DCIT, Circle - 9, Kolkata, Kolkata V. C.M.S. Shipping Agency Pvt. Ltd., Kolkata

ITA 965/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78441 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 30-06-2011
• Court: TRIBUNAL
• Department Lawyers: SANJAY MUKHERJEE JDIT
• Assessee Lawyers: N O N E
• Section: 143(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , . . . . ! ! ! ! /AND ' #!' ' #!' ' #!' ' #!' , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] !$ / I.T.A NO.965/KOL/2011 #% &'/ ASSESSMENT YEAR: 2004-05 DEPUTY COMMISSIONER OF INCOME TAX, VS. C. M. S SH IPPING AGENCY PVT. LTD. CIRCLE-9, KOLKATA. (PAN: AACCC1168N) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 31.07.2014 DATE OF PRONOUNCEMENT: 31.07.2014 FOR THE APPELLANT: SHRI SANJAY MUKHERJEE, JDIT, SR. DR FOR THE RESPONDENT: N O N E / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-VIII, KOLKATA IN APPEAL NO. 156/CIT(A)-VIII/KOL/08-09 DATED 22.02.2011. ASSESS MENT WAS FRAMED BY ACIT, CIRCLE-, KOLKATA U/S. 147/144 OF THE INCOME-TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 16.10. 2008. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION OF UNDISCLOSED INCOME OF RS.30,19,888/-. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN FACT AND IN LAW IN DELETING THE ADDITION OF RS.30,19,888/- REPRESEN TING UNDISCLOSED INCOME. 3. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A FRE IGHT AND FORWARDING AGENT. THE ASSESSEES GROSS RECEIPT FROM FREIGHT FORWARDING IS AT RS.59,76,153/ - AND MISCELLANEOUS INCOME IS AT RS.9,53,828/-. THE ASSESSEE CLAIMED TDS OF RS.1,02 ,726/- ON THE TOTAL RECEIPT OF FREIGHT AND FORWARDING CHARGES AT RS.36,24,099/- IN THE RETURN OF INCOME. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THIS FACT AND ADDED THE DIFFERENTIAL OF RECEIPT I.E. RS.30,19,888/- AS AGAINST THE DECLARED RECEIPT OF RS.6,04,211/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE RECONCILIATION QU A THE RECEIPTS AND EXPENSES AS WELL AS CONSIDERING THE SUBMISSIONS AND AUDITED ACCOUNTS OF FY 2002-03 AND 2005-06 AND ACCOUNTS 2 ITA NO.965/K/2011 CMS SHIPPING AGENCY PVT. LTD. AY 04-05 RELEVANT TO THIS AY 2004-05 RELEVANT TO FY 2003-04 DELETED THE ADDITION. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE FIND THAT THE ASSESSEE HAS FULLY ACCOUNTED FO R ENTIRE RECEIPT THAT HAS BEEN DISCLOSED IN THE TDS CERTIFICATE BUT THE AO HAS MISUNDERSTOOD THE METHOD OF ACCOUNTING OF ASSESSEE. THE ASSESSEE HAS DECLARED THE FOLLOWING IN THE P&L ACCOUNT: I. FREIGHT FORWARDING INCOME - RS. 98,729 /- II) MISCELLANEOUS INCOME - RS.5,01,098/- III) DIVIDEND ON MUTUAL FUNDS - RS. 8,376/ - IV) SHORT TERM PROFIT ON MUTUAL FUND - RS. 577/- V) INTEREST INCOME - RS. 4,384/- FURTHER, THE ASSESSEE HAS FOLLOWING RECEIPTS ALONG WITH RELATED EXPENSES: HEADS NET INCOME GROSS RECEIPTS RELATED EXPENSES FREIGHT FORWARDING INCOME RS.98,729/- RS.59,76,15 3/- RS.58,77,424/- MISCELLANEOUS INCOME RS.5,01,098/- RS. 9,53,828/ - RS. 4,52,730/- WE FIND THAT THE AO HAS TAKEN ENTIRE RECEIPT AS INC OME WITHOUT CONSIDERING THE EXPENSES FOR EARNING OF THIS INCOME. GOING BY THE NATURE OF REC EIPTS, WHICH ARE MOSTLY CONTRACTUAL RECEIPTS, FROM THAT IT IS VERY CLEAR THAT THERE ARE RELATED E XPENSES ALSO. THE ASSESSEE HAS PRODUCED COPIES OF AUDITED ACCOUNTS FOR FY 2002-03 AND 2005-06 FROM WHERE IT IS NOTED THAT FOR THE AUDITED ACCOUNTS VIDE NOTE NO. 7 TO THE ACCOUNTS FOR THE FY 2002-03 AND NOTE NO. 6 TO THE ACCOUNTS FOR FY 2005-06, THE FREIGHT FORWARDING INCOME HAS B EEN CONSIDERED IN THE ACCOUNTS AS NET OF THE INCOME AND EXPENSES. SIMILARLY, FOR THE FY 2005 -06 RELEVANT TO AY 2006-07, THE AO HAS COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT VIDE O RDER DATED 25.11.2008, WHEREIN EXACTLY SIMILAR FACTS WERE THERE AND ASSESSEE HAS CLAIMED N ET OF THE RECEIPTS AFTER EXPENSES ARE REFLECTED IN THE P&L ACCOUNT, WHICH WAS ACCEPTED BY THE AO. THE ASSESSEE IS FOLLOWING THIS METHOD OF ACCOUNTING CONSISTENTLY AND ONLY IN THIS YEAR THE R EVENUE HAS TAKEN OBJECTION TO THE SAME. EVEN OTHERWISE ON MERITS, THE ASSESSEE HAS PROVED ITS CA SE AND ONCE THIS IS THE POSITION, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) DELETING THE ADDIT ION. WE CONFIRM THE SAME. APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- , . . . . , ' #!' ' #!' ' #!' ' #!' , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST JULY, 2014 -. #/0 #1 JD.(SR.P.S.) 3 ITA NO.965/K/2011 CMS SHIPPING AGENCY PVT. LTD. AY 04-05 2 +##3 43&5- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DCIT, CIRCLE-9, KOLKATA 2 +,)* / RESPONDENT C.M.S SHIPPING AGENCY PVT. LTD., 3, WO OD STREET, KOLKATA-700 016.. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:#; +# / DR, KOLKATA BENCHES, KOLKATA ,3 +#/ TRUE COPY,