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ITA 621/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5079 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAN SOM J
• Assessee Lawyers: K M ROY
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUSDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 621 / KOL / 2013 ASSESSMENT YEAR :2009-10 ITO, WARD-7(2), P-7, CHOWRINGHEE SQURE, 5 TH FLOOR, KOLKATA-700 069 V/S . M/S QUARTRO TRAVEL & CARGO PVT. LTD., 4C & 4, CIRCUS PLAZA & CIRCUS AVENUE, 4 TH FLOOR, KOLKATA-7000017 [ PAN NO.AAACQ 0553 F ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI NILOY BARAN SOM, JCIT-DR /BY RESPONDENT SHRI K.M.ROY, FCA /DATE OF HEARING 14-01-2016 /DATE OF PRONOUNCEMENT 29-02-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOLKATA IN APPEAL NO.319 /CIT(A)-VIII/KOL/11-12 DATED 18.12.2012. ASSESSMENT WAS FRAMED BY ITO WARD -7(2), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2011 FOR ASSESSMENT YEAR 2009 -10. REVENUE HAS RAISED SOLE ISSUE, WHICH IS REPRODUCED BELOW:- 1. THAT THE LD. C.I.T.(APPEALS)-VIII, KOLKATA HAS ERRED IN FACTS IN DELETING THE ADDITION MADE BY THE A.O OF THE COMMISSION INCOME T HAT IS THE DIFFERENCE IN ITS COMMISSION INCOME DETAILS AS SHOWN IN THE P & L A/C AND AS PER DETAILS IN FORM NO. 26 AS AN AMOUNT OF RS.1,05,63,109 26,80, 206 THAT IS ITA NO.621/KOL/2013 A.Y.2009-10 ITO WD-7(2), KOL. V. M/S QUARTRO TRAVEL & CARG O PVT. LTD. PAGE 2 RS.78,82,903, AND ALSO THE AR OF THE ASSESSEE, DURI NG THE COURSE OF SCRUTINY PROCEEDINGS, COULD NOT SUBMIT ANY CLARIFICATION BY WHICH THE CLAIM OF THE ASSESSEE COULD BE SUBSTANTIATE, AFTER GIVING SEVERA L OPPORTUNITY FOR RECONCILIATION. 2. ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT L D. CIT(A) ERRED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER FOR AN AMOUNT OF 78,82,903/- ON ACCOUNT OF UNDERSTATEMENT OF COMMISSION INCOME. 2.1 FACTS IN BRIEF, ARE THAT ASSESSEE IN THE PRESEN T APPEAL IS A PRIVATE LIMITED COMPANY AND ENGAGED IN BUSINESS OF CUSTOM H OUSE AGENT (CARGO & TRAVEL). DURING THE YEAR UNDER CONSIDERATION, ASSES SEE DECLARED FOLLOWING INCOME FROM THE SOURCE OF COMMISSION:- A) COMMISSION OF 26,80,206/- B) COMMISSION INCOME AGAIN AIRLINES OF 50,96,167/- C) SALES PROMOTION OF 11,81,143/- D) SERVICE CHARGES OF 32,61,504/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO FOU ND THAT AS PER THE FORM 26 AS THE COMMISSION INCOME SHOULD HAVE BEEN TO 1,05,64,109/- ON WHICH THE TDS HAS BEEN DEDUCTED U/S 194H OF THE ACT. HOWE VER, ASSESSEE HAS DECLARED THE COMMISSION INCOME TO 26,80,206/- AS PER PROFIT AND LOSS ACCOUNT SO THERE ARISES THE DIFFERENCE OF 78,82,903/- WHICH HAS BEEN UNDERSTATED BY ASSESSEE. ACCORDINGLY, AO CALLED UPO N ASSESSEE FOR EXPLANATION. IN COMPLIANCE TO THE NOTICE THERETO AS SESSEE SUBMITTED THAT ENTIRE INCOME STATED ABOVE IS FROM THE SOURCE OF CO MMISSION ONLY BUT THE SAME HAS BEEN SHOWN UNDER DIFFERENT CATEGORY. THE T OTAL COMMISSION INCOME SHOWN IN THE RETURN IS OF 1,22,19,021/-. SO THE QUESTION OF UNDERSTATEMENT OF INCOME DOES NOT ARISE. HOWEVER, AO DISREGARDED THE CLAIM OF ASSESSEE BY OBSERVING THAT THE ASSESSEE FAILED TO PRODUCE PARTY -WISE RECONCILIATION OF THE DISCREPANCY NOTED IN ITS COMMISSION INCOME AND ALSO FAILED TO SUBSTANTIATE ITS CLAIM BY PRODUCING SUPPORTING DOCUMENTS: LIKE BILLS , VOUCHERS, PARTY-WISE ITA NO.621/KOL/2013 A.Y.2009-10 ITO WD-7(2), KOL. V. M/S QUARTRO TRAVEL & CARG O PVT. LTD. PAGE 3 LEDGER TO PROVE THAT SUCH COMMISSION INCOME HAS BEE N INCLUDED UNDER DIFFERENT CATEGORY OF COMMISSION INCOME AS STATED A FORESAID. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT COMMISSIO N INCOME OF 1,22,19,021/- HAS BEEN DULY DECLARED IN ITS RETURN UNDER DIFFERENT CATEGORY SUCH AS AIRLINES COMMISSION, SALES PROMOTION AND SE RVICE CHARGE, WHICH WERE SHOWN IN SCHEDULE-II OF PROFIT AND LOSS ACCOUNT BUT SAME WAS NOT CONSIDERED BY AO WHILE FRAMING ASSESSMENT ORDER. ACCORDINGLY, LD. CIT(A) DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER:- 5.1 GROUND NO. 1 & 2: THESE GROUNDS OF APPEAL OF T HE APPELLANT ARE DIRECTED AGAINST THE ACTION OF THE AO IN NOT APPRECIATING TH AT TOTAL RECEIPTS AS FOR TDS CERTIFICATES WERE NOT COMMISSION ONLY IT WAS FOR CO MMISSION (AIRLINES), COMMISSION SALES PROMOTION AND SERVICE CHARGES ALSO AND NOT CONSIDERING THE SCHEDULE-II FORMING PART OF PROFIT & LOSS A/C A ND THE TAX AUDIT REPORT DULY AUDITED BY A CHARTERED ACCOUNTANT. IT IS SUBMITTED THAT THE APPELLANT IS A LIMITED COM PANY. ITS BUSINESS IS THAT OF CUSTOMS HOUSE AGENT (CARGO & TRAVEL). AS REGARDS TH E ALLEGED SHORTFALL OF COMMISSION AS PER TDS CERTIFICATES, IT IS CONTENDED THAT THE APPELLANT RECEIVED AS PER PROFIT & LOSS A/C AN AMOUNT OF RS.1 ,22,19,021/- AS AIR LINES COMMISSION, COMMISSION, SALES PROMOTION CHARGES AND SERVICE CHARGES FROM DIFFERENT PARTIES FROM WHICH TAX OF RS.9,82,60 1/- WAS DEDUCTED AT SOURCE (VIDE ANNEXED CHART AND SCHEDULEII OF PROFIT & LOS S A/C.) WHEREAS AS PER TDS CERTIFICATES THE AMOUNT FROM WHI CH TAX WAS DEDUCTED WAS RS.1,05,56,132/-. SO THERE WAS NO SHORTFALL. HO WEVER, IT IS STATED THAT THE ITO SURMISED THAT TAX WAS DEDUCTED FROM COMMISSION ONLY WHICH IS NOT CORRECT. TAX WAS DEDUCTED NOT ONLY FROM COMMISSION BUT ALSO FROM OTHERS RECEIPTS STATED ABOVE. THE A/R OF THE APPELLANT EXP LAINED THAT THE APPELLANT DECLARED TOTAL RECEIPT OF RS.1,22,19,021/- AS PER P ROFIT & LOSS A/C, AS SHOWN IN THE ANNEXED CHART AND ALSO AT PAGE 3 OF THE ASSE SSMENT ORDER BUT AS PER TDS CERTIFICATES IT WAS RS.1,05,56,132/- THEREFORE, IT IS ARGUED THAT THE RECEIPTS SHOWN WAS EXCESS AND NOT SHORTFALL AS ALLE GED BY THE AO. THE REASON OF DIFFERENCE IS THAT SOME OF THE RECEIPTS W ERE OF LESSER AMOUNTS WHICH WAS NOT LIABLE TO TDS. IN SUPPORT OF THIS CONTENTIO N, THE AR FURNISHED A DETAIL CHART SHOWING THE TOTAL RECEIPTS AMOUNTING TO RS.1, 22,19,021/- AS AIR LINES COMMISSION, COMMISSION, SALES PROMOTION CHARGES AND SERVICE CHARGES FROM DIFFERENT PARTIES FROM WHICH TAX OF RS.9,82,60 1/- WAS DEDUCTED AT SOURCE. ACCORDINGLY, IT IS URGED THAT THE ALLEGED S HORTFALL OF RS.78,82,903/- IS LIABLE TO BE DELETED AS THE FIGURE AS PER TDS CERTI FICATES WAS LESS THAN RECEIPTS DECLARED. ITA NO.621/KOL/2013 A.Y.2009-10 ITO WD-7(2), KOL. V. M/S QUARTRO TRAVEL & CARG O PVT. LTD. PAGE 4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE A PPELLANT ALONG WITH THE SUPPORTING DETAILS FURNISHED, PERUSED THE FACTS OF THE CASE INCLUDING THE CONTENTION OF THE AO AND OTHER MATERIALS BROUGHT ON RECORD. I FIND SUBSTANTIAL FORCE IN THE ARGUMENT PUT FORTH BY THE APPELLANT. I AGREE WITH THE CONTENTION OF THE APPELLANT THAT THE AO HAS PARTLY CONSIDERED THE DEDUCTED TAX FROM COMMISSION ONLY WHICH IS NOT CORRECT AS THE TAX WAS DEDUCTED NOT ONLY FROM COMMISSION BUT ALSO FROM OTHERS RECEIPTS E.G. AIR L INES COMMISSION, COMMISSION, SALES PROMOTION CHARGES AND SERVICE CHA RGES FROM DIFFERENT PARTIES. I FIND THAT THE APPELLANT DECLARED TOTAL R ECEIPT OF RS.1,22,19,021/- AS PER PROFIT & LOSS A/C, AS SHOWN IN THE ANNEXED CHAR T AND ALSO AT PAGE 3 OF THE ASSESSMENT ORDER BUT AS PER TDS CERTIFICATES IT WAS RS.1,05,56,132/-. THEREFORE, IT IS SEEN THAT THE RECEIPTS SHOWN BY TH E APPELLANT WAS EXCESS AND NOT SHORTFALL AS ALLEGED BY THE AO. IN THE LIGHT OF THE ABOVE DISCUSSION AND OBSERVATIO N AND AFTER CONSIDERING THE ENTIRE FACTS OF THE CASE, IT IS HELD THAT THE AO WA S NOT JUSTIFIED IN MAKING THE ADDITION ON ACCOUNT OF ALLEGED SHORTFALL OF COMMISS ION AS PER TDS CERTIFICATES AND THEREFORE THE SAME IS HEREBY DIRECTED TO BE DE LETED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE CAME IN SECOND APPEAL BEFORE US. SHRI K.M. ROY, LD. AUTHORIZED REPRESENTATIVE APPEAR ING ON BEHALF OF ASSESSEE AND SHRI NILOY BARANA SOM, LD. DEPARTMENTA L REPRESENTATIVE APPEARING ON BEHALF OF DEPARTMENT. 4. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE US LD. DR SUB MITTED THAT NO PARTY-WISE RECONCILIATION WAS FILED AT THE TIME OF ASSESSMENT TO JUSTIFY THE COMMISSION INCOME THAT IT HAS NOT BEEN SUPPRESSED. BESIDES NO SUPPORTING EVIDENCE AS DESIRED BY THE AO IN SUPPORT OF ITS COMMISSION INCO ME WAS SUBMITTED AT THE TIME OF ASSESSMENT. THE LD. DR VEHEMENTLY RELIED ON THE ORDER OF AO. ON THE OTHER HAND, LD. AR RELIED ON THE ORDER OF LD. CIT(A ) AND CONTRADICTED THE ARGUMENT RAISED BY LD. DR. THE LD. AR SUBMITTED THA T PARTY-WISE RECONCILIATION WAS SUBMITTED AT THE TIME OF ASSESSM ENT AS EVIDENT FROM THE SUBMISSION RECORDED IN AO'S ORDER. 4.1 FROM THE AFORESAID DISCUSSION, WE UNDERSTAND TH AT ASSESSEE IS ACTING AS CUSTOM HOUSE AGENT AND ITS MAIN INCOME IS FROM T HE SOURCE OF ITA NO.621/KOL/2013 A.Y.2009-10 ITO WD-7(2), KOL. V. M/S QUARTRO TRAVEL & CARG O PVT. LTD. PAGE 5 COMMISSION. THE ASSESSEE HAS BIFURCATED ITS COMMISS ION INCOME INTO VARIOUS CATEGORY AND IT WAS PRESENTED IN THE SAME CATEGORY IN THE SCHEDULE OF PROFIT AND LOSS ACCOUNT. THE CATEGORIES OF COMMISSION INCO ME ARE SALES PROMOTION, COMMISSION FROM AIRLINES AND SERVICE CHARGES. WE FI ND THAT WHILE FRAMING THE ASSESSMENT THE AO OBSERVED THAT COMMISSION INCOME I S ONLY OF 26,80,206/- AND AS PER FORM 26AS GROSS COMMISSION RECEIVED SHOU LD BE 1,05,63,109/-. ACCORDINGLY, AO OPINED THAT THERE IS A DIFFERENCE O F 78,82,903/- WHICH HAS NOT BEEN DISCLOSED BY ASSESSEE IN ITS RETURNED INCO ME. AS A RESULT THE INCOME OF ASSESSEE HAS BEEN UNDERSTATED. HOWEVER, WE FIND FROM THE SUBMISSION OF ASSESSEE THAT THE COMMISSION INCOME DECLARED BY ASS ESSEE IS OF 1,22,19,021/- WHICH IS FROM THE SOURCE OF COMMISSIO N ONLY. THE ASSESSEE HAS ALSO SUBMITTED THE BREAKUP/ RECONCILIATION OF C OMMISSION INCOME AT THE TIME OF ASSESSMENT WHICH IS EVIDENT AS UNDER : AS PER VERIFICATION OF OUR BOOKS OF ACCOUNTS FOR T HE SAID FINANCIAL YEAR, IT IS NOTICED THAT MAJOR PART DIFFERENCE OF RS.50.96 LACKS HAD IN CLUDED IN FREIGHT ON CARGO& DUE CARRIER CHARGES [OTHER HEADS OF INCOME GROUP] AS PER SCH-11 OF AUDIDTED FINANCIAL STATEMENT OF P/L A/C, SOME OTHER PARTS WERE SHOWN SEPARATELY UNDER SALES PROMOTION HEAD HAVING RS.1 1.81 LACKS & RS.32.62 LACKS UNDER SERVICE CHARGES HEAD. SO THE TOTAL CO MMISSION INCOME AFTER ACCUMULATING ALL FOUR COME TO RS.122.19 LACKS [RS.( 26.80 + 50.96 + 11.81 + 32.62)] & SO FAR AS ACCOUNTING POINT OF VIEW THE PROFIT WOU LD REMAIN SAME & ONLY A COMPENSATING ERROR IS OCCURRED IN THE SAID FINANCIA L ACCOUNTS. FOR YOUR READY REFERENCE, ONE RECONCILIATON STATEME NT & NECESSARY LEDGERS, SCHEDULES & OTHER ALLIED DOCUMENTS ARE ATT ACHED HEREWITH. THE RECONCILIATION STATEMENT SUBMITTED BY THE ASSES SEE IS AS UNDER: RECONCILIATION OF COMMISSION INCOME WITH FREIGHT ON CARGO AS AT 31/03/2009 FREIGHT ON CARGO AS PER SCH -11 46,207,720.72 REVISED FREIGHT ON CARGO (41,132,789.40) DIFFERENCE [A] 5,074,931.32 DUE CARRIER CHARGES AS PER SCH-11 21,891,264.15 REVISED DUE CARRIER/AIRLINES CHARGES (21,870,028. 00) DIFFERENCE [B] 21,236.15 COMMISSION INCOME [AIR LINES] REVIWSED [A+B] TOTAL 5,096,167.47 U/S. 194H COVER THE FOLLOWING HEADS OF INCOME AS PE R P/L 1] COMMISSION INCOME 2,680,206.05 2] COMMISSION INCOME AIRLINES] 5,096,167.47 3] SALES PROMOTION 1,181,143,93 4] SERVICE CHARGES [PART] 3,261,504,00 TOTAL 12,219,021.45 ITA NO.621/KOL/2013 A.Y.2009-10 ITO WD-7(2), KOL. V. M/S QUARTRO TRAVEL & CARG O PVT. LTD. PAGE 6 WE ALSO FIND THAT AS PER THE OBSERVATION OF AO, THE INCOME OF ASSESSEE EARNED FROM COMMISSION SHOULD BE AT 1,05,63,109/- BUT IN ACTUALITY ASSESSEE HAS DECLARED COMMISSION INCOME OF RS. I.E., 1,22,19,021/- WHICH IS MORE THAN THE OBSERVATION OF THE AO. FROM THE ABOVE FACT S AND CIRCUMSTANCES OF THE CASE, WE UNDERSTAND THAT IT IS NOT THE CASE WHE RE INCOME HAS BEEN UNDERSTATED THEREFORE WE UPHOLD THE ORDER OF LD. CI T(A). HENCE THIS GROUND OF APPEAL OF THE REVENUE ACCORDINGLY DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 29 /02/2016 SD/- SD/- (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 29 / 02 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO, WARD-7(2) P7, CHOWRINGHEE SQUARE, 5 TH FLOOR, KOLKATA-69 2. /RESPONDENT-M/S QUARTRO TRAVEL & CARGO PVT. LTD. 4C & 4, CIRCUS PLAZA & CIRCUS AVENUE, 4 TH FLOOR, KOLKATA-700017 3. ) *+ , , - / CONCERNED CIT KOLKATA 4. , , -- / CIT (A) KOLKATA 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,