CRAWFORD BAYLEY & CO., MUMBAI V. ADDL CIT 11(2), MUMBAI

ITA 816/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100756 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 09-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2013
• Court: TRIBUNAL
• Department Lawyers: AMRITA MISRA
• Assessee Lawyers: PRASAD BAPAT
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 816/M/2013 (AY: 2007 - 2008 ) CRAWFORD BAYLEY & CO, 4 TH FLOOR, GATE NO.4, STATE BANK OF INDIA BUILDING, ANNEX NGN VAIDYA MARG, FORT, MUMBAI - 023. / VS. ADDL. CIT 11(2), MUMBAI. ./ PAN : AAAFC0787E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRASAD BAPAT, AR / RESPONDENT BY : MS. AMRITA MISRA, DR / DATE OF HEARING : 04.08 .2015 / DATE OF PRONOUNCEMENT : 28 .08.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 31.1.2013 IS AGAINST THE ORDER OF THE CIT (A) - 3, MUMBAI DATED 12.12.2012 FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUND WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 22,500/ - BEING ALLEGED UNDISCLOSED PROFESSIONAL FEES RELYING ON THE INFORMATION APPEARING IN AIR. FURTHER, CIT (A) OUGHT TO HAVE ACCEPTED THE ASSESSEES CONTENTION THAT THE AMOUNT OF RS. 22,500/ - WAS RECEIVED TOWARDS ADVANCE AND NO SERVICES WERE RENDERED TO THE CUSTOMERS. THE ADDITION BE DELETED. 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE RELATES TO THE ADDITION OF RS. 22,500/ - BEING ALLEGED UNDISCLOSED PROFESS IONAL FEES. AO MADE THE SAID ADDITION RELYING ON THE AIR INFORMATION. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 7,48,09,734/ - . DURING THE ASSESSMENT PROCEEDINGS, AO RECEI VED AIR INFORMATION AND THE ASSESSEE WAS ASKED TO RECONCILE THE PROFESSIONAL FEES RECEIVED BY THE ASSESSEE. TO THE EXTENT OF RS. 1.9 LAKHS, ASSESSEE MENTIONED THAT IT DOES NOT BELONG TO THE ASSESSEE IN WHICH COUPLE OF PARTIES ARE INVOLVED NAMELY; (I) BALA JI TOLL WAYS LTD ( RS. 10,000/ - ) AND (II) 2 ALLIANCE AG (RS. 1,80,000/ - ). AO INVOKED THE PROVISIONS OF SECTION 133(6) OF THE ACT AND ISSUED LETTERS. OTHERWISE, THERE WAS NO RESPONSE FROM THE SAID TWO PARTIES. ACCORDINGLY, AO PROCEEDED TO MAKE ADDITION OF RS. 1.9 LAKHS AS UNDISCLOSED PROFESSIONAL FEES. ACCORDINGLY, AO COMPLETED THE ASSESSMENT U/S 143(3)(II) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS.7,50,23,735/ - AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHOR ITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE PROVIDED SOME INFORMATION INVOLVING THE SAID TWO PARTIES. IN CONNECTION WITH RS. 10,000/ - , WHEREIN PARTY NAMED BALAJI TOLL WAYS LTD IS INVOLVED, CIT (A) FOUND THAT THE SAID A MOUNT STANDS EXPLAINED. ACCORDINGLY, HE GRANTED RELIEF TO THE ASSESSEE ON THE ADDITION OF RS. 10,000/ - . WITH REGARD TO THE OTHER ADDITION OF RS. 1.8 LAKHS INVOLVING ALLIANCE AG, ON CONSIDERING THE SUBMISSION OF THE SAID ALLIANCE AG THAT ONLY A SUM OF RS. 22,500/ - WAS PAID AND NOT RS. 1.8 LAKHS, CIT (A) RESTRICTED THE ADDITION OF RS. 22,500/ - AND GRANTED RELIEF IN RESPECT OF THE BALANCE AMOUNT OF RS. 1,57,500/ - . CIT (A) DISMISSED THE ASSESSEES CONTENTION THAT THE SUM WAS ISSUED ON ACCOUNT OF COUNSEL FEES WAS NOT ENTERTAINED BY THE CIT (A). HE GAVE A FINDING THAT THE SAID AMOUNT OF RS. 22,500/ - WAS PAID TO THE ASSESSEE AFTER EFFECTING TDS AND ISSUED TDS CERTIFICATE IN THE NAME OF THE ASSESSEE. CIT (A) ALSO NOTED THAT THE BOOKS OF ACCOUNTS OF THE ASSESSE E DO NOT INDICATE THAT THE AMOUNT SHOULD GO TO THE ACCOUNT OF THE COUNSELS FEES (MR. GAURAV JOSHI). HOWEVER, HE MENTIONED THAT THE SAID SUM RECEIVED DURING THE FY IE 6.3.2007 AND THE SAME WAS PAID TO THE ASSESSEE ON 22.11.2007 AND THE FIRM IS ONLY A TRUS TEE IN THE PROCESS. AGGRIEVED, ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ACTED AS A TRUSTEE TO THE SAID AMOUNT THE SAME WAS SUBSEQUENTLY PAID TO MR. JOSHI IN NOVEMBER, 2007 TO WHOM THE SAID AMOUNT BELONGS. THIS FACT OF TRANSMITTING THE AMOUNT TO THE ACCOUNT OF MR. JOSHI IS BORNE OUT OF THE BOOKS OF ACCOUNT. THEREFORE, THE CLAIM OF THE ASSESSEE THAT IT IS NOT A TAXABLE AMOUNT IN THE HANDS OF THE ASSESSE SHOULD BE ACCEPTED. THE INADVERTENT ERRORS RELATING TO THE TDS SHOULD NOT DECIDE THE CASE AGAINST THE ASSESSEE. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 3 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORIT IES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US, WE FIND IT IS NOT NEW TO THE ADVOCATES FIRM THAT THE AMOUNTS RELATING TO THE INDIVIDUAL ADVOCATES ARE RECEIVED BY THE CONSULTANT FIRM AND THEY ARE SUBSEQUENTLY HANDED OVER TO THE CONCERNED ADVOCATE. T HE PAYER SOMETIMES MAKES MISTAKE IN EFFECTING TDS. IT IS THE NOT THE CASE OF THE REVENUE THAT THE AMOUNT DID NOT REACH MR. JOSHI, AN ADVOCATE. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION, THAT THE SUM OF RS. 22,500/ - ACTUALLY WAS PAID BY M/S. BAJAJ ALL IANZ TOWARDS COUNSELS FEES OF MR. JOSHI. THIS VIEW IS FORTIFIED BY THE FACT THAT THE FIRM DO NOT PAID THE AMOUNT TO MR. JOSHI. CONSIDERING THE PECULIAR FATS OF THE CASE, WE ARE OF THE OPINION THAT THE SAID AMOUNT DOES NOT CONSTITUTE TAXABLE INCOME IN TH E HANDS OF THE ASSESSEE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 T H AUGUST, 2015. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 2 8 .8 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI