Tirupati Enterprises, Kolkata V. ITO, WD-43(4), KOLKATA, Kolkata

ITA 443/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4706 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 14-03-2016
• Court: TRIBUNAL
• Section: 133(6)

Judgement Text

I.T.A. NO. 443/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 443/KOL/ 2016 ASSESSMENT YEAR: 2008-2009 TIRUPATI ENTERPRISES,.............................. ...........................APPELLANT 282, RABINDRA SARANI, 3 RD FLOOR, ROOM NO. 308, KOLKATA-700 007 [PAN : AADFT 4640 E] -VS.- INCOME TAX OFFICER,................................ ...............................RESPONDENT WARD-43(4), KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, FOR THE ASSESSEE SHRI PRABAL CHOWDHURY, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JUNE 06, 2016 DATE OF PRONOUNCING THE ORDER : AUGUST 05, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKAT A DATED 06.01.2016 FOR THE ASSESSMENT YEAR 2008-09. 2. THE ISSUE INVOLVED IN GROUND NO. 1 RELATES TO TH E DISALLOWANCE OF 10% OF THE JOB WORK CHARGES MADE BY THE ASSESSING O FFICER, WHICH IS RESTRICTED BY THE LD. CIT(APPEALS) TO 5%. 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON ON 29.09.2008 DECLARING TOTAL INCOME AT NIL. IN THE PROFIT & LO SS ACCOUNT FILED ALONG WITH THE SAID RETURN, JOB CHARGES PAID AMOUNTING TO RS.1 ,52,40,083/- WERE I.T.A. NO. 443/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 4 DEBITED BY THE ASSESSEE AGAINST THE JOB CHARGES REC EIVED AMOUNTING TO RS.1,61,20,233/- CREDITED IN THE PROFIT & LOSS ACCO UNT. IN ORDER TO VERIFY THE COMPLIANCE OF TDS PROVISION, THE ASSESSEE WAS C ALLED UPON BY THE ASSESSING OFFICER TO FURNISH THE RELEVANT DETAILS O F JOB CHARGES PAID. IN REPLY, DETAILS WERE FURNISHED BY THE ASSESSEE SHOWI NG THAT TAX AT SOURCE WAS DEDUCTED FROM THE PAYMENT OF JOB CHARGES TO THE EXTENT OF RS.1,22,65,677/- WHILE THE BALANCE AMOUNT OF RS.29, 74,406/- WAS CLAIMED TO BE THE PAYMENTS MADE TO DIFFERENT WORKERS NOT EX CEEDING RS.50,000/- DURING THE YEAR AND RS.20,000/- IN A SINGLE PAYMENT . AS MOST OF THESE PAYMENTS CLAIMED TO BE MADE TO DIFFERENT WORKERS WE RE IN CASH, THE ASSESSING OFFICER HELD THAT THEY WERE NOT FULLY VER IFIABLE. ACCORDINGLY, THE DISALLOWANCE OF RS.2,97,441/- WAS MADE BY HIM OUT O F JOB CHARGES BEING 10% OF JOB CHARGES PAID BY THE ASSESSEE TO DIFFEREN T WORKERS. 4. ON APPEAL, THE LD. CIT(APPEALS) RESTRICTED THE D ISALLOWANCE OF 10% MADE BY THE ASSESSING OFFICER TO 5% KEEPING IN VIEW THE NATURE OF THE BUSINESS OF THE ASSESSEE AS WELL AS THE NATURE OF E XPENDITURE IN QUESTION BEING JOB CHARGES, WHICH ARE REQUIRED TO BE INCURRE D IN THE REGULAR COURSE OF BUSINESS OF THE ASSESSEE. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY S UBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE DISALLOWANCE OF 10% O F THE JOB CHARGES WAS MADE BY THE ASSESSING OFFICER FOR UNVERIFIABLE ELEM ENT INVOLVED IN THE SAID EXPENDITURE MERELY ON THE GROUND THAT THE SAID EXPENDITURE WAS MOSTLY INCURRED IN CASH. NOT A SINGLE INSTANCE WHAT SOEVER, HOWEVER, WAS POINTED OUT BY HIM TO SHOW ANY SUCH UNVERIFIABLE EL EMENT INVOLVED IN THE RELEVANT EXPENDITURE CLAIMED BY THE ASSESSEE ON ACC OUNT OF JOB CHARGES. I, THEREFORE, AGREE WITH THE CONTENTION OF THE LD. COU NSEL FOR THE ASSESSEE THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE WITHOUT POINTING OUT ANY INSTANCE OF UNVERIFIABLE ELEMENT W AS NOT SUSTAINABLE AND THE LD. CIT(APPEALS) IS NOT JUSTIFIED EVEN TO RESTR ICT THE SAME EVEN AT 5%. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON T HIS ISSUE AND I.T.A. NO. 443/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 4 SUSTAINED BY THE LD. CIT(APPEALS) IS, THEREFORE, DE LETED AND GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED. 6. THE ISSUE RAISED IN GROUND NO. 2 RELATES TO THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT( APPEALS) ON ACCOUNT OF DIFFERENCE IN THE LEDGER ACCOUNTS OF THE FOLLOWING PARTIES:- (I) M/S. CHANDRA KALA (P) LIMITED................ ........RS.1,50,093/-; (II)M/S. SAREE HOUSE (P) LIMITED................. .........RS.5,22,773/-; (III) M/S. PARIDHI SAREE (P) LIMITED............. .........RS. 23,514/-. 7. THE ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER IN ORDER TO VERIFY THE VARIOUS TRANSACTIONS ENTERED INTO BY THE ASSESS EE IN THE COURSE OF ITS BUSINESS OF TRADING IN SAREES BY ISSUING NOTICES UN DER SECTION 133(6) TO THE CONCERNED PARTIES REVEALED THAT THERE WERE DIFF ERENCES IN THE BALANCES OF ATLEAST THREE PARTIES AS APPEARING IN T HEIR ACCOUNTS AND AS APPEARING IN THE ACCOUNTS OF THE ASSESSEE. SINCE TH E ASSESSEE COULD NOT SATISFACTORILY EXPLAIN OR RECONCILE THE SAID DIFFER ENCES, THE AMOUNT OF SUCH DIFFERENCES WAS ADDED BY THE ASSESSING OFFICER TO T HE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE AFTER REJECTING THE STAND OF THE ASSESSEE THAT THE DIFFERENCES IN BALANCES OF THE CO NCERNED PARTIES WERE DUE TO RATE DIFFERENCE, WHICH HAD REMAINED UNSETTLE D AS THE SAME ACCORDING TO THE LD. CIT(APPEALS), WAS NOT SUPPORTE D BY ANY EVIDENCE. 8. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE SUBMISSIONS MADE BEFOR E THE ASSESSING OFFICER VIDE LETTER DATED 28.12.2010 (COPY PLACED A T PAGES 25 TO 27 OF THE PAPER BOOK) RECONCILING THE DIFFERENCES IN QUESTION AND SUBMITTED THAT THE DIFFERENCES POINTED OUT BY THE ASSESSING OFFICE R ACTUALLY WERE IN THE OPENING BALANCES AS ON 01.04.2007. HE CONTENDED THA T THE SAID DIFFERENCES THUS PERTAINED TO THE EARLIER YEARS AND EVEN IF THE SAME STAND UN-RECONCILED, ADDITION CANNOT BE MADE ON ACCOUNT O F SUCH UN-RECONCILED I.T.A. NO. 443/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 4 DIFFERENCES PERTAINING TO THE EARLIER YEARS IN THE YEAR UNDER CONSIDERATION. ALTHOUGH THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS ACCEPTABLE IN PRINCIPLE, THE SAME SPECIFICALLY R AISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL REQUIRES VERIFIC ATION OF RELEVANT FACTS FROM THE RECORDS AS RIGHTLY CONTENDED BY THE LD. D. R. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESSEE THAT THE DIFFERENCES IN QUESTION PERTAINED TO THE EARLIER YEARS AND NOT TO THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO CO NSIDER THIS ISSUE AFRESH IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 05, 20 16. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 5 TH DAY OF AUGUST, 2016 COPIES TO : (1) TIRUPATI ENTERPRISES, 282, RABINDRA SARANI, 3 RD FLOOR, ROOM NO. 308, KOLKATA-700 007 (2) INCOME TAX OFFICER, WARD-43(4), KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKA TA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.