Madhumita Basu, Kolkata V. DCIT, Cir. 50, Kolkata, Kolkata

ITA 185/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0527 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CHOWDHURY
• Assessee Lawyers: SHRI MIRAJ D SHAH
• Keywords: Reason to believe
• Section: 143(3); 194C; 147; 148

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 185 / KOL / 20 17 ASSESSMENT YEAR :2008-09 MADHUMITA BASU C/O D J SHAH & CO. KALYAN BHAVAN, 2 ELGIN ROAD, KOLKATA-20 [ PAN NO.AJQPB 3642 J ] V/S . DCIT, CIRCLE-50, DS BLOCK-2, 3 & 4, MANIKTALA CIVIC CENTRE, UTTARPAN MARKET COMPLEX, ULTADANGA, KOLKATA-54 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SHRI MIRAJ D. SHAH, ADVOCATE /BY RESPONDENT SHRI R. CHOWDHURY, ADDL. CIT-DR /DATE OF HEARING 13-08-2018 /DATE OF PRONOUNCEMENT 12-09-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-15, KOLKATAS ORDER DATED 18.11.2016, PASSED IN CASE NO.177/CIT(A)-15/14-15/CIR-50/KOL, I N PROCEEDINGS U/S. 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE RAISES TWO SUBSTANTIVE GROUNDS IN T HE INSTANT APPEAL. HER FORMER FIRST GROUND CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TAKING RECOURSES TO SECTION 148 R.W. 147 REOPENING PROCEEDINGS FOLLOWED BY THE LATTER ONE SEEKING TO DELETE SECTION 40(A)(IA) DISALLOWANCE OF ITA NO.185/KOL/2017 A.Y.2008-09 MADHUMITA BASU VS. DCIT, CIR-5 0 KOL. PAGE 2 1,43,40,722/- ON ACCOUNT OF NON-DEDUCTION OF TDS O N MACHINERY CHARGES; RESPECTIVELY. 3. WE COME TO FORMER LEGAL GROUND FIRST. A FEW FACT S NEED TO BE TAKEN NOTE OF. THERE IS NO DISPUTE THAT THIS ASSESSEE IS AN IN DIVIDUAL. HER RETURN STOOD SUMMARILY PROCESSED. THE ASSESSING OFFICER THEREAFT ER FORMED REASON TO BELIEVE THAT HER TAXABLE INCOME LIABLE TO BE ASSESS ED HAD ESCAPED ASSESSMENT. THIS FOLLOWED THE RE-ASSESSMENT DATED 2 8.10.011 DISALLOWING CONTRACTION PAYMENTS OF 1,80,51,163/- 40(A)(IA) OF THE ACT FOR NON-DEDUCTIO N OF TDS. 4. CASE FILE SUGGESTS THAT ASSESSING OFFICER FORMED YET ANOTHER REASON TO BELIEF OF ASSESSEES SIMILAR TAXABLE INCOME HAVING ESCAPED ASSESSMENT. RELEVANT RE-OPENING REASON RECORDED TO THIS EFFECT READ AS UNDER:- ON PERUSAL OF PROFIT AND LOSS ACCOUNT, IT IS NOTIC ED THAT YOU HAVE DEBITED AN AMOUNT OF 1,43,40,772/- ON ACCOUNT OF MACHINE HIRE CHARGES DURING THAT YEAR AS PER PROVISION OF SECTIO N 194C OF THE INCOME TAX, 1961, YOU HAVE REQUIRED TO DEDUCT TDS AT THE T IME OF MAKING PAYMENT BUT YOU HAVE FAILED TO DO SO AS MENTIONED I N TAX AUDIT REPORT IN FORM 3CD. SUFFICE TO SAY, THIS FOLLOWED THE RE-ASSESSMENT IN QUESTION FRAMED ON 2403.2014 MAKING THE ABOVE DISALLOWANCE OF MACHINE HIRE CHARGES. THE CIT(A) HAS UPHELD THE SAME ON BOTH LEGALITY AS WELL AS MERITS. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THE ASSESSEE TERMS THE IMPUGNED RE-ASSESSMENT TO BE NOT BASED ON ANY NEW MATERIAL AS THE ASSESSING OFFICER HAD MADE IT CLEAR IN HIS RE-OPENING REASON THAT IT WAS ONLY TAXPAYERS PROFIT AND LOSS ACCOUNT WHICH INDICATED NON- DEDUCTION OF TDS ON MACHINE HIRE CHARGES. THERE IS NO DISPUTE ABOUT THIS CLINCHING FACTUAL POSITION. WE NOTICE IN THIS BACKD ROP OF FACTS THAT HON'BLE JURISDICTIONAL HIGH COURTS DECISION IN S.R. BATLIBOI & CO. & ANR. VS. ACIT W.P. NO.205 OF 2013 DECIDED ON 17.07.2018 QUASHES A SIMI LAR RE-OPENING NOT BASED ON ANY NEW MATERIAL BEFORE THE ASSESSING OFFI CER FOR FORMING THE ITA NO.185/KOL/2017 A.Y.2008-09 MADHUMITA BASU VS. DCIT, CIR-5 0 KOL. PAGE 3 REASON OF ESCAPEMENT OF INCOME FROM ASSESSMENT U/S 147 OF THE ACT. THEIR LORDSHIPS YET ANOTHER JUDGMENT IN G.A NO.2149 OF 20 16 ITAT 295/2016 PRINCIPAL COMMISSIONER OF INCOME TAX-4 KOLKATA VS. M/S JALAN CHEMICAL INDUSTRIES PVT. LTD. DATED 08.05.2018 HOLDS A SIMILAR RE-OPENING AS NOT SUSTAINABLE ON THE GROUND THAT THERE WAS NO OTHER M ATERIAL TO TRIGGER EXPRESSION REASON TO BELIEVE IN SECTION 147 OF THE ACT SINCE AUDIT PARTY HAD RE-LOOKED INTO THE FACTS ALREADY EXISTING BEFORE TH E ASSESSING OFFICER. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO REBUT THE ABOV E AS LEGAL POSITION. WE ACCORDINGLY ACCEPT ASSESSEES FORMER LEGAL GROUND T O QUASH THE RE-OPENING / RE-ASSESSMENT IN ISSUE. THE SAME RENDERS LATTER ISS UE OF CORRECTNESS OF SECTION 40(A)(IA) DISALLOWANCE ON MERITS AS RENDERE D INFRUCTUOUS. 6. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 12/09/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 12 / 09 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-MADHUMITA BASU, C/O D.J. SHAH & CO KALYA NA BHAVAN, 2 ELGIN ROAD, KOLKAT-20 2. /RESPONDENT-DCIT, CIRCLE-50, DS BLOCK-2,3&4 MANIKTA LA CIVIC CENTRE, UTTARPAN MARKET COMPLEX, ULTADANG, KOLKATA-54 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,