Rakesh Enterprise, Kolkata V. ITO, Ward-44(2), Kolkata

ITA 541/KOL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5820 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-04-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 19-10-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Business expenditure; TDS
• Section: 40A(3); 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMCBENCH KOLKATA BEFORE SHRI S.S. GODARA, HONBLE JUDICIAL MEMBER [THROUGH VIRTUAL COURT] ITA NO.541/KOL/2020 ASSESSMENT YEAR:2014-15 RAKESH ENTERPRISE 11/E/1, GORAPADA SARKAR LANE, ULTADANGA, KOLKATA 700 067. / V/S . ITO, WARD 44(2), KOLKATA PAN NO.AALFR 0329 N /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SOUMITRA CHOUDHURY, ADVOCATE /BY RESPONDENT SHRI JAYANTA KHANRA, JCIT, SR. DR /DATE OF HEARING 12-04-2021 /DATE OF PRONOUNCEMENT 15-04-2021 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS) - 13, KOLKATA ORDER DATED 03.02.2020 PASSED IN CASE NO. 10011/CIT(A)-13/W-44(2)/KOL/2018-19 INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; (IN SHORT THE ACT). 2. IT EMERGES AT THE OUTSET THAT THIS ASSESSEES APPEAL SUFFERS FROM 150 DAYS DELAY IN FILING. IT IS PLEADED IN CONDONATION PETITION/AFFIDAVIT THAT THE RELEVANT FILE/PAPERS WERE NOT AVAILABLE. ALL THESE SOLEMN AVERMENTS HAVE GONE UNREBUTTED FROM THE ASSESSEE SIDE. HONBLE APEX COURT IN COLLECTOR, LAND ACQUISITION VS. MST . KATJI & ORS [1987] 167 ITR 0471 (SC) HELD LONG BACK THAT THE CAUSE OF SUBSTANTIAL JUSTICE PREVAILS OVER ALL TECHNICAL ASPECTS. I THUS TREAT THIS 150 DAYS DELAY IN FILING AS NEITHER INTENTIONAL NOR DELIBERATE BUT ON ACCOUNT OF COMMUNICATION GAP AT DIFFERENT LEVELS. THIS APPEAL IS TAKEN UP FOR ADJUDICATION ON MERITS THEREFORE. ITA NO.541/KOL/2020 RAKESH ENTERPRISE PAGE 2 3. COMING TO THE FIRST ISSUE OF GODOWN RENT DISALLOWANCE OF RS. 1,97,300/- MADE IN BOTH THE LOWER PROCEEDINGS ALLEGING ASSESSEES FAILURE TO DEDUCT TDS THEREUPON, LEARNED COUNSEL ONLY CASE IS THAT THE SAID PAYMENT(S) HAD BEEN MADE TO MULTIPLE GODOWN OWNERS AND; IN NO CASE, THE SAME EXCEEDED THE THRESHOLD LIMIT OF RS. 1,20,000/- U/S 194I AS PRESCRIBED FOR ASSESSMENT YEAR 2014-15. THE REVENUE PLEADED THAT THERE IS NO INDICATION FROM THE CASE FILED AS TO WHETHER THERE ARE MULTIPLE RECIPIENTS IN THE INSTANT APPEAL. THE FACT REMAIN THAT APART FROM THE ASSESSEES VOLUMINOUS CASE RECORDS PRIMA FACIE INDICATING MORE THAN A SINGLE PAYEE, LEARNED LOWER AUTHORITIES HAVE ALSO NOT INDICATED ANYTHING TO THE CONTRARY IN THEIR RESPECTIVE ORDERS. I, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCES FOR THIS SOLE REASON. SAME ORDER CONTINUES QUA THE SECOND ISSUE ON DISALLOWANCE OF LEGAL EXPENSES DISALLOWANCE OF RS. 39,000/- PAID WITHOUT DEDUCTING TDS AS WELL SINCE INDICATING MULTIPLE PAYEES. 4. THE THIRD ISSUE RAISED AT THE ASSESSEES BEHEST SEEKS TO CHALLENGE @10% ESTIMATED DISALLOWANCES OF THE BUSINESS EXPENSES OF RS. 64,10,036/-; COMING TO RS. 6,41,003/-. BOTH THE LEARNED REPRESENTATIVE FAILS TO DISPUTE THAT NEITHER THE ASSESSEE HAS BEEN ABLE TO PROVE THE SAME TO HAVE BEEN INCURRED ONLY FOR THE PURPOSE OF ITS BUSINESS BY FILING ALL THE SUPPORTIVE DOCUMENTS NOR THE LOWER AUTHORITIES HAVE PINPOINTED ANY FAILURE THEREIN. FACED WITH THIS SITUATION, I DIRECT THE ASSESSING OFFICER TO RESTRICT THE IMPUGNED DISALLOWANCE FROM 10% TO 5% ONLY WITH A RIDER THAT THE SAME SHALL NOT BE TREATED AS A PRECEDENT. 5. LEARNED COUNSEL DOES NOT WISH TO PRESS THAT THE ASSESSEES SIXTH SUBSTANTIVE ISSUE IF ELECTRICITY BILL PAYMENT OF RS. 20,110/- SMALLNESS THEREOF. REJECTED ACCORDINGLY. 6. LASTLY, THE ISSUE OF SECTION 40A(3) CASH PAYMENT DISALLOWANCE OF RS. 9,15,132/-. IT EMERGES DURING THE COURSE OF HEARING FOR THE ASSESSING OFFICERS ORIGINAL ASSESSMENT ORDER DATED 17.11.2016 HAD NOT MADE ANY DISALLOWANCE SINCE HE PROCEEDED TO INVOKE SECTION 154 JURISDICTION IN HIS ORDER DATED 08.03.2018 TO THIS EFFECT. A PERUSAL OF THE SAID ORDER MAKES IT EVIDENT THAT THE ASSESSING OFFICER HAD NOT EVEN DISCUSSED THE LIST OF THE RECIPIENT WHICH ALLEGEDLY HAVE EXCEEDED THE THRESHOLD LIMIT PRESCRIBED FOR THE RELEVANT ASSESSMENT YEAR. COUPLED WITH THIS, THE HONBLE APEX COURT IN T.S. BALARAM VS VOLKART BROTHERS (1971) 82 ITR 50 (SC) HAS SETTLED THE LAW LONG BACK THAT THIS RECTIFICATION ITA NO.541/KOL/2020 RAKESH ENTERPRISE PAGE 3 PROVISION COMES INTO PLAY ONLY IN CASE OF AN APPARENT MISTAKE ON RECORD. IT EMERGES THAT THE ASSESSING OFFICER HAD NOT EVEN EXAMINED THE SAME IN HIS ORIGINAL ASSESSMENT ORDER WHICH COULD MAKE OUT OF THE INSTANT ASSESSMENT ITSELF SUFFERING FROM ANY APPARENT ERROR. I THUS DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE. 7. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN OPEN COURT ON 15/04/2021. SD/- (S. S. GODARA) JUDICIAL MEMBER KOLKATA; DATE: 15/04/2021 BISWAJIT, SR. PS / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- RAKESH ENTERPRISE. 2. /RESPONDENT- ITO, WARD 44(2), KOLKATA. 3. / CONCERNED CIT 4. - / CIT (A) 5. , / DR, ITAT, 6. [ / GUARD FILE. //TRUE COPY// BY ORDER/ , ASSISTANT REGISTRAR/DDO ITAT, KOLKATA