M/S TOPSI KENDA C. S. SHOP,BURDWAN vs. ITO, WD-1(3), ASANSOL, ASANSOL

PDF · subscribers
ITA 419/KOL/2014Status: DisposedITAT Kolkata13 January 2017AY 2008-20094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal. It held that if the cash payments were made by depositing directly into the bank account of M/s Asansol Bottling & Packaging Co. Pvt. Ltd. as per the West Bengal Excise Rules, then an exemption under Rule 6DD(b) should be granted.

What were the facts?

The assessee's appeal was filed late due to the assessee suffering from a viral infection. The main issue was the disallowance of expenses under Section 40A(3) for cash payments made for country spirit purchases.

What were the issues?

Whether cash payments for country spirit purchases, made by depositing into the bank account of the bottling firm as per excise rules, are eligible for exemption under Rule 6DD(b) to avoid disallowance under Section 40A(3).

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Kolkata Bench, KOLKATA

Before: SRI ABY T.VARKEY & DR. A.L. SAINI

Hearing: 05.01.2017

ORDER Per Aby T.Varkey, JM

This is an appeal preferred by the assessee against the order of CIT(A, Asansol dated 25.11.2013 for AY 2008-09.

2.

We note that the appeal is time barred by 31 days. We have perused the affidavit of the assessee stating the reason for non-filing of the appeal on time. From the contents of the affidavit it is discerned that the assessee was down with viral infection and high temperature, so he was bed ridden for more than one month from 03.02.2014 to 26.02.2014. Therefore, he could not attend his business nor meet his lawyer and sent the appeal papers to the concerned AR to 2 M/s. Topsi Kenda C.S. Shop A.Yr.2008-09 file the appeal before the Tribunal. So, therefore, the delay was caused in filing the appeal on time. The Ld. AR also prayed that for reasons stated in the affidavit the delay may be condoned. The Ld. DR does not have any objection as such in condoning the delay. In light of the facts which prevented the assessee from filing the affidavit on time, we are inclined to condone the delay and proceed to hear the appeal on merits.

3.

The main grievance of the assessee is against the confirmation of addition of Rs. 61,00,991/- u/s 40A (3) of the Income Tax Act (hereinafter referred to as the “Act”), by stating that the said payments are covered by the exception prescribed under Rule 6DD of the Income Tax Rules, 1962. At the outset itself the Ld. Counsel for the assessee stated that this issue which is before us has been covered in favor of the assessee by several orders of the Tribunal and took our attention to few orders also.

4.

We have heard both the parties and perused the records. We take note that the assessee is a retail vendor of country spirit, other than that there is no mention about how the business activity is conducted or how the assessee makes the payment etc. is deciphered from the orders of the authorities below. The Ld. AR has submitted before us that the assessee is a retail vendor of country spirit and the assessee i.e. the retail vendor had made cash payments for purchase of country spirit by depositing cash directly in the bank account of M/s Asansol Bottling & Packaging Co. Pvt. Ltd. (M/s ABPL) which is the bottling firm and is the warehouse within the meaning of Rule 2(vii) of the West Bengal Excise (Supply of Country Spirit on Payment of Duty) Rules 2005 (hereinafter referred to as the “Rules”). It was explained before us by the Ld. AR that the payment of cash is made by the assessee (retail vendor) by depositing cash directly in the bank account of M/s M/s ABPL as per Rule 6(2) of the Rules. In case if the assessee (retail vendor) is making cash payment for purchase of country spirit directly into 2

3 M/s. Topsi Kenda C.S. Shop A.Yr.2008-09 the bank account of M/s ABPL as per Rule 6(2) of the Excise Rules, 2005 then the Tribunal order in ITA No. 148/Kol/2015 and 185 & 186/Kol/ A.Y. 2007-08 & 2010- 11 respectively will come in aid of the assessee because in these cases it has been held by the Tribunal that if such payment has been made as per Rule 6(2) to the bank account of M/s ABPL which is a warehouse within the meaning of Rule 2(vii) of the West Bengal Excise Rules 2005, and so is a State Government establishment which is controlled by the Excise Commissioner and resultantly the payment made in cash to it will attract the exemption provided in Rule 6DD(b) of the Income Tax Rules, 1962. 5. in such a scenario we set aside the order of the Ld. CIT(A) and remand the matter back to the file of the AO to verify as to whether the contentions as aforestated by the Ld. AR is correct and if it is found to be true then the cash payment made by the assessee which is done by depositing money into the bank account of M/s ABPL, then exemption should be granted to the assessee under Income Tax Rule 6DD(b) and so disallowance under 40A (3) of the Act should not be made against the assessee. With the aforesaid observation and direction we remand the matter back to the file of the AO to decide this issue afresh after hearing the assessee.

6.

In the result the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the Court on 13.01.2017

More judgments on Section 40A(3)

All 3,278 judgments and leading authorities on Section 40A(3) →

Recent GST High Court judgments

Search GST case law →