M/s. Charu Sales Agency, North 24 Parganas V. ITO, Ward - 50(1), Kolkata, Kolkata

ITA 942/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54456 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 27-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANADHIR GUPTA
• Assessee Lawyers: MIHIR BANDYOPADHYAY
• Section: 40A(3); 143(3)

Judgement Text

, SMC ( ) , IN THE INCOME TAX APPELLATE TRIBUNAL SMC (B) BENC H: KOLKATA () BEFORE , ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM] / I.T.A NO. 942/KOL/2011 ! '# ! '# ! '# ! '#/ // / ASSESSMENT YEAR: 2006-07 M/S. CHARU SALES AGENCY VS. INCOME-TAX OFFICER, WD-50(1), KOLKATA, (PAN-AADFC 7261 N) (%& /APPELLANT ) ('(%&/ RESPONDENT ) FOR THE APPELLANT: SHRI MIHIR BANDYOPADHYAY FOR THE RESPONDENT: SHRI RANADHIR GUPTA, SR.DR )* / ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXII, KOLKATA IN APPEAL NO.161/CIT(A)-XXXII/50(1)/08-09/KOL DATED 24.12.201 0. ASSESSMENT WAS FRAMED BY ITO, WARD-50(1), KOLKATA U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 31.12.2008. 2. THE SOLE ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE MADE U/S. 40A(3) OF THE ACT BY ASSESSI NG OFFICER ON ACCOUNT OF PURCHASE OF TRUCK TYRES. FOR THIS, ASSESSEE HAS RAISED FOLLOWING TWO GROUNDS: 1) THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION U/S. 40A(3) AGAINST PURCHASES OF TRUCK TYRES IN A ROUTINE MANNER WITHOUT APPRECIATIN G THE SITUATIONS INVOLVED IN THE BUSINESS OF THE APPELLANT. 3) THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION U/S. 40A(3) EVEN THOUGH SUB-RULE DD(J) HAS BEEN AMENDED. 3. I HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. ADMITTED POSITION ARE THAT THE ASSESSEE HAS MADE PA YMENT BY WAY OF CASH TO M/S. HARLALKA SALES & SERVICES AND TO M/S. AUTO SALES AGENCIES PV T. LTD. IN CASH IN EXCESS OF RS.20,000/- IN VIOLATION OF SECTION 40A(3) OF THE ACT. ASSESSING OFFICER HAS NARRATED THE DETAILS IN HIS ASSESSMENT ORDER AT PAGE 2 DATE WISE, WHICH CLEARLY REVEALS THAT SINGLE INSTANCE OF PAYMENT IS IN EXCESS OF RS.20,000/-. ACCORDINGLY, ASSESSING OFFI CER DETAILED OUT PAYMENTS TO M/S. HARALALKA SALES & SERVICES AT RS.7,50,000/- AND TO AUTO SALES AGENCIES (P) LTD. AT RS.8,59,750/- AND THEREBY DISALLOWED TOTAL PAYMENTS AGAINST PURCHASES AT RS.16,09,750/- BY INVOKING PROVISIONS 2 ITA 942K/2011 CHARU SALES AGENCY A.Y.06-07 OF SECTION 40A(3) OF THE ACT. BEFORE ASSESSING OFF ICER NO SPECIAL CIRCUMSTANCES AS DESCRIBED IN RULE 6DD WAS BROUGHT. THE CIT(A) ALSO CONFIRMED ACTION OF ASSESSING OFFICER ON THE SAME REASONING. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BE FORE US. 4. WE FIND THAT THE ASSESSEE ADMITTED THE VIOLATION S BUT ONLY REQUESTED THAT THE PAYMENTS MADE IN CASH ON HOLIDAYS SHOULD BE EXCLUDED FOR THE PURPOSE OF DISALLOWANCE. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US GIVEN THE PAYMENTS MADE ON HOLIDAYS AS UNDER: SL. NO. OCCASION /DATE AMOUNT PAID IN CASH TO WHO M PAID 1. 2. 3. 4. 5. 6. RAM NAVAMI 18.4.2005 SATURDAY 17.09.2005 SHAB-E-BARAT 20.09.2005 SATURDAY 23.04.2005 MAHA SAPTAMI 10.10.2005 SATURDAY 24.12.2005 RS.50,000/- RS.1,00,000/- RS.2,00,000/- RS.42,000/- RS.45,000/- RS.70,000/- RS.5,07,000/- M/S. HARLALKA & SONS M/S. HARLALKA & SONS M/S. HARLALKA & SONS M/S. AUTO SALES AGENCIES M/S. AUTO SALES AGENCIES M/S. AUTO SALES AGENCIES AS THE LD. COUNSEL FOR THE ASSESSEE URGED THAT QUA THE PAYMENT OF RS.5,07,000/- THE DISALLOWANCE BE DELETED. WE FIND THAT THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE IS QUITE REASONABLE AND THE DISALLOWANCE QUA THE PAYMENT OF RS.5,07,000/- SHOULD BE DELETED. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- , (MAHAVIR SINGH) JUDICIAL ME MBER ( +, +, +, +,) )) ) DATED 3RD AUGUST, 2011 -. /0 1 JD.(SR.P.S.) )* 2 ' 3)'4- COPY OF THE ORDER FORWARDED TO: 1 . %& / APPELLANT M/S. CHARU SALES AGENCY, SUKANTA NAGAR, JESSORE ROAD, 24 PGS (N). . 2 '(%& / RESPONDENT, ITO, WD-50(1), KOLKATA. . 3 . * ( )/ THE CIT(A), KOLKATA 4. * / CIT, KOLKATA 5 . ;< ' / DR, KOLKATA BENCHES, KOLKATA ( '/ TRUE COPY, )* =/ BY ORDER, 0 /ASSTT. REGISTRAR .