M/s. Sukumar Dutta, Burdwan V. ITO, Ward - 2(3), Burdwan, Burdwan

ITA 2005/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1556 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GOUTAM PATRA
• Assessee Lawyers: BISWESWAR GHOSH
• Section: 40A(3); 143(3); 194C

Judgement Text

1 ITA NO. 2005/KOL/2017 ASSESSMENT YEAR: 2008-2009 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 2005/KOL./2017 ASSESSMENT YEAR: 2008-2009 M/S. SUKUMAR DUTTA,................................ ..............................APPELLANT MEMARI STATION ROAD, MEMARI, BURDWAN-713 146 [PAN: ABGFS 6875 E] -VS.- INCOME TAX OFFICER,................................ .......................RESPONDENT WARD-2(3), BURDWAN, AAYAKAR BHAWAN ANNEXE, 2 ND FLOOR, COURT COMPOUND, BURDWAN-713 101 APPEARANCES BY: SHRI BISWESWAR GHOSH, ADVOCATE, FOR THE ASSESSEE SHRI GOUTAM PATRA, ADDL. CIT, D.R., FOR THE DEPARTM ENT DATE OF CONCLUDING THE HEARING : FEBRUARY 13, 2018 DATE OF PRONOUNCING THE ORDER : FEBRUARY 23, 2018 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), BURDWAN DATED 30.06.2017, WHEREBY HE CONFIRMED ALL THE THREE ADDITIONS MADE B Y THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF RETAIL TRADING OF FERTIL IZERS, PESTICIDES AND SEEDS. THE RETURN OF INCOME FOR THE YEAR UNDER CONS IDERATION WAS FILED BY IT ON 29.09.2008 DECLARING TOTAL INCOME OF RS.3,412 /-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE ASSE SSING OFFICER THAT THE ASSESSEE HAS MADE TOTAL CASH PURCHASES OF RS.41,730 /- FROM HATDALUI BZAR SUOBSS LIMITED ON THE SAME DATE, I.E. 31.03.2008. SINCE THE SAID PAYMENT EXCEEDING RS.20,000/- WAS MADE OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT AND THE ASSESSEE COULD NOT EXP LAIN ANY EXCEPTIONAL CIRCUMSTANCES UNDER WHICH THE SAME WAS REQUIRED TO BE MADE IN CASH, THE 2 ITA NO. 2005/KOL/2017 ASSESSMENT YEAR: 2008-2009 ASSESSING OFFICER INVOKED THE PROVISION OF SECTION 40A(3) AND MADE A DISALLOWANCE OF RS.41,730/-. IT WAS ALSO NOTICED BY THE ASSESSING OFFICER THAT A SINGLE PAYMENT OF RS.31,900/- WAS MADE BY TH E ASSESSEE TO SRI RAMA ROADLINES TOWARDS TRANSPORT CHARGES WITHOUT DE DUCTION OF TAX AT SOURCE AS REQUIRED BY SECTION 194C. HE, THEREFORE, INVOKED THE PROVISIONS OF SECTION 40(A)(IA) AND MADE A DISALLOWANCE OF RS. 31,900/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COUL D NOT FURNISH THE RELEVANT DETAILS REQUIRED BY THE ASSESSING OFFICER IN RESPECT OF SUNDRY DEBTORS AMOUNTING TO RS.25,14,322/-. THE ASSESSING OFFICER, THEREFORE, TREATED THE SUNDRY DEBTORS SHOWN BY THE ASSESSEE AS UNVERIFIABLE WARRANTING DISALLOWANCE OF 10% ON ESTIMATE BASIS. H E, HOWEVER, MADE A DISALLOWANCE OF RS.6,28,580/- BEING 25% OF THE TOTA L SUNDRY DEBTORS. ACCORDINGLY THE TOTAL INCOME OF THE ASSESSEE WAS DE TERMINED BY THE ASSESSING OFFICER AT RS.7,05,622/- AFTER MAKING THR EE ADDITIONS IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN O RDER DATED 30.12.2010. ON APPEAL, THE LD. CIT(APPEALS) CONFIRM ED THE SAID ADDITIONS AND DISMISSED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FO LLOWING GROUNDS:- 1. THAT ON THE FACT IN THE CIRCUMSTANCES OF THE CA SE THE LD. C.I.T. (APPEALS) BURDWAN ERRED IN CONFIRMING THE DISALLOWA NCE AND ADDITION MADE BY THE LD. AO OF WARD- 2(3) U/S.40A(3 ) OF THE INCOME TAX ACT, 1961, THOUGH THE APPELLANT HAS IMMU NITY AS PROVIDED BY THE LAW. 2. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD.CIT (APPEALS), BURDWAN ERRED IN CONFIRMING THE DISALLOW ANCE AND ADDITION MADE BY THE LD. AO OF WARD- 2(3), BURDWAN U/S 40(A)(IA) OF THE INCOME TAX ACT,1961 THOUGH HE COULD NOT ESTA BLISH ANY CONTRACT BETWEEN THE PAYER AND THE PAYEE BUT ONLY A SSUMED TO HAVE ONE. 3. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD.CIT (APPEALS), BURDWAN ERRED IN CONFIRMING THE DISALLOW ANCE OF 10% OF THE TOTAL AMOUNT SHOWN AS SUNDRY DEBTORS AND CON SEQUENTLY ADDITION OF RS.6,28,580/- TO THE TOTAL INCOME OF TH E APPELLANT AS MADE BY THE LD. AO. OF WARD 2(3), BURDWAN BECAUSE T HE APPELLANT HAS ALL THE DETAILS AS SOUGHT FOR AND IF GIVEN ANOT HER CHANCE THE APPELLANT CAN PRODUCE IT FOR PROPER ADJUDICATION. 3 ITA NO. 2005/KOL/2017 ASSESSMENT YEAR: 2008-2009 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE CASH PAYMENT OF RS.41,730/- AGAINST PURCHASES MADE FROM A SINGLE PARTY ON THE SAME DATE WAS IN CONTRAVENTION OF SECTION 40A(3 ) AND THIS POSITION IS NOT DISPUTED AT THE TIME OF HEARING BEFORE THE TRIB UNAL EVEN BY THE LD. COUNSEL FOR THE ASSESSEE. HE HAS ALSO NOT BEEN ABLE TO POINT OUT ANY EXCEPTIONAL CIRCUMSTANCES UNDER WHICH THE SAID PAYM ENT WAS MADE IN CASH AS SPECIFIED IN RULE 6DD OF INCOME TAX RULES, 1962. I, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNE D ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER UNDER SECTION 40A(3) AND UPHOLDING THE SAME ON THIS ISSUE, I DISMISS GROUND NO. 1 OF THE ASSESSEES APPEAL. 5. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 2 RE LATING TO THE DISALLOWANCE UNDER SECTION 40(A)(IA), THE LD. COUNS EL FOR THE ASSESSEE HAS SUBMITTED THAT SRI RAMA ROADLINES WAS NOT A REGULAR TRANSPORTER AND THE SAID TRANSPORTER WAS ENGAGED BY THE ASSESSEE FOR TR ANSPORTATION OF GOODS ONLY ONCE IN THE YEAR UNDER CONSIDERATION. AS RIGHT LY CONTENDED BY HIM, THE TRANSPORTATION OF GOODS BY SRI RAMA ROADLINES T HUS WAS ONLY ONE OFF TRANSACTION AND IN THE ABSENCE OF ANY WRITTEN OR VE RBAL CONTRACT WITH THE SAID PARTY, THE ASSESSEE WAS NOT UNDER AN OBLIGATIO N TO DEDUCT TAX AT SOURCE FROM THE ONE OFF PAYMENT MADE TO SRI RAMA RO ADLINES UNDER SECTION 194C OF THE ACT. THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER UNDER SECTION 40(A)(IA), IN MY OPINION, THEREFORE, WAS NOT SUSTAINABLE AND THE LD. CIT(APPEALS) WAS NOT JUSTIFIED TO CONFIRM T HE SAME. I, THEREFORE, DELETE THE SAID DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) AND ALLOW GROUND NO 2 OF TH E ASSESSEES APPEAL. 6. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 3 RE LATING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OUT OF S UNDRY DEBTORS, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE REL EVANT DETAILS ARE NOW AVAILABLE WITH THE ASSESSEE AND THE MATTER MAY BE S ENT BACK TO THE 4 ITA NO. 2005/KOL/2017 ASSESSMENT YEAR: 2008-2009 ASSESSING OFFICER FOR VERIFICATION. HE HAS ALSO FUR NISHED SUCH DETAILS AT PAGES NO.23 TO 25 OF HIS PAPER BOOK AND A PERUSAL O F THE SAME SHOWS THAT THE ADDRESSES OF THE DEBTORS GIVEN THEREIN ARE NOT COMPLETE ADDRESS SO AS TO ENABLE THE ASSESSING OFFICER TO MAKE THE VERIFIC ATION. MOREOVER, A PERIOD OF ABOUT 10 YEARS HAS ALREADY LAPSED IN BETW EEN MAKING THE VERIFICATION BY THE ASSESSING OFFICER A VERY DIFFIC ULT EXERCISE. AS RIGHTLY CONTENDED BY THE LD. D.R., SUFFICIENT OPPORTUNITY W AS GIVEN BY THE ASSESSING OFFICER TO THE ASSESSEE TO FURNISH THE RE LEVANT DETAILS OF SUNDRY DEBTORS AND THERE IS NO SATISFACTORY EXPLANATION OF FERED BY THE LD. COUNSEL FOR THE ASSESSEE FOR THE FAILURE OF THE ASSESSEE TO PRODUCE THE RELEVANT DETAILS EITHER BEFORE THE ASSESSING OFFICER OR EVEN BEFORE THE LD. CIT(APPEALS). I, THEREFORE, DO NOT FIND THIS CASE T O BE A FIT CASE FOR GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE BY SENDING THE MATTER BACK TO THE ASSESSING OFFICER FOR VERIFICATION. I, HOWEVER, FIN D MERIT IN THE ALTERNATIVE CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESS EE THAT THERE IS A MISTAKE IN THE ORDER OF THE ASSESSING OFFICER IN MA KING FINAL DISALLOWANCE OF 25% OF THE SUNDRY DEBTORS INSTEAD OF 10% AS OBSE RVED BY THE ASSESSING OFFICER HIMSELF IN THE ASSESSMENT ORDER. I, THEREFORE, DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE OUT OF SUNDRY DEBTORS TO 10%. GROUND NO.3 OF THE ASSESSEES APPEAL IS THUS P ARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF FEBRUARY, 2018. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 23 RD DAY OF FEBRUARY, 2018 COPIES TO : (1) M/S. SUKUMAR DUTTA, MEMARI STATION ROAD, MEMARI, BURDWAN-713 146 2) INCOME TAX OFFICER, WARD-2(3), BURDWAN, AAYAKAR BHAWAN ANNEXUE, 2 ND FLOOR, COURT COMPOUND, BURDWAN-713 101 (3) CIT(APPEALS)-BURDWAN, (4) CIT- , (5) THE DEPARTMENTAL REPRESENTATIVE 5 ITA NO. 2005/KOL/2017 ASSESSMENT YEAR: 2008-2009 (6) GUARD FILE TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO, INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.