M/s Tristar Metallurgical Pvt. Ltd., Kolkata V. DCIT, Circle-4(2), Kolkata, Kolkata

ITA 1853/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1342 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 16-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: TDS; Set aside
• Section: 40A(3)

Judgement Text

1 ITA NO.1853/KOL/2017 M/S. TRISTAR METALLURGICAL PVT. LTD. AY- 2014-15 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH, D AT KOLKATA () . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1853/KOL/2017 ASSESSMENT YEAR: 2014-15 M/S. TRISTAR METALLURGICAL PVT. LTD. [PAN: AABCT 0600 M] VS. DCIT, CIRCLE 4(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 22.01.2019 DATE OF PRONOUNCEMENT 15.03.2019 FOR THE APPELLANT SHRI MIRAJ D. SHAH, AR FOR THE RESPONDENT SHRI SHANKAR HALDER, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) 2, KOLKATA DATED 03.07.2017 FOR ASSESSMENT YEAR 2014-1 5. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF THE AO OF RS. 35,07,317/ - U/S 40A(3) OF THE ACT. 3. BRIEF FACTS OF THE CASE IS THAT DURING ASSESSMEN T PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAD PAID PAYMENTS EXCEEDING RS. 20,000/- W ITHOUT DEDUCTION OF TDS BREACHING THE THRESHOLD LIMIT PRESCRIBED BY SECTION 40A(3) AN D THEREFORE, HE MADE DISALLOWANCE OF RS. 35,07,317/- WHICH EXPENSES THE ASSESSEE CLAIMED UND ER THE HEAD TRAVELLING AND CONVEYANCE. AGGRIEVED THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE AO. AGGRIEVED THE ASSES SEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. WE NOTE THAT THE ASSESSEE HAD CLAIMED TRAVELLING AND CONVEYANCE EXPENSES INCU RRED WHENEVER ANY EMPLOYEE OR DIRECTOR OF THE APPELLANT-COMPANY TRAVELS TO VISIT ANY CUSTOMER. ACCORDING TO THE ASSESSEE, IF THE ACTUAL EXPENSES INCURRED FOR A PERSON/EMPLOYEE ON A DAILY BASIS IS TAKEN INTO CONSIDERATION THEN IT DID NOT BREACH THE THRESHOLD LIMIT PRESCRIBED BY SECTION 40A(3) OF THE 2 ITA NO.1853/KOL/2017 M/S. TRISTAR METALLURGICAL PVT. LTD. AY- 2014-15 ACT. HOWEVER, THE WHOLE CONFUSION OCCURRED ACCORDIN G TO THE LEARNED COUNSEL, BECAUSE THE EXPENSES OF TRAVELLING AND CONVEYANCE WAS ENTERED O N A CONSOLIDATED BASIS/ ENTRY AND THAT THE ASSESSEE DID NOT GET AN OPPORTUNITY TO PRODUCE THE BREAK-UP OF THE ACTUAL EXPENSES INCURRED PER DAY, PER PERSON WHICH WOULD CLEAR THE CONFUSION CAUSED BY THE CONSOLIDATED ENTRIES MADE ON THIS COUNT. ACCORDING TO THE COUNSE L, SINCE NO PROPER OPPORTUNITY, THE ASSESSEE GOT DURING THE ASSESSMENT PROCEEDINGS, THE BREAK-UP OF EXPENSES ON A DAILY BASIS COULD NOT BE FURNISHED BEFORE THE AO. SO ACCORDING TO ASSESSEE, GIVEN AN OPPORTUNITY, THE ASSESSEE WOULD BE ABLE TO SHOW THE AO THAT ON A SIN GLE DAY, PER PERSON, THE ASSESSEE HAS NOT BREACHED THE THRESHOLD LIMIT PRESCRIBED U/S 40A (3) OF THE ACT. AND PLEADS THAT THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY BEFORE THE AO TO EXPLAIN THE ABOVE FACTS AND GIVE DOCUMENTS TO ESTABLISH THE SAME. 5. WE NOTE THAT THE AO MADE THE ADDITION TAKING INT O CONSIDERATION, THE CONSOLIDATED ENTRIES MADE ON A MONTHLY BASIS BY THE ASSESSEE FOR THE TRAVELLING AND CONVEYANCE EXPENSES OF ITS EMPLOYEES / DIRECTORS. SINCE IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSEE HAD MADE THE CONSOLIDATED ENTRY OF THIS EXPENSES OF EMPLOYEE S / DIRECTORS INCURRED ON A MONTHLY BASIS AND IF THE BREAKUP IS TAKEN INTO CONSIDERATION I.E. ON A DAILY BASIS THE EXPENSES WOULD NOT BREACH THE THRESHOLD LIMIT PRESCRIBED BY SECTION 40 A(3) OF THE ACT. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THIS ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORD ANCE TO LAW AFTER HEARING THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15TH MARCH, 2019 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15TH MARCH, 2019 BISWAJIT (SR.P.S.) 3 ITA NO.1853/KOL/2017 M/S. TRISTAR METALLURGICAL PVT. LTD. AY- 2014-15 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. TRISTAR METALLURGICAL PVT. LTD., C HARTERED BANK BUILDING, 4, N.S. ROAD, 1 ST FLOOR, KOLKATA 700 001. 2 RESPONDENT DCIT, CIRCLE 4(2), P-7, CHOWRINGHEE SQ UARE, 4 TH FLOOR, KOLKATA 700 069. 3 . THE CIT(A), 4. 5. CIT , DR, / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR/H.O.O ITAT, KOLKATA