Income Tax Appellate Tribunal - Kolkata
Alok Kumar Das, Hooghly vs Assessee on 19 February, 2014
आयकर अपीलीय अधीकरण, Ûयायपीठ - " A ", कोलकाता
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- "A" KOLKATA
(सम¢)Before ौी आॄाहम पी. जॉज[, लेखा सदःय एवं/and
Shri Abraham P. George, Accountant Member
ौी जॉज[ म1थान, Ûयायीक सदःय r
Shri George Mathan, Judicial Member
आयकर अपील संÉया /
ITA No. 1129/Kol/2011 A.Y 2008-09
Alok Kumar Das -वनाम- I.T.O W 1(3), Burdwan
PAN: AGVPD 2230J
Versus.
(अपीलाथȸ/APPELLANT ) (ू×यथȸ/RESPONDENT)
अपीलाथȸ के िलए / ौी/Shri Somnath Ghosh, Advocate,Ld.AR
For the Appellant
ू×यथȸ के िलए/ ौी/Shri Vivek Verma, Ld.JCIT/Sr.DR
For the Respondent:
सुनवाई कȧ तारȣख/Date of Hearing : 19-02-2014
घोषणा कȧ तारȣख/Date of Pronouncement:21-02-2014
आदे श/ORDER
ौी जॉज[ म1थान, Ûयायीक सदःय Shri George Mathan, Judicial Member ITA No. 1129/Kol/2011 is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals), Asansol in appeal no.94/CIT(A)/Asl/W-1(3)/Erst Bwn/2010-11 dated 04-08-2011 for the assessment year 2008-09. .
2. Shri Somnath Ghosh, Advocate, learned AR represented on behalf of the assessee and Shri Vivek Verma, learned JCIT/Sr.DR represented on behalf of the revenue. .
3. In the assessee's appeal in ITA No. 1129/Kol/2011 for the A.Y 2008-09, the assessee has raised the following grounds of appeal:-
I. FOR THAT the ld. Commissioner of Income Tax (Appeals) Asansol failed to appreciate that none of the conditions precedent for the assumption of jurisdiction u/s. 40A(3) of the Income Tax Act, 1961 existed and/or has been complied with and/or fulfilled in the instant case by the ld. Income Tax Officer, Ward 1(3), Burdwan and the impugned disallowance made in the sum of Rs.47,98,141/- without any infringement on that behalf is ab initio void, ultra vires and ex-facie null in law.
2. FOR THAT under the circumstances of the case, the ld.
Commissioner of Income Tax (Appeals) Asansol acted unlawfully in upholding the impugned disallowance resorted to by the ld. Income Tax Officer, Ward 1(3), Burdwan by invoking the provision of s.40A(3) of the Income Tax Act, 1961 in the sum of Rs.47,98,141/- incurred for making purchase of country spirit acting as a licencee of the Government without considering the exception contained in Rule 6DD(b) read with Rule 6DD(k) of the Income Tax Rules 1962 and his purported finding on that behalf is altogether capricious, unwarranted and erroneous.
3. FOR THAT the ld. Commissioner of Income Tax (Appeals) Asansol misread evidences, considered improper facts, failed to consider proper position in law, misplaced onus of proof and came to an erroneous finding in upholding the addition of Rs.47,98,141/- made by the ld. Income Tax Officer, Ward 1(3), Burdwan invoking the provisions of s.40A(3) of the Income Tax Act, 1961.
4.. The learned AR for the assessee has submitted that the issue was squarely covered by the decision of the co-ordinate bench of this tribunal in the case of Ashok Mondal Vs. I.T.O, W 2(2), Asansol in ITA No.873/Kol/2012 dated 06-02-2014 for the assessment year 2009-10 as also the decision of the co-ordinate bench of this tribunal in the case of M/s. Amrai Pachwai & C.S Shop Vs. DCIT, Cir-1, Durgapur in ITA No.1251/Kol/2011 dated 15-01-2014 for the assessment year 2008-09.
5. In reply, it was the submission by the learned JCIT/Sr.DR that the disallowance was made by the AO of the cash purchases by the assessee of the country liquor by applying the provisions of section 40A(3) of the Act. It was the submission that before the AO the assessee had submitted that the exception contained in Rule 6DD(a) was applicable. It was further submitted that, however, before the ld.CIT(A) the assessee had claimed that the provisions of Rule 6DD(b) of the I T Rules was applicable. It was the submission that as the payments had been made in cash in violation of the provisions of section 40A(3) of the Act, the ld.CIT(A) was right in upholding the action of the AO.
6. We have considered the rival submissions. At the outset a perusal of the submissions of the learned AR for the assessee that the assessee has raised his exception claiming under Rule 6DD(b) r.w.r 6DD(k) of the I.T Rules and the Tribunal has considered the Rule 6DD(b), would not hold water in so far as exemption provided is in Rule 6DD. The various clauses of the said Rule would have to be considered. Even other wise, the said Rule is not exhaustive. Further, a perusal of the decisions of the co- ordinate bench of this tribunal in the cases of Ashok Mondol (refer to supra) and M/s.
ITA No.1129/Kol/11-Alok Kr.Das 2Amrai Pachwai & C.S Shop (refer to supra) shows that the co-ordinate bench of this tribunal held as follows:-
"7. We have considered the rival submissions. At the outset a perusal of the decision in the case of Smt. Pushpalata Mondal shows that the Tribunal had decided the case by following the decision of Hon'ble Kerala High Court in the case of K. Abdu & Co. referred to supra wherein the issue was in relation to Rule 6DD(a) of IT Rules. The issue in the assessee's case is in respect of the payments made under the rules framed by the Government and such payment was required to be made in legal tender. A perusal of the Government Notification issued by the Govt. of West Bengal clearly shows that the dealers are agents of the Government and the payments made are to the Government. It also makes it categorically required that the payment is to be made before lifting of the country spirit. Consequently, we are of the view that the issue is squarely covered by the decision of the Coordinate Bench of this Tribunal in the case of M/s. Amrai Pachwai & C.S Shop referred to supra wherein it has been held as follows:-
.
6. We have considered the rival submissions. At the outset a perusal of the assessment order clearly shows that the AO has recognised the assessee's business in trading of country spirit and country liquor. Copy of Form of Licence issued by Durgapur Municipal Corporation and copy of Form III issued by Department of Excise, Govt. of W.B were also found at pages 177 and 179 of the assessee's paper book. In any case the validity of licence of the assessee to trade in country spirit and country liquor is not the issue before us. The issue is whether the payments made by the assessee for the purchase of country spirit from the territorial licensee bottling plant, IFB Agro Industries Ltd, City Centre, Durgapur. falls within the exemption provided under rule 6DD(b) of the I.T Rules 1962. Admittedly, the AO has recognised that the provision of Rule 6DD(b) of the I.T Rules 1962 is applicable in case of payments made to government directly. This is found in page 2 of the assessment order. A perusal of the Kolkata Gazette Tuesday dated 20th Sept 2005 shows that the Government of West Bengal, Department of Excise has issued a notification, wherein the warehouse has been identified to mean the warehouse for supply of country spirit to the retail vendors, established at convenient places by the Commissioner at the expense of the State Government, or at the expense of a person to whom the exclusive privilege of supplying or selling country spirit by wholesale has been granted u/s. 22 of the Act of a licensed wholesale vendor of country spirit. Further, it has been specifically identified that the authorised representative of the wholesale licensee shall realize the necessary amount of duty, cost price and bottling charge, if there be any, at the prescribed rate and such other imposition, as may be prescribed by law, from the retail vendor to whom the country spirit is to be issued from the concerned warehouse. It is also specifically mentioned in section (2) of the said ITA No.1129/Kol/11-Alok Kr.Das 3 notification that no retail vendor of country spirit shall deposit duty direct into the local treasury for issue of country spirit to be taken by him from the warehouse concerned, which clearly shows that the warehouse is for the supply of the country liquor, specifically, the warehouse is under the direct control and custody of the State Govt.
The State Government has closed its doors in so far as the local treasury is concerned and the payment for the purchase of country spirit or country liquor has to be made to the warehouse, run by the government. This shows that any payment made to the warehouse, which is under the direct control of the state government, is a payment made directly to the government. Once, this is accepted then the provisions of Rule 6DD(b) of the I.T Rules 1962 which clearly spells out that the payment made to the government in legal tender under the rules framed by the Government, is exempted from the rigours of section 40A(3) of the Act. Here, it is noticed that the payments made by the assessee for purchase of country spirit and country liquor is to the government as per the notification issued by the government and is in legal tender specified by the notification. In the circumstances, we are of the view that the payment made by the assessee for the purchase of country liquor and country spirit from the territorial licensee bottling plant, IFB Agro Industries Ltd, City Centre, Durgapur is protected by the exemption in terms of Rule 6DD(b) of the I.T Rules 1962. In the circumstances, the addition as made by the AO and as confirmed by the ld.CIT(A) by invoking the provisions of section 40A(3) of the I.T Act 1961 stands deleted."
6.1 As it is noticed that the issue is squarely covered by the said decisions of the co- ordinate bench of this tribunal, wherein both of us are party, respectfully following the said decisions of the co-ordinate bench of this tribunal, the finding of the ld.CIT(A) on this issue stands reversed. The grounds raised by the assessee are liable to be allowed.
7. In the result, the assessee's appeal in ITA No. 1129Kol/2011 for the assessment year 2008-09 stands allowed as stated above.
यह आदे श खुले Ûयायालय मɅ सुनाया गया है THIS ORDER IS PRONOUNCED IN OPEN COURT ON Dt 21/02/2014 Sd/- Sd/-
( आॄाहम पी. जॉज[, लेखा सदःय ) ( जॉज[ म1थान, Ûयायीक सदःय ) ( Abraham P.George, AccountantMember) ( George Mathan, Judicial Member ) (तारȣख) तारȣख)Date 21/2/2014 ** PRADIP SPS ITA No.1129/Kol/11-Alok Kr.Das 4 आदे श कȧ ूितिलǒप अमेǒषतः/ Copy of the order forwarded to:
1.. अपीलाथȸ / The Appellant : Shri Alok Kumar Das C/o Shri Somnath Ghosh, Advocate, Seven Brothers' Lodge, Chinsurah, Dist Hooghly PIN 712105 2 ू×यथȸ / The Respondent- I.T.O W 1(3) Aaykar Bhawan, Burdwan Court Compound PO & Dist Burdwan PIN 713130.
3 आयकर किमशनर/The CIT,
4..
आयकर किमशनर (अपील)/The CIT(A)
5. वभािगय ूितनीधी / DR, Kolkata Bench
6. Guard file.
स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt Registrar ITA No.1129/Kol/11-Alok Kr.Das 5