Amalesh Das, Purba Medinipur V. ITO, WD-4, HALDIA, Purba Medinipur

ITA 604/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1871 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 05-04-2016
• Court: TRIBUNAL
• Department Lawyers: RAJAT KR KUREEL JCIT LD
• Assessee Lawyers: AVIJIT KUMAR SEN FCA L D
• Section: 40A(3); 133(6)

Judgement Text

1 ITA NO. 604/KOL/2016 M/S. TAMLUK FL OFF SHOP IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA BEFORE: SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 604/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. TAMLUK FL OFF SHOP VS. INCOME TAX OFFICER PAN: AADFT8951G WARD 4, HALDIA [ APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI AVIJIT KUMAR SEN, FCA, L D.AR FOR THE RESPONDENT : SHRI RAJAT KR. KUREEL, JCIT, LD.DR DATE OF HEARING : 20-01-2017 DATE OF PRONOUNCEMENT : 19-04-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER DAT ED 16-02-2016 OF CIT(A), 7, KOLKATA FOR THE ASSESSMENT YEAR 2011-12. 2. IT IS NOTICED THAT THOUGH THE ASSESSEE HAS RAIS ED AS MANY AS FOUR GROUNDS OF APPEAL AMONG WHICH EFFECTIVE GROUND NO.1 RELATES TO REJECTION OF CLAIM OF RS.90,584/- BEING 1% OF TCS ON THE TOTA L SUM OF RS.90,58,764/- PAID TOWARDS PURCHASE OF LIQUOR/WINE S AS PER 26AS. GROUND NO.2 REJECTION OF AGGREGATE SUM OF RS.18,79, 000/- PAID IN CASH TO CREDITORS U/S. 40A(3) OF THE ACT. GROUND NO.3 RELAT ES TO INCLUSION OF TCS COMPONENTS OF RS.27,960/- IN THE VALUATION OF CLOSI NG STOCK WHILE THE SAME WAS NOT INCLUDED THE PURCHASE BY THE ASSESSEE. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND O F APPEAL RELATES TO ADJUSTMENT OF DEMAND OF RS.1,54,930/- AS RAISED BY THE AO FOR THE AY 2011-12 AGAINST THE REFUND OF AY 2012-13 WITHOUT GI VING PRIOR INTIMATION U/S. 245 OF THE ACT IS BAD AND NOT TENABLE IN LAW. 2 ITA NO. 604/KOL/2016 M/S. TAMLUK FL OFF SHOP 4. REGARDING GROUND NO.1, ON PERUSAL OF DETAILS OF PURCHASE MADE BY THE ASSESSEE AND SALES MADE BY THE SUPPLIER TO THE ASSESSEE THE AO FOUND DIFFERENCE OF RS.1,28,693/- AND RS.90,584/- FROM M/ S. AJUDHIA DISTILLERY AND M/S.UNITED SPIRITS AND ACCORDINGLY, AN AMOUNT O F RS.2,19,277/- WAS ADDED TO THE TOTAL INCOME OF ASSESSEE BEING INFLATE D PURCHASE BY THE ASSESSEE. 5. THE CIT-A AFTER VERIFYING THE INFORMATION AS PER FORM 26AS RESTRICTED THE ADDITION TO RS.90,584/- BY STATING A S UNDER:- I VERIFIED THE INFORMATION AS PER THE FORM 26AS AN D FIND DIFFERENCE ONLY IN THE CASE OF SEN LAW & COMPANY. THE APPELLANT HAS ACCOUN TED RS.91,49,348/- AS PURCHASES WHEREAS BOTH THE SUPPLIER AND FORM 26AS S HOWN THE SUPPLIES AT RS.90,58,764/- AND THERE WAS A DIFFERENCE OF RS.90, 584/- FOR WHICH THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT COULD NOT FURNISH A NY EXPLANATION. THEREFORE, OUT OF THE TOTAL ADDITION OF RS.2,19,277/- THE AMOUNT OF RS.90 , 584/- IS CONFIRMED AND THE BALANCE IS DELETED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 6. THE LD.AR BEFORE US SUBMITS THAT THE ASSESSEE CO LLECTED TCS TO AN EXTENT OF RS.90,584/- I.E. 1% (APPROX) ON THE AMOUN T OF RS.90,58,764/-, WHICH WAS PAID TOWARDS PURCHASE OF LIQUOR AND WINE. BUT, HOWEVER, THE AO MISTAKENLY FOUND THE TOTAL AMOUNT OF RS.91,49,34 8/- PAID TOWARDS PURCHASE OF SAID GOODS. HE ALSO ARGUED THAT AN AMOU NT OF RS.90,584/- IS INCLUDED IN THE AMOUNT OF RS.91,49,348/-. THEREFORE , THERE WAS NO DIFFERENCE/VIOLATION IN PURCHASES AS FOUND BY THE AO/CIT-A AND URGED TO ALLOW THIS GROUND OF APPEAL. 7. THE LD.DR RELIED ON THE ORDER OF THE AO. 8. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE SUBMITTED THE REL EVANT MATERIAL SHOWING TCS COLLECTION BY ITS SUPPLIERS. THE CIT-A EXAMINED THE FORM 26AS AND FOUND THE DIFFERENCE ONLY IN THE CASE OF M/S. SEN L AW & COMPANY. FOR WHICH THE ASSESSEE FAILED TO PRODUCE ANY FURTHER EV IDENCE/EXPLANATION AND AS SUCH HE RESTRICTED THE ADDITION TO RS.90,584/- A S AGAINST RS.2,19,227 BY THE AO. WE FIND THAT THE CIT-A WAS JUSTIFIED IN DOING SO. ACCORDINGLY, WE UPHOLD THE SAME. GROUND NO.1 IS DISMISSED. 3 ITA NO. 604/KOL/2016 M/S. TAMLUK FL OFF SHOP 9. GROUND NO. 2 RELATES TO ADDITION REJECTING OF CL AIM OF RS.18,79,000/- BY THE CIT-A MADE FOR VIOLATION OF PROVISIONS OF SE CTION 40A(3) OF THE ACT. 10. DURING THE COURSE OF SCRUTINY PROCEEDINGS THE A O FOUND THAT THE ASSESSEE HAS PAID CASH TO AN EXTENT OF RS.10,95,000 /- AND RS.11,04,000/- TOTALING TO RS.21,99,000/- TO M/S.VTR MARKETING & M /S. SEN LAW & CO TOWARDS PURCHASE OF FOREIGN LIQUORS. BASING ON THE INFORMATION AS FURNISHED BY SAID TWO PARTIES U/S. 133(6) OF THE AC T, THE AO FOUND THAT THE ASSESSEE HAS MADE THE CASH PAYMENTS EXCEEDING RS.20 ,000/- ON A SINGLE DAY BY VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT AND ACCORDINGLY, HE DISALLOWED THE SUM OF RS.21,99,000/- US/ 40A(3) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 11. BEFORE THE CIT-A THE ASSESSEE CONTENDED THAT T HE INFORMATION AS SUPPLIED U/S. 133(6) OF THE ACT BY THE SAID TWO ENT ITIES WAS WRONG AND CLAIMED BEFORE HIM THAT THE PAYMENTS WERE MADE TO T HE SAID ENTITIES ON VARIOUS DATES IN CASH BELOW RS.20,000/- PER DAY. TH E SUPPLIERS HAVE ACCOUNTED THE CONSOLIDATED AMOUNT IN CASH AS PER DE TAILS DISCUSSED IN THE ASSESSMENT ORDER. BEFORE HIM THE ASSESSEE CLAIMED T HAT THE SOME PAYMENTS WERE PAID IN CASH ON SUNDAYS AND HOLIDAYS TO AN EXTENT OF RS. 2,20,000/- CASH ON 14-11-2010 AND RS. 1 LAKH CASH ON 25-12-2010. THE CIT-A AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE RESTRICTED THE ADDITION TO RS.18,79,000/- AS AGAINST RS.21,99,000/- BY THE AO BY STATING AS UNDER:- 4.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A PPELLANT BUT DO NOT FIND FORCE IN THE ARGUMENTS OF THE APPELLANT. THE APPELLANT HAS MADE PURCHASES FROM M/S. VTR MARKETING AND M/S. SEN LAW & CO. AS PER THE INFORMATION FURNI SHED BY THE SUPPLIERS THE CASH PAYMENTS WERE MADE TO THE EXTENT OF RS.10,95,000/- TO M/S. VTR MARKETING CO. AND RS.11,04,000/- TO M/S. SEN LAW & CO ON VARIOUS DATE S IN EXCESS OF RS.20,000/- AS PER THE INFORMATION SUBMITTED BY THE SUPPLIERS WHEREAS THE APPELLANT CLAIMED THAT THE PAYMENTS WERE NOT MADE IN A SUM EXCEEDING RS.20,000 /- ON A SINGLE DAY. THE APPELLANT CONTENDED THAT HIS BOOKS OF ACCOUNT ARE CORRECT AND THE ENTRIES MADE IN THE SUPPLIERS' ACCOUNT WERE WRONG. THE APPELLANT FAILED TO FURNISH ANY EVIDENCE IN SUPPORT OF HIS CLAIM EXCEPT THE CASH BOOK MAINTAINED BY THE APPELLANT. T HE APPELLANT IS STATIONED AT HALDIA IN THE DISTRICT OF PURBA MEDINIPUR AND M/S. VTR MARKET ING IS LOCATED AT KHARAGPUR IN THE DISTRICT OF PASCHIM MEDINIPUR AND M/S. SEN, LAW & C OMPANY IS LOCATED IN KOLKATA WHICH IS FAR AWAY FROM PURBA MEDINIPUR. BOTH ARE MORE THA N 80 KMS AWAY FROM PURBA MEDINIPUR AND THE APPELLANT CANNOT MAKE DAILY PAYME NTS TO THE SUPPLIERS. THOUGH THE APPELLANT STATED THAT THE PAYMENTS WERE MADE TO THE DEALERS OF SUPPLIERS AT PURBA MEDINIPUR NO EVIDENCE HAS BEEN FURNISHED IN SUPPORT OF ITS CLAIM. THE APPELLANT FAILED TO FURNISH ANY EVIDENCE FROM M/S. VTR MARKETING OR FRO M M/S. SEN, LAW & COMPANY 4 ITA NO. 604/KOL/2016 M/S. TAMLUK FL OFF SHOP CONFIRMING THE PAYMENT IN LESS THAN RS.20,000/-. BO TH THE APPELLANT AND THE SUPPLIERS ARE HAVING BANK ACCOUNTS AND HAVING REGULAR TRANSAC TIONS WITH THEM. THEREFORE, THERE IS NO NEED TO MAKE THE CASH PAYMENTS TO THE SUPPLIERS IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF INCOME TAX ACT, 1961. ACCORDINGLY I HOLD THAT THE APPELLANT HAS MADE THE CASH PAYMENTS IN EXCESS OF RS.20,000/- AS STATE D BY THE SUPPLIERS. THE APPELLANT'S CONTENTION THAT THE AMOUNTS WERE PAID LESS THAN RS. 20,000/- ON A SINGLE DAY IS WITHOUT ANY EVIDENCE. THEREFORE, THE APPELLANT HAS VIOLATED THE PROVISIONS OF SECTION 40A(3) OF INCOME TAX ACT, 1961 AND DISALLOWANCE REQUIRED TO B E MADE UNDER SECTION 40A(3) OF INCOME TAX ACT, 1961. HOWEVER, THE APPELLANT HAS MA DE CASH PAYMENT OF RS.1.00 LAKH ON 25.12.10 AND RS.2,20,OOO/- ON 14.11.2010 BOTH BE ING HOLIDAYS AND THE PAYMENTS WERE COVERED BY THE EXCEPTION. THEREFORE, OUT OF TH E TOTAL AMOUNT OF RS.21,99,000/- THE AMOUNT OF ADDITION OF RS.3,20,000/- IS DELETED AND THE BALANCE AMOUNT OF RS.18,79,000/- IS CONFIRMED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 12. THE LD.AR OF THE ASSESSEE REITERATED THE SAME S UBMISSIONS AS MADE BEFORE THE CIT-A. ON THE OTHER HAND, THE LD.DR RELI ED ON THE ORDER OF THE AO. 13. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT NEITHER THE ASSESSEE PRODUCED ANY EVIDENCE CONTRARY TO THE INFORMATION AS SUPPLIED BY THE SAID TWO ENTI TIES I.E. M/S. VTR MARKETING AND M/S. SEN, LAW & COMPANY U/S. 133(6) O F THE ACT BEFORE THE AO NOR BEFORE THE CIT-A. WE FIND THAT THE PAYMENTS WERE MADE IN A DAY LESS THAN 20,000/- IN CASH. IT IS ALSO NOTICED THAT THE ASSESSEE PRODUCED THE EVIDENCE TO AN EXTENT OF RS. 1,00,000/- AND 2,2 0,000/- BEING PAID ON SUNDAYS/HOLIDAYS. THE CIT-A CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE GRANTED RELIEF TO THAT EFFECT. BUT, HOWEVER, WE DO NOT FIND ANYTHING ON RECORD TO SHOW THAT THE INFORMATION AS FURNISHED BY THE SAID TWO PARTIES M/S. VTR MARKETING AND M/S. SEN, LAW & COMPANY U/S. 133(6) OF THE ACT ARE WRONG. WE DO NOT FIND ANY INFIRMITY IN THE IMPU GNED OF THE CIT-A. WE UPHOLD THE SAME. THIS GROUND OF ASSESSEES APPEAL I S DISMISSED. 14. GROUND NO.3 RELATES TO COLLECTION OF TCS COMPON ENTS OF RS.27,960/- ON VALUATION OF CLOSING STOCK. 15. THE AO FOUND THAT THE ASSESSEE DID NOT INCLUDE THE TCS COMPONENT AMOUNT IN CLOSING STOCK. ACCORDINGLY, AN AMOUNT OF RS.27,960/- WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 5 ITA NO. 604/KOL/2016 M/S. TAMLUK FL OFF SHOP 16. BEFORE THE CIT-A THE ASSESSEE CONTENDED THAT TC S COMPONENTS ON VALUE OF CLOSING STOCK IS RECOVERABLE AND ADJUSTABL E AGAINST INCOME TAX PAYABLE AND CONTENDED THAT THE ADDITION MADE THEREO N IS BAD IN LAW. 17. THE CIT-A ON VERIFICATION OF THE PURCHASES FOUN D THAT THE ASSESSEE INCLUDED THE COMPONENT OF TCS IN PURCHASES AND ACCO RDINGLY HE CONFIRMED THE SAME AS MADE BY THE AO BY OBSERVING AS UNDER:- 5.0 THIS GROUND OF APPEAL IS RELATED TO THE VALUAT ION OF CLOSING STOCK. WHILE VALUING THE CLOSING STOCK THE APPELLANT HAS EXCLUDED THE EL EMENT OF TCS AMOUNTING TO RS.27,960/-. THE APPELLANT HAS OBJECTED FOR INCLUSI ON OF TCS IN VALUING THE CLOSING STOCK. HOWEVER, ON VERIFICATION OF PURCHASES THE APPELLANT HAS INCLUDED THE ELEMENT OF TCS IN PURCHASES. THEREFORE, IT IS OBVIOUS THAT THE TCS HA S TO BE INCLUDED WHILE VALUING THE CLOSING STOCK. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 18. THE LD.AR REITERATED THE SAME SUBMISSIONS AS MA DE BEFORE THE CIT- A AND REFERRED TO THE STATEMENT OF FACTS FILED BEFO RE THE CIT-A. 19. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE AO. 20. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE CIT-A EXAMINING THE RELEVA NT EVIDENCE SO FURNISHED BY THE ASSESSEE BEFORE HIM FOUND THAT THE ASSESSEE INCLUDED THE TCS COMPONENT IN PURCHASES. WE FIND NO INFIRMITY I N THE IMPUGNED ORDER OF THE CIT-A. ACCORDINGLY, IT IS HELD TO BE JUSTIFI ED. GROUND NO.3 IS DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19-04-2017 SD/- SD/- WASEEM AHMED S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :19-04-2017 6 ITA NO. 604/KOL/2016 M/S. TAMLUK FL OFF SHOP PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI AMALESH DAS, PARTNER OF M/S. TAMLUK F.L OFF SH OP, GOURI SHANKAR MORE, PARBATIPUR, PURBA MEDINIPUR, WB 72163 6. 2 RESPONDENT THE INCOME TAX OFFICER, WARD 4, HALDIA , BASUDEBPUR, KHANJAN CHAK, PURBA MEDINIPUR 721602. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER ASSTT. REGISTRAR