Prabhakar Mishra, Kolkata V. DCIT, Circle-44, Kolkata, Kolkata

ITA 2255/KOL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4976 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 29-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANDEEP LAKRA
• Keywords: Business income; Additional evidence
• Section: 40A(3); 194C; 201(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI A T VARKEY, JM, & SHRI M.BAL AGANESH, AM] I.T.A NO. 2255/KOL/20 16 ASSESSMENT YEAR : 2012-1 3 PRABHAKAR MISHRA -VS- DCIT, CIRCLE-44, K OLKATA [PAN: AEZPM 7452 B ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ANIL KOCHAR, ADVOCATE FOR THE RESPONDENT : SHRI SANDEEP LAKRA, ADDL . CIT SR. DR DATE OF HEARING : 25.09.2018 DATE OF PRONOUNCEMENT : 24.10.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-13, KOLKATA [IN SHORT THE LD CI T(A)] IN APPEAL NO. 1131/CIT(A)- 13/KOL/CIR-44/2014-15 DATED 08.08.2016 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE- 44, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 14 3(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27.02.2015 FOR THE ASSESSM ENT YEAR 2012-13. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE IN THE SUM OF RS 2, 22,42,000/- TOWARDS UNEXPLAINED DEPOSITS IN BANK ACCOUNT, IN THE FACTS AND CIRCUMST ANCES OF THE CASE. 2 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 2 2.1. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASS ESSEE IS AN INDIVIDUAL AND HAD FILED HIS RETURN OF INCOME FOR THE ASST YEAR 2012-13 ON 29.9. 2012 DECLARING TOTAL INCOME OF RS 14,05,670/-. THE ASSESSEE IS ENGAGED IN THE BUSINE SS OF WHOLESALE AND RETAIL BUSINESS OF IRON AND STEEL IN THE NAME OF PROPRIETORY CONCERN S TYLED AS M/S UNIVERSAL TRADING CORPORATION. THE ASSESSEE FURNISHED THE TAX AUDIT REPORT BEFORE THE LD AO WHEREIN TOTAL SALES OF RS 163,59,55,699/- ; GROSS PROFIT OF RS 2,55,83,199/- DURING THE YEAR. IN THE IMMEDIATELY PRECEDING YEAR, THE ASSESSEE HAD RE PORTED GROSS PROFIT OF RS 1,02,43,110/- ON TOTAL SALES OF RS 108,06,60,762/-. THE GROSS PROFIT RATE OF THIS YEAR WAS 1.56% AS AGAINST 0.95 % IN THE PRECEDING ASSESSMENT YEAR. THE LD AO OBSERVED THAT BANK STATEMENTS, BILLS/VOUCHERS AND BOOKS OF ACCOUN TS WERE NOT PRODUCED DESPITE SEVERAL OPPORTUNITIES GRANTED TO THE ASSESSEE. THE ASSESSEE WAS SPECIFICALLY ASKED TO EXPLAIN THE SOURCE OF HUGE CASH DEPOSITS IN VARIOUS BANKS AS PER INDIVIDUAL TRANSACTION STATEMENT (ITS) , A COPY OF WHICH WAS GIVEN TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. TH E LD AO OBSERVED THAT NO EXPLANATION WAS OFFERED REGARDING THE SOURCE OF CAS H DEPOSITS IN BANK ACCOUNTS. THE LD AO OBSERVED THAT ASSESSEE PRODUCED ONLY DETAILS OF PURCHASE ACCOUNT, SALE ACCOUNT, STACKING EXPENSES, LOADING & UNLOADING EXPENSES, CA RRIAGE INWARD EXPENSES TOGETHER WITH SOME VOUCHERS RELATING TO THE SAID EXPENSES. T HE CASH BOOK, BANK BOOK. LEDGER, STOCK REGISTERS WERE NOT FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE LD AO OBSERVED THAT ASSESSEE HAD MADE CASH DEPO SITS IN SAVINGS BANK ACCOUNTS MAINTAINED WITH UNION BANK OF INDIA, BURRA BUZAR VI DE ACCOUNT NO. 416902010005887 AND IN ORIENTAL BANK OF COMMERCE, R .N.MUKHERJEE ROAD , KOLKATA VIDE ACCOUNT NO. 11012151003928. THE LD AO OBSERV ED THAT THE ASSESSEE HAD MADE DEPOSITS AS UNDER:- 3 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 3 UBI ORIENTAL BANK OF COMMERCE CASH DEPOSITS 52,92,000 2,15,50,000 CHEQUE DEPOSITS 8,42,025 61,41,000 THE ASSESSEE REPLIED THAT RS 19,00,000/- WAS WITHDR AWN IN CASH FROM UNION BANK OF INDIA AND RS 27,00,000/- FROM ORIENTAL BANK OF COMM ERCE AND THE BALANCE AMOUNT SHOWN AS WITHDRAWN FROM UNIVERSAL TRADING CORPORATI ON . BUT NO EVIDENCE OF THIS AMOUNT SHOWN AS WITHDRAWN FROM UNIVERSAL TRADING CO RPORATION I.E. CASH BOOK., SALE BILLS, DETAILED CAPITAL ACCOUNT, NAME AND ADDRESS O F THE PARTIES WITH THEIR COMPLETE CORRESPONDENCE ADDRESS, PAN, COPY OF ACKNOWLEDGEMEN T OF INCOME TAX RETURNS WHO HAVE MADE PAYMENTS TO ASSESSEE IN CASH, WERE FILED FOR VERIFICATION. IN THE ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE CORROBORATED WITH BOOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS, THE LD AO SHOW CAUSED THE ASSESSEE AS TO WHY THE ASSESSMENT SHOULD NOT BE FRAMED U/S 144 OF THE ACT BY TREATING THE UNEXPLAIN ED DEPOSITS IN BANK ACCOUNTS AS INCOME OF THE ASSESSEE, AMONG OTHER ISSUES. THE LD AO ACCORDINGLY SOUGHT TO ACCEPT THE CHEQUE DEPOSITS AS GENUINE AND PART OF BUSINESS PROCEEDS. HE HOWEVER PROCEEDED TO ADD THE CASH DEPOSITS IN SAVINGS BANK ACCOUNTS TO T HE TUNE OF RS 2,22,42,000/- (2,68,42,000 46,00,000) AFTER GIVING CREDIT FOR C ASH WITHDRAWALS OF RS 46,00,000/- . 2.2. BEFORE THE LD CITA, THE ASSESSEE SUBMITTED THA T HE HAD FROM TIME TO TIME MADE WITHDRAWALS FROM THE PROPRIETORY CONCERN M/S UNIVER SAL TRADING CORPORATION WHICH ARE DULY RECORDED IN THE BOOKS OF PROPRIETORY CONCERN A S WITHDRAWALS BY THE ASSESSEE AND THAT THE SAME WERE DEPOSITED IN THE PERSONAL SAVING S BANK ACCOUNTS OF THE ASSESSEE. THEREAFTER CHEQUES WERE ISSUED BY THE ASSESSEE TO A PARTNERSHIP FIRM M/S R.J.MISHRA & CO. , WHERE HE IS A PARTNER. THE ASSESSEE FURNISH ED THE FOLLOWING DOCUMENTS BEFORE THE LD CITA :- A) DETAILS OF CASH WITHDRAWALS FROM THE PERSONAL BO OKS STATING DATE AND AMOUNTS. B) DEPOSITS MADE IN BANK ACCOUNTS WHICH ARE DULY RE FERABLE TO THE BANK STATEMENTS. 4 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 4 C) WITHDRAWALS MADE FROM THE BANK ACCOUNTS FOR DEPO SITING IN ASSESSEES CAPITAL ACCOUNT WITH M/S R.J.MISHRA & CO. WHERE THE ASSESSE E IS A PARTNER. 2.3. THE LD CITA CALLED FOR A REMAND REPORT FROM TH E LD AO. THE LD CITA OBSERVED THAT THE ASSESSEE HAD INTRODUCED CAPITAL IN FIRM M/ S R.J.MISHRA & CO. TO THE EXTENT OF RS 2,02,15,374/-. THE INCOME TAX ASSESSMENT OF M/S R. J.MISHRA & CO. WAS MADE AND THE SOURCE OF CAPITAL INTRODUCED BY ASSESSEE WAS EXAMIN ED AND TREATED AS UNEXPLAINED AND ACCORDINGLY, ADDITION WAS MADE IN THE HANDS OF THE FIRM. THE LD CITA HELD THAT ASSESSEE COULD NOT PROPERLY EXPLAIN THE SOURCES OF CASH DEPOSITS AND ACCORDINGLY CONFIRMED THE ADDITION. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 2.4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT THE LD CITA HAD RELIED ON THE REMAND REPORT FURNISHED BY THE LD AO WHEREIN THE AS SESSMENT FRAMED IN THE HANDS OF A PARTNERSHIP FIRM M/S R.J.MISHRA & CO. REGARDING THE CAPITAL CONTRIBUTION MADE THEREIN BY THE ASSESSEE WAS DISCUSSED. THE LD AR STATED TH AT NO ADDITION IS REQUIRED TO BE MADE IN THE INSTANT CASE AS THE ENTIRE CASH DEPOSITS ARE EXPLAINABLE BY WAY OF WITHDRAWALS FROM PROPRIETORY CONCERN. HE ALSO PLEADED THAT THE ENTIRE TRANSACTIONS OF ASSESSEE INCLUDING ITS PROPRIETORY CONCERN VIS A VIS THE CAP ITAL ACCOUNT OF M/S R.J.MISHRA & CO. ARE TO BE KEPT TOGETHER AND THE ISSUE BEFORE US IS TO BE LOOKED INTO. ACCORDINGLY HE PRAYED FOR SETTING ASIDE OF THIS ISSUE TO THE FILE OF LD AO. THE LD DR FAIRLY AGREED FOR THE SETTING ASIDE TO THE FILE OF LD AO. HENCE IN T HE INTEREST OF JUSTICE AND FAIRPLAY, WE DEEM IT FIT AND APPROPRIATE, TO REMAND THIS ISSUE T O THE FILE OF LD AO FOR DENOVO ADJUDICATION OF THE ISSUE AND DECIDE THE SAME UNINF LUENCED BY EARLIER DECISION TAKEN IN THIS REGARD. ACCORDINGLY, THE GROUNDS 3 & 4 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 5 3. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF INTEREST IN THE SU M OF RS 26,51,363/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE LD AO OBSERVED THAT THE ASSESSEE HAD PAID INTEREST ON LOANS AND CLAIMED THE SAME AS DEDUCTION IN THE PROFIT AND LOSS ACCOUNT. ON THE OTHER HAND, HE HAS ADVANCED INTEREST FREE LOANS AND ADVANCES TO VARIOUS PERSONS. ACCORDINGLY THE LD AO DISALLOWED INTEREST U/S 36(1) (III) OF THE ACT ON PROPORTIONATE BASIS IN THE SUM OF RS 26,51,363/- TO THE EXTENT OF AMOUNTS ADVANCED TO VARIOUS PERSONS FREE OF INTEREST. BEFORE THE LD CITA, THE ASSESSEE PLEADED IT HAD SUFFICIENT INTEREST FREE FUNDS AT ITS DISPOSAL AND THAT INTEREST FREE ADVANC ES WERE GIVEN TO VARIOUS PERSONS NOT OUT OF INTEREST BEARING FUNDS. HENCE HE PLEADED TH AT NO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT IN THE FACTS OF THE INSTANT C ASE. THE DETAILS OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE AND INTEREST FREE ADVAN CES GIVEN TO VARIOUS PARTIES ARE AS UNDER:- CAPITAL ACCOUNT - RS 15,42,800 ADVANCE FROM CUSTOMERS - RS 30,29,75,034 INTEREST FREE ADVANCES GIVEN BY ASSESSEE - RS 17 ,48,29,409 THE ASSESSEE ALSO PLEADED THAT BOTH BORROWED FUNDS AND OWN FUNDS (INTEREST FREE FUNDS) ARE INEXTRICABLY MIXED IN THE SAME BANK ACCOUNT AND IT WOULD BE DIFFICULT TO IDENTIFY WHETHER THE INTEREST FREE ADVANCES WERE GIVEN BY TH E ASSESSEE OUT OF INTEREST BEARING FUNDS OR OUT OF OWN FUNDS. THE LD CITA PLACED RE LIANCE ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS A BHISHEK INDUSTRIES LTD REPORTED IN 286 ITR 1 (P&H HC) AND HONBLE DELHI HIGH COURT IN THE CASE OF PUNJAB STAINLESS STEEL LIMITED REPORTED IN 324 ITR 396 (DEL) AND UPH ELD THE ACTION OF THE LD AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 6 3.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OU TSET, WE FIND THAT THE ASSESSEE IS HAVING SUFFICIENT INTEREST FREE FUNDS AT ITS KITTY AS IS EVIDENT FROM THE BALANCE SHEET OF THE ASSESSEE. SINCE THE INTEREST FREE FUNDS AVAILA BLE WITH THE ASSESSEE IS MUCH MORE THAN INTEREST FREE ADVANCES GIVEN BY THE ASSESSEE, THERE COULD BE NO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT. RELIANCE IN THIS REGARD HAS BEEN RIGHTLY PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MUNJAL SALE S CORPN VS CIT REPORTED IN 298 ITR 298 (SC) ; S A BUILDERS LTD VS CIT REPORTED IN 288 ITR 1 (SC) ; HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS BRI TANNIA INDUSTRIES LTD REPORTED IN 280 ITR 525 (CAL) ; HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS RELIANCE UTILITIES AND POWER LTD REPORTED IN 313 ITR 340 (BOM) ; HON BLE GUJARAT HIGH COURT IN THE CASE OF PRINCIPAL CIT VS INDIA GELATINE AND CHEMICA LS LTD (2015) 376 ITR 553 (GUJ) ; HONBLE ANDHRAPRADESH HIGH COURT IN THE CASE OF CIT VS GOPALAKRISHNA MURALIDHAR REPORTED IN 47 ITR 469 (AP) ; HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF WOOLCOMBERS OF INDIA LTD VS CIT REPORTED IN 134 ITR 219 (CAL) ; HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS HOTEL SAVERA REPOR TED IN 239 ITR 795 (MAD) AND HONBLE GUJARAT HIGH COURT IN THE CASE OF SHREE DI GVIJAY CEMENT CO. LTD VS CIT REPORTED IN 138 ITR 45 (GUJ), AMONG OTHERS. RESPE CTFULLY FOLLOWING THE RATIO LAID DOWN IN THE SAID JUDICIAL PRECEDENTS, WE DIRECT THE LD AO TO DELETE THE DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT IN THE SUM OF RS 26,51,363/- . ACCORDINGLY, THE GROUND NO. 5 RAISED BY THE ASSESSEE IS ALLOWED. 4. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS 41,36,742/- ON ESTIMATED BASIS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE LD AO OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESEE FILED CERTAIN V OUCHERS IN RESPECT OF CARRIAGE INWARD 7 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 7 EXPENSES , LOADING AND UNLOADING EXPENSES AND STACK ING CHARGES. THE LD AO OBSERVED THAT THOSE VOUCHERS WERE PRIMA FACIE DEFECTIVE AS I T APPEARED TO HAVE BEEN PREPARED ON A SINGLE DAY. THE ASSESSEE HAD DEBITED IN ITS TRADI NG AND P&L ACCOUNT , THE FOLLOWING MAJOR EXPENSES :- CARRIAGE INWARD - RS 1,19,85,006/- LOADING & UNLOADING EXPENSES - RS 90,12,594/- STACKING CHARGES - RS 2,03,69,825/- THE LD AO OBSERVED THAT :- A) THE VOUCHERS SUBMITTED BY THE ASSESSEE DID NOT C ONTAIN THE ADDRESS OF THE PAYEES, THEIR CONTACT NUMBERS ETC. B) THE VOUCHERS DID NOT CONTAIN ANY SERIAL NUMBERS. MOREOVER, THESE AMOUNTS WERE LESS THAN RS 20,000/- ON A SINGLE DAY TO AVOID THE RIGOURS OF PROVISIONS OF SECTION 40A(3) OF THE ACT. C) THE VOUCHERS DO NOT CONTAIN ANY VEHICLE NUMBER E TC. ALL THESE FACTORS PROVE THAT THESE EXPENSES CAN NEV ER BE VERIFIED BY ANY AUTHORITY. THE LD AO OBSERVED THAT NO REPLY WAS FILED BY THE ASSES SEE IN THIS REGARD AND ACCORDINGLY PROCEEDED TO DISALLOW 10% OF AFORESAID EXPENDITURE IN THE SUM OF RS 41,36,742/- IN THE ASSESSMENT. THIS WAS UPHELD BY THE LD CITA. AGGRIEV ED, THE ASSESSEE IS IN APPEAL BEFORE US. 4.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSEE HAD NOT FURNISHED ANY DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF EXPENDITURE BEFORE THE LD AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS OR IN THE REMAN D PROCEEDINGS. EVEN BEFORE US, NO FURTHER DOCUMENTS WERE SUBMITTED BY THE ASSESSEE. WE ALSO FIND THAT THE ASSESSEE HAD NOT FURNISHED ANY BOOKS OF ACCOUNTS BEFORE THE LD A O DESPITE SEVERAL OPPORTUNITIES. ACCORDINGLY, THERE IS NO QUESTION OF REJECTION OF A NY BOOKS OF ACCOUNTS. WE FIND THAT THE LD AO HAVING FOUND SOME DEFECTS IN THE VOUCHERS SUBMITTED BY THE ASSESSEE IN 8 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 8 RESPECT OF AFORESAID EXPENDITURE PARTIALLY, DECIDED TO ESTIMATE THE DISALLOWANCE AT 10% OF SUCH EXPENDITURE WHICH IN OUR CONSIDERED OPINION , SEEMS TO BE REASONABLE. HENCE WE HOLD THAT THE LD CITA WAS JUSTIFIED IN UPHOLDING TH E DISALLOWANCE OF 10% OF SUCH EXPENDITURE ON AN ESTIMATED BASIS IN THE PECULIAR F ACTS OF THE INSTANT CASE. ACCORDINGLY, THE GROUND NO. 6 RAISED BY THE ASSESSEE IS DISMISSE D. 5. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT IN THE SUM OF RS 5,91,594/- FOR VIOLATION OF PROVISIONS OF SECTION 194C OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.1. THE LD AO OBSERVED THAT THE ASSESSEE PAID STAC KING CHARGES OF RS 5,91,594/- TO SHRI ARJUN YADAV ON VARIOUS DATES DURING THE YEAR. SINC E THE TOTAL AMOUNT PAID IN AGGREGATE EXCEEDS THE LIMIT PRESCRIBED U/S 194C OF THE ACT, T HE ASSESSEE IS BOUND TO DEDUCT TAX AT SOURCE THEREON, FOR VIOLATION OF WHICH, THE LD AO D ISALLOWED THE EXPENDITURE OF RS 5,91,594/- U/S 40(A)(IA) OF THE ACT. BEFORE THE LD CITA, THE ASSESSEE SUBMITTED THAT THERE IS NO CONTRACTUAL AGREEMENT IN THE MATTER WHICH WOU LD GIVE RISE TO THE DISALLOWANCE AS MADE BY THE LD AO ON ACCOUNT OF NON-DEDUCTION OF TD S. ACCORDINGLY, IT WAS PLEADED THAT SECTION 194C PER SE IS NOT APPLICABLE TO THE F ACTS OF THE INSTANT CASE. THIS WAS REJECTED BY THE LD CITA AS NO EVIDENCE WAS SUBMITTE D BY THE ASSESSEE TO PROVE HIS CONTENTIONS. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE TO PROVE THAT THERE WAS NO E XISTENCE OF ANY CONTRACT BETWEEN HIM AND SHRI ARJUN YADAV ENABLING PAYMENT OF STACKI NG CHARGES. BEFORE US, THE LD AR ARGUED THAT LET THIS ISSUE BE RESTORED BACK TO THE FILE OF LD AO TO VERIFY THE FACT OF INCLUSION OF THE SUBJECT MENTIONED RECEIPTS IN THE INCOME OF THE PAYEE (I.E SHRI ARJUN YADAV) AND ONCE IT IS DONE, THE ASSESSEE SHOULD NOT BE FASTENED WITH DISALLOWANCE U/S 9 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 9 40(A)(IA) OF THE ACT IN THE LIGHT OF SECOND PROVISO TO SECTION 40(A)(IA) READ WITH SECTION 201(1) OF THE ACT WHICH ALTHOUGH WAS INTRODUCED BY THE FINANCE ACT 2012 HAS BEEN HELD TO BE RETROSPECTIVE IN OPERATION BY THE DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL CIT VS TIRUPATI CONS TRUCTION GA NO. 2146 OF 2016 WITH ITAT NO. 287 OF 2016 DATED 23.8.2016 . HENCE IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE DEEM IT FIT AND APPROPRIATE TO REMAND THIS ISSUE TO THE FILE OF LD AO FOR DE NOVO ADJUDICATION IN THE LIGHT OF SECOND PROVISO TO SECT ION 40(A)(IA) READ WITH SECTION 201(1) OF THE ACT. THE ASSESSEE IS ALSO AT LIBERTY TO FURN ISH ADDITIONAL EVIDENCES , IF ANY, IN SUPPORT OF HIS CONTENTIONS. ACCORDINGLY, THE GROUN D NO. 7 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. THE GROUNDS 1 , 2 & 9 RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 7. THE GROUND NO. 8 RAISED BY THE ASSESSEE REGARDIN G THE DISALLOWANCE U/S 40A(3) OF THE ACT WAS STATED TO BE NOT PRESSED BY THE LD AR AT TH E TIME OF HEARING FOR WHICH NECESSARY ENDORSEMENT WAS MADE IN OUR FILE. THE SAME IS RECK ONED AS A STATEMENT FROM THE BAR AND ACCORDINGLY GROUND NO. 8 RAISED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 24.10. 2018 SD/- SD/- [A T VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24.10.2018 SB, SR. PS 10 ITA NO.2255/KOL/2016 PRABHAKAR MISHRA A.YR. 2012-13 10 COPY OF THE ORDER FORWARDED TO: 1. PRABHAKAR MISHRA, C/O, S.L. KOCHAR, ADVOCATE, 86 , CANNING STREET, KOLKATA-1. 2. DCIT, CIRCLE-44, KOLKATA, 3, GOVT. PLACE WEST, K OLKATA-700001. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES