DCIT, Circle - 10, Kolkata, Kolkata V. M/s. Soil & Enviro Industries Pvt. Ltd., Kolkata

ITA 616/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2581 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2010
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 26-03-2010
• Court: TRIBUNAL
• Keywords: Additional evidence; TDS; Set aside
• Section: 40(a)(ia); 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - B , KOLKATA ( ) BEFORE . . , , SHRI D.K.TYAGI, JUDICIAL MEMBER /AND . . , , SHRI B.C.MEENA, ACCOUNTANT MEMBER. / I.T.A.NO. 616/KOL/2010 / CROSS OBJECTION NO.46/KOL/2010 (FILED BY THE ASSESSEE) / ASSESSMENT YEAR 2005 - 06 DCIT, CIRCLE 10, KOLKATA. - - - VERSUS - . M/S. SOIL & ENVIRO INDUSTRIES PVT. LTD., 1/425, GARIAHAT ROAD (SOUTH), KOLKATA 700 068 PAN AAICS 5457 L ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI A.K.PRAMANICK, DR / FOR THE RESPONDENT : / SHRI A.K.CHAKRABORTY, AR / ORD ER . . , , SHRI B.C.MEENA, ACCOUNTANT MEMBER. THE REVENUE HAS FILED THIS APPEAL AGAINST ORDER DT.2.12.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) , KOLKATA FOR THE ASSESSMENT YEAR 2005 - 06. THE ASSESSEE HAS FILED CROSS OBJECTIO N. 2. IN THE APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1 . UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD.CIT(A) ERRED IN DELETING THE ADDITION ON SALE DIFFERENCE WHEREAS THE A.O. DISALLOWED THE SAME AS PER INFORMATION RECEIVED FROM THE CONCERNED PARTIES. 2 . UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD.CIT(A) ERRED IN ALLOWING THE ASSESSEES APPEAL ON THE BASIS OF ITS SUBMISSION AT THE APPELLATE STAGE THEREBY VIOLATING THE PROVISION OF RULE - 46A(3) OF THE LT. RULES. 3 . THAT THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND, TO ALTER OR MODIFY THE GROUNDS TAKEN ABOVE EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER ON THE BASIS OF INFORMATION COLLECTED FROM M/S.BHAGWA TI STEEL (P) LTD., AND M/S.DHURVESH META STEEL (P) LTD., AND ON COMPARISON WITH THE BOOKS OF ACCOUNTS, NOTICED THAT THERE IS I.T.A.NO.616/KOL/2010 AND C.O. NO.46/KOL/2010 2 A SALE DIFFERENCE OF RS.4,52,400 IN THE CASE OF M/S.BHAGWATI STEEL (P) LTD., AND RS.3,12,000 IN CASE OF M/S.DHRUVESH METAL STEEL (P ) LTD. THEREFORE, THE ASSESSING OFFICER ADDED THESE SALE DIFFERENCE TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LEARNED CIT(A) CONSIDERING THE LEDGER ACCOUNT COPY OF M/S.BHAGWATI STE E L (P) LTD., AND THE LETTER FROM M/S.DHRUVESH METAL STEEL (P) LTD. , DELETED THE ABOVE TWO ADDITIONS. AGGRIEVED, THE REVENUE IS IN APPEAL. 3. THE LEARNED DR CONTENDED BEFORE US THAT THE LEARNED CIT(A) HAS DELETED THE IMPUGNED ADDITIONS ON THE BASIS OF MATERIALS PLACED BEFORE HIM FOR THE FIRST TIME AND WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO HAVE HIS SAY IN THIS REGARD, WHICH IS VIOLATION OF THE PROVISIONS CONTAINED IN RULE 46A(3) OF THE INCOME - TAX RULES,1962. ACCORDINGLY, THE LEARNED DR SUBMITTED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE LEA RNED CIT(A) TO DECIDE THE ISSUE AFRESH AFTER GIVING OPPORTUNITY TO THE ASSESSING OFFICER. THE LEARNED AR OF THE ASSESSEE, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A). WHEREAS IN GROUND NO. 3 OF THE CROSS OBJECTION, THE ASSESSEE H AS SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A). 4. AFTER HEARING BOTH THE SIDES AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THERE IS NO DISPUTE TO THE FACT THAT THE LEARNED CIT(A) HAS DELETED BOTH THE ADDITIONS MADE ON AC COUNT OF SALES DIFFERENCE, RELYING ON THE LEDGER ACCOUNT COPY OF M/S.BHAGWATI STEEL (P) LTD., AND THE LETTER FROM M/S.DHRUVESH METAL STEEL (P) LTD., PRODUCED BEFORE THE LEARNED CIT(A) . IT IS ALSO NOT DISPUTED THAT THE SAID MATERIALS HAVE BEEN CONSIDERED B Y THE LEARNED CIT(A) WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO HAVE HIS SAY IN THIS REGARD OR CALLING ANY REMAND FROM THE ASSESSING OFFICER. THUS, THERE IS CLEAR VIOLATION OF THE PROVISIONS CONTAINED IN RULE 46A(3) , AS RIGHTLY CONTENDED BY THE LEARNED DR. IN SUCH VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THIS ISSUE TO HIS FILE FOR DECIDING AFRESH AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSING OFFICER AS WELL AS THE ASSESSEE. 5 . NOW ADVERTING TO THE CROSS OBJECTION FILED BY THE ASSESSEE, IN GROUND NO.1 THEREOF, THE ASSESSEE HAS DISPUTED THE DISALLOWANCE OF THE SUM OF RS.53,400 IN DEBTORS DIFFERENCE ACCOUNT. I.T.A.NO.616/KOL/2010 AND C.O. NO.46/KOL/2010 3 6 . THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE DIFFERENCE AS NOTED BY THE ASSESSI NG OFFICER RELATES TO M/S.BHAWATI STEEL (P) LTD., WHO IS ALSO A PARTY WHERE THE DIFFERENCE IN SALES HAVE BEEN RECONCILED BY THE ASSESSEE AND THE LEARNED CIT(A) HAS GRANTED RELIEF ON THIS GROUND. THEREFORE, THERE CANNOT BE ANY DIFFERENCE IN DEBTORS ACCOUNT AND THEREFORE, THE LEARNED CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.53,400. THE LEARNED DR, ON THE OTHER HAND, CONTENDED THAT THE LEARNED CIT(A) HAS DELETED THE ADDITION MADE ON ACCOUNT OF DIFFERENCE SALES ADMITTING ADDITIONAL EVIDENCE IN T HE FORM OF LEDGER COPY OF ACCOUNT AND CONFIRMATION LETTER FROM THE PARTY WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER. THEREFORE, THIS ISSUE ALSO DESERVES TO BE SET ASIDE TO THE FILE OF THE LEARNED CIT(A) TO BE DECIDED AFRESH AFTER GIVING OPPORTUNIT Y TO THE ASSESSING OFFICER TO HAVE HIS SAY. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. WHILE DECIDING THE APPEAL OF THE REVENUE, FOR THE REASONS DISCUSSED IN PARAGRAPH 4 ABOVE, WE HAVE ALREADY SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THE ISSUE RELATING TO DIFFERENCE IN SALES BY PARTIES INCLUDING M/S.BHAGAWATI STEEL (P) LTD. SINCE THE ISSUE RELATING TO DEBTORS DIFFERENCE IS CONNECTED WITH THE ISSUE OF DIFFERENCE SALES, IN OUR CONSIDERED V IEW AND IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) TO DECIDE THE SAME AFRESH AFTER GIVING OPPORTUNITY TO THE ASSESSING OFFICER AS WELL AS THE ASSESSEE. 8 . IN GROUND NO.2 OF THE CROSS OBJECTION, THE ASSESSEE HAS DISP UTED THE SUSTENANCE OF DISALLOWANCE OF RS.35,06,718 U/S.40(A)(IA) OF THE INCOME - TAX ACT,1961. 9 . DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER FOUND THE ASSESSEE TO HAVE DEPOSITED THE TDS MUCH AFTER 31.3.2005 DEDUCTED ON THE CREDITS/PAYMENTS MADE TO VARIOUS PARTIES TOWARDS WORKS DONE BY THEM AS TABULATED IN PARAGRAPH 5 OF THE ASSESSMENT ORDER. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID DEPOSITS WERE NOT MADE WITHIN THE STATUTORY TIME. ACCORDINGLY, APPLYING THE PROVISIONS CONTAIN ED IN SECTION 40(A)(IA) OF THE INCOME - TAX ACT,1961, THE ASSESSING OFFICER DISALLOWED THE CORRESPONDING EXPENSES OF RS.35,06,718. IN APPEAL, THE LEARNED CIT(A) WAS OF THE VIEW THAT AS REGARDS THE TDS I.T.A.NO.616/KOL/2010 AND C.O. NO.46/KOL/2010 4 CREDIT/PAYMENTS DONE BEFORE 1.3.2005, THE ASSESSEE SHOULD HAVE DEPOSITED THESE TDS AMOUNTS ON OR BEFORE 31.3.2005. SINCE THE ASSESSEE HAS DEPOSITED THE TDS IN RESPECT OF SUCH CREDIT/PAYMENTS BE YOND 31.3.2005, HE UPHELD DISALLOWANCE OF THE CORRESPONDING EXPENDITURE. HOWEVER, AS REGARDS THE TDS CREDIT/PAYMENTS DON E IN THE LAST MONTH I.E., MARCH, 2005, RELYING ON THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, AND SINCE THE TDS ON CREDIT/PAYMENTS DONE IN THE LAST MONTH I.E., MARCH, 2005 THE ASSESSEE HAS DEPOSITED THE TDS BEFORE THE DUE DATE OF FILING OF THE RETURN, THE LEARNED CIT(A) ALLOWED THE CORRESPONDING EXPENDITURE. THUS, THE LEARNED CIT(A) HAS ALLOWED PARTIAL RELIEF TO THE ASSESSEE. 1 0 . THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT SINCE THE TDS HAS BEEN PAID/DEPOSITED WITHIN THE DUE DATE OF FILING OF RETURN , THE DISALLOWANCE IS NOT PROPER IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT AMENDED BY FINANCE ACT , 2008 W. R. E.F. 1.4.2005. THE LEARNED DR, ON THE OTHER HAN D, SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A). 1 1 . HAVING HEARD BOTH THE PARTIE S AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOWANCE OF CORRESPONDING EXPENDITURES FOR WHICH CREDIT/PAYMENT S WERE MADE PRIOR TO 1.3.2005 AND TDS HA D THOUGH BEEN DEDUCTED BU T NOT DEPOSITED BEFORE 31.3.2005. IT IS THE CLAIM OF THE ASSESSEE THAT SINCE THE TDS AMOUNT SO COLLECTED WAS DEPOSITED WITHIN THE DUE DATE OF FILING OF THE RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THERE IS NO VIOLATION OF THE PROVISIONS OF SECTI ON 40(A)(IA) OF THE ACT. THE RELEVANT AMENDED PROVISIONS OF SECTION 40(A) (IA), AMENDED BY FINANCE ACT,200 8 W. R. E.F. 1.3.2005 , IS REPRODUCED AS UNDER : SECTION 40( IA ) : ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY, FEES FOR PROFES SIONAL SERVICES O R FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB - CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, H AS NOT BEEN PAID, ( A ) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR, ON OR BEFORE THE DUE DATE SPECIFIED IN SUB - SECTION (1) OF SECTION 139 ; OR ( B ) IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEAR: I.T.A.NO.616/KOL/2010 AND C.O. NO.46/KOL/2010 5 PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCTED ( A ) DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE SAID DUE DATE; OR ( B ) DURING ANY OTHER MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE END OF THE SAID PREVIOUS YEAR, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. THUS, IT IS CLEAR FROM THE AMENDED PROVISIONS THAT THE TAX DEDUCTED IN THE LAST MONTH OF THE PREVIOUS YEAR , IF PAID BEFORE THE DUE DATE OF FI LING OF RETURN AND THE TAX DEDUCTED IN ANY OTHER MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE END OF THE SAID PREVIOUS YEAR, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. THE LEARNED CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW THE TDS PAYMENTS MADE ON 29.06.2005 IN RESPECT OF TDS CREDIT/PAYMENTS DONE IN THE MONTH OF MARCH,2005. BUT IN RESPECT OF OTHER TRANSACTIONS, THE LEARNED CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. WE FIND THAT THE IMPUGNED ORDER OF THE LEARNED CIT(A) IS IN CONFORMITY WITH THE AMENDED PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME - TAX ACT,1961 AND AS SUCH, IT REQUIRES NO INTERFERENCE. ACCORDINGLY, WE DISMISS THE GROUND NO.2 TAKEN BY THE ASSESSEE IN TH E CROSS OBJECTION. 12 . IN GROUND NO.3 OF THE CROSS OBJECTION, THE ASSESSEE HAS SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN RESPECT OF THE DELETION OF THE ADDITION OF RS.4,52,400 AND RS.3,12,000 MADE ON ACCOUNT OF SALES DIFFERENCE. IT MAY BE MENT IONED HERE THAT AGAINST SUCH DELETION, THE REVENUE HAS DISPUTED THE SAME IN ITS APPEAL. WHILE DISPOSING THE APPEAL OF THE REVENUE, FOR THE REASONS RECORDED IN PARAGRAPHS 4 - 5 OF THIS ORDER, WE HAVE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND REST ORED THIS ISSUE TO HIS FILE FOR DECIDING IT AFRESH AFTER GIVING OPPORTUNITY TO THE ASSESSING OFFICER AS WELL AS THE ASSESSEE. ACCORDINGLY, GROUND NO.3 OF THE CROSS OBJECTION IS REJECTED. 13. GROUND NO. 4 OF THE CROSS OBJECTION IS GENERAL IN NATURE AND NEE DS NO SPECIFIC ADJUDICATION I.T.A.NO.616/KOL/2010 AND C.O. NO.46/KOL/2010 6 14. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNC ED IN OPEN COURT ON DT. 21.5.2010 SD/ - SD/ - ( . . ) , (D.K.TYAGI), JUDICIAL MEMBER. ( . . ) , , (B.C.MEENA), ACCOUNTANT MEMBER. ( ) DATE : 21.05.2010 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : DCIT, CIRCLE 10, KOLKATA. 2 / THE RESPONDENT - M/S. SOIL & ENVIRO INDUSTRIES PVT. LTD., 1/425, GARIAHAT ROAD (SOUTH), KOLKATA 70 0 068 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , / DEPUTY REGISTRAR . ( /) H.K.PADHEE / SNR.PRIVATE SECRETARY.