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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA
Before: Shri J.Sudhakar Reddy, AM ]
ORDER This appeal by the Assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals)-6, Kolkata [ in short the ld CITA] dated 22.02.2017 against the order passed by the ITO, Ward-2(4), Hooghly [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 21.03.2014 for the Assessment Year 2011-12.
The assessee is an AOP and in the business of selling of foreign liquor. He filed his return of income electronically for the assessment year 2011-12 on 31.03.2012 declaring total income of Rs. 8,27,568/-. The Assessing Officer passed an order u/s 143(3) of the Act on 21.03.2014 determining taxable income of Rs. 13,55,570/-, inter alia, making an addition of Rs. 1,74,000/- and 3,54,000/-
Arambagh Foreign Liquor A.Yr.2011-12 u/s 40A(3) of the Act. On appeal, the First Appellate Authority confirmed the addition made by the assessee. Further the assessee is in appeal before us.
Information was called by the Assessing Officer u/s 133(6) of the Act, and it was found that the assessee made cash payments in aggregate to the tune of Rs. 1,74,000/- to VTR Marketing, Johal & Co. (Wine Sales) Pvt. Ltd., R.G. Shaw & Sons Pvt. Ltd. and Ultra Trades and Holding Co. Pvt. Ltd. on various occasions in violation of Section 40A(3) of the Act. It was found that payments made through demand drafts aggregating to Rs. 3,54,000/- to M/s United Spirits, R.G. Shaw, United Trading and United Wines, were not included in the statement of M/s Allahabad Bank.
The assessee submitted that the modus operandi of the transaction with the supplier was that, the supplier engaged a person, who on their behalf delivers the goods to the premises of the assessee along with several other establishments in the same locality and also collects payments from these establishments and hands over there proceeds to the suppliers. It was submitted that this person who acts on behalf of the suppliers approaches the assessee for payment at odd times at night after sales are made and if the entire payment is not made then again he visits the assessee on the next day to collect the balance installment. The case of the assessee is that, each of the payments made by it to this agent of the supplier is below Rs. 20,000/- at a time and this person, deposits sale proceeds collected by him in a lumpsum amount to the suppliers, and this supplier records of such receipt as such. The assessee submits that there is no violation of provision of Section 40A(3) of the Act. From his side and that the recording in his books have to be accepted as correct. We find that all these cases, the genuineness of 2
Arambagh Foreign Liquor A.Yr.2011-12 the transaction has not been disputed by the Assessing Officer. Similarly, in the cases where the payments were made by demand drafts to United Spirits, R.G. Shaw Sons and United Trading. The addition in there three cases have been made solely on the ground that, these demand drafts were not account payee. Here also the genuineness of the transaction was not doubted. The assessee has filed and explanation which is a possible explanation and this has not been contoverted by the ld. DR. I find that the facts of the case are identical to the facts in the case of Jugal Kishore Das in dated 13.09.2017, wherein the Tribunal has followed the decision of the ITAT, Kolkata in the case of Excel Engineers Kolkata “A” Bench in I.T.A. No. 1588/Kol/2013 dated 25.112016 and upheld the contention of the assessee. Respectfully following the binding decision of the Co-ordinate division Bench, I delete the disallowance made u/s 40A(3) of the Act and allow this appeal of the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 20.12.2017