DCIT, Circle - 8, Kolkata, Kolkata V. M/s. Ambpali Finance Co. Ltd., Kolkata

ITA 940/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83025 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2011
• Court: TRIBUNAL
• Department Lawyers: A K DAS
• Assessee Lawyers: V N PUROHIT
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI MAHAVIR SINGH, JM] ITA NO.940/KOL/2011 ASSESSMENT YEAR : 2007-08 ( APPELLANT ) - (RESPONDENT) D.C.I.T., CIRCLE-8, M/S.AMBPALI FINANCE CO.LTD . KOLKATA -VERSUS- KOLKATA (PAN: AACCA 2087 L) FOR THE APPELLANT: SHRI A.K.DAS, JCIT, SR.DR FOR THE RESPONDENT: SHRI V.N.PUROHIT DATE OF HEARING : 30.07.2014 DATE OF PRONOUNCEMENT : 01.08.2014. ORDER PER SHRI P.K.BANSAL, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORDE R OF THE LD. CIT(A)-VIII, KOLKATA DATED 31.03.2011 BY TAKING THE FOLLOWING EF FECTIVE GROUNDS OF APPEAL : 1 . THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS CARRYING ON SOME BUSI NESS ACTIVITY DURING THE ASSESSMENT YEAR 2007-08 AND THEREBY ALLOWING A SUM OF RS.1,40, 240/- AS BUSINESS LOSS INCURRED BY THE ASSESSEE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF A SELF SERVING AGREEMENT DATED 01.10.2006 WITHOUT AFFORDING THE ASSESSING OFFICER AND THEREBY HOLDING THAT THE PAYMENT OF RS.3,39,17,500/- TO SHRI JAGANNATH GUPTA WAS A PART OF COST OF LAND. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE OF COMMISSION EXPENSES OF RS.34,33,320/- ALLEGEDLY PAID TO SATYAM SMELTERS PVT. LTD. 2. THE FACTS RELATING TO GROUND NO.1 ARE THAT THE A O NOTED THAT FROM COMPUTATION OF INCOME THE ASSESSEE HAS CLAIMED BUSINESS LOSS OF RS.1,40,240/- BY DISCLOSING MISCELLANEOUS INCOME OF RS.55,233/- AND CLAIMING DE DUCTION FOR VARIOUS EXPENSES. THE AO IN THE ABSENCE OF ANY PROOF BY THE ASSESSEE CARRYING OUT IN BUSINESS ACTIVITY, MISCELLANEOUS INCOME UNDER THE HEAD INCOME FROM OT HER SOURCES AND PROPORTIONATE EXPENSES OF ACCOUNTING CHARGES, FILING FEES AND AUD IT FEES WERE ALLOWED AS DEDUCTION. ITA NO.940/KOL/2011 M/S.AMBPALI FINANCE CO.LTD., A.YR.2007-08 2 THE ASSESSEE WENT IN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD. CIT(A) THE ASSESSEE CLAIMED THAT THE AO HIMSELF HAS MENTIONED THE NATUR E OF BUSINESS OF THE ASSESSEE AND THE ASSESSEE WAS ENGAGED IN PURCHASE AND SALE OF PR OPERTY. THOUGH THE PROFIT THERE FROM WAS SHOWN AS SHORT TERM CAPITAL GAIN THE ASSES SEE HAS INCURRED EXPENSES UNDER THE HEAD SALARY AND ALLOWANCES OF RS.1,20,000/-, A ND ON LABOUR CHARGES OF RS.38,270/- FOR THE PURPOSE OF CARRYING ON THE BUSI NESS. THE AO EVEN ESTIMATED THE ACCOUNTING CHARGES AND AUDITORS REMUNERATION WHICH WAS RS.24,000/- AND RS.11,236/-. THE CIT(A) AFTER VERIFYING THE FACTS H AS GIVEN THE FINDING OF THE FACTS AND NOTED THAT THE ASSESSEE HAS INCURRED THESE EXPE NSES AND ULTIMATELY ALLOWED THE GROUND OF ASSESSEE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. THE LD. DR EVEN THOUGH RELIED ON THE ORDER OF AO COULD NOT PRODUCE OR BRING TO OUR KNOWLEDGE ANY COGENT MATERIAL OR EVIDENCE WHICH MAY COMPEL US TO DISAGREE WITH THE FINDINGS GIVEN BY THE LD. CIT(A). WE, THEREFORE, AR E OF THE OPINION THAT THIS GROUND IS NOT FIT WHICH WOULD WARRANT OUR INTERFERENCE. GROUN D NO.1 TAKEN BY THE REVENUE STANDS DISMISSED. 4. GROUND NO.2 TAKEN BY THE REVENUE RELATES TO PAYM ENT TO SHRI JAGANNATH GUPTA AS A PART OF COST OF LAND AMOUNTING TO RS.3,39,17,5 00/ BY ENTERTAINING ADDITIONAL EVIDENCE BY THE LD. CIT(A) IN VIOLATION OF RULE 46A . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. WE NOTED THAT AS PER PAGE 6 AND 7 OF THE ORDER OF LD.C IT(A) AS CONTENDED BY THE LD. DR UNDER SUB-PARA (F) TO (I) THAT THE ASSESSEE HAS SUB MITTED FRESH EVIDENCE BEFORE THE LD. CIT(A). THESE EVIDENCES WERE NOT FILED BY THE ASSES EE BEFORE AO EVEN THOUGH THESE EVIDENCES WERE ENCLOSED BY THE ASSESSEE IN THE STAT EMENT OF FACTS MARKED AS ANNEXURE-A TO THE GROUND OF APPEAL BEFORE THE LD. C IT(A). ALTHOUGH THESE DOCUMENTS WHICH WERE RELIED ON BY THE ASSESSEE WERE SENT BY T HE LD.CIT(A) TO THE AO BUT WE DO NOT FIND THAT ANY REMAND REPORT ETC. WAS CALLED BY THE LD. CIT(A) FROM THE AO OR INVITE OBJECTION OF THE AO WHILE THESE EVIDENCES SH OULD NOT HAVE BEEN ADMITTED. THE ITA NO.940/KOL/2011 M/S.AMBPALI FINANCE CO.LTD., A.YR.2007-08 3 LD. AR EVEN THOUGH VEHEMENTLY RELIED ON PAGE-7 OF T HE ORDER OF LD.CIT(A) THAT ALL THE DOCUMENTS SUBMITTED BY THE ASSESSEE BEFORE CIT(A) F OR THE FIRST TIME WERE DULY SENT TO THE AO BUT FAIR ENOUGH TO CONCEDE THAT THERE WAS NO REMAND REPORT ON RECORD ON THIS ISSUE. WE FURTHER NOTED THAT THE REMAND REPORT HAS BEEN SENT BY THE AO AND CALLED FOR BY THE LD. CIT(A) IN RESPECT OF COMMISSI ON EXPENDITURE CLAIMED BY THE ASSESSEE AS DEDUCTION. WE FIND NO SUCH MENTION ABOU T INVITING THE COMMENTS OF THE AO BY THE CIT(A) ON SUBSTANTIAL ADDITIONAL EVIDENCE IN RESPECT OF PAYMENTS OF RS.3,39,17,500/- CLAIMED BY THE ASSESSEE AS PART OF THIS PARTICULAR LAND. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH TH E PARTIES RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT THE AO SHALL DECIDE THIS ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE AND ASSESSEE IS ALSO DIRECTED TO ADDUCE ALL NECESSARY EVIDENCES ON WHICH HE MAY RELY ON BEFORE THE AO TO SUPPORT HIS CLAIM AND COOPERATE WITH THE AO. THUS G ROUND NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO.3 TAKEN BY THE REVENUE RELATES TO DELE TION OF DISALLOWANCE OF THE COMMISSION EXPENSES AMOUNTING TO RS.34,33,320/-. TH E LD. DR VEHEMENTLY RELIED ON THE ORDER OF AO WHILE THE LD. AR OF THE ASSESSEE RE LIED ON THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. WE NOTED THAT THE AO DISALLOWED THIS COMMISSION AMOUNT ING TO RS.34,33,320/- PAID TO M/S.SATYAM SMELTERS PVT. LTD. MERELY ON THE BASIS T HAT HOW A CORPORATE ENTITY CAN ACT AS A BROKER AND ALSO HAS EXPRESSED ITS INABILITY TO PRODUCE THE DIRECTOR OF THE COMPANY. WE NOTED THAT WHEN THE MATTER WENT BEFORE THE LD. C IT(A) AFTER GETTING THE REMAND REPORT AND THE VERIFICATION BEING DONE BY THE AO TH ROUGH ENQUIRIES CONDUCTED BY THE INSPECTOR IT WAS FOUND THAT THE RECIPIENT COMPANY W AS DULY EXAMINED AND VERIFIED BY THE AO. IT WAS CONFIRMED BY THE RECIPIENT COMPANY T HAT THE ASSESSEE HAD PAID COMMISSION TO IT. THE ASSESSEE HAS ALSO DEDUCTED TD S AMOUNTING TO RS.1,92,048/-. THE COMMISSION WAS PAID BY THE ASSESSEE TO THE SALE OF THE LAND AND THEREFORE THE LD. CIT(A) DELETED THIS DISALLOWANCE. SINCE IN THE REMA ND REPORT THE AO HAD CONFIRMED THE COMMISSION PAID BY THE ASSESSEE TO THE PRINCIPA L COMPANY, IN OUR OPINION, NO ITA NO.940/KOL/2011 M/S.AMBPALI FINANCE CO.LTD., A.YR.2007-08 4 INFIRMITY IS CALLED FOR IN THE ORDER OF THE LD. CIT (A). WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS GROUND. GROUND NO.3 TAKE N BY THE REVENUE STANDS DISMISSED. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1.8.2014. SD/- SD/- [MAHAVIR SINGH ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 1.8.2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. M/S.AMBPALI FINANCE CO.LTD., 16B, SHAKESPEARE SARAN I, KOLKATA-700071. 2 D.C.I.T., CIRCLE-8, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-VIII, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES