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Income Tax Appellate Tribunal, BENCH “C”, KOLKATA
Before: Hon’ble Shri M.Balaganesh, AM & Shri S.S.Viswanethra Ravi, JM]
This appeal of the revenue arises out of the order of the Learned CIT(A) in Appeal No. 281/CIT(A)-XIV/10-11 dated 16.12.2011 for the Asst Year 2008-09 passed against the order of assessment framed by the Learned AO u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
The issue to be decided in this appeal is whether there was a violation of Rule 46A of Income Tax Rules 1962 by the Learned CITA in the facts and circumstances of the case.
The brief facts of this appeal is that the assessee is a partnership firm and is acting as a clearing and forwarding agent under Customs House and Port Authorities on behalf of customers who import goods through cargo vessels and including the execution of work to deliver the goods at the customers godown if desired by the party. For this purpose, the assessee obtained customs house licence in November 2006 and before that period, the same activities were carried on by the assessee by using the licence of M/s Peter & Smith India Pvt Ltd. Similarly the assessee also had allowed M/s Cargo Partner Logistics India Pvt Ltd to use their licence from January
M/s. MPRS Logistics Care A.Yr.2008-09 2007 against consideration for professional charges. The expenses incurred in the process were ultimately recorded by the assessee by raising bills on the parties.
The Learned AO during the course of assessment proceedings found that in Form 26AS, the gross payment favouring the assessee showed a turnover of Rs. 1,13,69,076/- , against which the assessee had disclosed turnover of Rs. 57,89,273/- in its accounts. The assessee during the course of assessment proceedings explained that the amount of Rs. 55,79,803/- (1,13,69,076 - 57,89,273) was actually made by M/s Cargo Partner Logistics India (P) Ltd (CPL IPL) , the user of the assessee’s customs house licence to various third parties, other than the assessee, who had also rendered services to CPL IPL in the course of carrying out their own business of logistics support services. These payments never reached the assessee nor any income accrued or arose or deemed to accrue or arise otherwise to the assessee from such third party payments made by CPL IPL directly. However, the CPL IPL had deducted tax at source in the name of the assessee for the same. The confirmation letter of CPL IPL was filed before the Learned AO stating that CPL IPL was obligated to pay Rs. 55,79,803/- to other service providers only and not to the assessee herein. Ignoring these facts, the Learned AO added the difference sum of Rs. 55,79,803/- ( 11369076- 5789273) in the assessment. On first appeal, the Learned CITA deleted the addition made in the sum of Rs. 55,79,803/- by accepting to the contentions of the assessee and from the confirmation filed by the CPL IPL with regard to the mistake committed by it in the TDS certificate. Aggrieved, the revenue is in appeal before us on the following grounds:-
1. For that the Ld. CIT(A) erred in law as well as on facts by deleting the addition of Rs.55,79,803/- made by the AO under the head “Undisclosed Receipt by admitting and also considering Additional Evidences in contravention of Rule 46A.
2. For that the Ld. CIT(A) erred in law as well as on facts by deleting the addition of Rs.50,33,547/- made by the AO on account of “Discrepancy in the Account with M/s Cargo Partners Logistic(I) Pvt. Ltd. by admitting and also considering Additional Evidences in contravention of Rule 46A. “
M/s. MPRS Logistics Care A.Yr.2008-09 5. Shri.Pinaki Mukherjee, JCIT, the Learned DR argued on behalf of the revenue and Shri.G.Banerjee, FCA, the Learned AR argued on behalf of the assessee.
The Learned AR argued that CPL IPL had committed a mistake by including an hypothetical payment in the TDS certificate issued to the assessee though such payment never reached the assessee in as much as the assessee did never had any right to receive the said payments as they had been made to other service providers. He argued that the said payments did not crystallize as income in the hands of the assessee. In support of his argument, he also placed reliance on the confirmation furnished by CPL IPL in this regard of accepting the mistake committed by it. The entire extract of the transactions with CPL IPL has been reproduced by the Learned AR at page 4 of the assessment order which is also reproduced at page 8 of Learned CITA order. He stated that the confirmation given by CPL IPL is reproduced at Para 4.1 Page 6 of the Learned CITA order. In view of the above, the Learned AR argued that the addition made in the sum of Rs. 55,79,803/- was rightly deleted by the Learned CITA and hence it requires no interference and no fresh evidences were filed before the Learned CITA as contended by the revenue in its grounds which would advance the case of the either parties. In response to this, the Learned DR supported the ground of the revenue by stating that in para 4.2, the Learned CITA had clearly stated that the assessee had furnished the ledger copies of the third parties as per books of CPL IPL showing details of transactions entered into by the third parties with CPL IPL and these ledger copies further corroborate the fact that invoices amounting to Rs. 69,66,729/- alogn with corresponding TDS certificates for Rs. 1,78,475/- did not belong to the assessee. Hence according to Learned DR, this ledger copy was the basis of formation of an opinion by the Learned CITA in favour of the assessee which admittedly was not before the Learned AO and accordingly it is in violation of Rule 46A as no opportunity was given to the Learned AO by calling for a remand report by the Learned CITA.
We have heard the rival submissions and perused the materials available on record. We find that the Learned CITA had deleted the addition of Rs. 55,79,803/-
M/s. MPRS Logistics Care A.Yr.2008-09 based on the confirmation filed by the CPL IPL which is also part of the assessment records and a ledger copies of third parties as per books of M/s CPL IPL showing details of transactions entered into by the third parties with CPL IPL. Admittedly, no remand report was called for by the Learned CITA from the Learned AO by treating these ledger copies as an additional evidences filed before him by the assessee. We hold that the contents of these ledger copies were already clearly mentioned in the confirmation filed by CPL IPL and the entire transactions of the year have been summarized in a tabular form in the confirmation filed by CPL IPL. Hence in our opinion, the individual entries recorded in the ledger copies would not help the revenue or advance its case in any way as the contents therein are anyway produced before the Learned AO in different form. We observe that the Learned CITA had stated that these ledger copies further corroborate the fact that invoices amounting to Rs. 69,66,729/- along with corresponding TDS certificates for Rs. 1,78,475/- did not belong to the assessee, the fact of which had been reiterated earlier in the confirmation furnished before the AO and the clarification thereto furnished by CPL IPL. We also find that the Learned CITA had categorically given a finding based on the confirmation of CPL IPL that, the deductor (CPL IPL) had clarified that invoices amounting to Rs. 69,66,729/- along with TDS certificates for Rs. 1,78,475/- not belonging to MPRS Logistics Care (i.e. assessee herein) had been wrongly shown as income and corresponding TDS as that of MPRS Logistics Care in 26AS due to their (deductor’s) inadvertent mistake while issuing TDS certificates. It is pertinent to note that the following finding given by the Learned CIT(A) has not been refuted by the revenue :-
It was also established by way of reconciliation / bank statement submitted in paper book that no part of the payment reached the ‘appellant’ the fact of which was available before the AO. It was further reiterated that the ‘appellant’ never had any right to receive these income.
7.1. It is also found that the Learned AO had made an independent addition of Rs. 50,33,547/- being the mismatch in the balance of the assessee vis a vis balance reflected by CPL IPL. It is undisputed that the assessee had filed reconciliation
M/s. MPRS Logistics Care A.Yr.2008-09 statement before the Learned AO and this difference had admittedly cropped up due to decision taken by the Learned AO with regard to the first addition in the sum of Rs. 55,79,803/-. Hence we agree with the findings of the Learned CITA that the addition of Rs. 50,33,547/- does not survive in view of first addition of Rs. 55,79,803/- as it would amount to double addition. We find from the records that the Learned AO had obtained the balance outstanding from CPL IPL u/s 133(6) of the Act and the assessee had duly filed the reconciliation statement of balance outstanding clearly explaining the differences. We find that the reconciliation statement of CPL IPL filed by the assessee before the Learned AO has been rejected by the Learned AO without any cogent reasons. Hence we are not inclined to interfere with the findings given by the Learned CITA in this regard.
In view of the above, we hold that no additional evidences were filed before the Learned CITA and all the facts stated before the Learned CITA were very much available before the Learned AO and we hold that there is no violation of Rule 46A as stated by the revenue in its grounds. Accordingly, the grounds raised by the revenue are dismissed.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the court on 08.10.2015.