Income Tax Appellate Tribunal - Kolkata
M/S Shreeraj Metalloys Pvt Ltd, Kolkata vs Department Of Income Tax on 18 April, 2013
आयकर अपीलीय अधीकरण, Ûयायपीठ - " सी ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "C", KOLKATA
[(सम¢) ौी के.के.गुƯा,
ा, लेखा सदःय, एवं ौी महावीर िसंह, Ûयायीक सदःय]]
[Before Hon'ble Sri K.K.Gupta, AM & Hon'ble Sri Mahavir Singh, JM]
आयकर अपील संÉया /ITA No.1645/Kol/2012
िनधॉरण वषॅ/Assessment Year : 2008-09
(अपीलाथȸ/APPELLANT ) -वनाम- (ू×यथȸ/RESPONDENT)
I.T.O., Ward-3(2) M/s. Shreeraj Metalloys Pvt. Ltd.
Kolkata . -versus- Kolkata
(PAN : AAECS 5538 C)
बास आपǒƣ/C.O.No.150/Kol/2012
आयकर अपील संÉया /A/o ITA No.1645/Kol/2012
िनधॉरण वषॅ/Assessment Year : 2008-09
(अपीलाथȸ/APPELLANT ) -वनाम- (ू×यथȸ/RESPONDENT)
M/s.Shreeraj Metalloys Pvt. Ltd. I.T.O., Ward-3(2),
Kolkata. -versus- Kolkata
(PAN : AAECS 5538 C)
अपीलाथȸ कȧ ओर से/ For the Department Shri L.K.S.Dehiya,
CIT(DR)
ू×यथȸ कȧ ओर से/For the Assessee Shri A.K.Tibrewal, FCA
सुनवाई कȧ तारȣख/Date of Hearing : 18.04.2013
घोषणा कȧ तारȣख/Date of Pronouncement : 19.04.2013.
आदे श/ORDER
Per Shri K.K.Gupta, AM
The Revenue is in appeal on the sole issue that the ld. CIT(A) deleted a sum of Rs.1,93,09,500/- brought to tax by the AO as undisclosed income of the impugned assessment year in the business of the assessee in disguise as advance taken form M/s Delhi Iron and Steel Co. The Revenue also agitated the deletion of addition of Rs.14,24,621/- considered by the AO under the provision of section 40(a)(ia) of the IT Act. The Cross Objection preferred by the assessee respondent supported the order of the ld. CIT(A) on merit deletions but has also objected to the ld. CIT(A) upholding the re-assessment proceedings initiated under the provision of section 147/148 of the Act, ITA No.1645/Kol/2012& C.O.150/Kol/2012 2 valid. At the outset the ld. Counsel for the assessee respondent has preferred to withdraw this cross objection as not pressed which is dismissed as not pressed.
2. The brief facts as have been brought on record and noted by the authorities below are that the assessee had filed return of income at nil which was scrutinized under the provision of section 144/147 of the Act when during the assessment proceedings the AO required the assessee to explain the amount outstanding in the name of M/s. Delhi Iron and Steel Company which had increased from Rs.8,01,000/- as on 31st March, 2007 to Rs.1,67,29,398/- as on 31st March, 2008. It was submitted that the assessee was having a regular transactions with the said company when the sales are made against the advance receipt are rendered to tax by the assessee on dealing with M/s. Delhi Iron and Steel Co. as a trader. However, declining the contention of the assessee, the AO held that mere payments by cheque does not indicate that the advance was under the guise of sales brought to tax the same. He also considered the payments to M/s. J.C.Bose and Sons on account of container charges amounting to Rs.14,24,621/- not subjected to TDS u/s 194C of the Act disallowed the same u/s 40(a)(ia) of the Act. Aggrieved the assessee preferred an appeal before the First Appellate Authority, who considered the case of the assessee on both the accounts after deliberating the case with respect to validity of re-assessment u/s 147 of the Act agitating the merit of additions/disallowances in the case of the assesee by deleting the same.
3. We have heard the rival contentions and the respective parties hereto have supported the order of the ld. CIT(A) as well as AO on their part. The ld. CIT(A) on the issue of advance receipt from M/s. Delhi Iron and Steel Co. found out that the assessee was dealing with the said company by making sales to which the ledger copy has been furnished indicating that the advance have been received by way of cheque and sales have been made in the impugned assessment year were accounted for as the difference amount as on 31st March, 2008 amounting to Rs.1,93,09,500/- was to be considered against the sale in the subsequent year. Therefore, it was not the case of the AO to hold the transactions taxable u/s 68 of the Act, in so far as M/s. Delhi Iron and Steel Co. was a debtor who had paid advance in accordance with the terms of ITA No.1645/Kol/2012& C.O.150/Kol/2012 3 business when the purchases were made by it from the assessee. Having established the identity, genuineness and creditworthiness of the third party the ld. CIT(A) held that the provision of section 68 of the Act were not applicable in the case of the assessee. On the issue of disallowance u/s 40(a)(ia) of the Act the ld. CIT(A)observed that the amount had already been paid and nothing was distinguished and in view of the Special Bench decision by ITAT in the case of Merlyn Shipping& Transproters in ITA NO.477/Vizag/2008 held that the same cannot be considered for re-assessment u/s 147/148 of the Act in so far as, he categorically observed that these two additions or disallowances were not the subject matter for reasons recorded u/s 148(2) of the Act. He also placed reliance on the decision of Bombay High Court in the case of Jet Airways Ltd. reported in 331 ITR 236 (Bom) and the decision of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs CIT 336 ITR 136 (Delhi) in compliance to deletion of the said decision. It has been submitted that the Special Bench decision viz. Merilyn Shipping & Transporters has been considered by the Hon'ble Jurisdictional High Court which decision is to be reported. In view thereof we restore this issue to the file of the ld. AO for reconsideration and to give effect as per their direction. This ground is considered allowed for statistical purposes.
4. As mentioned above, the ld. DR has supported the order of the AO and the ld. Counsel for the assessee respondent has supported the order of the ld. CIT(A). The ld. CIT(A)'s order suffers from no infirmity on the first issue. The Cross Objection by the assessee is not pressed is dismissed as withdrawn.
5. In the result the appeal of the Revenue is partly allowed and the Cross Objection of the assessee is dismissed.
Order pronounced in the court on 19.04.2013.
Sd/- Sd/-
[ौी.महावीर िसंह, Ûयायीक सदःय ] [ौी के.के.गुƯा,, लेखा सदःय]
[Mahavir Singh ] [K.K.Gupta]
Judicial Member Accountant Member
(तारȣख)
तारȣख)Date: 19.04.2013.
R.G.(.P.S.)
ITA No.1645/Kol/2012& C.O.150/Kol/2012 4
आदे श कȧ ूितिलǒप अमेǒषतः-
Copy of the order forwarded to:
1. M/s. Shreeraj Metalloys Pvt. Ltd., 48-D, Muktaram Babu Street, Kolkata-700007.
2 I.T.O., Ward-3(2), Kolkata.
3. CIT Kolkata 4. CIT(A)-I, Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.
स×याǒपत ूित/True Copy, आदे शानुसार/ By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches