M/s Savitri Devi, Rajesh Kumar & ORS, Kolkata V. The DCIT, Circle-10, Kolkata, Kolkata

ITA 2199/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6225 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 16-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHR SALLONG YADEN
• Assessee Lawyers: J M THARD
• Section: 40A(3); 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2198-2199/KOL/2016 ASSESSMENT YEAR:2009-10 M/S SAVITRI DEVI, AMITA JAISWAL & ORS, 7, RAJENDRA DEV ROAD,KOLKATA-007 [ PAN NO.AABAS 4315 E ] M/S SAVITRI DEVI, RAJESH KUMAR & ORS. 7, RAJENDRA DEV ROAD, KOLKATA-007 [ PAN NO.AABAS 8008 G ] / V/S . / V/S DCIT, CIRCLE-10, KOLKATA DCIT, CIRCLE-10, KOLKATA /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI J.M. THARD, ADVOCATE /BY RESPONDENT SHR SALLONG YADEN, ADDL. CIT-DR /DATE OF HEARING 09-05-2018 /DATE OF PRONOUNCEMENT 04-07-2018 /O R D E R PER S.S.VISWANETHRA, JUDICIAL MEMBER:- THESE TWO APPEALS BY THE ASSESSEE IS DIRECTED AGAI NST THE COMMON ORDER PASSED BY COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKATA DATED 01.09.2016 FOR ASSESSMENT YEAR 2009-10. 2. ONLY ISSUE IS TO BE DECIDED IS AS TOGETHER THE C IT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF CASH PURCHASE VIOLATING THE ITA NO.2198-99/KOL/2016 A.Y. 2009-10 M/S SAVITRI DEVI, AMITA JAISWAL &, RAJESH KUMAR & ORS VS. DCIT, CIR-10, KOL. PAGE 2 SECTION 40A(3) OF THE INCOME TAX ACT, 1961, IN SHOR T THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN AOP AND ENGAGED IN RETAIL TRADING OF COUNTRY LIQUOR. THE ASSESSEE FILED RETUR N OF INCOME SHOWING TOTAL INCOME OF 47,67,010/- AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ACCEPTING THE RETURN INCOME. THE SAID ASSESSMENT WAS RE-OPENED ON AN INF ORMATION THAT HUGE CASH PURCHASE OF LIQUOR IN EXCESS OF 20,000/- ON EACH OCCASION FROM M/S SARAYA DISTILLER Y, SADAR NAGAR, GORAKHPUR, U.P. AND THE SAME WERE MADE FOR THE COUNTRY LIQUOR SHOP M/S SAVITRI DEVI, AMITA JAISWAL & OTHERS IN OF PROV ISION U/S 40A(3) OF THE ACT. THE ASSESSING OFFICER FOUND THE SAID CASH PURCHASES WER E NOT MENTIONED IN THE TAX AUDIT REPORT THE ASSESSEE FILED WRITTEN SUBMISSIONS AND C ONTENDED THAT THE PAYMENTS MADE IN A SINGLE DAY AND CONSOLIDATED PAYMENT OF SEVERAL SH OPS WHEREIN THE SINGLE PAYMENT BILL OR MEMO DOES NOT EXCEEDS 20,000/-. THE AO DID NOT ACCEPT THE SAID SUBMISSION S MADE BY THE ASSESSEE AND ADDED AN AMOUNT OF 1,49,11,496/- TO THE TOTAL INCOME OF ASSESSEE ON ACCOUNT OF CASH PURCHASES FOR VIOLATIO N OF PROVISION OF SECTION 40A(3) OF THE ACT VIDE HIS ORDER DATED 17.10.2014 PASSED U/S 147/143(3) OF THE ACT. 4. BEFORE CIT(A) ASSESSEE REITERATED THE SAME SUBMI SSION THAT MADE BEFORE THE AO. FURTHER ASSESSEE CONTENDED THAT THE PURCHASES H AVE BEEN MADE FROM GOVERNMENT AUTHORIZED LICENCEE AND THE PAYMENTS ARE COVERED BY EXCEPTION UNDER RULE 6DD(B) AND RULE 6DD(K) OF THE INCOME TAX RULE, 1962 AND PL ACED RELIANCE ON THE ORDER OF ITAT ALLAHABAD BENCH IN THE CASE OF RAM NIVAS & OTH ERS -VS ITO, GORAKHPUR IN ITA NO.322/ALLD/2013 DATED 11.12.2015 AND SUBMITTED THAT THE PROVISION OF SECTION 40A(3) AS HELD BY THE TRIBUNAL ARE NOT ATTRACTED IN CASE OF LIQUOR PURCHASES FROM GOVERNMENT AUTHORIZED DISTRIBUTORS. THE CIT(A) HOWE VER NOT ACCEPTED THE SUBMISSION OF ASSESSEE AND BY PLACING RELIANCE ON THE DECISION OF HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT CENTRAL VS. PANDURANGA ENTERPRISES (2015) 55 TAXMANN.COM 437 (KAR) UPHELD THE VIEW OF AO. ITA NO.2198-99/KOL/2016 A.Y. 2009-10 M/S SAVITRI DEVI, AMITA JAISWAL &, RAJESH KUMAR & ORS VS. DCIT, CIR-10, KOL. PAGE 3 5. AGGRIEVED, ASSESSEE BEFORE US CONTENDING THAT TH E CASH PURCHASE OF ALCOHOL LIQUOR FOR HUMAN CONSUMPTION FROM A AUTHORIZED DIST RIBUTOR OF GOVERNMENT OF UTTAR PRADESH IS COVERED BY THE RULE 6DD(B) OF IT RULES, 1962 AND SUCH PAYMENTS WERE MADE TO AN AGENT OF GOVERNMENT OF UTTAR PRADESH. LE ARNED DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 6. HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL AVA ILABLE ON RECORD. WE FIND THE ISSUE ON HAND IS COVERED BY THE ORDER OF CO-ORDINAT E BENCH OF THIS TRIBUNAL WHEREIN IT WAS HELD THAT CASH PAYMENTS MADE TO AN AGENT OF GOV ERNMENT IS COVERED BY EXCEPTION PROVIDED UNDER RULE 6DD(B) OF IT RULES, 1962 REPROD UCED RELEVANT PORTION IN ITA NO.1913/KOL/2016 DATED 28.3.2018 7.HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON R ECORD. IT IS NOTICED THAT THE AO FOUND FROM THE STATEMENT RECEIVED FROM UNITED BANK OF INDIA, MAYABAZAR BRANCH THAT THE ASSESSEE PAID AN AMOUNT OF RS.2,33,23,967/- IN CASH TO IFB AGRO INDUSTRIES LTD AND NON PRODUCTION OF ANY EVIDENCE SHOWING THAT THE SAID PAYMENTS WERE MADE IN ACCOUNT PAYEE CHEQUE OR BANK DRAFT AND FOR VIOLATIO N OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT, THE AFORESAID AMOUNT WAS BROUGHT TO TAX BY THE AO. BEFORE THE CIT(A) IT WAS CONTENDED BY THE ASSESSEE THAT THE CA SH PAYMENTS WERE MADE TO IFB AGRO INDUSTRIES LTD, PANAGARH BAZAR, BUDBUD AS PER THE COMPLIANCES TO BE MADE WITH WEST BENGAL EXCISE (SUPPLY OF COUNTRY SPIRIT O N PAYMENT OF DUTY) RULES, 2005 AND IT IS A CREDIT TO THE AGENT OF THE STATE GOVERN MENT AND AS SUCH PAYMENTS ARE COVERED BY THE EXCEPTIONS CONTAINED IN RULE 6DD (B) OF INCOME TAX RULES, 1962. THE ITAT, KOLKATA BENCHES IN THE CASE OF AMRAI PACHWAI & C.S.SHOP VS DCIT (SUPRA) HELD THAT RULE 6DD(B) IS APPLICABLE THAT IF THE PAYMENTS MADE TO THE GOVERNMENT AGENT IN LEGAL TENDER UNDER THE RULES FRAMED BY IT AND CONSIDERING THE SAME AND TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANC ES OF THE CASE THAT THE ASSESSEE PURCHASED COUNTRY LIQUOR AND COUNTRY SPIRIT FROM TH E TERRITORIAL LICENSEE BOTTLING PLANT IFB AGRO INDUSTRIES LTD AND PAYMENTS IN CASH MADE T HERETO IS PROTECTED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF INCOME TAX RUL ES, 1962 AS PER THE NOTIFICATION ISSUED BY THE GOVERNMENT. IN VIEW OF THE SAME, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AS THE GROUNDS 1 TO 5 RAISED IN THE APPEAL BY THE REVENUE ARE DISMISSED. 7. IN VIEW OF ABOVE DISCUSSION AND FINDING OF CO-O RDINATE BENCH OF KOLKATA TRIBUNAL, WE FIND THE GOVERNMENT OF UTTAR PRADESH A PPOINTED M/S SARAYA DISTILLERY, SADAR NAGARA, GORAKHPUR, U.P. AS ITS AGENT AND THE ENTIRE PAYMENTS I.E. IMPUGNED AMOUNT PAID TO THE SAID AGENT IS TO BE TREATED AS I F PAID TO GOVERNMENT OF U.P AND AS SUCH SAID CASH PAYMENT ARE COVERED BY THE RULE 6DD( B) OF IT RULES, 1962. THEREFORE WE ARE NOT IN AGREEMENT WITH THE VIEW TAKEN BY AUTH ORITIES BELOW AND ADDITION ITA NO.2198-99/KOL/2016 A.Y. 2009-10 M/S SAVITRI DEVI, AMITA JAISWAL &, RAJESH KUMAR & ORS VS. DCIT, CIR-10, KOL. PAGE 4 CONFIRMED BY CIT(A) IS DELETED. GROUND NO.1 IS GENE RAL IN NATURE AND DOES NOT SURVIVE FOR ADJUDICATION. 8. GROUND NO.2 IS REGARDING REOPENING AND THERE WAS NO ARGUMENT ADVANCED IN THAT REGARD THEREFORE NO. 2 IS DISMISSED. 9. GROUND NO. 3 & 4 ARE ALLOWED AND GROUND NO 5 & 6 ARE IN GENERAL AND DO NOT SURVIVE FOR ADJUDICATION. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. COMING TO ITA NO.2199KOL/2016 11. LD. AR SUBMITS GROUNDS RAISED IN THIS APPEAL AR E SIMILAR TO THAT OF ITA NO.2198/KOL/2016 ON IDENTICAL FACTS. ON THE CONTRAR Y, LD. DR HAS NOT CONTROVERT THE SAME. SINCE MAIN ISSUE IN GROUND NO. 3 & 4 ARE DISC USSED IN AFORE-MENTIONED PARAGRAPH, WE DECIDE THE ISSUE IN FAVOUR OF ASSESSE E AND WE APPLY SAME RATIO IN THIS APPEAL ALSO. HENCE, GROUNDS RAISED BY ASSESSEE ARE ALLOWED. 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED PAR TLY. 13. IN COMBINE RESULT, BOTH APPEAL OF ASSESSEE ARE ALLO WED PARTLY. ORDER PRONOUNCED IN OPEN COURT ON 04/07/2018 SD/- SD/- ( ) (%& ) (J. SUDHAKAR REDDY) (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP ' - 04/07/2018 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S SAVITRI DEVI, AMITA JAISWAL & ORS./M/ S SAVITRI DEVI, RAJESH KUMAR & ORS, 7, RAJENDRA DEV ROAD, KOLKATA-700 007 2. /REVENUE-DCIT, CIRCLE-10, KOLKATA 3. * , / CONCERNED CIT 4. , - / CIT (A) 5. - &&* , * / DR, ITAT, KOLKATA 6. 1 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD O F OFFICE/DDO *,