ACIT, Circle - 54, Kolkata, Kolkata V. M/s. Mukherjee & Biswas, Kolkata

ITA 493/KOL/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4492 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 24-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY ADD
• Assessee Lawyers: MRS ANJAN GANGULY
• Section: 142(1); 147; 148; 144; 139

Judgement Text

1 M/S. MUKHERJEE & BISWAS ITA NO.493/KOL/2011 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C, KOLKATA (BEFORE SHRI P. M. JAGTAP, A.M. & SHRI S.S.VISWANET HRA RAVI, J.M.) ITA NO. 493/KOL/2011 : ASSTT. YE AR : 2004-2005 ACIT, CIRCLE-54, KOLKATA VS M/S. MUKHERJEE & BISWAS PAN: AAFFM 1079G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.K.CHAKRABORTY, ADD.CIT RESPONDENT BY : MRS. ANJAN GANGULY, A DVOCATE DATE OF HEARING : 09.05.2016 DATE OF PRONOUNCEMENT : 21-07-2016 ORDER PER SHRI S.S.VISWANETHRA RAVI, J.M . THIS APPEAL BY THE REVENUE AGAINST THE ORDER DATED 17-0-2009 PASSED BY THE COMMISSIONER OF APPEALS AGAINST THE ASSESSMENT ORDE R FRAMED BY THE AO FRAMED UNDER SECTION 144 /147 OF THAT ACT FOR THE ASSESSME NT YEARS 2004 2005. 2. THE ONLY ISSUE IN THIS APPEAL IS AS TO WHETHER T HE COMMISSIONER OF APPEALS HAS GIVEN AN OPPORTUNITY TO THE REVENUE IN RESPECT OF PROOF SHOWING THE DIFFERENCE AROSE BETWEEN THE PROFESSIONAL RECEIPTS AS PER TDS CERTIFICATE AND PROFESSIONAL RECEIPTS AS SHOWN IN THE P&L ACCOUNT. 3. THE BRIEF FACTS OF THE CASE AND THAT THAT THE AS SESSEE IS A LAW FIRM AND FILED ITS RETURN ON 29-10-2004 DECLARING INCOME OF RS.6,01,62 0/- FOR THE YEAR UNDER CONSIDERATION. THE AO ON VERIFICATION OF RECORDS FO UND THAT A SUM OF RS. 36,58,351/- WAS CREDITED TO THE PROFIT AND LOSS ACC OUNT AND ON ACCOUNT OF COLLECTION OF BILLS AS PER THE TDS CERTIFICATES IT WAS NOTICED AT RS.66,85,797/- UNDER THE SAME 2 M/S. MUKHERJEE & BISWAS ITA NO.493/KOL/2011 HEAD. THEREBY THE ASSESSING OFFICER REOPENED THE AS SESSMENT UNDER SECTION 147 AND A NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESS EE ON 12 TH OF FEBRUARY 2008 IN THE RESPONSE TO WHICH THE ASSESSEE REQUESTED THAT A SSESSING OFFICER TO TREAT THE RETURN FILED UNDER SECTION 139 (1) AS THE RETURN UN DER SECTION 148 OF THE ACT. THEREAFTER THE ASSESSING OFFICER ISSUED NOTICES UND ER SECTION 142(1) AND 143(2) OF THE ACT. IN RESPONSE TO WHICH, THE AUTHORISED REPRE SENTATIVE APPEARED ON 2 ND SEPTEMBER 2008 AND THE AUTHORISED REPRESENTATIVE FA ILED TO PRODUCE ANY BOOKS OF ACCOUNTS ON NOR ANY PASSBOOKS/ STATEMENTS AS SOUGHT UNDER SECTION 142(1) OF THE ACT. THE CONTENTION OF THE ASSESSING OFFICER WAS TH AT THE AUTHORISED REPRESENTATIVE SOUGHT ADJOURNMENTS FROM TIME TO TIME ON 22 ND SEPTEMBER 2008 AND 16 TH OCTOBER 2008 AND ALSO ON 23 RD OCTOBER 2008 BUT SHE COULD NOT PRODUCE ANY RELEVAN T MATERIAL AS SOUGHT BY HIM UNDER SECTION 142(1) OF T HAT ACT. THE ASSESSING OFFICER ALSO CONTENDS IN SPITE OF ISSUING SHOW CAUSE NOTICE THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE AS REQUESTED. THEREBY THE ASSESSING OFFICER ADDED AN AMOUNT OF THE RS30,27,446 BEING THE DIFFERENCE BETW EEN RECEIPTS SHOWN IN PROFIT AND LOSS ACCOUNT AND AS PER BILLS OF COLLECTION VID E TDS CERTIFICATE TREATING THE SAME UNEXPLAINED AND UNACCOUNTED, THEREBY ADDED TO THE INCOME OF THE ASSESSEE. 4. IN FIRST APPEAL BEFORE THE COMMISSIONER OF APPEA LS, THE ASSESSEE CONTENDED THAT IT WOULD RECEIVE AMOUNTS FROM ITS CLIENTS BY D EDUCTING TAX AT SOURCE ON WHICH THE ASSESSEE WOULD INCURRE ALL OTHER EXPENSES LIKE COURT FEE, COUNSEL FEE, COURT EXPENSES AND ALL OTHER MISCELLANEOUS EXPENSES ETC.. WHICH ARE ALL DONE FROM COLUMN OUT OF POCKET EXPENSES I.E TO AN EXTENT O F RS.66,85,797/- WHICH IS NOT AT ALL THE INCOME OF THE OF THE ASSESSEE. FURTHER CON TENDED THAT UNDER COLUMN IN POCKET EXPENSES AS SHOWN IS WHAT EXACTLY THE INCOME OF THE ASSESSE I.E TO AN EXTENT OF RS.36,58,351/- IN SUPPORT THE ASSESSEE FILED THE FUND UTILISATION STATEMENT BEFORE THE COMMISSIONER OF APPEALS AND ALSO COPY OF CHALLA NS SHOWING THE TAX SO 3 M/S. MUKHERJEE & BISWAS ITA NO.493/KOL/2011 DEDUCTED DEPOSITED TO ACCOUNT OF GOVERNMENT, BASING ON WHICH THE COMMISSIONER OF APPEALS GAVE RELIEF TO ASSESSEE THEREBY DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE APPELLANT AND SEEN THE DETAILS / DOCUMENTS FILED. AS PER THE TDS CREDI T CLAIMED, THE GROSS CLIENTELE RECEIPTS OF THE APPELLANT SHOULD BE OF RS .66,85,797/-. HOWEVER, THE SAID RECEIPTS WERE BI-FURCATED BY THE APPELLANT UND ER TWO HEADS, VIZ. (I) RECEIPTS TOWARDS REIMBURSEMENT OF ACTUAL EXPENSES I NCURRED FOR COUNSEL FEES, STAMP AND COURT FEES ETC. TERMED AS 'OUT OF P OCKET EXPENSES' OF RS.30,27,446/- AND (II) APPELLANT'S OWN PROFESSIONA L RECEIPTS TERMED AS 'IN POCKET EXPENSES' OF RS.36,58,351/-. THE CLAIM OF T HE APPELLANT THAT 'OUT POCKET EXPENSES' OF RS.30,27,446/- WERE UTILIZED TO WARDS PAYMENTS TO THE SOLICITORS AND ADVOCATES IS FOUND CORRECT. THE ARS OF THE APPELLANT HAVE FILED A 'FUND UTILIZATION STATEMENT' FOR THE RELEVANT YEA R, AS PER WHICH, THE APPELLANT MADE TOTAL 'COUNCIL PAYMENT' AT RS.53,71, 524/-, INCLUSIVE OF RS.30,27,446/- AS ABOVE. THE ARS HAVE FILED A LIST SHOWING PAYMENTS MADE TO 35 NUMBERS SOLICITORS AND ADVOCATES AND TAX DEDU CTED AT SOURCE ON SUCH PAYMENTS. AS PER THE SAID LIST, A TOTAL TAX OF RS.2 ,82,013/- WAS DEDUCTED AT SOURCE AGAINST TOTAL PAYMENTS MADE AT RS.53,71,534/ -. THE ARS ALSO PRODUCED COPY OF CHALLANS SHOWING THAT THE TAX SO D EDUCTED WAS DEPOSITED IN GOVERNMENT ACCOUNT FROM TIME TO TIME. UNDER THE CIR CUMSTANCES, THE ADDITION OF RS.30,27,446/- MADE BY THE AO AS UNACCO UNTED PROFESSIONAL INCOME IS NOT MAINTAINABLE, HENCE DELETED. 5. AT THE OUTSET IT WAS OBSERVED THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSE BASING ON THE MATERIAL EVIDENCE FILED A FUND UTILISATION STATEMENT SHOWING PAYMENTS MADE TO COUNSEL AND COPI ES OF CHALLANS SHOWING DEPOSITS IN THE ACCOUNT OF GOVERNMENT ADMIT TEDLY BOTH THE DOCUMENTS WERE NOT AVAILABLE BEFORE THE AO. THE LD. DR BEFORE US PRAYED FOR TO RESTORE THE ISSUE TO AO. THE LD. AR R AISED NO OBJECTION IN RESTORING THE SAME. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE CIT-A AND REMIT THE MATTER TO AO WITH A DIRECTI ON TO DECIDE THE SAME BY GIVING THE ASSESSEE PROPER AND SUFFICIENT O PPORTUNITY OF BEING 4 M/S. MUKHERJEE & BISWAS ITA NO.493/KOL/2011 HEARD. IT IS PERTINENT TO MENTION THAT THE ASSESSEE SHALL CO-OPERATE WITH THE AO WITHOUT SEEKING ANY ADJOURMENTS. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.07.2016 SD/- SD/- (P. M. JAGTAP) (S.S.VISWAN ETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21.07.2016 TALUKDAR (SR.PS) COPY OF THE ORDER FORWARDED TO: 1. M/S. MUKHERJEE & BISWAS, 10, OLD POST OFFICE STR EET, 3 RD FLOOR, KOLKATA- 700 001. 2 ACIT, CIRCLE-54, KOLKATA 3. THE CIT-I, 4. THE CIT(A)-I, 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSISTANT REGISTRAR, ITAT, KOLKATA BENCHES, KOLKATA