ITO, Ward-4(3), Kolkata, Kolkata V. M/S. Allied Technipack (P) Ltd., Kolkata

ITA 1980/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1198 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-06-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 22-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATYAJIT MONDAL CIT LD
• Assessee Lawyers: SOMNATH GHOSH LD
• Keywords: Additional evidence
• Section: 147

Judgement Text

1 ITA NO.1980/KOL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 1980/KOL/2014 A.Y: 2003-04 I.T.O. WARD 4(3), KOLKATA VS. M/S. ALLIED TECHNI PACK P.LTD. PAN: AAECA 0431E [APPELLANT] [RESPONDEN T] FOR THE APPELLANT : SHRI SATYAJIT MONDAL, ADDL .CIT, LD.SR.DR FOR THE RESPONDENT : SHRI SOMNATH GHOSH, ADVOCAT E, LD.AR DATE OF HEARING : 30-08-2017 DATE OF PRONOUNCEMENT : 03-11-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), IV, KOLKATA DT. 25-08-2014 FOR THE A.Y 2003-04. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A JUSTIFIED IN PASSING THE IMPUGNED ORDER VIOLATING RULE 46A OF THE IT RULES 1962 IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE AO DURING THE REOPENING PROCEEDINGS U/S. 147 OF THE ACT FOUND THAT THE TOTAL RECEIPTS AS PER TDS DETAILS I S OF RS.2,85,02,936/-. FOR WHICH, THE ASSESSEE EXPLAINED THAT IT RECEIVED ADVANCE (RS.39,44,685/-) FROM M/S. HIND LEVER CHEMI CALS ( PRESENTLY KNOWN AS M/S. TATA CHEMICALS LTD). THE AO SOUGHT D ETAILS FROM M/S. TATA CHEMICALS LTD. FROM WHICH, THE AO FOUND THAT A N AMOUNT OF RS.39,44,685/- NOT REFLECTED AS RECEIPT OF ADVANCE FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THE AO SHOW CAUSED THE ASSESSEE WHY THE SAID AMOUNT SHOULD NOT BE ADDED TO THE INCOME OF TH E ASSESSEE FOR NON EXPLANATION. THE AO ADDED THE SAID AMOUNT TO TH E TOTAL INCOME OF THE ASSESSEE. 2 ITA NO.1980/KOL/2014 4. IN CHALLENGE, BEFORE THE CIT-A THE ASSESSEE PROD UCED EVIDENCE TO ESTABLISH THAT WORK TO THE EXTENT IMPUGNED AMOUN T WAS ACTUALLY COMPLETED DURING F.Y 2003-04 AND THE SAID AMOUNT WA S INCLUDED IN THE TURNOVER FOR THE A.Y 2004-05. 5. THE CIT-A DIRECTED THE AO TO WORK OUT RELATABLE TDS TO THE AMOUNT OF ADVANCE RECEIVED DURING A.Y 2003-04 AND R EDUCE THIS AMOUNT FROM THE TOTAL CLAIM OF TDS MADE BY THE ASSE SSEE. ON NOTICING THAT THE ASSESSEE CLAIMED FULL TDS CREDIT ON THE SAID ADVANCES, WHICH WAS REDUCED FROM THE TURNOVER. RELE VANT PORTION OF CIT-A ORDER IS REPRODUCED HEREIN BELOW:- 4.5 FROM THE ABOVE ILLUSTRATION WHICH IS DULY SUPP ORTED BY BILLS, IT IS CLEAR THAT CERTAIN PART OF THE CONTRACTUAL WORK WHICH WAS PENDING DURI NG THE A.Y. 2003-04 WAS COMPLETED DURING A.Y. 2004-05. THIS HAPPENS IN THE NORMAL COU RSE OF EXECUTION OF CONTRACTS. ALL THE WORK UNDER TAKEN DURING A PARTICULAR FINANCIAL YEAR AND WHICH CANNOT BE COMPLETED DURING THAT FINANCIAL YEAR ARE SPILLED OVER TO THE SUBSEQUENT YEARS. IN THE CASE OF THE APPELLANT, THE SPILLOVER WORK WAS COMPLETED BY 19/0 5/2003 WHEN THE LAST BILL PERTAINING TO ADVANCE OF RS. 39,44,685/- WAS RAISED. THIS IS A NORMAL BUSINESS PRACTICE IN ANY CONTRACTUAL WORK AND THERE IS ALSO NOTHING IN THE I NCOME TAX ACT WHICH COMPELS AN APPELLANT TO COMPLETE ALL THE CONTRACTUAL WORK UNDE R TAKEN DURING A PARTICULAR FINANCIAL YEAR WITHIN THAT FINANCIAL YEAR. HENCE, I FIND NO J USTIFICATION IN THE ASSESSMENT ORDER FOR TREATING AN AMOUNT OF RS.39,88,685/- RECEIVED AS AD VANCE AS PART OF TURNOVER OF THE APPELLANT. FURTHER, THE INTENTION OF THE APPELLANT WAS VERY CLEAR BECAUSE THIS AMOUNT HAS ACTUALLY BEEN REFLECTED AS ADVANCE IN SCHEDULE-D OF THE BALANCE SHEET. HOWEVER, I AM ALSO AWARE THAT THE APPELLANT HAS CLAIMED FULL CRED IT OF THE TDS DEDUCTED BY M/S. TATA CHEMICALS DURING THE A.Y. 2003-04. I AM OF THE VIEW THAT THIS CLAIM OF THE APPELLANT IS NOT FULLY JUSTIFIED AND CREDIT FOR TDS DEDUCTED MUS T BE LIMITED TO THE RELATABLE RECEIPTS SHOWN BY THE APPELLANT. IN CASE OF THE APPELLANT, F ULL CLAIM OF TDS HAS BEEN MADE BUT ADVANCES HAVE BEEN REDUCED FROM THE TURNOVER. ACCOR DINGLY, THE A.D. IS DIRECTED TO WORK OUT RELATABLE TDS TO THE AMOUNT OF ADVANCE RECEIVED DURING A.Y. 2003-04 AND REDUCE THIS AMOUNT FROM THE TOTAL CLAIM OF TDS MADE BY THE APPELLANT.' 6. THE LD.DR SUBMITS THAT THE CIT-A WAS RIGHT IN DI RECTING THE AO TO EXAMINE THE SAID FACTS REFLECTED IN THE IMPUGNED ORDER I.E BILLS AND VOUCHERS. HE ALSO SUBMITS THAT THE BILLS AND VOUCHE RS WAS SUBMITTED FIRST TIME BEFORE THE CIT-A AND BASED ON WHICH HE D IRECTED THE AO TO WORK OUT THE TDS INVOLVED IN THE SAID ADVANCE AMOUN T. 7. ON THE OTHER HAND, THE LD.AR OBJECTED TO THE SAM E AS SUBMITTED BY THE LD.AR. 8. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE CIT-A CONSIDERING THE BALANCE SHEET AND SUBMIS SION OF THE ASSESSEE ASKED THE ASSESSEE TO PRODUCE EVIDENCE TO ESTABLISH THE ACTUAL WORK COMPLETED FOR THE FY 2003-04 AND TO SH OW THAT THE 3 ITA NO.1980/KOL/2014 IMPUGNED AMOUNT WAS INCLUDED IN THE TURNOVER FOR TH E FY 2004-05. THE ASSESSEE PRODUCED BILLS AND VOUCHERS FIRST TIME BEFORE THE CIT-A AND THE CIT-A DIRECTED TO WORK OUT RELATABLE TDS TO THE AMOUNT OF ADVANCE RECEIVED DURING THE A.Y UNDER CONSIDERATION ONLY ON THE BASIS OF SAID NEW EVIDENCE AS FILED BEFORE HIM. ADM ITTEDLY, THESE NEW EVIDENCES WERE NOT BEFORE THE AO AND THERE WAS NO O PPORTUNITY TO VERIFY AND CROSS EXAMINE THE SAME BY THE AO AND IS VIOLATION OF RULE 46A OF THE IT RULES 1962. THEREFORE, WE SET ASIDE THE ORDER OF CIT-A AND RESTORE THE MATTER TO THE FILE OF AO FOR DECIDI NG THE ISSUES AFRESH AFTER VERIFYING THE ADDITIONAL EVIDENCE. THUS, THE GROUND(S) RAISED BY THE REVENUE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 03-11 -2017 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 03-11-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/DEPARTMENT: I.T.O, WARD 4(3),KOLKATA, AAY KAR BHAWAN, 5 TH FLOOR, P-7, CHOWRINGHEE SQ., KOL-69. 2 RESPONDENT /ASSESSEE: DIRECTOR, M/S. ALLIED TECHNIP ACK PVT. LTD, 14 HARE STREET, 1 ST FLOOR, KOLKATA-700001. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, SR.PS/H.O.O,ITAT,KOL