Shri Vishal Kumar Arya, Kolkata V. ITO, Ward-44(3), Kolkata, Kolkata

ITA 1540/KOL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1180 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 25-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S ANKAR HALDER JCIT LD
• Assessee Lawyers: SOUMITRA CHOUDHURY ADOVATE LD
• Keywords: Bad and doubtful debts; TDS
• Section: 143(3); 40(a)(ia); 194C; 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI J. SUDHAKAR REDDY., AM & HONBLE SHRI S.S. GODARA, JM ] I .T . A NO. 1540 /KOL/201 6 A.Y 20 09 - 10 VISHAL KUMAR ARYA V/S. I.T.O., WARD 44(3), KOLKATA PAN: AGZPA8338G (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SOUMITRA CHOUDHURY, ADOVATE, LD.AR FOR THE RESPONDENT : SHRI S ANKAR HALDER, JCIT, LD.SR.DR DATE OF HEARING : 2 1 - 06 - 2 01 9 DATE OF PRONOUNCEMENT : 13 - 0 9 - 2019 ORDER SHRI S.S. GODARA, JM : 1. THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 20 09 - 10 ARISE S AGAINST THE CIT(A) , 13 , KOLKATA S ORDER DATED 30 - 03 - 2016 PASSED IN CASE NO . 1043/ CIT(A) - 13/2014 - 15/KOL INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT ) . HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANS PIRES AT THE OUTSET THAT THE CIT(A) IN HIS ORDER UNDER CHALLENGE HAS NOT CONDONED THE DELAY OF 73 DAYS IN ASSESSEES LOWER APPEAL STATED TO BE ATTRIBUTABLE TO THE FACT THAT ALTHOUGH HIS ACCOUNTANT HAD HANDED OVER THE CASE FILE ON THE DATE OF RECEIPT OF ASSESSM ENT ORDER ON 29 - 12 - 2016 ITSELF, THE SAME HAD BEEN MISPLACED IN HIS OFFICE . WE CONCLUDE IN TH ESE FACT S THAT ASSESSEES FOREGOING AVERMENTS SUFFICIENTLY INDICATE THAT THERE EXISTED CIRCUMSTANCES BEYOND HIS CONTROL LEADING TO THE DELAY IN QUESTION OF 73 DAYS IN FILING THE LOWER APPEAL. WE THEREFORE TREAT THE SAME AS DULY EXPLAINED. 2 ITA NO. 1540/KOL/2016 A.Y 2009 - 10 SHRI VISHAL KUMAR ARYA 2 IT FURTHER EMERGES DURING THE COURSE OF HEARING THAT THE CIT(A) HAS ALSO AFFIRMED THE ASSESSING OFFICERS ACTION MAKING VARIOUS DISALLOWANCES/ ADDITIONS ON MERITS. WE THE REFORE PROCEED TO TAKE UP THE INSTANT APPEAL ON MERITS AS WELL. 3 . LEARNED AUTHORIZED REPRESENTATIVE DOES NOT PRESS FOR ASSESSEES FIRST FOUR SUBSTANTIVE GROUND S THAT THE CIT(A) HAD NOT AFFORDED ADEQUATE OPPORTUNITY OF HEARING. 4 . THE A SSESSEES 5 TH TO 7 TH SUBSTANTIVE GROUNDS CHALLENGE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION DISALLOWING FREIGHT CHARGES OF RS.43 , 26 , 190/ - PAID TO M/S. MAA KAMAKSHA MINERALS LTD AND M/S. S.K.D P.LTD. THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE TREATED THE I MPUGNED PAYMENTS AS CONTRACTUAL IN NATURE INVITING TDS DEDUCTION U/S. 194C OF THE ACT. THEY HAVE INVOKED SECTION 40(A)(IA) OF THE ACT FOR THE PURPOSE OF DISALLOWING THE ABOVE STATED PAYMENTS. 5 . LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE ASSESSEES IMPUGNED PAYMENTS MADE AT REGULAR INTERVALS I NDICATE ORAL AGREEMENT OF FREIGHT DUTY BETWEEN THEM. WE DO NOT SEE ANY SUCH F ACT IN THE CASE THAT MERELY BECAUSE A SSESSEES FREIGHT TRANSACTION INVOLVE MULTIPLE INSTANCES DURING THE RELEVANT PREVIOUS YEAR. WE MAKE IT CLEAR THAT REVENUE S STAND AN ORAL AGREEMENT HAVING ENTERED BETWEEN ASSESSEE AND THE PAYEE ( S ) IN ABSENCE OF ANY MATERIAL TO DRAW SUCH INFERENCE LEADS TO PER VERSITY ONLY. COUPLED WITH THIS , THERE IS ALSO MATERIAL ON RECORD THAT THE ASSESSEES PAYEES HAD UNDERTAKEN ANY CONTRACTUAL LIABILITY ON HIS BEHALF . WE T HEREFORE DECLINE THE REVENUES SUPPORTIVE ARGUMENTS IN FAVOUR OF THE IMPUGNED DISALLOWANCE. HONBLE JURISDICTIONAL HIGH COURTS DECIS ION IN ITA NO.127 / 20 09 CIT V/S M/S. STUMM INDIA DATED 16 TH AUGUST, 2010 HOLDS THAT SECTION 194C R.W.S 40(A)(IA) OF THE ACT DOES NOT APPLY IN ABSENCE OF ANY ORAL/WRITTEN AGREEMENT BETWEEN THE PARTIES . WE 3 ITA NO. 1540/KOL/2016 A.Y 2009 - 10 SHRI VISHAL KUMAR ARYA 3 THEREFORE DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE OF RS.43 , 26 , 190/ - . 6 . THE ASSESSEES 8 TH SUBSTANTIVE GROUND SEEKS TO DELETE 10% ESTIMATED DISALLOWANCE OF LOADING/UNLOADING OF RS.6,64,337/ C OMING TO RS. 64 , 833/ - MADE DURING THE COURSE OF ASSESSMENT AS AFFIRMED IN LOWER APPELLATE PROCEEDINGS. IT TRANS P IRES DURING THAT THE COURSE OF HEARING THAT NEITHER THE ASSESSEE HAS FILED THE ENTIRE SUPPORTIVE DETAILS NOR THE DEPARTMENT HAD DRAWN ANY COMPARISON THEREOF VIS - - VIS IN PRECEDING AND SUCCEEDING ASSESSMENT YEARS . WE THERE FORE SEE NO MERIT TO AGREE WITH EITHER PART Y S ARGUMENTS IN ENTIRETY AND DEEM IT APPROPRIATE TO RESTRICT THE IMPUGNED DISALLOWANCE FROM 10% TO 5% ONLY WITH A RIDER THAT OUR INSTANT ESTIMATION SHALL NOT BE TREATED AS A PRECEDENT IN ANY OTHER ASSESSMENT YEAR . NECESSARY COMPUTATION TO FOLLOW AS PER LAW. 7 . NEXT COMES BAD DEBTS DISALLOWANCE OF RS.3,55,686/ - IN CASE OF M/S. AML STEEL & POWER LTD . THE ASSESSING OFFICER ADMITTEDLY QUOTED SECTION 36(2) OF THE ACT TO HOLD THAT THE IMPUGNED SUM HAS NOWHERE BE EN RECOGNIZED AS INCOME SINCE THE RELEVANT TRANSACTION S BETWEEN THE PARTIES RELATE TO F Y 2008 - 09 ONLY. THE REVENUE FAILS TO DISPUTE THAT ASSESSEE HAS WRITTEN OFF TH E IMPUGNED SUM AS NON - RECOVERABLE IN THE CORRESPONDING LEDGER IN CASE OF ABOVE STATED PARTY. LEARNED COUNSEL HAS ALSO FILED NECESSARY P & L ACCOUNT & TRADING ACCOUNT TO THIS EFFECT. WE CONCLUDE IN THIS FACTUAL BACKDROP THAT ASSESSEES IMPUGNED BAD DEBTS CLAIM OF RS. 3,55,686/ - DESERVES TO BE ACCEPTED. WE ORDER ACCORDINGLY. 8. LASTLY COME ASSESSEES 10 TH TO 12 TH SUBSTANTIVE GROUNDS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN TREATING SUNDRY CREDITORS OF RS.8 , 64 , 882/ - ON ACCOUNT OF RE - CONCILIATION IN CASE OF M/S. SREE BALAJI MINING P.LTD . AS BOGUS . LEARNED COUNSEL SUBMITS THAT CORRESPONDI NG PURCHASES IN CASE OF ABOVE STATED PART IES HAVE NOWHERE BEEN DISPUTED EITHER IN ASSESSMENT OR IN THE LOWER APPELLATE PROCEEDINGS. HONBLE APEX COURTS DECISION IN (1999) 102 TAXMAN 713(SC) CIT V/S. SUGAULI SUGAR WORKS (P) LTD. 4 ITA NO. 1540/KOL/2016 A.Y 2009 - 10 SHRI VISHAL KUMAR ARYA 4 HOLDS THAT MERE TRANSFER IN THE ACCOUNT IS NOT SUFFICIENT GROUND TO INVOKE SECTION 41 (1) OF THE ACT. WE FIND THAT THIS IS ESSENTIAL LY A RECONCILIATION ISSUE WHICH REQUIRES FRESH FACTUAL VERIFICATION AT THE ASSESSING OFFICERS END . WE THEREFORE RESTORE THE ASSESSEES INSTANT LA S T GRIEVANCE BACK TO THE ASSESSING OFFICER FOR FINALIZING CONSEQUENTIAL VERIFICATION AS PER LAW WITHIN THREE EFFECTIVE HEARINGS IN THE LIGHT OF HONBLE APEX COURTS FOREGOING DECISION. 9 . TH IS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS . ORDER PRONOUNCED IN THE COURT ON 13 - 0 9 - 2019 SD/ - SD/ - [ J. SUDH A KAR REDDY ] [ S.S.GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 - 0 9 - 2019 **PRADIP, SR. PS C OPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ ASSESSEE: SHRI VISHAL KUMAR ARYA C/O RAJSHREE STEELMET P.LTD. METRO TOWER, 170, C.R AVENUE, 5 TH FL., 5GH, KOLKATA - 7. 2. RESPONDENT/ DEPARTMENT: I.T.O., WARD 44(3), KOLKATA 3 GOVT PL (W), KOLKATA - 7. 3..C.I.T (A) . - 4. C.I.T. - KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR H.O.O/D.D.O KOLKATA