M/s Indian Publicity Bureau Pvt. Ltd., Kolkata V. ITO, WD-1(4), KOLKATA, Kolkata

ITA 464/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0739 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: M K DATTA
• Keywords: Additional evidence
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL KOLKATA D BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, HONBLE JUDICIA L MEMBER] I.T.A. NO. 464/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. INDIAN PUBLICITY BUREAU PRIVATE LIMITED. ...APPELLANT 6/2, MADAN STREET KOLKATA 700 072 [PAN : AAACI 7034 H] INCOME TAX OFFICER, WARD-1(4), KOLKATA. ......RESPONDENT P-7, CHOWRINGHEE SQUARE 7 TH FLOOR KOLKATA- 700 069 APPEARANCES BY: SHRI M.K. DATTA, FCA, APPEARED ON BEHALF OF THE ASSES SEE. SHRI ARINDAM BHATTACHARJEE, ADDL. CIT, DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 18 TH , 2017 DATE OF PRONOUNCING THE ORDER : DECEMBER 21 ST , 2017 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA (HE REINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT . 12/01/2006, FOR THE ASSESSMENT YEAR 2011-12. 2. THE ASSESSEE IS AN ADVERTISING AGENCY AND IS FIL ED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12, ON 30/09/2011. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE US, ARE AS FOLLOWS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 5,59,11,073/- U/S 2 I.T.A. NO. 464/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. INDIAN PUBLICITY BUREAU PRIVATE LIMITED 40(A)(IA) WITHOUT CONSIDERING THE FACT THAT THE ASS ESSE HAS FAILED TO PROVE THAT TDS IS NOT APPLICABLE ON THE PAYMENT. THE ASSE SSE EVEN FAILED TO PROVE THAT THE ENTIRE EXPENSE CLAIMED WAS GENUINE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE U/S 40(A)(IA) ON THE BASIS OF ITAT, KOLKATA'S ORDER IN THE CASE OF M/S MATRIX GLA SS & STRUCTURES PVT. LTD. - VS- ITO, WARD-6(2}, KOLKATA IN ITA NO. 658 (KOL) OF 2010 DATED 28.01.2011 WITHOUT CONSIDERING FAILURE OF OBLIGATION OF THE AS SESSE IN REGARD TO DEDUCTION OF TAX. 4. THAT THE DEPARTMENT CRAVES LEAVE TO ADD, MODIFY OR ALTER ANY OF THE GROUNDS OF APPEAL AND/OR ADDUCE ADDITIONAL EVIDENCE AT THE TIME OF HEARING-OF THE CASE. 3. WE HAVE HEARD, MR. M.K. DATTA, FCA, LD. COUNSEL ON BEHALF OF THE ASSESSEE AND SHRI ARINDAM BHATTACHARJEE, LD. CIT, ON BEHALF OF T HE REVENUE. 3.1. AFTER HEARING SUBMISSIONS, PERUSING THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW, WE HOLD AS FOLLOWS:- 4. GROUND NO. 1, IS ON THE ISSUE OF DISALLOWANCE UN DER SECTION 43B OF THE ACT. THE ASSESSEE HAS BEEN SPECIFICALLY PLEADING, BOTH BEFORE THE AO AS WELL AS THE LD. CIT(A), THAT HE HAS NOT CLAIMED THE SERVICE TAX PAID AS EXPENDITURE DURING THE YEAR AND HENCE THE QUESTION OF DISALLOWANCE UNDER SECTIO N 43B DOES NOT ARISE. THE AO AS WELL AS THE LD. CIT(A) IGNORED THIS SUBMISSION. WHE N AN ASSESSEE DOES NOT CLAIM A PARTICULAR AMOUNT AS AN EXPENDITURE, THE QUESTION O F DISALLOWANCE OF THE SAME UNDER SECTION 43B DOES NOT ARISE. HENCE WE RESTORE THIS I SSUE TO THE FILE OF THE AO WITH A DIRECTION THAT HE SHOULD EXAMINE WHETHER THE ASSESS EE HAS CLAIMED SERVICE TAX IN QUESTION AS AN EXPENDITURE IN HIS ACCOUNTS AND COMP UTATION OF INCOME DURING THE IMPUGNED ASSESSMENT YEAR AND IF HE HAS NOT DONE SO, HE IS DIRECTED NOT TO MAKE ANY DISALLOWANCE UNDER SECTION 43B OF THE ACT. IN THE R ESULT THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 3 I.T.A. NO. 464/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. INDIAN PUBLICITY BUREAU PRIVATE LIMITED 5. GROUND NO. 2, IS ON THE ISSUE WHETHER THE ASSESS EE HAS CLAIMED BOGUS EXPENDITURE. THE ASSESSEE HAS CERTAIN DIFFERENCES IN ACCOUNT BA LANCES WITH TIMES OF INDIA, BARTMAN LTD. & ANANDA BAZAR PATRIKA. BEFORE US, THE ASSESSEE HAS GIVEN A DETAILED SUBMISSION WHICH SHOWS THAT THE ASSESSING OFFICER H AS COMMITTED ERRORS IN RECONCILING THE ACCOUNTS OF THE ASSESSEE WITH THE ABOVE 3 PARTI ES. THE ASSESSEES CASE IS THAT THE TRANSACTIONS OF PATNA/RANCHI WERE NOT CONSIDERED BY THE ASSESSING OFFICER IN CASE OF TRANSACTIONS WITH TIMES OF INDIA. SIMILARLY, IN CAS E OF BARTAMAN LTD., OPENING BALANCE HAS BEEN WRONGLY DEDUCTED, WHEN IT WAS NEVER INCLUD ED IN THE FIRST PLACE. SIMILARLY, IN THE CASE OF ANANDA BAZAR PATRIKA, IT IS EXPLAINED T HAT FOR A CERTAIN PERIOD IN THE RELEVANT FINANCIAL YEAR, THE ASSESSEE HAD TO FACE A N EMBARGO ON RELEASE BY NEWSPAPER SOCIETY, NEW DELHI, BECAUSE HE HAD NOT PAID THE AMO UNTS DUE, IN TIME. HENCE HE PUBLISHED ADVERTISEMENTS THROUGH ANOTHER AGENCY I.E . M/S. INDIAN PUBLICITY BUREAU. M/S. ANAND BAZAR PATRIKA, HAD BILLED INDIAN PUBLICI TY BUREAU, WHO IN TURN DIRECTED THE ASSESSEE TO MAKE THE PAYMENTS. BILL-WISE DETAILS WE RE FURNISHED THE SAME. THE ASSESSING OFFICER HAS NOT CORRECTLY UNDERSTOOD THIS . 5.1. THE LD. D/R, SUBMITTED THAT THESE DETAILS WERE NEVER FILED BEFORE THE LOWER AUTHORITIES, NOR THE DIFFERENCE WERE EXPLAINED. HEN CE HE WANTED THE ORDER OF THE LD. CIT(A) TO BE UPHELD. 6. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE SHOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OF FICER, FOR FRESH ADJUDICATION, IN ACCORDANCE WITH LAW, AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE. THE ASSESSEE SHALL FILE THE ENTIRE DETAILS ALONG WITH RECONCILIA TION STATEMENTS TO THE SATISFACTION OF THE ASSESSING OFFICER. IN THE RESULT, THIS GROUND I S ALLOWED FOR STATISTICAL PURPOSES. 7. GROUND NO. 3, IS ON THE ADDITION OF RS. 88,195/- , AS UNEXPLAINED EXPENSES. THE ASSESSEE SUBMITS THAT THIS AMOUNT RELATES TO A LARGE NUMBER OF CREDIT NOTES ISSUED TO THE ASSESSEE BY M/S. PRATIDIN PRAKA SHINI (P) LTD., WHICH IS A NEWSPAPER. 4 I.T.A. NO. 464/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. INDIAN PUBLICITY BUREAU PRIVATE LIMITED CREDIT NOTE-WISE DETAILS HAVE BEEN FURNISHED AND IT WAS SUBMITTED THAT, WITHOUT CONSIDERING THESE CREDIT NOTES, THIS ADDITION WAS M ADE. WE FIND FORCE IN THE SUBMISSION OF THE ASSESSEE. ANYHOW, AS THIS REQUIRE S VERIFICATION OF FACTS, WE SET ASIDE THIS APPEAL TO THE FILE OF THE ASSESSING OFFICER, F OR FRESH ADJUDICATION, IN ACCORDANCE WITH LAW. 8. IN THE ISSUE, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. KOLKATA, THE 21 ST DAY OF DECEMBER, 2017. SD/- SD/- [ S.S. VISWANETHRA RAVI ] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :21.12.2017 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. INDIAN PUBLICITY BUREAU PRIVATE LIMITED 6/2, MADAN STREET KOLKATA 700 072 2. INCOME TAX OFFICER, WARD-1(4), KOLKATA P-7, CHOWRINGHEE SQUARE 7 TH FLOOR KOLKATA- 700 069 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES