M/s. Lal Fashions , Kolkata V. ACIT, Circle - 45, Kolkata , Kolkata

ITA 727/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5711 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VEN KATERAMANI CITSRDR
• Assessee Lawyers: SOUMITRA CHOUDHARY
• Section: 143(3); 40(a)(ia); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.727/KOL/2018 ASSESSMENT YEAR:2010-11 M/S LAL FASHIONS P-58, C.I.T. ROAD, SCHEME VIIM, KOLKATA-700054 [ PAN NO.AACFL 5723 F ] / V/S . ACIT, CIRCLE-45, 3, GOVT. PLACE (WEST), KOKATA-700 001 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SOUMITRA CHOUDHARY, ADVOCATE /BY RESPONDENT SHRI S. VEN KATERAMANI, ADDL. CIT-SR-DR /DATE OF HEARING 22-01-2019 /DATE OF PRONOUNCEMENT 31-01-2019 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, KOLKATAS ORDER DATED 18.12.2017 PASSED IN CASE NO. 413/CIT(A)-13/CIR-45/KOL/2014-15 INVOLV ING PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE SIDES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND CHALLENGE S CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION INVOKING U/S. 40(A)(IA) R.W.S. 194C OF THE ACT DISALLOWANCE ALLEGED CONTRACTUAL PAYMENT AMOUNTING TO 3,69,834/- ON ACCOUNT OF NON-DEDUCTION OF TDS THEREUPON. THERE IS NO DISPUTE THAT THIS ASSESSEE I S A GARMENTS & FABRICS TRADER / DISTRIBUTOR OF M/S REID AND TALOR SUITING & SHIRTIN G. PAPER BOOKS PAGE 10 ONWARDS REVEALS THAT THE ASSESSEE HAS ACTED MERELY AS AN AG ENT BETWEEN THE COMPANY AND ITA NO.727/KOL/2018 A.Y. 2 010-11 M/S LAL FASHIONS VS. ACIT, CIR-45, KOL. PAGE 2 PAYEES ON COST TO COST BASIS FOR THE PURPOSE OF R EIMBURSEMENT EXPENDITURE. THE REVENUE FAILS TO INDICATE ANY INCOME COMPONENT ELEM ENT IN ISSUE IN THE HANDS OF THE PAYEES. I THEREFORE CONCLUDE THAT THE ASSESSEE HAS RECEIVED ADVERTISEMENT EXPENSES FROM ITS PRINCIPAL AND PAID THE SAME TO THE PAYEES ON COST TO COST BASIS. I THEREFORE HOLD THAT SEC. 40(A)(IA) IN SUCH A CASE IS NOT APPL ICABLE ON REIMBURSEMENT OF EXPENSES ON COST TO COST BASIS IN ABSENCE OF INCOME COMPON ENT THEREIN IN PAYEES HANDS. THE IMPUGNED DISALLOWANCE IS STAND DELETED IN VIEW OF T HIS CLINCHING FACTUAL BACKDROP. 3. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31/01/2019 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 31/01/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S LAL FASHIONS, P-58, CIT ROAD, SCHEME VIIM, KOLKATA-54 2. /RESPONDENT-ACIT, CIR-45, 3, GOVT. PLACE (WEST), KO LKATA-001 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ',