Shri Sukhbir Agarwal, Kolkata V. ITO, Ward - 36(2), Kolkata, Kolkata

ITA 656/KOL/2010

• Counselvise Citation: 65623514 RSA 2010
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 28-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 05-04-2010
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANIK
• Assessee Lawyers: J AGARWAL
• Section: 43B; 143(3); 37(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND ! ! ! ! , '# SHRI AKBER BASHA, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 656/KOL/2010 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) SHRI SUKHBIR AGARWAL (PAN: ADCPA 1170 A) - % - - VERSUS - . (-.*+/ RESPONDENT ) THE I.T.O., WARD-36(2), KOLKATA *+ / 0 '/ FOR THE APPELLANT: SHRI J.AGARWAL -.*+ / 0 '/ FOR THE RESPONDENT: SHRI A.K.PRAMANIK '! / ORDER ( (( ( ! ! ! !) )) ), , , , '# PER SHRI AKBER BASHA, AM THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 01.01.2010 OF THE CIT (A)-XX, KOLKATA PERTAINING TO ASSESSMENT YEAR 2005- 06. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- 1. THAT THE LEARNED A.O. WAS ERRED, WRONG AND BAD IN LAW, DISALLOWING T.O.T. CHARGES AMOUNTING TO RS.8,84,714/- AND THE LEARNED CIT (APPEALS) ALSO DENIED TO INTERFERE WITH THE SAME. 2. THAT THE APPELLANT CRAVES, LEAVE TO ADD, ALTERS OR MODIFY THE ONLY POINT OF GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING 3. THE ONLY EFFECTIVE GROUND IN THIS APPEAL BY TH E ASSESSEE IS WHETHER THE LOWER AUTHORITIES ARE RIGHT IN DISALLOWING T.O.T. C HARGES AMOUNTING TO RS.8,84,714/-, CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE RELATED T O THE EARLIER YEARS. 2 4. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSES SEE FILED RETURN OF INCOME ON 28.7.2005 SHOWING THE TOTAL LOSS OF RS.7,41,719/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT DETERMIN ING THE TOTAL INCOME AT RS.1,64,170/- BY DISALLOWING EXPENDITURE NOT RELAT ED TO THE BUSINESS AND DISALLOWING THE CLAIM OF T.O.T. CHARGES CLAIM TO HAVE BEEN PAID BY THE ASSESSEE RELATED TO THE EARLIER YEARS. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE CIT [A]. 4.1. ON APPEAL, THE CIT (A) CONFIRMED THE ACTION OF ASSESSING OFFICER IN DISALLOWING THE CLAIM OF THE ASSESSEE TOWARDS T.O.T . CHARGES OF RS.8,84,714/- WHICH WERE CLAIMED TO HAVE BEEN PAID TO SEBI RELATED TO T HE EARLIER YEARS. 4.2. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALTHOUGH THE EXPENDITURE CLAIMED BY THE ASSESSEE TOWARDS T.O.T. CHARGES RELATED TO THE EARLIER YEARS BUT DUE TO DISPUTE ON CALCULATION AND TURNOVE R ETC., THE MATTER WAS BEFORE THE HONBLE CALCUTTA HIGH COURT AND THE PAYMENTS OF EAR LIER YEARS, WHEN THE DISPUTE WAS PENDING, WAS STAYED BEFORE THE HONBLE CALCUTTA HIG H COURT. NOW ACCORDING TO THE COURTS ORDER, THE T.O.T. CHARGES BEING A DISPUTED LIABILITY, WAS SETTLED AND PAID DURING THE YEAR UNDER CONSIDERATION. IT IS ALSO SUB MITTED THAT A DISPUTED LIABILITY BASED ON CONTRACTUAL OBLIGATION CRYSTALLIZED ONLY WHEN DI SPUTE WITH REGARD TO SUCH LIABILITY IS SETTLED AMICABLY OR BY JUDICIAL PROCESS AND THE SAI D EXPENDITURE WOULD BE ALLOWED AS DEDUCTION IN THE PREVIOUS YEAR RELEVANT TO ASSESSME NT YEAR ON WHICH THE DISPUTE IS SETTLED. IT IS SUBMITTED THAT THE EXPENSES ARE ALLO WABLE UNDER SECTION 37(1) OF THE ACT. ALTERNATIVELY IT IS SUBMITTED THAT T.O.T. CHARGES I S NOTHING BUT A FEE AND THE SAME IS STILL ALLOWABLE UNDER SECTION 43B OF THE IT ACT ON THE BASIS OF DATE OF PAYMENT. 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 3 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED MATERIALS AVAILABLE ON RECORD. IT IS AN UNDISPUTED FACT THAT THE AFORESAID T.O.T. CHARGES OF RS.8,84,714/- WAS SETTLED ONLY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IS ALSO UNDISPUTED FAC T THAT THE PAYMENT OF T.O.T CHARGERS BY THE ASSESSEE TO SEBI WAS STAYED BY OF HONBLE CA LCUTTA HIGH COURT. IT APPEARS THAT THESE EXPENSES WERE NOT CLAIMED BY THE ASSESSEE IN THE EARLIER ASSESSMENT YEARS. WE FIND THAT THE CIT (A) CONFIRMED THE ACTION OF ASSES SING OFFICER ONLY ON THE GROUND THAT THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS N OT FURNISHED COPY OF THE HONBLE CALCUTTA HIGH COURTS ORDER DUE TO WHICH THE CIT (A ) COULD NOT VERIFY THE SAME. WE FIND THAT, ON PERUSAL OF RECORDS, THE SAID T.O.T. CHARGES IS AN UNDISPUTED LIABILITY BASED ON CONTRACTUAL OBLIGATION WITH SEBI WHICH CRY STALLIZED AND SETTLED ONLY IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CON SIDERATION. IN VIEW OF THE ABOVE, AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIR CUMSTANCES OF THE CASE WE HELD THAT THE SAID LIABILITY SHOULD BE ALLOWED AS DEDUCTION I N THE ASSESSMENT YEAR IN WHICH THE DISPUTE IS SETTLED AND PAID. THE AFORESAID EXPENDIT URE IS ALLOWABLE UNDER SECTION 37(1) OF THE IT ACT. ACCORDINGLY, WE ALLOW THE APPEAL OF ASSESSEE AND DIRECT THE REVENUE TO ALLOW THE EXPENDITURE CLAIMED BY THE ASSESSEE TOWAR DS T.O.T. CHARGES FOR RS.8,84,714/- WHICH WERE CLAIMED TO HAVE BEEN PAID TO SEBI. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.04.2011. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER ! ! ! !, , , , '# '# '# '# , AKBER BASHA, ACCOUNTANT MEMBER. ( (( (1# 1# 1# 1#) )) ) DATE: 28.04.2011. R.G.(.P.S.) 4 '! / -2 3'2'4- COPY OF THE ORDER FORWARDED TO: 1. SHRI SUKHBIR AGARWAL, 5, CLIVE ROW, KOLKATA-700001. 2 THE I.T.O., WARD-36(2), KOLKATA 3. THE CIT, 4. THE CIT(A)-XX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA .2 -/ TRUE COPY, '!%:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES