ITO, Ward - 50(4), Kolkata, Kolkata V. M/s. Biswakarma Builders, Kolkata

ITA 727/KOL/2011

• Counselvise Citation: 72723514 RSA 2011
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SADHAN BHATTACHARYA
• Assessee Lawyers: S M SURANA
• Section: 68; 54; 133(6)

Judgement Text

I.T.A. NO.: 727/KOL./2011 AS SESSMENT YEAR : 2006-07 PAGE 1 TO 5 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) I.T.A. NO.: 727/KOL./ 2011 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER,............................... .........APPELLANT WARD-50(4), KOLKATA, MANIK TALA CIVIC CENTRE, UTTARAPAN COMPLEX, 2 ND FLOOR, ULTADANGA, KOLKATA-700 054 -VS.- M/S. BISWAKARMA BUILDERS,.......................... .............RESPONDENT 119, LAKE TOWN, BLOCKA, KOLKATA-700 089 [PAN : AAFFB 8861 M] APPEARANCES BY: SMT. SADHAN BHATTACHARYA, ADDL. CIT, SR. D.R., FOR THE DEPARTMENT SHRI S.M. SURANA, AR, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JANUARY 09, 2014 DATE OF PRONOUNCING THE ORDER : JANUARY 17, 2014 O R D E R PER ABRAHAM P. GEROGE: 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST AN ORDER DATED 29.11.2010 OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-XXXII, KOLKATA. 2. THE GROUNDS RAISED BY REVENUE ARE AS UNDER :- (1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-XXXII, KOLKTA IS NOT JUSTIFIED IN DELETING T HE ADDITION OF RS.9,50,000/- AS UNEXPLAINED CASH CREDI T U/S 68 OF THE I.T. ACT, 1961 BECAUSE CREDITWORTHINESS A ND GENUINENESS OF THE LOAN TRANSACTION WAS NOT PROVED. BESIDES THE ASSESSEE DID NOT PRODUCE PAN OF ONE LOA N DEBTORS NAMELY, SMT. TITHI MUNSHI. (2) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-XXXII, KOLKATA IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.35,000/- (20,000/- + 15,000/-) AND RS.48,000/- AS CONSULTANCY & SUPERVISION CHARGES AN D ACCOUNTING CHARGES RESPECTIVELY AS THE ASSESSEE COU LD NOT SUBMIT ANY DOCUMENTS REGARDING CONSULTANCY & I.T.A. NO.: 727/KOL./2011 AS SESSMENT YEAR : 2006-07 PAGE 1 TO 5 2 SUPERVISION CHARGES DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND COULD NOT PRODUCE ANY DOCUMENTS REGARDING THE STATUS OF THE ACCOUNTANT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS RESPECTIVELY. (3) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-XXXII, KOLKATA IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.26,095/- (50% OF TOTAL RS.52,195/-) ON ACCOUNT OF BUSINESS PROMOTION EXPENSES, AS THE ASSE SSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CL AIM EXCEPT BANK STATEMENT DURING ASSESSMENT PROCEEDINGS . 3. FACTS APROPOS ARE THAT THE ASSESSEE, A DEVELOPER , HAD FILED ITS RETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING I NCOME OF RS.2,99,790/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS NOTED BY THE ASSESSING OFFICER THAT ASSESSEE HAD RECEIVED LOANS TOTALLING RS.12,00,000/- FROM FIVE PARTIES, WHICH, INTER ALIA , INCLUDED THE FOLLOWING :- NAME LOAN NISHI KOREL RS.2,00,000/- TITHI MUNSHI RS.7,00,000/- M.R. SAHA RS. 50,000 NOTICE WAS SERVED UNDER SECTION 133(6) ON THE LOAN CREDITORS. IN RESPECT OF THE ABOVE THREE PARTIES, IT SEEMED LETTERS WERE NOT RESPONDED TO OR NOT SERVED. ASSESSING OFFICER WAS OF THE OPINION THAT A SSESSEE COULD NOT PROVE THE GENUINENESS OF THE LOAN OR CREDITWORTHINESS OF THE LOAN CREDITORS. AN ADDITION OF RS.9,50,000/- WAS MADE. 4. ASSESSING OFFICER ALSO FOUND THAT ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE ON VARIOUS PAYMENTS EFFECTED WHICH, INTER AL IA, INCLUDED CONSULTANCY AND SUPERVISION CHARGES AS WELL AS ACCO UNTING CHARGES. APPLYING UNDER SECTION 40(A)(IA) OF THE ACT, ASSESS ING OFFICER MADE A DISALLOWANCE OF RS.1,67,000/- CLAIMED UNDER THE HEA D CONSULTANCY AND SUPERVISION AND RS.48,000/- CLAIMED AS ACCOUNTING C HARGES. SELLING EXPENSES DELETED BY THE ASSESSEE INCLUDED BUSINESS PROMOTION EXPENSES I.T.A. NO.: 727/KOL./2011 AS SESSMENT YEAR : 2006-07 PAGE 1 TO 5 3 OF RS.52,195/-. SINCE ASSESSEE COULD NOT PRODUCE PR OOF JUSTIFICATION, ASSESSING OFFICER MADE 50% DISALLOWANCE THEREOF. 5. ASSESSEE MOVED IN APPEAL BEFORE LD. CIT(APPEALS) AGAINST THE ABOVE ADDITION AND DISALLOWANCES. SUBMISSION OF THE ASSES SEE WAS THAT CONFIRMATIONS FOR THE LOANS WERE ALL AVAILABLE. AS PER ASSESSEE LOANS WERE RECEIVED THROUGH CHEQUES AND PAN OF EACH OF THE CRE DITORS WERE FURNISHED. VIS-A-VIS DISALLOWANCE OF CONSULTANCY CH ARGES, ARGUMENT OF ASSESSEE WAS THAT THE PAYMENTS EFFECTED WERE OF SUM S OF RS.20,000/- OR LOWER FIGURES FOR AT LEAST TWO PARTIES NAMELY SHRI BIBAK RN. CHAKRABORTY AND SHRI CHANDRA ROY. AS FOR THE DISALLOWANCE OF AC COUNTING CHARGES, SUBMISSION OF THE ASSESSEE WAS THAT DECISION OF HON BLE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SAMANWAYA VS.- ACI T (2009) 34 SOT 332 STOOD IN HIS FAVOUR. 6. LD. CIT(APPEALS) SOUGHT A REMAND REPORT FROM THE ASSESSING OFFICER ON THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM. IN THE REMAND REPORT, IT SEEMS ASSESSING OFFICER OBJECTED TO THE CONFIRMATIONS FILED FOR THE LOAN CREDITS. ACCORDING TO HIM THESE WERE FRESH EVIDENCE AND OUGHT NOT BE CONSIDERED. FURTHER ACCORDING TO THE LD. ASS ESSING OFFICER, PAN OF SHRI TITHI MUNSHI WAS NOT AVAILABLE. IN THE CASE OF NISHI KOREL AS WELL AS M.R. SAHA CREDITWORTHINESS COULD NOT BE PROVED BY T HE ASSESSEE. AGAIN, AS PER THE ASSESSING OFFICER, RECEIPT OF RS.50,000/- F ROM SMT. M.R. SAHA WAS CLAIMED AS THROUGH CHEQUE NO. 193281 DATED 23.03.20 06. HOWEVER, THE CREDIT IN THE BANK ACCOUNT WAS FOR A SUM OF RS.3,00 ,000/-. VIS-A-VIS DISALLOWANCE UNDER SECTION 40(A)(IA) COMMENTS OF TH E ASSESSING OFFICER WAS THAT ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURC E. FURTHER AS PER ASSESSING OFFICER, DISALLOWANCE OF ACCOUNTING CHARG ES WAS MADE FOR WANT OF EVIDENCE. 7. LD. CIT(APPEALS) AFTER GOING THROUGH THE SUBMISS IONS OF ASSESSEE AND REMAND REPORT OF THE ASSESSING OFFICER WAS OF T HE OPINION THAT ASSESSEE HAD DISCHARGED THE ONUS RESTING ON HIM FOR PROVING THE LOANS FROM NISHI KOREL, TITHI MUNSHI AND M.R. SAHA. VIS-A -VIS THE DISALLOWANCE I.T.A. NO.: 727/KOL./2011 AS SESSMENT YEAR : 2006-07 PAGE 1 TO 5 4 UNDER SECTION 40(A)(IA) OF THE ACT, LD. CIT(APPEALS ) WAS OF THE OPINION THAT IN RESPECT OF PAYMENTS TO SHRI BIBAK RN. CHAKR ABORTY AND SHRI CHANDRA ROY THE AMOUNTS WERE LESS THAN THE LIMITS S PECIFIED UNDER SECTION 194J OF THE ACT. HE, THEREFORE, DIRECTED TH E ASSESSING OFFICER TO VERIFY SUCH CLAIM AND REFRAME THE DISALLOWANCE ACCO RDINGLY. AS FOR THE DISALLOWANCE OF ACCOUNTING CHARGES, LD. CIT(APPEALS ) RELYING ON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF SAMANWAYA (SUPRA) HELD THAT SECTION 194J APPLIED ON LY TO PROFESSIONAL PAYMENTS MADE TO CHARTERED ACCOUNTANTS. HE THEREFOR E DELETED THE SUCH DISALLOWANCE. 8. NOW BEFORE US, LD. D.R. STRONGLY ASSAILING THE O RDER OF LD. CIT(APPEALS) SUBMITTED THAT CREDITWORTHINESS OF LOA N CREDITORS WERE NOT PROVED BY THE ASSESSEE. AS FOR CONSULTANCY AND SUPE RVISION CHARGES, LD. D.R. SUBMITTED THAT ASSESSEE HAD FAILED TO DEDUCT T AX AT SOURCE AS REQUIRED UNDER SECTION 194J OF THE ACT. IN SO FAR A S THE PAYMENT TO ACCOUNTANT OF THE CONCERN, LD. DR SUBMITTED THAT PR OFESSIONAL FEES WOULD INCLUDE PAYMENTS EFFECTED FOR ACCOUNTING HELP AS WE LL. 9. PER CONTRA, LD. AR SUPPORTED THE ORDER OF LD. CI T(APPEALS). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR THE LOAN CREDITS FROM NISH I KOREL, TITHI MUNSHI AND M.R. SAHA, ASSESSEE HAD NOT ONLY FURNISHED CONF IRMATIONS BUT ALSO HAD GIVEN PAN OF EACH OF THE SAID PERSONS. NISHA KAREL WAS ASSESSED UNDER PAN AKFPK 4958 E AND LOAN GIVEN TO THE ASSESSEE WAS BY CHEQUE DATED 01.09.2005 CREDITED TO ASSESSEES BANK ACCOUNT WITH HDFC BANK, DUMDUM BRANCH. TITHI MUNSHI WAS ASSESSED UNDER PAN ATIPM 7157 P AND THE LOAN RECEIVED FROM HIM WAS ALSO BY ACCOUNT PAYEE CHEQUE ISSUED FROM HER BANK ACCOUNT WITH ALLAHABAD BANK, NEW ALIP ORE BRANCH. HER HUSBAND SHRI SALIL KUMAR MUNSHI HAD RECEIVED VRS AN D CREDITED THE AMOUNTS TO HER ACCOUNT OUT OF WHICH LOANS WERE GIVE N. ASSESSEE HAD ALSO FURNISHED PAN OF HER HUSBAND. M.R. SAHA WAS ASSESSE D UNDER PAN ALJPS I.T.A. NO.: 727/KOL./2011 AS SESSMENT YEAR : 2006-07 PAGE 1 TO 5 5 6939 N. THIS AMOUNT WAS ALSO RECEIVED BY CHEQUE BY ASSESSEE. ASSESSEE HAD ALSO CLARIFIED THAT THE SUM OF RS.3,00,000/- CR EDITED IN THE BANK ACCOUNT ON 23.03.2006 WERE THREE CHEQUES TOTALLING TO RS.3,00,000/- WHICH, INTER ALIA, INCLUDED THE CHEQUE OF RS.50,000 /- FROM SMT. M.R. SAHA. NONE OF THESE SUBMISSIONS OF THE ASSESSEE HAS BEEN FOUND TO BE INCORRECT. VIS-A-VIS DISALLOWANCE FOR CONSULTANCY AND SUPERVIS ION CHARGES, LD. CIT(APPEALS) HAD ONLY DIRECTED THE ASSESSING OFFICE R TO VERIFY THE CLAIM OF ASSESSEE, SINCE PAYMENTS MADE TO SHRI BIBAK RN. CHAKRABORTY AND SHRI CHANDRA ROY WERE WITHIN THE LIMITS PRESCRIBED UNDER SECTION 194J OF THE ACT. VIS-A-VIS THE DISALLOWANCE OF ACCOUNTING CHARG ES IN THE CASE OF SAMANWAYA(SUPRA), HONBLE COORDINATE BENCH OF THIS TRIBUNAL HAS HELD THAT SECTION 194J WOULD APPLY ONLY TO PROFESSIONAL FEES PAID TO A CHARTERED ACCOUNTANT AND NOT TO SALARY PAID TO AN A CCOUNTANT. LD. CIT(APPEALS) HAD RIGHTLY RELIED ON THE ABOVE DECISI ON OF THE TRIBUNAL AND DELETED THE DISALLOWANCE. IN THE FACTS AND CIRCUMST ANCES MENTIONED ABOVE, WE ARE OF THE OPINION THAT THERE IS NO REASO N TO INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). 11. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DAY OF JANUARY, 2014. SD/- SD/- MAHAVIR SINGH ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 17 TH DAY OF JANUARY, 2014 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.