Prink Steels Pvt. Ltd, Khurda V. DCIT, Bhubaneswar

ITA 89/CTK/2011

• Counselvise Citation: 8922114 RSA 2011
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 21-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 14-02-2011
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: B K MOHAPATRA

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 089/CTK/2011 (ASSESSMENT YEAR 2007 - 08) PRINK STEELS PRIVATE LTD.,61, INDUSTERIAL ESTATE,KHURDA 752057 AN: AABCP 9328 G VERS US ASST.COMMISSIONER OF INCOME - TAX , CIRCLE 2(2), BHUBANESWAR (PRESENTLY - DCIT,CIRCLE 2(2),BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI B.K.MOHAPATRA, AR FOR THE RESPONDENT SHRI A.BHATTACHARJEE, DR DATE OF HEARING : 2 1.10.2011 DATE OF PRONOUNCEMENT : 09.11.2011 ORDER SHRI K.S.S.PRASAD RAO, JM : THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER DT.26.11.2010 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEAR 2007 - 08. 2. THE FACTS, IN BRIEF, ARE THAT DURIN G THE COURSE OF ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ON VERIFICATION OF THE TDS CERTIFICATES, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS RECEIVED COMMISSION/BROKERAGE FROM DIFFERENT PARTIES TOTALLING 6,18,68,050 AS AGAINST WHICH THE ASSESSEE HAS SHOWN A SUM OF 5,90,98,106 AND THUS THERE IS SHORT CREDIT OF 27,69,944. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE SAID DIFFERENCE IS DUE TO DEDUCTION OF SERVICE TAX AND EDUCATION CESS F ROM THE COMMISSION RECEIVED BY THE ASSESSEE AND THE ASSESSEE HAS SHOWN THE NET AMOUNT ONLY IN RESPECT OF COMMISSION. THIS EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFICER AS HE OBSERVED THAT THERE IS NO MENTION AS TO DEDUCTION OF SERVICE TAX OR EDUCAT ION CESS IN THE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE PARTIES. ACCORDINGLY, HE MADE ADDITION OF 27,69,944 TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). ON THE GROUND THAT THE APPEAL FORM NO.35 IS NOT SIGNED AND VERIFIED IN ACCORDANCE WITH THE ACT, THE LEARNED 2 CIT(A) ISSUED A LETTER TO RECTIFY THE DEF ECT ON OR BEFORE 26.11.2010 BUT THE ASSESSEE HAVING NOT COMPLIED WITH THE SAME, THE LEARNED CIT(A) TREATED THE APPEAL AS INVALID AND ACCORDINGLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3. BESIDES CHALLENGING THE ACTION OF THE LEARNED CIT(A) IN TREAT ING THE APPEAL FILED BEFORE HIM AS INVALID, TO BE ARBITRARY, ERRONEOUS AND BAD IN LAW, THE ASSESSEE HAS ALSO CHALLENGED THE IMPUGNED ADDITION OF 27,69,944 MADE BY THE ASSESSING OFFICER. 4. HAVING HEARD BOTH THE PARTIES AND GOING THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE LEARNED CIT(A) TREATED THE APPEAL FILED BEFORE HIM AS INVALID SINCE THE ASSESSEE DID NOT RESPOND TO HIS LETTER DT.16.11.2010 ASKING THE ASSESSEE TO RECTIFY THE DEFECT ON OR BEFORE 26.11.2010 . WE FIND THAT THE LEARNED CIT(A) HAS PASSED THE IMPUGNED ORDER ON THE SAME DATE I.E., 26.11.2010. IN OUR CONSIDERED VIEW, GIVING ONE MORE OPPORTUNITY BY THE LEARNED CIT(A) FOR RECTIFICATION OF DEFECT WOULD HAVE BEEN JUSTIFIED. NOW ADVERTING TO THE GROUND RELATING TO THE ADDITION OF 27,69,944 MADE BY THE ASSESSING OFFICER, WE FIND THAT THE ASSESSEE EXPLAINED THAT THE DIFFERENCE WAS DUE TO THE FACT THAT THE ASSESSEE HAS SHOWN THE NET COMMISSION/BROKERAGE RECEIPTS IN THE P & L ACCOUNT EXCLUDING SERVICE TAX AND EDUCATION CESS CHARGED B Y THE PARTIES. SINCE CHARGING OF TAX AND CESS ARE STATUTORY OBLIGATION AND THE AMOUNT SO COLLECTED/CHARGED GOES TO THE COFFER OF GOVERNMENT AND AS SUCH, THE SAME CANNOT BE THE PART OF INCOME OF THE ASSESSEE, EVEN IF THERE IS NO SPECIFIC MENTION ABOUT IT IN THE AGREEMENT FOR COMMISSION/BROKERAGE. IN THIS VIEW OF THE MATTER, THE DIFFERENCE IN THE TDS CERTIFICATE AND P & L ACCOUNT IN REGARD TO THE RECEIPT OF COMMISSION/BROKERAGE APPEARS TO BE CONVINCING. HOWEVER, IT NEEDS DETAIL 3 VERIFICATION AND THEREFORE, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR THE SAID PURPOSE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 9 TH NOVEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: PRINK STEELS PRIVATE LTD.,61, INDUSTERIAL ESTATE,KHURDA 752057 2. THE RESPONDENT: ASST.COMMISSIONER OF INCO ME - TAX , CIRCLE 2(2), BHUBANESWAR (PRESENTLY - DCIT,CIRCLE 2(2),BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY .