Shri Joydeb Chandra, Kolkata V. DCIT, Cir-33, Kolkata, Kolkata

ITA 1642/KOL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6520 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S ALLONG YADEN CIT LD
• Assessee Lawyers: SOUMITRA CHOUDHURY LD
• Keywords: Retrospective amendment
• Section: 143(3); 142(1); 194C; 139

Judgement Text

1 ITA NO 1642/KOL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUD ICIAL MEMBER I.T.A NO. 1642/KOL /2014 A.Y: 2009-10 JOYDEB CHANDRA VS. D.C.I.T, CIR-33, KOLKATA PAN: ABZPC 3187E [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI SOUMITRA CHOUDHURY, A DVOCATE,LD.AR FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL.CI T, LD.SR.DR DATE OF HEARING : 05-02-2018 DATE OF PRONOUNCEMENT : 25-04-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), XIX, KOLKATA DT. 29-05-2014 FOR THE A.Y 2009-10. 2. THE APPEAL WAS FILED WITH A DELAY OF 369 DAYS. F OR WHICH, THE ASSESSEE FILED A CONDONATION PETITION. CONSIDERING THE REASONS STATED IN THE DELAY CONDONATION PETITION DT. 8-1-18 AND AF TER HEARING BOTH THE PARTIES, WE FIND THE REASONS STATED IN THE PETI TION ARE BONAFIDE AND REASONABLE AND THEREFORE, WE CONDONE THE DELAY IN FILING THE ABOVE APPEAL. 3. GROUND NOS. 2 TO 7 RELATING TO CONFIRMATION OF A DDITIONS OF RS.36,15,736/-, RS.7,75,362/- & RS.9,60,000/- UNDER THE HEADS LABOUR CHARGES, INSTALLATION CHARGES & HIRE CH ARGES. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A GOVERNMENT CONTRACTOR. THE ASSESSEE FILED HIS RET URN OF INCOME FOR THE A.Y UNDER CONSIDERATION ON 23-0-09 DECLARING TO TAL INCOME AT RS.1,30,14,057/-. NOTICE U/S. 143(2) AND 142(1) OF THE ACT WERE 2 ITA NO 1642/KOL/2014 ISSUED TO ASSESSEE. IN RESPONSE TO WHICH, THE ASSES SEE APPEARED AND FILED BOOKS OF ACCOUNT AND BANK STATEMENT. 5. THE AO FOUND THAT THE ASSESSEE HAD NOT DEDUCTED TDS ON PAYMENTS/EXPENSES I.E A) LABOUR CHARGES OF RS.36,15 ,736 B)INSTALLATION CHARGES OF RS. 7,75,362/- & C)HIRE CHARGES OF RS.9,60,000/- TOTALING TO 53,51,098/- AND FOR NON D EDUCTION OF TDS BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ADDED A SUM OF RS. 53,51,098/- TO THE TOTAL INCOME OF ASSESSEE BY AN ORDER DT. 29-12-2011 PASSED U/S. 143(3) OF THE ACT. 6. BEFORE THE CIT-A THE ASSESSEE FILED A WRITTEN SU BMISSION ALONG WITH SUPPORTING DOCUMENTS IN THIS REGARD. THE LD.AR OF THE ASSESSEE BEFORE HIM SUBMITS THAT THE ASSESSEE IS A GOVERNMEN T CONTRACTOR AND INCURRED THE SAID EXPENDITURE TOWARDS LABOUR CHARG ES, INSTALLATION CHARGES AND HIRE CHARGES TOTALING TO RS. 53,51,116/ -. DURING THE F.Y 2008-09 RELEVANT TO A.Y UNDER CONSIDERATION THE ASS ESSEE SPENT A SUM OF 1,72,23,736/- AS LABOUR CHARGES ON ACCOUNT OF OPERATION & MAINTENANCE CHARGES FOR THE DIFFERENT PUMP HOUSE MA INTAINED BY THE PHE(PUBLIC HEALTH ENGINEERING), GOVT. OF W.B DURING GANGA SAGAR MELA. IN THIS CONNECTION, THE ASSESSEE ALSO SPENT O F RS.12,14,000/- TOWARDS INSTALLATION CHARGES AND RS.9,60,000/- TOWA RDS HIRE CHARGES. 7. THE CIT-A AFTER CONSIDERING THE ABOVE SUBMISSION S OF ASSESSEE DISMISSED THE GROUND BY OBSERVING AS UNDER:- 5.2 I HAVE PERUSED THE ASSESSMENT ORDER AND THE C ONTENTION OF THE APPELLANT VIDE WRITTEN SUBMISSION DATED WRITTEN SUBMISSION DATED 2 0-05-2014 ON THE ISSUE. ON CONSIDERATION OF THE ASSESSMENT ORDER, I FIND THAT THE APPELLANT HAD CONCEDED TO THE MISTAKE OF NOT DEDUCTING TAX AT SOURCE FOR THE PAYM ENTS MADE AS DISCUSSED (SUPRA) BEFORE THE AO AND EVEN FILED WRITTEN SUBMISSION TO THE EFFECT THAT THE DISALLOWANCE U/S.40(A)(IA) MAY BE MADE AND THAT TAX WAS DEDUCTED AND DEPOSITED IN THE SUBSEQUENT YEAR. THE SECOND PROVISO TO SECTION 40 READS AS FOL LOWS: WHERE IN RESPECT OF ANY SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HA S BEEN DEDUCTED DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIE D IN SUB-SECTION (1) OF SECTION 139, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTI NG THE INCOME OF THE PREVIOUS YEAR IN WHICH TAX HAS BEEN PAID. THE PRESENT SUBMISSION BEFORE DURING THE APPELLATE PROCEEDING IS IN STARK CONTRAST TO WHAT TRANSPIRED AT THE ASSESSMENT STAGE. THE ASSESSEE HAD SUBMITTED DETAILED OF LABOR CHARGES BEFORE THE AO. ON PERUSAL OF THE SAME IT APPEARS THAT THESE PAYMENTS WERE MADE TO VARIOUS CO MPANIES AND NO TDS WAS EFFECTED ON THESE PAYMENTS. IT IS THEREFORE EVIDENT THAT THE PAYMENTS WERE MADE TO VARIOUS FIRMS AND COMPANIES AND SUCH PAYMENTS WERE IN EXCESS OF T HE BASIC LIMIT OF EXEMPTION OF TDS U/S. 194C OF THE ACT. THE ASSESSEE IS NOT TAKING A NEW LINE OF ARGUMENT THAT THE PAYMENTS WERE MADE TO INDIVIDUAL LABORS, SUCH SUBMI SSIONS ARE NOT BORNE OUT OF RECORDS 3 ITA NO 1642/KOL/2014 AND RATHER IS CONTRARY TO THE EVIDENCES ON RECORDS. IN VIEW OF THE GIVEN FACTS AS NARRATED IN THE ASSESSMENT ORDER THAT THE APPELLANT HAD DEDU CTED TAX ON THESE PAYMENTS AND DEPOSITED THE SAME IN THE GOVT. A/C SUBSEQUENTLY DU RING THE FY 2011-12, I FIND THAT THE APPEAL ON THIS GROUND STANDS TO NO MERIT AND THE SA ME IS THEREFORE DISMISSED. 8. BEFORE US THE LD.AR REITERATED HIS SAME SUBMISSI ONS MADE BEFORE THE CIT-A. FURTHER, THE ASSESSEE HAS GIVEN DETAILS OF SAID PAYMENTS AND REFERRED TO PAGE-2 OF THE ASSESSMENT O RDER. NOW THE ASSESSEE IS READY TO PRODUCE ALL THE DETAILS OF SAI D PAYEES AS REFERRED IN PARA- 2 OF AO S ORDER FOR HIS VERIFICATION TO FIND OUT WHETHER THE PAYEES SHOWN RESPECTIVE AMOUNTS RECEIVED FROM ASSES SEE IN THEIR ACCOUNTS AND OFFERED THE SAME FOR TAXATION IN THE IR RETURNS OF INCOME AND PRAYED TO REMAND THE MATTER TO THE FILE OF AO FOR HIS VERIFICATION IN TERMS OF 2 ND PROVISO TO SECTION OF SECTION 40(A)(IA) OF THE ACT. 9. THE LD.DR SUBMITS THAT THE ASSESSEE HAS ADMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT IT WAS A MIST AKE IN NOT DEDUCTING TDS ON SUCH PAYMENTS AND OFFERED TO TAX VIDE HIS REPLY DT. 12-12-2011 AND REFERRED TO PAGE 2 & 3 OF THE A OS ORDER. THE ASSESSEE HAS TAKEN A SUBMISSION BEFORE THE CIT-A ST ATING THAT THE SAID PAYMENTS WERE MADE TO LABOUR AND DEDUCTION OF TDS ON LABOUR PAYMENT DOES NOT ARISE. BEFORE THIS TRIBUNAL THE AS SESSEE HAS RAISED A NEW SUBMISSION FOR REMANDING THE MATTER TO THE FI LE OF AO. THE LD.DR ARGUED THAT IN THE SUBMISSIONS OF ASSESSEE HA S NO FORCE AND MERIT IN REMANDING THE MATTER TO THE AO FOR HIS VER IFICATION AND PRAYED TO DISMISS THE GROUND NOS. 2 TO 7 RAISED BY THE ASSESSEE IN THE APPEAL. 10. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT THE CIT-A EXAMINED THE ISSUE IN DETAIL AND FOUND THAT THE PAYMENTS WERE MADE TO VARIOUS FIRMS AND COMPAN IES AND CONFIRMED THE ADDITIONS MADE BY THE AO FOR NON DEDU CTION OF TDS AS REQUIRED U/S. 194C R.W.S 40(A)(IA) OF THE ACT. ON PERUSAL OF ASSESSMENT ORDER, IT IS OBSERVED THAT THE ASSESSEE HAD INCURRED EXPENDITURE ON ACCOUNT OF LABOUR CHARGES, INSTALLAT ION CHARGES AND 4 ITA NO 1642/KOL/2014 HIRE CHARGES AND ALL THE PAYMENTS WERE MADE TO VARI OUS FIRMS AND COMPANIES. THE CONTENTION OF THE LD.AR IS THAT IF ANOTHER OPPORTUNITY IS GIVEN TO ASSESSEE TO SUBMIT ALL THE DETAILS RELA TING TO PAYMENTS MADE TO SAID FIRMS AND COMPANIES AND TO FIND OUT AS TO WHETHER THE PAYEES (FIRMS/COMPANIES) CONSIDERED RESPECTIVE AMOU NTS IN THEIR ACCOUNTS AND ALSO OFFERED TO TAX THEREON IN THEIR R ESPECTIVE RETURNS OF INCOME IN TERMS OF 2 ND PROVISO TO SECTION 40(A)(IA) OF THE ACT. WE FIND FORCE IN THE SUBMISSIONS OF THE LD.AR AND WE F IND SUPPORT FROM THE DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ANSAL LANDMARK TOWNSHIP (P) LTD. REPORTED IN 377 IT R 635(DEL) IN REMANDING THE MATTER TO THE AO FOR THE SAID PURPOSE . RELEVANT FINDINGS OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF ANSAL LAND MARK TOWNSHIP(P) LTD IS REPRODUCED HEREIN BELOW:- 7. HAVING AGGRIEVED BY ORDER OF LD. CIT(A), THE AS SESSEE BEFORE US PRAYED TO RESTORE THE ISSUE ON HAND TO THE FILE OF AO AND R ELIED ON JUDGMENT DT. 26-8-2015 OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT-1 V S. ANSAL LAND MARK TOWNSHIP(P) LTD REPORTED IN 377 ITR 635 (DEL) AND ON ORDER OF TRIBU NAL, KOLKATA BENCHES IN THE CASE OF DCIT VS. M/S. FIVE STAR SHIPPING AGENCY PVT. LTD FO R ASSESSMENT YEAR 2006-07. THE LD. DR SUBMITS THAT THE SECTION 194C OF THE ACT IS APPL ICABLE TO THE ISSUE ON HAND AND RELIED ON THE ORDER OF AO. 8. HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. AS RELIED BY THE LD.AR ON THE CASE LAW OF THE HONBLE HIGH CO URT OF DELHI SUPRA, WHILE DEALING WITH THE CASE ON HAND, HAD AN OCCASION TO READ DOWN THE DECISION OF AGRA BENCH OF TRIBUNAL IN ITA 337/AGRA/2013 AS IT WAS RELIED ON, AND HELD AND AGREED WITH THE REASONING AND CONCLUSION TO THE INSERTION OF SECOND PROVISO TO SE CTION 40(A)(IA) OF THE ACT BY THE LEGISLATURE. THE RELEVANT PORTION FROM PARAS 11 TO 14 ARE REPRODUCED HERE IN BELOW: 11. THE FIRST PROVISO TO SECTION 201 (1) OF THE AC T HAS BEEN INSERTED TO BENEFIT THE ASSESSEE. IT ALSO STATES THAT WHERE A PERSON FAILS TO DEDUCT TAX AT SOURCE ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SUCH PERSON SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF S UCH TAX IF SUCH RESIDENT HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139 OF THE ACT. NO DOUBT, THERE IS A MANDATORY REQUIREMENT UNDER SECTION 201 TO DEDUCT TAX AT SOUR CE UNDER CERTAIN CONTINGENCIES, BUT THE INTENTION OF THE LEGISLATURE IS NOT TO TREAT TH E ASSESSEE AS A PERSON IN DEFAULT SUBJECT TO THE FULFILLMENT OF THE CONDITIONS AS STIPULATED IN THE FIRST PROVISO TO SECTION 201(1). THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A) (I A) ALSO REQUIRES TO BE VIEWED IN THE SAME MANNER. THIS AGAIN IS A PROVISO INTENDED TO BENEFIT THE ASSESSEE. THE EFFECT OF THE LEGAL FICTION CREATED THEREBY IS TO TREAT THE ASSESSEE AS A PERSON NOT IN DEFAULT OF DEDUCTING TAX AT SOURCE UNDER CERTAIN CONTINGENCIES. 12. RELEVANT TO THE CASE IN HAND, WHAT IS COMMON T O BOTH THE PROVISOS TO SECTION 40 (A) (IA) AND SECTION 201 (1) OF THE ACT IS THAT THE AS LONG AS THE PAYEE/RESIDENT (WHICH IN THIS CASE IS APIL) HAS FILED ITS RETURN OF INCOM E DISCLOSING THE PAYMENT RECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HA S ALSO PAID TAX ON SUCH INCOME, THE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAUL T. AS FAR AS THE PRESENT CASE IS CONCERNED, IT IS NOT DISPUTED BY THE REVENUE THAT T HE PAYEE HAS FILED RETURNS AND OFFERED THE SUM RECEIVED TO TAX. 13. TURNING TO THE DECISION OF THE AGRA BENCH OF I TA T IN RAJIV KUMAR AGARWAL V. A CIT (SUPRA ) , THE COURT FINDS THAT IT HAS UNDERTAK EN A THOROUGH ANALYSIS OF THE SECOND PROVISO TO SECTION 40 (A)(IA) OF THE ACT AND ALSO S OUGHT TO EXPLAIN THE RATIONALE BEHIND ITS INSERTION. IN PARTICULAR, THE COURT WOULD LIKE TO R EFER TO PARA 9 OF THE SAID ORDER WHICH READS AS UNDER: 5 ITA NO 1642/KOL/2014 'ON A CONCEPTUAL NOTE, PRIMARY JUSTIFICATION FOR SU CH A DISALLOWANCE IS THAT SUCH A DENIAL OF DEDUCTION IS TO COMPENSATE FOR THE LOSS O F REVENUE BY CORRESPONDING INCOME NOT BEING TAKEN INTO ACCOUNT IN COMPUTATION OF TAXA BLE INCOME IN THE HANDS OF THE RECIPIENTS OF THE PAYMENTS. SUCH A POLICY MOTIVATED DEDUCTION RESTRICTIONS SHOULD, THEREFORE, NOT COME INTO PLAY WHEN AN ASSESSEE IS A BLE TO ESTABLISH THAT THERE IS NO ACTUAL LOSS OF REVENUE. THIS DISALLOWANCE DOES DEIN CENTIVIZE NOT DEDUCTING TAX AT SOURCE, WHEN SUCH TAX DEDUCTIONS ARE DUE, BUT, SO FAR AS TH E LEGAL FRAMEWORK IS CONCERNED, THIS PROVISION IS NOT FOR THE PURPOSE OF PENALIZING FOR THE TAX DEDUCTION AT SOURCE LAPSES. THERE ARE SEPARATE PENAL PROVISIONS TO THAT EFFECT. DEINCENTIVIZING A LAPSE AND PUNISHING A LAPSE ARE TWO DIFFERENT THINGS AND HAVE DISTINCTL Y DIFFERENT, AND SOMETIMES MUTUALLY EXCLUSIVE, CONNOTATIONS. WHEN WE APPRECIATE THE OBJ ECT OF SCHEME OF SECTION 40(A)(IA), AS ON THE STATUTE, AND TO EXAMINE WHETHER OR NOT, O N A 'FAIR, JUST AND EQUITABLE' INTERPRETATION OF LAW- AS IS THE GUIDANCE FROM HON' BLE DELHI HIGH COURT ON INTERPRETATION OF THIS LEGAL PROVISION, IN OUR HUMBLE UNDERSTANDIN G, IT COULD NOT BE AN 'INTENDED CONSEQUENCE' TO DISALLOW THE EXPENDITURE, DUE TO NO N DEDUCTION OF TAX AT SOURCE, EVEN IN .A SITUATION IN WHICH CORRESPONDING INCOME IS BROUG HT TO TAX IN THE HANDS OF THE RECIPIENT. THE SCHEME OF SECTION 40(A)(IA), AS WE S EE IT, IS AIMED AT ENSURING THAT AN EXPENDITURE SHOULD NOT BE ALLOWED AS DEDUCTION IN T HE HANDS OF AN ASSESSEE IN A SITUATION IN WHICH INCOME EMBEDDED IN SUCH EXPENDI TURE HAS REMAINED UNTAXED DUE TO TAX WITHHOLDING LAPSES BY THE ASSESSEE. IT IS NOT, IN OUR CONSIDERED VIEW, A PENALTY FOR TAX WITHHOLDING LAPSE BUT IT IS A SORT OF COMPENSAT ORY DEDUCTION RESTRICTION FOR AN INCOME GOING UNTAXED DUE TO TAX WITHHOLDING LAPSE. THE PEN ALTY FOR TAX WITHHOLDING LAPSE PER SE IS SEPARATELY PROVIDED FOR IN SECTION 271 C, AND, S ECTION 40(A)(IA) DOES NOT ADD TO THE SAME. THE PROVISIONS OF SECTION 40 A)(IA1 AS THEY' EXISTED PRIOR TO INSERTION OF SECOND PROVISO THERETO, WENT MUCH BEYOND THE OBVIOUS INTEN TIONS OF THE LAWMAKERS AND CREATED UNDUE HARDSHIPS EVEN IN CASES IN WHICH THE ASSESSEE 'S TAX WITHHOLDING LAPSES DID NOT RESULT IN ANY LOSS TO THE EXCHEQUER. NOW THAT THE L EGISLATURE HAS BEEN COMPASSIONATE ENOUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNINTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDE D CONSEQUENCES IS TO BE TREATED IN NATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY , THE INSERTION OF SECOND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIM E WHEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS, AS ALSO F OR THE DETAILED REASONS SET OUT EARLIER, WE CANNOT SUBSCRIBE TO THE VIEW THAT IT COULD HAVE BEEN AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON DEDUCTION OF TAX AT SO URCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS, EVEN WHEN THE CORRESPO NDING INCOME IS DULY BROUGHT TO TAX. THAT WILL BE GOING MUCH BEYOND THE OBVIOUS INT ENTION OF THE SECTION. ACCORDINGLY, WE HOLD THAT THE INSERTION OF SECOND PROVISO TO SEC TION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INS ERTED BY THE FINANCE (NO. 2) ACT, 2004.' 14. THE COURT IS OF THE VIEW THAT THE ABOVE REASONI NG OF THE AGRA BENCH OF ITAT AS REGARDS THE RATIONALE BEHIND THE INSERTION OF THE S ECOND PROVISO TO SECTION 40(A) (IA) OF THE ACT AND ITS CONCLUSION THAT THE SAID PROVISO IS DECLARATORY AND CURATIVE AND HAS RETROSPECTIVE EFFECT FROM 1 ST APRIL 2005, MERITS ACCEPTANCE. 11. RESPECTFULLY FOLLOWING THE ABOVE, WE DEEM IT FI T AND PROPER TO REMAND THE MATTER TO THE FILE OF THE AO. GROUND NOS . 2 TO 7 RAISED BY THE ASSESSEE IN THE APPEAL ARE ALLOWED FOR STATISTI CAL PURPOSE. 12. GROUND NOS. 8 TO 10 ARE RELATING TO CONFIRMATI ON OF ADDITION OF RS.77,26,433/- MADE ON ACCOUNT OF CONTRACTUAL RECEI PTS SHOWN IN THE P & L ACCOUNT OF ASSESSEE. 13. DURING THE SCRUTINY PROCEEDINGS THE AO FOUND TH AT THE ASSESSEE HAS DEBITED THE FOLLOWING EXPENSES/TDS OF RS.77,26, 433/- IN THE PROFIT & LOSS A/C AGAINST RECEIPT OF RS.25,27,52,38 4/-:- 6 ITA NO 1642/KOL/2014 A) RS.11,99,860/- ON ACCOUNT OF CESS B) RS.34,42,284/- ON ACCOUNT OF TDS C) RS.30,84,289/- ON ACCOUNT W.C.T, TOTALING TO RS. 77,26,433/ - 14. ACCORDING TO AO, THE ASSESSEE HAS NOT CONSIDERE D THE CONTRACTUAL RECEIPTS OF RS. 77,26,433/- IN HIS P & L A/C. THE ASSESSEE SUBMITTED HIS EXPLANATION ON 12-12-2011 ST ATING THAT AN AMOUNT OF RS.80,00,000/- RECEIVED AS AD-INTERIM ADV ANCE DURING THE F.Y 2007-08 AND DEDUCTED TDS IN F.Y 2008-09. THE A SSESSEE ADJUSTED THE CONTRACTUAL RECEIPTS IN F.Y 2010-11 AN D PAID TAXES THEREON. THE AO FOUND THAT THE SUBMISSIONS OF ASSES SEE IS NOT ACCEPTABLE AS THE ASSESSEE HAS NOT CONSIDERED THE C ONTRACTUAL RECEIPTS OF RS. 77,26,433/- IN HIS P & L A/C IN THE A.Y UNDER CONSIDERATION AND, THEREFORE, ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE. 15. BEFORE THE CIT-A, THE ASSESSEE CONTENDED THAT T HE TOTAL CONTRACTUAL RECEIPTS BASED ON VARIOUS TDS CERTIFICA TES RECEIVED FROM PHE, GOVT. OF W.B IN WHICH AN AMOUNT OF RS.80,00,00 0/- RECEIVED AS AD-INTERIM ADVANCE FROM SOUTH 24-PGS, MECHANICAL DI VISION, GOVT. OF W.B. FURTHER CONTENDED THAT TDS CERTIFICATE(S) SHOW S ONLY CONTRACTUAL VALUE AND THE PAYMENT IS DECIDED ON VARIOUS REASONS DEPENDING UPON REPORT VERIFICATION CERTIFICATE AND FINAL PAYMENT I S NET RESULT OF PAYMENT AFTER SUCH DEDUCTION. THE CIT-A HAS NOT CON SIDERED THE ABOVE SUBMISSIONS OF ASSESSEE AND CONFIRMED THE ADD ITION MADE BY THE AO BY STATING AS UNDER:- 6.2 I HAVE PERUSED THE ASSESSMENT ORDER AND THE S UBMISSION OF THE APPELLANT ON THE ISSUE AT HAND FOR COMING TO A DECISION ON MERITS. A T THE ASSESSMENT STAGE, THE APPELLANT ADMITTED IN HIS SUBMISSION THAT CONTRACTUAL RECEIPT OF RS.77,26,433/- WAS NOT CONSIDERED BY HIM IN HIS TOTAL TURNOVER IN THE P & L A/C AND O FFERED THE SAME FOR TAXATION. THE APPELLANT ALSO PAID RS.10,00,000/- BY WAY OF SELF A SSESSMENT TAX ON 08.12.2011, RS.5,00,000/- ON 14.12.2011, RS.5,00,000/- ON 21.12 .2011. THE AO OBSERVED THAT FROM THE ABOVE SUBMISSION OF THE ASSESSEE, IT WAS PROVEN BEYOND DOUBT THAT THE ASSESSEE HAD NOT CONSIDERED THE CONTRACTUAL RECEIPT OF RS.77 ,26,433/- IN HIS P&L A/C WHEREAS HE HAD DEBITED THE EXPENSES/TDS OF RS.11,99,860/- ON A CCOUNT OF CESS, RS.34,42,284/- ON ACCOUNT OF TDS AND RS.30,84,289/- ON ACCOUNT OF W.C .T. IN THE P&L A/C AGAINST THE RECEIPT OF RS.15,27,52,384/- INCLUDING AD-INTERIM ADVANCE PAYMENT OF RS.80,00,000/-. THEREFORE, RS.77,26,433/- IS ADDED TO THE TOTAL INC OME OF THE ASSESSEE. I FIND THAT DIFFERENCE OF TURNOVER AS PER TDS STATEMENT AND PRO FIT & LOSS A/C WAS RS.1 ,50,21,171/- . THE AO FAIRLY EXCLUDED THE AMOUNTS WHICH WERE PRO PERLY EXPLAINED AND OR RECONCILED BY THE APPELLANT. THE APPELLANT COULD NOT DEMONSTRATE BEFORE ME WHY THE AMOUNT OF RS.77,26,433/- DESERVES TO BE DELETED. ON THE OTHER HAND THE AO MADE THE ADDITION OF RS.77,26.433/- AFTER CONSIDERING ALL RECONCILIATION AND EXCLUDING ADVANCES ETC., I FIND THAT THE APPEAL ON THIS GROUND STANDS TO NO MERIT A ND THE SAME IS THEREFORE DISMISSED. 7 ITA NO 1642/KOL/2014 16. THE LD.AR SUBMITS THAT THE ISSUE WAS TOTALLY MI SREPRESENTED BEFORE THE CIT-A AND THE ASSESSEE IS READY TO FILE ALL DOCUMENTS AND PRAYED TO REMAND THE MATTER TO THE FILE OF AO. ON T HE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE AO & CIT-A. 17. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND THAT THE CONTENTION OF ASSESSEE WAS THAT THE CONTRACTUA L RECEIPTS INCLUDES AD-INTERIM ADVANCE AND THE SAME WERE ADJUSTED AGAIN ST THE REPORT VERIFICATION CERTIFICATE AND DEDUCTION IS MADE ON F INAL PAYMENT. ACCORDING TO ASSESSEE, THERE WERE DISCREPANCIES BET WEEN THE AMOUNT PAYABLE AND AMOUNT RECEIVABLE FROM MECHANICA L DIVISION, GOVT. OF W.B & TDS CERTIFICATES ISSUED. THE AO & C IT-A DID NOT CONSIDER THE SUBMISSIONS OF ASSESSEE IN THEIR RIGHT PERSPECTIVE. WE FIND THAT THERE WAS DIFFERENCE OF TURNOVER AS PER T DS STATEMENT AND PROFIT & LOSS A/C, WHICH REQUIRES VERIFICATION BY T HE AO. THEREFORE, TAKING INTO CONSIDERATION THE FACTS OF THE CASE AND THE SUBMISSIONS OF LD.AR AND ISSUE INVOLVED IN THE APPEAL, WE DEEM IT FIT AND PROPER TO REMAND THE MATTER TO THE FILE OF THE AO FOR VERIFIC ATION. THE ASSESSEE HAS TO CLARIFY THE DIFFERENCE FOUND BY THE AO BY PR OPER EXPLANATION ALONG WITH EVIDENCE IN RESPECT OF TDS, TURNOVER AND TOTAL RECEIPTS OF ASSESSEE. THE AO SHALL PASS A FRESH ORDER AS PER LA W, AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS AND EXPLANATIONS OF A SSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO FILE REQUISITE EVID ENCES, IF ANY, TO SUBSTANTIATE ITS CLAIM AND CONTENTION. THE GROUND N OS.8 TO 10 ARE ALLOWED FOR STATISTICAL PURPOSE. 18. GROUND NO. 11 ARE CONSEQUENTIAL IN NATURE, WHIC H REQUIRES NO ADJUDICATION. GROUND NO. 12 IS GENERAL IN NATURE, W HICH REQUIRES NO ADJUDICATION BY US. 8 ITA NO 1642/KOL/2014 19. IN THE RESULT, THE APPEAL OF ASSESSEE-ITA NO. 1 642/KOL/2014 FOR THE A.Y 2009-10 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 -04-2018 SD/- SD/- M. BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :25-04-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: SHRI JOYDEB CHANDRA 7/1A ABHOY HALDER LANE, KOLKATA-12. 2 RESPONDENT/REVENUE: DEPUTY COMMISSIONER OF INCOME T AX, CIRCLE-33, 10B, MIDDLETON ROW, KOLKATA-71. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA