Ashok Mondal, Burdwan V. ITO,Ward-2(2), Asansol, Asansol

ITA 873/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75048 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 30-04-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2012
• Court: TRIBUNAL
• Assessee Lawyers: U DASGUPTA
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI ABRAHAM P.GEORGE, AM & HONBL E SRI GEORGE MATHAN, JM] ITA NO.873/KOL/2012 ASSESSMENT YEAR : 2009-10 ( APPELLANT ) (RESPONDENT) ASHOK MONDAL -VS- I.T.O., WARD-2(2), BARAKAR ASANSOL (PAN: ADZPM 7709 G) FOR THE APPELLANT SHRI U.DASGUPTA, ADVOCATE FOR THE RESPONDENT: SHRI SANJAY MUKHERJEE, JCIT, SR.DR DATE OF HEARING : 30.01.2014 DATE OF PRONOUNCEMENT : 06. 02.2014 ORDER PER SHRI GEORGE MATHAN, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. C.I.T.-(A), ASANSOL IN APPEAL.NO.127/C.I.T.(A)/ASL/W-2(2)/ASL/1 1-12 DATED 27.04.2012 FOR ASSESSMENT YEAR 2009-10. 2. SHRI U.DASGUPTA, ADVOCATE REPRESENTED ON BEHAL F OF THE ASSESSEE AND SHRI SANJAY MUKHERJEE,JCIT,SR.DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL : 1. FOR THAT THE ORDER OF THE LD.CIT(A) IS ARBITRAR Y, EXCESSIVE AND HENCE BAD IN LAW. 2. FOR THAT ON THE FACTS OF THE ASSESSEE THE LD. CI T(A), DURGAPUR, WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.1,09,40,639/- U/S 40A (3), WHEN THE PAYMENTS ARE ALL COVERED BY THE EXCEPTION TO RULE 6DD OF THE I.T.RUL E62, AND AS SUCH THE ADDITION MAY PLEASE BE DELETED. 3. FOR THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTE R, AMEND ANY FURTHER GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 4. IT WAS SUBMITTED BY THE LD. AR THAT THIS ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N CASE OF M/S.AMRAI PACHWAI & C.S.SHOP IN ITA NO.1251/KOL/2011 DATED 15.01.2014 F OR A.YR.2008-09. IT WAS THE ITA NO.873/KOL/2012 ASHOK MONDAL A.YR.2009-10 2 SUBMISSION THAT THE ISSUE IN THIS APPEAL WAS AGAINS T THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO BY INVOKING THE PROVISION OF SECTION 40A(3) OF THE ACT IN RESPECT OF CASH PAYMENTS MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY LIQUOR FROM THE GOVERNMENT AUTHORISED DEALE RS. 5. IN REPLY THE LD. DR SUBMITTED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE REVENUE IN THE CASE OF PUSHPALATA MONDAL IN ITA NO. 965/KOL/2010 DATED 28.07.2011 FOR A.YR.2007-08 WHEREIN THE COORDINATE BENCH OF TH IS TRIBUNAL RELYING UPON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF K.ABDU & CO. IN 170 TAXMAN 297 (KER) HAD HELD THAT THE CASH PURCHASE MA DE FROM THE GOVERNMENT AUTHORISED DEALERS FOR THE PURCHASE OF COUNTRY LIQU OR WAS NOT COVERED BY RULE 6DD(A). 6. IN REPLY THE LD. AR SUBMITTED THAT THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF K.ABDU & CO. HAD BEEN CONSIDERED IN THE CASE OF ASHOK MONDAL. IT WAS THE FURTHER SUBMISSION THAT THE CASE OF K.ABDU & CO . WAS RELATED TO RULE 6DD(A) OF IT RULES WHEREAS THE ASSESSEES CASE WAS COVERED BY RULE 6DD(B) OF IT RULES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET A PERUSAL OF THE DECISION IN THE CASE OF SMT.PUSHPALATA MONDAL SHOW S THAT THE TRIBUNAL HAD DECIDED THE CASE BY FOLLOWING THE DECISION OF HONBLE KERAL A HIGH COURT IN THE CASE OF K.ABDU & CO. REFERRED TO SUPRA WHEREIN THE ISSUE WA S IN RELATION TO RULE 6DD(A) OF IT RULES. THE ISSUE IN THE ASESSEES CASE IS IN RES PECT OF THE PAYMENTS MADE UNDER THE RULES FRAMED BY THE GOVERNMENT AND SUCH PAYMENT WAS REQUIRED TO BE MADE IN LEGAL TENDER. A PERUSAL OF THE GOVERNMENT NOTIFICATION IS SUED BY THE GOVT. OF WEST BENGAL CLEARLY SHOWS THAT THE DEALERS ARE AGENTS OF THE GO VERNMENT AND THE PAYMENTS MADE ARE TO THE GOVERNMENT. IT ALSO MAKES IT CATEGORICAL LY REQUIRED THAT THE PAYMENT IS TO BE MADE BEFORE LIFTING OF THE COUNTRY SPIRIT. CONSEQUE NTLY WE ARE OF THE VIEW THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S.AMRAI PACHWAI & C.S.SHOP REFERRED T O SUPRA WHEREIN IT HAS BEEN HELD AS FOLLOWS :- ITA NO.873/KOL/2012 ASHOK MONDAL A.YR.2009-10 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT T HE OUTSET A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS RECO GNIZED THE ASSESSEES BUSINESS IN TRADING OF COUNTRY SPIRIT AND COUNTRY LIQUOR. COPY OF FORM OF LICENCE ISSUED BY DURGAPUR MUNICIPAL CORPORATION AND COPY OF FORM III ISSUED BY DEPARTMENT OF EXCISE, GOVT. OF W.B. WERE ALSO FOUND AT PAGES 177 AND 179 OF THE ASSESSEES PAPER BOOK. IN ANY CASE THE VALIDITY OF LICENCE OF THE ASSESSEE TO TRADE IN COUNTRY SPIRIT AND COUNTRY LIQUOR IS NOT THE ISSUE BEFORE US. THE ISSUE IS WHE THER THE PAYMENTS MADE BY THE ASSESSEE FOR THE PURCHASE OF COUNTRY SPIRIT FROM THE TERRITO RIAL LICENSEE BOTTLING PLANT, IFB AGRO INDUSTRIES LTD., CITY CENTRE, DURGAPUR FALLS WITHIN THE EXEMPTION PROVIDED UNDER RULE 6DD(B) OF THE I.T.RULES, 1962. ADMITTEDLY, THE AO HAS RECOGNIZED THAT THE PROVISION OF RULE 6DD(B) OF THE I.T.RULES, 1962 IS APPLICABLE IN CASE OF PAYMENTS MADE TO GOVERNMENT DIRECTLY. THIS IS FOUND IN PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE KOLKATA GAZETTE TUESDAY 20 TH SEPT 2005 SHOWS THAT THE GOVERNMENT OF WEST BENGAL , DEPARTMENT OF EXCISE HAS ISSUED A NOTIFICATION, WHE REIN THE WAREHOUSE HAS BEEN IDENTIFIED TO MEAN THE WAREHOUSE FOR SUPPLY OF COUN TRY SPIRIT TO THE RETAIL VENDORS, ESTABLISHED AT CONVENIENT PLACES BY THE COMMISSIONE R AT THE EXPENSE OF THE STATE GOVERNMENT, OR AT THE EXPENSE OF A PERSON TO WHOM T HE EXCLUSIVE PRIVILEGE OF SUPPLYING OR SELLING COUNTRY SPIRIT BY WHOLESALE HAS BEEN GRA NTED U/S 22 OF THE ACT OF A LICENSED WHOLESALE VENDOR OF COUNTRY SPIRIT. FURTHER, IT HAS BEEN SPECIFICALLY IDENTIFIED THAT THE AUTHORISED REPRESENTATIVE OF THE WHOLESALE LICENSEE SHALL REALIZE THE NECESSARY AMOUNT OF DUTY, COST PRICE AND BOTTLING CHARGE, IF THERE B E ANY, AT THE PRESCRIBED RATE AND SUCH OTHER IMPOSITION, AS MAY BE PRESCRIBED BY LAW, FROM THE RETAIL VENDOR TO WHOM THE COUNTRY SPIRIT IS TO BE ISSUED FORM THE CONCERNED W AREHOUSE. IT IS ALSO SPECIFICALLY MENTIONED IN SECTION (2) OF THE SAID NOTIFICATION T HAT NO RETAIL VENDOR OF COUNTRY SPIRIT SHALL DEPOSIT DUTY DIRECT INTO THE LOCAL TREASURY F OR ISSUE OF COUNTRY SPIRIT TO BE TAKEN BY HIM FROM THE WAREHOUSE CONCERNED WHICH CLEARLY SHOW S THAT THE WAREHOUSE IS FOR THE SUPPLY OF THE COUNTRY LIQUOR, SPECIFICALLY, THE WAR EHOUSE IS UNDER THE DIRECT CONTROL AND CUSTODY OF THE STATE GOVT. THE STATE GOVERNMENT HAS CLOSED ITS DOORS IN SO FAR AS THE LOCAL TREASURY IS CONCERNED AND THE PAYMENT FOR TH E PURCHASE OF COUNTRY SPIRIT OR COUNTRY LIQUOR HAS TO BE MADE TO THE WAREHOUSE, RUN BY THE GOVERNMENT. THIS SHOWS THAT ANY PAYMENT MADE TO THE WAREHOUSE, WHICH IS UNDER T HE DIRECT CONTROL OF THE STATE GOVERNMENT , IS A PAYMENT MADE DIRECTLY TO THE GOVE RNMENT. ONCE, THIS IS ACCEPTED THEN THE PROVISIONS OF RULE 6DD(B) OF THE I.T.RULES, 196 2 WHICH CLEARLY SPELLS OUT THAT THE PAYMENT MADE TO THE GOVERNMENT IN LEGAL TENDER UNDE R THE RULES FRAMED BY THE GOVERNMENT, IS EXEMPTED FROM THE RIGOURS OF SECTION 40A(3) OF THE ACT. HERE, IT IS NOTICED THAT THE PAYMENTS MADE BY THE ASSESEE FOR P URCHASE OF COUNTRY SPIRIT AND COUNTRY LIQUOR IS TO THE GOVERNMENT AS PER THE NOTI FICATION ISSUED BY THE GOVERNMENT AND IS IN LEGAL TENDER SPECIFIED BY THE NOTIFICATION. I N THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE PAYMENT MADE BY THE ASSESSEE FOR THE PURCH ASE OF COUNTRY LIQUOR AND COUNTRY SPIRIT FROM THE TERRITORIAL LICENSEE BOTTLING PLANT , IFB AGRO INDUSTRIES LTD., CITY CENTRE, DURGAPUR IS PROTECTED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF THE I.T.RULES 1962. IN THE CIRCUMSTANCES, THE ADDITION AS MADE BY THE A O AND AS CONFIRMED BY THE LD. CIT(A) BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE I.T.ACT 1961 STANDS DELETED. 8. IN THE RESULT THE ADDITION AS CONFIRMED BY THE L D. CIT(A) STANDS DELETED. ITA NO.873/KOL/2012 ASHOK MONDAL A.YR.2009-10 4 9. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 06.02.2014. SD/- SD/- [ABRAHAM P.GEORGE] [ GEORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 06.02.1014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. ASHOK MONDAL, PROP.M/S.CHUNGARI PACHWAI & C.S.SHOP, BEGUNIA MORE, BARAKAR-713324. 2 I.T.O., WARD-2(2), ASANSOL. 3 . CIT(A)-ASANSOL. 4 . CIT - KOLKATA. 5. CIT(A)DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES