Sri Amit Kumar Sen, Kolkata V. D.C.I.T Cir - 51,kolkata, Kolkata

ITA 402/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4997 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 28-02-2013
• Court: TRIBUNAL
• Assessee Lawyers: S L KOCHAR
• Keywords: Additional evidence
• Section: 40A(3); 143(3)

Judgement Text

I.T.A. NOS. 402 & 631/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 402/KOL/2013 ASSESSMENT YEAR: 2008-2009 SRI AMIT KUMAR SEN,................................ .....................................APPELLANT C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA-700 001 [PAN : ARWPS 0497 A] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ....................RESPONDENT CIRCLE-51, KOLKATA, UTTARAPAN COMPLEX, ULTADANGA, KOLKATA-700 054 & I.T.A. NO. 631/KOL/2013 ASSESSMENT YEAR: 2008-2009 ASSISTANT COMMISSIONER OF INCOME TAX,.............. .......................APPELLANT CIRCLE-51, KOLKATA, UTTARAPAN COMPLEX, ULTADANGA, KOLKATA-700 054 -VS.- SRI AMIT KUMAR SEN,................................ .....................................RESPONDENT C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA-700 001 [PAN : ARWPS 0497 A] APPEARANCES BY: SHRI S.L. KOCHAR, ADVOCATE AND SHRI ANIL KOCHAR, AD VOCATE, FOR THE ASSESSEE SHRI RAJAT KR. KUREEL, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 16 , 2016 DATE OF PRONOUNCING THE ORDER : APRIL 13, 2016 O R D E R PER SHRI P.M. JAGTAP :- THESE TWO APPEALS, ONE FILED BY THE ASSESSEE AND OT HER FILED BY THE REVENUE, ARE CROSS APPEALS WHICH ARE DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 01.01.2013. I.T.A. NOS. 402 & 631/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 6 2. GROUNDS NO. 1 AND 2 RAISED IN THE APPEAL OF THE ASSESSEE CHALLENGING THE VALIDITY OF THE ASSESSMENT MADE BY THE ASSESSIN G OFFICER UNDER SECTION 143(3) OF THE ACT ARE NOT PRESSED BY THE LD . COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 3. THE ISSUE RAISED IN GROUND NO. 3 OF THE ASSESSEE S APPEAL RELATES TO THE ADDITION MADE BY THE ASSESSING OFFICER BY WAY O F DISALLOWANCE UNDER SECTION 40(A)(IA) ON ACCOUNT OF TRANSPORT CHARGES, WHICH IS SUSTAINED BY THE LD. CIT(APPEALS) TO THE EXTENT OF RS.7,26,274/- . 4. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN TRANSPORT BUSINESS. THE RETURN OF INCOME FOR THE YE AR UNDER CONSIDERATION WAS FILED BY HIM ON 19.09.2008 DECLARING TOTAL INCO ME OF RS.4,72,887/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CL AIM OF THE ASSESSEE FOR EXPENDITURE INCURRED ON TRANSPORT CHARGES PAID AMOUNTING TO RS.89,92,615/- WAS EXAMINED BY THE ASSESSING OFFICE R. ON SUCH EXAMINATION, HE FOUND THAT NO TAX AT SOURCE WAS DED UCTED BY THE ASSESSEE FROM THE PAYMENT MADE ON ACCOUNT OF TRANSPORT CHARG ES TO THE EXTENT OF RS.68,56,869/-. SINCE NO SATISFACTORY EXPLANATION I N THIS REGARD COULD BE OFFERED BY THE ASSESSEE, THE ASSESSING OFFICER INVO KED THE PROVISIONS OF SECTION 40(A)(IA) AND DISALLOWED TRANSPORT CHARGES TO THE EXTENT OF RS.68,56,869/- IN THE ASSESSMENT COMPLETED UNDER SE CTION 143(3) VIDE AN ORDER DATED 31.12.2010. 5. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE THE LD. CIT(APPEALS), A DETAILED SUBMISSION WAS FILED BY TH E ASSESSEE ALONG WITH THE ADDITIONAL EVIDENCE IN SUPPORT OF HIS CLAIM THA T THE DISALLOWANCE I.T.A. NOS. 402 & 631/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 6 MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I A) ON ACCOUNT OF TRANSPORT CHARGES WAS NOT SUSTAINABLE. THE SAID SUB MISSIONS ALONG WITH THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WERE FORWARDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER AND AFTER TAK ING INTO CONSIDERATION THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICE R AS WELL AS THE COUNTER COMMENTS OFFERED BY THE ASSESSEE THEREON, T HE LD. CIT(APPEALS) FOUND THAT THE PAYMENTS IN QUESTION MADE BY THE ASS ESSEE ON ACCOUNT OF TRANSPORT CHARGES WERE NOT EXCEEDING RS.50,000/- IN A YEAR IN CASE OF ANY SINGLE PARTY. HE, HOWEVER, FOUND THAT SOME OF THE S AID PAYMENTS EXCEEDED RS.20,000/- ON SINGLE OCCASION AND THE ASSESSEE, TH EREFORE, WAS REQUIRED TO DEDUCT TAX AT SOURCE FROM THE SAID PAYMENTS. ACC ORDINGLY, HE HELD THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDE R SECTION 40(A)(IA) WAS SUSTAINABLE TO THE EXTENT OF SUCH PAYMENTS AMOU NTING TO RS.7,26,274/-. HE ALSO FOUND THAT ALL THESE PAYMENT S EXCEEDING RS.20,000/- WERE MADE BY THE ASSESSEE IN CASH AND T HE SAME, THEREFORE, WERE HIT BY THE PROVISIONS OF SECTION 40A(3) OF THE ACT. HE, THEREFORE, HELD THAT THE SAME WERE LIABLE TO BE DISALLOWED EVE N UNDER SECTION 40A(3) AND ACCORDINGLY DIRECTED THE ASSESSING OFFIC ER TO MAKE A DISALLOWANCE UNDER SECTION 40A(3). KEEPING IN VIEW THIS DISALLOWANCE MADE UNDER SECTION 40A(3), THE LD. CIT(APPEALS) HEL D THAT NO ADDITION WAS SEPARATELY REQUIRED TO BE MADE UNDER SECTION 40 (A)(IA) TO AVOID DOUBLE ADDITION OF THE SAME AMOUNT. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ONLY CON TENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE ON THIS ISSUE IS THAT THE ORDER OF THE LD. CIT(APPEALS) HAS RESULTED INTO DOUBLE ADDITION OF T HE SAME AMOUNT ONCE BY WAY OF DISALLOWANCE UNDER SECTION 40(A)(IA) AND ANOTHER BY WAY OF DISALLOWANCE UNDER SECTION 40A(3). IT IS, HOWEVER, OBSERVED THAT THE LD. CIT(APPEALS) HAS SPECIFICALLY CLARIFIED IN HIS IMPU GNED ORDER THAT SINCE THE DISALLOWANCE AMOUNTING TO RS.7,26,274/- WAS CON FIRMED BY HIM UNDER SECTION 40A(3), NO SEPARATE ADDITION UNDER SECTION 40(A)(IA) WAS I.T.A. NOS. 402 & 631/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 6 REQUIRED TO BE MADE. THUS THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) HAS NOT RESULTED INTO DOUBLE ADDITION AS ALLEGED BY THE LD COUNSEL FOR THE ASSESSEE AND THERE BEING NO MERIT IN THE APPEAL OF THE ASSESSEE ON THIS ISSUE, WE DISMISS GROUND NO. 3 OF THE ASSESSEES AP PEAL. 7. IN GROUND NO. 4, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DIRECTING THE ASSESSING OFFICER TO MAKE AN ADDITION OF RS.8,90,262/- ON ACCOUNT OF BOGUS EXPENSES ALLEGEDL Y CLAIMED BY THE ASSESSEE UNDER THE HEAD TRANSPORT CHARGES. 8. ON THE BASIS OF VARIOUS DISCREPANCIES POINTED OU T BY THE ASSESSING OFFICER IN THE VOUCHERS MAINTAINED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM FOR TRANSPORT CHARGES, THE LD. CIT(APPEALS) WAS OF THE VIEW THAT THE CLAIM OF THE ASSESSEE FOR TRANSPORT CHARGES WAS NOT FULLY VERIFIABLE. THE ASSESSEE, THEREFORE, WAS CALLED UPON BY HIM TO EXPL AIN AS TO WHY 10% OF THE TRANSPORT CHARGES SHOULD NOT BE DISALLOWED AS B OGUS. IN REPLY, THE ASSESSEE CONTENDED THAT EVEN THOUGH SOME OF THE EXP ENSES CLAIMED UNDER THE HEAD TRANSPORT CHARGES WERE NOT FULLY VERIFIA BLE, THE ADDITION MADE UNDER SECTION 40A(3) WAS SUFFICIENT TO COVER SUCH U NVERIFIABLE ELEMENT. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCE PTABLE BY THE LD. CIT(APPEALS) AND KEEPING IN VIEW THE DEFICIENCIES P OINTED OUT BY THE ASSESSING OFFICER IN THE RELEVANT VOUCHERS, HE HELD THAT THE CLAIM OF THE ASSESSEE FOR TRANSPORT CHARGES WAS NOT FULLY VERIFI ABLE. ACCORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO TREAT 10% OF THE TRANSPORT CHARGES CLAIMED BY THE ASSESSEE AS BOGUS AND DISALLOW THE S AME. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE MAIN DEFECT POINTED OUT BY THE ASSESSING OFFICER IN THE VOUCHERS OF TRANSPO RT CHARGES MAINTAINED BY THE ASSESSEE WAS THAT THE SAME WERE PAID IN CASH AND, THEREFORE, THE I.T.A. NOS. 402 & 631/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 5 OF 6 VERIFICATION THEREOF WAS NOT POSSIBLE. HOWEVER, SUC H CASH PAYMENTS EXCEEDING RS.20,000/- WERE ALREADY DISALLOWED BY TH E LD. CIT(APPEALS) UNDER SECTION 40A(3) AND, THEREFORE, THE DEFICIENCY IN THE RELEVANT VOUCHERS OF CASH PAYMENTS WAS ALREADY TAKEN CARE OF . MOREOVER, THE NET PROFIT DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS 5% AND IF THE DISALLOWANCE UNDER SECTION 40A(3) IS TAK EN INTO CONSIDERATION, IT GIVES A NET PROFIT OF ABOUT 12.5% AND THE SAME B EING MUCH MORE THAN THE NET PROFIT OF 8% DECLARED BY THE ASSESSEE AND A CCEPTED BY THE DEPARTMENT IN A.Y. 2007-08, WE ARE OF THE VIEW THAT THERE IS NO CASE FOR MAKING ANY FURTHER DISALLOWANCE ON ACCOUNT OF ALLEG ED UNVERIFIABLE ELEMENT INVOLVED IN TRANSPORT CHARGES CLAIMED BY TH E ASSESSEE. WE, THEREFORE, DELETE THE DISALLOWANCE MADE BY THE LD. CIT(APPEALS) ON THIS ISSUE AND ALLOW GROUND NO. 4 OF THE ASSESSEES APPE AL. 10. THE SOLITARY ISSUE INVOLVED IN THE APPEAL OF TH E REVENUE RELATES TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITIO N MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE ACT TO THE E XTENT OF RS.52,31,333/-. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS ALREADY DISCUSSED, TRANSPORT CHARGES CLAIMED BY THE ASSESSEE WERE DISALLOWED BY THE ASSE SSING OFFICER TO THE EXTENT OF RS.68,56,869/- UNDER SECTION 40(A)(IA) AF TER HAVING FOUND THAT NO TAX AT SOURCE WAS DEDUCTED BY THE ASSESSEE FROM THE PAYMENTS MADE THEREOF. BEFORE THE LD. CIT(APPEALS), THE CASE MADE OUT BY THE ASSESSEE, HOWEVER, WAS THAT THERE BEING NO PAYMENT EXCEEDING RS.50,000/-MADE ON ACCOUNT OF TRANSPORT CHARGES TO ANY SINGLE PARTY DU RING THE YEAR UNDER CONSIDERATION, THERE WAS NO REQUIREMENT OF DEDUCTIO N OF TAX AT SOURCE AND THE QUESTION OF DISALLOWANCE UNDER SECTION 40(A )(IA) WOULD NOT ARISE. AFTER GETTING THIS ASPECT VERIFIED FROM THE ASSESSI NG OFFICER, THE LD. CIT(APPEALS) FOUND MERIT IN THE CASE OF THE ASSESSE E. HE, HOWEVER, HELD THAT A SUM OF RS.7,26,274/- OUT OF TRANSPORT CHARGE S WAS DISALLOWABLE UNDER SECTION 40A(3) WHILE A FURTHER SUM OF RS.8,90 ,262/- WAS I.T.A. NOS. 402 & 631/KOL./2013 ASSESSMENT YEAR: 2008-2009 PAGE 6 OF 6 DISALLOWABLE ON ACCOUNT OF UNVERIFIABLE ELEMENT INV OLVED IN TRANSPORT CHARGES PAID BY THE ASSESSEE. ACCORDINGLY, HE ALLOW ED A RELIEF OF RS..52,31,333/- TO THE ASSESSEE. AT THE TIME OF HEA RING BEFORE US, THE LD. D.R. HAS NOT BEEN ABLE TO BRING ANYTHING ON RECORD TO DISPUTE THE FINDING RECORDED BY THE LD. CIT(APPEALS) THAT THE TRANSPORT CHARGES PAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION DID NO T EXCEED RS.50,000/- IN CASE OF ANY SINGLE PARTY. WE, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(AP PEALS) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE AND UPHOLDING THE SAME, WE DISMISS THIS APPEAL OF THE REVENUE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 13, 201 6. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 13 TH DAY OF APRIL, 2016 COPIES TO : (1) SRI AMIT KUMAR SEN, C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA-700 001 (2) DEPUTY /ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-51, KOLKATA, UTTARAPAN COMPLEX, ULTADANGA, KOLKATA-700 054 (3) COMMISSIONER OF INCOME-TAX, KOLKATA; (4) CIT(APPEALS)-XXXII, KOLKATA , (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.