A.C.I.T Cir - 52,kolkata.., Kolkata V. The West Bengal State Co - Operative Marketing Federation Ltd., Kolkata

ITA 308/KOL/2013

• Counselvise Citation: 30823514 RSA 2013
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 13-02-2013
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARARJ NA CIT LD
• Assessee Lawyers: MIRAJ D SHAH FCA LD
• Section: 143(3)

Judgement Text

ITA NO.30 8 CO NOS. 36,38/KOL/2013-C-AM W.B.S CO-OP MKTG FDRN LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 308/KOL/2013 A.Y 2006-07 THE ACIT, CIR-52, KOLKATA VS. WEST BENGAL STA TE CO-OPERATIVE MARKETING FEDERATION LTD. PAN:AABAT0010H (APPELLANT) (R ESPONDENT) CO NOS. 36 & 38/KOL/2013 [ARISING OUT OF ITA NO.308/KOL/2013 AY 2006-07] WEST BENGAL STATE CO-OPERATIVE VS. THE ACIT, CIR-5 2, KOLKATA MARKETING FEDERATION LTD. PAN:AABAT0010H (CROSS OBJECTOR) (DEPARTMENT) FOR THE APPELLANT/DEPARTMENT: SHRI G.MALLIKARARJ NA, CIT, LD.DR FOR THE RESPONDENT : SHRI MIRAJ D.SHAH, FCA, LD.AR DATE OF HEARING: 16-11-2015 DATE OF PRONOUNCEMENT: 20 -11- 2015 ORDER PER BENCH THIS APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED CIT(A)-XX, KOLKATA IN APPEAL NO. 216/CIT(A)-XX/CIR-36/2011- 12/KOL DATED 16-10-2012 FOR THE ASST YEAR 2006-07 A GAINST THE ORDER OF ASSESSMENT FRAMED U/S 143(3) OF THE INCOME TAX ACT 1961 (HEREI NAFTER REFERRED TO AS THE ACT). 2. IT IS SEEN THAT THE ASSESSEE HAD ORIGINALLY FI LED CROSS OBJECTION BEFORE US AND THE REGISTRY HAD NUMBERED THE SAME AS CO 36/KOL/2013. BUT IT WAS NOTICED BY THE REGISTRY THAT THE SAID CROSS OBJECTION WAS NOT SIGNED BY THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY. ACCORDINGLY A DEFECT MEMO WAS ISSUED TO T HE ASSESSEE. THE ASSESSEE HAD DULY RECTIFIED THE DEFECT AND FILED FRESH CROSS OBJECTIO N DULY SIGNED BY THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY WITH A DELAY OF 13 DAYS AND THIS WAS ALSO NUMBERED BY THE ITA NO.30 8 CO NOS. 36,38/KOL/2013-C-AM W.B.S CO-OP MKTG FDRN LTD 2 REGISTRY AGAIN AS CO 38/KOL/2013. WE FIND THAT THE ASSESSEE HAD ONLY RECTIFIED THE DEFECT AND HENCE THERE IS NO QUESTION OF ANY DELAY IN FILI NG THE CROSS OBJECTION. EFFECTIVELY IT IS THE CO 36/KOL/2013 WHICH NEEDS TO BE ADJUDICATED HE REIN. HENCE CO 38/KOL/2013 IS DISMISSED AS INFRUCTUOUS. 3. AT THE TIME OF HEARING, THE LEARNED DR ARGU ED THAT THE LEARNED CITA ERRED IN DELETING THE ADDITION MADE IN THE SUM OF RS. 9,36,0 7,739/- U/S 40(A)(IA) OF THE ACT TOWARDS DISCOUNT CATEGORIZED AS COMMISSION BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. BUT WE FIND THAT THE REVENUE HAS NOT RAISED ANY GROUND BEFORE U S ON THE SAID ISSUE. HENCE THE SAME IS NOT ADJUDICATED HEREIN. 4. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT COULD BE MADE TOWARDS PROCESSI NG CHARGES OF RS. 18,05,93,872/- ; PACKING CHARGES OF RS. 5,82,33,598/- AND PROCUREMEN T EXPENSES OF RS. 6,28,79,213/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED AR AT THE TIME OF HEARING IN SUPPO RT OF HIS CROSS OBJECTION ALSO STATED THAT THE IMPUGNED ISSUE MAY BE SET ASIDE TO THE FIL E OF THE LEARNED AO TO DECIDE THE MATTER IN THE LIGHT OF THE SECOND PROVISO TO SECTIO N 40(A)(IA) OF THE ACT WHEREIN IF THE PAYEE HAD INCLUDED THE SUBJECT MENTIONED RECEIPTS I N HIS RETURNS, THEN THE PAYER (THE ASSESSEE HEREIN) SHOULD NOT BE INVOKED WITH DISALLO WANCE U/S 40(A)(IA) OF THE ACT. IN RESPONSE TO THIS, THE LEARNED DR ARGUED THAT THE SECOND GROUND RAISED BY THE REVENUE IS ALREADY COVERED IN FAVOUR OF THE REVENUE BY THE DEC ISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS CRESCENT EXPORT SYNDICATE (2013) 33 TAXMANN. COM 250 (CAL) WHEREIN IT WAS HELD THAT PROVISIONS OF 40(A)(IA) CO ULD BE INVOKED EVEN ON AMOUNTS PAID BEFORE THE END OF THE PREVIOUS YEAR AND NOT ONLY IN RESPECT OF AMOUNTS PAYABLE AT THE END OF THE PREVIOUS YEAR. HOWEVER, HE FAIRLY CONCEDE D FOR THE SUGGESTION OF THE LEARNED AR FOR SETTING ASIDE OF THIS ISSUE TO DECIDE IN THE LI GHT OF AMENDMENT TO SECTION 40(A)(IA) OF THE ACT. ITA NO.30 8 CO NOS. 36,38/KOL/2013-C-AM W.B.S CO-OP MKTG FDRN LTD 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND WE FIN D THAT THE AMENDMENT IN SECTION 40(A)(IA) OF THE ACT BY WAY OF INTRODUCTION OF SECO ND PROVISO WITH EFFECT FROM 1.4.2013 HAS BEEN HELD TO BE RETROSPECTIVE IN OPERATION BY T HE DECISION RENDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND M ARK TOWNSHIP P LTD REPORTED IN (2015) 377 TIR 635 (DELHI), WHEREIN, IF THE PAYEE HAD CONSIDERED THE SUBJECT M ENTIONED RECEIPTS AND INCLUDED IN HIS RETURNS, THEN THE ASSE SSEE SHOULD NOT BE TREATED AS ASSESSEE IN DEFAULT AND NO DISALLOWANCE U/S 40(A)(IA) OF THE AC T COULD BE MADE IN THE HANDS OF THE ASSESSEE AND THE AMENDMENT TO SECOND PROVISO TO SEC TION 40(A)(IA) OF THE ACT HAS ALSO BEEN HELD TO BE RETROSPECTIVE IN OPERATION. ACCORD INGLY WE DEEM IT FIT AND APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED AO TO DECIDE THIS ISSUE IN THE LIGHT OF THE DELHI HIGH COURT DECISION STATED SUPRA. THE ASSESEE IS DIRECTED TO EXTEND FULL CO-OPERATION IN THIS REGARD AND IS ALSO AT LIBERTY TO FILE FRESH EVIDENCES AND SUBMISSIONS IN SUPPORT OF HIS CONTENTIONS. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 7. WITH REGARD TO THE CROSS OBJECTION OF THE ASSE SSEE, SINCE THE ISSUE IS SET ASIDE TO THE FILE OF THE LEARNED AO , THE ADJUDICATION OF CROSS OBJECTION OF THE ASSESSEE BECOMES INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED AS INFRUC TUOUS. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 20/11/20 15 SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATED 20/ 11/2015 ITA NO.30 8 CO NOS. 36,38/KOL/2013-C-AM W.B.S CO-OP MKTG FDRN LTD 4 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT :ACIT, CIR-32 AAYKAR BHAWAN DAKS HIN 2 GARIAHAT ROAD(S) KOL-68. 2 THE RESPONDENT- THE WEST BENGAL STATE CO-OPERATI VE MARKETING FEDRATION LTD 1582 RAJDANGA MAIN ROAD, SOUTH END CONCLAVE, 3 RD FL., KOL-107. 3 4.. THE CIT, THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR ** PRADIP SPS