ACIT, Circle - 46, Kolkata, Kolkata V. Shri Shyam Sundar Satnaliwala, Howrah

ITA 1637/KOL/2010

• Counselvise Citation: 163723514 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: SUNIL SURANA
• Section: 133(6)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . , ,, , . . ! ! ! ! . , '# '# '# '# ] [BEFORE SHRI N. VIJAYA KUMARAN, J. M. & SHRI C. D. RAO, A.M.] $ $ $ $ / I.T.A NO.1637/KOL/2010 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 ASSTT. COMMISSIONER OF INCOME TAX -VS.- SHRI SHYAM SUNDAR SATNALIWALA CIRCLE-46, KOLKATA. L/H SMT. RANI SATNALIWALA HOWRAH [PAN : AMPPS 5369 F]. [ *+ *+ *+ *+ /APPELLANT ] ]] ] [ - -- -.*+ .*+ .*+ .*+/ // / RESPONDENT ] ]] ] *+ *+ *+ *+ / FOR THE APPELLANT : SHRI S. K. ROY -.*+ -.*+ -.*+ -.*+ / FOR THE RESPONDENT : SHRI SUNIL SURANA / 0 !# / 0 !# / 0 !# / 0 !# /DATE OF HEARING : 11.11.2011 1' 0 !# 1' 0 !# 1' 0 !# 1' 0 !# /DATE OF PRONOUNCEMENT : 18.11.2011 '2 /ORDER . . . . , PER N. VIJAYA KUMARAN, J. M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST ORDER OF LD. CIT(A)-XXX, KOLKATA DATED 25.05.2010 FOR ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS THE LEGAL HEIR OF SMT. RANI SATN ALIWALA. THE GROUNDS URGED BY THE DEPARTMENT ARE AS UNDER :- (1) ON THE FACTS AND CIRCUMSTANCES OF T HE CASE THE ORDER OF LD. CIT(A) IS ARBITRARY AND BAD IN LAW. (2) ON THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF EXCESS LIABILIT Y ON THE BASIS OF RECONCILIATION STATEMENT FILED LATER BY VISA STEEL LTD. IGNORING THE NORMAL ACCOUNTING STANDARD AND THE MATERIAL AVAILAB LE ON RECORD REGARDING THE STATUS OF THE ASSESSEE AS CONSIGNEE O F THE M/S. VISA STEEL LTD. [ ITA NO.1637/KOL/2010] 2 (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN PROVIDING RELIEF TO THE ASSESSEE ON ACCOUNT OF COMM ISSION PAYMENTS EVEN IN ABSENCE OF CATEGORICAL EXPLANATION ABOUT TH E NATURE OF SERVICES RENDERED AND SUPPORTING DOCUMENTS. 3. THE SECOND GROUND RELATES TO THE ADDITION OF RS. 57,49,751/- BEING EXCESS LIABILITY. 4. THE FACTS RELEVANT ARE THAT THE ASSESSING OFFICE R ON VERIFICATION OF TRADING AND PROFIT AND LOSS ACCOUNT FOUND THAT EVEN AFTER RECONCILIATION, DIFFERENCE BETWEEN ACCOUNT STOOD AT THE ABOVE AMOUNT WHICH IS EXCESS LIABILITY ACCORDING TO ASSES SING OFFICER. HOWEVER, THE ASSESSING OFFICER ADMITS THAT THE ACCOUNTS WERE TALLIED BY PLUS AND M INUS IN OPENING STOCK, PURCHASE, SALES, PAYMENT AND CLOSING STOCK OF THE ASSESSEE. ACCORDIN G TO ASSESSING OFFICER, ASSESSEE DID NOT FURNISH SUCH PLUS AND MINUS EXCEPT TO A CERTAIN PAY MENT. THEREFORE, DIFFERENCE OF EXCESS LIABILITY, WHICH THE ASSESSEE COULD NOT FURNISH THE DETAILS OF SUCH PLUS AND MINUS, ADDED AS INCOME. ON APPEAL TO THE LD. CIT(A), LD. CIT(A) REP RODUCED THE STATEMENT OF ACCOUNTS RECONCILIATION BETWEEN PAHARIMATA ENTERPRISES & VIS A STEEL LIMITED FOR THE YEAR 2006-07. LD. CIT(A) WAS OF THE VIEW THAT RECONCILIATION CLEARLY SHOWS THAT THE MAJOR DIFFERENCE WAS ON ACCOUNT OF OPENING BALANCE, NON-RECORDING OF DEBIT NOTES AND SALES MADE BY THE ASSESSEE DURING THE ASSESSMENT YEAR AS CONSIGNEE BUT NOT RECORDED B Y VISA STEEL LIMITED. HOWEVER, THE SAID VISA STEEL LIMITED RECONCILED THE DIFFERENCE. IF AT ALL THE EXPLANATION DOES NOT GET EXPLAINED BY VISA STEEL LIMITED, IT CAN ONLY BE CONSIDERED IN THE HAN DS OF SAID VISA STEEL LIMITED AND NOT IN THE HANDS OF THE ASSESSEE. THIS MADE THE LD. CIT(A) CON VINCED AND ONCE VISA STEEL LIMITED HAS RECONCILED THE DIFFERENCE, NO ONUS IS CAST ON THE A SSESSEE TO FILE FURTHER EXPLANATION. FOR THE ABOVE REASONS, LD. CIT(A) DELETED THE ADDITION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. THE ASSESSEE IS IN THE BU SINESS OF TRADING IN HARD COKE AND COAL. AT THE ASSESSING OFFICERS LEVEL ITSELF, ASSESSEE WAS ASKED TO RECONCILE THE DIFFERENCE. IN RESPONSE, ASSESSEE FILED STATEMENT OF ACCOUNTS RECONCILIATION BETWEEN M/S. PARAHIMATA ENTERPRISES AND VISA STEEL LIMITED. ASSESSING OFFICER FOUND THAT THE ACC OUNTS WERE TALLIED BY PLUS AND MINUS IN OPENING STOCK, PURCHASE, SALES, PAYMENT AND CLOSING STOCK. HOWEVER, ASSESSING OFFICER OBSERVED THAT PLUS AND MINUS ARE TO THE TUNE OF RS.57,49,751 /- WAS NOT EXPLAINED WITH DETAILS. HE ADDED IN THE HANDS OF THE ASSESSEE. HOWEVER, LD. CIT(A) FOUN D THAT ASSESSEE HAS DISCHARGED THE BURDEN [ ITA NO.1637/KOL/2010] 3 AND NO BURDEN IS LEFT OUT TO BE DISCHARGED AND THER E IS NO CONTRA-FINDINGS ABOUT THE RECONCILIATION STATEMENT FILED BY VISA STEEL LIMITED. ONCE THE VIS A STEEL LIMITED HAS RECONCILED THE DIFFERENCE, THE BURDEN GET DISCHARGED AS THE ASSESSEE IS CONCER NED. IN OTHER WORDS, BY THIS ACT, ASSESSEE HAS DISCHARGED THE BURDEN. ONCE THE ASSESSEE HAS DISCHA RGED THE BURDEN, IT IS NOT JUSTIFIED TO ADD THIS AMOUNT IN THE HANDS OF THE ASSESSEE. WE AGREE WITH THE FINDINGS OF THE LD. CIT(A) IN THE ABOVE FACTS AND CIRCUMSTANCES. HENCE, GROUND NO.2 IS DECI DED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 6. COMING TO THE THIRD GROUND, IT IS ADDITION BY DI SALLOWANCE OF COMMISSION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. LD. CIT(A) CALLED FOR REM AND REPORT ALSO. THE ENTIRE COMMISSION WAS PAID BY ACCOUNT PAYEE CHEQUE. THE MAJOR PORTION OF THE COMMISSION WAS PAID TO NAND KESHWARI STEEL INDUSTRIES PVT. LIMITED WHICH WAS DU LY VERIFIED BY THE ASSESSING OFFICER BY NOTICE UNDER SECTION 133(6). THE NATURAL SERVICES R ENDERED AND THE NAME OF THE PARTIES TO WHOM SALES WERE MADE THROUGH THE SAID AGENT AND THE SALE AGREEMENT SHOWING TERMS AND CONDITIONS OF PAYMENT WILL GO TO SHOW THAT THE PAYMENT OF COMMISS ION IS FOR THE PURPOSE OF BUSINESS AND GENUINE ALSO. LD. CIT(A) CALLED FOR THE REMAND REPO RT AND ASSESSING OFFICER HAS NOT COMMENTED ON THE SALES AGREEMENT. COMMISSION SALES AGREEMENT WERE AVAILABLE IN ASSESSEES PAPER BOOK AT PAGES 38 TO 41. THE SAMPLE COPY IS DATED 01.04.200 6. WE HAVE PERUSED THE COMMISSION AGREEMENT ALSO. IT IS OBVIOUS THAT ASSESSING OFFICE R HAS NOT COMMENTED ON SALES AGREEMENT AND THERE IS CONTRAVENING FACTS PARTICULARLY WHEN ASSES SING OFFICER DECIDED THE ISSUE BY ISSUING NOTICE UNDER SECTION 133(6) AND THAT PARTY WHO ADMI TTED THE PAYMENT OF COMMISSION. THAT BEING THE CASE, THE ASSESSEE HAS DISCHARGED THE BURDEN AN D ALL THE COMMISSIONS WERE PAID BY ACCOUNT PAYEE CHEQUE WHICH WAS ALSO NOT DENIED BY THE DEPAR TMENT AND THERE IS NO EVIDENCE TO SHOW THAT THE COMMISSION PAYMENTS WERE PAID WITHOUT GETT ING ANY SERVICES. HENCE, THE DISALLOWANCE IS NOT JUSTIFIED. THE ASSESSING OFFICER HAS TO POSSESS SOME SUFFICIENT MATERIAL TO DISALLOW THE SAME. IN ABSENCE OF SUPPORTIVE MATERIAL THE DISALLOWANCE IS NOT JUSTIFIED. HERE IN THIS CASE THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE AND THERE IS NO REASON TO DOUBT THE GENUINENESS OF THE PAYMENT. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, W E AGREE WITH THE FINDINGS OF THE LD. CIT(A) WHO RIGHTLY DELETED THE ADDITION. HENCE, GROUND NO. 3 IS ALSO DECIDED AGAINST THE DEPARTMENT AND [ ITA NO.1637/KOL/2010] 4 IN FAVOUR OF THE ASSESSEE. 4. GROUND NO.1 & 4 ARE GENERAL IN NATURE WHICH REQU IRES NO ADJUDICATION. 5. IN THE RESULT, REVENUE APPEAL IS DISMISSED. '2 '2 '2 '2 #' #' #' #' 3 4 56 3 4 56 3 4 56 3 4 56 !# !# !# !# ORDER PRONOUNCED IN THE COURT ON 18.11.2011. SD/- SD/- [ . . . . 7 77 7. .. .'58 '58 '58 '58 , '# '# '# '# ] [ . . . . , ,, , ] [ C. D. RAO ] [ N. VIJAYAKUMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 18TH NOVEMBER, 2011. '2 0 -%% 9''/ COPY OF THE ORDER FORWARDED TO: 1. *+ /APPELLANT : ASSTT. COMMISSIONER OF INCOME TAX, CI RCLE-46, 3, GOVT. PLACE (WEST), KOLKATA- 700 001. 2 . -.*+ / RESPONDENT : SHRI SHYAM SUNDAR SATNALIWALA, L/H SMT. RANI SATNALIWALA, 24/25 DOBSON LA NE, 3 RD FLOOR, FLAT NO.3H, HOWRAH-711 101. 3. %2 - / CIT, 4. %2 ()/ CIT(A), KOLKATA. 5. 7%4 -%/ DR, KOLKATA BENCHES, KOLKATA [. -%/ TRUE COPY] '2/ BY ORDER, /ASSTT. REGISTRAR [KKC BC %D %E /SR.PS]