Late Jagmohan Jalan(HUF), Kolkata V. DCIT, Circle-32, Kolkata, Kolkata

ITA 1916/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6601 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 30-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Keywords: Corroborative evidences
• Section: 143(3); 201(1)

Judgement Text

ITA NO.1916/KOL/2016 LALIT JAGMOHAN JALAN (HUF) A. Y.2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI S.S.GODARA, JM & SHRI M.BALA GANESH, AM ] ITA NO.1916/KOL/2016 ASSESSMENT YEAR : 2013-14 LALIT JAGMOHAN JALAN (HUF) -VERSUS- D.C.I.T. , CIRCLE-32, KOLKATA KOLKATA (PAN: AAAHL 5798 L) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SIDDHARTH AGARWAL, ADVO CATE FOR THE RESPONDENT: SHRI S.DASGUPTA, ADDL. CIT(DR) DATE OF HEARING : 19.06.2018. DATE OF PRONOUNCEMENT : 27.06.2018. ORDER PER S.S.GODARA, JM: THIS ASSESSEES APPEAL FOR A.Y.2013-14 ARISES AGAIN ST THE LD. CIT(A)-9, KOLKATAS ORDER DATED 31.08.2016 PASSED IN APPEAL N O.10/CIT(A)-9/CIR-32/2016- 17/KOL. UPHOLDING THE ASSESSING OFFICERS ACTION DI SALLOWING/ADDING FREIGHT, DELIVERY AND OTHER CHARGES EXPENDITURE OF RS.26,96,065/- OU T OF TOTAL AMOUNT OF RS.89,86,884/- LEGAL CONSULTANCY AND PROFESSIONAL SERVICES OF RS.1 ,69,900/- AND RS.1,31,400/- PAID IN CASE OF M/S PAN INDIA LAW ASSOCIATES AND SHRI SAJAL KUMAR PAL SHRI S.K.PAL FOR NOT HAVING DEDUCTED TDS THEREUPON, RESPECTIVELY INVOLV ING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 (ACT). HEARD BOTH THE PARTIES REITERATING THEIR RESPECTIV E STANDS ON BOTH THE ISSUES. CASE FILE PERUSED. 2. WE ADVERT TO THE FORMER ISSUE OF DEBIT/ESTIMATE OF RS.26,96,065/-@30% OUT OF TOTAL EXPENDITURE OF RS.89,86,884/-. THIS ASSESSEE IS A DISTRIBUTOR OF CONSUMER GOODS. IT CLAIMED THE ABOVE GROSS EXPENDITURE TO HAVE BEEN INCURRED ON FREIGHT, DELIVERY AND OTHER CHARGES. THE ASSESSING OFFICER DISALLOWED THE SAME @30% COMING TO THE IMPUGNED SUM OF RS.26,96,065/- AFTER ALLEGING THAT THE ASSESSEE FAILED TO FURNISH ALL ITA NO.1916/KOL/2016 LALIT JAGMOHAN JALAN (HUF) A. Y.2013-14 2 THE CORRESPONDING SUPPORTING EVIDENCE TO SUBSTANTIA TE THE SAME DURING THE COURSE OF SCRUTINY. THE CIT(A) AFFIRMED THE ASSESSING OFFICER S ACTION IN LOWER APPELLATE ORDER UNDER CHALLENGE. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO T HE RIVAL SUBMISSIONS AGAINST AND IN FAVOUR OF THE IMPUGNED DISALLOWANCE. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THE FACT THAT SUCH KIND OF EXPENDI TURE IS OF A ROUTINE NATURE IN ASSESSEES LINE OF BUSINESS INVOLVING DISTRIBUTION OF CONSUMER GOODS SINCE INVOLVING FREIGHT, DELIVERY CHARGES. THE FACT ALSO REMAINS TH AT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE ALREADY ACCEPTED THE IMPUGNED CLAIM TO THE EXTENT OF 70% MEANING THEREBY THERE IS FURTHER NO QUARREL AS FAR AS GENUI NENESS OF THE CLAIM IN QUESTION IS CONCERNED. WE OBSERVE IN THIS PECULIAR FACTS THAT T HE IMPUGNED ADHOC DISALLOWANCE/ESTIMATED DISALLOWANCE @30% IS ON A HI GHER SIDE. WE TAKE INTO ACCOUNT ALL THESE FACTS IN ASSESSEES BUSINESS AS WELL AS T HE RELEVANT FINDINGS OF THE LOWER AUTHORITIES TO CONCLUDE THAT LARGER INTEREST OF JUS TICE WOULD BE MET IF THE IMPUGNED DISALLOWANCE IS RESTRICTED TO 10% AND NOT 30% AS IS THE CASE IN THE CIT(A)S ORDER. WE THEREFORE DIRECT THE AO TO CONFINE THE IMPUGNED DISALLOWANCE TO RS.8,98,688/- ONLY. THE ASSESSEE GETS PART RELIEF. IT IS MADE CLE AR THAT OUR INSTANT ESTIMATION WOULD NOT BE TAKEN AS A PRECEDENT IN ANY PRECEDING OR SUC CEEDING ASSESSMENT YEAR. 4. NEXT IS THE ISSUE OF ASSESSEES LEGAL CONSULTANC Y AND PROFESSIONAL SERVICE CHARGES OF RS.1,69,900/- AND RS.1,31,400/- PAID TO M/S PAN INDIA LAW ASSOCIATES AND SHRI SAJAL KUMAR PAL. THERE IS NO DOUBT THAT THE AS SESSEE HAS NOT DEDUCTED TDS THEREUPON IN EITHER OF THE TWO CASES FORMING THE RE ASONS FOR INVOKING SECTION 40(A)(IA) OF THE ACT. LEARNED COUNSELS ONLY PLEA BEFORE US I S THAT THE SAID TWO PAYEES STAND ASSESSED QUA THE ABOVE STATED EXPENDITURE. HE QUOTE S SECTION 40(A)(IA) 2 ND PROVISO THAT THE IMPUGNED DISALLOWANCE DOES NOT COME INTO P LAY IN CASE THE TAX PAYER IS NOT AN ASSESSEE IN DEFAULT U/S 201(1) 1 ST PROVISO OF THE ACT. HONBLE JURISDICTIONAL HIGH C OURT IN PCIT VS TIRUPATI CONSTRUCTION COMPANY ITAT NO.2 87 OF 2016 IN G.A.NO.2146 OF 2016 HAS ALREADY CONCLUDED THAT THE ABOVE SECOND PR OVISO TO SECTION 40(A)(IA) INSERTED BY THE FINANCE ACT 2012 W.E.F. 01.04.2013 CARRIES R ETROSPECTIVE EFFECT BEING CURATIVE ITA NO.1916/KOL/2016 LALIT JAGMOHAN JALAN (HUF) A. Y.2013-14 3 IN NATURE. WE THEREFORE ACCEPT THE ASSESSEES INSTA NT LATTER SUBSTANTIVE GROUND IN PRINCIPLE AND LEAVE IT OPEN FOR THE ASSESSING OFFIC ER TO CARRY OUT NECESSARY VERIFICATION AS PER LAW AFTER AFFORDING ADEQUATE OP PORTUNITY OF HEARING. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN THE ABOVE TERMS. O RDER PRONOUNCED IN THE COURT ON 27.06.2018. SD/- SD/- [M.BALAGANESH] [ S.S.GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27.06.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.LALIT JAGMOHAN JALAN (HUF), 26, SHAKESPEARE SARAN I, KOLKATA-700017. 2 .D.C.I.T., CIRCLE-32, KOLKATA.. 3. C.I.T.(A)- 9, KOLKATA 4. C.I.T-11, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES