M/s. Shivangi Fashions, Kolkata V. ACIT, Central Circle - XXVIII, Kolkata, Kolkata

ITA 2167/KOL/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4856 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 21-04-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-12-2010
• Court: TRIBUNAL
• Department Lawyers: PINAKI MUKHERJEE
• Keywords: Bogus purchase; Unexplained cash credit; Corroborative evidences; Onus to prove
• Section: 143(3); 133(6); 194C; 131; 68

Judgement Text

ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI N.V. VASUDEVAN, JUDICIAL MEMBER , AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 2167/KOL/2010 A.Y 2006-07 M/S. SHIVANGI FASHIONS VS. A.C.I.T, CENTRAL CI R-XXVIII, KOL. PAN: ABAFS 8328J (APPELLANT/ASSESSEE) (RESPONDENT) FOR THE APPELLANT/ASSESSEE: SHRI SU BASH AGARWAL, ADVOCATE FOR THE RESPONDENT/DEPARTMENT: S HRI PINAKI MUKHERJEE, JCIT, LD.SR.DR DATE OF HEARING: 21-04-2016 DATE OF PRONOUNCEMENT: 11 - 5 -2 016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED CIT(A), CENTRAL-I, KOLKATA IN APPEAL NO. 352/CIT(A)C-I/CC- XXVIII/08-09 DATED 16-09-2010 AGAINST THE ORDER OF ASSESSMENT FRAMED FOR THE ASST YEAR 2006-07 U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). 2. THE FIRST GROUND RAISED BY THE ASSESSEE IS GE NERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 3. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL I S AS TO WHETHER THE LEARNED AO IS JUSTIFIED IN MAKING THE DISALLOWANCE OF RS. 57,01,7 24/- ON THE ALLEGED GROUND OF BOGUS PURCHASES IN THE FACTS AND CIRCUMSTANCES OF THE CAS E. ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 2 3.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE AS SESSEE IS A PARTNERSHIP FIRM AND IS A WHOLESALE TRADER/ DEALER IN EMBROIDERED SAREES. TH E RETURN OF INCOME FOR THE ASST YEAR 2006+07 WAS FILED BY THE ASSESSEE SHOWING TOTA L INCOME OF RS. 3,81,230/- ALONG WITH AUDITED STATEMENT OF ACCOUNTS AND THE TAX AUDI T REPORT U/S 44AB OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LE ARNED AO FOUND THAT THE PURCHASES MADE BY THE ASSESSEE WERE TO THE TUNE OF RS. 9.22 CRORES. THE LEARNED AO SOUGHT TO VERIFY THE PERSONS FROM WHOM PURCHASES IN EXCESS OF RS. 50,000/- WERE MADE BY THE ASSESSEE. THE ASSESSEE SUBMITTED THE DETAILS OF THE SAME BY PRODUCING THE NAMES, ADDRESSES, PAN AND OTHER DETAILS OF THOS E PARTIES. THE LEARNED AO OBSERVED THAT NOTICES U/S 133(6) OF THE ACT WERE NO T RESPONDED BY THE FOLLOWING PARTIES FROM WHOM ASSESSEE HAD MADE PURCHASES :- EMBROIDERY SAREES - RS. 19,40,669 HASAN JAMADAR - RS. 23,775 SABIR ALI PURKAIT - RS. 25,61,000 ABDUL RAHIM LASHKAR - RS. 11,76,280 THE ASSESSEE SUBMITTED THE DETAILS OF PURCHASES WIT H COMPLETE NAMES AND MAILING ADDRESSES OF ALL THE PARTIES INCLUDING THE AFORESAI D FOUR PARTIES TOGETHER WITH THEIR LEDGER COPIES, PURCHASE BILLS , STOCK REGISTERS, BA NK STATEMENTS AND DETAILS OF PAYMENTS BY ACCOUNT PAYEE CHEQUES. THE ASSESSEE ALSO SUBMITT ED THE PAN OF THE FOUR PARTIES AS BELOW:- EMBROIDERY SAREES - AXFPS 6827D HASAN JAMADAR - AGBPJ 0951C SABIR ALI PURKAIT - AHOPP 6478L ABDUL RAHIM LASHKAR - ABZPL 3112E THE ASSESSEE PRODUCED THE DETAILS OF CORRESPONDING SALES MADE OUT OF PURCHASES FROM THE AFORESAID FOUR PARTIES AND THE SAME WERE VERIFI ED BY THE LEARNED AO AND FOUND TO BE CORRECT. THE ASSESSEE PRODUCED THE FOLLOWING CHA RT BEFORE THE LEARNED AO :- ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 3 YEAR ENDED YEAR ENDED 31.03.2005 31.03.2006 (IN RS.) (IN RS.) SALES 8,00,65,386 10,43,70,280 GROSS PROFIT 29,41,934 56,57,129 NET PROFIT 2,31,404 3,81,227 G.P. RATIO 3.67% 5.42% THE LEARNED AO OBSERVED THAT THE ASSESSEE COULD NOT PRODUCE THE AFORESAID FOUR PARTIES NOR ANY CONFIRMATION OF PURCHASES SUBMITTED BEFORE HIM. THE LEARNED AO OBSERVED AS UNDER IN HIS ASSESSMENT ORDER :- IT IS A PREVALENT PRACTICE AMONG TAX EVADERS TO MAK E OUT OF BOOK PURCHASES. TO GIVE IT THE COLOR OF GENUINENESS TO SUCH PURCHASES KARIGARS AND JOB WORKERS/ CONTRACTORS ARE SHOWN AS PERSONS F ROM PURCHASES ARE MADE. IT IS NOT THE CASE HERE THAT ASSESSEE HAS MADE SALE WITHOUT HAVING ANY PURCHASE. INDEED PURCHASE HAS TO BE THERE BUT UNLE SS CORROBORATIVE EVIDENCES ARE BROUGHT TO THE NOTICE IT CANNOT BE BE LIEVED THAT SUCH PERSONS COULD HAVE MADE HUGE SALES AS APPEARING IN THE BOOK S OF THE ASSESSEE. MOST LIKELY, THESE PERSONS COULD HAVE DONE KARIGARS OR JOB WORKS FOR THE ASSESSEE AND TO CIRCUMVENT THE TDS PROVISIONS ASSES SEE IS SHOWING SALE FROM SUCH PERSONS. IN VIEW OF SUCH FACTS AND CIRCU MSTANCES OF THE CASE IN WANT OF ANY CORROBORATIVE EVIDENCES AS MENTIONED AB OVE THE PURCHASES FROM PERSONS MENTIONED ABOVE CANNOT BE BELIEVED AS GENUINE. 3.2. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED THAT THE GROSS PROFIT REPORTED BY THE ASSESSEE IS VERY LOW AND HE RELIED ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KAVERI RICE MILLS VS CIT REPOR TED IN (2006) 157 TAXMAN 376 (ALL) AND UPHELD THE DISALLOWANCE MADE BY THE LEARNED AO. ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 4 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LEA RNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. HE ARGUED THAT THE LEARNED AO NEVER ASKED THE ASSESSEE TO FURNISH CONFIRMATION OF BALANCE FROM TH E SAID FOUR PARTIES DURING ASSESSMENT PROCEEDINGS. HENCE THE SAME WERE PRODUC ED BEFORE THE LEARNED CIT(A) FOR THE FIRST TIME WHICH WERE ADMITTED AS ADDITIONA L EVIDENCE AND REMAND REPORT SOUGHT THEREON. IT WAS ALSO ARGUED THAT THE FOUR PARTIES WERE DIRECTED TO BE PRODUCED IN THE LAST MONTH OF THE YEAR 2008 AND HENCE THE ASSESSEE FOUND IT DIFFICULT TO PRODUCE THE SAME AT A VERY SHORT NOTICE TO BRING THEM FROM VILL AGES IN THE MONTH OF DECEMBER AND HENCE THE ASSESSEE HAD REQUESTED THE LEARNED AO TO VERIFY THE TRANSACTIONS OF THE SAID FOUR PARTIES FROM THE INCOME TAX FILES BY DEPUTING THE IT INSPECTOR OR BY ISSUING SUMMONS U/S 131 OF THE ACT AS PAN DETAILS ARE VERY MUCH AVAILABLE WITH THE LEARNED AO. 3.3.1. THE LEARNED AR ARGUED THAT THE CASE LAW REL IED UPON BY THE LEARNED CIT(A) ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KAVERI RICE MILLS VS CIT REPORTED IN (2006) 157 TAXMAN 376 (ALL) IS SQUARELY DISTINGUISHABLE FROM THE FACTS OF THE INSTANT CASE. IN THE FACTS BEFORE THE HONBLE ALLAHABAD HIGH COURT, THE PURCHASE BILLS WERE NOT FILED BY THE ASSESSEE AND HENCE THE HIGH COURT HELD THAT DISALLOWANCE OF SOME PURCHASES TO MAKE IT COMPARABLE WITH THE GROSS PROFITS OF EARLIER YEARS IS JUSTIFIED. WHEREAS IN THE INSTANT CASE, THE PURC HASE BILLS TOGETHER WITH ALL THE RELEVANT DOCUMENTS IN THE FORM OF STOCK REGISTERS, QUANTITAT IVE DETAILS, BANK STATEMENTS, PAYMENTS BY ACCOUNT PAYEE CHEQUES TO SUPPLIERS WERE PRODUCED. HENCE WE AGREE WITH THE ARGUMENTS OF THE LEARNED AR THAT THE DECISION R ELIED UPON BY THE LEARNED CIT(A) IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. 3.3.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE RS OF THE LOWER AUTHORITIES. WE FIND THAT THE ASSESSEE HAD SUBMITTED THE FOLLOWING DETAILS BEFORE THE LEARNED AO IN SUPPORT OF PURCHASES MADE FROM THE AFORESAID FOUR P ARTIES :- ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 5 (I) NAMES AND ADDRESSES OF PARTIES WITH PAN. (II) COPY OF PURCHASE BILLS, DETAILS OF PAYMEN TS BY ACCOUNT PAYEE CHEQUES, LEDGER COPY OF THE PARTIES AS APPEARING I N THE BOOKS OF ASSESSEE. (I) QUANTITATIVE DETAILS IN STOCK REGISTER OF THE PURCH ASES FROM FOUR PARTIES. (II) DETAILS OF CORRESPONDING SALES OUT OF PURCHASES FRO M FOUR PARTIES. IT WAS ARGUED THAT ALL PAYMENTS TO THE AFORESAID PA RTIES WERE MADE BY ACCOUNT PAYEE CHEQUES, THAT NO DEFECTS WERE FOUND IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE , THAT THERE IS INCREASE IN GROSS PROFIT THIS YEAR AS COMP ARED TO LAST YEAR AND THE LEARNED AO HAD ACCEPTED THE SALES OF THE ASSESSEE BUT ON THE O THER HAND DISALLOWED THE CORRESPONDING PURCHASES FROM FOUR PARTIES. IT WAS ARGUED THAT WITHOUT MAKING PURCHASES, HOW THE SALES COULD BE MADE. WE FIND TH AT THE LEARNED AO HAD NOT FOUND ANY DISCREPANCY IN THE STOCK REGISTERS MAINTAINED B Y THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT THE SALES WERE MADE BY THE ASSESSE E OUT OF STOCKS AVAILABLE WITH THE ASSESSEE THEREBY PROVING THAT NO PURCHASES WERE MAD E BY THE ASSESSEE FROM FOUR PARTIES. OBVIOUSLY THE PURCHASES MADE FROM FOUR PA RTIES HAD ENTERED THE STOCK REGISTERS AND FROM WHICH THE SALES WERE MADE BY THE ASSESSEE AND STOCKS REDUCED ACCORDINGLY. HENCE WE FIND THAT THE ASSESEE HAD D ULY PRODUCED THE CORROBORATIVE EVIDENCES TO SUPPORT THE PURCHASES MADE FROM THE FO UR PARTIES. WE ALSO FIND THAT THE PAYMENTS FOR PURCHASES FROM THESE FOUR PARTIES WERE MADE BY ACCOUNT PAYEE CHEQUES IN SUPPORT OF WHICH THE ASSESSEE HAD PRODUCED THE L EDGER ACCOUNTS OF THESE FOUR PARTIES TOGETHER WITH THE CORRESPONDING BANK STATEMENTS. 3.3.3. WE ALSO FIND THAT THE ASSESSEE HAD PRODUCED TWO PARTIES BEFORE THE LEARNED AO DURING REMAND PROCEEDINGS WHO HAD DULY CONFIRMED TH E FACT OF HAVING SOLD EMBROIDERED SAREES TO ASSESSEE. THESE TWO PARTIES VIZ. MR.RASIK SHAIKH (PROPRIETOR OF EMBROIDERY SAREES ) AND MR.ABDUL RAHIM LASKAR HAD F ILED THEIR WRITTEN SUBMISSIONS DATED 8.2.2010 BEFORE THE LEARNED AO FURNISHING ALL THE DETAILS SUCH AS BANK ACCOUNTS, PAN, TRADE LICENCE, CONFIRMATION ETC. THE LEARNED AO HAD TRIED TO POINT OUT THE FACT ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 6 THAT THE TRADE LICENCE FURNISHED BY MR.RASIK SHAIK H IS FROM 1.10.2008 AND ACCORDINGLY CONCLUDED THAT HE HAD NOT DONE ANY BUSINESS IN THE NAME OF EMBROIDERY SAREES BEFORE 1.10.2008 THEREBY ENABLING HIM TO SELL GOODS TO ASSESSEE HEREIN. THIS ARGUMENT HAS BEEN CONTROVERTED BY THE LEARNED AR BY STATING THAT THE SAID SUPPLIER HAD PRODUCED THE LATEST TRADE LICENCE REGISTRATION CERTIFICATE AS THE SAME NEEDS TO BE RENEWED EVERY YEAR. HE ARGUED THAT THIS DOES NOT M EAN THAT THE SUPPLIER DID NOT CARRY OUT TRANSACTIONS WITH ASSESSEE IN THE FINANCIAL YEA R 2005-06 RELEVANT TO ASST YEAR 2006-07. WE FIND LOT OF FORCE IN THE ARGUMENT OF THE LEARNED AR THAT THE SAID SUPPLIER HAD FURNISHED HIS PAN ALONG WITH OTHER REL EVANT DETAILS TO JUSTIFY THE SALES MADE BY HIM TO ASSESSEE. IT CANNOT BE BRUSHED ASID E THAT ASSESSEE HAD PAYMENTS TO SUPPLIER BY ACCOUNT PAYEE CHEQUES. IF THE LEARNED AO HAD ANY DOUBT REGARDING THE SAME, THEN HE COULD HAVE VERY WELL VERIFIED THE SAM E WITH THE BANK TO ENSURE WHETHER THE CHEQUES WERE CLEARED IN THE NAME OF THE PAYEE ( I.E MR.RASIK SHAIKH PROPRIETOR OF EMBROIDERY SAREES). THE LEARNED AR ALSO PRODUCED A COPY OF THE CO-ORDINATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF SUSHIL KUM AR GUPTA C/O SHANKAR SAREE STORES VS ACIT IN ITA NO. 2168/KOL/2010 DATED 18.12.2014 F OR ASST YEAR 2006-07, WHEREIN UNDER SAME FACTS AND CIRCUMSTANCES, THE TRIBUNAL HA D DELETED THE ADDITIONS MADE BY THE LEARNED AO. WE ALSO FIND LOT OF FORCE IN THE DEFEN CE ARGUMENTS OF THE LEARNED AR THAT THE SUPPLIERS ARE EMANATING FROM REMOTE VILLAG ES WHO ARE NOT CONVERSANT WITH THE MANNER OF MAINTENANCE OF BOOKS OF ACCOUNTS ; THAT THEY ARE BASICALLY ARTISANS WHO GET THE VALUE ADDITION ONLY IN THE EMBROIDERY WORK CARR IED OUT BY THEM AND THAT IS WHERE THE REAL PROFIT MARGIN LIES FOR THEM. THE TWO PA RTIES HAD APPEARED IN PERSON AND HAD CONFIRMED THAT THEY ARE ENGAGED IN THE BUSINESS OF EMBROIDERED SAREES AND HAD IN FACT SOLD GOODS TO ASSESSEE HEREIN. 3.3.4. WE FIND THAT THE BASIS FOR THE ENTIRE ADDIT ION MADE BY THE LEARNED AO IS ONLY A WILD ALLEGATION THAT THE ASSESSEE HAD TRIED TO CIRC UMVENT THE PROVISIONS OF TDS AND ASSESSEE INSTEAD OF PAYING JOB CHARGES TO THOSE ART ISANS HAD CHOSEN TO SHOW THE SAME AS PURCHASES. THIS ALLEGATION IN OUR OPINION IS COMPLETELY BASELESS AS IT DOES NOT ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 7 MAKE ANY DIFFERENCE FOR THE ASSESSEE TO DEDUCT TAX AT SOURCE AS PAN OF THE PAYEES ARE ALSO AVAILABLE WITH THE ASSESSEE. IN ANY CASE, IT IS ONLY A WILD GUESS MADE BY THE LEARNED AO WITHOUT ANY EVIDENCES ON RECORD. WE A LSO FIND THAT THE LEARNED AO BY MAKING THIS STATEMENT HAD ADMITTEDLY AGREED THE TRA NSACTIONS TO BE A GENUINE BUSINESS TRANSACTIONS AS HIS ONLY ALLEGATION WAS THAT THE AS SESSEE TRIED TO CIRCUMVENT TDS PROVISIONS. BUT IT IS PERTINENT TO NOTE THAT NO D ISALLOWANCE WAS MADE BY THE LEARNED AO FOR VIOLATION OF TDS PROVISIONS U/S 40(A)(IA) OF THE ACT. 3.3.5. WE FIND THAT THE LEARNED AO HAD NOT MENTIO NED ANY SECTION UNDER WHICH HE IS SEEKING TO MAKE DISALLOWANCE OF PURCHASES. WE FIND THAT THE ASSESSEE HAD FULLY DISCHARGED ITS ONUS TO PROVE THE GENUINITY OF CLAIM OF PURCHASES AND ASSESSEE CANNOT BE EXPECTED TO PRODUCE FURTHER EVIDENCES IN THIS RE GARD AS ADMITTEDLY THE ADDITION IS NOT MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. HENCE NO DEEMING FICTION IS PERMISSIBLE IN THIS CASE. IN THE INSTA NT CASE, THE ASSESSEE WAS ABLE TO ENSURE THE PRESENCE OF TWO PARTIES DURING REMAND PROCEEDIN GS WHO HAD DULY CONFIRMED THE FACT OF HAVING SOLD GOODS TO ASSESSEE. THE ALLEGED DISCREPANCIES POINTED OUT BY THE LEARNED AO IN THE REMAND PROCEEDINGS AS TO NON-MAIN TENANCE OF PURCHASE BILLS IN CHRONOLOGICAL ORDER BY THE SAID PARTY , SIGNATURE I N BENGALI, ETC. ARE TO BE ADDRESSED ONLY IN THE HANDS OF THE SAID PARTIES AND ASSESSEE CANNOT BE EXPECTED TO PROVE THE VERACITY AND THE MANNER OF MAINTENANCE OF ACCOUNTS AND DOCUMENTS BY THE OTHER PARTY AS ADMITTEDLY THE SAME ARE NOT IN THE CONTROL AND D OMAIN OF THE ASSESSEE. WE HOLD THAT WHEN THE PARTY HAD APPEARED IN PERSON BEFORE T HE LEARNED AO AND CONFIRMED THE TRANSACTIONS WITH THE ASSESSEE, THERE IS NO NEED TO DISBELIEVE THE SAME. WE HOLD THAT NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE BY DISBELIEVING THE PURCHASES MERELY BECAUSE TWO PARTIES COULD NOT APPEAR BEFORE THE LEARNED AO IN THE REMAND PROCEEDINGS. IN FACT THE ASSESSEE HAD ALSO SOUGHT TO EXPLAIN THE FACT THAT THOSE TWO PARTIES WHO HAD NOT APPEARED BEFORE THE LEARNED AO HAD MIGRATED TO MIDDLE EAST FOR BETTER PROSPECTS OF LIVELIHOOD. NOTHING PREVENTED THE REVENUE FROM VERIFYING THIS FACT TO ENSURE THE VERACITY OF THE CLAIM OF THE ASSESSEE IN THIS REGARD IN THE MANNER KNOWN ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 8 IN ACCORDANCE WITH LAW. WE FIND THAT THESE TWO PA RTIES HAD FILED CONFIRMATION AND FURNISHED ALL THE DETAILS CALLED FOR BY THE LEARNED AO VIDE THEIR LETTER DATED 8.2.2010 WITH RELEVANT EVIDENCES WHICH ARE PART OF THE RECOR DS. WE FIND THAT THE ASSESSEE HAD MET EACH AND EVERY POINT OF ALLEGATION IN THE ASSES SMENT ORDER AS WELL AS IN THE REMAND ORDER WITH PROPER EXPLANATIONS WHICH IN OUR OPINION IS LOGICAL. WE HOLD THAT THE ASSESSEE HAD PRODUCED ALL THE RELEVANT DOCUMENTS TO PROVE THE CLAIM OF PURCHASES MADE FROM THE FOUR PARTIES AND ACCORDINGLY WE DIREC T THE LEARNED AO TO DELETE THE ADDITION MADE IN THE SUM OF RS. 57,01,724/-. HENCE THE GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. 4. THE LAST GROUND TO BE DECIDED IN THIS APPEAL I S AS TO WHETHER THE DISALLOWANCE OF RS. 3,74,527/- COULD BE MADE U/S 40(A)(IA) OF THE A CT TOWARDS LABOUR CHARGES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LEA RNED AO OBSERVED THAT THE ASSESSEE HAS PAID LABOUR CHARGES TO VARIOUS PARTIES DURING THE Y EAR UNDER APPEAL TO THE TUNE OF RS. 3,74,527/-. THE ENTIRE DETAILS OF PARTIES TO WHOM THE SAME WERE PAID TOGETHER WITH THEIR NAMES, ADDRESSES, LEDGER COPIES, COPIES OF BI LLS WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS ALSO SUBMITTED THAT THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES TO THE SAID PARTIES. THE LEA RNED AO OBSERVED THAT THE ASSESSEE HAD MADE PAYMENTS MORE THAN RS 20,000/- AND HENCE V IOLATED THE PROVISIONS OF SECTION 194C OF THE ACT BY NOT DEDUCTING TAX AT SOU RCE AND MADE THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT WHICH WAS UPHELD BY THE LEARNE D CIT(A) IN FIRST APPEAL. 4.2. THE LEARNED AR ARGUED THAT THE PROVISIONS OF S ECTION 194C OF THE ACT HAVE NOT BEEN PROPERLY UNDERSTOOD BY THE LOWER AUTHORITIES A S THE SAID SECTION CONTAINS A PROVISION THAT IF THE OVERALL PAYMENTS MADE TO THE PARTY EXCEEDS RS. 50,000/- IN A YEAR AND IF SINGLE PAYMENT EXCEEDS RS. 20,000/- , THEN T HE PAYER HAS TO DEDUCT TAX AT SOURCE IN TERMS OF SECTION 194C OF THE ACT. HE ARGUED THA T NONE OF THE PARTIES HAVE BEEN PAID ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 9 MORE THAN RS. 50,000/- IN A YEAR AND IN SUPPORT OF WHICH, HE SUBMITTED THE LEDGER COPIES OF ALL THE PARTIES AND FAIRLY AGREED THAT TH E SAME MAY BE DIRECTED TO BE EXAMINED BY THE LEARNED AO TO MEET THE ENDS OF JUSTICE. THE LEARNED DR ALSO FAIRLY AGREED FOR THE SAME. 4.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN THE FACTS AND CIRCUMSTANCE S, WE DEEM IT FIT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO , TO VERIFY THE FACT AS TO WHETHER SINGLE PARTY HAS BEEN PAID MORE THAN RS. 50,000/- IN A YEAR WARRANTING DEDUCTION OF TAX AT SOURCE IN TERMS OF SECTION 194C OF THE ACT AND DECIDE THE ISSUE ACCORDINGLY AS PER LAW. ACCORDING LY, THE GROUND NO. 3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 11-5- 20 16 1.. THE APPELLANT/ASSESSEE: M/S. SHIVANGI FASHIONS 65 SIR HARI RAM GOENKA STREET, 1 ST FLOOR, BANGUR ARCADE, KOL-7. 2 THE RESPONDENT/DEPARTMENT: THE ACIT, CENTRAL CIR XXVIII/KOL PODDAR COURT, 18 RABINDRA SARANI, 5 TH FLOOR, KOLKATA-700 001. 3 /THE CIT, 4.THE CIT(A ) SD/- ( N.V.VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 11-5 -2016 COPY OF THE ORDER FORWARDED TO:- ITA NO. 2167/KOL/20 10 -C-AM M/S. SHIVANGI FASHIONS 10 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS