ITO, Ward - 28(1), Kolkata, Kolkata V. M/s. MPRS Logistics Care, Kolkata

ITA 376/KOL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2051 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2012
• Court: TRIBUNAL
• Department Lawyers: PINAKI MUKHERJEE
• Assessee Lawyers: G BANERJEE
• Keywords: Additional evidence; Assessment record
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & SHRI S.S. VISWANETHRA RAVI, JM] ITA NO.376/KOL/2012 ASSESSMENT YEAR : 2008-09 ( APPELLANT ) (RESPONDENT) I.T.O., WARD-28(1), -VERSUS- M/S. MPRS LOGISTICS CARE KOLKATA KOLKATA (PAN:AAKFM 1891 P) FOR THE APPELLANT : SHRI PINAKI MUKHERJEE, JCIT FOR THE RESPONDENT : SHRI G.BANERJEE, CA DATE OF HEARING : 01.10.2015. DATE OF PRONOUNCEMENT : 8.10.2015. ORDER PER SHRI M.BALAGANESH, AM THIS APPEAL OF THE REVENUE ARISES OUT OF TH E ORDER OF THE LEARNED CIT(A) IN APPEAL NO. 281/CIT(A)-XIV/10-11 DATED 16.12.2011 FO R THE ASST YEAR 2008-09 PASSED AGAINST THE ORDER OF ASSESSMENT FRAMED BY TH E LEARNED AO U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). 2. THE ISSUE TO BE DECIDED IN THIS APPEAL IS W HETHER THERE WAS A VIOLATION OF RULE 46A OF INCOME TAX RULES 1962 BY THE LEARNED CITA IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS APPEAL IS THAT THE A SSESSEE IS A PARTNERSHIP FIRM AND IS ACTING AS A CLEARING AND FORWARDING AGENT UNDER CUS TOMS HOUSE AND PORT AUTHORITIES ON BEHALF OF CUSTOMERS WHO IMPORT GOODS THROUGH CAR GO VESSELS AND INCLUDING THE EXECUTION OF WORK TO DELIVER THE GOODS AT THE CUSTO MERS GODOWN IF DESIRED BY THE PARTY. FOR THIS PURPOSE, THE ASSESSEE OBTAINED C USTOMS HOUSE LICENCE IN NOVEMBER 2006 AND BEFORE THAT PERIOD, THE SAME ACTIVITIES WE RE CARRIED ON BY THE ASSESSEE BY USING THE LICENCE OF M/S PETER & SMITH INDIA PVT LT D. SIMILARLY THE ASSESSEE ALSO HAD ALLOWED M/S CARGO PARTNER LOGISTICS INDIA PVT LTD T O USE THEIR LICENCE FROM JANUARY ITA NO.376/KOL/2012 M/S. MPRS LOGISTICS CARE A.YR.2008-09 2 2007 AGAINST CONSIDERATION FOR PROFESSIONAL CHARGES . THE EXPENSES INCURRED IN THE PROCESS WERE ULTIMATELY RECORDED BY THE ASSESSEE BY RAISING BILLS ON THE PARTIES. 4. THE LEARNED AO DURING THE COURSE OF ASSESSMEN T PROCEEDINGS FOUND THAT IN FORM 26AS, THE GROSS PAYMENT FAVOURING THE ASSESSEE SHO WED A TURNOVER OF RS. 1,13,69,076/- , AGAINST WHICH THE ASSESSEE HAD DISC LOSED TURNOVER OF RS. 57,89,273/- IN ITS ACCOUNTS. THE ASSESSEE DURING THE COURSE OF AS SESSMENT PROCEEDINGS EXPLAINED THAT THE AMOUNT OF RS. 55,79,803/- (1,13,69,076 - 57,89, 273) WAS ACTUALLY MADE BY M/S CARGO PARTNER LOGISTICS INDIA (P) LTD (CPL IPL) , T HE USER OF THE ASSESSEES CUSTOMS HOUSE LICENCE TO VARIOUS THIRD PARTIES, OTHER THAN THE ASSESSEE, WHO HAD ALSO RENDERED SERVICES TO CPL IPL IN THE COURSE OF CARRYING OUT T HEIR OWN BUSINESS OF LOGISTICS SUPPORT SERVICES. THESE PAYMENTS NEVER REACHED THE ASSESSEE NOR ANY INCOME ACCRUED OR AROSE OR DEEMED TO ACCRUE OR ARISE OTHERWISE TO THE ASSESSEE FROM SUCH THIRD PARTY PAYMENTS MADE BY CPL IPL DIRECTLY. HOWEVER, THE C PL IPL HAD DEDUCTED TAX AT SOURCE IN THE NAME OF THE ASSESSEE FOR THE SAME. T HE CONFIRMATION LETTER OF CPL IPL WAS FILED BEFORE THE LEARNED AO STATING THAT CPL IP L WAS OBLIGATED TO PAY RS. 55,79,803/- TO OTHER SERVICE PROVIDERS ONLY AND NOT TO THE ASSESSEE HEREIN. IGNORING THESE FACTS, THE LEARNED AO ADDED THE DIFFERENCE SU M OF RS. 55,79,803/- ( 11369076- 5789273) IN THE ASSESSMENT. ON FIRST APPEAL, THE LEARNED CITA DELETED THE ADDITION MADE IN THE SUM OF RS. 55,79,803/- BY ACCEPTING TO THE CONTENTIONS OF THE ASSESSEE AND FROM THE CONFIRMATION FILED BY THE CPL IPL WITH REG ARD TO THE MISTAKE COMMITTED BY IT IN THE TDS CERTIFICATE. AGGRIEVED, THE REVENUE I S IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS BY DELETING THE ADDITION OF RS.55,79,803/- MADE BY THE AO UNDER THE HEAD UNDIS CLOSED RECEIPT BY ADMITTING AND ALSO CONSIDERING ADDITIONAL EVIDENCES IN CONTRAVENT ION OF RULE 46A. 2. FOR THAT THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS BY DELETING THE ADDITION OF RS.50,33,547/- MADE BY THE AO ON ACCOUNT OF DISCRE PANCY IN THE ACCOUNT WITH M/S CARGO PARTNERS LOGISTIC(I) PVT. LTD. BY ADMITTING A ND ALSO CONSIDERING ADDITIONAL EVIDENCES IN CONTRAVENTION OF RULE 46A. ITA NO.376/KOL/2012 M/S. MPRS LOGISTICS CARE A.YR.2008-09 3 5. SHRI.PINAKI MUKHERJEE, JCIT, THE LEARNED DR A RGUED ON BEHALF OF THE REVENUE AND SHRI.G.BANERJEE, FCA, THE LEARNED AR ARGUED ON BEHALF OF THE ASSESSEE. 6. THE LEARNED AR ARGUED THAT CPL IPL HAD COMMIT TED A MISTAKE BY INCLUDING AN HYPOTHETICAL PAYMENT IN THE TDS CERTIFICATE ISSUED TO THE ASSESSEE THOUGH SUCH PAYMENT NEVER REACHED THE ASSESSEE IN AS MUCH AS TH E ASSESSEE DID NEVER HAD ANY RIGHT TO RECEIVE THE SAID PAYMENTS AS THEY HAD BEEN MADE TO OTHER SERVICE PROVIDERS. HE ARGUED THAT THE SAID PAYMENTS DID NOT CRYSTALLIZE A S INCOME IN THE HANDS OF THE ASSESSEE. IN SUPPORT OF HIS ARGUMENT, HE ALSO PLAC ED RELIANCE ON THE CONFIRMATION FURNISHED BY CPL IPL IN THIS REGARD OF ACCEPTING TH E MISTAKE COMMITTED BY IT. THE ENTIRE EXTRACT OF THE TRANSACTIONS WITH CPL IPL HAS BEEN REPRODUCED BY THE LEARNED AR AT PAGE 4 OF THE ASSESSMENT ORDER WHICH IS ALSO REPRODUCED AT PAGE 8 OF LEARNED CITA ORDER. HE STATED THAT THE CONFIRMATION GIVEN BY CPL IPL IS REPRODUCED AT PARA 4.1 PAGE 6 OF THE LEARNED CITA ORDER. IN VIEW OF THE ABOVE, THE LEARNED AR ARGUED THAT THE ADDITION MADE IN THE SUM OF RS. 55,79,803/ - WAS RIGHTLY DELETED BY THE LEARNED CITA AND HENCE IT REQUIRES NO INTERFERENCE AND NO FRESH EVIDENCES WERE FILED BEFORE THE LEARNED CITA AS CONTENDED BY THE REVENUE IN ITS GROUNDS WHICH WOULD ADVANCE THE CASE OF THE EITHER PARTIES. IN RESPON SE TO THIS, THE LEARNED DR SUPPORTED THE GROUND OF THE REVENUE BY STATING THAT IN PARA 4 .2, THE LEARNED CITA HAD CLEARLY STATED THAT THE ASSESSEE HAD FURNISHED THE LEDGER C OPIES OF THE THIRD PARTIES AS PER BOOKS OF CPL IPL SHOWING DETAILS OF TRANSACTIONS EN TERED INTO BY THE THIRD PARTIES WITH CPL IPL AND THESE LEDGER COPIES FURTHER CORROBORATE THE FACT THAT INVOICES AMOUNTING TO RS. 69,66,729/- ALOGN WITH CORRESPONDING TDS CER TIFICATES FOR RS. 1,78,475/- DID NOT BELONG TO THE ASSESSEE. HENCE ACCORDING TO L EARNED DR, THIS LEDGER COPY WAS THE BASIS OF FORMATION OF AN OPINION BY THE LEARNED CIT A IN FAVOUR OF THE ASSESSEE WHICH ADMITTEDLY WAS NOT BEFORE THE LEARNED AO AND ACCORD INGLY IT IS IN VIOLATION OF RULE 46A AS NO OPPORTUNITY WAS GIVEN TO THE LEARNED AO B Y CALLING FOR A REMAND REPORT BY THE LEARNED CITA. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE LEARNED CITA HAD DELETED THE ADDITION OF RS. 55,79,803/- ITA NO.376/KOL/2012 M/S. MPRS LOGISTICS CARE A.YR.2008-09 4 BASED ON THE CONFIRMATION FILED BY THE CPL IPL WHIC H IS ALSO PART OF THE ASSESSMENT RECORDS AND A LEDGER COPIES OF THIRD PARTIES AS PER BOOKS OF M/S CPL IPL SHOWING DETAILS OF TRANSACTIONS ENTERED INTO BY THE THIRD P ARTIES WITH CPL IPL. ADMITTEDLY, NO REMAND REPORT WAS CALLED FOR BY THE LEARNED CITA FR OM THE LEARNED AO BY TREATING THESE LEDGER COPIES AS AN ADDITIONAL EVIDENCES FILE D BEFORE HIM BY THE ASSESSEE. WE HOLD THAT THE CONTENTS OF THESE LEDGER COPIES WERE ALREADY CLEARLY MENTIONED IN THE CONFIRMATION FILED BY CPL IPL AND THE ENTIRE TRANSA CTIONS OF THE YEAR HAVE BEEN SUMMARIZED IN A TABULAR FORM IN THE CONFIRMATION FI LED BY CPL IPL. HENCE IN OUR OPINION, THE INDIVIDUAL ENTRIES RECORDED IN THE LED GER COPIES WOULD NOT HELP THE REVENUE OR ADVANCE ITS CASE IN ANY WAY AS THE CONTE NTS THEREIN ARE ANYWAY PRODUCED BEFORE THE LEARNED AO IN DIFFERENT FORM. WE OBSERV E THAT THE LEARNED CITA HAD STATED THAT THESE LEDGER COPIES FURTHER CORROBORATE THE FACT THAT INVOICES AMOUNTING TO RS. 69,66,729/- ALONG WITH CORRESPONDING TDS CERTIF ICATES FOR RS. 1,78,475/- DID NOT BELONG TO THE ASSESSEE, THE FACT OF WHICH HAD BEEN REITERATED EARLIER IN THE CONFIRMATION FURNISHED BEFORE THE AO AND THE CLARIFICATION THERE TO FURNISHED BY CPL IPL. WE ALSO FIND THAT THE LEARNED CITA HAD CATEGORICALLY GIVEN A FINDING BASED ON THE CONFIRMATION OF CPL IPL THAT, THE DEDUCTOR (CPL IPL ) HAD CLARIFIED THAT INVOICES AMOUNTING TO RS. 69,66,729/- ALONG WITH TDS CERTIFI CATES FOR RS. 1,78,475/- NOT BELONGING TO MPRS LOGISTICS CARE (I.E. ASSESSEE HER EIN) HAD BEEN WRONGLY SHOWN AS INCOME AND CORRESPONDING TDS AS THAT OF MPRS LOGIST ICS CARE IN 26AS DUE TO THEIR (DEDUCTORS) INADVERTENT MISTAKE WHILE ISSUING TDS CERTIFICATES. IT IS PERTINENT TO NOTE THAT THE FOLLOWING FINDING GIVEN BY THE LEARNED CIT (A) HAS NOT BEEN REFUTED BY THE REVENUE :- IT WAS ALSO ESTABLISHED BY WAY OF RECONCILIATION / BANK STATEMENT SUBMITTED IN PAPER BOOK THAT NO PART OF THE PAYMENT REACHED THE APPEL LANT THE FACT OF WHICH WAS AVAILABLE BEFORE THE AO. IT WAS FURTHER REITERATED THAT THE APPELLANT NEVER HAD ANY RIGHT TO RECEIVE THESE INCOME. 7.1. IT IS ALSO FOUND THAT THE LEARNED AO HAD MADE AN INDEPENDENT ADDITION OF RS. 50,33,547/- BEING THE MISMATCH IN THE BALANCE OF TH E ASSESSEE VIS A VIS BALANCE REFLECTED BY CPL IPL. IT IS UNDISPUTED THAT THE AS SESSEE HAD FILED RECONCILIATION ITA NO.376/KOL/2012 M/S. MPRS LOGISTICS CARE A.YR.2008-09 5 STATEMENT BEFORE THE LEARNED AO AND THIS DIFFERENCE HAD ADMITTEDLY CROPPED UP DUE TO DECISION TAKEN BY THE LEARNED AO WITH REGARD TO THE FIRST ADDITION IN THE SUM OF RS. 55,79,803/-. HENCE WE AGREE WITH THE FINDINGS OF THE LEARNED CITA THAT THE ADDITION OF RS. 50,33,547/- DOES NOT SURVIVE IN VIEW OF FIRS T ADDITION OF RS. 55,79,803/- AS IT WOULD AMOUNT TO DOUBLE ADDITION. WE FIND FROM TH E RECORDS THAT THE LEARNED AO HAD OBTAINED THE BALANCE OUTSTANDING FROM CPL IPL U /S 133(6) OF THE ACT AND THE ASSESSEE HAD DULY FILED THE RECONCILIATION STATEMEN T OF BALANCE OUTSTANDING CLEARLY EXPLAINING THE DIFFERENCES. WE FIND THAT THE RECON CILIATION STATEMENT OF CPL IPL FILED BY THE ASSESSEE BEFORE THE LEARNED AO HAS BEEN REJE CTED BY THE LEARNED AO WITHOUT ANY COGENT REASONS. HENCE WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS GIVEN BY THE LEARNED CITA IN THIS REGARD. IN VIEW OF THE ABOVE, WE HOLD THAT NO ADDITIONAL EV IDENCES WERE FILED BEFORE THE LEARNED CITA AND ALL THE FACTS STATED BEFORE THE LE ARNED CITA WERE VERY MUCH AVAILABLE BEFORE THE LEARNED AO AND WE HOLD THAT TH ERE IS NO VIOLATION OF RULE 46A AS STATED BY THE REVENUE IN ITS GROUNDS. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 08.10.2015. SD/- SD/- [S.S.VISWANETHRA RAVI] [M.BALAGAN ESH] JUDICIAL MEMBER ACCOUNTANT MEMBE R DATE: 08.10.2015. R.G.(.P.S.) ITA NO.376/KOL/2012 M/S. MPRS LOGISTICS CARE A.YR.2008-09 6 COPY OF THE ORDER FORWARDED TO: 1 . M/S. MPRS LOGISTICS CARE, 17, S.N.CHATTERJEE ROAD, KOLKATA-700038. 2 THE I.T.O., WARD-28(1), KOLKATA. 3 . THE CIT-VIII, KOLKATA, 4. THE CIT(A)-XIV, KOLKATA. 5 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES