I.T.O Wd - 2(1),kolkata., Kolkata V. M/s Rajami Barter Pvt Ltd, Kolkata

ITA 876/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3405 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-04-2013
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: A K TIBREWAL; AMIT AGA
• Keywords: Additional evidence
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KO LKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.876/KOL/2013 ASSESSMENT YEAR: 2009-10 INCOME-TAX OFFICER, WD-2(1), KOLKATA. VS. M/S. RA JAMI BARTER PVT. LTD. (PAN: AABCR2915D) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 11.12.2015 DATE OF PRONOUNCEMENT: 20.01.2016 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI A. K. TIBREWAL, FCA & SHRI AMIT AGARWAL, ADVOCATE ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-I, KOLKATA VIDE APPEAL NO. 935/CIT(A)-1/2(1)/11-12 DATED 11.01.2013. ASSES SMENT WAS FRAMED BY ITO, WARD- 2(1), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2009-10 VIDE HIS ORDER DA TED 28.12.2011. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF COORDINATION CHARGES PAID TO GA NCO SS (INDIA) LTD. (GSSIL) ADDED BY AO BY ADMITTING FRESH EVIDENCE IN VIOLATION OF R ULE 46A OF I. T. RULES, 1962( HEREIN AFTER REFERRED AS THE RULES). AGGRIEVED, REVENUE PREFERRED THESE FOLLOWING TWO GROUNDS: 1. THAT THE CIT(A) ERRED IN ADMITTING FRESH EVIDE NCE UNDER RULE 46A OVERRULING OBJECTION OF THE ASSESSING OFFICER. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN DELETING DISALLOWANCE OF RS.1.10 CRORE MADE BY THE AO ON ACC OUNT OF AMOUNT PAID TO M/S. GANCO SS INDIA PVT. LTD. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS DE L CREDRE AGENT OF HALDIA PETRO CHEMICALS LTD. (HPCL). THE ASSESSEE AND HPCL ENTER ED INTO AN AGREEMENT FROM TIME TO TIME AND AS PER TERMS AND CONDITIONS OF THE AGRE EMENT, ASSESSEE IS OBLIGED TO ORGANIZE, ADVERTISE, PROMOTE AND MARKET THE PRODUCT OF HPCL AND ALSO REALIZATION OF ALL BILLS OF HPCL FROM PARTIES. THE ASSESSEE WITH THE OBJECT OF INCREASING IN BUSINESS AND SECURED TIMELY REALIZATION OF SALE BILLS OF HPCL, A GREED WITH GSSIL TO ACT AS A COORDINATING AGENCY OF THE ASSESSEE COMPANY AND TO UNDERTAKE MORE OR LESS THE SAME RESPONSIBILITY THOSE WERE ASSIGNED TO THE ASSESSEE COMPANY BY HPCL. THE ASSESSEE, IN 2 ITA NO.876/K/2013 RAJAMI BARTER PVT. LTD. AY 2009-10 TERM OF THE SERVICES RENDERED BY GSSIL FROM YEAR TO YEAR PAID COORDINATION CHARGES TO THEM AND DURING THE RELEVANT FY 2008-09 RELEVANT TO THIS AY 2009-10 PAID COORDINATION CHARGES AT RS.1.10 CR. AND CLAIMED THE EXPENSES IN ITS RETURN OF INCOME. THE AO WHILE FRAMING ASSESSMENT DISALLOWED THE ENTIRE SUM OF RS. 1.10 CR. PAID BY THE ASSESSEE COMPANY TO GSSIL ONLY ON THE REASON THAT THERE IS N O WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND GSSIL REGARDING ARRANGEMENT BETWEEN TH EM FOR SUPERVISING AND LIFTING WORK THOUGH ALL THE ARRANGEMENTS WERE MADE ON VERBA L COMMUNICATION. ACCORDING TO AO, THE ASSESSEE COULD NOT PRODUCE ANY CORROBORATIV E EVIDENCE OF SUCH SERVICES RENDERED AND HE MADE DISALLOWANCE. AGGRIEVED, ASSE SSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALLOWED THE CLAIM OF ASSESSEE AFTER TAK ING REMAND REPORT FROM THE AO ON ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE BY OB SERVING AS UNDER: THE ADDITIONAL EVIDENCE SUBMITTED BY THE APPELLANT ARE RELEVANT TO THE ISSUE OF DISALLOWANCE OF COORDINATION CHARGES AND ARE ADMITT ED SINCE THESE EVIDENCES GO TO THE ROOT OF THE MATTER UNDER CONSIDERATION. KEEPING IN VIEW ABOVE SUBMISSIONS AND THE COUNTER C OMMENTS OF THE APPELLANT THE COORDINATION CHARGES OF RS.1,10,00,000/- WAS PAID B Y THE APPELLANT M/S. GANCO SS PVT. LTD. FOR MANAGING A TURNOVER OF 45,833 METRIC TONES OF THE MATERIALS FROM MORE THAN 75 CUSTOMERS BY A/C PAYEE CHEQUE AFTER DEDUCTION OF TD S. IT IS PERTINENT TO NOTE THAT THE SIMILAR COORDINATION CHARGES PAYMENT WAS ACCEPTED B Y ORDER DATED 26.11.2008 U/S. 143(3) FOR AY 2006-07 BY DCIT, CIRCLE-2, KOLKATA. THEREFORE KEEPING IN THE VIEW THE ABOVE FACTS AND CIRCUMSTANCES THE GROUND OF APPEAL NO. 1 IS ALLOWED. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE COMPANY WAS A DEL C REDRE AGENT OF HPCL FOR WHOLE OF THE WEST BENGAL. THE ASSESSEE PAID A SUM OF RS.1.10 CR. TO GSSIL AS COORDINATION CHARGES FOR SUPERVISING THE WORK OF TIMELY LIFTING OF GOODS AND THEIR SUBSEQUENT DELIVERY TO THE PARTIES OR FOLLOWING UP PAYMENTS THEREOF. W E FIND FROM THE ORDER OF CIT(A) THAT THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS CONTAINI NG THE DETAILS OF AGREEMENT WITH HPCL, BILL OF GSSIL, QUANTITATIVE DETAILS OR CORRES PONDENCE BETWEEN THE ASSESSEE AND GSSIL AND PROOF REGARDING DEDUCTION OF TDS ON THE A BOVE PAYMENT AND ALSO FILING OF TDS RETURN BY THE ASSESSEE ALONG WITH ASSESSMENT OR DER U/S. 143(3) OF THE ACT FOR AY 2006-07 AND THE REMAND REPORT OF THE AO ON 31.12.20 12. WE FIND THAT THE AO HAS OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCES U NDER RULE 46A OF THE RULES AND HE MAINLY RELIED ON THE FINDINGS GIVEN BY THE AO IN HI S ASSESSMENT ORDER. WE FIND THAT THE AO HAS BEEN CONFRONTED WITH ALL THE ADDITIONAL EVID ENCE BY THE CIT(A) IN TERM OF RULE 3 ITA NO.876/K/2013 RAJAMI BARTER PVT. LTD. AY 2009-10 46A OF THE RULES AND HE HAS SUBMITTED A REMAND REPO RT VIDE NO. APPEAL NO. 935/CIT(A)-1/WQ-2(1)/11-12 . WE FIND THAT AO IN HIS REMAND REPORT DATED 31.12.2012 HAS ALLEGED THAT THE DISALLOWANCE FOR PAYMENT BY AS SESSEE TO GSSIS AND DEBITED IN THE ACCOUNTS AS COORDINATION CHARGES WAS MADE BY THE AO AND REASSERTED THE POSITION IN THE REMAND REPORT ALSO. WE FIND THAT THE AO IN HIS REM AND REPORT NEITHER REFERRED TO NOR DEALT WITH THE EVIDENCE PRODUCED BY ASSESSEE BEFORE CIT(A), WHICH IN TURN, WERE REFERRED TO HIM THE FACTS ARE EMERGING FROM THE CAS E RECORDS. I) M/S. GANCO IS A DEL CREDERE AGENT FOR THE ASSE SSEE SINCE 1 ST APRIL, 2005 AND THE COORDINATION CHARGES TO THEM FROM YEAR TO YEAR HAS BEEN ALLOWED AS DEDUCTION IN THE CASE OF THE ASSESSEE. THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07, THE FIRST YEAR OF ASSESSEES BUSINESS WITH M/S. GANCO, WAS COMPLETED U/S. 131 OF THE ACT AND AFTER EXAMINING THE GENUINENESS OF THE TRANSACTION WITH M /S. GANCO. THIS FACT IS VERIFIED FROM THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2006-0 7. II) A DEL CREDERE IS ONE UNDER WHICH THE AGENT, IN CONSIDERATION REMUNERATION, ENGAGES TO INSURE TO HIS PRINCIPAL NOT ONLY THE SOLVENCY OF TH E DEBTOR, BUT THE PUNCTUAL DISCHARGE OF THE DEBT; AND HE IS LIABLE, IN THE FIRST INSTANCE, WITHOUT ANY DEMAND FROM THE DEBTOR. III) M/S. GANCO IS REGULARLY ASSESSED TO TAX UNDER PAN:AABCG7681D. IV) M/S. GANCO IS ALSO REGISTERED WITH SERVICE TAX UNDER REGISTRATION NO. AABCG7681DST001. THEY HAVE CHARGED SERVICE TAX ON THE GROSS AMOUNT OF BILLS RAISED BY THEM ON THE ASSESSEE. THE ASSESSEE HAS PAID SUC H SERVICE TAX TO GANCO. V) M/S. GANCO OBTAINED CERTIFICATE OF LOWER DEDUCT ION OF TAX FROM THE INCOME TAX DEPARTMENT AND THE ASSESSEE HAS DEDUCTED TDS ON THE IR CHARGES AT THE RATES PRESCRIBED BY THE TDS OFFICER. THE ASSESSEE HAS ALSO FILED ST ATUTORY RETURNS OF TDS FROM TIME TO TIME. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE AR E OF THE VIEW THAT THE COORDINATION CHARGES PAID BY THE ASSESSEE ARE CLEARLY ALLOWABLE AS DEDUCTION AND ASSESSEE HAS RIGHTLY CLAIMED THE SAME AND CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. WE CONFIRM THE ACTION OF CIT(A) AND THIS ISSUE OF REVENUES AP PEAL IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.01.2 016 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :20TH JANUARY, 2016 JD.(SR.P.S.) 4 ITA NO.876/K/2013 RAJAMI BARTER PVT. LTD. AY 2009-10 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-2(1), KOLKATA. 2 RESPONDENT M/S. RAJAMI BARTER PVT. LTD., SAHA C OURT, 1 ST FLOOR, 8, GANESH CHANDRA AVENUE, KOLKATA-13 3. THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .