Scarlet Impex, Kolkata V. A.C.I.T, Circle-37, Kolkata., Kolkata

ITA 2508/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9579 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 29-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL JCITSRDR
• Assessee Lawyers: V N PUROHIT
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.2508/KOL/2013 ( / ASSESSMENT YEAR:2010-2011) SCARLET IMPEX, 37, RATU SARKAR LANE, KOLKATA-700073 VS. ACIT, CIRCLE-37, PODDER COURT, 8 TH FLOOR, GATE NO.2,18, RABINDRA SARANI KOLKATA-700001 ./ ./PAN/GIR NO.: AAMFS 8725 L ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI V.N.PUROHIT, FCA REVENUE BY : SHRI RAJAT KUMAR KUREEL, JCIT, SR-D R / DATE OF HEARING : 18/01/2017 /DATE OF PRONOUNCEMENT 20/01/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEAR 2010-11, IS DIRECTED AGAINST THE OR DER PASSED BY THE LD. CIT(A), XXIV, KOLKATA IN APPEAL NO.1225/CIT(A)-XXIV /C-37/12-13, DATED 27.08.2013, WHICH IN TURN ARISES OUT OF AN ORDER PA SSED BY THE ASSESSING OFFICER (AO),UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 21.12 .2012. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.9.2010 FOR THE ASSESSMEN T YEAR 2010-2011 DECLARING TOTAL INCOME OF RS.61,15,221/- AND THE SA ME WAS PROCESSED U/S.143(1) OF THE ACT. LATER ON, ASSESSEES CASE WA S SELECTED FOR SCRUTINY U/S.143(3) OF THE ACT AND THE AO HAS COMPLETED THE ASSESSMENT BY MAKING THE ADDITION OF RS.85,20,808/-. THE ASSESSEE HAD PAID TO CLEARING ITA NO.2508/13 SCARLET IMPEX 2 AND FORWARDING AGENTS TO THE TUNE OF RS.88,20,808/- BUT HE HAD NOT DEDUCTED TDS, HENCE, THE AMOUNT IS DISALLOWED BY TH E AO U/S.40(A)(IA) OF THE ACT.1961. 3. AGGRIEVED FROM THE ORDER OF ASSESSING OFFICER, T HE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ADDITION MADE BY THE AO (AFTER GIVING A PARTIAL RELIEF TO THE ASSESS EE), OBSERVING THE FOLLOWINGS :- 7. THE APPELLANT IS LIABLE TO DEDUCT THE TDS AS PER SECTION 194C OF THE IT. ACT. THE SECTION 194C SUB SECTION (5) AS UN DER:- . 'NO DEDUCTION SHALL BE MADE FROM THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACC OUNT OF, OR TO, THE CONTRACTOR, IF SUCH SUM DOES NOT EXCEED [TWENTY] TH OUSAND RUPEES. PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID D URING THE FINANCIAL YEAR EXCEEDS [FIFTY)] THOUSAND RUPEES, THE PERSON R ESPONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) SHA LL BE LIABLE TO DEDUCT INCOME TAX UNDER THIS SECTION. ' 8. THE APPELLANT MADE THE PAYMENT AS UNDER.- DETAILS OF FORWARDING & CLEARING CHARGES AS ON 31.0 3.2010 SL.NO. NAME AMOUNT 1. ATLANTIC & OCEAN FREIGHT SERVICES PVT. LTD. 937. 50 2. CARGO PARTNER LOGISTICS PVT. LTD. 220651.00 3. EVERGREEN SHIPPING AGENCY 9INDIA) PVT. LTD. 3088 .40 4. HANS INTERNATIONAL 48570.00 5. INDIAN AIR EXPRESS 7695468.00 6. METRO GLOBAL LOGISTICS 26699.00 7. NYK LOGISTICS INDIA LTD 76027.00 8. TEAM GLOBAL LOGISTICS PVT. LTD. 12026.91 9. TNT INDIA PVT. LTD. 179018.54 10. VERTEX 14796.00 11. WELCOME AIR EXPRESS PVT. LTD. 242358.00 12. CASH 1168.00 TOTAL 8520808.35 THUS THE APPELLANT MADE THE PAYMENT LESS THAN TWENT Y THOUSAND AS UNDER.- SL.NO. NAME AMOUNT 1. ATLANTIC & OCEAN FREIGHT SERVICES PVT. LTD. 937. 50 2. EVERGREEN SHIPPING AGENCY 9INDIA) PVT. LTD. 3088 .40 3. TEAM GLOBAL LOGISTICS PVT. LTD. 12026.91 4. VERTEX 14796.00 ITA NO.2508/13 SCARLET IMPEX 3 5. CASH 1168.00 TOTAL 32016.81 TOTAL COMES OF RS. 32,017 WHICH IS NOT VIOLATION OF 194C OF THE IT. ACT AND THE BALANCE OF RS. 84,88,791 IS VIOLATION O F 194C OF THE IT. ACT. 09. CONSIDERING THE ABOVE FINDINGS AND FACTS OF THE CASES I CONFIRM THE ADDITION MADE BY THE A.O. OF RS. 84,88,791/- U/ S. 40(A)(IA) OF THE IT. ACT. BALANCE OF RS. 32,017/- IS DELETED. TH ESE GROUNDS ARE PARTLY ALLOWED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- L. THAT ON FACTS AS WELL AS ON LAW, THE ORDER PASS ED BY THE LEARNED CIT(A)-XXIV, KOLKATA IS PERVERSE, ARBITRARY , BAD IN LAW AND IS LIABLE TO BE QUASHED. 2. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED C IT(A)-XXIV, KOLKATA HAS ERRED IN CONFIRMING THAT VIEW OF THE LE ARNED AO THAT THE PROVISION OF SECTION 194C OF THE INCOME TA X ACT IS APPLICABLE IN CASE OF REIMBURSEMENT OF EXPENSES MAD E TO CLEARING AND FORWARDING AGENTS AMOUNTING TO RS. 84, 88,791/- 3. THAT, ON FACTS AS WELL AS ON LAW, THE LEARNED C IT(A)-XXIV, KOLKATA HAS ERRED IN CONFIRMING THE DISALLOWANCE OF THE AMOUNT OF RS. 84,88,791/- REIMBURSED TO CLEARING AND FORWA RDING AGENTS UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT ON AC COUNT OF ALLEGED DEFAULT UNDER SECTION 194C. 5. LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT NO DO UBT IN THIS CASE, THE ASSESSEE HAS NOT DEDUCTED THE TAX AND PAID TO T HE REVENUE BUT THE DEDUCTEE HAS PAID THE TAX ON BEHALF OF THE DEDUCTO R(ASSESSEE). THE AO FAILED TO VERIFY THAT THE TAX HAS BEEN DEPOSITED BY THE DEDUCTEE. IT IS WELL SETTLED POSITION OF LAW THAT IF DEDUCTOR OF THE TDS HAS NOT DEDUCTED TDS AND PAD TO THE GOVERNMENT BUT THE DEDUCTEE HAS PAID TDS ON BEHALF OF THE DEDUCTOR, THEN IT WOULD BE SUFFICIENT COMPLIANC E. THAT IS, THE GOVERNMENT IS NOT LOSING THE REVENUE. THEREFORE, AD DITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) SHOULD BE DELETE D. ITA NO.2508/13 SCARLET IMPEX 4 THE LD. AR ALSO REQUESTED THE BENCH THAT THE AO DI D NOT VERIFY THE TAX DEPOSITED BY THE DEDUCTEE, THEREFORE, IT IS IN THE INTEREST OF JUSTICE TO SEND THE CASE BACK TO THE FILE OF AO TO VERIFY THIS FACT AND GIVE THE NECESSARY RELIEF TO THE ASSESSEE. 6. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS P RIMARILY RELIED ON THE FINDINGS OF THE AO WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. THE LD. AR FOR THE ASSESSEE HAS POINTED OUT THAT THE TDS AMOUNT HAS BEEN DEPOSITED BY THE D EDUCTEE. THE ASSESSEE DEDUCTOR NEITHER DEDUCTED THE TDS NOR DEPO SITED TO THE REVENUE ACCOUNT BUT THE DEDUCTEE HAS PAID AMOUNT ON BEHALF OF THE DEDUCTOR (ASSESSEE). THIS ASPECT HAS NOT BEEN VERIF IED BY THE AO, THEREFORE, WE ARE OF THE VIEW TO REMIT THE CASE BAC K TO THE FILE OF AO WITH A DIRECTION TO VERIFY AS TO WHETHER INCOME HAS RECORD ED CORRECTLY AND THE TDS AMOUNT HAS BEEN PAID BY DEDUCTEE TO THE REVENUE ACCOUNT. IF THE AO FINDS THAT THE DEDUCTEE HAS PAID THE TDS AMOUNT TO THE GOVERNMENT ON BEHALF OF THE DEDUCTOR(ASSESSEE) THEN HE SHOULD GIVE NECESSARY RELIEF TO THE ASSESSEE. ACCORDINGLY, WE REMIT THE CASE BAC K TO THE FILE OF AO TO VERIFY THE TDS AMOUNT DEPOSITED BY THE DEDUCTEE. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ITA NO.2508/13 SCARLET IMPEX 5 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20/01 /2017. S D/ - (A.T.VARKEY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 20/01/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-SCARLET IMPEX 2. / THE RESPONDENT.- ACIT, CIRCLE-37, KOLKATA 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//