Sisir Kumar Chakraborty (Choudhury) v. Income-tax Officer, Wd-3(1), Asansol
[Citation -2016-LL-1021-222]

Citation 2016-LL-1021-222
Appellant Name Sisir Kumar Chakraborty (Choudhury)
Respondent Name Income-tax Officer, Wd-3(1), Asansol
Court ITAT-Kolkata
Relevant Act Income-tax
Date of Order 21/10/2016
Assessment Year 2008-09
Judgment View Judgment
Keyword Tags opportunity of being heard • reasonable opportunity • excise department • service of notice • state government • payment in cash • prescribed rate • country liquor • excise duty • cost price • plant
Bot Summary: The Assessment Officer relying on a decision of Hon ble Kerala High Court in K.Abdu Co. vs. Income Tax Officer 2008 170 Taxman 297 observed that the Rule 6DD of the Rules applies only for payments to the institutions referred to therein and not for payments made to any party s account maintained in the institutions referred to therein. 40A(3) of the Act, 1961, when the payments made as per procedure laid down under the West Bengal Excise Rules, 2005, is covered by exception to Rule 6DD of the Income Tax Rules 62, and as such the addition may please be deleted. In Rule 2(vii) of the West Bengal Excise Rules, 2005 the warehouse was defined and in section 22 of the West Bengal Excise Act exclusive privilege of manufacture and sale of country liquor was granted to such bottling plant. In Rule 6DD(b) of the Income Tax rules, it is stated that where the payment is made to the Government and under the rules framed by it such payment is required to be made in legal tender and also to Rule 6DD(k) of the Rules which states that where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person. In M/s. Amrai Pachai C.S. Shop, ITA No. 1251/Kol/2011 dated 15.01.2014 a coordinate bench of this Tribunal on a comprehensive consideration of Rule 6(2) of the Rules under notification issued in Calcutta Gazette, Tuesday 20th September, 2005 and 6DD(b) of the I. T. Rules held that the payments made by the assessee to the wholesale licensee for purchase of country spirit are protected by exemption in terms of rule 6DD(b) of the I. T. Rules. Further in a decision of a Coordinate Bench of this Tribunal in Ramnagar Pachwai C.S.(S) Shop, in ITA No. 148/Kol/2015 this Tribunal considered similar set of facts with reference to Rule 2(vii) of the West Bengal Excise Rules section 22 of the West Bengal Excise Act, Rule 6DD(b) and Rule 6DD(k) of the I. T. Rules in the light of the observations of this Tribunal in Amrai Pachai C.S. Shop, supra and came to the conclusion that the case of assessee in that case falls under the exception provided in Rule 6DD(b) and Rule 6DD(k) of I. T. Rules and the disallowance made u/s. In the absence of such evidence it is not possible for us to reach any conclusion to the effect that the case of the assessee is covered under Rule 6DD(b) of the Rules.


ITA No. 254/Kol/2014 Sisir Kr. Chakraborty(Choudhury), AY 2008-09 IN INCOME TAX APPELLATE TRIBUNAL BENCH: KOLKATA [Before Shri Waseem Ahmed, AM & Shri K. Narasimha Chary, JM] I.T.A No. 254/Kol/2014 Assessment Year: 2008-09 Sisir Kumar Chakraborty (Choudhury) Vs. Income-tax Officer, Wd-3(1), Asansol (PAN: ACSPC7768H) (Appellant) (Respondent) Date of hearing: 05.10.2016 Date of pronouncement: 21.10.2016 For Appellant: None For Respondent: Shri Anand Kr. Singh, JCIT ORDER Per Shri K. Narasimha Chary, JM: This appeal by assessee is arising out of order of CIT(A), Asansol vide Appeal No. 117/CIT(A)/Asl/W-1(3)/Asl/10-11 dated 25.11.2013. Assessment was framed by ITO, Wd- 1(3), Asansol u/s. 143(3) of Income-tax Act, 1961 (hereinafter referred to as Act ) for AY 2008-09 vide his order dated 25.10.2010. 2. Brief facts of this case are that assessee is seller of country spirit. For Assessment Year 2008-09, he filed return of income on 3.10.2008 declaring total income of Rs. 1,92,420/-. During relevant year, assessee was found to have made purchases from Bottling Plant. Ld. AO made enquiries u/s. 133(6) of Act and basing on reply received from Bottling plant people, he found that payment for purchases worth Rs.71,11,297/- was made in cash in excess of Rs. 20,000/- each. It was submitted before Assessment Officer that such payments do not attract provisions under section 40A(3) of Act, in view of provisions under Rule 6DD(a) of Income Tax Rules. However, Assessment Officer relying on decision of Hon ble Kerala High Court in K.Abdu & Co. vs. Income Tax Officer [2008] 170 Taxman 297 (Ker) observed that Rule 6DD (a) of Rules applies only for payments to institutions referred to therein and not for payments made to any party s account maintained in institutions referred to therein. Challenging such findings, assessee carried matter in appeal before Ld. CIT(A). 2 ITA No. 254/Kol/2014 Sisir Kr. Chakraborty(Choudhury), AY 2008-09 2. It was argued before learned CIT(Appeals) that payments are made pursuant to provisions of West Bengal Excise (Supply of Country Spirit on Payment of Duty) Rules, 2005 as such Rule 6DD(b) applies to this case. Learned CIT(Appeals) by way of impugned order, dismissed appeal holding that in West Bengal Excise (Supply of Country Spirit on Payment of Duty) Rules, 2005 there is no mandate for purchaser or agent to make payment by way cash. 3. Challenging said findings of Ld. CIT(A), AO filed this appeal before Tribunal on following grounds: 1. For that on facts of case Ld. CIT(A), Asansol, was not legally justified in sustaining addition of Rs.71,80,697/- u/s. 40A(3) of Act, 1961, when payments made as per procedure laid down under West Bengal Excise (Supply of country spirit on Payment of Duty) Rules, 2005, is covered by exception to Rule 6DD of Income Tax Rules 62, and as such addition may please be deleted. 4. In spite of service of notice and granting opportunities, assessee did not enter appearance either in person or through authorized Representative. Hence, we shall proceed with matter to determine issue with reference to material available on record and hearing learned DR. 5. There is no dispute that assessee is retail vendor of country liquor which is excisable commodity. sales and purchases country liquor are controlled by State Government and earlier retail sellers used to deposit cost price, excise duty, bottling charges etc. in treasury but subsequently Excise Department by way of Notification dated 29.08.2005 changed procedure. We have gone through such Rules. As per this procedure vide clause 6(2) no retail vendor of country spirit shall deposit duty directly into local treasury for issue of country spirit to be taken by him from warehouse concerned, but duty, cost price, bottling charge, if there be any, at prescribed rate and other imposition, as may be prescribed by law, shall be paid by retail vendor to credit of wholesale licensee concerned. assessee claims that payments were made under these Rules, to Bottling plant appointed by State Government by way of notification to be wholesale licensee for collecting cost price, excise duty, bottling charges etc. However, no such notification is available before us to sustain this statement of assessee that there is any such appointment. 3 ITA No. 254/Kol/2014 Sisir Kr. Chakraborty(Choudhury), AY 2008-09 6. In Rule 2(vii) of West Bengal Excise Rules, 2005 warehouse was defined and in section 22 of West Bengal Excise Act exclusive privilege of manufacture and sale of country liquor was granted to such bottling plant. In Rule 6DD(b) of Income Tax rules, it is stated that where payment is made to Government and under rules framed by it such payment is required to be made in legal tender and also to Rule 6DD(k) of Rules which states that where payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person. In M/s. Amrai Pachai & C.S. Shop, ITA No. 1251/Kol/2011 dated 15.01.2014 coordinate bench of this Tribunal on comprehensive consideration of Rule 6(2) of Rules under notification issued in Calcutta Gazette, Tuesday 20th September, 2005 and 6DD(b) of I. T. Rules held that payments made by assessee to wholesale licensee for purchase of country spirit are protected by exemption in terms of rule 6DD(b) of I. T. Rules. Further in decision of Coordinate Bench of this Tribunal in Ramnagar Pachwai & C.S.(S) Shop, in ITA No. 148/Kol/2015 this Tribunal considered similar set of facts with reference to Rule 2(vii) of West Bengal Excise Rules section 22 of West Bengal Excise Act, Rule 6DD(b) and Rule 6DD(k) of I. T. Rules in light of observations of this Tribunal in Amrai Pachai & C.S. Shop, supra and came to conclusion that case of assessee in that case falls under exception provided in Rule 6DD(b) and Rule 6DD(k) of I. T. Rules and disallowance made u/s. 40A(3) of Act was deleted. 6. We have carefully perused record and find that no notification in respect of appointment of Bottling Plant to credit of whose account assessee was making payments as wholesale licensee is available before us to consider status of such entity with reference to different provisions and citations placed before us. In absence of such evidence it is not possible for us to reach any conclusion to effect that case of assessee is covered under Rule 6DD(b) of Rules. Further, AO had no opportunity of considering contention of assessee in light of legal position referred to above by us. We, therefore, in these circumstances, feel it just and proper to set aside orders of lower authorities and restore matter to file of AO for fresh adjudication after giving reasonable opportunity of being heard to assessee. Assessee may produce all 4 ITA No. 254/Kol/2014 Sisir Kr. Chakraborty(Choudhury), AY 2008-09 relevant material before Assessing Officer and cooperate in adjudication of just tax liability. ground of appeal is answered accordingly. 7. In result, appeal of assessee is allowed for statistical purposes. Order is pronounced in open court on 21.10.2016 Sd/- Sd/- (Waseem Ahmed) (K. Narasimha Chary) Accountant Member Judicial Member Dated : 21st October, 2016 Jd.(Sr.P.S.) Copy of order forwarded to: 1. APPELLANT Shri Sisir Kumar Chakraborty(Choudhury), Kanyapur C.S. & Wine Beer Shop, P.O. Kanyapur, Dist. Burdwan, Pin-713341 2 Respondent ITO, Ward-3(1), Asansol 3. CIT(A), Asansol 4. CIT , Asansol 5. DR, Kolkata Benches, Kolkata True Copy, By order, Asstt. Registrar. Sisir Kumar Chakraborty (Choudhury) v. Income-tax Officer, Wd-3(1), Asansol
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