Swarup Kumar Saha, Kolkata V. JCIT, Range - 50, Kolkata, Kolkata

ITA 245/KOL/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4923 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-02-2016
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL
• Assessee Lawyers: K M ROY FCA LD
• Keywords: Additional evidence; Non-deduction of tax; Corroborative evidences
• Section: 143(3); 133(6); 37(1); 2

Judgement Text

ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI M. BALAGANESH, ACCOU NTANT MEMBER, AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 245/KOL/2016 A.Y 2011-12 SWARUP KUMAR SAHA VS. J.C.I.T., RANGE-50, KOLKA TA PAN: ALGPS1418K (APPELLANT/ASSESSEE) (RESPONDENT/DEPARTMENT) FOR THE APPELLANT/ASSESSEE: SHRI K.M ROY, FCA, LD.AR FOR THE RESPONDENT/DEPARTMENT: S HRI RAJAT KR. KUREEL, JCIT, LD.SR.DR DATE OF HEARING: 28-03-2016 DATE OF PRONOUNCEMENT: 30 -03 - 2016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED CIT(A)-15, KOLKATA IN APPEAL NO. 152/CIT(A)-15/14-15/R-50/KOL DATED 08/01/2016 AGAINST THE ORDER OF ASSESSMENT FRAMED FOR THE ASST YEAR 2011-1 2 U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE FIRST ISSUE TO BE DECIDED IN THIS CASE IS AS TO WHETHER THE LEARNED AO IS JUSTIFIED IN MAKING THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT TOWARDS COMMISSION EXPENDITURE AMOUNTING TO RS. 55,67,385/- IN THE FAC TS AND CIRCUMSTANCES OF THE CASE. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE IS AN INDIVIDUAL RUNNING A PROPRIETARY CONCERN UNDER THE NAME AND STYLE M/S C LAIM CORNER WHEREIN HE HAS RECEIVED COMMISSION AND CONSULTANCY CHARGES AGAINST LAND ACQUISITION AND REQUISITION AMOUNTING TO RS. 3,55,76,533/-. THE LEARNED AO OB SERVED THAT OUT OF THIS RECEIPT, A SUM OF RS. 3,52,57,708/- WAS RECEIVED BY THE ASSESS EE FROM M/S SRI GIRIJA PRASANNA ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 2 COTTON MILLS LTD. THE ASSESSEE SUBMITTED COPY OF THE AGREEMENT DATED 10.3.2009 BETWEEN SRI GIRIJA PRASANNA COTTON MILLS LTD AND TH E ASSESSEE. THE SAID COMPANY WAS THE OWNER OF THE LAND AT MOUJAGARH SHYAMNAGAR P.S.J AGATDAL HAVING TOTAL AREA OF 10.315 ACRES. THE SAID LAND WAS REQUISITIONED UNDE R THE WEST BENGAL LAND (REQUISITION & ACQUISITION) ACT 1948 FOR CONSTRUCTI ON OF ESIC HOSPITAL ON 30.05.1979 AND AWARD WAS MADE ON 11.3.1998. AGGRIE VED BY THIS AWARD, THE COMPANY FILED REFERENCE PEITITON TO LAND ACQUISITION COLLEC TOR. IT WAS ALSO MENTIONED THAT THE COMPANY APPOINTED SHRI SWARUP KUMAR SAHA (ASSESSEE HEREIN) , TO REPRESENT ITS CASE IN THE LAND ACQUISITION COURT UPTO HONBLE HIGH CO URT AND SUPREME COURT AT THE COST OF THE SECOND PARTY. THE COMPANY AGREED TO P AY 30% COMMISSION OF THE TOTAL ENHANCED COMPENSATION TO THE ASSESSEE. FINAL COMP ENSATION AWARDED TO THE COMPANY WAS RS. 11,75,25,964/- AND OUT OF THIS, RS. 3,52,57 ,708/- WAS PAID TO THE ASSESSEE AS COMMISSION ON 22.3.2011. AFTER DEDUCTING TAX AT SO URCE OF RS. 35,25,771/-, THE COMPANY PAID RS. 3,17,31,937/- TO THE ASSESSEE WHIC H IS FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE. AGAINST THIS COMMISSION R ECEIPT, THE ASSESSEE DEBITED EXPENSES TOWARDS COMMISSION PAYMENTS , SALARY PAYME NTS AND OTHER EXPENSES. THE LEARNED AO OBSERVED THAT THE ASSESSEE HAS TOTALLY P AID COMMISSION TO 19 PARTIES AMOUNTING TO RS. 1,94,05,385/- AND OUT OF THIS, A S UM OF RS. 55,67,385/- PAID TO 13 PARTIES WERE WITHOUT DEDUCTION OF TAX AT SOURCE. THE LEARNED AO DOUBTED THE GENUINENESS OF THE SAID COMMISSION EXPENDITURE AND DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT FOR VIOLATION OF TDS PROVISIONS U/S 194H OF THE ACT. 2.2. ON FIRST APPEAL, BEFORE THE LEARNED CIT(A), T HE ASSESSEE SUBMITTED THAT HIS CONCERN CLAIM CORNER IS ENGAGED IN PROVIDING CONS ULTANCY SERVICES AND CONDUCTING CASES IN RESPECT OF MATTERS RELATING TO AWARDS & CO MPENSATION SPECIALLY LAND ACQUISITION MATTER ON CONTRACTUAL BASIS SINCE LONG. IN RESPECT TO SUCH LAND ACQUISITION OF CASE GIRIJA PRASANNA COTTON MILLS LTD , REPRESEN TED BY ITS DIRECTOR, WHO IS THE LAND LOSER AND CLAIMANT, APPROACHED THE ASSESSEE FOR CON SULTATION OF THEIR LAND ACQUISITION CASE BEING NO. L.A.II/79(N) OF 1978-79 IN RESPECT O F LAND AT MOUZAGARH SHYAMNAGAR, ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 3 NORTH 24 PARGANAS. AFTER CONSULTATION, THE DIRECT OR REQUESTED AND APPOINTED THE ASSESSEE TO CONDUCT THE ABOVE L.A. CASE. THEREAFTE R THE ASSESSEE IN RESPECT OF CONDUCTING THE SAID CASE APPEARED AND SEND HIS REPR ESENTATIVES TO DIFFERENT OFFICES AND APPOINTED ADVOCATES FOR PROCEEDING OF THE CASE AND ALSO APPROACHED THE HONBLE SUPREME COURT AND HIGH COURT AT CALCUTTA FOR NECESS ARY DIRECTIONS UPON THE GOVERNMENT OF WEST BENGAL FOR ADJUDICATION OF THE C ASE AND NECESSARY RELIEFS THEREOF. THEREAFTER THE AWARD FOR COMPENSATION WAS MADE BY T HE CONCERNED L.A. COLLECTOR ON 11.3.1998. IT WAS ALSO MENTIONED THAT ALL THE EXPE NSES WERE INCURRED BY THE ASSESSEE. THE COMPANY BEING AGGRIEVED BY THE COMPENSATION AWA RD , THE CLAIMANT (I.E GIRIJA PRASANNA COTTON MILLS LTD) FURTHER REQUESTED AND CO NTRACTED THE ASSESSEE TO CONDUCT THE SAID CASE AND AS PER DIRECTION PROCEEDING UNDER SECTION 18 OF THE LAND ACQUISITION ACT WAS STARTED IN THE REFERENCE COURT BEING L.R.A. CASE NO. 27 /1998, WHICH WAS DECREED AFTER SIX YEARS BY THE LAND ACQUISITION COU RT AT BARASAT BY THE JUDGEMENT AND DECREE DATED 31.5.2004. THEREAFTER AND EXECUTION P ROCEEDING BEING L.R.A EXECUTION CASE NO. 15/2005 WAS PREFERRED FOR ATTACHMENT OF TH E COLLECTORS P/L ACCOUNT FOR PAYMENT OF THE COMPENSATION AWARD. DURING THESE 6 YEARS THE ASSESSEE INCURRED ALL EXPENSES RELATING TO APPOINTMENT OF ADVOCATES AND D IFFERENT PEOPLE AS REQUIRED FOR CONDUCTING THE CASE AND PAID THE NECESSARY FEES, CH ARGES, INCIDENTAL EXPENSES OF THE SAID CASE. BEIGN FURTHER AGGRIEVED BY THE JUDGEMEN T AND DECREE DATED 31.5.2004 OF THE LAND ACQUISITION COURT AT BARASAT, THE STATE OF WES T BENGAL PREFERRED AN APPEAL IN THE HONBLE HIGH COURT AT CALCUTTA AGAINST WHICH A CROS S APPEAL BEING FAT NO. 382 OF 2005 AND CAN NO. 3009 OF 2005 WAS PREFERRED BY THE ASSESSEE ON BEHALF OF HIS CLIENTS GIRIJA PRASANNA COTTON MILLS LTD. LATER THE HONBL E CALCUTTA HIGH COURT PASSED AN ORDER DATED 18.5.2005 WHEREIN IT WAS DIRECTED TO PA Y AN AMOUNT TO THE CLAIMANT BY THE GOVERNMENT OF WEST BENGAL. 2.2.1. THE ASSESSEE FURTHER PLACED A COPY OF AGREE MENT DATED 24.4.2009 BETWEEN HIM AND M/S GIRIJA PRASANNA COTTON MILLS LTD. THE OPER ATIVE PORTION OF THE AGREEMENT AS REPRODUCED IN THE LEARNED CIT(A) ORDER IS AS UNDER: - ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 4 1. THE FIRST PARTY HEREBY APPOINT THE SECOND PARTY DATED 13.03.2009 TO CONDUCT THE REFERENCE CASE BEFORE THE L.A. COURT, T HE APPEAL BEFORE THE HON 'BLE HIGH COURT, CALCUTTA AND THE SUPREME COURT OF INDIA, THE EXECUTION PROCEEDING AND THE PURSUE THE MATTER BEFORE THE L.A . COLLECTOR. 2. THAT THE SECOND PARTY WILL CONDUCT CASE/CASES PE NDING BEFORE REFERENCE COURT, THE HON 'BLE HIGH COURT, CALCUTTA AT THE COS T OF SECOND PARTY INCLUDING ALL EXPENSES FOR ADVOCATES'S FEES SOLIETO R FEES AND FEES OF OTHER AGENTS AD THEY THINK FIT AND IF NECESSARY TO CONTES T THE CASE BEFORE THE HON 'BLE SUPREME COURT OF INDIA. DELHI AT THE COST OF THE SE COND PARTY. 3. THE SECOND PARTY WILL CONDUCT THE SAID L.A. CASE NO. I.A. II/79(N) OF 78-79 ALONG WITH THE L.R.A. NO. 27/98(V) & EXECUTION CASE IF NECESSARIES ON BEHALF OF THE FIRST PARTY FOR REALIZATION OF THE ENHANCED COMPENSATION FROM THE L.A. COLLECTOR. NORTH 24 PARGANAS AND WILL TAKE ALL NECE SSARY STEPS FOR THE SAME AT THEIR OWN COST. 4. THE SECOND PARTY WILL BEAR ALL EXPENSES TO BE IN CURRED IN CONNECTION WITH THE PROCEEDINGS INCLUDING THE FEES OF THE SENIOR AN D JUNIOR COUNSELS AND NO PART THREE OF CAN BE CLAIMED FROM THE FIRST PARTY E XCEPT THE REMUNERATION CHARGES FIXED AS WILL APPEAR HEREINAFTER. 5. THAT THE FIRST PARTY SHALL SIGN THE NECESSARY VO KALATNAMES AND EXECUTE OTHER DOCUMENTS TO CONDUCT AND/OR TO CONTEST THE CA SE BEFORE THE L.A. JUDGE BARASAT, HIGH COURT, CALCUTTA AND SUPREME COURT OF INDIA. 6. THAT THE FIRST PARTY WILL PAY 30% (THIRTY FIVE) OF THE TOTAL ENHANCED COMPENSATION INCLUDING INTEREST AND ALL OTHERS STAT UTORY ALLOWANCES ETC. WHICH WILL BE DECREED BY THE L.A. JUDGES, BARASAT AND/OR TO BE DECREED BY THE APPELLATE COURT. 7. THAT, IF NECESSARY, THE SECOND PARTY MAY ENTER I NTO AGREEMENT WITH OTHER PARTY FOR TAKING FINANCIAL HELP FOR CONDUCTING THIS CASE. 8. NEITHER PARTY HAVE THE OPTION TO RESCIND OR CANC EL THIS AGREEMENT AND THIS AGREEMENT SHALL REMAIN VALID TILL THE REFERENCE CAS E IS DISPOSED BY THE HON 'BLE SUPREME COURT OF INDIA AND FINAL PAYMENT IS MADE AN D THE 30% (THIRTY) OF THE ENHANCED COMPENSATION IN TERMS OF THE DECREE OF TH E REFERENCE COURT AND/OR BY APPELLATE COURT IS PAID BY THE FIRST PARTY TO SE COND PARTY. ' ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 5 THE LEARNED CIT(A) OBSERVED THAT IN RESPONSE TO NOT ICE ISSUED BY THE LEARNED AO U/S 133(6) OF THE ACT, M/S GIRIJA PRASANNA COTTON MILLS LTD SUBMITTED THE COPY OF THE AGREEMENT DATED 10.3.2009 BEFORE THE LEARNED AO. I T WAS FURTHER OBSERVED THAT THE SL.NO. OF THE STAMP PAPER WAS 28AA 057957. WHEREA S THE COPY OF AGREEMENT SUPPLIED DURING THE APPELLATE PROCEEDINGS WAS DATED 24.4.2009 AND SL.NO. OF THE STAMP PAPER WAS 27 AA 895798. THUS , THE LEARNED C IT(A) OBSERVED THAT THERE ARE TWO EXACTLY SIMILAR WORDED AGREEMENTS ON RECORD OF TWO DIFFERENT DATES. IN BOTH THE AGREEMENTS THERE IS NO SIGNATURE OF WITNESSES. THE LEARNED CIT(A) BY GIVING DUE COGNIZANCE TO THIS ANOMALY CONCLUDED THAT THE ASSES SEE HAD NOT PRODUCED ANY EVIDENCES TO SUPPORT THE CLAIM OF LEGAL PROCEEDINGS BEING CARRIED ON FOR YEARS TO GETHER AND ASSESSEES ENGAGEMENT IN THE SAME. ACCORDINGL Y HE FOUND THAT THE BASIS OF RECEIPT OF RS. 3.52 CRORES FROM M/S GIRIJA PRASANNA COTTON MILLS LTD BY THE ASSESSEE BECOMES DOUBTFUL. HE ALSO OBSERVED THAT THE COMMI SSION PAID BY THE SAID COMPANY @ 30% OF ENHANCED COMPENSATION IS TOO EXCESSIVE AND NOT HEARD OFF AS PAID IN GENUINE LAND ACQUISITION CASES. THE LEARNED CIT( A) SUMMARIZED THE EVENTS AND FOUND THAT THE ASSESSEE HAS OFFERED RS. 3,55,76,533 /- AS CONSULTANCY CHARGES RECEIVED FROM M/S GIRIJA PRASANNA COTTON MILLS LTD AND AGAIN ST IT, DEBITED VARIOUS EXPENSES TO THE TUNE OF RS. 3,34,50,908/- TO EARN THIS INCOME A ND OFFERED THE PROFIT FOR TAXATION TO THE TUNE OF RS. 21,25,625/-. HE PROCEEDED TO EXA MINE THE CLAIM OF EXPENDITURE OF THE ASSESSEE IN THE LIGHT OF THE AFORESAID BACKGROUND. 2.2.2. WITH REGARD TO DISALLOWANCE U/S 40(A)(IA) O F THE ACT IN RESPECT OF COMMISSION EXPENDITURE CLAIMED BY THE ASSESSEE TO THE TUNE OF RS. 55,67,385/-, IT WAS OBSERVED THAT THESE AMOUNTS WERE NOT ACTUALLY PAID TO THE 13 PART IES BEFORE THE END OF THE PREVIOUS YEAR. IT WAS FURTHER OBSERVED THAT THE ASSESSEE WA S NOT ABLE TO PRODUCE ANY EVIDENCES TO PROVE THE NATURE OF SERVICES RENDERED BY THESE 1 3 PARTIES TO MAKE THEM ELIGIBLE FOR COMMISSION. EVEN THE ADDRESSES OF THESE PARTIES TO GETHER WITH THEIR PAN DETAILS WERE NOT PROVIDED BY THE ASSESSEE FOR CROSS VERIFICATION BY THE LEARNED AO. THE LEARNED CIT(A) OBSERVED THAT NO FRESH ARGUMENTS OR EVIDENCE S WERE FILED BY THE ASSESSEE IN ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 6 THIS REGARD BEFORE HIM AND ACCORDINGLY UPHELD THE D ISALLOWANCE MADE BY THE LEARNED AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 1) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, CIT(A) HAS ERRED IN SUSTAINING DISALLOWANCE OF RS. 55,67,3 85/- U/S 40(A)(IA ). 2.3. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE LOWER AUTHORITIES AND ARGUED THAT THE ASSESSEE HAD NOT PROVIDED ANY EVIDE NCE TO PROVE THE NATURE OF SERVICES RENDERED BY THESE 13 PARTIES EVEN DURING APPELLATE PROCEEDINGS AND ACCORDINGLY PRAYED FOR NON-INTERFERENCE IN THE ORDERS OF THE LOWER AUT HORITIES. IN RESPONSE TO THIS, THE LEARNED AR ONLY REITERATED THE SUBMISSIONS MADE BEF ORE THE LOWER AUTHORITIES. 2.4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE DISALLOWANCE OF COMMISSION TO THE TUNE OF RS. 55,67,385/- HAS BEEN MADE ONLY U/S 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX AT SOURCE IN TERMS OF SECT ION 194H OF THE ACT. IN THE FACTS AND CIRCUMSTANCES, WE DEEM IT FIT AND APPROPRIATE, TO S ET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO, TO VERIFY AS TO WHETHER THE PAYEES HAVE DULY RECORDED THE SUBJECT MENTIONED COMMISSION RECEIPT IN THEIR RETURNS AND I F SO, IN THE LIGHT OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT AND IN THE LIGHT OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND MARK TO WNSHIP (P) LTD REPORTED IN 377 ITR 635 (DEL), THE ASSESSEE HEREIN SHOULD NOT BE TREATED AS ASSES SEE IN DEFAULT AND HENCE NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT COUL D BE INVOKED IN THE HANDS OF THE PAYER (ASSESSEE HEREIN). THE ASSESSEE IS DIRECTED TO FILE THE NECESSARY DOCUMENTS AND EVIDENCES BEFORE THE LEARNED AO IN THIS REGARD. A CCORDINGLY, THE GROUND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 3. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LEARNED AO IS JUSTIFIED IN DISALLOWING A SUM OF RS. 1,20,00,000/- TOWARDS COMMISSION EXPENDITURE INCURRED ON THREE PARTIES IN THE FACTS AND CIRCUMST ANCES OF THE CASE. ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 7 3.1. THE ASSESSEE INCURRED COMMISSION EXPENDITURE TO BE PAID TO THE FOLLOWING THREE PARTIES :- MR.SUBHASH SAHU 40,00,000 TAX DEDUCTED RS 4,00,00 0 MR.SUBRATA BISWAS 40,00,000 TAX DEDUCTED RS 4,00, 000 MR.SATYABRATA BISWAS 40,00,000 TAX DEDUCTED RS 4,0 0,000 APART FROM THIS, THE ASSESSEE ALSO INCURRED COMMISS ION EXPENDITURE TO BE PAID TO MR.SAKTI PRASAD CHAKRABORTY RS. 2,78,000/- (TAX D EDUCTED RS. 27,800/-) ; MR.DEBAYAN BERA RS. 9,00,000/- (TAX DEDUCTED RS. 90,000/-) AND MR.NIRMAL CHANDRA OJHA RS. 6,60,000/- (TAX DEDUCTED RS. 66, 000/-) , WHICH WERE ACCEPTED AS GENUINE BY THE LEARNED AO AND ALLOWED AS DEDUCTION. WITH REGARD TO THE CLAIM OF DEDUCTION TOWARDS COMMI SSION EXPENDITURE OF RS. 1,20,00,000/- IN RESPECT OF THREE PARTIES, THE LEAR NED AO MADE INDEPENDENT VERIFICATION FROM THEIR RESPECTIVE INCOME TAX RETUR NS AND FOUND THAT THE SAME HAD BEEN DULY DISCLOSED AS INCOME IN THE RETURNS OF THE PAYE ES BUT FOUND THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCES WITH REGARD TO NATURE O F SERVICES RENDERED BY THESE 3 PARTIES TO MAKE THEM ELIGIBLE TO RECEIVE SERVICE CH ARGES FROM ASSESSSEE. HE ALSO FOUND THAT MR. SUBRATA BISWAS IS BROTHER IN LAW OF THE AS SESSEE AND IS RESIDING IN THE SAME ADDRESS OF THE ASSESSEE. HE ALSO OBSERVED THAT MR .SATYABRATA BISWAS IS ALSO BROTHER IN LAW OF THE ASSESSEE. HE FURTHER OBSERVED THAT THE TAX AUDITOR FOR ALL THESE PARTIES AND THE ASSESSEE ARE SAME. HE ALSO FOUND THAT COMMISSI ON INCOME WAS DERIVED BY THOSE 3 PARTIES FOR THE FIRST TIME IN ASST YEAR 2011-12. T HE LEARNED AO ALSO FOUND THAT THIS COMMISSION WAS NOT PAID BY THE ASSESSEE BEFORE THE END OF THE PREVIOUS YEAR . BASED ON THESE OBSERVATIONS, THE LEARNED AO TREATED THE C OMMISSION EXPENDITURE OF 3 PARTIES TO THE TUNE OF RS. 1,20,00,000/- AS BOGUS AND DISAL LOWED THE SAME. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE WAS N OT ABLE TO CONTROVERT ANY OF THE FINDINGS GIVEN IN THE ASSESSMENT ORDER BY THE LEARN ED AO. THE ASSESSEE SUBMITTED THE FOLLOWING DOCUMENTS BEFORE THE LEARNED CIT(A) TO JU STIFY HIS CLAIM OF DEDUCTION :- ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 8 (A) LETTER OF ENGAGEMENT GIVEN BY THE ASSESSEE APPOINTI NG MR.SATYABRATA BISWAS AS LAWYER ON RECORD TO HANDLE THE LAND ACQUI SITION CASE OF M/S GIRIJA PRASANNA COTTON MILLS LTD DATED 7.6.2009 DUL Y SIGNED BY THE ASSESSEE. (B) LETTER OF ENGAGEMENT GIVEN BY THE ASSESSEE APPOINT ING MR.SUBRATA BISWAS AS LEGAL ADVISOR ON RECORD TO HANDLE THE LAN D ACQUISITION CASE OF M/S GIRIJA PRASANNA COTTON MILLS LTD DATED 7.6.2009 DULY SIGNED BY THE ASSESSEE. (C) LETTER OF ENGAGEMENT GIVEN BY THE ASSESSEE APPOINTI NG MR.SUBHAS SAHU AS LEGAL ADVISOR ON RECORD TO HANDLE THE LAND ACQUI SITION CASE OF M/S GIRIJA PRASANNA COTTON MILLS LTD DATED 7.6.2009 DUL Y SIGNED BY THE ASSESSEE. 3.1.1. THE LEARNED CIT(A) OBSERVED FROM THE BANK ST ATEMENTS SUBMITTED BY THE ASSESSEE THAT THE FOLLOWING PAYMENTS WERE MADE BY T HE ASSESSEE :- SRI SUBHAS SAHU 7.4.2011 40,00,000 SRI SUBRATA BISWAS 19.4.2011 26,00,000 SRI SATYABRATA BISWAS 29.3.2011 25,00,000 SRI SATYABRATA BISWAS 26.3.2011 10,00,000 THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE HAD N OT TAKEN INTO ACCOUNT THE PAYMENTS MADE BY HIM BEFORE 31.3.2011 IN HIS BOOKS OF ACCOUNTS AND INSTEAD REFLECTED THE ENTIRE AMOUNT OF COMMISSION OF RS. 40,00,000/- AS PAYABLE AT THE END OF THE FINANCIAL YEAR. IT WAS FURTHER OBSERVED THAT THE A SSESSEE CLAIMED TO DEDUCTED TAX AT SOURCE AS PER THE TDS CERTIFICATES DATED 22.5.2011 FILED BY THE ASSESSEE WITH REGARD TO THESE THREE PARTIES , THE FOLLOWING SUMS WERE DEDUC TED AS TAX AT SOURCE:- ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 9 --------------------------------------------------- -------------------------------------- NAME AMOUNT CREDITED TAX DEDUCTED AMOUNT PAYABL E SHOULD BE --------------------------------------------------- -------------------------------------- SRI SUBHAS SAHU 40,00,000 4,00,000 36,00,000 SRI SUBRATA BISWAS 40,00,000 4,11,415 35,88,585 SRI SATYABRATA BISWAS 40,00,000 4,00,000 36,00,000 3.1.2. THE LEARNED CIT(A) OBSERVED THAT THE ASSESS EE HAD MANIPULATED HIS BOOKS OF ACCOUNTS BY SHOWING THE WRONG FIGURE OF RS 40,00,00 0/- EACH AS AMOUNTS PAYABLE IN HIS BOOKS OF ACCOUNTS. HE ACCORDINGLY CONCLUDED TH AT THE ASESSSEE HAD WRONGLY SHOWN THAT TDS WAS DEDUCTED BUT WHEREAS NO TAX HAS BEEN D EDUCTED ON THIS EXPENDITURE. BASED ON THESE OBSERVATIONS, HE FOUND THAT THE BOOK S OF ACCOUNTS ARE NOT ALL RELIABLE AND LIABLE TO BE REJECTED. HE FURTHER OBSERVED FR OM THE INCOME TAX RETURNS OF ASST YEARS 2011-12 , 2012-13 AND 2013-14 OF THE ASSESSEE THAT THE COMMISSION WAS OUTSTANDING AS BELOW:- --------------------------------------------------- ----------------------------------- A.Y. COMMISSION DEBITED ACTUALLY PAID COMMISSION OUTSTANDING --------------------------------------------------- ----------------------------------- 2011-12 1,94,05,385 1,52,02,500 2012-13 0 1,05,05,000 46,97,500 2013-14 0 0 46,97,500 3.1.3. HENCE HE OBSERVED THAT DESPITE LAPSE OF TWO YEARS, THE AMOUNT OF RS. 46,97,500/- WAS APPEARING AS OUTSTANDING IN THE BOO KS OF THE ASSESSEE WHICH SHOWED THAT THE TRANSACTIONS ARE NOT GENUINE. 3.1.4. THE LEARNED CIT(A) WENT TO INVESTIGATE THE INCOME TAX RETURNS OF THESE THREE PARTIES VIZ SRI SUBHAS SAHU , SRI SUBRATA BISWAS AN D SRI SATYABRATA BISWAS AND FOUND ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 10 THAT THEY HAVE DEBITED EXPENSES TOWARDS SALARIES AN D WAGES AND OTHER EXPENSES AND HAD SHOWN MEAGER TAXABLE INCOME IN THEIR RETURNS AS UNDER FOR ASST YEAR 2011-12 :- --------------------------------------------------- --------------------------------------- NAME COMMISSION SALARY & WAGES TAXABLE CREDITED INCOME --------------------------------------------------- --------------------------------------- SRI SUBHAS SAHU 40,00,000 32,70,750 4,78,604 SRI SUBRATA BISWAS 40,00,000 34,91,650 4,95,280 SRI SATYABRATA BISWAS 40,00,000 28,07,150 4,90,03 5 THE LEARNED AO HAD ALREADY GIVEN A FINDING THAT EVE N THE SALARIES AND WAGES FIGURE SHOWN AS ABOVE IN THE RETURNS OF THREE PARTIES WERE REMAINING OUTSTANDING AT THE END OF THE PREVIOUS YEAR. THE ASSESSEE COULD NOT CONTROVE RT THIS FINDING BY WAY OF SUPPORTING EVIDENCES BEFORE LEARNED CIT(A). BASED ON THESE OB SERVATIONS, THE LEARNED CIT(A) CONCLUDED THAT THESE NAMES HAVE BEEN USED BY THE AS SESSEE TO DEBIT BOGUS EXPENDITURES AND THE PARTIES BEING RELATIVES OF THE ASSESSEE HAD COLLUDED WITH HIM IN DIVERTING TAXABLE RECEIPTS. THE LEARNED CIT(A) FUR THER OBSERVED THAT THE ASSESSEE HAD NOT PROVIDED EVIDENCES IN THE FORM OF ACADEMIC QUAL IFICATIONS OF THESE PERSONS TO PROVE AS TO WHETHER THEY ARE ACTUALLY COMPETENT TO RENDER THE PROFESSIONAL LEGAL SERVICES AS CLAIMED BY THE ASSESSEE. FROM THEIR RE TURNS, IT WAS NOTICED THAT THEY HAD RECEIVED PROFESSIONAL FEES ONLY FROM THE ASSESSEE. THE LEARNED CIT(A) ACCORDINGLY CONCLUDED THAT THE GENUINENESS OF THE EXPENDITURE W AS NOT PROVED BY THE ASSESSEE BY WAY OF SUPPORTING EVIDENCES AND UPHELD THE ACTION O F THE LEARNED AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUND :- 2) FOR THAT LD'CIT(A) HAS ERRED IN SUSTAINING DISAL LOWANCE OF RS. RS.1,20,00,000/- TOWARDS COMMISSION WITHOUT ERRORS- EXAMINING THE PAGES. 3.2. THE LEARNED AR REITERATED THE SUBMISSIONS MAD E BY HIM BEFORE THE LOWER AUTHORITIES. HE FURTHER ARGUED THAT THE LEARNED AO HAVING ACCEPTED THE COMMISSION PAYMENTS TO MR.SAKTI PRASAD CHAKRABORTY RS. 2,78, 000/- (TAX DEDUCTED RS. 27,800/- ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 11 ) ; MR.DEBAYAN BERA RS. 9,00,000/- (TAX DEDUCTED RS. 90,000/-) AND MR.NIRMAL CHANDRA OJHA RS. 6,60,000/- (TAX DEDUCTED RS. 66, 000/-) , AS GENUINE, OUGHT TO HAVE ALLOWED THE COMMISSION EXPENDITURE OF RS. 1,20,00,0 00/- AS GENUINE AS THE SAME HAS BEEN SUBJECTED TO TDS. IN RESPONSE TO THIS, THE LEA RNED DR ARGUED THAT THE FACT OF DEDUCTION OF TAX AT SOURCE ITSELF IS IN DISPUTE AS COULD BE SEEN FROM THE LEARNED CIT(A) ORDER AND ARGUED THAT THE ASSESSEE HAD MERELY USED THE NAMES OF HIS RELATIVES TO DIVERT HIS TAXABLE INCOME TO THEIR HANDS AND THEY IN TURN HAD SHOWN MEAGER TAXABLE INCOME IN THEIR RESPECTIVE RETURNS AFTER CLAIMING BOGUS EXPEN DITURE. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) IN THIS REGARD. 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. FROM THE DETAILED ORDER PASSED BY THE LEARNED CIT(A) AND EXAMINATION CARRIED OUT BY HIM, IN THE FACTS AND CIRCUMSTANCES, THE ASSESSEE HAD NOT PROVED THE GENUINENESS OF THE TRANSACTIONS OF COMMISSION EXPENDITURE TOGETHER WITH THE NATURE OF SERVICES RE NDERED BY THOSE 3 PARTIES EXCEPT SELF SERVING LETTER OF ENGAGEMENT GIVEN BY HIM TO THEM. EVEN NO EVIDENCE WAS FURNISHED TO PROVE AS TO WHETHER SUCH LETTER OF ENGAGEMENT WA S INDEED ACKNOWLEDGED BY THOSE THREE PARTIES. THE ACADEMIC QUALIFICATIONS TO PROV E THE COMPETENCY LEVEL OF THOSE THREE PARTIES COULD ALSO NOT BE PROVED BY THE ASSES SEE. IN THESE FACTS AND CIRCUMSTANCES, WE FIND THAT THE ASSESSEE HAD MERELY TRIED TO USE THE NAMES OF HIS RELATIVES AND OTHERS TO DIVERT HIS TAXABLE RECEIPTS AND HENCE WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, THE GROU ND NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 4. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LEARNED AO IS JUSTIFIED IN DISALLOWING THE SALARY EXPENDITURE TO THE TUNE OF RS. 1,10,89,550/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE WAS IN RECEIPT OF COMMISSION / CONSULTANCY CHARGES TO THE TUNE OF RS. 3,55,76,533/ - AND OUT OF THIS, AMOUNT RECEIVED ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 12 FROM M/S GIRIJA PRASANNA COTTON MILLS LTD ON 22.3.2 011 WAS TO THE TUNE OF RS. 3,52,57,708/-. AGAINST THIS COMMISSION RECEIPT, TH E ASSESSEE ALSO DEBITED SALARIES AND WAGES TO THE TUNE OF RS. 1,10,89,550/- AND CLAIMED THE SAME AS DEDUCTION. THE LEARNED AO ASKED FOR THE DETAILS OF THE SAME TOGETH ER WITH THE FACT AS TO WHETHER ANY PF AND ESI WERE DEDUCTED AND REMITTED ON THE SALARI ES. THE LEARNED AO OBSERVED THAT NO PF AND ESI WERE DEDUCTED BY THE ASSESSEE AN D FROM THE DETAILS FILED BY THE ASSESSEE, AS AGAINST SALARY DEBIT OF RS. 1,10,89,55 0/- , A SUM OF RS. 96,50,000/- WAS SHOWN AS OUTSTANDING AS ON 31.3.2011. THE LEARNED AO ALSO OBSERVED THAT IT IS HIGHLY IMPRACTICAL THAT SALARIED EMPLOYEE WILL NOT TAKE TH EIR SALARY ON A MONTHLY BASIS. HE FURTHER OBSERVED THAT ADDRESS OF MOST OF THE EMPLOY EES ARE SAME AS THAT OF THE ASSESSEE I.E 40C/1, JESSORE ROAD, BARASAT, KOL-124. HE FUR THER OBSERVED FROM THE DETAILS FILED BY THE ASSESSEE THAT OUT OF 73 EMPLOYEES, PAYMENTS MADE TO 66 EMPLOYEES ARE IN THE NATURE OF LABOUR PAYMENTS AND GENERALLY THE LABOUR PAYMENTS ARE MADE ON A WEEKLY BASIS , IT IS VERY UNLIKELY THAT THESE ARE SHOWN AS OUTSTANDING LIABILITIES AS ON 31.3.2011. BASED ON THESE OBSERVATIONS, HE DISALLO WED THE ENTIRE SALARIES AND WAGES DEBITED TO THE TUNE OF RS. 1,10,89,550/- U/S 37(1) OF THE ACT. 4.2. BEFORE THE LEARNED CIT(A), THE ASSESSEE CAME UP WITH A NEW EXPLANATION THAT THE SALARIES AND WAGES WERE PAID BY HIS WIFE SMT.SHIKHA SAHA TO THE TUNE OF RS. 40,00,000/- AND HIS SON SRI AVISHEK SAHA TO THE TU NE OF RS. 40,00,000/- ON HIS BEHALF AND CLAIMED THAT THE GENUINITY OF THE SALARY PAYMEN T IS PROVED BEYOND DOUBT. HE ALSO PLACED INDEPENDENT AFFIDAVITS FROM HIS WIFE AND SON BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A), HOWEVER, DID NOT GIVE WEIGHTAGE TO THOSE AFFIDAVITS AS ACCORDING TO HIM THE SAME WERE ONLY SELF-SERVING AND DID NOT CON TAIN DATE WISE DETAILS OF PAYMENTS MADE ON BEHALF OF THE ASSESSEE. ACCORDINGLY HE REJ ECTED THOSE AFFIDAVITS AND DID NOT ADMIT EVEN AS AN ADDITIONAL EVIDENCE. HE ALSO HELD THAT THE CONTENTS IN THE AFFIDAVITS ARE FALSE IN VIEW OF THE FACT THAT HAD THE SALARIE S BEEN PAID BY HIS WIFE AND SON ON BEHALF OF THE ASSESSEE, THEN THE SAME SHOULD HAVE B EEN REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND SALARY OUTSTANDING AS ON 31.3.2011 WOULD HAVE COME ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 13 DOWN BY RS 80,00,000/- AS AGAINST RS. 96,50,000/- . MOREOVER HE ALSO FOUND THAT THE LIST CONTAINING THE NAMES OF 65 PERSONS MENTIONS TH AT THE SALARY IS PAYABLE AS ON 31.3.2011. HENCE THE CONTENTS OF THE AFFIDAVITS AR E PROVED WRONG BY THE ENTRIES IN THE BOOKS OF THE ASSESSEE AND THE DETAILS FILED BY THE ASSESSEE. IT WAS FURTHER OBSERVED THAT THESE PAYMENTS WERE MADE BY CASH BY HIS WIFE AND SO N WHICH ARE NOT SUPPORTED BY ANY EVIDENCE. 4.2.1. THE LEARNED CIT(A) FURTHER OBSERVED FROM TH E INCOME TAX RETURNS OF ASST YEARS 2011-12 , 2012-13 AND 2013-14 OF THE ASSESSEE THAT THE SALARY & WAGES WAS OUTSTANDING AS BELOW:- --------------------------------------------------- --------------------------------------- A.Y. SALARY & WAGES DEBITED ACTUALLY PAID SALARY & WAGES OUT OF OUTSTANDING OUTSTANDING --------------------------------------------------- ---------------------------------------- 2011-12 1,10,89,550 96,50,000 2012-13 5,32,410 16,50,000 80,00,000 2013-14 2,06,500 29,50,000 60,00,000 4.2.2. HENCE HE OBSERVED THAT DESPITE LAPSE OF TWO YEARS, THE AMOUNT OF RS. 60,00,000/- WAS APPEARING AS OUTSTANDING IN THE BOO KS OF THE ASSESSEE WHICH SHOWED THAT THE TRANSACTIONS ARE NOT GENUINE. 4.2.3. IT WAS FURTHER OBSERVED THAT THE BALANCE SH EET OF THE ASSESSEE DOES NOT SHOW MRS.SHIKHA SAHA AND SRI AVISHEK SAHA AS CREDITORS E ITHER IN ASST YEARS 2011-12 OR 2012-13 OR 2013-14. BASED ON THE AFORESAID OBSERVATIONS, HE HELD THAT THE ASSESSEE WAS NOT ABLE TO PROVE THAT THESE EMPLOYEES AND LABOURERS HAD ACTUALLY REN DERED ANY SERVICES AND THE EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT ARE BOGUS AND ACCORDINGLY UPHELD THE ACTION OF THE LEARNED AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND :- ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 14 3) FOR THAT LD'CIT(A) HAS ERRED IN CONFIRMING DISAL LOWANCE OF RS.1,10,89,550/- WITHOUT EXAMINING THE VERACITY OF AFFIDAVITS. 4.3. THE LEARNED AR REITERATED THE SUBMISSIONS MAD E BY HIM BEFORE THE LOWER AUTHORITIES. HE FURTHER ARGUED THAT THE LEARNED AO HAVING ACCEPTED THAT THE BALANCE OUTSTANDING ON ACCOUNT OF SALARY AND WAGES WAS ONLY RS. 96,50,000/- AS ON 31.3.2011, OUGHT TO HAVE GRANTED DEDUCTION OF RS. 14,39,550/- ( 11089550-9650000) ATLEAST TO THE EXTENT OF ACTUAL PAYMENT MADE. HE FURTHER ARGUE D THAT THE AFFIDAVITS FILED BY WIFE AND SON OF THE ASSESSEE WERE NEVER EXAMINED BY THE LEARNED CITA BY ADMITTING THE SAME AS ADDITIONAL EVIDENCES. IN THIS REGARD , HE RELIED ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF L.SOHAN LAL GUP TA VS CIT REPORTED IN (1958) 33 ITR 786 (ALL), WHEREIN IT WAS HELD THAT THE TRIBUNAL HAD REJECTED THE AFFIDAVIT ON THE MERE GROUND THAT THERE WAS NO DOCUMENTARY EVIDENCE IN CORROBORATION IN THE FORM OF ANY CORRESPONDENCE OR OTHERWISE ON THIS POINT. ACCO RDINGLY, IT WAS HELD THAT THE ASSESSEE WAS ENTITLED TO ASSUME THAT THE IT AUTHORI TIES WERE SATISFIED WITH THE AFFIDAVIT AS SUFFICIENT PROOF ON THIS POINT. 4.4. IN RESPONSE TO THIS, THE LEARNED DR ARGUED THA T THE FACT OF DEDUCTION OF TAX AT SOURCE ITSELF IS IN DISPUTE AS COULD BE SEEN FROM T HE LEARNED CIT(A) ORDER AND ARGUED THAT THE ASSESSEE HAD MERELY USED THE NAMES OF HIS RELATIVES TO DIVERT HIS TAXABLE INCOME TO THEIR HANDS AND THEY IN TURN HAD SHOWN ME AGER TAXABLE INCOME IN THEIR RESPECTIVE RETURNS AFTER CLAIMING BOGUS EXPENDITURE . HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) IN THIS REGARD. 4.5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LEARNED AR PLACES HEAVY RELIANCE ON THE DECISION OF THE HONBLE ALLAHABAD H IGH COURT (SUPRA) IN RESPECT OF THE AFFIDAVITS AND NOT ACTING ON THE SAME. WE FIND TH AT THE LEARNED CITA HAD REJECTED THE AFFIDAVITS FILED BY THE WIFE AND SON OF THE ASSESSE E AS THEY WERE ONLY SELF SERVING AND DID NOT CONTAIN DATE WISE DETAILS OF PAYMENTS MADE ON BEHALF OF THE ASSESSEE. WE FIND ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 15 THAT THE SAID AFFIDAVITS DID NOT EVEN CONTAIN THE B ASIC FACT AS TO WHETHER THE WIFE AND SON OF THE ASSESSEE WERE ASSESSED TO INCOME TAX AND THE DETAILS OF THEIR PAN TOGETHER WITH INCOME TAX PARTICULARS WERE ABSENT CONSPICUOUS LY. WHEN A PERSON FILES AN AFFIDAVIT STATING THAT HE / SHE HAS INCURRED RS. 40 ,00,000/- ON BEHALF OF THE ASSESSEE, THEN HE / SHE SHOULD HAVE DEFINITELY INCOME ON HIS / HER OWN VOLITION SO AS TO ADVANCE THIS MUCH OF FUNDS ON BEHALF OF THE ASSESSEE AND DE FINITELY WOULD BE ASSESSEE LIABLE TO PAY INCOME TAX. THIS GOES AGAINST THE TEST OF HUMA N PROBABILITIES. WE ALSO FIND THAT THE LEARNED CIT(A) HAD HELD THAT THE CONTENTS IN TH E AFFIDAVITS ARE FALSE, IN VIEW OF THE FACT, THAT HAD THE SALARIES BEEN PAID BY HIS WIFE AND SON ON BEHALF OF THE ASSESSEE, THEN THE SAME SHOULD HAVE BEEN REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND SALARY OUTSTANDING AS ON 31.3.2011 WOULD HAVE COME DOWN BY RS 80,00,000/- AS AGAINST RS. 96,50,000/- . MOREOVER THE LEARNED CI TA ALSO FOUND THAT THE LIST CONTAINING THE NAMES OF 65 PERSONS MENTIONS THAT TH E SALARY IS PAYABLE AS ON 31.3.2011. HENCE THE CONTENTS OF THE AFFIDAVITS AR E PROVED WRONG BY THE ENTRIES IN THE BOOKS OF THE ASSESSEE AND THE DETAILS FILED BY THE ASSESSEE. WE FIND THAT THE LEARNED CITA FURTHER OBSERVED FROM THE INCOME TAX RETURNS O F ASST YEARS 2011-12 , 2012-13 AND 2013-14 OF THE ASSESSEE THAT THE SALARY & WAGES WAS OUTSTANDING AS BELOW:- --------------------------------------------------- -------------------------------------- A.Y. SALARY & WAGES DEBITED ACTUALLY PAID SALARY & WAGES OUT OF OUTSTANDING OUTSTANDING --------------------------------------------------- -------------------------------------- 2011-12 1,10,89,550 96,50,000 2012-13 5,32,410 16,50,000 80,00,000 2013-14 2,06,500 29,50,000 60,00,000 THE LEARNED CIT(A) HAD OBSERVED THAT DESPITE LAPSE OF TWO YEARS, THE AMOUNT OF RS. 60,00,000/- WAS APPEARING AS OUTSTANDING IN THE BOO KS OF THE ASSESSEE WHICH SHOWED THAT THE TRANSACTIONS ARE NOT GENUINE. MOREOVER, IT WAS FURTHER OBSERVED THAT THE BALANCE SHEET OF THE ASSESSEE DOES NOT SHOW MRS.SHI KHA SAHA (WIFE OF ASSESSEEE) AND SRI AVISHEK SAHA (SON OF ASSESSEE) AS CREDITORS EIT HER IN ASST YEARS 2011-12 OR 2012- ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 16 13 OR 2013-14. WE FIND THAT THE LEARNED CIT(A) HAD GIVEN LOGICAL REASONS FOR REJECTING THE AFFIDAVITS OF WIFE AND SON OF THE ASS ESSEE AND ACCORDINGLY DID NOT ADMIT THE SAME AS ADDITIONAL EVIDENCES. ACCORDINGLY, TH E CASE LAW RELIED UPON BY THE LEARNED AR ON THE DECISION OF HONBLE ALLAHABAD HIG H COURT (SUPRA) IS SQUARELY DISTINGUISHABLE AND NOT AT ALL APPLICABLE TO THE FA CTS OF THE INSTANT CASE. HOWEVER, TAKING INTO ACCOUNT, THE NATURE OF ACTIVITIES OF TH E ASSESSEE, IT IS HIGHLY IMPROBABLE AND IMPRACTICAL TO CONCLUDE THAT THE ASSESSEE COULD HAV E CARRIED ON ALL THE ACTIVITIES ON ITS OWN TO EARN THE CONSULTANCY CHARGES / COMMISSION IN COME. DEFINITELY HE REQUIRES THE ASSISTANCE OF CERTAIN EMPLOYEES FOR CARRYING OUT CE RTAIN SECRETARIAL ACTIVITIES AND TAKING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND MORE ESPECIALLY IN VIEW OF THE FACT THAT NO ADVERSE REMARKS WERE MADE BY THE LEARN ED AO IN RESPECT OF RS. 14,39,550/- (11089550-9650000) BEING THE SALARIES A CTUALLY PAID BEFORE THE END OF THE PREVIOUS YEAR BY THE ASSESSEE, WE DEEM IT FIT AND A PPROPRIATE, TO MEET THE ENDS OF JUSTICE, TO ALLOW THE SALARIES & WAGES CLAIM TO THE EXTENT OF RS. 14,39,550/-. WE HOLD THAT THE LEARNED AR WAS NOT ABLE TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A) WITH ANY DOCUMENTARY EVIDENCES EXCEPT PLACING RELIA NCE ON THE AFFIDAVITS OF WIFE AND SON WHICH HAS BEEN REJECTED BY LOGICAL REASONS. HE NCE ON THE BALANCE SUM OF RS. 96,50,000/- ( 11089550-1439550), WE FIND NO INFIRMI TY IN THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, THE GROUND NO.3 RAISED BY TH E ASSESSEE IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 30 - 03 - 2016 SD/- ( S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 30 -03-2016 ITA NO.245/KOL/2016 -B-AM SWARUP KUMAR SAHA 17 1.. THE APPELLANT/ASSESSEE: SWARUP KUMAR SAHA 40C/ 1 JESSORE ROAD, BARASAT, KOL-126 2 THE RESPONDENT/DEPARTMENT: THE JCIT, RANGE-50, UT TARAPAN COMPLEX, ULTADANGA, KOL-54. 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS COPY OF THE ORDER FORWARDED TO:-