REVEN UE IS IN APPEAL BEFORE US. M/S SHRADHA AGENCIES PVT. LTD. ITA NO. ASSESSMENT YEAR: IN THE ORDER OF THE LD. CIT(A) . THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORD ER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND NO. 4 RAISED BY THE REVENUE IS DISMISSED. 26. GROUND NO. 5 RAISED BY THE REVENUE RELATES TO A DDITION OF RS. 2,57,213/ PUJA AND SUBSCRIPTION EXPENSES DISALLOWED BY AO. 27. BRIEF FACTS QUA THE ISSU E ARE THAT DURING THE SCRUTINY PROCEEDINGS FOLLOWING EXPENSES WERE NOT INCIDENTAL TO ASSESSEE`S DISALLOWED: 28. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER AL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWINGS: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BATA INDIA LTD. 201 ITR 884 HAS HELD IT IS NOTORIOUS FACT TH AT, IN THE FESTIVAL MONTHS, THE OF THE COUNTRY HAVE TO PAY CONTRIBUTIONS TOWARDS CO MMUNITY CELEBRATIONS TO KEEP THE YOUTHS IN THE NEIGHBOURHOO D OF THE SHOP HAPPY TO ENSURE SMOOTH CONDUCT OF THE BUSINESS. THE EXPENDITURE CAN BE SAID TO BE AN EXPENDITURE REQUIRED TO MAINTAIN THE BUSINESS. FOLLOWING DECISION OF THE CALCUTTA HIGH COURT, THE JURISDICTIONAL TRIBUNAL IN THE CASE OF DAS MAJU MDER CONSTRUCTION VS. ITO IN ITA NO. 1441/KOL/2009 AND ITO VS. ASIT MUKHERJEE IN ITA NO. 2209/KOL/2010 AND ALLOWED SUCH TYPES OF EXPENDITURE BEING RELATED TO THE BUSINESS. AFTER A CAREFUL CONSIDERATION OF THE DECISIONS AS F OREGOING INCLUDING THE BINDING DECISIONS OF THE JURISDICTIONAL HIGH COURT, AND ITA T, THE ASSESSMENT RECORDS AND THE SUBMISSION OF THE APPELLANT, ADDITION ON ACCOUN T OF DONATION A IS DELETED. THE ASSESSING OFFICER IS DIRECTED ACCOR DINGLY. 29. AGGRIEVED THE ORDER OF THE LD. CIT(A) THE REVEN UE IS IN APPEAL BEFORE US. M/S SHRADHA AGENCIES PVT. LTD. ITA NO. 1362/KOL/2018 ASSESSMENT YEAR: 2013-14 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 IN THE ORDER OF THE LD. CIT(A) . THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER ER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND 26. GROUND NO. 5 RAISED BY THE REVENUE RELATES TO A DDITION OF RS. 2,57,213/ -, BEING DURING THE SCRUTINY PROCEEDINGS THE AO ASSESSEE`S BUSINESS AND 28. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER AL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITI ON MADE BY THE I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BATA INDIA LTD. 201 ITR 884 HAS HELD IT IS NOTORIOUS FACT TH AT, IN THE FESTIVAL MONTHS, THE OF THE COUNTRY HAVE TO PAY CONTRIBUTIONS TOWARDS CO MMUNITY CELEBRATIONS TO KEEP THE YOUTHS IN THE NEIGHBOURHOO D OF THE SHOP HAPPY TO ENSURE SMOOTH CONDUCT OF THE BUSINESS. THE EXPENDITURE CAN BE SAID TO BE AN EXPENDITURE FOLLOWING DECISION OF THE CALCUTTA HIGH COURT, THE JURISDICTIONAL TRIBUNAL IN THE CASE OF DAS MAJU MDER CONSTRUCTION VS. ITO IN ITA NO. 1441/KOL/2009 AND ITO VS. ASIT MUKHERJEE IN ITA NO. 2209/KOL/2010 RELATED TO THE BUSINESS. AFTER A CAREFUL CONSIDERATION OF THE DECISIONS AS F OREGOING INCLUDING THE BINDING DECISIONS OF THE JURISDICTIONAL HIGH COURT, AND ITA T, THE ASSESSMENT RECORDS AND THE SUBMISSION OF THE APPELLANT, ADDITION ON ACCOUN T OF DONATION A ND SUBSCRIPTION 29. AGGRIEVED THE ORDER OF THE LD. CIT(A) THE REVEN UE IS IN APPEAL BEFORE US. M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 1 11 13 33 3 30. THE LD. DR HAS PRIMARILY REITERATED THE STAND T AKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY AND ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THELD CIT(A). 31. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GO NE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCU MENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS AVAILABLE ON RECORD. WE NOTE THAT PUJA AND SUBSCRIPTION EXPENSES ARE INCIDENTAL TO THE ASSESSE E`S BUSINESS THEREFORE SHOULD BE ALLOWED WE NOTE THAT THERE IS NO INFIRMITY IN THE O RDER OF THE LD. CIT(A) . THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASS ED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE, IS HEREBY UPHELD AND THE GROUND NO. 5 R AISED BY THE REVENUE IS DISMISSED. 32. GROUND NO. 6 RAISED BY THE REVENUE RELATES TO A DDITION OF RS. 76,977/- ON ACCOUNT OF DISALLOWANCE U/S 14A READ WITH RULE 8D O F THE RULES. 33. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE IN GROUND NO. 6 IS NO LONGER RES INTEGRA . SINCE THE ASSESSEE DOES NOT HAVE ANY EXEMPT INCOME THEREFORE NO DISALL OWANCE IS WARRANTED AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEM INVESTMENT VS CIT REPORTED IN 317 ITD 33 (DEL) WHEREIN IT WAS HELD THAT IF THE RE IS NO EXEMPT INCOME EARNED OR RECEIVED BY THE ASSESSEE, NO DISALLOWANCE IS WAR RANTED U/S 14A READ WITH RULE 8D OF THE RULES. SINCE THIS ISSUE IS SQUARELY COVER ED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEM INVESTMENT (SUPRA) THEREF ORE, WE DISMISS THE GROUND NO. 6 RAISED BY THE REVENUE AND UPHELD THE ORDER OF LD CIT(A). 34. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS B EING PRONOUNCED AFTER 90 DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE M/S SHRADHA AGENCIES PVT. LTD. ITA NO.1362/KOL/2018 ASSESSMENT YEAR:2013-14 P PP PA AA AG GG GE EE E | || | 1 11 14 44 4 EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO- ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F DCIT VS. JCB LIMITED IN ITA NO. 6264/MUM/2018 AND ITA NO. 6103/MUM/2018 FOR A.Y. 2013-14 ORDER DATED 14.05.2020. 35.IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 12.06.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 12/06/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-13(2), KOLKATA 2. M/S SHRADHA AGENCIES PVT. LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES