Mr. Badal Bhowmik, Kolkata V. Addl. CIT, Range -5 2, Kolkata, Kolkata

ITA 575/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83021 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 12-04-2012
• Court: TRIBUNAL
• Department Lawyers: USMANI
• Assessee Lawyers: N O N E

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , . . . . ! ! ! ! /AND ' #!' ' #!' ' #!' ' #!' , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] !$ / I.T.A NO.575/KOL/2012 #% &'/ ASSESSMENT YEAR: 2005-06 MR. BADAL BHOWMIK VS. ADDL. COMMISSIONER OF INCOME-TAX, (PAN: AEEPB5721K) RANGE-52, KOLKATA. ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 24.07.2014 DATE OF PRONOUNCEMENT: 01.08.2014 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI S. H. USMANI, JCIT, SR. DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXIII, KOLKATA IN APPEAL NO. 176/CIT(A)-XXXIII/ADDL.CIT-R-52/09-10/KOL DATED 05.01.2012. ASSESSMENT WAS FRAMED BY ADDL. CIT, RANGE-52, KOLKATA U/S. 143(3)/147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2005 -06 VIDE HIS ORDER DATED 31.12.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF EXPENDITURE TO THE TUNE OF RS.3,18, 250/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. FOR THAT THE HONBLE COMMISSIONER OF INCOME TAX (APPEAL) HAS FAILED TO APPRECIATE THE FACT IN DISALLOWING THE EXPENDITURE TO THE TUNE OF RS.3,18,250 (RS.1,59,750 + RS.1,58,500), WHICH IS NOT SUSTAINABLE IN THE EYE O F THE LA AND HENCE NEEDS TO BE DELETED. 3. NONE APPEARED ON BEHALF OF ASSESSEE BUT AN ADJOU RNMENT APPLICATION IS PLACED IN FILE. THE ADJOURNMENT APPLICATION IS REJECTED AND APPEAL IS DECIDED HAVING HEARD LD. SR. DR. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CI RCUMSTANCES OF THE CASE. WE FIND THAT THE AO DISALLOWED THE COMMISSION EXPENSES OF RS.7,99,00 0/- BUT CIT(A) RESTRICTED THE DISALLOWANCE AT RS.3,18,250/- BY OBSERVING IN PARA 4.2 AS UNDER: 2 ITA NO.575/K/2012 MR. BADAL BHOWMIK, AY 2005-06 4.2. I HAVE CONSIDERED FACTS OF THE CASE. THE AP PELLANT HAD SHOWN COMMISSION OF RS.35,76,329/- AGAINST WHICH EXPENSES OF RS.7,99,00 0/- HAVE BEEN CLAIMED. ON PERUSAL OF AGREEMENTS SIGNED WITH SELLERS OF THE LAND, IT I S SEEN THAT THE SELLERS HAVE PERMITTED THE APPELLANT TO DEVELOP THE PLOT OF LAND FOR EXECUTING SALE. THE EXPENSES ARE ON ACCOUNT OF PURCHASE OF BUILDING MATERIAL FROM SUPPLIERS IN THE SAME LOCALITY. ON CONSIDERATION OF THE OVERALL SURROUNDING CIRCUMSTANCES OF THE CASE F ROM APPEARS TO BE FORCE IN THE CONTENTION OF THE APPELLANT THAT SOME DEVELOPMENT W ORK WAS REQUIRED TO BE CARRIED OUT WITHOUT WHICH THE APPELLANT WOULD NOT HAVE EARNED S O MUCH COMMISSION. THOUGH THE APPELLANT HAD NOT MAINTAINED DETAILED ACCOUNTS HE H AD GIVEN WHATEVER DTAILS WERE TO HIS POSSESSION. CONSIDERING THIS I AM OF THE OPINION T HAT THE ASSESSING OFFICER WAS NOT RIGHT HIS TOTALLY REJECTING THE CLAIM OF EXPENSES MADE BY THE APPELLANT. HOWEVER, NEITHER CAN THE CLAIM MADE BE ACCEPTED IN TOTO. AS POINTED OUT BY THE ASSESSING OFFICER THE BILLS ISSUED BY M/S. STAR ENTERPRISE AND M/S. SRI KRISHNA ENTERPRISE AMOUNTING TO RS.1,59,750/- AND RS.1,58,500/- ARE OF DATES SUBSEQ UENT TO THE LAST SALE OF LAND. THOUGH THE APPELLANT HAS AGREED THAT PRACTICALLY IT OFTEN HAPPENS THAT PAYMENTS ARE MADE FROM TIME TO TIME AND BILLS ARE ISSUED AT A SUBSEQUENT D ATE, SUCH GENERAL ASSERTION CANNOT BE SUFFICIENT DISCHARGE OF ONUS. SINCE NO EVIDENCE HA S BEEN PRODUCED BY THE APPELLANT REGARDING ACTUAL DATE OF PURCHASE PAYMENT WITH THES E PARTIES. IT IS WELL SETTLED PRINCIPLE THAT FOR CLAIMING ANY EXPENDITURE ONUS IS SQUARELY UPON THE ASSESSEE. THEREFORE, DISALLOWANCE IN RESPECT OF THE SAID AMOUNTS OF RS.1 ,59,750/- AND RS.1,58,500/- ARE CONFIRMED. AGGRIEVED, ASSESSEE CAME IN APPEAL BEFORE US. 4. AFTER GOING THROUGH THE FACTS IN ENTIRETY WE FIN D THAT THE ASSESSEE HAS EARNED COMMISSION ON ACCOUNT OF SALE OF LAND AT RS.27,77,3 29/- AND ALSO INCURRED EXPENSES TO THE EXTENT OF RS.7,99,000/-. THE DISPUTE BEFORE US NOW IS RESTRICTED THE COMMISSION PAYMENT OF RS.3,18,250/- IN RESPECT TO THE FOLLOWING TWO PARTI ES: SL. NO. NAME ADDRESS DATE OF THE BILL AMOUNT I.) II) M/S. STARS ENTERPRISES SRI KRISHNA ENTERPRISE E/8, SAHID SMRITY COLONY, KOLKATA-94 S/6, SAHID SMRITY COLONY, KOLKATA-94 10.03.2005 28.02.2005 RS.1,59,750 RS.1,58,500 THE DATE OF SALE OF LAND IS FROM25.10.2004 TO 8.2. 2005 AND THE BILLS RAISD BY M/S. STAR ENTERPRISES AND M/S. SRI KRISHNA ENTERPRISES IS DAT ED 10.03.2005 AND 28.02.2005. THE CONTENTION OF THE ASSESSEE BEFORE THE AO AS WELL AS BEFORE CIT(A) IS THAT THIS IS USUAL PRACTICE THAT THE EXPENDITURE WAS INCURRED PRIOR AND BILLS W ERE RAISED BY THESE PARTIES AFTER THE DATE OF SALE. IT IS NOT THE CASE OF THE REVENUE THAT THESE TRANSACTIONS AE NOT GENUINE AND THE AO HAS NOT DOUBTED THAT THE PAYMENTS ARE NOT MADE. ONCE THIS IS THE POSITION, WE ARE OF THE VIEW THAT WHEN THE COMMISSION PAID TO OTHER PARTIES IS ALLOWE D BY CIT(A), THE COMMISSION PAID TO THESE 3 ITA NO.575/K/2012 MR. BADAL BHOWMIK, AY 2005-06 PARTIES CANNOT BE DISALLOWED. ACCORDINGLY, WE ALLO W THE CLAIM OF THE ASSESSEE AND THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 6. ORDER PRONOUNCED IN OPEN COURT ON 01.08.2014. SD/- SD/- , . . . . , ' #!' ' #!' ' #!' ' #!' , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 ST AUGUST, 2014 -. #/0 #1 JD.(SR.P.S.) 2 +##3 43&5- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT MR. BADAL BHOWMIK, 28, LAKE EAST, 6 TH ROAD, SANTOSHPUR, KOLKATA-700075 2 +,)* / RESPONDENT ADDL.CIT, RANGE-52, KOLKATA. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:#; +# / DR, KOLKATA BENCHES, KOLKATA ,3 +#/ TRUE COPY,