M/s Surajbhan Commodities P. Ltd., Kolkata V. ACIT, Circle-5, Kolkata, Kolkata

ITA 1899/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1599 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 29-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE ACIT
• Keywords: Business income
• Section: 43B; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI N.V. VASUDEVAN, JM &DR. A.L.SAINI, AM ./ ITA NO.1899/KOL/2016 ( / ASSESSMENT YEAR: 2005-06 M/S. SURAJBHAN COMMODITIES (P) LTD. 11, CLIVE ROW, 1 ST FLOOR, R. NO.106, KOLKATA 700 001. VS. A.C.I.T, CIRCLE 5 , KOLKATA P-7, CHOWRINGHEE SQR, AAYAKARBHAWAN, KOLKATA 700 069. ./ ./PAN/GIR NO. : AAFCS1744R (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI SUNIL SURANA, CA RESPONDENT BY :SHRI ARINDAM BHATTACHARJEE, ACIT, CIT DR / DATE OF HEARING : 04/08/2017 /DATE OF PRONOUNCEMENT : 30/08/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2005-06, IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA, IN APPEAL NO.499/CIT(A)-2/14-15 DATED 19.07.2016, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE AO U/S.143 OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 31.12.2007. 2. THE FACTS OF THE CASE QUA THE ASSESSEE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.15,44,780/- ON 24.10.2005. THE RETURN WAS PROCESSED U/S 143(1) ON 31.03.2007. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND NOTICE WAS ISSUED U/S.143(2) AND THE ASSESSING OFFICER HAS COMPLETED ASSESSMENT BY MAKING ADDITION ON ACCOUNT OF PRIOR PERIOD EXPENSES OF M/S. SURAJBHAN COMMODITIES (P) LTD. ITA NO.1899/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 2 RS.80,048/- AND ADDITION ON ACCOUNT OF TDS NOT DEPOSITED INTO THE CENTRAL GOVT. ACCOUNT, U/S.40(A)(IA) OF RS.1,22,000/- . 3. THE ASSESSEE HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1.FOR THAT THE ORDER OF THE LD. CIT(A) IS ARBITRARY, ILLEGAL AND BAD IN LAW. 2.FOR THAT THE LD. CIT(A) ERRED IN DISMISSING THE GROUNDS TAKEN BY THE ASSESSEE AS GENERAL IN NATURE NOT TO REQUIRE ANY SEPARATE ADJUDICATION WHEN SPECIFIC GROUNDS WITH REGARD TO THE DISALLOWANCE MADE WERE TAKEN BEFORE HIM AND THE FACTS WERE AVAILABLE FROM THE ASSESSMENT ORDER ITSELF REQUIRED NO FRESH INVESTIGATION OF SUCH FACTS. 3.FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF SALES TAX PAYMENT OF RS.80,048/- AS PRIOR PERIOD EXPENSES WHEN THE SAME WAS FULLY ALLOWABLE U/S.43B. 4.FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,20,000/- UNDER SEC. 40(A)(IA) OF THE I.T. ACT WHEN TAX WAS DULY DEDUCTED AND DEPOSITED BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME AND THEREFORE NO DISALLOWANCE WAS CALLED FOR. 5.FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PRAYED FOR. 6.FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 4. HOWEVER, THE ASSESSEE IN THIS APPEAL, HAS RAISED A MULTIPLE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING, THE MAIN GRIEVANCE OF THE ASSESSEE HAS BEEN CONFINED TO IN GROUND NO.3 AND GROUND NO.4.AND OTHER GROUNDS ARE GENERAL IN NATURE, THEREFORE DO NOT REQUIRE ADJUDICATION. 5.GROUND NO.3 RELATES TO DISALLOWANCE OF SALES TAX PAYMENT OF RS.80,048/- AS PRIOR PERIOD EXPENSES. 5.1THE BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE HAS DEBITED RS.80,048/- AS PRIOR PERIOD EXPENSES IN HIS PROFIT & LOSS A/C. THIS PRIOR PERIOD EXPENSES RELATES M/S. SURAJBHAN COMMODITIES (P) LTD. ITA NO.1899/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 3 TO SALES DEMAND FOR THE F.Y 2001-02. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE STATED BEFORE THE AO THAT DURING THE F.Y 2001-02, CERTAIN PURCHASES WERE MADE FROM M/S. GLOSTER JUTE MILLS LTD. AGAINST WHICH FORM 14 WAS ISSUED AND A TOTAL SALES TAX WAIVER OF RS.80,048/- WAS OBTAINED. THE FORM WAS SUBSEQUENTLY REJECTED BY THE ASSISTANT COMMISSIONER AT THE TIME OF ASSESSMENT OF THE SAID GLOSTER JUTE MILLS LTD. BUT THE AO IGNORED THE SUBMISSIONS OF THE ASSESSEE STATING THAT THESE ARE PRIOR PERIOD EXPENSES AND IT IS NOT ALLOWANCE EXPENDITURE BASED ON MERCANTILE SYSTEM OF ACCOUNTING. THEREFORE, ADDITION OF RS.80,048/- WAS MADE BY AO. 5.2 AGGRIEVED BY THE ADDITION OF LD. AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) DID NOT ADJUDICATE THE ISSUE STATING THAT THE GROUNDS RAISED BY THE ASSESSEE WERE GENERAL IN NATURE AND, THEREFORE, DID NOT REQUIRE ANY ADJUDICATION. 5.3 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THESE PRIOR PERIOD EXPENSES PERTAINS TO THE SALES TAX PAYMENT OF RS.80,048/- AND THE SAME WAS FULLY ALLOWABLE U/S. 43B OF THE ACT ON PAYMENT BASIS. SINCE, THE SALES TAX PAYMENT WAS MADE BY THE ASSESSEE BEFORE AND WITHIN DUE DATE OF FILING RETURN OF INCOME UNDER SUB-SECTION(I) OF SECTION 139 THEREFORE, AMENDED PROVISIONS OF THE ACT IS APPLICABLE AND THESE PRIOR PERIOD EXPENSES ARE ALLOWABLE U/S 43B OF THE ACT. 5.4 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT REPEATED FOR THE SAKE OF BREVITY. M/S. SURAJBHAN COMMODITIES (P) LTD. ITA NO.1899/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 4 5.5 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTICE THAT STATUTORY PAYMENT, THAT IS, SALES TAX PAYMENT OF RS.80,048/- WHICH PERTAINS TO THE PREVIOUS YEARS AND PAID BY THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION, SHOULD BE ALLOWED ON PAYMENT BASIS.THEREFORE, BASED ON PAYMENT, IT IS ALLOWABLE U/S.43B OF THE ACT. IN THIS CASE, THE ALLOW ABILITY OF EXPENSES PERTAINING TO PREVIOUS YEARS HAS BEEN CRYSTALLIZED THIS YEAR, THEREFORE PRIOR PERIOD EXPENSES SHOULD BE ALLOWED BASED ON CRYSTALLIZATION. SINCE, THE SALES TAX PAYMENT WAS MADE BY THE ASSESSEE BEFORE AND WITHIN DUE DATE FILING RETURN OF INCOME UNDER SUB-SECTION(I) OF SECTION 139 THEREFORE, AMENDED PROVISIONS OF THE ACT, IS APPLICABLE AND THESE PRIOR PERIOD EXPENSES ARE ALLOWABLE U/S 43B OF THE ACT.THEREFORE, BASED ON THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE ADDITION OF RS.80,048/-. 5.6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE,( GROUND NO. 3), IS ALLOWED. 6.GROUND NO.4 RAISED BY THE ASSESSEE RELATES TO DISALLOWANCE OF RS. 1,22,000/- UNDER SECTION 40 (A) (IA) OF THE ACT. 6.1 BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSING OFFICER DISALLOWED RS.1,22,000/- STATING THAT THE ASSESSEE DID NOT DEDUCT THE TDS U/S194C OF THE ACT.IN GROUND NO.4 THE AMOUNT OF RS.1,20,000/- HAS BEEN WRONGLY WRITTEN, IT SHOULD BE READ AS RS.1,22,000/-. THEASSESSEE WAS ASKED BY THE AO, TO SUBMIT DETAILS OF DEDUCTION UNDER VARIOUS HEADS ALONG WITH THE AMOUNT DEDUCTED AS WELL AS DEPOSITED WITH DATES. THE ASSESSEE SUBMITTED A DETAILED CHART OF ALL TDS DEDUCTED ALONG WITH THE DUE DATE AND THE DATE OF DEPOSIT. ON PERUSAL OF RECORDS M/S. SURAJBHAN COMMODITIES (P) LTD. ITA NO.1899/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 5 SUBMITTED BY THE ASSESSEE IT WAS FOUND BY THE AO THAT TDS DEDUCTED ON CERTAIN PAYMENTS US/194C WERE NOT MADE AS PER PROVISIONS OF SECTION 40(A)(IA). THESE PAYMENTS WERE AS FOLLOWS: EXPENDITURE FOR CONTRACT PAYMENTS U/S.194C NAME OF THE PARTY AMOUNT DATE ON WHICH TDS DEDUCTED DUE DATE DEPOSIT DATE DEVENDRA SINGH SATYANARAYANBAGLA& SONS 58600 24100 32800 6500 03/03/05 10/03/05 29/03/05 22/03/05 07/04/05 07/04/05 07/04/05 07/04/05 07/05/05 07/05/05 07/05/05 07/05/05 TOTAL 1,22,000/- THEREFORE, AS PER THE DETAILS SUBMITTED BY THE ASSESSEE MENTIONED ABOVE, THEGROSS AMOUNT OF EXPENDITURE ON WHICH TDS WAS DEDUCTED AFTER THE DUE DATE OR TDS NOT DEDUCTED AT ALL WAS RS.1,22,000/- U/S.194C, THEREFORE, AO DISALLOWED THE SAME U/S.40(A)(IA) AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 6.2 AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER STATING THAT THE GROUNDS RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND THEY DO NOT REQUIRE ANY ADJUDICATION. 6.3 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ASSESSEE HAD SUBMITTED A DETAILED CHART OF TDS INCLUDING THE DATE OF DEPOSIT. THE LD. COUNSEL SUBMITTED THAT THE TDS DEDUCTED ON CERTAIN ITEMS U/S.194C HAS BEEN DEPOSITED BY THE ASSESSEE COMPANY WITHIN DUE DATE MENTIONED U/S.139(1) OF THE I.T ACT AND THEREFORE, THE ASSESSEE IS ENTITLED TO CLAIM EXPENDITURE. THE COUNSEL ALSO RELIED ON THE JUDGMENT OF HON`BLE ITAT HYDERABAD, IN THE CASE OF M/S M/S. SURAJBHAN COMMODITIES (P) LTD. ITA NO.1899/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 6 PARNIKA CONSTRUCTIONS P. LTD, ITA NO.470/HYD/ 2015, A.Y. 2007-08 DATED 10.07.2015, WHEREIN IT WAS HELD THAT THE RELEVANT AMENDMENT MADE TO SECTION 40(A) (IA) BY THE FINANCE ACT,2010 BEING RETROSPECTIVE IN NATURE, THEREFORE NO DISALLOWANCE UNDER SECTION 40(A) (IA) CAN BE MADE IF THE CORRESPONDING TDS AMOUNT IS PAID BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME FOR THE RELEVANT YEAR. IN THE PRESENT CASE, THE TDS AMOUNT WAS DULY PAID BY THE ASSESSEE INTO THE GOVERNMENT ACCOUNT ON 07.05.2005, THAT IS BEFORE THE DUE DATE OF FILING RETURN OF INCOME, THEREFORE THE ASSESSEE IS ENTITLED TO TAKE THE BENEFIT OF AMENDED PROVISIONS. 6.4 ON THE OTHER HAND, THE LD. DR DID NOT CONTROVERT THE SUBMISSIONS OF THE LD. COUNSEL. 6.5 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTICE THAT IN THIS CASE THE ASSESSEE HAS PAID THE TDS AS DEDUCTED ON CERTAIN PAYMENTS U/S.194C WITHIN THE DUE DATEMENTIONED IN SECTION 139(1) OF THE ACT. THAT IS, IF THE ASSESSEE HAD PAID THE TDS AMOUNT WITHIN DUE DATE MENTIONED U/S139(1) OF THE ACT THEN AMENDED PROVISIONS OF THE ACT ARE APPLICABLE AND ASSESSEE IS ENTITLED TO CLAIM THE BENEFIT ON ACTUAL PAYMENT BASIS.THE RELEVANT AMENDMENT MADE TO SECTION 40(A)(IA) BY THE FINANCE ACT,2010 BEING RETROSPECTIVE IN NATURE, THEREFORE NO DISALLOWANCE UNDER SECTION 40(A) (IA) CAN BE MADE IF THE CORRESPONDING TDS AMOUNT IS PAID BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME FOR THE RELEVANT YEAR. IN THE PRESENT CASE, THE TDS AMOUNT WAS DULY PAID BY THE ASSESSEE INTO THE GOVERNMENT ACCOUNT ON 07.05.2005, THAT IS, BEFORE THE DUE DATE OF FILING RETURN ON INCOME THEREFORE THE ASSESSEE IS ENTITLED M/S. SURAJBHAN COMMODITIES (P) LTD. ITA NO.1899/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 7 TO TAKE THE BENEFIT OF AMENDED PROVISIONS AND THIS BEING THE UNDISPUTED POSITION, WE DELETE THE ADDITION MADE BY THE CIT(A). 6.5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE ( GROUND NO.4), IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30/08/2017. SD/- (N. V. VASUDEVAN) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 30/08/2017 RS, SPS / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT M/S. SURAJBHAN COMMODITIES PVT. LTD. 2. / THE RESPONDENT-A.C.I.T, CIRCLE 5, KOLKATA 3. ( ) / THE CIT(A), :KOLKATA. 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.