Sri Nabarun Kanti Saha, Burdwan V. ACIT, Circle - 2, Burdwan, Burdwan

ITA 1383/KOL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5297 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBA JYOTI RAY JCITSRDR
• Keywords: Principle of natural justice; Assessment record; TDS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH VIRTUAL COURT A KOLKATA BEFORE SHRI P.M.JAGTAP, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1383/KOL/2017 ASSESSMENT YEAR:2013-14 SRI NABARUN KANTI SAHA PARULIA BAZAR, P.O. PARULIA, P.S. PURBASTHALI, DIST. BURDWAN-713513 [ PAN NO.CCWPS 8624 Q ] / V/S . ACIT, CIRCLE-2, BURDWAN AYAKAR BHAWAN, COURT COMPOUND, BURDWAN- 713101 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SOUMITRA CHOUDHURY, ADVOCATE /BY RESPONDENT SHRI DHRUBAJYOTI RAY, JCIT-SR-DR /DATE OF HEARING 06-10-2020 /DATE OF PRONOUNCEMENT 09-10-2020 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-BURDWANS ORDE R DATED 31.03.2017, PASSED IN CASE NO.16/CIT(A)/ACIT/CIR:2/BWN/2016-17 U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED IN THE INSTANT APPEAL SEEKS TO REVERSE BOTH THE LOWER AUTHORITIES ACTION DISALLOWI NG / ADDING 15% OF THE SUB-AGENT COMMISSION INVOLVING PAYMENTS OF 2,35,11,268; COMING TO 35,26,690/-; IN THE COURSE OF ASSESSMENT FRAMED ON 08.03.2016 AND AFFIR MED IN THE CIT(A)S ORDER UNDER CHALLENGE. ITA NO.1383/KOL/2017 A.Y. 2013-14 SH. NABARUN KANTI SAHA VS. ACIT, CRI-2 BW N PAGE 2 3. WE ADVERT TO THE RELEVANT FACTS AND FIND THAT TH E ASSESSEE / INDIVIDUAL IS A DISTRIBUTOR AND COMMISSION AGENT IN TELEPHONE / MOB ILE SERVICES. HE RUNS HIS PROPRIETORSHIP BUSINESS IN THE NAME AND STYLE OF M/ S SAHA COMMUNICATION IN PARULIA. THE ASSESSEE HAD CLAIMED THE IMPUGNED SUB-AGENT OF 2,35,11,268/- TO HAVE BEEN PAID TO VARIOUS SUB-AGENT(S) WHILST CARRYING OUT DISTRIB UTION AND COMMISSION AGENT BUSINESS IN COMMUNICATIVE SERVICES. THE ASSESSING OFFICER INTER ALIA NOTED IN HIS ASSESSMENT ORDER THAT HE HAD FAILED TO FILE THE CORRESPONDING BOOKS OF ACCOUNT REGARDING THE IMPUGNED SUB BROKER RE-CHARGES PAYMENTS DESPITE HAV ING BEINGAFFORDED VARIOUS OPPORTUNITIES ON 19.11.2015, 18.12.2015, 13.01/.201 6 25.01.2016 08.02.2016, 16.02.16 AS WELL AS ON THE DATE OF ASSESSMENT (SUPR A). THIS MADE THE ASSESSING OFFICER TO INVOKE THE IMPUGNED AD HOC DISALLOWANCE @ 15% COMING TO 35,26,690/-. 4. THE CIT(A) HAS AFFIRMED THE SAME VIDE ITS FOLLOW ING DETAILED DISCUSSION:- 3. DISCUSSIONS AND FINDINGS:- AT THE VERY OUTSET IT MAY BE MENTIONED THAT THE APP ELLANT HAS NOT SHOWN MUCH OF AN ALACRITY IN COMPLYING WITH STATUTORY REQUIREMENTS. IN THE CASE OF FILING OF THIS APPEAL, THE APPELLANT ORDER APPEALED AGAINST HAS BEEN PASSED ON 08.03.16. THE D EMAND NOTICE HAS BEEN ISSUED ON 08.03.2016 THE AO HAS ALSO SUPPLIED A COPY OF THE POSTAL ENVELOP SHOWING THE DATE OF 08.03.2016, ON WHICH THE NOTICE WAS DULY SENT TO TH E APPELLANT, DESPITE THIS, THE APPELLANT HAS TRIED TO SUGGEST THAT HE RECEIVED THE NOTICE FOR DE MAND ON 18.03.2016, AFTER WHICH HE FILED THE APPEAL ON 18.04.2016. HE HAS NOT PRODUCED ANY EVIDE NCE TO ESTABLISH THAT THE NOTICE WAS RECEIVED ON THE DATE ON WHICH HE SAYS IT WAS RECEIV ED. AS PER RECORDS, THE APPEAL HAS BEEN FILED LATE, WITHOUT ANY REASONS BEING OFFERED FOR T HIS DELAY. THE APPEAL, IN THE ABSENCE OF ANY REASON FOR THIS DELAY, CANNOT BE CONDONED AUTOMATIC ALLY AND STANDS DISMISSED . WITHOUT PREJUDICE TO THE ABOVE, IT IS FOUND, UPON A STUDY OF THE GROUNDS OF APPEAL THAT: GROUND 1 : THIS GROUND AGITATES THE LACK OF OPPORTUNITY BEING GIVEN TO THE APPELLANT AND THEREFORE IT BEING PREJUDICIAL TO HIM ON ACCOUNT OF DEPRIVATION OF NATURAL JUSTICE. AS STUDY OF THE AM ORDER BELIES ALL SUCH CONTENTION S AS THE AO HAS SUFFICIENTLY DOCUMENTS, IN THE BODY OF THE ORDER ITSELF, THE NUMBER OF TIMES T HE APPELLANT HAS BEEN AFFORDED OPPORTUNITIES AND WHICH HE HAS NOT AVAILED OF. THE APPELLANT HAS BEEN VARIOUSLY ASKED TO PRODUCE BOOKS OF ACCOUNT, SUPPORTING MATERIAL, DOCUMENTS IN SUPPORT OF EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT, SHOW CAUSE NOTICE ETC. THE APPELLANT, IT I S DOCUMENTED, HAS NOT AVAILED OF ANY OPPORTUNITY AND HAS BEEN TRYING TO PROCRASTINATE IN ORDER TO AVOID SUBMITTING EVIDENCE, WHICH, IT CAN ONLY BE INFERRED, HE DOES NOT POSSESS . IN VIEW OF THIS, IT CANNOT BE UNDERSTOOD HOW AND ON WHAT BASIS THE APE IS SUGGESTING THAT HE WAS NOT AFFORDED AMPLE OPPORTUNITY. THIS GROUND THEREFORE STANDS DISMISSED . GROUND 2 : THE APPELLANT HAS SUGGESTED THAT THE ORDER WAS MADE WITHOUT APPLICATION OF INTELLECT AND MECHANICALLY WITHOUT PROPER JUSTICE. THE APPELLANT HAS NOT ELABORATED UPON THIS ISSUE. AS PER RECORD AND A STUDY OF THE ASSESSMENT ORDER, THERE I S NOTHING THAT SEEMS TO SUPPORT THIS CLAIM OF THE APPELLANT. THE APPELLANT HAS ALSO NOT CLARIF IED THIS ISSUE DURING APPEAL. THE ONLY CONTENTION THAT THE APPELLANT HAS MADE IN THIS CONT EXT IS THAT HE PRODUCED ALL THE DOCUMENTS BEFORE THE AO BUT THE LATTER DID NOT CONSIDER THEM WHILE DRAFTING THE ORDER OF ASSESSMENT. ITA NO.1383/KOL/2017 A.Y. 2013-14 SH. NABARUN KANTI SAHA VS. ACIT, CRI-2 BW N PAGE 3 IN THE DOCUMENTS THAT HE HAS SUBMITTED, IT IS HOWEV ER FOUND THAT THERE IS NO EVIDENCE THAT THESE DOCUMENTS HAD INDEED BEEN SUBMITTED BEFORE TH E AO. THE LATTER, ON THE OTHER HAND, HAS CLEARLY BROUGHT OUT IN HIS ORDER THAT DESPITE REPEA TED OPPORTUNITIES, THE APPELLANT DID NOT BRING FORTH ANY EVIDENCE WITH REGARD TO HIS RETURN OF INCOME. THE APPELLANT WAS ENGAGED IN THE BUSINESS IN THE TR ADE NAME OF SAHA COMMUNICATION. HE WORKED AS COMMISSION AGENT AND DISTRIBUTOR OF MOBIL E SIMS, RECHARGE VOUCHERS ETC. FOR RELIANCE TELECOM LTD AND ALSO IN THE TRADING OF MOB ILE SETS AND ACCESSORIES. IT TRANSPIRES THAT DURING ASSESSMENT, THE APPELLANT AFTER SEVERAL NON-COMPLIANCES, SUBMITTED AN AUDIT REPORT, PROFIT AND LOSS ACCOUNT AND BANK S TATEMENT. DESPITE THE AO ASKING FOR THEM, THE BOOKS OF ACCOUNT WERE NOT PRODUCED. NO VOUCHERS , SUPPORTING DOCUMENTS ETC. WERE PRODUCED. FINALLY, HE WAS ASKED BY THE AO TO SUBSTA NTIATE THE SUB-BROKER POINT RE-CHARGES AMOUNTING TO RS.2,13,57,878/- DEBITED IN HIS PROFIT AND LOSS ACCOUNT. THE ONLY SUBMISSIONS THAT THE APPELLANT MADE IN THIS CONTEXT WAS THAT IN THE PROFIT AND LOSS ACCOUNT THE COMMISSION AMOUNT OF RS 2.35,11,268/-, WAS PAID TO SUB AGENTS FROM THE ORIGINAL COMMISSIONS WHICH HE RECEIVED FROM THE COMPANY AMOUNT TO RS.2,60,45,250/ - AS PER BANK TRANSACTIONS. THE AO ONCE AGAINST RECORDS THAT NO SUPPORTING DOCUMENTS W ERE PRODUCED BY THE APPELLANT. EVEN IN THESE CIRCUMSTANCES OF THE APPELLANT STEADFASTLY NO T PRODUCING ANY DETAILS, THE AO WAS MORE THAN LENIENT AND MODERATE, IN DISALLOWING ONLY 15% OF THESE EXPENSES. IN THESE CIRCUMSTANCES, THE BASIS FOR THE APPELLANTS AGITAT ION CANNOT BE UNDERSTOOD. THE ORDER OF THE AO IS HARDLY EXCESSIVE OR ARBITRARY, BUT IN FACT IS IN CONFORMITY WITH THE PRINCIPLES OF NATURAL JUSTICE. THIS GROUND IS THEREFORE DISMISSED . THIS LEAVES THE ASSESSEE AGGRIEVED. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED AD HOC DISALLOWANCE. THERE IS HARDLY ANY ISSUE BETWEEN TH E PARTIES THAT THIS TAXPAYER HAS ACTED AS DISTRIBUTOR / COMMISSION AGENT IN TELEPHONE / MOBILE SERVICES AND PAID THE IMPUGNED RE-CHARGE SUM (S) TO THE SUB-AGENTS WORKING IN THE FIELD. LEARNED DEPARTMENTAL REPRESENTATIVE VEHE MENTLY SOUGHT TO HIGHLIGHT THE FACT THAT ASSESSEE HAD FAILED TO FILE THE RELEVANT DETAI LED EVIDENCE BEFORE BOTH THE LOWER AUTHORITIES WHICH FORMED THE SOLE REASON FOR THE IM PUGNED ESTIMATED DISALLOWANCE. (THE ASSESSEE ON THE OTHER HAND HAS INVITED OUR ATT ENTION TO HIS DETAILED PAPER BOOK(S) RUNNING INTO 128 PAGES DULY CERTIFIED THAT ALL THE CORRESPONDING DOCUMENTS FORMED PART OF THE ASSESSMENT RECORD. MR. CHOUDHURY NEXT T OOK US TO A CERTIFICATE DATED 18.02.2016 ( MUCH BEFORE THE ASSESSMENT ORDER DATED 08.03.2016 ) COMING FROM THE CELLULAR OPERATOR M/S RELIANCE TELECOM LIMITED MAKI NG IT CLEAR THAT THE CORRESPONDING E-RE-CHARGES AMOUNT INVOLVED A SUM OF 235,11,268 INCLUDING COMMISSION OF 113,06,268/- AND RE-CHARGE(S) FIGURE OF 122,05,000/-; RESPECTIVELY AS PER THE RELEVANT UNDERSTANDING BETWEEN THE PARTIES. THERE IS NO REBUTTAL TO THIS CLINCHING FACT COMING FROM THE REVENUES SIDE. THE ASSESSEE HAS ALSO PLACED ON RECORD THE RELEVANT DETAILS OF ALL THE CORRESPONDING RE-CH ARGE TRANSACTIONS HIS PAGES 2 TO 96 OF ITA NO.1383/KOL/2017 A.Y. 2013-14 SH. NABARUN KANTI SAHA VS. ACIT, CRI-2 BW N PAGE 4 THE PAPER BOOK. THERE IS NO PRAYER COMING FROM THE DEPARTMENT SIDE THAT THE ASSESSEES CERTIFICATE HAVING PLACED ON RECORD ALL THESE DOCUMENTS IS FACTUALLY INCORRECT. 6. WE PROCEED FURTHER TO NOTE THAT THE ASSESSEE HAS ALSO PLACED ON RECORD PROFIT AND LOSS ACCOUNT AT PAGE 104 IN THE PAPER HAVING DI SCLOSED NET PROFIT ON TURNOVER @ 6.92% NOT IDENTIFY ANY ABNORMAL TREND VIS--VIS EA RLIER AND LATTER ASSESSMENT YEARS. THIS TRIBUNALS CO-ORDINATE BENCH ORDER IN ITA NO.1464/KOL/2014 GOURANGA SUNDAR MONDAL VS. INCOME TAX OFFICER WARD-2(1) BURDWAN DEC IDED ON 07.09.2018 ALSO APPEARS TO HAVE DELETED IDENTICAL DISALLOWANCE IN S IMILAR TELEPHONE INCOME / MOBILE SERVICES DISTRIBUTION AND COMMISSION BUSINESS ON T HE BASIS OF CELLULAR OPERATORS CERTIFICATE AS UNDER:- 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH T HE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE IS A PROPRIETOR OF DISHA COMMUNICATIONS AND WAS A DISTRIBUTOR UNDER M/S. DWL (AIRCEL) MOBILE NETWOR KING FOR THE AREAS BURDWAN TOWN, BUD BUD, KALNA, KATWA AND MEMARI. THE AIRCEL ALLOWED INCENTIVE TO RETAIL SHOP FOR ACTIVATION CHARGES THROUGH DISTRIBUTORS, T HE ASSESSEE DISHA COMMUNICATIONS. FROM A PERUSAL OF THE P&L ACCOUNT FILED BEFORE US, WE FIND THAT THE TOTAL TURNOVER OF THE ASSESSEE WAS TO THE TUNE OF RS.2,24,22,061/- AN D THE COMMISSION RECEIVED FROM AIRCEL IS SHOWN AS RS.3,17,699/-. ACCORDING TO THE ASSESSEE, THE AIRCEL HAS PAID RETAIL INCENTIVE COMMISSION OF RS.65,12,658/- DIRECTLY TO THE RETAILERS IN THE FORM OF RECHARGING COMMISSION, ACTIVATION CHARGES ON BEHALF OF THE ASSESSEE. HOWEVER, THE TDS CREDIT WAS REFLECTED ON ASSESSEES ACCOUNT AND, THEREFORE, THE CONFUSION HAS HAPPENED, THOUGH THE FACT IS THAT THE ASSESSEE HAS BEEN PAID AS COMMISSION ONLY RS.3,17,699/-. ACCORDING TO THE ASSESSEE, THE AO IS SUED LETTER DATED 23.12.2010 TO THE PRINCIPAL OFFICER OF AIRCEL AND SINCE THE AO DID NO T RECEIVE ANY REPLY FROM THE AIRCEL MADE THE ADDITION OF RS.62,27,292/- AND CONCLUDED T HE ASSESSMENT VIDE ORDER DATED 31.12.2010. ON APPEAL, THE LD. CIT(A) TAKING NOTE O F THE LETTER DATE 28.12.2010 OF AIRCEL WAS PLEASED TO MAKE AN ENHANCEMENT OF RS.2,8 5,366/- AS WELL AS CONFIRMED THE ACTION OF THE AO IN MAKING ADDITION OF RS.62,27,292 /-. THE LD. AR DREW OUR ATTENTION TO THE LETTER OF THE AIRCEL DATED 08.02.2 012 WHEREIN THE AIRCEL HAS CLARIFIED THE FACT THAT IT HAD PAID COMMISSION OF ONLY RS.3,1 7,699/- TO THE ASSESSEE AND RS.65,12,658/- WAS REMITTED TO THE RETAILERS IN THE FORM OF RECHARGE COMMISSION, ACTIVATION CHARGES BY AIRCEL ON BEHALF OF THE ASSES SEE. THAT LETTER DATED 08.02.2012 OF THE AIRCEL TO THE ASSESSEE EXPLAINING THE FACTS IS REPRODUCED BELOW: ITA NO.1383/KOL/2017 A.Y. 2013-14 SH. NABARUN KANTI SAHA VS. ACIT, CRI-2 BW N PAGE 5 5. WE HAVE CROSSED CHECKED THE FIGURES AND FIND IT TO TALLY WITH THE FIGURES OF P&L ACCOUNT AND OTHER LETTERS EARLIER ON RECORD. FROM A PERUSAL OF THE P&L ACCOUNT, WE NOTE THAT THE ASSESSEE HAS SHOWN THE COMMISSION REC EIVED FROM AIRCEL TO THE TUNE OF ITA NO.1383/KOL/2017 A.Y. 2013-14 SH. NABARUN KANTI SAHA VS. ACIT, CRI-2 BW N PAGE 6 RS.3,17,699/- WHICH IS THE SAME FIGURE AS REFLECTED IN THE LETTER DATED 08.02.2012, WHICH IS STATED IN THE LETTER WRITTEN BY AIRCEL PUR SUANT TO THE NOTICE OF AO. WE NOTE FROM PAGE 3 PARA 5 OF THE IMPUGNED ORDER OF THE LD. CIT(A) WHEREIN THE LD. CIT(A) HAS REFERRED TO THE LETTER DATED 28.12.2010 FROM M/ S. DWL (AIRCEL) WHEREIN IT HAS CONFIRMED THE PAYMENT OF RS.65,12,658/- WHICH ALSO TALLIES WITH THE FIGURE OF RS.65,12,658/- AS REFERRED TO IN LETTER DATED 08.02 .2012 WHICH HAS BEEN REPRODUCED ABOVE. TAKING INTO CONSIDERATION THE AFORESAID FACT S AND THE AFORESAID LETTER, THE COMMISSION ATTRIBUTABLE TO THE ASSESSEE AS HIS INCO ME IS ONLY RS.3,17,699/- AND , THEREFORE, ASSESSEE CANNOT BE SADDLED WITH THE ADDI TION OF AMOUNT WHICH HAS NOT BEEN DISBURSED TO THE ASSESSEE BY AIRCEL. SO, WE ARE INC LINED TO ALLOW THE APPEAL OF THE ASSESSEE. WE ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTAN DIS AND MORE SO IN THE LIGHT OF CORRESPONDING CERTIFICATE COMING FROM THE M/S RELIA NCE COMMUNICATION LIMITED IN ASSESSEES CASE TO HOLD THAT BOTH THE LOWER AUTHORI TIES HAVE ERRED IN LAW AND ON FACTS IN MAKING THE IMPUGNED AD HOC DISALLOWANCE @ 15% OF 235,11,268/-.THE SAME STANDS DELETED. 7. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09/10/2020 SD/- SD/ - ( !) (#$ ') (P.M.JAGTAP) (S.S.GODARA) VICE PRESIDENT JUDICIAL MEMBER *DKP-SR.PS ( - 09/10/2020 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SRI NABARUN KANTI SAHA PARULIA BAZAR, P. O. PARULIA, P.S. PURBASTHALI, DIST/. BURDWAN-713513 2. /RESPONDENT-ACIT, CIR-2, AYAKAR BHAWAN, COURT COMPO UND, BURDWAN-713101 3. + . / CONCERNED CIT 4. . - / CIT (A) 5. / $$+ , + / DR, ITAT, KOLKATA 6. 3 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ +,