M/s. Durga Trading Corporation, Kolkata V. DCIT, Circle - 34, Kolkata, Kolkata

ITA 167/KOL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62110 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 02-02-2012
• Court: TRIBUNAL
• Department Lawyers: B HAZRA
• Assessee Lawyers: S P CHOWDHURY
• Keywords: Business expenditure
• Section: 133(6); 194C; 131

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () . .. . . .. . , , , , , ! ''# $% ''# $% ''# $% ''# $% ] ]] ] [BEFORE HONBLE SRI C. D. RAO, AM & HONBLE SRI GEORGE MATHAN, JM] !' !' !' !' /ITA NO.167/KOL/2012 (%) *+/ ASSESSMENT YEAR : 2007-08 ($- / APPELLANT ) - % - ( /0$- /RESPONDENT) M/S.DURGA TRADING CORPORATION D.C.I.T., CIRCLE- 34, KOLKATA -VERSUS- KOLKATA (PAN: AACFD 1272 B) $- 1 2 / FOR THE APPELLANT: SHRI S.P.CHOWDHURY /0$- 1 2 / FOR THE RESPONDENT: SHRI B.HAZRA 3%4 1 /DATE OF HEARING : 23.05.2012. 5* 1 /DATE OF PRONOUNCEMENT : 23.5.2012. 6 / ORDER 789 789 789 789 PER BENCH THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-XX, KOLKATA IN APPEAL NO.253/CIT(A)-XX/CIR-34/09-10/KOL DATED 05.10.2011 FOR ASSESSMENT YEAR 2007-08. 2. AT THE TIME OF HEARING, SHRI S.P.CHOWDHURY, LD. AR APPEARED ON BEHALF OF ASSESSEE AND SHRI B.HAZRA, THE LD. DR APPEARED ON B EHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. FOR THAT ON THE FACTS OF THE CASE, THE LD. C.I. T.(A) IS ERRED IN DISMISSING THE APPEAL WITHOUT CONSIDERING THE WRITTEN ARGUMENT, THUS, HIS FINDING IS COMPLETELY ERRONEOUS, PERVERSE, MALA-FIDE AND ILLEGAL. 2. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN CONFIRMING THE DISALLOWANCE OF PAYMENT TO SECURITY PERSONAL RS.87, 968/- U/S. 40(A)(IA), HE FAILED TO APPRECIATE THE APPELLANTS ARGUMENT AND DECISIONS O F THE COURT AND I.T.A.T. ORDERS, THEREFORE, HIS ACTION IS COMPLETELY ARBITRARY, UNJU STIFIED, UNWARRANTED AND ILLEGAL. 3. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) IS ERRED IN SUSTAINING THE DISALLOWANCE OF OUT POCKET EXPENSES PAID TO SOLICIT OR BEING DISBURSEMENT OF LEGAL CHARGES, FOR PAYMENT TO COUNSEL ON WHICH T.D.S. WAS MADE AND DEPOSITED BY SOLICITOR, AS SUCH DISALLOWANCE OF LEGAL CHARGES RS.4,82,475/- IS ERRONEOUS, PERVERSE AND ILLEGAL. 2 4. FOR THAT. THERE BEING NO CONTRACT FOR ABOVE PAYM ENT OF BUSINESS EXPENSES, THEREFORE, U/S. 194C HAS NO APPLICATION. 5. FOR THAT THE DISALLOWANCE OF OUT POCKET LEGAL CH ARGES AMOUNTED TO DOUBLE DEDUCTION ON THE SAME AMOUNT IN SO FAR AS COUNSEL PAYMENT ARE CONCERNED WHICH IS AGAINST THE LAW. 6. FOR THAT THE ABOVE EXPENSES WERE PAID BUT IT W AS NOT PAYABLE, AND THE I.T. ACT DOES NOT INCLUDE THE WORD PAID AS SUCH THE SAID D ISALLOWANCE WERE UNJUSTIFIED, UNWARRANTED AND ILLEGAL. 7. FOR THAT ON THE FACTS OF THE CASE, THE FIRM I.E. THE ASSESSEE WAS NEVER A CREDIT CARD HOLDER, ON THE BASIS OF WRONG AIR INFORMATION THE D EPOSIT IN CREDIT CARD RS.5,05,986/- HAS BEEN WRONGLY ADDED TO THE INCOME OF THE APPELLA NT AND CONFIRMED IN APPEAL WHICH IS ERRONEOUS, PERVERSE AND ILLEGAL. 8.THAT ON THE FACTS OF THE CASE. THE CITY BANK CRED IT CARD WAS STANDING IN THE NAME OF ASHWINI KUMAR MORE WITH HIS PAN, BUT NOT UNDER THE PAN OF THE APPELLANT, BUT THE LD. C.I.T.(A) FAILED TO CONSIDER THE APPELLANTS ARGUME NT AND EVIDENCES PRODUCED, THEREFORE. HIS FINDING IS ARBITRARY, UNJUSTIFIED AND ILLEGAL. 9. FOR THAT ON THE FACTS OF THE CASE THE APPELLANT RESERVE THE RIGHT TO ADDUCE ANY FURTHER GROUND OR GROUNDS IF NECESSARY, ON OR BEFORE THE HE ARING OF THE APPEAL. 3. IT WAS FAIRLY AGREED BY BOTH THE SIDES ON GROUN DS 1 TO 6 OF THE ASSESSEES APPEAL WHICH CONTAINS THE ISSUE OF PAID/PAYABLE IN REGARD TO TDS THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF M/S.MERILYN SHIPPING & TRANSPORTS, VISHAKAPATNAM VS ACIT, RANGE -1 IN ITA NO.477/VIZ/2008 DATED 29.03.2012. IT WAS FURTHER ARGUED BY THE LD. DR THAT EVEN THOUGH IT IS COVERED BY THE DECISION OF THE SPECIAL BENCH HE STILL RELIES O N THE ORDERS OF LD. CIT(A). 4. WE HAVE CONSIDERED THE SUBMISSIONS. AS IT IS NO TICED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF THI S TRIBUNAL IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS (SUPRA), RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL BENCH THE FINDINGS OF LD. CIT(A) ON THIS IS SUE STANDS REVERSED. 5. IN REGARD TO GROUND NOS. 7 AND 8, IT WAS SUBMIT TED BY THE LD. AR THAT THE AO HAD RECEIVED AN AIR INFORMATION THAT THE CREDIT CAR D WAS BEING USED IN THE NAME OF ASSESSEE AND WHICH WAS ISSUED BY CITI BANK. IT WAS THE SUBMISSION THAT THE TRANSACTIONS TO THE EXTENT OF RS.5,05,986/- HAD BEE N SHOWN TO HAVE BEEN DONE BY USING THE SAID CREDIT CARD. IT WAS THE SUBMISSION THAT TH E SAID CREDIT CARD DID NOT BELONG TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE AO WAS CARRIED AWAY BY THE FACT THAT THE AIR CONTAINED THE PAN OF THE ASSESSEE. HE HAD PRODU CED LETTERS FROM THE BANK AS ALSO 3 THE OWNER OF THE CREDIT CARD THAT THE CREDIT CARD D ID NOT BELONG TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE AO DISBELIEVED THE CLAIM OF ASSESSEE AND ADDED THE TRANSACTIONS IN THE CREDIT CARD IN THE HANDS OF ASS ESSEE ON THE GROUND THAT THE ASSESSEE DID NOT PRODUCE THE ACTUAL PERSON IN WHOSE NAME THE CREDIT CARD WAS ISSUED SHRI ASHIWINI KUMAR MORE. IT WAS THE SUBMISSION THAT THE PRAYER BEFORE THE LD. CIT(A) ALSO DID NOT RESULT IN ANY RELIEF TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE AIR INFORMATION WHICH WAS SHOWN AT PAGE 9 OF THE PAPER BOOK HAD THE ASSESSEES PAN NUMBER. HOWEVER, IT WAS THE SUBMISSION THAT THE NAM E OF THE OWNER OF THE CREDIT CAD IS MR.ASHWINI KUMAR MORE AND THE ADDRESS IS M/S. OL IVE TEA PLANTATIONS PVT. LTD. THE SAID ASHWINI KUMAR MORE IS IN NO WAY CONNECTED TO THE ASSESSEE. SHRI ASHWINI KUMAR MORE HAD ALSO ISSUED A LETTER TO THE ASSESSEE AS ALSO TO THE AO AND TO CITI BANK SPECIFYING THAT THE PAN ACCOUNT MENTIONED IN THE AI R IS NOT THAT OF ASHWINI KUMAR MORE. HOWEVER THE CREDIT CARD WHICH IS BEING REFERR ED TO DOES NOT BELONG TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ADDITION M ADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) MAY BE DELETED. 6. IN REPLY THE LD. DR SUBMITTED THAT THE PAN AS ME NTIONED IN AIR INFORMATION IN RESPECT OF THE SAID CREDIT CARD IN THE NAME OF ASHW INI KUMAR MORE BELONG TO THE ASSESSEE. IT WAS THE SUBMISSION THAT HE HAD NO OBJE CTION IF THE ISSUE WAS RESTORED TO THE FILE OF AO FOR RE-VERIFICATION. 7. WE HAVE CONSIDERED THE SUBMISSIONS. A PERUSAL O F THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS DONE EVERYTHING POSSIBL E FROM THE SIDE OF THE ASSESSEE TO SUBSTANTIATE HIS CLAIM THAT THE CREDIT CARD DOES NO T BELONG TO THE ASSESSEE. HE HAS ALSO PRODUCED THE CONFIRMATION FROM SHRI ASHWINI KUMAR M ORE. THE CLAIM OF THE AO THAT THE ASSESSEE DID NOT PRODUCE SHRI ASHWINI KUMAR MOR E FOR VERIFICATION DOES NOT STAND TO REASON FOR THE SIMPLE REASON THAT THERE IS NO TR ANSACTION BETWEEN THE ASSESSEE AND SHRI ASHWINI KUMAR MORE. WHEN THERE IS NO RELATIONS HIP OR CONNECTION BETWEEN THE TWO, THERE IS NO REASON WHY SHRI ASHWINI KUMAR MORE SHOULD PRODUCE HIMSELF FOR VERIFICATION AT THE REQUEST OF THE ASSESSEE. WHAT W AS TO BE DONE BY THE AO WAS TO ISSUE A SUMMON U/S 131 OR CALL FOR A DETAILS U/S 133(6) O F THE ACT OR DEPUTE HIS INSPECTOR OR 4 HIS OFFICE PERSONNEL FOR VERIFYING THE TRANSACTIONS AND IDENTITY OF THE CREDIT CARD HOLDER. NONE OF THIS HAS BEEN DONE. THE ASSESSEE HA S GIVEN AN EXPLANATION. THE SAME CANNOT BE BRUSHED ASIDE WITHOUT PRODUCING ANY COGEN T AND TANGIBLE EVIDENCES TO SHOW THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS FALSE . UNDER THIS CIRCUMSTANCES WE ARE OF THE VIEW THAT THIS ISSUE MUST BE RESTORED TO THE FI LE OF AO FOR RE-ADJUDICATION AND VERIFICATION BY THE AO ON THE BASIS OF THE DOCUMENT S FILED BY ASSESSEE. THE AO IF HE FINDS THE EXPLANATION TO BE FALSE OR FINDS ANY INC RIMINATING EVIDENCES AGAINST THE ASSESSEE THE SAME SHALL BE PUT TO THE ASSESSEE HIS EXPLANATION. UNDER THE CIRCUMSTANCES THIS ISSUE IS RESTORED TO THE FILE OF AO WITH THE DIRECTIONS AS INDICATED ABOVE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT ON 23.05.2012. SD/- SD/- [ .''# $% , ] [ .., ] [ GEORGE MATHAN ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( ( ) )) ) DATE: 23.05.2012. R.G.(.P.S.) 6 1 /((: ;:*<- COPY OF THE ORDER FORWARDED TO: 1. M/S.DURGA TRADING CORPORATION, 5, DR.RAJENDRA PRASA D SARANI, KOLKATA-700001. 2 THE D.C.I.T, CIRCLE-34, KOLKATA 3. THE CIT- 4. THE CIT(A)-XX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 0: /(/ TRUE COPY, 6%3/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES