Damas Leder Waren, Kolkata V. I.T.O Wd - 30(1),kolkata, Kolkata

ITA 526/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100044 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAY KR SARKAR A
• Keywords: Non compliance
• Section: 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO.526/KOL/2013 ASSESSMENT YEAR :2006-07 DAMAS LEDERWAREN 5/2C, TILJALA LANE, KOLKATA 700 019 [ PAN NO.AACFD 3378 C ] V/S . INCOME TAX OFFICER, WARD-30(1) 10B, MIDDLETON ROW, KOLKATA - 71 /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI UDAY KR. SARKAR, ACIT-DR /DATE OF HEARING 12-10-2015 /DATE OF PRONOUNCEMENT 06-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA IN APPEAL NO.396/ CIT(A)-XIV/KOL./08-09 DATED 03.01.2013. ASSESSMENT WAS FRAMED BY ITO WARD -30(1), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2008 FOR ASSESSMENT YEAR 2006 -07. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE THOUGH NOTICE OF HEARING WAS SENT TO ASSESSEE IN DUE COURS E OF TIME. BUT WE FIND FROM ITA NO.526/KOL/2013 A.Y. 2006-07 DAMAS LEDERWAREN V. ITO WD-30(1) KOL. PAGE 2 THE RECORDS THAT IT WILL NOT BE A CASE OF INJUSTICE IF WE TAKE UP THE HEARING OF THE APPEAL WITHOUT THE APPEARANCE OF THE ASSESSEE OR HI S AUTHORIZED REPRESENTATIVE. SO WE DECIDED TO PROCEED TO HEAR TH E APPEAL AFTER HEARING LD. DR. SHRI NIRAJ KUMAR APPEARING ON BEHALF OF DEPARTM ENT. THE COMMON ISSUE RAISED BY THE ASSESSEE IN THIS APP EAL IS THAT THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY TH E AO ON ACCOUNT OF THE VIOLATION OF THE TDS PROVISIONS. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PART NERSHIP FIRM AND HAS INCOME UNDER THE HEAD OF BUSINESS. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY ASSESSING OFFICER THAT CERTAIN PAYMENTS WERE MADE BY ASSESSEE WITHOUT DEDUCTING TDS AS DETAILED BELOW:- 1. RS.51,750/- TO SHRI SHAKIR NAWAZ IN RESPECT OF FABRICATION CHARGES; 2. RS. 13,58,255/- TO M/S DHL LEMUIR PVT. LTD. IN R ESPECT OF FORWARDING & CLEARING CHARGES. ON THE QUESTION BY THE AO ABOUT THE NON DEDUCTION O F TAX, THE ASSESSEE COULD NOT EXPLAIN ANY REASON FOR THE NON COMPLIANCE OF TD S PROVISION. SO THE AO HAS DISALLOWED THE AFORESAID EXPENSES AND ADDED IT TO THE INCOME OF ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHERE THE LD. AR OF ASSESSEE SUBMITTED THAT PAYMENTS WERE MADE AFTER DE DUCTING TDS AT THE APPROPRIATE RATE. THE ASSESSEE ALSO PRODUCED THE TD S CERTIFICATE AND CHALLAN IN SUPPORT OF HIS CLAIM. BUT THE LD. CIT(A) FOUND T HE TDS CERTIFICATE DEFECTIVE AND NOT OF THE RELEVANT PERIOD. THE ASSESSEE ALSO S UBMITTED THAT THE PAYMENT IN RESPECT OF FORWARDING & CLEARING CHARGES WAS PAI D TO NON-RESIDENT AIR LINES AND THE PROVISIONS OF SECTION 172 OF THE ACT ARE AP PLICABLE SO THE TRANSACTION IS OUT OF THE PURVIEW OF THE TDS PROVISIONS. HOWEVE R THE LD. CIT(A) HAS DISREGARDED THE CLAIM OF THE ASSESSEE AND CONFIRMED THE DISALLOWANCE MADE ITA NO.526/KOL/2013 A.Y. 2006-07 DAMAS LEDERWAREN V. ITO WD-30(1) KOL. PAGE 3 BY THE AO ON THE GROUND THAT THE ASSESSEE HAS FAILE D TO SUBSTANTIATE THE CLAIM ON THE BASIS OF DOCUMENTARY EVIDENCE. AGGRIEVED WITH THE ORDER OF LD. CIT(A) ASSESSEE PRE FERRED SECOND APPEAL BEFORE US. 3. WE HAVE HEARD LD. DR AND PERUSED THE MATERIALS A VAILABLE ON RECORD. WE FIND FROM THE AFORESAID DISCUSSION THAT LD. CIT( A) HAS DISALLOWED THE EXPENDITURE FOR THE VIOLATION OF SEC. 40(A)(IA) OF THE ACT. HOWEVER, AT THE APPELLATE STAGE LD. AR OF ASSESSEE SUBMITTED DIFFER ENT PLEA SAYING THAT TDS WAS DEDUCTED AND DEPOSITED, ASSESSEES PLEA WAS ALS O THAT PAYMENT WAS MADE TO NON-RESIDENT AIRLINES AND ACCORDINGLY THIS TRANSACTION WAS OUT OF PURVIEW OF INCOME TAX PROVISIONS U/S 172 OF THE ACT . WE FIND FROM THE RECORDS THAT THE PLEA OF ASSESSEE IS NOT VERY CLEAR IN JUST IFYING THE VIOLATION OF SEC. 40(A)(IA) OF THE ACT. FURTHER THE TDS CERTIFICATES AND CHALLANS SUBMITTED BY THE ASSESSEE WAS FOUND DEFECTIVE AND NOT OF THE REL EVANT PERIOD BY THE LD. CIT(A). SIMILARLY THE ASSESSEE COULD NOT PRODUCE AN Y DOCUMENTARY EVIDENCE THAT THE PAYMENT WAS MADE TO NON RESIDENT AIRLINE I N RESPECT OF FORWARDING AND CLEARING CHARGES. IT APPEARS FROM THE ABOVE STA TED DISCUSSION THAT THE ASSESSEE TRIED TO JUSTIFY THE CLAIM BUT FAILED TO S UBSTANTIATE THE SAME. HOWEVER IT IS ALSO IMPORTANT TO NOTE THAT AS PER THE ASSESS MENT ORDER THIS CASE WAS GETTING TIME BARRED. THE RELEVANT EXTRACT OF THE AS SESSMENT ORDER IS REPRODUCED BELOW : THE A/R OF THE FIRM WAS REQUESTED TO EXPLAIN AS TO WHY PROVISION OF SECTION 40(A)(IA) SHALL NOT BE ATTRACTED. THEREAFTE R, THERE WAS NO COMPLIANCE ON THE PART OF THE A/R. SINCE THE CASE I S BARRED BY LIMITATION ON 31-12-2008, I HAD NO OPTION BUT TO COMPLETE THE CASE BASED ON MATERIAL AVAILABLE ON RECORD. THEREFORE, IN ABSENCE OF ANY EXPLANATION, IT IS CONSTRUED THAT THERE IS NOTHING TO OFFER IN T HIS REGARD, AND HENCE, THE ENTIRE AMOUNT OF RS.(51750 + 1358255)= RS.14,10,005 /- IS BEING DISALLOWED U/S. 40(A)(IA) OF THE I.T. ACT, 1961 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO.526/KOL/2013 A.Y. 2006-07 DAMAS LEDERWAREN V. ITO WD-30(1) KOL. PAGE 4 FROM THE ABOVE WE OPINED THAT THE ASSESSMENT WAS MA DE IN LITTLE HASTE AS IT WAS GETTING TIME BARRED. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY WE ARE INCLINED TO SET ASIDE THE ORDER OF AO AND REMIT THE MATTER BEFORE HIM WITH A DIRECTION TO ENSURE ABOUT THE EXPENSE AS CLAIMED BY ASSESSEE ARE SUBJECT TO TDS OR NOT AND ACCORDINGLY PASS ORDER IN TERMS O F LAW. IT IS ALSO NOT OUT OF PLACE TO MENTION THAT ASSESSEE SHOULD CO-OPERATE IN ASSESSMENT PROCEEDINGS. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 06/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 06 /1 1 /2015 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT-DAMAS LEDERWAREN, 5/2C TILJALA LANE KO LKTA-19 2. / RESPONDENT-ITO, WARD-30(1), 10B MIDDLETON ROY, K OLKATA-71 3. * +,- - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5.01233+,, - +, , / DR, ITAT, KOLKATA 6.26789 / GUARD FILE. BY ORDER/ -, /TRUE COPY/ / - +, ,