ITO,Ward-45(3), Kolkata, Kolkata V. Sri Rajesh Kr. Agarwal, Kolkata

ITA 1424/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83217 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-10-2012
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASADJCIT
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE HON BLE SRI MAHAVIR SINGH, JM& HON BLE SRI SHAMIM YAHYA , A M ] ITA NO.1424 /KOL/2012 ASSESSMENT YEAR : 2007 - 08 ( A PPELLANT ) (RESPONDENT) I.T.O., W ARD - 45(3) - VS - SRI RAJESH KR.AGARWAL KOLKATA KOLKATA (PAN: ADHPA 0736 H) FOR THE APPELLAN T SHRI RAJENDRA PRASAD,JCIT FOR THE RESPONDENT SRI SUNIL SURANA,ADVOCATE DATE OF HEARING : 01.12.2014 DATE OF PRONOUNCEMENT : 03.12.2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF L D. C.I.T - XXX , KOLKATA DT. 14.06 .2012 AND PERTAIN S TO ASSESSMENT YEAR 2007 - 08. 2. THE GROUNDS OF APPEAL READ AS UNDER : - ) THAT ON THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW BY DELETING THE ADDITION AMOUNT OF RS.22,10,000/ - FOR PAYMENT TO CONTRACTOR/SUB - CONTRACTOR WITHOUT DEDUCTING THE TAX WHICH WAS MADE BY INVOKING PROVISION OF SEC.40(A)(IA) OF THE IT ACT, 1961. II) THAT THE LD. C IT(A) HAS ERRED IN LAW BY ACCEPTING ADDITIONAL FRESH DOCUMENTS I.E. COPY OF THE AGREEMENT DATED 15/01/2007 WHICH WAS NEVER PRODUCED BY THE ASSESSEE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. EVEN THE CIT(A) DID NOT GIVE AN OPPORTUNITY TO THE AO WHILE ACCEPTING THE ASSESSEE PLEA, WHICH ATTRACTS VIOLATION OF RULE 46(A) OF THE I.T.ACT, 1961. III) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR ABROGATE ANY GROUND OF APPEAL AT THE TIME OF HEARING. 3. IN THIS CASE THE AO NOTED THAT THE ASSESSEE HAS RECEIVED RS.29,85,000/ - FROM BHARAT COOKING COAL LTD. (BCCL) FOR SUPPLY OF TRANSFORMERS WITH A CONTRACT FOR MAINTENANCE OF SUCH TRANSFORMER. HE FURTHER NOTED THAT THE TRANSFORMER WHICH WERE SOLD BY THE ASSESSEE TO BCCL WERE REPAIRED BY CRO MPTON GRE VES LTD BY A SUB - ITA.NO.1424 /K/2012 SRI RAJESH KR.AGARWAL A.YR. 2007 - 08 2 CONTRACT WITH THE ASSESSEE AND OUT OF WHICH THE ASSESSE PAID RS.22,10,000/ - TO CROMPTON GREVES LTD FOR SUCH JOB WORK DONE OF THOSE TRANSFORMERS AS SUB CONTRACT PAYMENT MADE WITHOUT DEDUCTING TAX AT SOURCE. AO ASKED THE ASSESSEE TO PRODUCE THE CONTRACT PAP ERS BETWEEN BCCL AN D THE ASSESSEE AND CROMPTON GRE VES LTD AND THE ASSESSEE OR BCCL AND CROMPTON GRE VES LTD. BUT THE ASSESSEE S COUNSEL FAILED TO SUBMIT THE SAME. HENCE HE CONCLUDED THAT AS THE ASSESSEE FAILED TO ESTABLISH THAT THE JOB OF TRANSFORMERS WER E MADE BETWEEN CROMPTON GREVES LTD AND BCCL HENCE, WITH THE LEDGER COPIES OF ACCOUNT OF THE ASSESSEE ESTABLISHED THAT THE PAYMENT TO CROMPTON GREVES LIMITED OF RS.22,10,000/ - IS PAID FOR JOB WORK OF TRANSFORMER. THE ASSESSEE VIOLATED THE SECTION 40(A)(IA) OF THE I.T.ACT NOT DEDUCTING TAX FOR PAYMENT OF RS.22,10,000/ - TO CROMPTON GREVES LTD, HENCE I ADD BACK THE SAME AS INCOME OF THE ASSESSEE FOR F.Y.2006 - 07 FOR SUCH VIOLATION . 4. UPON ASSESSEE S APPEAL THE LD. CIT(A) NOTED THAT THE ASSESSEE WAS ACTING ON LY AS REPRESENTATIVE OF CROMPTON GREVES LTD. IN THIS REGARD THE LD.CIT(A) NOTED THAT AGREEMENT DATED 15.01.2007 APPOINTING THE ASSESSEE AS A LIAISON AGENT WAS ALSO FILED IN WHICH AS PER CLAUSE 2 THE ASSESSEE WAS APPOINTED AS APPROVED REPRESENTATIVE OF M/S. CROMPTON GREVES LTD AND AS PER CLAUSE 3.1 WAS RESPONSIBLE FOR COLLECTING PAYMENT DUE TO THE COMPANY FROM THE CUSTOMERS. ACCORDINGLY THE LD. CIT(A) CONCLUDED AS UNDER : - FROM THE ABOVE FACTS, IT IS CLEAR THAT THE APPELLANT WAS A REPRESENTATIVE OF ITS PRINC IPAL M/S.CROMPTON GREAVES AND THE PAYMENT RECEIVED FROM M/S.BHARAT COKING COAL LTD. WAS COLLECTED ON BEHALF OF THE PRINCIPAL AND THE PAYMENT MADE BY THE APPELLANT WAS THEREFORE NOT IN THE FORM OF SUB - CONTRACT PAYMENT TO M/S. CROMPTON GREAVES. THEREFORE THE RELATIONSHIP BETWEEN THE APPELLANT & M/S. CROMPTON GREAVES WAS NOT OF A SUB - CONTRACTOR FOR THIS PURPOSE BUT THE APPELLANT WAS ONLY AN AUTHORIZED REPRESENTATIVE WHO WAS RESPONSIBLE FOR PROCURING ORDERS AND COLLECTING PAYMENTS ON THEIR BEHALF. THE DECISIO N SUBMITTED BY THE APPELLANT OF ITAT, B BENCH KOLKATA IN ITA NO.1580/KOL/2008 IN DCIT, CIRCLE - 3, KOLKATA V. M/S. M.B.ISPAT CROPORATION, KOLKATA DATED 03.04.2009 HAS ALSO BEEN CONSIDERED AND IS FOUND TO BE APPLICABLE ON THE FACTS OF THE APPELLANT S CASE. HENCE THE LD. CIT(A) CONCLUDED THAT THE PAYMENT MADE BY THE ASSESSEE AMOUNTING TO RS.22,10,000/ - DID NOT CALL FOR ANY DISALLOWANCE. ITA.NO.1424 /K/2012 SRI RAJESH KR.AGARWAL A.YR. 2007 - 08 3 AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT SUBMITTED THE REQUIRED AGREEMENT BEFORE THE AO. HE SUBMITTED THAT THE LD. CIT(A) HAS SUBMITTED ADDITIONAL FRESH DOCUMENTS BY WAY OF AGREEMENT DATED 15.01.2007 BETWEEN THE ASSESSEE AND CROMPTON GREAVES LTD WHICH W AS NEVER PRODUCED BEFORE THE AO. HENCE THE LD. DR PLEADED THAT THE MATTER BE REMITTED TO THE FILE OF AO TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE ADDITIONAL DOCUMENTS SUBMITTED BEFORE THE LD. CIT(A). 5.1. AS AGAINST THE ABOVE THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ACTED ONLY AS REPRESENTATIVE OF M/S.CROMPTON GREAVES LTD. HENCE THE ASSESSEE WAS NOT LIABLE TO MAKE ANY DEDUCTION FOR ANY PAYMENT WHICH HAS BEEN CALLED BY THE REVENUE AS SUB - CONTRACT IN THIS REGARD. THE LD. COUNSE L OF THE ASSESSEE ALSO PLACED RELIANCE UPON CERTAIN CASE LAWS FOR THIS PROPOSITION. 5.2. UPON CAREFUL CONSIDERATION WE NOTE THAT AGREEMENT DATED 15.01.2007 BETWEEN THE ASSESSEE AND CROMPTON GREAVES LTD WAS NOT BEFORE THE AO. WE NOTE THAT THE AO HAS SPECI FICALLY ASKED FOR SUCH AGREEMENT AND AO HAS NOTED IN HIS ASSESSMENT ORDER THAT THE SAME WAS NOT PRODUCED. HENCE IN OUR CONSIDERED OPINION RULE 46A HAS BEEN VIOLATED IN AS MUCH AS THE LD. CIT(A) HAS ACCEPTED ADDITIONAL EVIDENCES WITHOUT GIVING OPPORTUNITY T O THE AO TO GO THROUGH THEM. FIRST IT NEEDS TO BE ESTABLISHED WHETHER THE ASSESSEE IS AN AGENT OF CROMPTON GREAVES LTD OR NOT AND THEREAFTER THE CASE LAWS IN THIS REGARD CAN BE REFERRED TO. SINCE THE LD. CIT(A) HAS CONCLUDED THAT THE ASSESSEE IS AN AGENT O F CROMPTON GREAVES LTD ON THE BASIS OF AN AGREEMENT WHICH WAS NOT PRODUCED BEFORE THE AO WE DEEM IT APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE AO. AO IS DIRECTED TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE SUBMISSION AND DOCUMENTS PRODUCED BEF ORE THE LD. CIT(A). ITA.NO.1424 /K/2012 SRI RAJESH KR.AGARWAL A.YR. 2007 - 08 4 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCE D IN THE COURT ON 0 3.12.2014. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 03.12.2014. R.G.(.P.S.) COPY OF THE ORDER FOR WARDED TO: 1 . SRI RAJESH KR.AGARWAL, 122, M.G.ROAD, 4 TH FLOOR, (WEST), KOLKATA - 700001. 2 I.T.O., WARD - 45(3) , KOLKATA 3 . CIT(A) - XXX, KOLKATA 4. CIT - KOLKATA CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES