Rajendra Sethia, Kolkata V. JCIT, Range-40, Kolkata (Erstwhile Range-56, Kolkata), Kolkata

ITA 49/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1768 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 13-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 49/KOL/2015 ASSESSMENT YEAR : 2010-1 1 RAJENDRA SETHIA -VS- J.C.I.T., RANGE-40 (ERSTWHILE RANGE-56), KOLKATA [PAN: ALXPS 9803 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ANIL KOCHAR, AR FOR THE RESPONDENT : SHRI DAVID Z. CHAWNGTHU, ADDL. CIT SR.DR DATE OF HEARING : 14.08.2017 DATE OF PRONOUNCEMENT : 06.09.2017 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -XXXVI, KOLKAT A [ IN SHORT THE LD CITA] IN APPEAL NO. 202/CIT(A)-XXXVI/KOL./JCIT,R-56/KOL/2013 -14 DATED 22.10.2014 AGAINST THE ORDER PASSED BY THE JCIT, RANGE-56, KO LKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT) DATED 25.03.2013 FOR THE ASSESSMENT YEAR 2010-11. 2. DURING THE COURSE OF HEARING, THE LD. AR STATED THAT GROUND NOS. 4 AND 5 RAISED BY THE ASSESSEE ARE NOT PRESSED. THE SAME IS TAKEN AS STATEMENT FROM THE BAR AND ACCORDINGLY GROUND NOS. 4 AND 5 RAISED BY THE ASSE SSEE ARE DISMISSED AS NOT PRESSED. 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL OF T HE ASSESSEE IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF VARIOUS EXPENDITURES TO THE TUNE OF RS. 76,40,980/- U/S 40(A)(IA) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF TRANSPORTATION. THE LD. AO DURING THE COURSE OF ASS ESSMENT PROCEEDINGS COMPARED BY 2 ITA NO.49/KOL/2015 RAJENDRA SETHIA A.YR.2010-11 2 THE TURNOVER AND PROFITS DECLARED BY THE ASSESSEE FROM ASSESSMENT YEARS 2008-09 TO 2010-11. HE HAS LISTED OUT VARIOUS EXPENDITURES WHI CH WERE SUBJECTED TO DEDUCTION OF TAX AT SOURCE AND TDS COMPLIANCE MADE BY THE ASSESS EE THEREON. WITH REGARD TO THE FOLLOWING EXPENDITURES, HE FOUND THAT THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE AND ACCORDINGLY DISALLOWED THE SAME U/S 40(A)(IA) OF TH E ACT:- I) DISALLOWANCE OF COMMISSIONER & BROKERAGE : RS . 9,07,024/- II) DISALLOWANCE OF RENT & WAREHOUSING : RS. 11, 02,000/- III) DISALLOWANCE OF LEGAL & PROFESSIONAL CHARGES : RS. 1,90,800/- IV) DISALLOWANCE OF CRAIN CHARGES : RS. 7,97,3 78/- V) DISALLOWANCE OF CAR HIRE CHARGES : RS. 1,38 ,346/- VI) DISALLOWANCE OF DOCK & CUSTOMS CLEARING CHARGES : RS. 45,05,432/- TOTAL RS. 76,40,980/- 5. THIS ACTION OF THE LD. AO WAS CONFIRMED BY THE L D. CIT(A). AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. FOR THAT THE LD. CIT(A) ERRED IN PASSING ORDER W ITHOUT PROPERLY CONSIDERING THE CONTENTIONS RAISED BY THE APPELLANT IN RESPECT OF VARIOUS ADDITIONS/DISALLOWANCES MADE BY THE A.O. 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING DISA LLOWANCE OF RS. 76,40,980/- MADE BY THE A.O. BY INVOKING THE PROVISION OF SECTI ON 40(A)(IA) WITHOUT CONSIDERING THE FACTUAL ASPECT OF THE CASE OF THE A PPELLANT. 3. FOR THAT THE LD. CIT(A) OUGHT NOT TO HAVE PROCEE DED TO CONFIRM THE DISALLOWANCE AS MADE OUT BY THE A.O. IN THE MATTER OF INVOKING THE PROVISION OF SECTION 40(A)(IA) AND OUGHT TO HAVE CONSIDERED THE CONTENTIONS RAISED BY THE APPELLANT AND APPLIED HIS MIND TO THE FACTS AND THE LAW APPLICABLE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE LD. AR PRAYS FOR SETTING ASIDE OF THIS ISSUE TO THE FILE OF THE LD. AO IN TERMS OF THE SECOND PROVISO TO SECTION 40(A)(IA) READ WITH SECTION 201 OF THE ACT WHEREIN THE SAID P ROVISO HAS BEEN HELD TO BE RETROSPECTIVE IN OPERATION. THE LD. DR FAIRLY CONSI DERED FOR THE SAME. WE FIND THAT THE 3 ITA NO.49/KOL/2015 RAJENDRA SETHIA A.YR.2010-11 3 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANS AL LAND MARK TOWNSHIP PVT. LTD. REPORTED IN 377 ITR 635 (DEL) AND THE HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. TIRUPATI CONSTRUCTION IN G.A. NO. 2146 OF 2016 IN I.T.A.T. NO. 287 OF 2016 DATED 23.08.2016, HAD HELD THAT THE AMENDMENT BROUG HT IN SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT READ WITH SECTION 201 OF THE A CT IS RETROSPECTIVE IN OPERATION. ACCORDINGLY, IF THE PAYEES HAVE REPORTED THE SAID T RANSACTION IN THEIR RETURNS AND PAID TAXES THEREON, WHICH IS SUPPORTED BY A CERTIFICATE FROM A CHARTERED ACCOUNTANT, THEN PAYER CANNOT BE MADE LIABLE FOR DISALLOWANCE U/S 40 (A)(IA) OF THE ACT. THE LD. AO IS DIRECTED TO EXAMINE THE SAME AND THE ASSESSEE IS AL SO DIRECTED TO FURNISH THE NECESSARY EVIDENCES IN THIS REGARD. IN THE EVENT OF NON-COOPE RATION OF THE PAYEES ON THE REQUEST OF THE ASSESSEE, THE LD. AO HAS TO EXAMINE THESE ASPEC TS BY RESORTING TO OBTAINING INFORMATION DIRECTLY FROM THE PAYEES U/S 133(6) OF THE ACT OR OBTAINING INFORMATION BY ISSUING SUMMONS U/S 131 OF THE ACT AND TAKE NECESSA RY RECORDS THEREON IN ACCORDANCE WITH LAW. ACCORDINGLY, WE DEEM IT FIT AND APPROPRIA TE TO REMAND THIS MATTER TO THE FILE OF THE LD. AO TO EXAMINE THAT THE ISSUE OF DISALLOWANC E OF AFORESAID EXPENDITURES TO THE TUNE OF RS. 76,40,980/- IN THE LIGHT OF DIRECTION M ENTIONED HEREINABOVE. 7. THE GROUND NO. 6 RAISED BY THE ASSESSEE IS GENE RAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES SUBJECT TO DIRECTION GIVEN HEREINABOVE. ORDER PRONOUNCED IN THE COURT ON 06.09.2017 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06.09.2017 SB, SR. PS 4 ITA NO.49/KOL/2015 RAJENDRA SETHIA A.YR.2010-11 4 COPY OF THE ORDER FORWARDED TO: 1. RAJENDRA SETHIA, C/O, S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOL-1. 2. J.C.I.T., RANGE-56, KOLKATA 3..C.I.T.(A)-XXXVI, KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S