DIBYENDU MAJHI,HOWRAH vs. I.T.O.,WARD-47(4), KOLKATA

आदेश / ORDER The captioned two appeals have been preferred by the assessee against the separate orders both dated 12.09.2018 of the Commissioner of Income Tax (Appeals)-14, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. We first take assessee’s appeal ITA No.929/Kol/2019. The assessee in this appeal has taken the following revised grounds of appeal: “1. That the appellant had preferred the instant appeal being aggrieved by the appellate order passed by the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata who was pleased to dismiss the appeal upholding &930/Kol/2019 Assessment Years: 2013-14 & 2015-16 Dibyendu Majhi

, enclosed along with the Memorandum of appeal in Form No. 36, are not in conformity with Rule 11 of the Income Tax Appellate Tribunal Rules, 1963 and as such, they require modification for adjudication of the appeal. The Modified Grounds of Appeal, which are independent of each other, are as follows.

1. FOR THAT on the facts and in the circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata acted unlawfully in upholding the impugned disallowances to the extent of Rs.1.20,000/- in respect of expense claimed under "Managing Contractor Commission by the Ld. Income Tax Officer, Ward 47(4), Kolkata by wrongly invoking the provisions of s. 40(a)(ia) read with s. 194C of the Income Tax Act, 1961 and the alleged finding on that behalf is wholly illegal, illegitimate, and infirm in law.

2. FOR THAT on a true and proper interpretation of the scope and ambit of the provisions of s. 69 of the Income Tax Act, 1961, the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata was absolutely in error in upholding the action of the Ld. Income Tax Officer, Ward 47(4), Kolkata in resorting to the impugned addition of Rs.14,20,582/- alleging inflated purchase to that extent without satisfying the conditions precedent therefor and such specious conclusion reached on that behalf is completely unfounded, unjustified, and untenable in law.

3. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata acted unlawfully in not considering that the purported addition in the amount of Rs.14,20,582/- on account of inflated purchase made by the Ld. Income Tax Officer, Ward 47(4), Kolkata was duly explained and the alleged finding on that issue is wholly arbitrary, unwarranted, and perverse.

3. That the aforesaid grounds may please be entertained for adjudication in place and stead of the grounds annexed to the Memorandum of Appeal in Form No. 36.

4. That the appellant has strong prima facie case. The balance of convenience strongly favours the appellant in passing an order of admission of the modified grounds. The appellant will suffer irreparable injury if the prayer is refused.”

&930/Kol/2019 Assessment Years: 2013-14 & 2015-16 Dibyendu Majhi

two issues arise for adjudication. The first issue is regarding the disallowance of salary expenses to manager which was booked under the heading ‘managing contractor commission’.

4. The ld. Counsel for the assessee has submitted that the assessee is running liquor shop and that the assessee has appointed a manager to look after the affairs of the shop. However, the lower authorities have disallowed the amount of Rs.1,20,000/- paid as salary to the manager only because the nomenclature of the past was mentioned as ‘manager contractor commission’. However, there is no fact on the file that the assessee had not employed that manager.

5. It is a commonly known fact that in a type of business of liquor shop, the contractors have to appoint some persons not only to manage affairs but also to avoid any type of quarrel or dispute with the alcohol consumers. In view of this, I do not find any justification on the part of the lower authorities in making the impugned disallowance to salary paid to the said manager. The same is ordered to be deleted.

6. Vide Ground No.2, the assessee has contested the action of the Assessing Officer in making disallowance of purchases.

7. The ld. Counsel for the assessee has submitted that the assessee had made purchases during the year from various parties and total purchases of the assessee were more than 4 crores. However, the Assessing Officer doubted the purchases in respect of four parties amounting to Rs.14,20,582/- on the ground that the assessee could not produce the relevant bills etc. &930/Kol/2019 Assessment Years: 2013-14 & 2015-16 Dibyendu Majhi However, during the appellate proceedings, the assessee produced bills, whereupon, a remand report was called upon by the CIT(A) from the Assessing Officer. During the remand proceedings, the Assessing Officer accepted the purchases in respect of two parties. However, he did not get satisfied in respect of other two parties. However, the ld. CIT(A) confirmed the addition made by the Assessing Officer in respect of all the four parties.

8. Before this Tribunal, the ld. Counsel for the assessee has submitted that since the Assessing Officer had accepted the evidences furnished by the assessee in respect of two parties, the ld. CIT(A) was not justified in making the addition in respect of two parties. He has further submitted that in respect of third party, the entire purchases were made through banking channel, there is no question of doubting the purchases. That in respect of only one party, the purchases were made in cash. However, since the aforesaid two parties did not respond to the notices issued u/s 133(6) of the Act, the Assessing Officer added the said purchases. The ld. Counsel, in this respect, has submitted that the sales have not been doubted by the Assessing Officer and all the purchases and sales have been duly recorded. Even the books of account have not been rejected by the Assessing Officer.

9. Considering the overall facts and circumstances of the case and also considering that in two cases, the Assessing Officer has accepted the purchases and further in one case, the entire purchases were made through banking channel and the sales have not been doubted and even books of account have not been rejected. I do not find justification on the part of the CIT(A) to confirm the impugned disallowance and the same is accordingly ordered to be deleted. &930/Kol/2019 Assessment Years: 2013-14 & 2015-16 Dibyendu Majhi

10. Ground No.3 is general in nature and does not require any adjudication.

“1. That the appellant had preferred the instant appeal being aggrieved by the appellate order passed by the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata who was pleased to dismiss the appeal upholding the specious additions made by the Ld. Income Tax Officer, Ward 47(4), Kolkata under two independent heads. 2. That the Grounds of Appeal

, enclosed along with the Memorandum of appeal in Form No. 36, are not in conformity with Rule 11 of the Income Tax Appellate Tribunal Rules, 1963 and as such, they require modification for adjudication of the appeal. The Modified Grounds of Appeal, which are independent of each other, are as follows.

1. FOR THAT on a true and proper interpretation of the scope and ambit of the provisions of s. 69 of the Income Tax Act, 1961, the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata was absolutely in error in upholding the action of the Ld. Income Tax Officer, Ward 47(4), Kolkata in resorting to the impugned addition of Rs.9,18,655/- alleging net profit earned from unaccounted purchase to that extent without satisfying the conditions precedent therefor and such specious conclusion reached on that behalf is completely unfounded, unjustified, and untenable in law.

2. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata acted unlawfully in not considering that the purported addition in the amount of Rs.9,18,655/- on account of net profit earned from unaccounted purchase made by the Ld. Income Tax Officer, Ward 47(4), Kolkata was duly explained and the alleged finding on that issue is wholly arbitrary, unwarranted, and perverse.

3. FOR THAT on the facts and in the circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-14, Kolkata acted unlawfully in upholding the impugned disallowance in the sum of Rs. 1,20,000/- in respect of expense claimed under "Managing Salary" by the Ld. Income Tax Officer, Ward 47(4), &930/Kol/2019 Assessment Years: 2013-14 & 2015-16 Dibyendu Majhi Kolkata under a wrong prognosis and the alleged finding on that behalf is wholly illegal, illegitimate, and infirm in law.

3. That the aforesaid grounds may please be entertained for adjudication in place and stead of the grounds annexed to the Memorandum of Appeal in Form No. 36.

4. That the appellant has strong prima facie case. The balance of convenience strongly favours the appellant in passing an order of admission of the modified grounds. The appellant will suffer irreparable injury if the prayer is refused.”