Sri Sushil Kumar Agarwal, Kolkata V. I.T.O, Wd 44(3), Kolkata

ITA 1531/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99711 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2013
• Court: TRIBUNAL
• Department Lawyers: SNEHOTPAL DUTTA
• Assessee Lawyers: VINAY GUPTA ACA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC , KOLKATA [BEFORE HON BLE SHRI MAHAVIR SINGH, JM ] IT A NO.1531 /KOL/2013 ASSESSMENT YEAR : 2008 - 09 ( A PPELLANT ) (RESPONDENT) SHRI SUSHIL KUMAR AGARWAL - VERSUS - I.T.O., WARD - 44 (3) K OLKATA KOLKATA (PAN: ACTPA 2477 N) FOR THE APPELLANT: SHRI VINAY GUPTA, ACA FOR THE RESPONDENT: SHRI SNEHOTPAL DUTTA, JCIT DATE OF HEARING : 30 .07 .2015. DATE OF PRONOUNCEMENT : 05.08.2015. ORDER THIS APPEAL OF ASSESSEE ARIS ES FROM THE ORDER OF LD. CIT(A) - XXX, KOLKATA IN APPEAL NO . 334/CIT(A) - XXX/WD - 44(3)/2010 - 11 DATED 09 .01.2013 . ASSESSMENT WAS FRAMED BY I.T.O., WARD - 44 (3), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT ) FOR A.Y . 2008 - 09 VIDE ITS ORDER DATED 31.12.2010. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS DISALLOWANCE OF JOB CHARGES @ 10%. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PUBLICATIONS AND TRAINING IN DIFFERENT P ROPRIETORSHIP CONCERNS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BOOKS OF ACCOUNTS, BILLS AND VOUCHERS HAVE BEEN PRODUCED AND THE SAME WERE SUBJECTED TO VERIFICATION BY THE LD. AO ON TEST CHECK BASIS. THESE FACTS ARE UN DISPUTED AND INDISPUTABLE. THE LD . AO DISALLOWED A SUM OF RS.18,000/ - BEING 20% OF RS.90,000/ - TOWARDS JOB CHARGES ON AN ADHOC BASIS FOR WANT OF PROPER VERIFIABLE EVIDENCES. AGGRIEVED BY THIS ORDER, THE ASSESSEE HAS CHALLENGED THIS ISSUE BEFORE THE LD. CIT(A), WHO UPHELD THE DISALLOWANCE OF LD.AO BUT BROUGHT DOWN THE PERCENTAGE OF THE DISALLOWANCE TO 10%. ITA NO. 1531/KOL/2013 SHRI SUSHIL KUMAR AGARWAL A.YR. 2008 - 09 2 AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUND : 1.FOR THAT THE LD.CIT(A) - XXX ERRED IN FACT AS WELL AS IN LAW IN RESTRICTING THE DISALLOWANCE FROM JOB CHARGES TO 10% IGNORING THAT THE ASSESSING OFFICER DID NOT BRING INTO RECORDS THE EVIDENCE OF JOB CHARGES PRODUCED BY THE ASSESSEE WHICH COULD NOT BE VERIFIED BY HIM. 4. THE LD. AR SHRI VINAY GUPTA , ACA APPEARED ON BEHALF OF TH E ASSESSEE AND SHRI SNEHOTPAL DUTTA, JCIT APPEARED ON BEHALF OF THE REVENUE. 5. THE LD. AR OF THE ASSESSEE SUBMITTED THAT BOOKS OF ACCOUNT AND BILLS AND VOUCHERS WERE PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HENCE NO CA USE FOR MAKING ANY ADDITION ON AN ADHOC BASIS. 6. IN RESPONSE TO THIS, THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE HEARD THE RIVAL SUBMISSIONS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS SEEN THAT A DDITION HAS BEEN MADE ONLY ON ESTIMATED BASIS BY THE AO AND THE LD. AO DISALLOWED 20% OF THE JOB CHARGES AND THE LD. CIT(A) RESTRICTED THE SAME TO 10% OF THE JOB CHARGES IS TOTALLY UNWARRANTED AS THE ENTIRE BOOKS OF ACCOUNT AND VOUCHERS WERE DULY PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WITHOUT REJECTION OF THE BOOKS OF ACCOUNT , THE ACTION OF THE LD. AO AS WELL AS THE LD. CIT(A) IN SUSTAINING THE ADDITION ON AN ESTIMATED BASIS IS ARBITRARY AND UNWARRANTED. HENCE, I HAVE NO HESI TATION TO DELETE THE SAID ADDITION MADE IN THE SUM OF RS.9,000/ - BEING 10% OF THE JOB CHARGES. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 8. THE SECOND ISSUE TO BE DECIDED IN THIS APPEAL IS DISALLOWANCE OF ADMINISTRATIVE EXPENSES. 9 . THE BRIEF FACTS OF THE CASE ARE THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS, BOOKS OF ACCOUNTS, BILLS AND VOUCHERS HAVE BEEN PRODUCED AND THE SAME WERE ITA NO. 1531/KOL/2013 SHRI SUSHIL KUMAR AGARWAL A.YR. 2008 - 09 3 SUBJECTED TO VERIFICATION BY THE LD. AO ON TEST CHECK BASIS. THE LD. AO DISALLOWED A SUM OF RS.9,372/ - BEING 20% OF RS.46,860/ - TOWARDS ADMINISTRATIVE EXPENSES ON AN ADHOC BASIS FOR WANT OF PROPER VERIFIABLE EVIDENCES. AGGRIEVED BY THIS ORDER, THE ASSESSEE HAS CHALLENGED THIS ISSUE BEFORE THE LD. CIT(A), WHO UPHELD THE DISALLOWANCE OF LD.AO. AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUND : 2. FOR THAT THE LD. CIT(A) - XXX, ERRED IN FACT AS WELL AS IN LAW IN CONFIRMING THE ESTIMATED DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS.9,372/ - FROM ADMINISTRATIVE EXPENSES IGNORING THE FACT THAT THE DISALLOWANCES WERE ARBITRARILY MADE WITHOUT RECORDING THE EXPENSES WHICH COULD NOT BE VERIFIED BY HIM. 10. THE LD. AR SHRI VINAY GUPTA, ACA APPEARED ON BEHALF OF THE ASSESSEE AND SHRI SNEHOTPAL DUTTA, JCIT APPEA RED ON BEHALF OF THE REVENUE. 11. THE LD. AR OF THE ASSESSEE SUBMITTED THAT BOOKS OF ACCOUNT AND BILLS AND VOUCHERS WERE PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HENCE NO CAUSE FOR MAKING ANY ADDITION ON AN ADHOC BASIS. 12. IN RESPONSE TO THIS, THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 13. I HAVE HEARD THE RIVAL SUBMISSIONS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS SEEN THAT ADDITION HAS BEEN MADE ONLY ON ESTIMATED BASIS BY THE AO AND THE LD. AO DISALLOWED 20% OF THE ADMINISTRATIVE EXPENSES AND THE LD. CIT(A) UPHOLDING THE ACTION OF AO IS TOTALLY UNWARRANTED AS THE ENTIRE BOOKS OF ACCOUNT AND VOUCHERS WERE DULY PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEED INGS. WITHOUT REJECTION OF THE BOOKS OF ACCOUNT , THE ACTION OF THE LD. AO AS WELL AS THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION ON AN ESTIMATED BASIS IS ARBITRARY AND UNWARRANTED. ITA NO. 1531/KOL/2013 SHRI SUSHIL KUMAR AGARWAL A.YR. 2008 - 09 4 HENCE, I HAVE NO HESITATION TO DELETE THE SAID ADDITION MADE IN THE SU M OF RS. 9,372/ - BEING 2 0% OF THE ADMINISTRATIVE EXPENSES . HENCE, THIS GROUND OF APPEAL IS ALLOWED. 14. THE THIRD ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS RIGHT IN CONFIRMING THE ADDITION OF RS.11,82,000/ - BEING PROFESSION AL FEES RECEIVED BY THE ASSESSEE FROM I.C.I.C.I. PRUDENTIAL LIFE INSURANCE CORPORATION LTD. FOR A.Y.2008 - 09. 15. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND WAS ENTITLED TO A SUM OF RS.11,82,0 00/ - AS PROFESSIONAL FEES FROM I.C.I.C.I. PRUDENTIAL LIFE INSURANCE CORPORATION LTD IN RESPECT OF SERVICES RENDERED DURING A.Y.2008 - 09. THE ASSESSEE EXPLAINED BEFORE THE LD. AO THAT THE SAID RECEIPT THOUGH QUANTIFIED BY ICICI PRUDENTIAL INSURANCE CORPORAT ION LTD. BUT THE SAME WAS NOT INTIMATED BY ICICI PRUDENTIAL INSURANCE CORPORATION LTD TO THE ASSESSEE TILL 31.03.2008. THE ASSESSEE FURTHER PLEADED THAT THE SAID SUM WAS RECEIVED AFTER TDS BY THE ASSESSEE FROM ICICI PRUDENTIAL INSURANCE CORPORATION LTD DUR ING THE FIRST WEEK OF APRIL, 2008 AND ACCORDINGLY , THE SAME WAS DULY OFFERED TO TAX BY THE ASSESSEE DURING A.Y.2009 - 10 AND TDS CLAIMED THEREON IN A.Y.2009 - 10. THIS EXPLANATION WAS NOT ACCEPTED BY THE AO AND THE LD. AO PROCEEDED TO ADD THE SAME AS INCOME F OR A.Y.2008 - 09. HOWEVER, THE LD. AO FAIRLY GAVE CREDIT FOR TDS ON THIS TAXABLE INCOME OF RS.11,82,000/ - IN A.Y.2008 - 09 ITSELF THOUGH THE SAME WAS NOT CLAIMED BY THE ASSESSEE IN THE RETURN. AGGRIEVED BY THIS ORDER, THE ASSESSEE HAS CHALLENGED THIS ISSUE BE FORE THE LD. CIT(A) , WHO UPHELD THE DISALLOWANCE MADE BY THE LD.AO BY DULY APPRECIATING THE METHOD OF ACCOUNTING EMPLOYED BY THE ASSESSEE. AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUND : 2. FOR THA T THE LD. CIT(A) - XXX, WAS WRONG IN CONFIRMING THE ADDITION OF FEES OF RS.11,82,000/ - IN THE ASSESSMENT YEAR 2008 - 2009 ON MERCANTILE BASIS IGNORING THE FACT THAT THE FEES ALTHOUGH RELATED TO FINANCIAL YEAR 2007 - 2008 WAS NOT QUANTIFIED AND INTIMATED BY THE I .C.I.C.I. PRUDENTIAL LIFE INSURANCE CORPORATION TO THE APPELLANT TILL 31.03.2008. ITA NO. 1531/KOL/2013 SHRI SUSHIL KUMAR AGARWAL A.YR. 2008 - 09 5 16. THE LD. AR SHRI VINAY GUPTA, ACA APPEARED ON BEHALF OF THE ASSESSEE AND SHRI SNEHOTPAL DUTTA, JCIT APPEARED ON BEHALF OF THE REVENUE. 17. THE LD. AR OF THE ASSE SSEE VEHEMENTLY PLEADED THAT IT WAS NOT KNOWN TO THE ASSESSEE FROM ICIC I PRUDENTIAL LIFE INSURANCE CORPORATION LTD. TILL 31.03.2008 AND ACCORDINGLY THE ASSESSEE CHOSE TO OFFER THE SAME IN THE YEAR OF RECEIPT (I.E. A.Y.2009 - 10) AND HENCE, THERE IS NO DEVIAT ION FROM THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. HOWEVER, THE LD. AR ARGUED THAT THERE IS NO LOSS TO THE EXCHEQUER THAT THE SUB JECT MENTIONED RECEIPTS HAVE BEEN VOLUNTARILY OFFERED TO TAX BY THE ASSESSEE IN A.Y.2009 - 10 AND ACCORDINGLY PLEADED FOR THE RELIEF BEFORE ME. IN RESPONSE TO THIS, THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 18. I HAVE HEARD THE RIVAL SUBMISSIONS. IT IS SEEN FROM THE MATERIALS AVAILABLE ON RECORD THAT ICIC I PRUDENTIAL LIFE INSURANCE COR PORATION LTD HAD CUT A CHEQUE ON 21.03.2008 AND TAX WAS DULY DEDUCTED ON THE SAME WHICH IS MENTIONED IN THE TDS CERTIFICATE OF THE ASSESSEE AND IN CONSONANCE WITH THE MERCANTILE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE, THE ASSESSEE OUGHT TO HAVE DISC LOSED THIS RECEIPT AS INCOME IN A.Y.2008 - 09. HENCE THE ACTION OF THE ASSESSEE IN NOT DISCLOSING THE SAME IS NOT APPRECIATED. HOWEVER, IT IS ALSO SEEN THAT THE ASSESSEE HAS OFFERED THE SAME IN A.Y.2009 - 10 ON RECEIPT BASIS. I HEREBY DIRECT THE LD. AO TO WITH DRAW THAT INCOME OF RS.11,82,000/ - IN A.Y.2009 - 10 TOGETHER WITH TDS THEREON TO MEET THE ENDS OF JUSTICE AND IN ORDER TO AVOID DOUBLE TAXATION OF THE SAME RECEIPT. ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED SUBJECTED TO THE DIRECTIONS CONTAINED HEREIN ABOVE. 19. IN THE RESULT THE APPEAL OF THE ASSESEE IS PARTLY ALLOWED. O RDER PRONOUNC ED IN TH E COURT . SD/ - [MAHAVIR SINGH] JUDICIAL MEMBER DATE: 05.08.2015. R.G.(.P.S.) ITA NO. 1531/KOL/2013 SHRI SUSHIL KUMAR AGARWAL A.YR. 2008 - 09 6 COPY OF THE ORDER FORWARDED TO : 1 . SHRI SUSHIL KUMAR AGARWAL, 25/1, BARANASHI GHOSH STREET, KOLKATA - 700007. 2 THE I.T.O., WARD - 44(3), KOLKATA . 3 . THE CIT, 4. THE CIT(A) - XXX, KOLKATA. 5 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY , BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES