ITO, Ward-1(1), Midnapore., Paschim Medinipur V. RIKTWIK KUMAR BERA, Paschim Medinipur

ITA 2316/KOL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5650 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-08-2013
• Court: TRIBUNAL
• Department Lawyers: VIVEK VERMA LD JCITSR DR
• Assessee Lawyers: SOMNATH GHOSH LD
• Section: 40A(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL, B ENCH- A KOLKATA ( ) BEFORE . , ! SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER '#$ /AND 1 & ' , ! SHRI GEORGE MATHAN, JUDICIAL MEMBER $( / ITA NO.2316/KOL/2013 A.Y 2010-11 I.T.O W 1(1), MIDNAPORE - #' - VERSUS . RIKTWIK KUMAR BERA PAN: AIBPB 8356 C.O NO. 137/KOL/2013 A/O ITA NO.2316/KOL/2013 A.Y 2010-11 RIKTWIK KUMAR BERA PAN: AIBPB 8356 - #' - - VERSUS - . I.T.O W 1(1), MIDNAPORE ( &* / APPELLANT ) ( +,&* / RESPONDENT ) &* .' / FOR THE APPELLANT / SHRI VIVEK VERMA, LD.JCIT/SR.DR +,&* .' / FOR THE RESPONDENT: / SHRI SOMNATH GHOSH, ADVOCATE,LD.AR /'#0 1 2 /DATE OF HEARING : 19-02-2014 34 1 2 /DATE OF PRONOUNCEMENT:21-02-2014 5 / ORDER 1 &' , ! SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 2316/KOL/2013 IS AN APPEAL FILED BY THE RE VENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), X XXVI, KOLKATA IN APPEAL NO. 257/CIT(A)-XXXVI/KOL/WD.1(1), MID/2012-13 DATED 19 -06-2013 FOR THE ASSESSMENT YEAR 2010-11 AND CO NO. 137/KOL/2013 IS A CROSS OB JECTION FILED BY THE ASSESSEE IN THE REVENUES APPEAL IN ITA NO. 2316/KOL/2013 FOR T HE ASSESSMENT YEAR 2010-11. 2. SHRI VIVEK VERMA, LEARNED JCIT/SR.DR REPRESENT ED ON BEHALF OF THE REVENUE AND SHRI SOMNATH GHOSH, ADVOCATE, LEARNED AR REPR ESENTED ON BEHALF OF THE ASSESSEE. ITA NO.2316/KOL/13 & CO NO.137/KOL/13- RIKTWIK KUMA R BERA 2 3. AT THE TIME OF HEARING BEFORE US THE LEARNED AR FOR THE ASSESSEE HAS SUBMITTED THAT HE DID NOT WISH TO PRESS THE CROSS OBJECTION F ILED BY THE ASSESSEE. CONSEQUENTLY, THE SAME STANDS DISMISSED BEING NOT PRESSED. 4. IN THE REVENUES APPEAL IN ITA NO. 2316/KOL/2013 FOR THE A.Y 2010-11, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - I. THE LD. CIT(A)-XXXVI, KOLKATA HAS ERRED IN DELET ING THE ADDITION OF RS.56,66,094/- MADE U/S. 40A(3) HOLDING THAT THE AS SESSEES CASE FALLS UNDER EXCEPTION CONTAINED IN RULE 6DD(B) OF T HE I.T RULES. II. THE REDUCTION OF DEMAND IN THE INSTANT CASE IS RS.17,50,825/- AND IN THE LIGHT OF THE BOARDS INSTRUCTION NO.3/20 11 DATED 09/02/2011, AS THE MONETARY LIMIT FOR FILING APPEA L BEFORE THE HONBLE ITAT, KOLKATA BENCHES IS RS. 3 LAKHS, CONSI DERING THE AFORESAID FACTS AN APPEAL BEFORE THE HONBLE ITAT KOLKATA BENCHES IS STRONGLY SUGGESTED IN THIS CASE. 5.. IT WAS THE SUBMISSION BY THE LEARNED JCIT/SR .DR THAT THE ISSUE IN THIS APPEAL WAS AGAINST THE ACTION OF THE LD.CIT(A) IN D ELETING THE DISALLOWANCE MADE BY THE AO OF THE CASH PURCHASES MADE BY THE ASSESSEE O F THE COUNTRY LIQUOR BY APPLYING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. IT WA S THE SUBMISSION THAT BEFORE THE AO THE ASSESSEE HAD SUBMITTED THAT THE EXCEPTION CONTA INED IN RULE 6DD(A) WAS APPLICABLE. IT WAS FURTHER SUBMITTED THAT, HOWEVER, BEFORE THE LD.CIT(A) THE ASSESSEE HAD CLAIMED THAT THE PROVISIONS OF RULE 6DD(B) OF T HE I T RULES WAS APPLICABLE. IT WAS THE SUBMISSION THAT AS THE PAYMENTS HAD BEEN MADE I N CASH IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT, THE LD.CI T(A) OUGHT NOT TO HAVE DELETED THE DISALLOWANCE MADE BY THE AO. 6. IN REPLY, THE LEARNED AR FOR THE ASSESSEE HAS SU BMITTED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ASHOK MONDAL VS. I.T.O, W 2(2), ASANSOL IN ITA NO.873/KOL/2012 DATED 06-02- 2014 FOR THE ASSESSMENT YEAR 2009-10 AS ALSO THE DE CISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. AMRAI PACHWAI & C.S SHOP VS. DCIT, CIR-1, DURGAPUR IN ITA NO.1251/KOL/2011 DATED 15-01-2014 F OR THE ASSESSMENT YEAR 2008- 09. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET A PERUSAL OF THE SUBMISSIONS OF THE LEARNED SR.DR THAT THE ASSESSEE HAS RAISED HIS EXCEPTION CLAIMING ITA NO.2316/KOL/13 & CO NO.137/KOL/13- RIKTWIK KUMA R BERA 3 UNDER RULE 6DD(A) OF THE I.T RULES AND THE TRIBUNAL AND THE LD.CIT(A) BOTH HAVE CONSIDERED THE RULE 6DD(B), WOULD NOT HOLD WATER I N SO FAR AS EXEMPTION PROVIDED IS IN RULE 6DD. THE VARIOUS CLAUSES OF THE SAID RULE WOULD HAVE TO BE CONSIDERED. EVEN OTHER WISE, THE SAID RULE IS NOT EXHAUSTIVE. F URTHER, A PERUSAL OF THE DECISIONS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASES OF ASHOK MONDOL (REFER TO SUPRA) AND M/S. AMRAI PACHWAI & C.S SHOP (REFER TO SUPRA) SHOWS THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL HELD AS FOLLOWS:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET A PERUSAL OF THE DECISION IN THE CASE OF SMT. PUSHPAL ATA MONDAL SHOWS THAT THE TRIBUNAL HAD DECIDED THE CASE BY FOLLOWING THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF K. ABDU & CO. REFERRED TO SUPRA WHEREIN THE ISSUE WAS IN RELATION TO RULE 6DD (A) OF IT RULES. THE ISSUE IN THE ASSESSEES CASE IS IN RESPECT OF T HE PAYMENTS MADE UNDER THE RULES FRAMED BY THE GOVERNMENT AND SUCH P AYMENT WAS REQUIRED TO BE MADE IN LEGAL TENDER. A PERUSAL OF THE GOVERNMENT NOTIFICATION ISSUED BY THE GOVT. OF WEST BENGAL CLE ARLY SHOWS THAT THE DEALERS ARE AGENTS OF THE GOVERNMENT AND THE P AYMENTS MADE ARE TO THE GOVERNMENT. IT ALSO MAKES IT CATEGORICAL LY REQUIRED THAT THE PAYMENT IS TO BE MADE BEFORE LIFTING OF THE C OUNTRY SPIRIT. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRI BUNAL IN THE CASE OF M/S. AMRAI PACHWAI & C.S SHOP REFERRED TO SUPRA WHEREIN IT HAS BEEN HELD AS FOLLOWS:- . 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS RECOGNISED THE ASSESSEES BUSINESS IN TRADING OF C OUNTRY SPIRIT AND COUNTRY LIQUOR. COPY OF FORM OF LICENCE ISSUED BY D URGAPUR MUNICIPAL CORPORATION AND COPY OF FORM III ISSUED B Y DEPARTMENT OF EXCISE, GOVT. OF W.B WERE ALSO FOUND AT PAGES 177 AND 179 OF THE ASSESSEES PAPER BOOK. IN ANY CASE THE VALIDITY OF LICENCE OF THE ASSESSEE TO TRADE IN COUNTRY SPIRIT AND COUNTRY LI QUOR IS NOT THE ISSUE BEFORE US. THE ISSUE IS WHETHER THE PAYMENTS MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY SPIRIT FROM T HE TERRITORIAL LICENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD, C ITY CENTRE, DURGAPUR. FALLS WITHIN THE EXEMPTION PROVIDED UNDER RULE 6DD(B) OF THE I.T RULES 1962. ADMITTEDLY, THE AO HAS RECOGNIS ED THAT THE PROVISION OF RULE 6DD(B) OF THE I.T RULES 1962 IS A PPLICABLE IN CASE OF PAYMENTS MADE TO GOVERNMENT DIRECTLY. THIS IS FO UND IN PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE KOLKATA GAZE TTE TUESDAY DATED 20 TH SEPT 2005 SHOWS THAT THE GOVERNMENT OF WEST BENGA L, DEPARTMENT OF EXCISE HAS ISSUED A NOTIFICATION, WHE REIN THE ITA NO.2316/KOL/13 & CO NO.137/KOL/13- RIKTWIK KUMA R BERA 4 WAREHOUSE HAS BEEN IDENTIFIED 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 S TATE GOVERNMENT, OR AT THE EXPENSE OF A PERSON TO WHOM T HE EXCLUSIVE PRIVILEGE OF SUPPLYING OR SELLING COUNTRY SPIRIT B Y WHOLESALE HAS BEEN GRANTED U/S. 22 OF THE ACT OF A LICENSED WHOLESALE VENDOR OF COUNTRY SPIRIT. FURTHER, IT HAS BEEN SPECIFICALLY IDENTI FIED THAT THE AUTHORISED REPRESENTATIVE OF THE WHOLESALE LICENSEE SHALL RE ALIZE THE NECESSARY AMOUNT OF DUTY, COST PRICE AND BOTTLING C HARGE, IF THERE BE ANY, AT THE PRESCRIBED RATE AND SUCH OTHER IMPOSITI ON, 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 SPECIFICALLY MENTIONED IN SECTION (2) OF THE SAID N OTIFICATION THAT NO RETAIL VENDOR OF COUNTRY SPIRIT SHALL DEPOSIT DUTY DIRECT INTO THE LOCAL TREASURY FOR ISSUE OF COUNTRY SPIRIT TO BE TAKEN B Y HIM FROM THE WAREHOUSE CONCERNED, WHICH CLEARLY SHOWS THAT THE W AREHOUSE IS FOR THE SUPPLY OF THE COUNTRY LIQUOR, SPECIFICALLY, THE WAREHOUSE IS UNDER THE DIRECT CONTROL AND CUSTODY OF THE STATE G OVT. THE STATE GOVERNMENT HAS CLOSED ITS DOORS IN SO FAR AS THE LO CAL TREASURY IS CONCERNED AND THE PAYMENT FOR THE PURCHASE OF COUNT RY 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 GOVE RNMENT, 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 GOV ERNMENT IN LEGAL TENDER UNDER THE RULES FRAMED BY THE GOVERNMENT, IS EXEMPTED FROM THE RIGOURS OF SECTION 40A(3) OF THE ACT. HERE , IT IS NOTICED THAT THE PAYMENTS MADE BY THE ASSESSEE FOR PURCHASE OF C OUNTRY 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 OF THE VIEW THAT THE P AYMENT MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY LIQUOR AND COUNTRY SPIRIT FROM THE TERRITORIAL LICENSEE BOTTLING PLANT, IFB A GRO INDUSTRIES LTD, CITY CENTRE, DURGAPUR IS PROTECTED BY THE EXEMPTIO N IN TERMS OF RULE 6DD(B) OF THE I.T RULES 1962. IN THE CIRCUMSTA NCES, 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. 7.1 AS IT IS NOTICED THAT THE ISSUE IS SQUARELY COV ERED BY THE SAID DECISIONS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, WHEREIN BOTH OF US ARE PARTY, RESPECTFULLY FOLLOWING THE SAID DECISIONS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, THE FINDING OF THE LD.CIT(A) ITA NO.2316/KOL/13 & CO NO.137/KOL/13- RIKTWIK KUMA R BERA 5 ON THIS ISSUE STANDS CONFIRMED. THE GROUNDS RAISED BY THE REVENUE ARE LIABLE TO BE DISMISSED. 8. IN THE RESULT, THE REVENUES APPEAL IN ITA NO.2 316/KOL/2013 AND THE ASSESSEES C.O NO. 137/KOL/2013 FOR THE ASSESSMENT YEAR 2010-11 STAND DISMISSED AS STATED ABOVE. 5 / 6 /' 7 8 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 21/02 /2014 SD/- SD/- ** PRADIP SPS 5 1 +..9 :94; / COPY OF THE ORDER FORWARDED TO: 1. . &* / THE APPELLANT : I.T.O, W 1(1), AMRAVATI, RAJA N .L KHAN RD, KERANITTOLA, P.O MIDNAPORE, PASCHIM MIDNAPORE-72110 1. 2 +,&* / THE RESPONDENT- SRI RIKTWIK KUMAR BERA PROP: M /S. TANTIGERIA C.S SHOP, TANTIGERIA P.O VIDYASAGAR UNIVERSITY, PASCHIM MIDNAPORE 721102. 3 4. . .5' / THE CIT, .5' ( )/ THE CIT(A) 5 . #<.7 +.' / DR, KOLKATA BENCH 6 . GUARD FILE . ,9 +./ TRUE COPY, 5'// BY ORDER, $ /ASSTT REGISTRAR ( . , ! ) ( ABRAHAM P.GEORGE, ACCOUNTANTMEMBER ( 1 & ' , ! ) ( GEORGE MATHAN, JUDICIAL MEMBER ) ( (( ( 2 2 2 2 ) )) ) DATE21/2/2014