ITO, Ward-13(1), Kolkata, Kolkata V. M/s Calcutta Ahmedabad Carriers Pvt. Ltd., Kolkata

ITA 1772/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6307 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 07-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Difference of opinion; Change of opinion
• Section: 143(3); 147

Judgement Text

1 ITA NO.1772/KOL/2016 M/S CALCUTTA AHMEDABAD COURIER S PVT. LTD. A.Y.2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI S.S. GODARA, JM & SHRI M.BAL AGANESH, AM ] ITA NO.1772/KOL/2016 ASSESSMENT YEAR : 2006-07 I.T.O., WARD-13(1) -VERSUS- M/S CALCUTTA AHMEDAB AD KOLKATA CARRIERS PVT. LTD. KOLKATA (PAN:AACCC 2260 P) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SALLONG YADEN, ADDL CIT FOR THE RESPONDENT: SHRI ANIL KOCHAR, ADVOCATE DATE OF HEARING : 02.05.2018. DATE OF PRONOUNCEMENT : 09.05.2018. ORDER PER S.S. GODARA, JM: 1. THIS REVENUES APPEAL FOR A.Y.2006-07 ARISES F ROM THE CIT(A)-5, KOLKATAS ORDER DATED 18.07.2016, PASSED IN APPEAL NO. 93/CIT (A)-5/W-3(3)/13-14/14-15, QUASHING THE REOPENING IN QUESTION, IN PROCEEDING S U/S 147/148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. WE NOTICE, AT THE OUTSET THAT THE CIT(A)S DET AILED DISCUSSION ON THE ABOVE LEGAL ISSUE WHILE QUASHING THE IMPUGNED REOPENING R EADS AS FOLLOWS :- 2. THE NOTICE U/S.148 WAS ISSUED ON 28.02.2012. THE RELEVANT ASSESSMENT YEAR IS 2006-07. THE CASE WAS FIRST SCRUTINIZED U/S.143( 3) OF THE I.T. ACT VIDE THE ORDER DATED 29.12.2008. THUS IT IS A CASE OF RE-ASSESSMEN T AFTER THE EARLIER ASSESSMENT WAS MADE U/S.143(3). IN TERMS OF THE PROVISO TO SEC TION 147 INITIATION OF RE- ASSESSMENT PROCEEDING AFTER THE EXPIRY OF FOUR YEAR S FROM THE END OF THE RELEVANT ASSESSMENT YEAR CAN BE RESORTED TO ONLY IN CASES W HERE INCOME ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT FOR THAT ASSESSMENT YEAR. THERE IS NO FINDING IN THE RELEVANT NOTICE OR NOTIC ES AND IN THE ASSESSMENT ORDER U/S.147/ 143(3) DATED 28.03.2013 TA~T THE APPELLANT FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. THE A.O. HAS MAINLY DRAWN INFERENCES FROM FORM 3CD AND E-TDS RETURNS WHICH HAVE BEEN FILED BY THE APPE LLANT ITSELF. THOUGH THE INFERENCES HAVE BEEN CHALLENGED BY THE APPELLANT IT BECOMES APPARENT THAT NO THIRD PARTY INFORMATION WAS IN POSSESSION OF THE A. O. WHO INITIATED THE 2 ITA NO.1772/KOL/2016 M/S CALCUTTA AHMEDABAD COURIER S PVT. LTD. A.Y.2006-07 RE-ASSESSMENT PROCEEDING U/S.147. FORM 3CD AND E-TD S RETURNS ARE FILED BY THE APPELLANT ITSELF. THESE DOCUMENTS WERE AVAILABLE BE FORE THE A.O. WHEN THE EARLIER ASSESSMENT U/S.143(3) WAS PASSED VIDE THE O RDER DATED 29.12.2008. ON THE EARLIER OCCASION THE A.O. DID NOT POINT OUT ANY DEF ICIENCY ON ACCOUNT OF THE ISSUES PICKED UP IN THE PRESENT RE-ASSESSMENT PROCE EDING. 2.1. FROM THE ASSESSMENT FOLDER, IT IS SEEN THAT THE APPELLANT FILED A BUNCH OF COPIES OF VARIOUS PAGES OF FORM 26Q FOR VARIOUS QU ARTERS OF THE. FINANCIAL YEAR 2005-06 RELEVANT FOR THE CURRENT ASSESSMENT YEAR. T HE SAID PAGES RUNNING INTO TENS OF PAGES SHOW DEDUCTEE DETAILS OF VARIOUS PAYM ENTS WITH OTHER CORRESPONDING DETAILS SUCH AS DATES, TDS, DATE OR D EDUCTION AND SO ON. ALONG WITH THE SAID FORM 26Q PAGES ARE DETAILS OF TRUCK HIRE CHARGES, IN WHICH BREAK UP OF LORRY HIRE CHARGES IS SHOWN BRANCH WISE, QUAR TER-WISE AND ACCORDING TO TDS DEDUCTED AND NOT DEDUCTED. THE SAID DETAILS APP EARING ON ONE PAGE AND FLAGGED AS 'DETAILS OF TRUCK HIRE CHARGE' IN THE BO TTOM OF THE PAGE SHOWS LORRY HIRE CHARGES WITH REFERENCE TO TDS DEDUCTED AND NOT DEDUCTED AS UNDER :- TOTAL TDS DEDUCTABLE AMOUNT LORRY /HIRE CHARGES - 1 31,156,729/- LORRY /HIRE CHARGES - 2 12,798,860/- 43,955,589/- TAX DEDUCTED 26,399,838/- NO TDS DEDUCTED 17,555,751/- FURTHER DETAILS ON THE SAME PAGE PRESENTED BRANCH W ISE CONFIRM THE LORRY HIRE CHARGES AS AGGREGATED ABOVE OF RS.4,39,55,589/ - AG AINST TWO HEADS NUMBERED AS LORRY HIRE CHARGES-I AND LORRY HIRE CHARGES-2 FORMI NG PART OF THE TOTAL SHOWN ON THE LAST COLUMN AGGREGATED TO, ALONG WITH OTHER ITE MS, RS.5,27,64,671/-, WHICH IS THE FIGURE SHOWN IN THE P&L A/C UNDER TRUCK HIRE CH ARGES IN SCHEDULE-LO ANNEXED TO AUDITED P&L A/C. THE SAID SCHEDULE CLEAR LY SHOWS RS.5,27,64,671/- FORMING PART OF THE TOTAL DIRECT EXPENSES AS DEBITE D TO THE P&L A/C. OF RS.7,95,35,668/-. THUS IT BECOMES CLEAR THAT THE TR UCK HIRE CHARGES/LORRY HIRE CHARGES INCLUDING ONES ON WHICH TDS HAS BEEN EFFECT ED AS PER THE COPIES OF FORM 26Q FOR THE CURRENT FINANCIAL YEAR FOR VARIOUS QUAR TERS HAVE BEEN INCORPORATED IN THE P&L A/C. FROM THE ORIGINAL ASSESSMENT ORDER, PAGES 1 & 2, IT IS APPARENT THAT THE A.O. HAS EXAMINED THE LORRY HIRE CHARGES I N GENERAL AND ALSO WITH REFERENCE TO THE PAYEES LISTED U/S.40A(2)(B). ON TH E SAID POINT THE A.O. HAD MADE SOME ADDITIONS ALSO AS IS CLEAR FROM PAGE-2 OF THE ORIGINAL ASSESSMENT ORDER. THUS THE LORRY HIRE CHARGES WERE EXAMINED BY THE THEN A. O. IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING AND THE, APPELLANT FILED RELE VANT DETAILS IN THE FORM OF VARIOUS PAGES OF 26Q AND SOME OTHER DETAILS ALONG W ITH SCHEDULE-10 OF THE P&L A/ C. 3 ITA NO.1772/KOL/2016 M/S CALCUTTA AHMEDABAD COURIER S PVT. LTD. A.Y.2006-07 2.2. AS REGARDS THE A,O.'S DECISION THAT THE APPELL ANT INCURRED EXPENSES OF RS.77,51,915/- AND FAILED TO OFFER THE EXPLANATION FOR THE SOURCE OF THE SAID EXPENDITURE, THE RELEVANT FACTS APPEARING IN THE AS SESSMENT ORDER AND FOLDER DO NOT SUPPORT THE A.O.'S ACTION. THE A.O.'S ALLEGATIO N ON PAGE-4 OF THE ASSESSMENT ORDER THAT THE APPELLANT DID NOT ACCOUNT FOR THE SA ID EXPENDITURE OF RS. 77,51,915/ - IS NOT BASED ON MATERIALS, DETAILS OR DOCUMENTS A PPEARING IN THE ASSESSMENT FOLDER AS BRIEFLY DESCRIBED ABOVE. COMPARISON WITH THE ANNEXURE TO FORM 3CD CANNOT BE MECHANICALLY RESORTED TO IN VIEW OF OTHER MORE PRIMARY FACTS AVAILABLE IN THE ASSESSMENT FOLDER. THE TABLE APPEARING ON PA GE-4 AND PAGE-L OF THE ASSESSMENT ORDER WHICH APPARENTLY HAS BEEN MADE THE BASIS FOR ADDITION BY THE A.O. DRAWS CONCLUSION ON WRONG DATA. THE FACTS IN T HE ASSESSMENT FOLDER CLEARLY INDICATE THAT RS.1.37,23,353/- APPEARING IN THE LAS T COLUMN OF THE TWO TABLES IN THE ASSESSMENT ORDER WAS ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS, FORM 26Q AND THE P&L A/C. THE FIGURES LISTED AGAINST ANNEXURE TO FORMS 3CD IN THE PENULTIMATE ROW OF THE SAID TABLES ARE WRONG, WHICH ARE NOT IN SINE WITH OTHER RELEVANT DETAILS AND PRIMARY FACTS IN THE ASSESSMEN T FOLDER. THESE WRONG FIGURES, IN VIEW OF OTHER MATERIAL FACTS SUGGESTING OTHERWIS E, CANNOT BE THE BASIS FOR CONCLUDING THAT THESE WAS UNEXPLAINED EXPENDITURE I N THE CASE OF THE APPELLANT. THE LORRY HIRE CHARGES AGAINST THE INDICATED THREE DEDUCTEES /PAYEES IN NO CASE CAN BE TERMED AS UNEXPLAINED EXPENDITURE AS THIS HA VE BEEN CULLED OUT FROM THE FORM 26Q TRANSACTIONS FURNISHED BY THE APPELLANT AN D WHICH FORM PART OF THE P&L A/ C. AND ITS ANNEXURE. 2.3. IT APPEARS TO BE A CASE OF CHANGE OF OPINION O N EXISTING MATERIALS. IN ANY CASE THE A.O. HAS NOT DEMONSTRATED THAT THERE WAS FAILUR E ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR THE ASSESSMENT. THUS THE SAID CONDITION PRECEDENT FOR INITIATING THE INC OME ESCAPING ASSESSMENT U/S.147 AS LAID DOWN IN THE PROVISO TO SECTION 147 HAS NOT BEEN MET IN REGARD TO THE SAID FIGURE OF RS.77,51,915. THUS THE A.O. GETS NO JURISDICTION TO INITIATE THE PROCEEDING U/S 14 7/148 IN RELATION TO RS. 77,51,91 5/-. 3. WE HAVE HEARD RIVAL CONTENTIONS. CASE FILE PERUS ED. LEARNED DEPARTMENTAL REPRESENTATIVE QUOTES HONBLE APEX COURTS DECISION IN CIT VS PVS BEEDIES [1999] 237 ITR 13 (SC) THAT THE REVENUES AUDIT PARTY IS V ERY MUCH ENTITLED TO POINT OUT FACTUAL ERROR OR OMISSION MADE IN FRAMING OF A REG ULAR ASSESSMENT. THE REVENUES CASE IS THAT THE ASSESSING OFFICER HAD RIGHTLY TAKE N RECOURSE TO THE IMPUGNED REOPENING IN VIEW OF THE FACT THAT ASSESSEES TAXAB LE INCOME LIABLE TO BE ASSESSED HAD ESCAPED ASSESSMENT. WE FIND NO SUBSTANCE IN THE REV ENUES INSTANT ARGUMENTS. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER INITIATED THE IMPUGNED REOPENING BEYOND FOUR 4 ITA NO.1772/KOL/2016 M/S CALCUTTA AHMEDABAD COURIER S PVT. LTD. A.Y.2006-07 YEARS FROM THE END OF THE IMPUGNED ASSESSMENT YEAR. THERE IS NO MATERIAL IN THE INSTANT FILE WHICH COULD INDICATE THAT THE IMPUGNED REOPENING HAS BEEN INITIATED ON ACCOUNT OF ASSESSEES FAILURE IN FURNISHING FULLY A ND TRULY ALL THE RELEVANT PARTICULARS DURING THE COURSE OF ASSESSMENT AS PER FIRST PROVIS O TO SECTION 147 OF THE ACT. HONBLE APEX COURTS DECISION IN 1997 106 ITR 1 (SC) PARAS HURAM POTTERY WORKS CO. LTD. VS ITO HOLDS IN SIMILAR CIRCUMSTANCES THAT AN ASSESSEE IS NOT TO BE HELD RESPONSIBLE FOR THE ASSESSING OFFICERS REMISSNESS IN NOT APPLYING THE STATUTORY PROVISION CORRECTLY. HONBLE GUJARAT HIGH COURTS DECISIONS IN [2013] 35 9 ITR 447 IN CASE KANAK FABRICS LTD VS ITO [2014] 360 ITR 496 (GUJ) GUJARAT LEASE FINANCING LTD. VS DCIT ALSO QUASH SIMILAR RE-OPENINGS INITIATED BEYOND FOUR YEA RS WITHOUT UTTERING A SINGLE WORD ON ASSESSEES FAILURE AS STIPULATED IN FIRST PROVIS O TO SECTION 147. LEARNED COUNSEL REPRESENTING ASSESSEE FILES BEFORE US A COPY OF THE REGULAR ASSESSMENT ORDER DATED 29.12.2008 AS WELL. HE PLEADS THAT THE ASSESSING OF FICER HAD VERY WELL EXAMINED ALL THE RELEVANT ISSUES WHILE FRAMING THE SAID REGULAR ASSESSMENT. HE FURTHER TAKES US TO REASSESSMENT FRAMED IN QUESTION FINALISED ON 28.02. 2013 MAKING IT EVIDENT THAT THE ASSESSING OFFICER HAD INITIATED REOPENING IN QUESTI ON ON THE BASIS OF RECORDS ALREADY FILED BY THE ASSESSEE ONLY. WE TAKE INTO ACCOUNT AL L THESE FACTS AND LEGAL POSITION TO CONCLUDE THAT THE CIT(A) HAS RIGHTLY QUASHED THE RE OPENING PROCEEDINGS BEYOND FOUR YEARS FROM THE END OF THE IMPUGNED ASSESSMENT YEAR. THE REVENUES SOLE SUBSTANTIVE GROUND IS REJECTED. THIS REVENUES APPEAL IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 09.05.2018. SD/- SD/- [M.BALAGANESH] [ S.S. GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09.05.2018. [RG SR.PS] 5 ITA NO.1772/KOL/2016 M/S CALCUTTA AHMEDABAD COURIER S PVT. LTD. A.Y.2006-07 COPY OF THE ORDER FORWARDED TO: 1.M/S CALCUTTA AHMEDABAD CARRIERS PVT. LTD., 7, TAR ACHAND DUTTA STREET, KOLKATA- 700073. 2. I.T.O. WARD-13 (1), KOLKATA. 3. CIT(A)-5, KOLKATA 4. C.I.T.-5, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES