Swarup Kumar Saha, Kolkata V. JCIT, R-50, KOLKATA, Kolkata

MA 70/KOL/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4525 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 24-05-2016
• Court: TRIBUNAL

Judgement Text

1 MA NO. 70/KOL/2016 SWARUP KR. SAHA, AY: 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] M.A. NO. 70/KOL/2016 I.T.A NO.245/KOL/2016 ASSESSMENT YEAR: 2011-12 SWARUP KUMAR SAHA VS. JOINT COMMISSIONER OF INC OME-TAX, (PAN: ALGPS1418K) RANGE-50, KOLKATA ( APPLICANT ) ( RESPONDENT ) DATE OF HEARING: 15.07.2016 DATE OF PRONOUNCEMENT: 20.07.2016 FOR THE APPLICANT: SHRI K. M. ROY, FCA FOR THE RESPONDENT: SHRI RAJAT KUMAR KUREEL, J CIT, SR. DR ORDER PER SHRI M. BALAGANESH, AM: BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HAS SOUGHT FOR RECTIFICATION OF THE ORDER OF TRIBUNAL PASSED IN ITA NO. 245/KOL/2016 FOR AY 2 011-12 DATED 30.03.2016. 2. THE FIRST ISSUE IS WITH REGARD TO THE DISALLOWAN CE OF COMMISSION EXPENSES CLAIMED BY THE ASSESSEE IN THE SUM OF RS.1,20,00,000/- TO BE PAID TO THE FOLLOWING THREE PARTIES: I) MR. SUBHASH SAHU RS. 40,00,000/- II) MR. SUBRATA BISWAS RS. 40,00,000/- III) MR. SATYABRATA BISWAS RS. 40,00,000 THE ASSESSEE HAS POINTED OUT THE FOLLOWING ERRORS I N THE MISC. APPLICATION WITH REGARD TO THESE DISALLOWANCES: 1. IN PARA 3.3 OF THE ORDER IT HAS BEEN MENTIONED THAT NO EVIDENCE WAS FURNISHED TO PROVE AS TO WHETHER LETTER OF ENGAGEMENT WAS INDEED ACKNOWLEDGE D BY THOSE THREE PARTIES. BUT THE INCOME TAX RETURNS OF THESE THREE PARTIES WERE DULY CONSID ERED DURING ADJUDICATION CLEARLY PROVES THAT THEY HAVE DISCLOSED THE INCOME IN THEIR INDIVIDUAL CAPACITY. THUS WHEN THE INCOME HAS BEEN DISCLOSED, IT AUTOMATICALLY GOES TO ESTABLISH THAT LETTER OF ENGAGEMENT HAS BEEN ACTED UPON. THUS IT IS AN APPARENT MISTAKE OF FACT WHICH MAY BE KIND LY RECTIFIED UPON. THE AGREEMENT OF A/R TO THIS EFFECT WAS NOT CONSIDERED INADVERTENTLY. 2.1. WE FIND THAT THE LETTERS OF ENGAGEMENT GIVEN B Y THE ASSESSEE WERE NOT ACKNOWLEDGED BY THOSE THREE PARTIES AND NO EVIDENCE WAS FURNISHED T O PROVE THE COMPETENCY LEVEL OF THOSE THREE 2 MA NO. 70/KOL/2016 SWARUP KR. SAHA, AY: 2011-12 PARTIES FOR RENDERING LEGAL SERVICES IN CONNECTION WITH LAND ACQUISITION CASE. THIS FINDING WAS CLEARLY GIVEN IN THE ORDER OF THIS TRIBUNAL. THE L D. AR COULD NOT POINT OUT ANY APPARENT ERROR IN THE ORDER OF THE TRIBUNAL WARRANTING ANY RECTIFI CATION. HENCE, WE DECLINE TO INTERFERE IN THE SAME. ACCORDINGLY, THE GROUND NO.1 RAISED IN THE M ISC. APPLICATION IS DISMISSED. 3. THE SECOND AND THIRD GROUND RAISED IN THE MISC. APPLICATION ARE WITH REGARD TO THE DISALLOWANCE ON ACCOUNT OF SALARY PAID BY THE ASSES SEE IN THE SUM OF RS.96,50,000/-. 3.1. IT IS FOUND THAT THE ASSESSEE HAD DEBITED TOTA L SALARY OF RS.1,10,89,550/- AND OUT OF THAT A SUM OF RS.14,39,550/- HAS BEEN GRANTED RELIEF BY TH IS TRIBUNAL AND CONFIRMED THE ADDITION FOR THE REMAINING SUM OF RS.96,50,000/-. THE LD. AO OB SERVED THAT IT IS HIGHLY IMPRACTICAL THAT SALARIED EMPLOYEES WILL NOT TAKE THEIR SALARY ON MO NTHLY BASIS AND FURTHER OBSERVED THAT THE ADDRESS OF MOST OF THE EMPLOYEES TO WHOM THE ASSESS EE CLAIMED TO HAVE PAID SALARIES WERE SAME AS THAT OF THE ASSESSEE I.E. 40C/1, JESSORE RO AD, BARASAT, KOLKATA-124. THE LD. AO FURTHER OBSERVED THAT NO PF AND ESI PAYMENTS WERE M ADE BY ASSESSEE TO ITS EMPLOYEES AND THAT OUT OF 73 EMPLOYEES, PAYMENTS MADE TO 66 EMPLOYEES ARE IN THE NATURE OF LABOUR PAYMENTS, WHO WOULD NORMALLY RECEIVE PAYMENTS ON WEEKLY BASIS . THE TRIBUNAL HAD DECIDED IN PARA 4.5 AS BELOW: 4.5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LEARNED AR PLACES HEAVY RELIANCE ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT (SUPRA ) IN RESPECT OF THE AFFIDAVITS AND NOT ACTING ON TH E SAME. WE FIND THAT THE LEARNED CITA HAD REJECTED TH E AFFIDAVITS FILED BY THE WIFE AND SON OF THE ASSES SEE AS THEY WERE ONLY SELF SERVING AND DID NOT CONTAIN DATE WISE DETAILS OF PAYMENTS MADE ON BEHALF OF THE ASSESSEE. WE FIND THAT THE SAID AFFIDAVITS DID NOT EVEN CONTAIN THE BASIC FACT AS TO WHETHER THE WIFE AND SON OF THE ASSESSEE WERE ASSESSED TO INCOME TAX AND THE DETAILS OF THEIR PAN TOGETHER WITH INCOME TAX PARTICULARS WERE ABSENT CONSPICUOUSLY. WHEN A PERSO N FILES AN AFFIDAVIT STATING THAT HE / SHE HAS INCU RRED RS. 40,00,000/- ON BEHALF OF THE ASSESSEE, THEN HE / SHE SHOULD HAVE DEFINITELY INCOME ON HIS / HER OW N VOLITION SO AS TO ADVANCE THIS MUCH OF FUNDS ON BEH ALF OF THE ASSESSEE AND DEFINITELY WOULD BE ASSESSE E LIABLE TO PAY INCOME TAX. THIS GOES AGAINST THE TES T OF HUMAN PROBABILITIES. WE ALSO FIND THAT THE LEA RNED CIT(A) HAD HELD THAT THE CONTENTS IN THE AFFIDAVITS ARE FALSE, IN VIEW OF THE FACT, THAT HAD THE SALAR IES BEEN PAID BY HIS WIFE AND SON ON BEHALF OF THE ASSESSEE, THEN THE SAME SHOULD HAVE BEEN REFLECTED IN THE BO OKS OF ACCOUNTS OF THE ASSESSEE AND SALARY OUTSTANDING AS ON 31.3.2011 WOULD HAVE COME DOWN BY RS 80,00,000/- AS AGAINST RS. 96,50,000/- . .. SALARIES AMOUNTING TO RS.60,00,000/- WERE SHOWN TO BE OUTSTANDING UPTO AY 2013-14 WHICH IS VERY UNLIKELY. THE ASSESSEE HAD NOT SHOWN THE ACCO UNT OF HIS WIFE AND THE SON AS HIS CREDITORS IN HIS BOOKS. TAKING INTO ACCOUNT ALL THESE FACTS, NATURE OF ACTIVITIES OF ASSESSEE MORE 3 MA NO. 70/KOL/2016 SWARUP KR. SAHA, AY: 2011-12 ESPECIALLY THAT SALARIES WERE SHOWN AS OUTSTANDING TO THE TUNE OF RS.60 LACS EVEN AS ON 31.03.2013, IT WAS CONCLUDED THAT THE AFFIDAVITS GI VEN BY THE ASSESSEE FROM HIS WIFE AND SON AS FALSE AND THE FALSITY IN THE SAID AFFIDAVITS WERE P ROVED BEYOND DOUBT. THE INCOME TAX PARTICULARS OF WIFE AND SON WERE ALSO NOT PRODUCED IN THE AFFIDAVITS TO EXPLAIN THEIR RESPECTIVE SOURCES FOR MAKING ALLEGED PAYMENT OF SALARIES. TH E LD. AR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER PASSED BY THIS TRIBUNAL EXCEPT S TATING THAT THE PAN OF WIFE AND SON OF THE ASSESSEE WERE DULY MENTIONED IN THEIR AFFIDAVITS. WE FIND THAT THIS MISTAKE DOES NOT CHANGE THE ULTIMATE DECISION TAKEN BY THIS TRIBUNAL AS THIS IS SUE WAS DECIDED ON SEVERAL FACTORS AGAINST THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LD. AR ON THE COORDINATE BENCH DECISION OF MUMBAI TRIBUNAL IN THE CASE OF JCIT VS. GRASIM INDU STRIES LTD. IN MA NO. 247/MUM/2010 DATED 25.03.2011 IS DIRECTLY AGAINST HIM. IN THE S AID CASE IT WAS HELD AS UNDER: 28. AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL F OR THE ASSESSEE, THE POWER OF THE TRIBUNAL UNDER S. 254(2) OF THE ACT IS CONFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. THE TRIBUNAL DOES NOT HAVE INHERENT POWER OF RECTIFICATION OR RE VIEW OR REVISION. UNLESS THERE IS MISTAKE APPARENT FROM THE RECORD IN THE SENSE OF PATENT, OB VIOUS, CLEAR ERROR OR MISTAKE, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. IF THE ERROR OR M ISTAKE IS ONE WHICH COULD BE ESTABLISHED ONLY BY LONG-DRAWN ARGUMENTS OR BY WAY OF PROCESS OF INVEST IGATION AND RESEARCH, IT IS NOT A MISTAKE APPARENT FROM THE RECORD. UNLESS THERE IS MANIFEST ERRORS WHICH ARE OBVIOUS, CLEAR AND SELF EVIDENT, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS OR DER IN AN ATTEMPT TO REWRITE THE SAME. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EI THER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBUNAL CANNOT IN EXERCISE OF ITS POWER OF RECTIFICATION LOOK INTO SO ME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION. THE TRIBUNAL CANNOT RED ECIDE THE MATTER AND IT HAS NO POWER TO REVIEW ITS ORDER. THE TRIBUNAL HAS NO POWER TO RECTIFY A D ECISION ON DEBATABLE POINT OF LAW. A DECISION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FR OM THE RECORD. 29. WHERE THE TRIBUNAL HAS OVERLOOKED THE RELEVANT MATERIAL ON RECORD, THERE WOULD BE AN ERROR APPARENT FROM RECORD WHICH CAN BE RECTIFIED BY SETT ING ASIDE THE ORDER FOR FRESH CONSIDERATION. WHERE A MATERIAL FACT BROUGHT TO THE NOTICE OF THE TRIBUNAL HAS BEEN LOST SIGHT OF, THE TRIBUNAL HAS THE POWER TO RECTIFY THE MISTAKE SO COMMITTED; PROV IDED THE MATERIAL FACT HAS AN IMPORTANT BEARING ON THE ULTIMATE DECISION. THE MISTAKE POINTED OUT I N THE APPLICATION U/S.254(2) OF THE ACT BY THE REVENUE IN THE PRESENT CASE CANNOT BE SAID TO FALL IN EITHER OF THE ABOVE CATEGORIES. THE LD. DR ALSO VEHEMENTLY OBJECTED TO THE RECALLIN G OF THE ORDER AND STATED THAT THIS TRIBUNAL HAD PASSED A VERY REASONED ORDER AFTER ELABORATELY DISCUSSING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS ALSO ARGUED BY THE LD. DR THAT NO SPECIFIC ERRORS WERE PIN POINTED BY THE LD. AR IN THE ORDERS OF THIS TRIBUNAL WHICH WOULD R ADICALLY CHANGE THE DECISION MAKING PROCESS OF THE TRIBUNAL ON THE IMPUGNED ISSUES. IN VIEW OF THE AFORESAID FINDINGS AND 4 MA NO. 70/KOL/2016 SWARUP KR. SAHA, AY: 2011-12 RESPECTFULLY FOLLOWING THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF GRASIM INDUSTRIES LTD., SUPRA WE DISMISS THE MISC. APPLICATION PREFER RED BY THE ASSESSEE. 4. IN THE RESULT, MISC. APPLICATION OF ASSESSEE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.07.201 6. SD/- SD/- (S. S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED : 20TH JULY, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPLICANT SHRI SWARUP KUMAR SAHA, 40/C/1, JESSORE ROAD, BARASAT, KOL-126 2 RESPONDENT JCIT, RANGE-50, KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .