Calcutta Export Company, Kolkata V. ACIT, Range - 34, Kolkata, Kolkata

ITA 47/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1720 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 13-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: SIKHA AGARWAL ACA
• Keywords: Retrospective amendment
• Section: 194C; 139

Judgement Text

1 ITA NO.47/KOL/2015 CALCUTTA EXPORT COMPANY, AY 2010-11 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE .., /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] / I.T.A NO. 47/KOL/2015 ! ' / ASSESSMENT YEAR: 2010-11 CALCUTTA EXPORT COMPANY (PAN: AACFC3872C) VS. ASSISTANT COMMISSIONER OF INCOME-TAX, RANGE-34, KOLKATA. ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING 13.06.2017 DATE OF PRONOUNCEMENT 03.08.2017 FOR THE APPELLANT/ MS. SIKHA AGARWAL, ACA FOR THE RESPONDENT/ N O N E / ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-XX, KOLKATA DATED 12.11.2014 FOR AY 2010-11. NONE APPEARED FOR THE DEPARTMENT. AFTER GOING THROUGH THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, WE AR E INCLINED TO HEAR AND ADJUDICATE THE MATTER AFTER HEARING THE LD. AR. 2. THE SOLE ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.28,99,021/- U/S. 40(A)((IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE FAIL URE OF THE ASSESSEE TO WITHHOLD INCOME TAX U/S. 194C OF THE ACT ON THE PAYMENT OF SHIPMENT CHA RGES, DOCK CHARGES, COURIER CHARGES AND TRANSPORT CHARGES. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT DURING THE YEAR UNDER CONSIDERATION, T HE ASSESSEE HAD INCURRED EXPENSES ON EXPORT SUCH AS TRANSPORTATION, SHIPPING OF GOODS AN D CHARGES INCURRED FOR STORAGE AND 2 ITA NO.47/KOL/2015 CALCUTTA EXPORT COMPANY, AY 2010-11 WAREHOUSING FACILITY AT THE DOCKYARD AGGREGATING TO RS.28,99,021/- WITHOUT DEDUCTING TAX AS PER SECTION 194C OF THE ACT. THEREFORE, HE DISALLO WED RS.28,99,021/- U/S. 40(A)(IA) READ WITH SECTION 194C OF THE ACT. AGGRIEVED, THE ASSES SEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO CONFIRM THE SAME. AGGRI EVED, THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD LD. AR AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEE HAD INCURRED CERTAIN EXPE NSES ON EXPORT LIKE SHIPMENT CHARGES OF RS.2,57,907/- AND DOCK CHARGES OF RS.21,14,069/- WH ICH HAVE BEEN PAID BY THE ASSESSEE TO KOLKATA PORT TRUST BEFORE 31.03.2010 AND SIMILARLY, COURIER CHARGES OF RS.3,05,495/- TO M/S. YOGAYOG COURIER PVT. LTD. AND TRANSPORT CHARGES OF RS.2,21,550/- TO M/S. ATUL KUMAR SINGH WHICH ALSO HAVE BEEN PAID BEFORE 31.03.2010. THE ASSESSEE PLEADED BEFORE THE LD. CIT(A) THAT IN VIEW OF THE INSERTION OF SECOND PROV ISO TO SEC. 40(A)(IA) BY THE FINANCE ACT, 2012 AND IN VIEW OF THE FACT THAT THE RECIPIENTS OF THE VARIOUS CHARGES HAVE ALREADY INCLUDED THE INCOME EMBEDDED IN THESE PAYMENTS IN THEIR TAX RETURNS FILED UNDER SEC. 139 OF THE ACT DISALLOWANCE U/S. 40(A)(IA) OF THE ACT COULD NOT BE INVOKED SINCE THIS PROVISO IS DECLARATORY AND CURATIVE IN NATURE AND, THEREFORE, IT SHOULD BE GIVEN RETROSPECTIVE EFFECT FROM 01.04.2005 BEING THE DATE FROM WHICH SUB-CLAUSE (IA) OF SECTIO N 40(A) OF THE ACT WAS INSERTED BY THE FINANCE NO. 2 ACT, 2004. HOWEVER, THE LD. CIT(A) W AS OF THE VIEW THAT THE SECOND PROVISO IS EFFECTIVE FROM 01.04.2013 ONLY AND, THEREFORE, T HE SAME IS NOT APPLICABLE TO THE RELEVANT AY 2010-11, WHICH DECISION OF THE LD. CIT(A) CANNO T BE AGREED UPON BY US. WE NOTE THAT THIS ISSUE IS NO LONGER RES INTEGRA. THE INSERTION OF SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT HAD ALREADY BEEN HELD TO BE RETROSPECTIVE IN AP PLICATION BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LANDM ARK TOWNSHIP PVT. LTD. 377 ITR 635 (DEL) WHICH WAS LATER FOLLOWED BY THE HONBLE JURIS DICTIONAL HIGH COURT AT CALCUTTA IN THE CASE OF TIRUPATI CONSTRUCTION IN GA NO. 2146 OF 201 6 WITH ITAT NO. 287 OF 2016 DATED 23.08.2016 AND, THEREFORE, ASSESSEE CANNOT BE TREAT ED AS DEFAULTER AND DISALLOWANCE U/S. 40(A)(IA) OF THE ACT WAS NOT WARRANTED IN CASE THE PAYEE HAS DULY OFFERED THE RECEIPTS IN THEIR RESPECTIVE RETURN OF INCOME. THEREFORE, WE SET ASI DE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO VERIFY AS TO WHETHER THE PAYEES IN THIS CASE HAS DISCLOSED THE RECEIPTS IN THEIR RESPECTIVE RETURNS AND PAID TAXES THEREON AND THEN THE ASSESSEE SHOULD NOT 3 ITA NO.47/KOL/2015 CALCUTTA EXPORT COMPANY, AY 2010-11 BE INVITED WITH DISALLOWANCE U/S. 40(A)(IA) OF THE ACT. WE DIRECT THE AO TO VERIFY THE SAID ASPECT AND DISPOSE OF THE ISSUE ACCORDINGLY. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.08.2017 SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :3 RD AUGUST, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT CALCUTTA EXPORT COMPANY, 18, R. N. MUKH ERJEE ROAD, KOLKATA-700 001. 2 RESPONDENT ACIT, RANGE-34, KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECY