M/s. Adhunik Infrastructure (P) Ltd., Kolkata V. ACIT, Central Circle - 3(3), Kolkata, Kolkata

ITSSA 47/KOL/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3862 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 29-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: M D SHAH
• Section: 143(3); 153A; 37(1); 37

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER IT(SS) NO. 47 / KOL / 20 17 ASSESSMENT YEAR :2014-15 M/S. ADHUNIK INFRASTRUCTURE (P) LTD., KAMALAYA CENTRE, UNIT 307 & 308, 156A, LENIN SARANI, KOLKATA 700 013. [ PAN: AADCA 1315 L ] V/S . ACIT, CENTRAL CIRCLE- 3(3), 110, SHANTI PALLY, AAYAKAR BHAWAN POORVA, 4 TH FLOOR, KOLKATA 700 107. /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI M.D. SHAH, AR /BY RESPONDENT SHRI P.K. SRIHARI, CIT(DR) /DATE OF HEARING 09-07-2018 /DATE OF PRONOUNCEMENT 18-07-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS) 21, KOLKATAS ORDER DATED 29.01.2017 PASSED IN CASE NO. 11012(E.F)/DCIT, CC-3(3)/CIT(A) 21/KOL/2016-17, UPHOLDING ASSESSING OFFICERS ACTION DISALLOWING ITS PAYMENTS MADE TO HUF M/S. CHANDRA KUMAR SATYAM SUREKA UNDER SECTION 37(1) R.W.S. 40A(2)(B) IN ASSESSMENT ORDER DATED 30.12.2016 INVOLVING PROCEEDINGS UNDER SECTION 153A READ WITH SECTION 143(3) OF INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THERE IS NO DISPUTE ABOUT THE RELEVANT BASIC FACT THAT THE IMPUGNED ASSESSMENT HAS EMANATED FROM THE SEARCH IN QUESTION DATED 17 TH AND 18 TH IT(SS) NO. 47/KOL/2017 A.Y. 2014-15 M/S. ADHUNIK INFRASTRUCTURE (P) LTD. VS. ACIT CIR-3(3), KOL. PAGE 2 DECEMBER, 2014 CONDUCTED IN M/S. ADHUNIK INFRASTRUCTURE (P) LTD. GROUP OF CASES. THE SAME CULMINATED INTO INITIATION OF SECTION 153A PROCEEDINGS. THE ASSESSING OFFICER THEREAFTER NOTICED THE ASSESSEE TO HAVE PAID THE IMPUGNED SUM OF 7,20,000/- TO THE PAYEE HUF NAMELY M/S. CHANDRA KUMAR SATYAM SUREKA IN LIEU OF MANAGERIAL REMUNERATION AND MEETING FEE. IT HAS ALSO INCURRED IDENTICAL EXPENDITURE OF 6,00,000/- IN CASE OF SHRI CHANDRA KUMAR SUREKA INDIVIDUAL UNDER THE SAME HEAD(S). THE ASSESSING OFFICER DISALLOWED THE ABOVE FORMER CLAIM ON THE GROUND THAT IT WAS THE HUF WHO IS KARTA HAS PERFORMED ALL MANAGERIAL WORK AND THEREFORE, INCOME OF THE KARTA IS NOT HUFS INCOME. HE ADOPTED THE VERY REASONING TO DISALLOW THE ASSESSEES CLAIM OF 7,20,000/- AS UPHELD DURING THE COURSE OF LOWER APPELLATE PROCEEDINGS. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. BOTH THE LOWER AUTHORITIES ARE OF THE VIEW THAT AN HUF CANNOT PERFORM SUCH TYPE OF MANAGERIAL OR MEETING SERVICES WHICH COULD MAKE THE CORRESPONDING EXPENDITURE TO BE ALLOWABLE UNDER SECTION 37 READ WITH SECTION 40A(2)(B) OF THE ACT. WE FIND NO MERIT IN THIS PRECISE REASON. THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN ASSESSEES CASE ITSELF ITA 503/KOL/2007 FOR A.Y. 2003-04 DECIDED ON 06.07.2007 HAS ALREADY DELETED THE SIMILAR DISALLOWANCE IN CASE OF THE VERY PAYEE WHEREIN THE LLOWER AUTHORITIES HAD ADOPTED THE SAME REASONING THAT A KARTA CANNOT PERFORM SUCH SERVICES. THERE IS NO DISTINCTION ON FACTS INDICATED AT THE REVENUES BEHEST. WE THEREFORE DIRECT THE ASSESSING OFFICER TO DELETE IMPUGNED DISALLOWANCE. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 18/07/2018 SD/- SD/- ( ) ( ) (A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, BISWAJIT, SR.P.S - 18 / 07 /201 8 IT(SS) NO. 47/KOL/2017 A.Y. 2014-15 M/S. ADHUNIK INFRASTRUCTURE (P) LTD. VS. ACIT CIR-3(3), KOL. PAGE 3 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S. ADHUNIK INFRASTRUCTURE (P) LTD., KAMALAYA CENTRE, UNIT 307 & 308, 156A, LENIN SARANI, KOLKATA 700 013. 2. /RESPONDENT-ACIT, CENTRAL CIRCLE-3(3), AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, 4 TH FLOOR, KOLKATA 700 107. 3. / CONCERNED CIT KOLKATA 4. - / CIT (A) KOLKATA (SENT THROUGH E-MAIL) 5. , , / DR, ITAT, KOLKATA (SENT E-MAIL) 6. [ / GUARD FILE. BY ORDER/ , SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO ,