KAYPAN VANIJYA PVT. LTD, MUMBAI V. ITO-6(2)(4), MUMBAI

ITA 2943/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3926 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 13-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBEY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI AMIT SHUKLA (JM) I.T.A. NO. 2943 /MUM/ 20 1 1 (ASSESSMENT YEAR 200 6 - 0 7 ) M/S. KAYPAN VANIJYA PVT. LTD. 2, VARDHMAN COMPLEX LBS MARG, VIKHROLI (W) MUMBAI - 400 083. PAN NO.AAACK3290K VS. ITO 6(2)(4) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 2944/MUM/2011 (ASSESSMENT YEAR 2006 - 07) M/S. KAYPAN EXPORTS PVT. LTD. (FORMERLY KNOWN AS MUKUND EXPORTS P. LTD.) 2, VARDHMAN COMPLEX LBS MARG , VIKHROLI (W) MUMBAI - 400 083. PAN NO.AAACK3404B VS. ITO 6(2)(4) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI SACHCHIDANAND DUBEY DATE OF HEARING 4 .8. 201 6 DATE OF PRONOUNCEMENT 4 . 8 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THESE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY LD CIT(A) - 12, MUMBAI IN THEIR RESPECTIVE HANDS FOR ASSESSMENT YEAR 2006 - 07. BOTH THESE APPEALS BELONG TO SA ME GROUP AND HENCE BOTH OF THEM WERE HEARD TOGETHER AND THE COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE. KAYPAN EXPORTS P. LTD. KAYPAN VANIJYA P. LTD. 2 2. NONE APPEARED ON BEHALF OF THESE ASSESSEES, EVEN THOUGH THE NOTICE OF HEARING SENT BY REGISTERED POST WAS DULY ACKNOWLEDGED BY THE A SSESSEE. HENCE WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3. WE SHALL FIRST TAKE UP THE APPEAL FILED BY M/S KAYPAN VANIJYA P LTD. THE ONLY ISSUE URGED BY THE ASSESSEE RELATES TO THE DISALLOWANCE MADE U/S 40(A )(IA) OF THE ACT FOR NON - DEDUCTION OF TAX AT SOURCE FROM THE PAYMENT MADE TO CLEARING AND FORWARDING AGENT. 4. WE HEARD LD D.R AND PERUSED THE RECORD. THE AO NOTICED THAT THE ASSESSEE HAS PAID A SUM OF RS.4,60,676/ - TO THE C & F AGENT WITHOUT DEDUCTING TAX AT SOURCE. HENCE THE AO DISALLOWED THE SAME BY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE SAME. 5. WE NOTICE THAT THE ASSESSEE HAD TAKEN THE PLEA THAT THE ABOVE SAID SUM INCLUDES A SUM OF RS.3,33,539/ - REPRESENTING REIMBURSEMENT OF EXPENSES AND HENCE NO TAX IS DEDUCTIBLE AT SOURCE ON SUCH REIMBURSEMENTS. IN OUR VIEW, THE C & F AGENT IS ACTING AS AN AGENT OF THE ASSESSEE, MEANING THEREBY, THE EXPENSES HAVE BEEN INCURRED BY THE AGENT ON BEHALF OF THE ASS ESSEE. HENCE, IN OUR VIEW, THE TAX SHOULD HAVE BEEN DEDUCTED AT SOURCE FROM THE PAYMENTS, WHICH ARE ATTRACTED BY THE TDS PROVISIONS, EITHER BY THE C & F AGENT OR BY THE ASSESSEE. IT IS NOT CLEAR AS TO WHETHER THE C & F AGENT HAS DEDUCTED TAX AT SOURCE FR OM THE PAYMENTS. 6. FURTHER WE NOTICE THAT THE BREAK UP DETAILS OF THE ABOVE SAID AMOUNT OF RS.3,33,539/ - IS NOT AVAILABLE ON RECORD. WE NOTICE THAT THE AO HAS MADE THE DISALLOWANCE WITHOUT EXAMINING AS TO WHETHER ALL THE PAYMENTS ARE ATTRACTED BY T DS PROVISIONS OR NOT? UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THIS KAYPAN EXPORTS P. LTD. KAYPAN VANIJYA P. LTD. 3 ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO WITH TH E DIRECTION TO EXAMINE THIS ISSUE AFRESH BY OBTAINING THE BREAK - UP DETAILS OF THE ABOVE SAID SUM OF RS.3,33,539/ - , THE ITEMS WHICH ATTRACT TDS PROVISIONS, THE PAYMENTS WHICH REQUIRE TDS DEDUCTION ETC. AND/OR SUCH OTHER DETAILS AS MAY BE FOUND NECESSARY. T HE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE WITH THE AO FOR EXPEDITIOUS COMPLETION OF THE ASSESSMENT. 7. NOW WE SHALL TAKE UP THE APPEAL FILED BY M/S KAYPAN EXPORTS P LTD. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITIO N OF RS.14,60,052/ - MADE U/S 68 OF THE ACT. 8. WE HEARD LD D.R AND PERUSED THE RECORD. THE AO NOTICED THAT THE ASSESSEE HAS RECEIVED A LOAN OF RS.14,60,052/ - FROM A PERSON NAMED SHRI BALWANTBHAI GREWAL. SINCE THE ASSESSEE DID NOT PROVE THE GENUINENE SS OF LOAN IN TERMS OF SEC. 68, THE AO ASSESSED THE SAME AS INCOME OF THE ASSESSEE. BEFORE LD CIT(A), THE ASSESSEE TOOK THE PLEA THAT SHRI BALWANTBHAI GREWAL WAS ASSOCIATING WITH THE ASSESSEES GROUP IN COLLECTING THE RECEIVABLES FROM THE FOREIGN CLIENTS. ACCORDINGLY IT WAS SUBMITTED THAT THE ABOVE SAID AMOUNT REPRESENTS COLLECTION OF EXPORT RECEIVABLES MADE ON BEHALF OF ASSESSES SISTER CONCERN NAMED M/S KAYPAN VANIJYA PVT LTD. IT WAS FURTHER SUBMITTED THAT THE AMOUNT WAS CREDITED IN THE ACCOUNT OF SHR I BALWANTBHAI GREWAL, SINCE THE RELEVANT DETAILS WERE NOT FURNISHED TO THE ACCOUNTANT. THE LD CIT(A) NOTICED THAT THE ASSESSEE DID NOT FURNISH ANY DOCUMENT OR EVIDENCE TO SUPPORT THE ABOVE SAID CONTENTIONS. HENCE HE CONFIRMED THE ADDITION MADE BY THE AO. KAYPAN EXPORTS P. LTD. KAYPAN VANIJYA P. LTD. 4 9. BEFORE US ALSO, THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE OR MATERIAL TO SUPPORT THE SUBMISSIONS MADE BEFORE THE LD CIT(A). HENCE, WE DO NOT HAVE ANY OTHER OPTION, BUT THE CONFIRM THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE. 10. IN THE R ESULT, THE APPEAL NO.2943/MUM/2011 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL NO.2944/MUM/2011 IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 4. 8 .2016 SD/ - SD/ - (AMIT SHUKLA ) (B.R.BASKARAN) JUDICIAL MEM BER ACCOUNTANT MEMBER MUMBAI ; DATED : 4 / 8 / 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS