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Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA
Before: Shri S.S, Godara
This assessee’s appeal for assessment year 2006-07, arises against the Commissioner of Income-tax (Appeals)-9, Kolkata’s order dated 29.05.2018 passed in case No.386/CIT(A)-9/Wd-32(1)/2014-15/Kol involving proceedings u/s. 143(3) r.w.s. 254 r.w.s. 251 of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.
The assessee’s first substantive ground challenges correctness of both the lower authorities’ action disallowing 20% its cash payments exceeding of ₹20,000/- amounting to ₹2.85 lac; coming to ₹57,000/- on account of purchases made from M/s S.R. Leathers. There is no dispute that this assessee is a dealer in tanning skin latter case revenue and latter hon'ble juri ictional high court’s decision in CIT vs. CPL Tannery 318 ITR 179 (2008) (Cal) holds that cash payments in this line of leather business is covered under Rule DD(f)(ii) of the Income Tax Rules, 1962 as the ITA No.2108/Kol/2018 A.Y. 2006-07 Leather Graphica vs. ITO Wd-32(1), Kol. Page 2 payees/ suppliers had to be recognized as purchaser of hides/skin. I adopt the said detailed reasoning mutatis mutandis to delete this first disallowance of ₹57,000/-.
Next comes undisclosed income addition. Mr. Agarwal is fair enough in not pressing for this ground keeping in mind smallness of the amount involved. I decline this second substantive ground in above terms accordingly.
Next comes sec. 40(a)(ia) disallowance made of ₹3,04,122/- made in both lower proceedings. The Assessing Officer as well as CIT(A) treat assessee’s tanning charges paid to Md. Anwar and M/s R.H. Tannery to be contractual payments u/s/. 194C of the Act. There is no nexus in either in assessment order or CIT(A)’s findings that they are exceeded in earlier or written contract between assessee and these two payees. I therefore delete the impugned disallowance in this count alone.
This assessee’s appeal is partly allowed in above terms. Order pronounced in open court on 22/03/2019 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 22/03/2019 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Leather Graphica C/o Subash Agarwal & Associates Siddha Gibson, 1, Gibson Lane, Suite-213, 2nd Floor, Kolkaktg-69
""यथ"/Respondent-ITO Wd-32(1), Aayakar Bhawan, Poorba, 110, Shantipally, Kolkata-107 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, // सहायक पंजीकार आयकर अपील"य अ"धकरण, कोलकाता ।