Dy. Commissioner of Income Tax, Bareilly V. M/s Kisan Sahkari Chini Mills Ltd., Bareilly

ITA 236/LKW/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0565 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 06-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SHYAM LAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 236/LKW/2016 ASSESSMENT YEAR: 2012 - 13 DCIT CIRCLE 1 BAREILLY V. M/S KISAN SAHKARI C HINI MILLS LTD. SEMI KHERA BAREILLY T AN /PAN : AAAAK3453A (APP ELL ANT) (RESPONDENT) APPELLANT BY: SMT. ALKA SINGH, D.R. RESPONDENT BY: SHRI SHYAM LAL, FCA DATE OF HEARING: 07 12 201 7 DATE OF PRONOUNCEMENT: 08 12 201 7 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF THE LD. CIT(A), BAREILLY DATED 19/2/2016. 2 . THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT TO RS.3,77,55, 710/ - WHEREAS THE ASSESSING OFFICER HAD DISALLOWED RS.4,49,71,347/ - UNDER SECTION 40(A)(IA) OF THE ACT. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2012 - 13 ON 8/9/2012 SHOWING TOTAL LOSS OF RS.26,12,93,0 57/ - IN THE STATUS OF AOP. ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS MADE ON 30/1/2015 AT A LOSS OF [ ITA NO.236/LKW/2016 ] 2 RS.17,86,88,649/ - WHICH WAS ALLOWED TO BE CARRIED FORWARD ALONG WITH EARLIER YEAR LOSS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSE RVED FROM THE AUDIT REPORT THAT THE ASSESSEE HAS SHOWN OUTSTANDING AT RS.72,15,637.71 AS COMMISSION PAYABLE AND ALSO NOTICE D THAT DURING THE YEAR UNDER CONSIDERATION , ASSESSEE HAS CREDITED COMMISSION OF RS.3,77,55,710.12. THE ASSESSEE WAS REQUIRED TO EXPL AIN WHY THE AMOUNT SHOULD L NOT BE DISALLOWED , SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE ON THE COMMISSION. THE ASSESSEE WAS UNABLE TO GIVE SATISFACTORY EXPLANATION AND THE ASSESSING OFFICER DISALLOWED RS.4,49,71,347/ - . 4 . OUT OF THE TOTAL ADDITION OF R S.4,49,71,347/ - , THE LD. CIT(A) HAS PARTLY DELETED RS.3,77,55,710/ - . THE LD. CIT(A), AFTER CONSIDERING THE ORDER OF THE ASSESSING OFFICER AND THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT PAYMENT OF COMMISSION TO THE EXTENT OF RS.3,77,55,710/ - WAS PAID W ITHIN THE FINANCIAL YEAR AND ONLY RS.72,15,637.71 WAS PAYABLE AND RELYING UPON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES P. LTD., 357 ITR 642 (ALLD), HE DISALLOWED THE AMOUNT WHICH REMAINED PAYABLE I.E . RS.72,15,637.71 AND PROVIDED RELIEF OF THE PAID AMOUNT I.E. RS.3,77,55,710.12. 5 . AT THE TIME OF HEARING, THE LD. A.R. OF THE ASSESSEE P LACED BEFORE US THE RELE VANT EXTRACT OF THE SUGARCANE (SUPPLY & P URCHASE) ACT, 1953 AND SUBMITTED THAT ASSESSEES CASE IS COVERED WITHIN THE STATUTE. THOUGH VECTOR SHIPPINGS CASE DOES NOT HOLD GOOD, BUT ASSESSEE SHOULD BE CONSIDERED WITHIN THE STATUTE I.E. SUGAR CANE (SUPPLY & PURCHASE) ACT, 1953. [ ITA NO.236/LKW/2016 ] 3 6 . THE LD. D.R., ON THE OTHER HAND, BROUGHT TO OUR NOTICE THE DECISION OF THE H ON'BLE APEX COURT IN THE CASE OF M/S PALAM GAS SERVICE VS. CIT IN CIVIL APPEAL NO.5512/2017 (SC) WHEREIN THE HON'BLE APEX COURT , RELYING UPON THE DECISION OF THE HON'BLE HIGH COURTS OF PUNJAB & HARYANA, MADRAS AND CALCUTTA , OVERRULED THE JUDGMENT OF THE HO N'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES P. LTD. (SUPRA) HOLDING THAT SECTION 40(A)(IA) OF THE ACT WOULD ONLY APPLY TO THE AMOUNT PAYABLE WOULD NOT BE A CORRECT VIEW AND WILL GO AGAINST THE INTENT OF THE STATUTORY FRAMEWOR K OF THE INCOME - TAX ACT IN REFERENCE TO SECTION 40(A)(IA) OF THE ACT. 7 . WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS AND WE APPRECIATE THAT THE RULING OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES P. LTD . (SUPRA) HAVE BEEN OVERRULED BY THE HON'BLE APEX COURT IN THE CASE OF M/S PALAM GAS SERVICE VS. CIT (SUPRA) UPHOLDING THE OBSERVATIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT, MADRAS HIGH COURT AND CALCUTTA HIGH COURT, BUT AT THE SAME TIME , THE LD. A.R . OF THE ASSESSEE HAS PRODUCED BEFORE US THE EXTRACT OF THE STATUTE WHEREIN HE SUBMITTED THAT THE CASE OF THE ASSESSEE WOULD BE COVERED WITHIN THE AMBIT OF SUGAR CANE (SUPPLY & PURCHASE) ACT, 1953. THE LD. A.R. OF THE ASSESSEE ADMITTED THAT THIS FACT WAS NOT PLACED BEFORE THE LD. CIT(A) DURING THE APPELLATE PROCEEDINGS. IN THIS VIEW OF THE MATTER AND IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED VIEW AND WE HOLD THAT THE ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE AND THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) TO ADJUDICATE IT AFRESH IN VIEW OF THE RECENT JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF M/S PALAM GAS SERVICE VS. CIT (SUPRA) AND ALSO TAKING INTO CONSIDERATION SUGAR CANE (SUPPLY & PURCHASE) ACT, [ ITA NO.236/LKW/2016 ] 4 1953, AS SUBMITT ED BY THE ASSESSEE , AFTER A FFO RDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8/12/ 201 7 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH DECEMBER , 2017 JJ: 0712 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR