Birendra Nath Mondal, Asansol V. ITO, Wd-2(2), Asansol, Asansol

ITA 681/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9362 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 21-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-04-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: U DASGUPTA
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.681/KOL/2014 ( / ASSESSMENT YEAR:2009-2010) BIRENDRA NATH MONDAL, PROP.DAMRA C.S.SHOP & MANI KAMAL HOTEL, 2, HOSPITAL ROAD, ASANSOL-713304 VS. ITO, WARD-2(2), ASANSOL G.T.ROAD, PARMAR BUILDING, ASANSOL-713304 ./ ./PAN/GIR NO.: AMAPM 5196 M ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI U.DASGUPTA, ADVOCATE REVENUE BY : SHRI RAJAT KUMAR KUREEL, JCIT / DATE OF HEARING : 21/02/2017 /DATE OF PRONOUNCEMENT 23/02/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEAR 2009-2010, IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A), ASANSOL IN APPEAL NO.226/CIT(A)/ASL/W-2(2)/ ASL/11-12, DATED 25.11.2013, WHICH IN TURN ARISES OUT OF AN ORDER PA SSED BY THE ASSESSING OFFICER (AO) UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 08.12 .2011. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.03.2010. LATER ON, THE A SSESSEES CASE WAS SELECTED FOR SCRUTINY U/S.143(3) OF THE ACT AND THE AO HAS COMPLETED THE ASSESSMENT BY MAKING ADDITION U/S.40A(3) AT RS.58,5 7,326/- AND OTHER ADDITIONS. WHILE MAKING THE ADDITION U/S.40A(3) THE AO OBSERVED THAT THE ASSESSEE HAS MADE PAYMENT TOWARDS PURCHASE IN CASH ON DIFFERENT DATES BY VIOLATION OF PROVISIONS U/S.40A(3) OF THE ACT, 1 961. THE ASSESSEE PURCHASED COUNTRY SPIRIT FROM ASANSOL BOTTLING AND PACKAGING PVT. LTD. ITA NO.681/14 BIRENDRA NATH MONDAL 2 AND PAID DIRECTLY INTO THE BANK ACCOUNT OF THE CONC ERNED COMPANY BY DEPOSITING CASH OF RS.48,79,201/- UNDER A CHALLAN. THE ASSESSEE ALSO PURCHASED C.SPIRIT AND COLOURED FLAVOURS FROM MC DO WELL OF ASANSOL IN CASH FOR RS.9,78,125/-. THE AO OBSERVED THAT THE AS SESSEE IS HABITUATED TO DEPOSIT CASH IN THE BANK ACCOUNT BY MAKING VIOL ATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT, THEREFORE, TOTAL CASH PU RCHASED AMOUNTING TO RS.58,57,326/- WAS ADDED BY THE AO. 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ORDER PASSED BY THE AO OBSERVING THE FOLLOWINGS :- 5. THERE WAS NO RESPONSE EVEN TO SUBSEQUENT POSTING S ON 7.10.2013 AND 20.11.2013. HENCE THE MATTER IS ADJUD ICATED ON THE BASIS OF EVIDENCE IN RECORD. THE PAYMENT DISALLOWED BY ASSESSING OFFICER INVOKING SECTION 40A(3) IS NOT TO GOVERNMEN T. THE CASE OF APPELLANT IS NOT COVERED BY ANY OF THE SUB-CLAUSES OF RULE 6DD. RULES 4 AND 5 OF WEST BENGAL EXCISE (SUPPLY OF COUN TRY SPIRIT ON PAYMENT OF DUTY) RULES, 2005 PRESCRIBE THE MANNER O F PAYMENT TO WEST BENGAL GOVT. IT STATES THAT BOTTLING PLANT HAS TO MAKE ADVANCE PAYMENT TO GOVT. AND SUMS PAID BY INDIVIDUAL DEALER S ARE DEBITED TO THE ADVANCE. THERE IS NO REMITTANCE OF CASE BY C ASE REMITTANCE OF SUMS PAID BY DEALERS TO BOTTLING PLANT FOR SUBSE QUENT REMITTANCE BY BOTTLING PLANT TO GOVT. THE RULES NO WHERE PRESC RIBE MANDATORY CASH PAYMENT. ACCORDINGLY I HOLD THAT THE ASSESSING OFFICER HAS CORRECTLY MADE THE DISALLOWANCE. THE QUESTIONS RAIS ED BY ME WITH REASONS ARE NOT NEGATED. IN ITS ABSENCE, FOR REASON S STATED IN THE PROPOSAL ISSUED TO APPELLANT, I DISMISS GROUND 1. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1) FOR THAT THE ORDER OF THE LD. CIT(A) IS ARBITRA RY, EXCESSIVE, HENCE BAD IN LAW. 2) FOR THAT ON THE FACTS OF THE CASE THE LD. CIT(A ) WAS NOT LEGALLY JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 5857326 /-, U/S 40A(3) OF THE ACT'61, WHEN THE SAID PAYMENTS EVEN THOUGH, MADE OTHERWISE THAN BY A/C PAYEE CHEQUES AND A/C PAYEE B ANK DRAFTS, ARE COVERED BY THE EXCEPTION PRESCRIBED UND ER RULE ITA NO.681/14 BIRENDRA NATH MONDAL 3 6DD OF THE IT.RULES, 62, AND AS SUCH THE ADDITION M AY PLEASE BE DELETED. 3) FOR THAT ON THE FACTS OF THE CASE THE LD. CIT(A ) WAS NOT LEGALLY JUSTIFIED IN SUSTAINING THE ADDITION OF RS.38,000/- ON A/C OF SALARY, THE ADDITION MAY PLEASE BE DELETED. 4) FOR THAT ON THE FACTS OF THE CASE THE LD. CIT(A ) WAS NOT LEGALLY JUSTIFIED IN SUSTAINING THE ADDITION OF RS.2,52,879 /- ON ALC OF BANK CHARGES ,AND THE ADDITION MAY PLEASE BE DELETE D. 5) FOR THAT THE APPELLANT CRAVES LEAVE TO ADD, ALT ER, AMEND ANY FURTHER GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 5. ALTHOUGH IN THIS APPEAL THE ASSESSEE HAS RAISED FIVE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING, THE MAIN GRIEVANCE OF T HE ASSESSEE HAS BEEN CONFINED TO GROUND NO.2 AND GROUND NO.4. GROUND NO. 3 IS NOT PRESSED BY THE ASSESSE. 6. GROUND NO.2 RELATES TO ADDITION OF RS.58,57,326/ - U/S.40A(3) OF THE ACT ON ACCOUNT OF PAYMENT MADE, OTHERWISE THAN BY A/C PAYEE CHEQUES AND A/C PAYEE BANK DRAFTS. 6.1 LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE ISSUE UNDER CONSIDERATION IS FULLY COVERED BY THE TWO JU DGMENTS OF THE KOLKATA BENCH OF THE TRIBUNAL. LD. AR FOR THE ASSESSEE SUBM ITTED BEFORE US THAT THE ASSESSEE IS A RETAILER OF COUNTRY SPIRIT AND PA ID DIRECTLY INTO THE BANK ACCOUNT OF CONCERNED BOTTLING PLANT CO. BY DEPOSITI NG CASH WHICH IS APPROVED BY WEST BENGAL GOVT. AND IT IS COVERED BY THE EXCEPTION PRESCRIBED UNDER RULE 6DD OF THE IT RULES 1962. IN ADDITION TO THIS, LD. AR FOR THE ASSESSEE HAS RELIED ON THE FOLLOWING JUDGME NTS :- I) M/STOPSI KENDA C.S.SHOP, ITA NO.419/KOL/2014, OR DER DATED 13.01.2017: 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE TAKE NOTE THAT THE ASSESSEE IS A RETAIL VENDOR OF C OUNTRY SPIRIT, OTHER THAN THAT THERE IS NO MENTION ABOUT HOW THE BUSINES S ACTIVITY IS ITA NO.681/14 BIRENDRA NATH MONDAL 4 CONDUCTED OR HOW THE ASSESSEE MAKES THE PAYMENT ETC . IS DECIPHERED FROM THE ORDERS OF THE AUTHORITIES BELOW . THE LD. AR HAS SUBMITTED BEFORE US THAT THE ASSESSEE IS A RETAIL V ENDOR OF COUNTRY SPIRIT AND THE ASSESSEE I.E. THE RETAIL VENDOR HAD MADE CASH PAYMENTS FOR PURCHASE OF COUNTRY SPIRIT BY DEPOSITI NG CASH DIRECTLY IN THE BANK ACCOUNT OF M/S ASANSOL BOTTLING & PACKA GING CO. PVT. LTD. (M/S ABPL) WHICH IS THE BOTTLING FIRM AND IS T HE WAREHOUSE WITHIN THE MEANING OF RULE 2(VII) OF THE WEST BENGA L EXCISE (SUPPLY OF COUNTRY SPIRIT ON PAYMENT OF DUTY) RULES 2005 (H EREINAFTER REFERRED TO AS THE 'RULES'). IT WAS EXPLAINED BEFOR E US BY THE LD. AR THAT THE PAYMENT OF CASH IS MADE BY THE ASSESSEE (R ETAIL VENDOR) BY DEPOSITING CASH DIRECTLY IN THE BANK ACCOUNT OF M/S M/S ABPL AS PER RULE 6(2) OF THE RULES. IN CASE IF THE ASSESSEE (RETAIL VENDOR) IS MAKING CASH PAYMENT FOR PURCHASE OF COUNTRY SPIRIT DIRECTLY INTO ITA NO.419/KOL/2014 M/S. TOPSI KENDA C.S. SHOP A.YR.200 8-09 THE BANK ACCOUNT OF M/S ABPL AS PER RULE 6(2) OF THE EX CISE RULES, 2005 THEN THE TRIBUNAL ORDER IN ITA NO. 148/KOL/201 5 AND 185 & 186/KOL/ A.Y. 2007-08 & 2010- 11 RESPECTIVELY WILL COME IN AID OF THE ASSESSEE BECAUSE IN THESE CASES IT HAS BEEN HEL D BY THE TRIBUNAL THAT IF SUCH PAYMENT HAS BEEN MADE AS PER RULE 6(2) TO THE BANK ACCOUNT OF M/S ABPL WHICH IS A WAREHOUSE W ITHIN THE MEANING OF RULE 2(VII) OF THE WEST BENGAL EXCISE RU LES 2005, AND SO IS A STATE GOVERNMENT ESTABLISHMENT WHICH IS CON TROLLED BY THE EXCISE COMMISSIONER AND RESULTANTLY THE PAYMENT MAD E IN CASH TO IT WILL ATTRACT THE EXEMPTION PROVIDED IN RULE 6DD( B) OF THE INCOME TAX RULES, 1962. II) BOLKUNDA PACHWATI & (S) C.S.SHOP, ITA NOS.165&1 66/KOL/2014, ORDER DATED 10.08.2016: 3.9. THE LD AR HAD ADVANCED ANOTHER ARGUMENT THAT T HE PAYMENT IS MADE BY THE ASSESSEE TO STATE BANK OF INDIA AND ACC ORDINGLY THE SAME WOULD FALL UNDER THE EXCEPTION PROVIDED IN RUL E 6DD(A) OF THE RULES. WE FIND THAT THE ASSESSEE HAD MADE PAYMENTS ONLY TO THE CUSTOMER OF STATE BANK OF INDIA AND NOT TO STATE BA NK OF INDIA. HENCE THE ASSESSEE'S CASE DOES NOT FALL UNDER THE E XCEPTION PROVIDED IN RULE 6DD(A) OF THE RULES. 3.10. WE HOLD FROM THE AFORESAID FINDINGS THAT THE ASSESSEE'S CASE FALLS UNDER THE EXCEPTIONS PROVIDED IN RULE 6DD(B) AND RULE 6DD(K) OF THE RULES. IN VIEW OF THE AFORESAID FACTS AND CI RCUMSTANCES AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELI ED UPON HEREINABOVE, WE HAVE NO HESITATION IN DELETING THE DISALLOWANCE MADE U/S 40A(3) 6.2 ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PRIMARILY RELIED ON THE FINDINGS OF THE AO WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. ITA NO.681/14 BIRENDRA NATH MONDAL 5 6.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE AND THE CASE LAWS C ITED BY HIM ABOVE. AS LD. AR FOR THE ASSESSEE HAS POINTED OUT THAT THE A SSESSEES CASE IS COVERED UNDER RULE 6DD OF THE RULES, 1962. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLL OWING THE JUDICIAL PRECEDENTS OF THE KOLKATA BENCH OF THE TRIBUNAL, WE HAVE NO HESITATION IN DELETING THE DISALLOWANCE MADE U/S.40A(3) OF THE AC T. ACCORDINGLY, WE DELETE THE ADDITION. 6.4 IN THE RESULT, APPEAL FILED BY THE ASSESSE ON G ROUND NO.2 IS ALLOWED. 7. GROUND NO.4 RELATES TO ADDITION OF RS.2,52,879/- ON A/C OF BANK CHARGES. 7.1 LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE DID NOT FILE BANK STATEMENT BEFORE THE AO TO EXPLAIN THE BA NK CHARGES, BECAUSE THESE BANK STATEMENTS WERE NOT AVAILABLE BEFORE THE ASSESSEE. THE ASSESSEE ALSO DID NOT FILE BANK STATEMENT BEFORE T HE LD. CIT(A), THEREFORE, THE LD. AR FOR THE ASSESSEE REQUESTED THE BENCH TO SEND THE CASE BACK TO THE FILE OF AO TO EXAMINE THE BANK CHARGES AND ADJU DICATE THE ISSUE. 7.2 ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS R ELIED ON THE ORDERS PASSED BY THE AO. 7.3 HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY ITA NO.681/14 BIRENDRA NATH MONDAL 6 THE FACTS NARRATED BY HIM ABOVE. AS LD. AR FOR THE ASSESSEE HAS POINTED OUT THAT BECAUSE OF CERTAIN CIRCUMSTANCES THE AS SESSEE COULD NOT PRODUCE THE BANK STATEMENT BEFORE THE AO AND BEFORE THE LD. CIT(A), THEREFORE, THEY HAVE MADE SAID ADDITION. NOW, THE A SSESSEE IS READY TO FURNISH THE BANK STATEMENT AND TO EXPLAIN THE BANK CHARGES, THEREFORE, WE ARE OF THE VIEW THAT THIS BANK STATEMENT IS TO BE E XAMINED BY THE AO AND, THUS, WE REMAND THE CASE BACK TO THE FILE OF AO TO ADJUDICATE THIS ISSUE AFTER EXAMINATION OF THE BANK STATEMENT. IF THE AO FINDS THE BANK CHARGES IN THE BANK STATEMENT AT RS.2,52,879/-, THEN HE SHO ULD GIVE RELIEF TO THE ASSESSEE. ACCORDINGLY, THIS GROUND IS ALLOWED FOR S TATISTICAL PURPOSES. 7.4 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE ON GROUND NO.4, IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23/02 /2017. SD/ - (A.T.VARKEY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 23/02/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-BIRENDRA NATH MONDAL 2. / THE RESPONDENT.- ITO, WARD-2(2), KOLKATA 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//