S. Sen Service Advertising Pvt. Ltd., Cuttack V. ITO, Ward - 7(3),Kolkata, Kolkata

ITA 636/KOL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8061 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 31-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K DAS SR DR PER SHRI
• Assessee Lawyers: A P M OHANTA
• Keywords: Business expenditure; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI PRAMOD KUMAR, A.M. & SHRI GEORGE MATH AN, J.M. ] I.T.A. NO.636/KOL/2010 ASSESSMENT YEAR : 2006-2007 S. SEN SERVICE ADVERTISING PVT. LTD. VS- I.T.O., WARD-7(3), KOLKATA SRI AMBIKA PRASAD MOHANTY, F.C.A, PATRO & CO., BANDHA BASELI, DAGARAPARA, CTK-753 002 (PAN:AAGCS 7585K) ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 12.10.2012 DATE OF PRONOUNCING THE ORDER : 12.10.2012 APPEARANCES : FOR THE APPELLANT : SHRI A.P.M OHANTA, FCA : FOR THE RESPONDENT : SHRI K.K.DAS, SR.( DR) O R D E R PER SHRI GEORGE MATHAN,J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)- VIII, KOLKATA IN APPEAL NO.429/CIT(A)-VIII/KOL./08- 09 DATED 22 ND FEBRUARY, 2010 FOR THE ASSESSMENT YEAR 2006-2007. 2. SHRI A.P. MOHANTA, FCA REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.K.DAS, SR.(DR) REPRESENTED ON BEHALF OF THE REVEN UE. 3. IN THE ASSESSEES APPEAL, THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS: 1. THE LD. CIT(APPEALS) IS WRONG IN CONFIRMING THE ADDITIONS MADE U/S.40(A)(IA) AMOUNTING TO RS.48,000/-, RS.170,000 /- AND RS.72,000/- OF GENUINE BUSINESS EXPENDITURE INCURRED AND PAID BY THE ASSESSEE. 2. THE LD. CIT(APPEALS) IS WRONG IN CONFIRMING TH E DISALLOWANCE OF EXPENSES PAID FOR NON DEDUCTION OF TAX AT SOURCE A ND INVOKING THE PROVISIONS OF SECTION 40(A)(IA) WHICH IS INAPPROPR IATE IN THE INSTANT CASE. 2 I.T.A. NO.636/KOL/2010 S. SEN SERVICE ADVERTISING P.LTD. ASSESSMENT YEAR : 20 06-07 3. THE LD. CIT(APPEALS) HAD FAILED TO PROVIDE REA SONABLE OPPORTUNITY TO THE APPELLANT FOR REBUTTAL THEREFORE THE ORDER IS DEVOID OF NATURAL JUSTICE AND BAD IN LAW. 4. THE LD CIT (APPEALS) IS WRONG IN CONFIRMING THE ADDITION OF RS.13,01,688/- MADE BY THE A.O. BASED ON UNRELIABL E EVIDENCE OR NO EVIDENCE. 5. THE APPELLANT CRAVES LEAVE TO TILE ADDITIONAL GROUNDS, ADD, ALTER OR MODIFY THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. 3. IT WAS SUBMITTED BY THE LD. A.R. IN REGARD TO GR OUND NOS.1 AND 2 THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(A) IN C ONFIRMING THE ADDITIONS MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 40(A)( IA) OF THE ACT IN RESPECT OF PAYMENTS MADE TO MR. R.K.SINGH TO THE EXTENT OF RS. 48,000/- TOWARDS ACCOUNTING CHARGES, AN AMOUNT OF RS.1,70,000/- REPRESENTING TH E SECURITY CHARGES PAID TO GROUP FOUR SECURITY AS ALSO AN AMOUNT OF RS.72,00 0/- PAID TO ONE SHRI PRASANJIT GHOSH. IT WAS A SUBMISSION THAT AS THE ASSESSEE HAS PAID ALL THE AMOUNTS DURING THE RELEVANT ASSESSMENT YEAR AND NO AMOUNT WAS PENDING PAYMENT, IN VIEW OF THE DECISION OF THE HONBLE SPECIAL BENCH OF THE I.T.A. T. IN THE CASE OF MERILYN SHIPPING & TRANSPORTS REPORTED IN [2012] 20 TAXMANN .COM 244 (VISAKHAPATNAM), NO DISALLOWANCE WAS CALLED FOR. 3.1 WITH REGARD TO GROUND NOS. 3 AND 4, IT WAS SU BMITTED BY THE LD. A.R. THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.13,01,688/- MADE BY THE AO ON THE GROUND THAT TH ERE WAS DIFFERENCE BETWEEN AIR INFORMATION AND THE INCOME DISCLOSED BY THE ASS ESSEE. IT WAS A SUBMISSION THAT THE LD. CIT(A) HAD HELD THAT IT WAS FOR THE AS SESSEE TO PROVE THE RECONCILIATION IN RESPECT OF DIFFERENCES BETWEEN AIR INFORMATION A VAILABLE WITH THE AO AND THE RECEIPTS AS SHOWN BY THE ASSESSEE IN HIS ACCOUNTS. IT WAS SUBMISSION THAT HOWEVER, THE LD. CIT(A) HAD NOT CONSIDERED THE RECONCILIATIO N FILED IN SO FAR AS SOME OF THE ADDITIONS REPRESENTED DOUBLE ENTRIES. THE LD. A.R. DREW OUR ATTENTION TO THE WRITTEN 3 I.T.A. NO.636/KOL/2010 S. SEN SERVICE ADVERTISING P.LTD. ASSESSMENT YEAR : 20 06-07 SUBMISSIONS FILED BY THE ASSESSEE WHEREIN THE DOUBL E ENTRIES HAD BEEN EXPLAINED. IT WAS A SUBMISSION THAT HE HAD NO OBJECTION IF THE IS SUE WAS RESTORED TO THE FILE OF THE AO FOR VERIFICATION OF THE RECONCILIATION, AS S UBMITTED BY THE ASSESSEE. 4. IN REPLY, THE LD. SR.(D.R.) VEHEMENTLY SUPPORTED THE ORDERS OF THE LD. CIT(A). IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD TO SHOW THAT THERE WAS NO AMOUNT PENDING PAYMENT, AS PER THE DECISION OF THE LD. SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPOR TS, REFERRED TO SUPRA . IT WAS A SUBMISSION THAT IN RESPECT OF GROUND NOS.1 AND 2 OF THE ASSESSEES APPEAL, THE ISSUES COULD BE SENT BACK TO THE AO FOR VERIFICATIO N AS TO WHETHER THERE WAS ANY AMOUNT PAYABLE OR IF ALL THE AMOUNTS WERE FULLY PAI D AS ON THE END OF THE RELEVANT FINANCIAL YEAR. IN RESPECT OF GROUND NOS.3 AND 4, I T WAS A SUBMISSION THAT IT WAS THE DUTY OF THE ASSESSEE TO RECONCILE THE DIFFERENCES, IF ANY, WHICH HAD NOT BEEN DONE BY THE ASSESSEE. IT IS FURTHER SUBMITTED THAT HE HA D NO OBJECTION IF THE ASSESSEE IS GRANTED ANOTHER OPPORTUNITY TO RECONCILE THE DIFFER ENCES BEFORE THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN RES PECT OF GROUND NOS. 1 AND 2, IT IS NOTICED THAT THE ASSESSEE HAS FILED A CHAR T SHOWING THAT ALL THE AMOUNTS HAVE BEEN PAID DURING THE YEAR. HOWEVER, THE RELEVANT BO OKS OF ACCOUNTS AND ENTRIES ARE NOT BEFORE US. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS ISSUE IS LIABLE TO BE RESTORED TO THE FILE OF THE AO AND WE DO SO. THE AO SHALL GRANT THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE HIS CASE THAT THERE WERE NO AMOUNT IN RESPECT OF WHICH TDS WAS LIABLE TO BE MADE, WHICH IS SHOWN AS PAYABLE AS ON THE END OF THE RELEVANT ASSESSMENT YEAR. IF THE AMOUNTS ARE FU LLY PAID, THEN IN VIEW OF THE DECISION OF THE LD. SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS, REFERRED TO SUPRA , THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WOULD NOT BE APPLICABLE. IN RESPECT OF GROUND NOS. 3 AND 4, A PERUSAL OF THE WRITTEN SUBMISSION SHOWS THAT THERE ARE CERTAIN AMOUNTS REF LECTED TWICE IN THE AIR INFORMATION. HOWEVER, THE RECONCILIATION WOULD HAVE TO BE VERIFIED BY THE AO. IN THE CIRCUMSTANCES, THIS ISSUE IS ALSO RESTORED TO T HE FILE OF THE AO, WHO SHALL GRANT 4 I.T.A. NO.636/KOL/2010 S. SEN SERVICE ADVERTISING P.LTD. ASSESSMENT YEAR : 20 06-07 THE ASSESSEE ADEQUATE OPPORTUNITY TO RECONCILE AND EXPLAIN THE DIFFERENCES BETWEEN AIR INFORMATION AS IS AVAILABLE WITH THE AO AND THE RECEIPTS AS RECORDED BY THE ASSESSEE IN ITS BOOKS. IN THE CIRCUMSTANCES, THE AP PEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER, 2012 ON THE DAY OF HEARING ITSELF IN PRESENCE OF BOTH THE REPRE SENTATIVES. SD/- SD/- (PRAMOD KUMAR) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12 TH OCTOBER, 2012 COPY OF THE ORDER FORWARDED TO: 1. S. SEN SERVICE ADVERTISING PVT. LTD., SRI AMBIKA PR ASAD MOHANTY, F.C.A., PATRO & CO., BANDHA BASELI, DAGARAPARA, CTK -753 002 2 I.T.O., WARD-7(3), KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.) 5 I.T.A. NO.636/KOL/2010 S. SEN SERVICE ADVERTISING P.LTD. ASSESSMENT YEAR : 20 06-07