Asst. Commissioner of Income Tax, Circle-2 (1), Panaji V. Shri William E. D"Costa., Vasco

ITA 7/PAN/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93617 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S NATARAJ
• Assessee Lawyers: A A KULKARNI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 07 /PNJ/201 5 (ASST. YEAR : 20 11 - 1 2 ) ACIT, CIRCLE - 2(1), PANAJI GOA. VS. SHRI WILLIAM EUSTAQUIO DCOSTA, S - 20, 2 ND FLOOR, SAPANA TERRACES, SWATANTRA PATH, VASCO - DA - GAMA, GOA. PAN NO. ABQPD 4954 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.A. KULKARNI ADV. DEPARTMENT BY : SHRI S. NATARAJ - D R DATE OF HEARING : 27 / 0 7 /2015 . DATE OF PRONOUNCEMENT : 27 / 0 7 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , PANAJI , DATED 0 8 / 1 0/201 4 . 2. GROUND NOS. 1 & 6 OF THE APPEAL ARE GENERAL IN NATURE, HENCE, REQUIRES NO SEPARATE ADJUDICATION BY US. 3 . THE ISSUE INVOLVED IN GROUND NOS. 2 TO 4 OF THE APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWING THE RELIEF OF RS.42,26,292/ - TO THE ASSESSEE EVEN THOUGH THERE WAS A DISCREPANCY OF RS. 42,26,292/ - IN TURNOVER AS PER PROFIT & LOSS ACCOUNT AND TURNOVER AS PER 26AS STATEMENT. 2 ITA NO. 07 /PNJ/201 5 4 . BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE S UBMITTED THE DETAILS OF RECEIPTS FROM VARIOUS PARTIES FORMING TURNOVER OF THE YEAR AND SUBMITTED THE 26AS STATEMENT. FROM A PERUSAL OF THE DETAILS , THE ASSESSING OFFICER FOUND TH A T THE ASSESSEE HAD SHOWN TOTAL RECEIPTS OF RS. 1,55, 67,323/ - FROM M/S. CARGO SOLUTION PVT. LTD. WHEREAS 26AS STATEMENT (TDS STATEMENT) SHOW ED TOTAL RECEIPT OF RS. 2,10,22,520/ - . THUS, THERE WAS A DISCREPANCY OF RS. 54,55,197/ - . THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE DISCREPANC Y W AS DUE TO INCLUSION OF SERVICE TAX BY M/S. STEER OVERSEAS PVT. LTD. /CARGO SOLUTIONS PVT. LTD. IN THE TOTAL TURNOVER INCLUDING IN TDS CERTIFICATE ISSUED BY THEM. THE TOTAL SERVICE TAX OF RS.16,03,434/ - WAS PAYABLE ON THE TOTAL TURNOVER OF RS. 2,12,68,363/ - . THE ASSESSING OFFICER FOUND THAT THE TOTAL RECEIPT EXCLUDING SERVICE TAX AMOUNTS TO RS. 1,96,64,929/ - . THE ASSESSEE HAS SHOWN TURNOVER OF RS.1,54,38,637/ - FROM THE ABOVE SAID CONCERN M/S. STEER OVERSEAS PVT. LTD./CARGO SOLUTIONS PVT. LTD. AND THAT THERE IS STILL DISCREPANCY OF RS.42, 2 6,292/ - . THE ASSESSEE S REPRESENTATIVE FURTHER EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE ABOVE SAID PARTIES DISPUTED THE BILL AMOUNT AND ASKED FOR DISCOUNT ON VARIOUS BILLS FOR ABOVE TURNOVER . ACCORDI NGLY, THE ASSESSEE CLAIMED TO HAVE PASSED ON A DISCOUNT OF RS.40,97,606/ - ON CONTRACT RECEIPTS IN THE FORM OF CREDIT NOTES ON ACCOUNT OF BARGE CREDITORS AS ON 31/03/2011 AND CLAIMED TO HAVE SETTLED ACCOUNT AS ON 31/03/2011. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS ISSUED DEBIT NOTE S TO THE SAID PARTY ON ACCOUNT OF MOBILIZATION CHARGE OF THE BARGE CALLED WYNONA BEING CHARGE FOR TRANSPORTATION OF THE BARGES FROM GOA TO KOLKATA AND BACK. THE ASSESSEE PASSED A DISCOUNT OF RS. 1,26,686/ - ON THIS MOBILIZATION CHARGES VIDE D EBIT NOTE DATED 31/03/2011 FOR THE AMOUNT DISPUTED BY THE ABOVE SAID PARTY. THE ASSESSING OFFICER OBSERVED THAT THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTABLE BECAUSE M/S. STEER OVERSEAS PVT. LTD./CARGO SOLUTIONS PVT. LTD. HAD DULY SHOWN THE TOTAL RECEIPTS IN THE TDS CERTIFICATES ISSUED BY THEM . HAD THIS CLAIMED 3 ITA NO. 07 /PNJ/201 5 DISCOUNT BEEN CORRECT THEIR TDS CERTIFICATES WOULD HAVE SHOWN THE REVISED/DISCOUNTED PAYMENT TO THE ASSESSEE WHICH IS NOT DONE BY M/S.STEER OVERSEAS PVT. LTD./CARG O SOLUTIONS PVT. LTD. THE ASSESSEE CLAIMED TO HAVE PASSED A DISCOUNT AS ON 31/03/2011 BY ISSUING CREDIT NOTE ON RECEIPT OF RS. 40,97,606/ - AND DEBIT NOTES OF EXPENSES OF RS.1,28,686/ - , BUT THESE RECEIPTS NOT EXCLUDED BY THESE COMPANIES FROM THEIR BOOKS AN D DULY SHOWN THE CORRECT AMOUNT IN THE 26AS STATEMENT SUBMITTED BY THEM TO TDS SECTION. IN VIEW OF THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS SUPPRESSED ITS TURNOVER TO THE TUNE OF RS.42,26,292/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 5. ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY OBSERVING AS UNDER: - 5.4. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. FOUND THAT THERE WAS SUBS TANTIAL DIFFERENCE OF RS.54,55,197/ - BETWEEN THE RECEIPT DISCLOSED BY THE ASSESSEE AND THE RECEIPT AS EVIDENCED FROM TDS CERTIFICATES (26AS). THE A.O. REQUESTED THE ASSESSEE TO RECONCILE THE DIFFERENCE. IN ITS SUBMISSION BEFORE THE A.O., THE APPELLANT SUBM ITTED THAT SOME PARTIES HAD EVEN INCLUDED SERVICE TAX IN TURNOVER. SO THE A.O. EXCLUDED AMOUNT OF RS.16,03,434/ - REPRESENTED BY SERVICE TAX. STILL A DIFFERENCE OF RS.42,46,292/ - REMAINED TO BE RECONCILED. FOR THE BALANCE AMOUNT, THE APPELLANT CLAIMED TO HA VE GIVEN DISCOUNT TO ITS CLIENTS AND CLAIMED THAT TOTAL DISCOUNT OF RS.40,97,606/ - WERE GIVEN IN THE FORM OF CREDIT NOTES TO M/S. CARGO SOLUTION PVT. LTD./STEER OVERSEAS PVT. LTD. AND ANOTHER DISCOUNT WAS GIVEN FOR RS.1,26,686/ - ON TRANSPORTATION OF BARGE WYNONA FROM GOA TO KOLKATA AND BACK. THE ASSESSEE SHOWED THE CREDIT NOTES COPIES TO THE A.O., BUT THE A.O. DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND CONCLUDED THAT I) IF THE DISCOUNT WAS ALLOWED, THEN THE PARTIES CONCERNED SHOULD HAVE GIVEN REVISED FIGURES IN THE TDS CERTIFICATES. II) TH E DEBIT NOTES ARE ONLY AN AFTER THOUGHT. ON THE OTHER HAND, THE APPELLANT CLAIMED THAT ACTUALLY DID NOT RECEIVE THE MONEY BECAUSE OF BAD AND VOLATILE MARKET CONDITIONS AND TO BE ABLE TO SUSTAIN AND CONTINUE IN THE BUSINESS, THEY HAD NO OTHER OPTION BUT TO ALLOW DISCOUNT. I HAVE GONE THROUGH THE C OPIES OF E - MAILS AND FIND CONTENTION OF THE APPELLANT TO BE 4 ITA NO. 07 /PNJ/201 5 CORRECT. THE CREDIT NOTES ISSUED ARE DATED 31.03.2011 AND ENTRIES WERE PASSED ON THAT DAY ITSELF AND THEREFORE THE SAME CAN NOT BE SAID TO BE AN AFTER THOUGHT. THE A.O. HAS ALSO NOT ESTABLISHED THAT THE APPELLANT HAS RECEIVED ANY AMOUNT OUT OF DISCOUNT ALLOWED SUBSEQUENTLY. ONCE A CREDIT NOTE IS GIVEN BY THE ASSESSEE, THE AMOUNT IN QUESTION DOES NOT REMAIN RECEIVABLE ANY MORE. IN VIEW OF THE ABOVE FACTS, IN MY OPINION, THE A.O. WAS NOT JUSTIFIED IN REJECTING THE EXPLANATION OF THE APPELLANT, CALLING IT AN AFTERTHOUGHT AND HE IS DIRECTED TO DELETE THE ADDITION OF RS.42,26,292/ - MADE ON THIS ACCOUNT. THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED ACCORDINGLY. 6 . THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF ASSESSING OFFICER. 7 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED BEFORE US RECONCILIATION STATEMENT OF BARGE HIRE CHARGES AT PAGE NOS. 57 & 58 OF THE PAPER BOOK AND SUBMITTED THAT THE DISCREPANCY OF RS. 42 , 26,292/ - FOUND BY THE ASSESSING OFFICER IS FULLY RECONCILED IN THIS STATEMENT. 8 . WHEN QUESTION ED BY THE BENCH WHETHER THIS RECONCILIATION STATEMENT WAS FILED BEFORE THE ASSESSING OFFICER, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE VERY FAIRLY SUBMITTED THAT THE SAME WAS NOT FILED BEFORE THE ASSESSING OFFICER. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE HAD NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATING THE ISSUE AFRESH AFTER VERIFICATION OF THE RECONCILIATION STATEMENT WITH THE RELEVANT DOCUMENTS. THE DEPARTMENTAL REPRESENTATIVE HAD NO OBJECTION TO THE SAME. 9. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE , AS THE RECONCILIATION STATEMENT NOW FILED BEFORE US REQUIRES TO BE VERIFIED BY THE ASSESSING OFFICER WITH THE BOOKS OF ACCOUNTS AND THE RELEVANT DOCUMENTS , W E FEEL THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR ADJUDICATING THE 5 ITA NO. 07 /PNJ/201 5 ISSUE AFRESH AFTER VERIFICATION AND AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY, THUS, THESE GROUNDS OF APPEAL OF THE REVENUE STAND ALLOWED FOR STATISTICAL PURPOSES. 10 . GROUND NO.5 OF THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF RS. 30 LAC. TOWARDS CREDIT PAYABLE TO M/S. SHIVAUM ISPAT. 11 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT ON PERUSAL OF THE DETAILS OF SUNDRY CREDITORS IT IS SEEN THAT CREDIT PAYABLE OF RS. 39,93,383/ - , RS. 76,056/ - , RS. 1,19,655/ - AND RS.1,43,757/ - WAS SHOWN AGAINST M/S. SHIVAUM ISPAT, M/S. V.S.L. ENTERPRISES, M/S. MANDOVI SHIPPING PVT. LTD. AND M/S. SHIVPRIYA SHIPPING SERVICE RESPECTIVELY . IT IS SEEN THAT WITH THESE CREDITORS THERE ARE NO TRANSACTIONS AND FURTHER THE SAID PAYMENTS ARE NOT PAID TILL DATE. THEREFORE, THE ASSESSING OFFICER HE LD THAT THE LIABILIT IES SHOWN AS SUNDRY CREDITORS NO MORE EXISTS AND THEREFORE, NOT PAYABLE BY THE ASSESSEE AND ADDED THE SAME UNDER SEC. 41(1) AS CESSATION OF LIABILITY BEING WRITTEN OFF FROM THE ASSESSEES ACCOUNT. 12 ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF RS. 30 LAC. ON ACCOUNT OF AMOUNT PAYABLE TO M/S. SHIVAUM ISPAT ON THE GROUND THAT DURING THE COURSE OF HEARING , ASSESSEE SUBMITTED THAT THERE WAS NEGOTIATION WITH THE SAID PARTY AND TH E SAID PARTY FINALLY AGREED FOR ONE TIME SETTLEMENT OF RS. 30 LAC AND AGREED TO FOREGO THE BALANCE AMOUNT OF RS. 9,93,383/ - . ACCORDINGLY, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION OF RS.9,93,383/ - AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS. 30 LAC. 13 THE DEPARTMENTAL REPRESENTATIVE RELIE D ON THE ORDER OF THE ASSESSING OFFICER. 6 ITA NO. 07 /PNJ/201 5 14 THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 15 WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DELETED THE ADDITION OF RS. 30 LAC MADE UNDER SEC. 41(1) OF THE ACT ON THE GROUND THAT THE ASSESSEE FILED A LETTER DATED 22/09/2014 FROM M/S.SHIVAUM ISPAT WHEREBY THE SAID PARTY AGREED FOR SETTLEMENT OF THE AMOUNT OF RS. 39,93,383/ - FOR RS. 30 ,00,000/ - . ACCORDINGLY, THE ASSESSEE AGREED FOR ADDITION OF RS. 9,93,383/ - IN PLACE OF RS. 39,93,383/ - MADE BY THE ASSESSING OFFICER. THE COMMI SSIONER OF INCOME TAX (APPEALS) AFTER VERIFYING THE SAID LETTER DELETED THE ADDITION OF RS. 30 LAC. NO MATERIAL WAS BROUGHT ON RECORD BY THE DEPARTMENTAL REPRESENTATIVE TO SHOW THAT THE AMOUNT NOT PAYABLE BY THE ASSESSEE TO THE SAID PARTY I.E. M/S. SHIVAU M ISPAT WAS MORE RS. 30 LAC. IN ABSENCE OF THE SAME, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS HEREBY CONFIRMED AND THIS GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 16 . IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON MONDAY , THE 27 TH DAY OF JULY , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH JU LY , 201 5 . VR/ - 7 ITA NO. 07 /PNJ/201 5 COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 8 ITA NO. 07 /PNJ/201 5 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 27 .0 7 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28 .07 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 28 /07 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 28 /0 7 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28 /07 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 27 /0 7 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 28 /07 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER