Achintyesh Chandra Bhattacharya, Kolkata V. A.C.I.T, Circle-41, Kolkata., Kolkata

ITA 2433/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1611 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 08-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: S JHAJHARIA

Judgement Text

1 ITA NO.2433/KOL/2013 ACHINTYESH CHANDRA BHATTACHARYA, AY 2006-07 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] / I.T.A NO. 2433/KOL/2013 ! ' / ASSESSMENT YEAR: 2006-07 ACHINTYESH CHANDRA BHATTACHARYA (PAN: AEEPB1974Q) VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-41, KOLKATA. ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING 19.06.2017 DATE OF PRONOUNCEMENT 23.08.2017 FOR THE APPELLANT/ SHRI S. JHAJHARIA, FCA FOR THE RESPONDENT/ N O N E / ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-XII, KOLKATA DATED 26.07.2013 FOR AY 2006-07. NEITHER ANY OFFICE R APPEARED FOR REVENUE NOR MOVED ANY APPLICATION FOR ADJOURNMENT. AFTER GOING THROUGH TH E RECORDS BEFORE US, WE ARE INCLINED TO ADJUDICATE AFTER HEARING THE LD. AR. 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE DOES NOT WANT TO PRESS GROUND NOS. 1 AND 2, SO THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 3. THE GROUND NO. 3 IS IN RESPECT TO THE ACTION OF THE LD. CIT(A) OF TREATING THE OUTSTANDING LIABILITY OF LOADING AND UNLOADING EXPE NSES OF RS.4,14,171/- OUT OF THE TOTAL LIABILITY OF RS.21,50,850/- AS INCOME OF THE ASSESS EE. 4. THE ASSESSEE DERIVES ITS INCOME MAINLY FROM ITS PROPRIETORSHIP CONCERN M/S. BHATTACHARYA & CO., A CLEARING AND FORWARDING AGENT ENGAGED IN PROVIDING SERVICES TO EXPORTERS OF MERCHANDISE TO BANGLADESH AND IMPORTER S OF MERCHANDISE FROM BANGLADESH AT 2 ITA NO.2433/KOL/2013 ACHINTYESH CHANDRA BHATTACHARYA, AY 2006-07 INDO BANGLADESH BORDER THROUGH ROAD TRANSPORT. THE ASSESSEE IS ALSO A WORKING PARTNER IN A PARTNERSHIP FIRM NAMED AND STYLED BENGAL NATIONAL A GENCY. THE AO OBSERVED THAT THE ASSESSEE HAD FILED RETURN OF INCOME DISCLOSING TOTA L INCOME OF RS.9,90,520/-. LATER THE CASE WAS TAKEN UP FOR SCRUTINY. THE AO DURING THE ASSES SMENT PROCEEDINGS NOTED THAT A SUM OF RS.21,50,850/- WAS SHOWN AS OUTSTANDING LIABILITY A S ON 31.03.2006. ACCORDING TO THE AO, NO DETAILS OF OUTSTANDING LIABILITY OF CLEARING AND FORWARDING HAVE BEEN FILED BEFORE HIM. THE AO VERIFIED BILLS/VOUCHERS AND FOUND THAT ALL E XPENSES ON THOSE HEAD ARE MADE BY MAKING PAYMENT BY CASH RESTRICTING IT BELOW THE TH RESHOLD OF RS.20,000/- THROUGH THE EMPLOYEES NAMELY, SHRI ASHISH DAS, SHRI PRADIP DAS AND SHRI SANJAY SARKAR AND WERE SUPPORTED BY SELF MADE VOUCHERS. THE AO NOTED THAT IN THE VOUCHERS SIGNATURES OF THE EMPLOYEES RECEIVING THE AMOUNT ON ACCOUNT OF THE AB OVE EXPENDITURE FROM THE ASSESSEE HAS BEEN TAKEN IN EACH VOUCHER. HOWEVER, ON CERTAIN VO UCHERS THE SIGNATURE OF THE RECIPIENT EMPLOYEES WAS NOT FOUND. SO, HE NOTED THE VOUCHERS WHERE SIGNATURE OF THE RECIPIENT EMPLOYEE WAS NOT FOUND AND HE MADE A TABLE WHICH IS FOUND IN PAGE 2 AND 3 OF THE AOS ORDER AND COMPUTED THE TOTAL AMOUNT AS RS.4,14,171/ - AND DISALLOWED THE SAME. 5. ON APPEAL, THE LD. CIT(A) CALLED FOR REMAND REPO RT FROM AO AND THEREAFTER HE NOTED THAT DURING REMAND PROCEEDINGS ALSO THE ASSESSEE CO ULD NOT PROVE THAT THE PAYMENTS WERE ACTUALLY MADE. IT WAS NOTED DURING THE REMAND PROC EEDINGS THAT THE RECORDS IN RESPECT TO THE ACTUAL PAYEES WERE MAINTAINED AT THE OFFICE OF THE ASSESSEE SITUATED AT THE BORDER OF BANGLADESH FROM WHERE GOODS ARE EXPORTED THROUGH TR UCKS TO BANGLADESH. ACCORDING TO LD. CIT(A), SINCE THE ASSESSEE COULD NOT FILE SUPPORTIN G EVIDENCE FOR THE EXPENDITURE CLAIMED EVEN DURING THE REMAND PROCEEDINGS AND THE AFFIDAVI T OF THREE EMPLOYEES BEING SELF SERVING CANNOT BE GIVEN CREDENCE FOR SUPPORTING THE CLAIM O F THE ASSESSEE, SO HE CONFIRMED THE ADDITION. AGGRIEVED THE ASSESSEE IS BEFORE US. 6. WE HAVE HEARD THE SUBMISSIONS OF LD. AR AND CAR EFULLY GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSE ES PROPRIETARY CONCERN IS A CLEARING AND FORWARDING AGENT ENGAGED IN PROVIDING SERVICES TO E XPORTERS OF MERCHANDISE TO BANGLADESH AND IMPORTERS OF MERCHANDISE FROM BANGLADESH AT IND O BANGLADESH BORDER THROUGH ROAD TRANSPORT. THE ASSESSEES CLAIM WAS THAT THESE EXP ENSES WERE INCURRED WHOLLY AND 3 ITA NO.2433/KOL/2013 ACHINTYESH CHANDRA BHATTACHARYA, AY 2006-07 EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED IN TERMS OF SECTION 44AB OF TH E ACT. THE ASSESSEE HAD CLAIMED TO HAVE PAID RS.21,50,850/- TOWARDS DISCHARGE OF THE ASSESS EES OUTSTANDING LIABILITY ON ACCOUNT OF CLEARING AND FORWARDING. THE PAYMENT DETAILS AND S UPPORTING EVIDENCE WERE PROVIDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. OUT O F THE TOTAL AMOUNT CLAIMED BY THE ASSESSEE CERTAIN CASH VOUCHERS AGGREGATING TO RS.4, 14,171/- DID NOT HAD THE SIGNATURE OF THE RECIPIENT, WHICH THE ASSESSEE CLAIMED TO HAVE BEEN PAID TO THE THREE EMPLOYEES NAMELY, SHRI ASHISH DAS (RS.15,348/-), SHRI PRADIP DAS (RS.1,71 ,657/-) AND SHRI SANJAY SARKAR (RS.2,27,166/-) FOR DISBURSEMENT OF THE OUTSTANDING LIABILITY ON BEHALF OF THE ASSESSEE. THESE THREE EMPLOYEES HAVE FILED AFFIDAVITS SWORN O N 25.04.2012 WHICH ARE KEPT AT PAGES 37 TO 47 OF THE PAPER BOOK AND ONE SPECIMEN COPY OF VO UCHERS ALONG WITH THE STATEMENT OF EXPENSES FOR WHICH THE PAYMENT WAS SOUGHT TO HAVE B EEN MADE IS FOUND KEPT IN PAGES 48 TO 53 OF THE PAPER BOOK. IN THE AFFIDAVITS, THE THREE EMPLOYEES HAVE MADE SWORN STATEMENT THAT DUE TO OVERSIGHT THEY COULD NOT AFFIX THEIR SIGNATU RES ON THE VOUCHERS. IT WAS POINTED OUT TO US THAT THE INITIALS OF THE PERSON PREPARING THE VO UCHER AND THE PERSONS AUTHORIZING THE VOUCHER WERE THERE AND WE HAVE ALSO TAKEN NOTE OF T HAT FACT. THE AMOUNTS HAVE BEEN WITHDRAWN BY THE THREE EMPLOYEES TO THE TOTAL AMOUN T OF RS.4,14,171/- FROM THE ASSESSEES PROPRIETARY CONCERN AND HAS BEEN DISBURSED BY THEM ON BEHALF OF THE ASSESSEE TO DISCHARGE THE OUTSTANDING LIABILITY ON ACCOUNT OF CLEARING AN D FORWARDING AT THE OFFICE AT BANGLADESH BORDER. MERELY BECAUSE THE SIGNATURES OF THE THREE EMPLOYEES WERE ABSENT IN CERTAIN VOUCHERS CANNOT BE THE SOLE GROUND TO TOTALLY DISBE LIEVE THE CLAIM OF THE ASSESSEE. OUT OF THE TOTAL CLAIM OF RS.21,50,850/- MADE BY THE ASSES SEE ON THIS HEAD OF EXPENDITURE, THE AO HAD FOUND CLAIM TO THE EXTENT OF RS.17,36,679/- TO BE IN ORDER. HOWEVER, MERELY BECAUSE THE THREE EMPLOYEES DID NOT AFFIX THE SIGNATURE ON SOME VOUCHERS CANNOT BE THE SOLE REASON TO DISBELIEVE THE VERACITY OF CLAIM, WHEN THE ASSES SEE HAS PLACED THE SWORN AFFIDAVIT OF THE RECIPIENT AND THE MODUS OPERANDI BY THE ASSESSEE TO DISBURSE THE OUTSTANDING LIABILITY WERE THROUGH THE VERY SAME THREE EMPLOYEES BEING THE SAM E AND THE AO ACCEPTING THE CLAIM OF ASSESSEE IN RESPECT TO RS.17,36,679/-, THE DISALLOW ANCE WAS NOT WARRANTED. THE ASSESSEE HAS EXPLAINED BEFORE THE LD. CIT(A) AND AO IN THE REMA ND PROCEEDINGS THAT THE ACTUAL PAYMENTS HAVE BEEN MADE FROM THE AMOUNTS RECEIVED T HROUGH THESE VOUCHERS OF THOSE EMPLOYEES TO THE TRANSPORTERS FOR CLEARING AND FORW ARDING EXPENSES IS AT BANGLADESH OFFICE. 4 ITA NO.2433/KOL/2013 ACHINTYESH CHANDRA BHATTACHARYA, AY 2006-07 THE AUDITED BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED AND, THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND TAKING NOTE OF THE AF FIDAVIT AND THE MODUS ADOPTED IN THE BUSINESS OF THE ASSESSEE BEING CARRIED OUT AT THE B ANGLADESH BORDER, WE ARE OF THE CONSIDERED OPINION THAT NO DISALLOWANCE WAS WARRANTED AND, THE REFORE, WE DIRECT DELETION OF THE ADDITION OF RS.4,14,171/-. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.08.201 7 SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :23RD AUGUST, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI ACHINTYESH CHANDRA BHATTACHARYA, R OHIT SHUKLA & ASSOCIATES, CHARTERED ACCOUNTANTS, B BLOCK, 7 TH FLOOR, INDIA HOUSE, 69, GANESH CHANDRA AVENUE, KOLKATA-700013. 2 RESPONDENT ACIT, CIRCLE-41, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECY