Nayan Ranjan Dey, Hooghly V. Income Tax Officer, Ward - 2(1), Midnapore, Midnapore

ITA 2324/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83088 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2013
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU ADD L
• Keywords: Assessment record
• Section: 143(3); 133(6); 194C

Judgement Text

` , SMC(C) , IN THE INCOME TAX APPELLATE TRIBUNAL SMC(C) BENCH : KOLKATA () BEFORE , ) [BEFORE SHRI MAHAVIR SINGH, JM] / I.T.A NO.2324/KOL/2013 !'/ ASSESSMENT YEAR: 2009-10 NAYAN RANJAN DEY VS. INCOME-TAX OFFICER, WD-2(1 ), MIDNAPORE (PAN: ACPPD7054G) ($% /APPELLANT ) (&'$%/ RESPONDENT ) DATE OF HEARING: 21.08.2014 DATE OF PRONOUNCEMENT: 02.09.2014 FOR THE APPELLANT: SHRI SOMNATH GHOSH FOR THE RESPONDENT: SHRI DAVID Z. CHAWNGTHU, ADD L. CIT, SR. DR () / ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXVI, KOLKATA IN APPEAL NO. 488/CIT(A)-XXXVI/KOL/WD.2(1),MID./11-12 DATED 1 7.07.2013. ASSESSMENT WAS FRAMED BY ITO, WARD-2(1), MIDNAPORE U/S. 143(3) OF THE INC OME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2009-10 VIDE HIS ORDER DATED 2 0.12.2011. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ORDER OF AO DISALLOWING EXPENSES DEBITED TO THE P&L ACCOUNT ON ACCOUNT OF CARRIAGE IN WARD FOR NON-DEDUCTION OF TDS U/S. 194C OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NOS. 2 AND 3: 2. FOR THAT THE LD. CIT(A), KOLKATA FAILED TO APPR ECIATE THAT THE CONDITIONS PRECEDENT REQUIRED TO BE SATISFIED FOR THE APPLICATION OF THE PROVISIONS OF S. 40(A)(IA) OF THE I. T. ACT, 1961 WAS NOT COMPLIED WITH AND/OR FULFILLED BY THE LD. INCOME-TAX OFFICER, WARD 2(1), MIDNAPORE AND THE IMPUGNED ADDITION OF RS.2,3 3,500/- UPHELD ON THAT BEHALF IS COMPLETELY UNFOUNDED, UNJUSTIFIED AND UNTENABLE IN LAW. 3. FOR THAT THE LD. CIT(A)-XXXVI, KOLKATA WAS REMIS S IN UPHOLDING THE ALLEGED ADDITION IN THE SUM OF RS.2,33,800/- MADE U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 OUT OF EXPENSES DEBITED ON ACCOUNT OF CARRIAGE INWARD BY T HE LD. INCOME TAX OFFICER, WARD 2(1), MIDNAPORE MISREADING THE PROVISIONS OF S. 194 C(3) OF THE ACT AND HIS PURPORTED FINDING ON THAT BEHALF ARE WHOLLY ARBITRARY, UNREAS ONABLE AND PERVERSE. 3. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE DISALLOWANCE ON ACCOUNT OF CARRIAGE IN WARD EXPENSES DEBITED TO TRADING AND P&L ACCOUNT AT RS.2,33,800/- DUE TO FAILURE OF ASSESSEE TO DEDUCT TDS U/S. 194C OF THE ACT AND INVOKING PRO VISIONS OF SECTION 40(A)(IA) OF THE ACT. THE AO MADE DISALLOWANCE FOR THE REASON THAT NO EXP LANATION WAS FILED BY THE ASSESSEE DESPITE REPEATED REQUESTS. THE CIT(A) ALSO CONFIRMED THE A CTION OF AO BY OBSERVING AS UNDER: 2 ITA NO.2324/K/2013 NAYAN RANJAN DEY AY 09-10 4.3. DURING THE APPELLATE PROCEEDING IT IS STATED THAT THE LEDGER COPY OF CARRIAGE INWARDS WAS PRODUCED INDICATING INDIVIDUAL TRANSPOR T PAYMENT BELOW RS.20,000/- AND NO PAYMENT TO ANY PARTICULAR TRUCK OWNER DURING THE YEAR ABOVE RS.50,000/-. A COPY OF THE LEDGER WAS PRODUCED DURING APPELLATE PROCEEDING . HOWEVER ON GOING THROUGH THE COMPLETE ASSESSMENT RECORD, THERE IS NO EVIDENCE OF PRODUCTION OF SUCH A LEDGER COPY DURING ASSESSMENT PROCEEDING. IN SPITE OF REPEATED OPPORTUNITY GIVEN DURING ASSESSMENT PROCEEDING, NO SUCH EXPLANATION WITH EVIDENCE WAS F URNISHED. .. .. AS IS EVIDENT THAT NONE OF THE CONDITION MENTIONED ABOVE IS APPLICABLE IN THE CASE OF THE APPELLANT. THUS THE FRESH EVIDENCE AS PRODUCED DUR ING THE APPELLATE PROCEEDING, UNLESS ANY OF THE CONDITIONS AS ENUMERATED IN RULE 46A ARE PRESENT, CANNOT BE ACCEPTED BY CIT(A). THE APPELLANT DID NOT PRODUCE ANY DOCUMENTARY EVIDE NCE DURING THE COURSE OF ASSESSMENT PROCEEDING THAT THE INDIVIDUAL TRANSPORT PAYMENTS WERE BELOW RS.20,000/- AND THE CUMULATIVE TRANSPORT PAYMENT TO A TRUCK OWN ER DURING THE YEAR, WAS BELOW RS.50,000/-. UNDER SUCH CIRCUMSTANCES, IN ABSENCE OF TDS ON TRANSPORT PAYMENT THE A.O. HAS CORRECTLY APPLIED THE PROVISIONS OF 40(A)( IA) FOR MAKING THE ADDITIONS. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE TRIBUNA L. 4. THE ASSESSEE BEFORE ME ARGUED THAT THE ASSESSEE IS AN INDIVIDUAL AND THE RELEVANT ASSESSMENT YEAR INVOLVED IS 2009-10. HE STATED THA T THE TRANSPORT PAYMENT TO INDIVIDUAL TRUCK OWNER FOR CARRIAGE IN WARD EXPENSES IS BELOW RS.20, 000/- I.E. EACH PAYMENT AND THE CUMULATIVE TRANSPORT PAYMENT TO A TRUCK OWNER DURING THE YEAR IS BELOW RS.50,000/-. FOR THIS, HE PRODUCED THE COPY OF JOURNAL LEDGER ACCOUNT AS APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, WHICH IS ENCLOSED IN HIS PAPER BOOK AT PAGES 10 TO 14. A QUERY WAS RAISED THAT THE PAYMENT I.E. TRUCK WISE IS REFLECTED IN THE COPY OF LEDGER ACCOUNT OF CARRIAGE IN WARD PAID BY THE ASSESSEE AND HE WAS ASKED TO GIVE A CUMULATIVE PAYMENT CHART BEFORE RISE OF THE BENCH. HE SUBMITTED DETAILS WHICH READ AS UNDER: SUMMARY OF CARRIAGE IN WARD SL. TRUCK NO. AGGREGATE AMOUNT PAID IN FY 2008-09 1. WB 33 4936 RS. 19,500/- 2. WB 33A 7362 RS. 28,325/- 3. WB 33 3174 RS. 17,775/- 4. WB 33A 3603 RS. 16,875/- 5. WB 33A 5334 RS. 20,050/- 6. WB 33 5258 RS. 18,100/- 7. WGB 5639 RS. 20,575/- 8. WB 29 0428 RS. 21,250/- 9. WGB 5684 RS. 17,800/- 10. WB 33A 4200 RS. 16,875/- 11. WBA 2309 RS. 16,025/- 12. WGB 6983 RS. 20,650/- TOTAL PAYMENT: RS.2,33,800/- THE OBJECTION OF LD. SR. DR WAS THAT THIS IS A NEW EVIDENCE AS STATED BY CIT(A) IN HIS ORDER THAT THIS WAS NEVER PRODUCED BEFORE THE AO. ON FUR THER QUERY FROM THE BENCH, LD. COUNSEL FOR 3 ITA NO.2324/K/2013 NAYAN RANJAN DEY AY 09-10 THE ASSESSEE DREW OUR ATTENTION TO THE ASSESSMENT O RDER PAGE 2, WHEREIN THE AO OBSERVED THAT THE ASSESSEE APPEARED FROM TIME TO TIME AND THE STATEM ENT OF EXPENSES PRODUCED AS WELL AS INFORMATION COLLECTED U/S. 133(6) HAVE BEEN VERIFIE D WITH THAT OF BOOKS OF ACCOUNTS OF ASSESSEE FOR THE YEAR UNDER CONSIDERATION. IN VIEW OF THIS, LD. COUNSEL FOR THE ASSESSEE STATE D THAT THE COMPLETE BOOKS OF ACCOUNT, WHICH INCLUDES THIS LEDG ER STATEMENT WAS BEFORE THE AO. HENCE, NOTHING NEW WAS PRODUCED BEFORE THE CIT(A) OR BEFOR E TRIBUNAL NOW. HE CATEGORICALLY STATED. WE FIND FROM THE COPY OF JOURNAL LEDGER OF CARRIAGE IN WARD EXPENSES W.E.F. 01.04.2008 TO 31.03.2009 THAT THIS IS THE EXTRACT OF THE BOOKS OF ACCOUNT, WHICH WAS PRODUCED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY THE ASSESSEE. HENCE, THIS IS NOT A NEW EVIDENCE AND THERE IS NO VIOLATION OF THE PROVISIONS OF RULE 46A OF THE RULES AS CONTENDED BY LD. SR. DR AND ALSO NOTED BY CIT(A) IN HIS ORDER. ONCE THIS I S A FACT, I AM OF THE CONSIDERED VIEW THAT NONE OF THE PAYMENT EXCEEDS RS.20,000/- AT ONE TIME OR RS.50,000/- PER ANNUM TO ANY OF THE PARTY. HENCE, THE REQUIREMENT U/S. 194C(3)(I) OF T HE ACT IS THAT NO DEDUCTION SHALL BE MADE U/S. 194C(1) OR 194C(2) OF THE ACT FROM THE AMOUNT OF AN Y SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR O R SUB-CONTRACTOR, IF SUCH SUM DOES NOT EXCEEDS RS.20,000/-, WHEREAS THE FIRST PROVISO THEREOF REQU IRES THAT WHERE THE AGGREGATE OF THE AMOUNT OF SUCH SUM CREDITED OR PAID DURING THE RELEVANT PR EVIOUS YEAR EXCEEDS RS.50,000/- THE PERSONS RESPONSIBLE FOR PAYING SUCH SUM REFERRED TO IN SECT ION 194C(1) OR 194C(2) OF THE ACT SHALL BE LIABLE FOR DEDUCTION OF TAX UNDER THE PROVISION ACC ORDINGLY. PAYMENT EXCEEDING RS.20,000/- ON A SINGLE OCCASION AND AGGREGATE PAYMENT EXCEEDS RS. 50,000/- IN EACH CASE DURING THE RELEVANT PREVIOUS YEAR WILL TRIGGER THE PROVISION OF SECTION 194C OF THE ACT. BUT IN THE PRESENT CASE BEFORE US, BOTH CONDITIONS FAILED AND NONE OF PAYME NTS ARE EXCEEDING THE PRESCRIBED LIMIT. IN TERM OF THE ABOVE, I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TDS. HENCE, THERE IS NO QUESTION OF DISALLOWANCE BY INVO KING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. ACCORDINGLY, THIS ISSUE OF ASSESSEES APP EAL IS ALLOWED. 5. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF LOW HOUSEHOLD WITHDRAWAL AT RS.78,000/- . FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.4: FOR THAT THE LD. CIT(A),XXXVI, KOLKATA WAS WHOLLY IN ERROR IN UPHOLDING THE SPECIOUS ADDITION IN THE SUM OF RS.78,000/- MADE BY THE LD. INCOME TAX OFFICER, WARD 2(1), MIDNAPORE ON ACCOUNT OF ALLEGED LOW DRAWINGS WRONGL Y CONSTRUING THE CIRCUMSTANCES OF THE INSTANT CASE AND THE IMPUGNED FINDING IN THAT R ESPECT IS TOTALLY ILLEGAL, ILLEGITIMATE AND INFIRM IN LAW. 6. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE AO DURING THE COURSE OF ASSESSMENT PR OCEEDINGS MADE ADDITION ON ACCOUNT OF LOW HOUSEHOLD DRAWINGS AT RS.78,000/- BY OBSERVING AS U NDER: 4 ITA NO.2324/K/2013 NAYAN RANJAN DEY AY 09-10 FURTHER, THE ASSESSEE HAD SHOWN DRAWINGS OF RS.30 ,000/- ONLY FOR PERSONAL EXPENSES WHICH SEEMS TO BE TOO LOW CONSIDERING THE PREVAILIN G MARKET RATES AS WELL AS STANDARD OF LIVING OF THE ASSESSEE. THE ASSESSEE IS REQUESTED TO JUSTIFY HIS CLAIM OF LOW DRAWINGS WITH SUPPORTING PROOF OF EVIDENCE AS PER NOTING IN THE O RDER SHEET AS WELL AS VIDE THIS OFFICE SHOW CAUSE LETTER UNDER REFERENCE. HAVING NO EXPLAN ATION FROM THE ASSESSEE TILL DATE AND TAKING NOTE PREVAILING MARKET RATES AS WELL AS STA NDARD OF LIVING OF THE ASSESSEE, THE DRAWINGS SEEMS TO BE TOO LOW AND AS SUCH I ADD RS.7 8,000/- UNDER THE HEAD LOW DRAWINGS TO THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UN DER CONSIDERATION. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER: AS FAR AS THE DRAWINGS ARE CONCERNED INSPITE OF TH E REPEATED OPPORTUNITY PROVIDED, ASSESEE COULD NOT PRODUCE ANY EVIDENCE DURING THE C OURSE OF ASSESSMENT PROCEEING TO JUSTIFY THE LOW DRAWINGS. THUS THE A.O. ADDED A SU M OF RS.78,000/- WHICH IS CONSIDERED REASONABLE. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE TRIBUNA L. 7. I FIND FROM THE RECORDS THAT THE ASSESSEE PRODUC ED EVIDENCE BEFORE CIT(A) FOR THE FIRST TIME THAT OF DRAWING MADE BY HIS WIFE AT RS. 1 LAC. SHE HAS MADE DRAWINGS OF RS.1 LAC AS IS EVIDENT FROM THE DOCUMENTS PLACED BEFORE CIT(A) AND EVEN NOW BEFORE ME IN ASSESSEES PAPER BOOK. I FIND THAT THE CUMULATIVE DRAWINGS I.E. RS.3 0,000/- BY ASSESSEE AND RS. 1 LAC BY ASSESSEES WIFE IS QUITE SUFFICIENT TO MEET THE HOU SEHOLD EXPENSES OF THE ASSESSEE AS NARRATED BY THE AO BUT SINCE THIS DOCUMENT IS PRODUCED FIRST TI ME BEFORE CIT(A), I AM OF THE CONSIDERED VIEW THAT LET THE AO VERIFY THE VERACITY OF THIS DO CUMENT, WHETHER THE ASSESSEE HAS FILED THIS BEFORE THE AO AND WHERE SHE IS BEING ASSESSED. IN CASE, THE AO FINDS THAT THESE DOCUMENTS ARE AVAILABLE ALONGWITH THE RETURN OF INCOME OF ASSESSE ES WIFE, HE WILL DELETE THE ADDITION. IN TERM OF THE ABOVE, THIS ISSUE OF ASSESSEES APPEAL IS AL LOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. 9. ORDER PRONOUNCED IN OPEN COURT ON 02.09.2014 SD/- , (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 2ND SEPTEMBER, 2014 *+ ,- . JD.(SR.P.S.) 5 ITA NO.2324/K/2013 NAYAN RANJAN DEY AY 09-10 () / &0 1(0!2- COPY OF THE ORDER FORWARDED TO: 1 . $% / APPELLANT MR. NAYAN RANJAN DEY,C/O, SHRI SOMNATH GHOSH, ADVOCATE, SEVEN BROTHERS LODGE, P.O. BUROSHIBTALA, CHINSURAH, DIST. HOOGHLY, PIN-712105. 2 &'$% / RESPONDENT ITO, WARD-2(1), MIDNAPORE 3 . ) ( )/ THE CIT(A), KOLKATA 4. 5. ) / CIT KOLKATA 089 & / DR, KOLKATA BENCHES, KOLKATA '0 &/ TRUE COPY, ():/ BY ORDER, - /ASSTT. REGISTRAR .