Dipendra Nath Basu, Kolkata V. ITO, Ward - 56(3), Kolkata, Kolkata

ITA 2084/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1655 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: T P KAR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BE NCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM ] I.T.A NO.2084/KOL/201 7 ASSESSMENT YEAR : 2009-1 0 DIPENDRA NATH BASU -VS.- I.T.O., WARD-56 (3) KOLKATA KOLKATA [PAN : ADBPB 5261 E] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI T.P.KAR , FCA FOR THE RESPONDENT : MD. GHAYAS UDDIN, ADDL. CIT DATE OF HEARING : 25..01.2018. DATE OF PRONOUNCEMENT : 02.02.2018. ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 24.07.2017 OF CIT(A)- 12, KOLKATA RELATING TO A.Y.2009-10. 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS FOLLOWS :- (1) THAT IN THE FACTS AND IN THE GROUNDS OF APPEAL HOW FAR THE COMMISSIONER (APPEAL) IS CORRECT IN AFFIRMING THE ADDITION AS MA DE BY THE ASSESSING OFFICER THE SUM OF RS.2,88,235/- WITHOUT CONSIDERING THE EXPLAN ATIONS OF THE APPELLANT AND THE COMPARATIVE STATEMENT WITH 26AS WHICH DISPLAYED WRO NG INFORMATION. 3. THE ASSESSEE IS AN INDIVIDUAL. HE CARRIES ON TH E BUSINESS OF RUNNING AN ADVERTISEMENT AGENCY. THERE WAS A DIFFERENCE OF RS. 2,88,235/- BETWEEN THE RECEIPTS FROM BUSINESS AS DISCLOSED BY THE ASSESSEE IN THE B OOKS OF ACCOUNTS AND AS PER 26AS STATEMENT (AIR INFORMATION) AVAILABLE WITH THE INCO ME TAX DEPARTMENT. IT IS NOT IN DISPUTE THAT THE ASSESSEE COULD NOT RECONCILE THE D IFFERENCES. HENCE A SUM OF RS.2,88,235/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE CIT(A) THE ASSESSEE MADE AN ALTERNATI VE SUBMISSION THAT THE ENTIRE RECEIPTS CANNOT BE ADDED AS INCOME OF THE ASSESSEE. THE CIT(A) ACCEPTED THE PLEA OF THE 2 ITA NO.2084/KOL/2017 DIPENDRA NATH BSSU A.YR.2009-10 2 ASSESSEE AND DIRECTED THE AO TO APPLY THE NET PROFI T RATE AS PER THE RETURN AND COMPUTE THE INCOME ON THE UNDISCLOSED RECEIPTS OF RS.2,88,2 35/-. 5. BEFORE ME THE LD. COUNSEL FOR THE ASSESSE WAS UN ABLE TO RECONCILE THE DISCREPANCY BETWEEN THE RECEIPTS AS PER 26AS AND AS PER THE ASS ESSEES BOOKS OF ACCOUNTS. IN THESE CIRCUMSTANCES, I AM OF THE VIEW THAT THE ORDER OF C IT(A) IS JUST AND PROPER AND DOES NOT CALL FOR ANY INTERFERENCE. 6. GROUND NO.2 RAISED BY THE ASSESSE READS AS FOLLO WS :- (2) THAT IN THE FACTS AND IN THE GROUNDS OF APPEAL HOW FAR THE CIT(A} IS CORRECT IN AFFIRMING THE ORDER OF THE ASSESSING OFFICER FOR TH E SUM OF RS.3,28,800/- BEING PAID AS RENT FOR UTILISING THE LAND SPACE UNDER SECTION 194-1 IN TERMS OF THE AGREEMENT WITH THE LANDLORD BUT THE ASSESSING OFFICER HAS CON SIDERED IT U/S 194C OF THE INCOME TAX ACT. 7. THE ASSESSEE AS I HAVE ALREADY EXPLAINED IS IN THE BUSINESS OF ACTING AS AN ADVERTISING AGENT. IN THE COURSE OF HIS BUSINESS TH E ASSESSEE TAKES SPACE FOR HIRE FROM DIFFERENT AGENCIES FOR DISPLAY OF ADVERTISEMENT HOA RDINGS. THE AMOUNT PAID TO THESE PARTIES WERE TREATED AS IN THE NATURE OF RENT. THE ORDER OF THE AO IS SILENT AS TO WHETHER TAX WAS DEDUCTED BY THE ASSESSEE U/S 194I OF THE IN COME TAX ACT, 1961 (ACT) TREATING THE PAYMENTS AS RENT. THE AO HAS HOWEVER OBSERVED T HAT THE PAYMENTS TO THE PARTIES WILL FALL WITHIN THE AMBIT OF PAYMENT FOR CARRYING OUT WORK U/S 194C OF THE ACT. UNDER SECTION 194C OF THE ACT HIGHER RATE OF TAX HAVE TO BE DEDUCTED AT SOURCE. IF THE ASSESSEE HAD DEDUCTED TAX AT SOURCE U/S 194I OF THE ACT THEN IT WOULD BE A CASE OF SHORT DEDUCTION OF TAX AT SOURCE. THE AO DISALLOWED A SUM OF RS.3,2 8,800/- WHICH WERE PAYMENTS MADE WITHOUT ANY DEDUCTION U/S 194C OF THE ACT. 8. THE CIT(A) CONFIRMED THE ORDER OF AO. IT IS SEEN FROM ONE OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE CIT(A) THAT HE HAD PLAC ED RELIANCE ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF S.K.TEKR IWAL 361 ITR 432(CAL) WHEREIN IT 3 ITA NO.2084/KOL/2017 DIPENDRA NATH BSSU A.YR.2009-10 3 WAS HELD THAT THERE CAN BE NO DISALLOWANCE U/S 40(A )(IA) OF THE ACT IN THE CASE OF SHORT DEDUCTION OF TAX AT SOURCE AND SUCH DISALLOWANCE CO ULD BE MADE ONLY WHEN THERE IS NO DEDUCTION. IN OTHER WORDS IF TAX IS DEDUCTED AT SOU RCE AT A LESSER RATE THEN NO DISALLOWANCE U/S 40(A)(IA) COULD BE MADE. THE ORDER OF CIT(A) IS SILENT ON THIS ISSUE. I AM THEREFORE OF THE VIEW THAT IT WOULD MEET THE END S OF JUSTICE IF THE ADDITION MADE BY CIT(A) IS SET ASIDE AND THE ISSUE REMANDED TO THE A O. IF THE ASSESSEE HAD DEDUCTED TAX AT SOURCE IN TERMS OF SECTION 194I OF THE ACT THEN THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT SHOULD BE DELETED. THE AO WILL AFFORD OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE IN THE SET ASIDE PROCEEDINGS. 9. GROUND NO.3 RAISED BY THE ASSESSEE READS AS FOLL OWS :- (3) THAT IN THE FACTS AND IN THE GROUNDS OF APPEAL HOW FAR THE CIT(A) IS CORRECT IN AFFIRMING THE DECISION OF THE ASSESSING OFFICER FOR DISALLOWING THE FOLLOWING EXPENSES FOR NOT DEDUCTING THE TAX AT SOURCE U/S 40 (A)(IA) - A) REPAIR AND MAINTENANCE RS. 60,750/- B) PRODUCTION CHARGE RS. 96,184/- C) DISPLAY CHARGES RS.1,72,500/- TOTAL = RS.3,29,434/- 10. IT IS NOT DISPUTED IN RESPECT OF THE EXPENSES S ET OUT IN THE GROUNDS OF APPEAL, TAX HAS NOT BEEN DEDUCTED AT SOURCE. THE ONLY ARGUMENT OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT AS ON THE LAST DATE OF THE PREVIOUS YEAR N ONE OF THE AMOUNTS REMAINED OUTSTANDING. THE ASSESSEE RELIED ON DECISION OF THE SPECIAL BENCH VISAKAHAPATNAM IN THE CASE OF MERILYN SHIPPING & SHIPPING TRANSPORTS VS ADDL. CIT 136 ITD 23 WHEREIN IT WAS HELD THAT THE PROVISION OF SECTION 40(A)(IA) OF THE ACT IS APPLICABLE ONLY WHEN THE AMOUNTS REMAIN PAYABLE ON THE LAST DATE OF THE RELE VANT PREVIOUS YEAR AND NOT WHEN THE AMOUNTS HAVE ALREADY BEEN PAID AS ON THE SAID DATE. THE CIT(A) REJECTED THIS ARGUMENT BY PLACING RELIANCE ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS CRECENT EXPORT SYNDICATE IN ITAT NO.20 OF 20 13 IN GA NO.190 OF 2013 JUDGMENT DATED 03.04.2013. 4 ITA NO.2084/KOL/2017 DIPENDRA NATH BSSU A.YR.2009-10 4 11. BEFORE ME THE LD. COUNSEL FOR THE ASSESSEE COUL D NOT SUBSTANTIATE AS TO HOW THE PROVISION OF TDS ARE NOT APPLICABLE ON THE AFORESAI D PAYMENTS. I AM OF THE VIEW THAT THE ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE IN VIEW OF THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CRESCENT EXPORT SYNDICATE (SUPRA). GROUND NO.3 IS ACCORDINGLY DISMISSED. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT 02.02.2018. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 02.02.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1. DIPENDRA NATH BASU, WAKF BUILDING, 6/2, MADAN ST REET, KOLAKAT-700072. 2. I.T.O., WARD-56(3), KOLKATA. 3. CIT(A)-12, KOLKATA 4. C.I.T-14, KOLKA TA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECR ETARY HEAD OF OFFICE/ D.D.O., ITAT KOLKATA BENCHES 5 ITA NO.2084/KOL/2017 DIPENDRA NATH BSSU A.YR.2009-10 5