P. B. Enterprise, Kolkata V. ACIT Circle 37, Kolkata, Kolkata

ITA 719/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1194 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWASNATH DAS J CIT CIT SR D
• Assessee Lawyers: M K MUNDRA; S N BURMAN
• Keywords: Additional evidence
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (SMC) BENCH, KOLKATA BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER I.T.A. NO. 719 / KOL /201 7 ASSESSMENT YEAR: 2 008 - 09 P.B. ENTERPRISE.. .. . . .APPELLANT 42, MAHENDRA GOSWAMI LANE KOLKATA 700 006 [PAN : AAKFP 1758 N ] ACIT, CIRCLE - 37 , KOLKATA . RESPONDENT 3, GOVT. PLACE (W) KOLKATA - 700 001 APPEARANCES BY: SRI S.N. BURMAN & SHRI M.K. MUNDRA , C.A. APPEARED ON BEHALF OF THE ASSESSEE. SHRI BISWASNATH DAS , J CIT , ADDL. CIT, SR. DR , APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : SEPTEMBER 14 , 2017 DATE OF PRONOUNCING THE ORDER : OCTO BER 31 , 2017 O R D E R PER J. SUDHAKAR REDDY, AM : - THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD. COMM ISS IONER OF INCOME TAX (APPEALS) - 11 , KOLKATA (HEREINAFTER THE LD. CIT(A)), DT. 30 / 0 1 /201 7 , PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 20 08 - 09. 2. THE ASSESSEE IS A PARTNERSHIP FORM AND IS IN THE BUSINESS OF CONTRACTS AND CHAIN ORDER SUPPLIERS. IT HAS UNDERTAKEN THE WORK OF GARBAGE REMOVAL AND FOR THIS PURPOSE IT HIRES LORRIES . HE CLAIMED THE PAYMENT OF HIGHER CHARGES FOR THESE LORRIES. THE AO IN HIS ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, ON 15/12/2010, DISALLOWED THE CLAIM OF DEDUCTION ON 2 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE ACCOUNT OF LORRY HIRING CHARGES U/S 40(A) (IA) OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE AS REQUIRED U/S 194C OF THE ACT. 3. THIS APPEAL H AS A CHEQUERED HISTORY, THE DATES AND EVENTS ARE BROUGHT OUT BY THE ASSESSEE AT PAGE NUMBER 56 OF THE PAPER BOOK, WHICH IS EXTRACTED FOR READY REFERENCE: - 3 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE 4. THE S OLE ISSUE BEFORE US, IS THE CORRECTNESS OF THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT, WHICH ARISES FROM THE ORIGINAL ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT. 4.1. THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE HAS FU RNISHED FORM NUMBER 15 I AND 15 J, OBTAINED FROM VARIOUS TRANSPORTERS AND SUBCONTRACTORS, DURING THE FIRST ROUND OF APPELLATE PROCEEDINGS AND THE LD. CIT(A) WAS KIND ENOUGH TO ADMIT THIS EVIDENCE AND THE HAD CALLED FOR A REMAND REPORT FROM THE AO AND THE A O HAD GIVEN A REMAND REPORT AND AFTER CONSIDERING THE SAME THE LD. CIT(A) HAD ADJUDICATED THE ISSUE. HE DREW THE ATTENTION OF THE BENCH TO THE REMAND REPORT GIVEN BY THE ASSESSING OFFICER, ON 6 TH MARCH, 2012, TO THE THEN LD. CIT(A) - 24, KOLKATA. IN THIS BACKGROUND HE STRONGLY DISPUTED THE FINDINGS IN THE IMPUGNED ORDER OF THE LD. CIT(A), WHEREIN, IT WAS HELD THAT NON - FILING OF FORMS 15I & 15J, BEFORE THE AO CAN LEAD TO FABRICATION OF THESE FORMS. HE VEHEMENTLY CONTENDED THAT THESE FORMS WERE FILED WAY BAC K IN 2012, BEFORE THE THEN LD. CIT(A) AND THE SAME WAS SENT TO THE AO OR A REMAND REPORT. HE SUBMITTED THAT THE LD. CIT(A) IN THE IMPUGNED ORDER WAS WRONG IN HOLDING THAT THESE ARE NEW EVIDENCES WHICH ARE BROUGHT BEFORE HIM AND THIS SHOULD NOT BE ADMITTED. HE REFERRED TO THE CROSS OBJECTION FILED BY HIM VIDE C.O. NO. 4 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE 90/KOL/2012, AND DREW THE ATTENTION OF THE BENCH TO THE ORDER OF THE ITAT IN ITA NO. 1236/KOL/2012, ORDER DT. 13 TH MAY, 2013, WHERE THE CROSS OBJECTION WAS RESTORED TO THE FILE OF THE LD. CIT(A ). HE ARGUED THAT HAVING FAILED TO CONSIDER THESE EVIDENCES DESPITE NUMBER OF GROUNDS OF APPELLATE PROCEEDINGS IN THE INTEREST OF JUSTICE, THE MATTER SHOULD NOT BE ONCE AGAIN RESTORED TO THE FILE OF THE LD. CIT(A) OR THE ASSESSING OFFICER, AND THE DISALLOW ANCE DELETED. FOR THIS PROPOSITION, HE RELIED ON THE FOLLOWING CASE LAWS: - TROPICAL CLOTHING CO. PVT. LTD. VS. ASST. CIT (MUMBAI ITAT ) IN ITA NO. 3143 & 3144/MUM/2017, RELATING TO ASSESSMENT YEAR 2001 - 02 & 2002 - 03. 4.1.1. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS REJECTED THE CLAIM OF THE ASSESSEE ONLY ON SUSPICION AND RELIED ON THE FOLLOWING CASE LAWS FOR THE PROPOSITIONS THAT SUSPICION, HOWEVER, STRONG CANNOT TAKE THE PLACE OF PROOF. ITA NO. 270 OF 1999, CIT VS. LAKSHMANGARH ESTATE & TRADING CO. LTD. CIT VS. DAULAT RAM RAWAT MULL, (1973) 87 ITR 349 (SC) 4.1.2. HE PRAYED THAT THE DISALLOWANCE BE DELETED AND IN THE ALTERNATIVE, THE ISSUE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, IN ACCORDANCE WITH LAW. HE PLEADED THAT THIS BEING A VERY OLD MATTER AND THE ASSESSEE BEING A SMALL BUSINESSMAN AND THE FACT THAT NUMEROUS ROUNDS OF 5 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE PROCEEDINGS HAVE ALREADY TAKEN PLACE, THE TRIBUNAL SHOULD DELETE THE ADDITION. 5. THE LD. DR, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT THE LD. CIT(A) HAS CLEARLY STATED THAT THERE IS NO REASON WHATSOEVER, FOR THE ASSESSEE IN NOT FILING THE FORM NOS. 15I & 15J, BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT THE LD. CIT(A), IN THE ORDER DT. 29/06/2012, DID NOT PRONOUNCE ANY DECISION ON THE ADMISSIBILITY OF THE FRESH EVIDENCE WHICH WAS IN THE FORM OF FORM NOS. 15I & 15J . HE ARGUED THAT THE PRODUCTION OF FORM NOS. 15I & 15J, WAS AN AFTERTHOUGHT. HE RELIED ON THE ORDER OF THE LD. CIT(A). 6. RIVAL CONTENTIONS HEARD. ON A CAR EFUL CONSIDERATION OF THE PAPERS ON RECORD, CASE LAWS CITED AND ORDERS OF THE AUTHORITIES BELOW, I HOLD AS FOLLOWS: - 6.1. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONTRACTS AND CHAIN ORDER SUPPLIERS . IT HAD PAID AN AMOUNT OF RS. 41,98,227/ - , AS LORRY HIR E CHARGES. THE DISALLOWANCE OF THIS EXPENDITURE WAS MADE U/S 40(A)(IA) OF THE ACT, ON THE GROUND THAT TAX WAS NOT DEDUCTED AT SOURCE U/S 194C OF THE ACT. THE ASSESSEES CASE IS THAT IT HAS OBTAINED DECLARATION IN THE FORM OF FORM NOS. 15I & 15J , AND UNDER THESE CIRCUMSTANCES, NO TAX NEED TO BE DEDUCTED AT 6 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE SOURCE FROM THESE LORRIES. THE RELIANCE WAS PLACE ON THE FOLLOWING DECISIONS: - ITO VS. RAJESH KR. GARG, ITA NO. 522/KOL/2011 CAPITAL TRANSPORT VS. ITO, ITA NO.1573/KOL/2009 ITO VS. GAUTAM ROADW AYS PVT. LTD., ITA NO. 1290/KOL/2011. 6.2. THE SOLE GROUND ON WHICH THE LD. CIT(A), REJECTED THE CLAIM OF THE ASSESSEE IS THAT, THESE FORMS, WERE NOT PRODUCED DURING THE COURSE OF ASSESSMENT. IN MY VIEW, THE ASSESSEE HAD SUBMITTED THESE DOCUMENTS BEFORE TH E LD. CIT(A), DURING THE COURSE OF FIRST ROUND OF ASSESSMENT PROCEEDINGS ON 15/12/2010. THE LD. CIT(A), CALLED FOR REMAND REPORT FROM THE ASS ESSING OFFICER AND THEREAFTER GA VE RELIEF TO THE ASSESSEE BY RELYING ON THE DECISION OF THE SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF MERILYN SHIPPING TRANSPORT VS. ADDL. CIT. IN OTHER WORDS, THE LD. CIT(A), HAD GRANTED RELIEF BASED ON AN INTERPRETATION OF LAW RATHER THAN THE FACTS OF THE CASE. THE REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE ITAT ON A LEGAL ISSU E AND THE ASSESSEE FILED CROSS OBJECTION ON THE GROUND THAT THE LD. CIT(A) SHOULD HAVE GRANTED RELIEF BY TAKING INTO CONSIDERATION THE FORMS, SUBMITTED BY THE ASSESSEE BEFORE HIM. THE TRIBUNAL RESTORED THIS ISSUE TO THE FILE OF THE LD. CIT(A), FOR ADJUDICA TING THIS ISSUE. 7 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE 7. AT THIS STAGE, I AM OF THE CONSIDERED OPINION THAT IT IS WRONG ON THE PART OF THE LD. CIT(A) TO HOLD THAT THESE ARE ADDITIONAL EVIDEN CES WHICH WERE FILED AT A VERY B ELATED STAGE AND HENCE CANNOT BE ADMITTED. THOUGH THE LD. CIT(A), HAS N OT COMMENTED ON TH ESE ADDITIONAL EVIDENCES IN THE FIRST ROUND OF APPELLATE PROCEEDINGS, THE FACT THAT HE HAD TAKEN THEM ON RECORD AND CALLED FOR A REMAND REPORT AND THEREAFTER HAS NOT ADVERSELY COMMENTED ON THE SAME, POINTS TO THE FACT THAT HE HAS NOT REJECTED THESE EVIDENCES. THUS, NON - CONSIDERATION OF THESE EVIDENCES IS BAD IN LAW. 7.2. THE ASSESSEE HAS FILED FORM NOS. 15I & 15J , FROM ALL THE TRANSPORTERS FROM WHOM THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE . THE AO IN THE REMAND PROCEEDINGS, ON A REFERENCE FROM THE LD. CIT(A), DURING T HE FIRST ROUND OF APPELLATE PROCEEDINGS, HAS NOT DRAWN ANY ADVERSE INFERENCE ON THESE EVIDENCE. I AM OF THE OPINION THAT THESE EVIDENCES HAVE TO BE ACCEPTED AND THERE IS NO CASE FOR REMANDING THE MATTER ONCE AGAIN TO THE FILE OF THE ASSESSING OFFICER, FOR FRESH ADJUDICATION ON THIS ISSUE. THIS IS A VERY OLD CASE AND HAS GONE THROUGH MULTIPLE LITIG A TIONS. 8 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE 8. THE TRIBUNAL IN THE CASE OF ITO VS. RAJESH KR. GARG, ITA NO. 522/KOL/2011, CAPITAL TRANSPORT VS. ITO, ITA NO.1573/KOL/2009, ITO VS. GAUTAM ROADWAYS PVT. LTD., ITA NO. 1290/KOL/2011 , HAS LAID DOWN THAT IF THE ASSESSEE HAS OBTAINED FORM NOS. 15I & 15J , FROM THE TRANSPORTER, THERE IS NO OBLIGATION ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE. 8.1. RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL, I DELETE THE DISALLOWANCE OF RS. 40,90,994/ - , AND ALLOW THIS APPEAL OF THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 31 ST DAY OF OCTOBER , 2017. SD / - [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 31 . 10 .2017 {SC SPS} 9 I.T.A. NO. 719/KOL/2017 ASSESSMENT YEAR: 2008 - 09 P.B. ENTERPRISE COPY OF THE ORDER FORWARDED TO: 1. P.B. ENTERPRISE 42, MAHENDRA GOSWAMI LANE KOLKATA 700 006 2. ACIT, CIRCLE - 37, KOLKATA 3, GOVT. PLACE (W) KOLKATA - 700 001 3. CIT(A) - 4. CIT - , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES