Debajyoti Saha, Hooghly V. ITO, Ward-2(3), Hooghly, Hooghly

ITA 2131/KOL/2014

• Counselvise Citation: 213123514 RSA 2014
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K L KANAK
• Assessee Lawyers: SOMNATH GHOSH; SUBIR GUHA
• Section: 40A(3)

Judgement Text

I.T.A. NO . 2 131 / KOL ./201 4 ASSESSMENT YEAR: 20 0 8 - 20 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER I.T.A. NO. 2 131 / KOL / 20 1 4 ASSESSMENT YEAR : 20 0 8 - 20 09 DEBAJYOTI SAHA,........................................... .... ........... .. .APP ELL ANT C/O. S.N. GHOSH & ASSOCIATES, ADVOCATES, SEVEN BROTHERS LODGE , P.O. BUROSHIBTALA, P.S. CHINSURAH, DISTRICT - HOOGHLY - 712 105 [ PAN : A KKPS 5461 R ] - VS. - INCOME TAX OFFICER , ....................... ................. ... . RESPONDENT WARD - 2(3), HOOGHL Y, AAYAKAR BHAWAN, G.R. ROAD, KHADINA MORE, P.O. CHINSURAH, P.S. CHINSURAH, DIST. HOOGHLY - 712 101 APPEARANCES BY: SHRI S OMNATH GHOSH, ADVOCATE AND SHRI SUBIR GUHA, ADVOCATE , FOR THE ASSESSEE S HRI K.L. KANAK , J CIT, SR. D.R., FOR THE DEPARTMENT DATE OF CON CLUDING THE HEARING : FEBRUARY 2 5 , 2 01 5 DATE OF PRONOUNCING THE ORDER : FEBRUARY 2 5 , 201 5 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - X XX VI , KOLKATA IN APPEAL N O. 364 / CIT(A) - X XX VI/KOL/WD - 2(3)/HG/2010 - 11/407 D ATED 24 . 0 7 .201 4 FOR THE ASSESSMENT YEAR 20 0 8 - 09 . 2 . SHRI S OMNATH GHOSH, ADVOCATE ALONGWITH SHRI SUBIR GUHA, ADVOCATE, REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.L. KANAK, JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A .R. THAT THE ISSUE IN THE ASSESSEE S APP E AL WAS AGAINST THE ACTION OF THE LD. I.T.A. NO . 2 131 / KOL ./201 4 ASSESSMENT YEAR: 20 0 8 - 20 09 PAGE 2 OF 4 CIT(APPEALS) IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40A(3) IN RESPECT OF THE CASH PAYMENTS MADE FOR THE PURCHASE OF COUNTRY LIQUOR FROM M/S. IFB AGRO INDUSTRIES LIMITED, WHICH WAS THE GOVERNMENT AUTHORIZED SUPPLIER FOR THE COUNTRY MADE LIQUOR. IT WAS THE SUBMISSION THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF AMRAI PACHWAI & C.S. SHOP IN ITA NO. 1251/KOL/2011 DATED 15.01.2014. IT WAS THE SUBMISSION THAT THE ADDITION AS CONFIRMED BY THE LD. CIT(APPEALS) MAY BE DELETED. 4. IN REPLY, LD. SR. D.R. VEHEMENTLY SU PPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). 5 . I HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ISSUE IN TH E ASSESSEE S APPEAL IS IDENTICAL AND SQUARELY COVERED BY THE DECISION OF THE DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF AMRAI PACHWAI & C.S. SHOP REFERRED TO SUPRA, WHEREIN IT HAS BEEN HELD AS UNDER: - 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS RECOGNISED THE ASSESSEE S BUSINESS IN TRADING OF COUNTRY SPIRIT AND COUNTRY LIQUOR. COPY OF FORM OF LICENCE ISSUED BY DURGAPUR MUNICIPAL CORPORATION AND COPY OF FORM III ISSUED BY DEPARTMENT OF EXCISE, GOVT. OF W.B WERE ALSO FOUND AT PAGES 177 AND 179 OF THE ASSESSEE S PAPER BOOK. IN ANY CA SE THE VALIDITY OF LICENCE OF THE ASSESSEE TO TRADE IN COUNTRY SPIRIT AND COUNTRY LIQUOR IS NOT THE ISSUE BEFORE US. THE ISSUE IS WHETHER THE PAYMENTS MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY SPIRIT FROM THE TERRITORIAL LICENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD, CITY CENTRE, DURGAPUR. FALLS WITHIN THE EXEMPTION PROVIDED UNDER RULE 6DD(B) OF THE I.T RULES 1962. ADMITTEDLY, THE AO HAS RECOGNISED THAT THE PROVISION OF RULE 6DD(B) OF THE I.T RULES 1962 IS APPLICABLE IN CASE OF PAYMENTS MADE TO GO VERNMENT DIRECTLY. THIS IS FOUND IN PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE KOLKATA GAZETTE TUESDAY DATED 20TH SEPT 2005 SHOWS THAT THE GOVERNMENT OF WEST BENGAL, DEPARTMENT OF EXCISE HAS ISSUED A NOTIFICATION, WHEREIN THE WAREHOUSE HAS BEEN IDENT IFIED TO MEAN THE WAREHOUSE FOR SUPPLY OF COUNTRY SPIRIT TO THE RETAIL VENDORS, ESTABLISHED AT CONVENIENT PLACES BY THE COMMISSIONER AT THE EXPENSE OF THE STATE GOVERNMENT, OR AT THE EXPENSE OF A PERSON TO WHOM THE EXCLUSIVE PRIVILEGE OF SUPPLYING OR SELLI NG COUNTRY SPIRIT BY WHOLESALE HAS BEEN GRANTED U/S. 22 OF THE ACT OF A LICENSED WHOLESALE I.T.A. NO . 2 131 / KOL ./201 4 ASSESSMENT YEAR: 20 0 8 - 20 09 PAGE 3 OF 4 VENDOR OF COUNTRY SPIRIT. FURTHER, IT HAS BEEN SPECIFICALLY IDENTIFIED THAT THE AUTHORISED REPRESENTATIVE OF THE WHOLESALE LICENSEE SHALL REALIZE THE NECESSARY AMOUN T OF DUTY, COST PRICE AND BOTTLING CHARGE, IF THERE BE ANY, AT THE PRESCRIBED RATE AND SUCH OTHER IMPOSITION, AS MAY BE PRESCRIBED BY LAW, FROM THE RETAIL VENDOR TO WHOM THE COUNTRY SPIRIT IS TO BE ISSUED FROM THE CONCERNED WAREHOUSE. IT IS ALSO SPECIFICAL LY MENTIONED IN SECTION (2) OF THE SAID NOTIFICATION THAT NO RETAIL VENDOR OF COUNTRY SPIRIT SHALL DEPOSIT DUTY DIRECT INTO THE LOCAL TREASURY FOR ISSUE OF COUNTRY SPIRIT TO BE TAKEN BY HIM FROM THE WAREHOUSE CONCERNED, WHICH CLEARLY SHOWS THAT THE WAREHOU SE IS FOR THE SUPPLY OF THE COUNTRY LIQUOR, SPECIFICALLY, THE WAREHOUSE IS UNDER THE DIRECT CONTROL AND CUSTODY OF THE STATE GOVT. THE STATE GOVERNMENT HAS CLOSED ITS DOORS IN SO FAR AS THE LOCAL TREASURY IS CONCERNED AND THE PAYMENT FOR THE PURCHASE OF CO UNTRY SPIRIT OR COUNTRY LIQUOR HAS TO BE MADE TO THE WAREHOUSE, RUN BY THE GOVERNMENT. THIS SHOWS THAT ANY PAYMENT MADE TO THE WAREHOUSE, WHICH IS UNDER THE DIRECT CONTROL OF THE STATE GOVERNMENT, IS A PAYMENT MADE DIRECTLY TO THE GOVERNMENT. ONCE, THIS IS ACCEPTED THEN THE PROVISIONS OF RULE 6DD(B) OF THE I.T RULES 1962 WHICH CLEARLY SPELLS OUT THAT THE PAYMENT MADE TO THE GOVERNMENT IN LEGAL TENDER UNDER THE RULES FRAMED BY THE GOVERNMENT, IS EXEMPTED FROM THE RIGOURS OF SECTION 40A(3) OF THE ACT. HERE, I T IS NOTICED THAT THE PAYMENTS MADE BY THE ASSESSEE FOR PURCHASE OF COUNTRY SPIRIT AND COUNTRY LIQUOR IS TO THE GOVERNMENT AS PER THE NOTIFICATION ISSUED BY THE GOVERNMENT AND IS IN LEGAL TENDER SPECIFIED BY THE NOTIFICATION. IN THE CIRCUMSTANCES, WE ARE O F THE VIEW THAT THE PAYMENT MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY LIQUOR AND COUNTRY SPIRIT FROM THE TERRITORIAL LICENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD, CITY CENTRE, DURGAPUR IS PROTECTED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF THE I.T RULES 1962. IN THE CIRCUMSTANCES, THE ADDITION AS MADE BY THE AO AND AS CONFIRMED BY THE LD.CIT(A) BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE I.T ACT 1961 STANDS DELETED. IN THESE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF DIVISIO N BENCH OF THIS TRIBUNAL IN THE CASE OF AMRAI PACHWAI & C.S. SHOP IN ITA NO. 1251/KOL/2011, THE ADDITION AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) STANDS DELETED. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 TH FEBRUARY , 201 5 . SD/ - GEORGE MATHAN ( JUDICIAL MEMBER) KOLKATA, THE 2 5 TH D AY OF FEBRUARY , 201 5 I.T.A. NO . 2 131 / KOL ./201 4 ASSESSMENT YEAR: 20 0 8 - 20 09 PAGE 4 OF 4 COPIES TO : (1) DEBAJYOTI SAHA, C/O. S.N. GHOSH & ASSOCIATES , ADVOCATES, SEVEN BROTHERS LODGE , P.O. BUROSHIBTALA, P.S. CHINSURAH, DISTRICT - HOOGHLY - 712 105 (2) INCOME TAX OFFICER, WARD - 2(3), HOOGHLY, AAYAKAR BHAWAN, G.R. ROAD, KHADINA MORE, P.O. CHINSURAH, P.S. CHINSURAH, DIST. HOOGHLY - 712 101 (3) COMMISS IONER OF INCOME - T AX (APPEALS) (4) COMMISSIONER OF INCOME T AX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .