Sukumar Mondal, Hooghly V. ITO, Wd-2(1), Burdwan, Burdwan

ITA 265/KOL/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75082 (ITAT-KOLKATA)
• Duration Of Justice: 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2014
• Court: TRIBUNAL
• Department Lawyers: APURBA KR DAS
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI ABRAHAM P.GEORGE, AM & HONBL E SRI GEORGE MATHAN, JM] ITA NO.265/KOL/2014 ASSESSMENT YEAR : 2008-09 ( APPELLANT ) (RESPONDENT) SUKUMAR MONDAL -VS- I.T.O., WARD-2 (1) L.R.ABHIJIT MONDAL BURDWAN HOOGHLY (PAN:ADMPM 4123 D) FOR THE APPELLANT SHRI SOMNATH GHOSH, ADVOCATE FOR THE RESPONDENT SHRI APURBA KR.DAS, JCIT, SR.DR DATE OF HEARING : 06.03.2014 DATE OF PRONOUNCEMENT : 06. 03.2014. ORDER PER SHRI GEORGE MATHAN, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. C.I.T.(A)- DURGAPUR IN APPEAL NO.72/XXXII/11-12/2(1)/BWN/R&T/K OL. DATED 24.01.2014 FOR ASSESSMENT YEAR 2008-09. 2. SHRI SOMNATH GHOSH, ADVOCATE, REPRESENTED ON BE HALF OF THE ASSESSEE AND SHRI APURBA KR.DAS, JCIT(SR.DR) REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD. AR THAT THE ISSUE I N APPEAL WAS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCE MA DE BY AO BY INVOKING THE PROVISION OF SECTION 40A(3) OF THE ACT ON THE CASH PURCHASE OF COUNTRY SPIRIT FROM THE GOVERNMENT AUTHORISED DISTRIBUTORS. IT WAS THE SUBM ISSION THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S.AMRAI PACHWAI & C.S.SHOP IN ITA NO.1251/KOL/201 1 DATED 15.01.2014 AS ALSO THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF ASHOK MONDAL IN ITA NO.873/KOL/2012 DATED 06.02.2014. 4. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORD ERS OF AO AND THE LD. CIT(A). ITA.NO.265/KOL/2014 SUKUMAR MONDAL L.R.A BHIJIT MONDAL A.YR.2008-09 2 5. WE HAVE CONSIDERED THE SUBMISSIONS. AS IT IS NOT ICED THAT THE ISSUE IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE C OORDINATE BENCH OF THIS TRIBUNAL WHEREIN WE ARE THE SIGNATORIES TO THIS ORDER AND WH EREIN IT HAS BEEN HELD AS FOLLOWS : 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET A PERUSAL OF THE DECISION IN THE CASE OF SMT.PUSHPALATA MONDAL SHOW S THAT THE TRIBUNAL HAD DECIDED THE CASE BY FOLLOWING THE DECISION OF HONBLE KERALA HI GH COURT IN THE CASE OF K.ABDU & CO. REFERRED TO SUPRA WHEREIN THE ISSUE WAS IN RELA TION TO RULE 6DD(A) OF IT RULES. THE ISSUE IN THE ASESSEES CASE IS IN RESPECT OF THE PA YMENTS MADE UNDER THE RULES FRAMED BY THE GOVERNMENT AND SUCH PAYMENT WAS REQUIRED TO BE MADE IN LEGAL TENDER. A PERUSAL OF THE GOVERNMENT NOTIFICATION ISSUED BY THE GOVT. OF WEST BENGAL CLEARLY SHOWS THAT THE DEALERS ARE AGENTS OF THE GOVERNMENT AND THE PAYMEN TS MADE ARE TO THE GOVERNMENT. IT ALSO MAKES IT CATEGORICALLY REQUIRED THAT THE PAYME NT IS TO BE MADE BEFORE LIFTING OF THE COUNTRY SPIRIT. CONSEQUENTLY WE ARE OF THE VIEW THA T THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF M/S.AMRAI PACHWAI & C.S.SHOP REFERRED TO SUPRA WHEREIN IT HAS BEEN HELD AS FOLLOWS :- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT T HE OUTSET A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS RECO GNIZED THE ASSESSEES BUSINESS IN TRADING OF COUNTRY SPIRIT AND COUNTRY LIQUOR. COPY OF FORM OF LICENCE ISSUED BY DURGAPUR MUNICIPAL CORPORATION AND COPY OF FORM III ISSUED BY DEPARTMENT OF EXCISE, GOVT. OF W.B. WERE ALSO FOUND AT PAGES 177 AND 179 OF THE ASSESSEES PAPER BOOK. IN ANY CASE THE VALIDITY OF LICENCE OF THE ASSESSEE TO TRADE IN COUNTRY SPIRIT AND COUNTRY LIQUOR IS NOT THE ISSUE BEFORE US. THE ISSUE IS WHE THER THE PAYMENTS MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY SPIRIT FROM THE TERRITO RIAL LICENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD., CITY CENTRE, DURGAPUR FALLS WITHIN THE EXEMPTION PROVIDED UNDER RULE 6DD(B) OF THE I.T.RULES, 1962. ADMITTEDLY, THE AO HAS RECOGNIZED THAT THE PROVISION OF RULE 6DD(B) OF THE I.T.RULES, 1962 IS APPLICABLE IN CASE OF PAYMENTS MADE TO GOVERNMENT DIRECTLY. THIS IS FOUND IN PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE KOLKATA GAZETTE TUESDAY 20 TH SEPT 2005 SHOWS THAT THE GOVERNMENT OF WEST BENGAL , DEPARTMENT OF EXCISE HAS ISSUED A NOTIFICATION, WHE REIN THE WAREHOUSE HAS BEEN IDENTIFIED TO MEAN THE WAREHOUSE FOR SUPPLY OF COUN TRY SPIRIT TO THE RETAIL VENDORS, ESTABLISHED AT CONVENIENT PLACES BY THE COMMISSIONE R AT THE EXPENSE OF THE STATE GOVERNMENT, OR AT THE EXPENSE OF A PERSON TO WHOM T HE EXCLUSIVE PRIVILEGE OF SUPPLYING OR SELLING COUNTRY SPIRIT BY WHOLESALE HAS BEEN GRA NTED U/S 22 OF THE ACT OF A LICENSED WHOLESALE VENDOR OF COUNTRY SPIRIT. FURTHER, IT HAS BEEN SPECIFICALLY IDENTIFIED THAT THE AUTHORISED REPRESENTATIVE OF THE WHOLESALE LICENSEE SHALL REALIZE THE NECESSARY AMOUNT OF DUTY, COST PRICE AND BOTTLING CHARGE, IF THERE B E ANY, AT THE PRESCRIBED RATE AND SUCH OTHER IMPOSITION, AS MAY BE PRESCRIBED BY LAW, FROM THE RETAIL VENDOR TO WHOM THE COUNTRY SPIRIT IS TO BE ISSUED FORM THE CONCERNED W AREHOUSE. IT IS ALSO SPECIFICALLY MENTIONED IN SECTION (2) OF THE SAID NOTIFICATION T HAT NO RETAIL VENDOR OF COUNTRY SPIRIT SHALL DEPOSIT DUTY DIRECT INTO THE LOCAL TREASURY F OR ISSUE OF COUNTRY SPIRIT TO BE TAKEN BY HIM FROM THE WAREHOUSE CONCERNED WHICH CLEARLY SHOW S THAT THE WAREHOUSE IS FOR THE SUPPLY OF THE COUNTRY LIQUOR, SPECIFICALLY, THE WAR EHOUSE IS UNDER THE DIRECT CONTROL AND CUSTODY OF THE STATE GOVT. THE STATE GOVERNMENT HAS CLOSED ITS DOORS IN SO FAR AS THE LOCAL TREASURY IS CONCERNED AND THE PAYMENT FOR TH E PURCHASE OF COUNTRY SPIRIT OR COUNTRY LIQUOR HAS TO BE MADE TO THE WAREHOUSE, RUN BY THE GOVERNMENT. THIS SHOWS THAT ANY PAYMENT MADE TO THE WAREHOUSE, WHICH IS UNDER T HE DIRECT CONTROL OF THE STATE ITA.NO.265/KOL/2014 SUKUMAR MONDAL L.R.A BHIJIT MONDAL A.YR.2008-09 3 GOVERNMENT , IS A PAYMENT MADE DIRECTLY TO THE GOVE RNMENT. ONCE, THIS IS ACCEPTED THEN THE PROVISIONS OF RULE 6DD(B) OF THE I.T.RULES, 196 2 WHICH CLEARLY SPELLS OUT THAT THE PAYMENT MADE TO THE GOVERNMENT IN LEGAL TENDER UNDE R THE RULES FRAMED BY THE GOVERNMENT, IS EXEMPTED FROM THE RIGOURS OF SECTION 40A(3) OF THE ACT. HERE, IT IS NOTICED THAT THE PAYMENTS MADE BY THE ASSESEE FOR P URCHASE OF COUNTRY SPIRIT AND COUNTRY LIQUOR IS TO THE GOVERNMENT AS PER THE NOTI FICATION ISSUED BY THE GOVERNMENT AND IS IN LEGAL TENDER SPECIFIED BY THE NOTIFICATION. I N THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE PAYMENT MADE BY THE ASSESSEE FOR THE PURCH ASE OF COUNTRY LIQUOR AND COUNTRY SPIRIT FROM THE TERRITORIAL LICENSEE BOTTLING PLANT , IFB AGRO INDUSTRIES LTD., CITY CENTRE, DURGAPUR IS PROTECTED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF THE I.T.RULES 1962. IN THE CIRCUMSTANCES, THE ADDITION AS MADE BY THE A O AND AS CONFIRMED BY THE LD. CIT(A) BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE I.T.ACT 1961 STANDS DELETED. 7.1. WE ARE OF THE VIEW THAT THE ASSESSEE IS PROTEC TED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF IT RULES, 1962. IN THE CIRCUMSTANCES THE ADDITION AS MADE BY THE AO AND AS CONFIRMED BY LD. CIT(A) BY INVOKING THE PROV ISIONS OF SECTION 40A(3) OF THE ACT STANDS DELETED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED ORDER PRONOUNCED IN THE COURT ON 06.03.2014. SD/- SD/- [ABRAHAM P.GEORGE] [ GEORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 06.03.2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. SUKUMAR MONDAL, L.R.ABHIJIT MONDAL, C/O, SOMNATH GH OSH, ADVOCATE, SEVEN BROTHERS LODGE, P.O.BUROSHIBTALA, P.S.CHINSURAH, DI ST.HOOGHLY, PIN-712 105. 2 I.T.O., WARD-2(1), BURDWAN. 3 . CIT(A)-DURGAPUR. 4. CIT - KOLKATA. 5. CIT(A)DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA.NO.265/KOL/2014 SUKUMAR MONDAL L.R.A BHIJIT MONDAL A.YR.2008-09 4