M/s Jagdish Trading Co., Neemuch V. The ITO, Neemuch

ITA 212/IND/2012

• Counselvise Citation: 21222714 RSA 2012
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE; H PATIDAR
• Section: 43B; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.212/IND/2012 A.Y.2004-05 M/S JAGDISH TRADING COMPANY NEEMUCH PAN AAGFJ 0627G :: APPELLANT VS INCOME TAX OFFICER NEEMUCH :: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE AND SHRI H. PATIDAR RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 29.08.2012 DATE OF PRONOUNCEMENT 29.08.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 27 TH FEBRUARY, 2012 PASSED BY LEARNED CIT(A), UJJAIN, ON THE GROUND 2 THAT THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN CONFIRMING THE ORDER PASSED U/S 154 OF THE ACT, BEING DEBATABLE IS SUE AND CONSEQUENTLY CONFIRMING THE ADDITION OF RS. 24,06,7 47/-, BEING THE AMOUNT OF BONUS DECLARED BY VIKRAM CEMENT, KHOR , AND PAID THROUGH THE ASSESSEE, THUS THERE IS NO LIABILITY OF THE ASSESSEE TO DECLARE AND PAY THE BONUS AND FURTHER ERRED IN CONF IRMING THE APPLICATION OF PROVISIONS OF SECTION 43B WITHOUT AP PRECIATING THE FACTS. 2. DURING HEARING, THE LEARNED COUNSEL FOR THE ASSE SSEE ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE G ROUND RAISED BY FURTHER POINTING OUT THAT EARLIER THE LEARNED AS SESSING OFFICER ACCEPTED THE CLAIM OF THE ASSESSEE BUT IN ORDER U/S 154 OF THE ACT RECTIFIED THE SAME WHICH IS NOT PERMISSIBLE. OUR AT TENTION WAS INVITED TO VARIOUS PAGES OF THE PAPER BOOK BY SUBMI TTING THAT IT WAS NOT A MISTAKE APPARENT FROM RECORD. THE CRUX OF ARGUMENTS IS THAT SINCE THE MATTER IS DEBATABLE SO IT IS NOT PERMISSIBLE U/S 154 OF THE ACT ESPECIALLY WHEN REGULAR CASH BOOK IS MAINTAINED AND ONLY THE MISTAKE WHICH IS APPARENT FROM RECORD CAN BE RECTIFIED U/S 154. HOWEVER, THE LEARNED SR. DR, SHR I R.A. VERMA, DEFENDED THE ORDER BY SUBMITTING THAT ANY MISTAKE, EVEN IF DEBATABLE, CAN BE RECTIFIED U/S 154 OF THE ACT. 3 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. BRIEF FACTS OF T HE CASE ARE THAT THE ASSESSEE IS A LABOUR SUPPLIER TO M/S VIKRAM CEM ENT FOR LOADING AND UNLOADING THE CEMENT IN THEIR CEMENT PL ANT AT KHORE UNDER A LABOUR CONTRACT. THE WAGES PAYMENTS TO THE WORKERS ARE REIMBURSED BY VIKRAM CEMENT BY ADDING AN AMOUNT OF 7.5% TO 9% AS COMMISSION TO THE ASSESSEE FOR SUPPLY OF LABO UR. THE ASSESSEE PAID THE AMOUNT TO LABOUR ON MONTHLY INTER VAL AFTER GETTING ADVANCE FROM THE SAID COMPANY AND RAISED BI LL INCLUDING THE COMMISSION WHICH IS DEBITED TO THE ACCOUNT OF T HE COMPANY. THIS SYSTEM IS FOLLOWED BY THE ASSESSEE FOR THE PAS T MANY YEARS. THE PAYMENT OF BONUS IS DECIDED BY THE COMPANY TO I TS WORKERS ON THE BASIS OF AGREEMENT WITH THE WORKERS AND THE ASSESSEE. THE ASSESSEE ALSO PAYS TO THE WORKERS AND THIS PAYMENT IS REIMBURSED BY THE COMPANY, MEANING THEREBY THE PAYM ENT OF BONUS IS MADE ON THE BASIS OF AGREEMENT, THEREFORE, THE PROVISIONS OF SECTION 43B ARE NOT ATTRACTED SINCE I T IS NOT A BONUS PAYMENT BY THE ASSESSEE TO THE LABOUR. THE AMOUNT P AID IS AS PER THE INSTRUCTION OF VIKRAM CEMENT SUPPORTED BY A UDIT REPORT. THE PAYMENT WAS CLAIMED TO BE MADE IN THE MONTH OF OCTOBER, 2004 WITHIN THE STIPULATED TIME. SUCH DETAILS ALONG WITH THE 4 COPIES OF CASH BOOK WERE FILED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE DATE HAS BEEN PUT UP NOT FOR PAYMENT BUT FOR CHECKING, THEREFORE, THE SAME CANNO T BE TREATED AS DATE OF PAYMENT. SO FAR AS ACTION U/S 154 OF TH E ACT IS CONCERNED, IT IS NOT JUSTIFIED BECAUSE IT IS NOT A MISTAKE APPARENT FROM RECORD. FOR TAKING ACTION U/S 154 OF THE ACT, THE MISTAKE MUST BE OBVIOUS AND PATENT ON THE RECORD AND NOT SO METHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. U/ S 154 THERE HAS TO BE A MISTAKE APPARENT FROM RECORD. IN OTHER WORDS, A LOOK ON THE RECORD MUST SHOW THAT THERE HAS BEEN AN ERRO R AND THAT ERROR MAY BE RECTIFIED. REFERENCE TO DOCUMENTS OUTS IDE THE RECORD AND THE LAW IS IMPERMISSIBLE WHEN APPLYING THE PROV ISIONS OF SECTION 154 OF THE ACT. OUR VIEW IS FORTIFIED BY T HE FOLLOWING JUDICIAL PRONOUNCEMENTS :- I. ITO VS. VOLKART BROTHERS; 82 ITR 50 (SC) II. SWARM YASH VS. CIT; 138 ITR 734 (DEL) III. ORIENT PAPER IND. LTD.; 208 ITR 158 (CAL) IV. SOUTH INDIA BANK LTD.; 249 ITR 304 (SC) V. CIT VS. HERO CYCLES; 228 ITR 463 (SC) 5 IN VIEW OF THE ABOVE FACTS AND THE JUDICIAL PRONOUN CEMENTS, WE FIND THAT THERE IS NO MISTAKE APPARENT FROM RECORD, THEREFORE, INVOCATION OF SECTION 154 OF THE ACT IS NOT JUSTIFI ED, CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 29 TH AUGUST, 2012. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 30 TH AUGUST, 2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-3030