Assistant Commissiner of Income Tax, SATNA V. M/s Steel Traders, SATNA

ITA 16/JAB/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1069 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 29-01-2014
• Court: TRIBUNAL
• Department Lawyers: V B SAGAR
• Keywords: TDS
• Section: 143(3); 54; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NOS. 15 & 16/JAB/2014 A.YS. 2006-07 & 2007-08 ASSTT.COMMISSIONER OF INCOME TAX CIRCLE SATNA ::: APPELLANT VS M/S STEEL TRADERS SATNA PAN AAQFS 56827 ::: RESPONDENT ` APPELLANT BY SHRI V.B. SAGAR RESPONDENT BY NONE DATE OF HEARING 29 . 5 .2015 DATE OF PRONOUNCEMENT 6 . 7 . 2015 O R D E R PER SHRI B.C. MEENA, AM BOTH THESE APPEALS EMANATE FROM THE ORDERS OF THE ORDERS DATED 20.11.2013 OF THE LEARNED CIT(A)-28, MU MBAI, FOR THE A.YS. 2006-07 AND 2007-08. 2 2. IN BOTH THESE APPEALS, THE ISSUE INVOLVED IS REGARDING DELETION OF ADDITION MADE BY THE ORDER U/S 1 54 OF THE ACT. THE GROUNDS OF APPEAL READ AS UNDER :- 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT NEITHER THE ISSUE IN QUESTION WAS RECTIFIABLE U/S 154 AS IT DID NOT AMOUNT TO MISTAKE APPARENT FROM RECORD NOR ON MERITS. 3. THE LEARNED CIT(A) HAS GRANTED THE RELIEF BY HOLDIN G AS UNDER :- I HAVE CONSIDERED THE SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFICER. UNDER FIRST GROUND OF APPEAL, THE AR HAS CLAIMED THAT THE ACIT CIRCLE SATNA DID NOT HAVE THE AUTHORITY TO RECTIFY THE ORDER PASSED U/S 143(3) BY THE ADDL. 3 CIT RANGE SATNA. IN THIS REGARD, IT IS SEEN THAT THE BASIC JURISDICTION OVER THE CASE LIES WITH ACIT CIRCLE SATNA AND GENERALLY ONLY FOR THE PURPOSE OF MAKING AN ASSESSMENT OF A PARTICULAR YEAR THAT CASES ARE ASSIGNED TO THE ADDL. CIT. ALL WORK POST-ASSESSMENTS ARE DONE BY THE A.O. HAVING ORIGINAL JURISDICTION OVER THE CASE. HENCE ANY REQUIRED RECTIFICATION PERTAINING TO THE CASE HAD TO BE CARRIED OUT BY THE ACIT CIRCLE SATNA ONLY. THERE WAS NO IRREGULARITY IN ACIT SATNA PASSING AN ORDER U/S 154 IN THIS CASE. THE GROUND THAT THE ACIT CIRCLE SATNA HAD NO JURISDICTION TO DO SO, IS INCORRECT. THIS GROUND OF APPEAL IS THEREFORE DISMISSED. FROM THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 22.08.2008, BY THE ADDL. CIT 4 RANGE SATNA, IT IS SEEN THAT THE ADDL. CIT HAS CATEGORICALLY MENTIONED ON PAGE 1 THAT COPY OF ACCOUNT OF PRISM CEMENT LTD. DULY CONFIRMED ALONG WITH RECONCILIATION STATEMENT IS PLACED ON RECORD. THIS IMPLIES THAT THE ADDL. CIT HAD VERIFIED THIS ASPECT DURING ASSESSMENT PROCEEDINGS. IN ANY CASE, THE DIFFERENCE BETWEEN THE RECEIPTS AS PER TDS CERTIFICATE AND THE RECEIPTS SHOWN IN THE P&L A/LEARNED CIT(A) INVOLVED DETAILED ANALYSIS FOR THE REASONS OF THE DIFFERENCE AND THE TAXABILITY OF THOSE RECEIPTS AND WHETHER THOSE RECEIPTS HAD AN ELEMENT OF INCOME SO AS TO BE CREDITED TO THE P&L A/C. THERE WERE NO MISTAKE APPARENT FROM RECORD WHICH COULD BE RECTIFIED U/S 154. THIS IS MORE SO AFTER THE EXPLANATION OFFERED BY THE ASSESSEE 5 IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE A.O. PROPOSING TO THE SAID RECTIFICATION. IT IS FURTHER SEEN THAT THE DIFFERENCE IN THE RECEIPTS ARE ON ACCOUNT OF SERVICE TAX AND EDUCATION CESS ON THE COMMISSION INCOME EARNED BY THE ASSESSEE AND THE REIMBURSEMENT OF LEARNED C&F AGENT EXPENSES RECEIVED BY THE ASSESSEE FROM THE COMPANY PRISM CEMENT LTD. FROM THE RECONCILIATION CHART FILED BY THE APPELLANT DURING APPELLANT PROCEEDINGS EXPLAINING THE DIFFERENCE, IT IS SEEN THAT THOSE RECEIPTS DID NOT ALTER THE TOTAL INCOME CHARGEABLE TO TAX AS THE ASSESSEE HAS ACCOUNTED THE NET COMMISSION AS INCOME AND HAS NOT CLAIMED THE SERVICE TAX AND EDUCATION CESS AS EXPENSES. SIMILARLY, THE REIMBURSEMENT OF C&F AGENT EXPENSES DO NOT FORM INCOME IN 6 THE HANDS OF THE ASSESSE AS THE ASSESSEE HAS NOT CHARGED THESE EXPENSES IN P&L A/C. THUS ON MERITS ALSO, THE DIFFERENCE OF RECEIPTS ARE NOT REQUIRED TO BE ADDED TO THE TOTAL INCOME ASSESSED U/S 143(3). IN VIEW OF ALL THE ABOVE IT IS HELD THAT NEITHER THE ISSUE IN QUESTION WAS RECTIFIABLE U/S 154 AS IT DID NOT AMOUNT TO MISTAKE APPARENT FROM RECORD NOR ON MERITS, THE AMOUNT MERIT ADDITION TO THE TOTAL INCOME. HENCE, THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.13,75,768/- MADE U/S154. GROUNDS OF APPEAL NO. 2 & 3 ARE THEREFORE ALLOWED. 4. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE REL IEF IN THESE APPEALS HAS BEEN GRANTED ON THE BASIS THAT THE MISTAKE WHICH THE ASSESSING OFFICER WANTED TO RECTIFY WAS NOT A RECTIFIABLE MISTAKE U/S 154 OF THE ACT AS IT WAS N OT A 7 MISTAKE APPARENT FROM RECORD. THE LEARNED CIT(A) HAS ALSO GRANTED RELIEF ON MERITS ALSO BY HOLDING THAT THE ADDIT ION WAS NOT SUSTAINABLE AS THE ASSESSEE HIMSELF HAS SUBMITTED RECONCILIATION STATEMENT BEFORE THE ASSESSING OFFICER WHICH HAS BEEN DULY VERIFIED AND ACCEPTED. IN VIEW OF THESE FACTS, WE FIND NO MERIT IN THIS APPEAL AND DISMISS THE SAME. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE STAN D DISMISSED. PRONOUNCED IN OPEN COURT ON 6.7.2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED - 6.7.2015 DN/-1819