9911796707
TMI Blog2010 (4) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned assessment order by two months five days, the learned Commissioner of Income Tax (Appeals) erred in holding that the said delay was inadvertent. 3) That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals) erred in alleging that the expenditure of ₹ 6,62,922 in question was in the nature of commission liable to be disallowed u/s 40(a)(ia) as the assessee allegedly failed to deduct tax at source. 2. In respect of ground No.1 of the appeal, we have heard the learned Representatives of the parties at length and have also considered the orders of the authorities below. We observe that the Assessing Officer passed the assessment order dt.27.12.2007 but the said order was served on the assessee on 4.3.2008 alongwith the Demand Notice. The assessee has contended that the said assessment order was not passed on 27.12.2007 and it was passed after 31.12.2007 and therefore, it is barred by limitation as per Section 153 of the I.T.Act. We find that similar contentions were also raised before the learned CIT(A) and learned CIT(A) after considering the submissions and facts and circumstances of the case held that the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 were called for verification. The process of assessment and demand management is required to be looked into. Assessing officer passes the order. Immediately on passing of order it goes to the Senior Tax assistant who enters the demand worked out in assessment order in current demand and collection register. Thereafter, the demand notice is prepared by the Sr. Tax assistant and it is handed over to either the notice server for service of the demand notice and assessment order or it is sent by post. There are inherent delays in the process before the demand notice and assessment orders reach the assessee. In the present case, it is apparent from the case records of appellant that on 8.2.2008 the refund which had arisen from the processing of return of Assessment Year 2006-07 was adjusted against the demand which had arisen from the instant assessment order of Assessment Year 2005-06. There is a stamp of the date of receipt of 8.2.2008 from State Bank of India in respect of payment of demand of ₹ 1,31,720 as part payment of the total demand of 3,43,878/- arising out of the instant assessment order. It is true that it is an adjustment challan against the refund of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that due to same inadvertent delay, the order which was existent on 27 122007 was served on appellant on 4.3.2008. It appears to be a case of inadvertent delay that the order was not served after it was passed on 27.12.2007. There is no evidence with the appellant to prove that the order was passed on any date after 31.12.2007. If I have to choose between backdating and inadvertent delay in the instant case, the reasons for inadvertent delay are 5 आयकर अऩीऱ संख्या /ITA No. 1081/KOL/2009 stronger than backdating. Therefore, it cannot be said in the instant case that the assessment order was not passed on 27.12.2007. 2.1. During the course of hearing before us, the learned AR of the assessee submitted that the assessment order has not been served within the reasonable time and since it was served after a period of two and half months and the Assessing Officer could not explain the reason for the delay in service of the assessment order, it is to be held that the same was passed after the expiry of the period of limitation and placed reliance on the decision of Hon ble Apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Ferro Alloy Industry Pvt. Ltd. V. CIT [(1993) 202 ITR 671 (Cal.)]. In the said case it was contended on behalf of the assessee that the date of completion of assessment should be taken as October 22, 1980, on which date the assessment order was served on the assessee and not on October 15, 1980, when it was signed by the Income tax Officer and Hon ble High Court has held that what is required for completion of the assessment is the determination of the tax liability and issue of demand notice but certainly not the service of the same on the assessee. We observe that the learned CIT(A) has also stated in his order the steps proposed to be taken after the assessment is made and it is dispatched to the assessee. We observe that the learned CIT(A) has stated that the assessment for the Assessment Year 2006-07 was processed on 15.1.2008 and it resulted into a refund of ₹ 1,32,720 which was adjusted against the total demand of ₹ 3,43,878 arising out of the assessment order for the Assessment Year under consideration. Therefore it is evident that the assessment was ready before 15.1.2008. Not only this, the learned CIT(A) in his order has also stated the entries made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shantilal Ghodawat ors., v. ACIT [(2009) 126 TTJ 135], we observe that the assessment orders were passed on 28.12.2007 and the same were dispatched to the assessee on 2.1.2008. The said assessment orders relates to search carried on 7.3.2006. Respectfully, we state that in the said order of the ITAT, the details were not given as to why the assessments are barred by limitation particularly when the assessment orders were admittedly passed on 28.12.2007 and dispatched to the assessee on 2.1.2008. Since, we have stated herein above, relying on the decision of Hon ble jurisdictional High Court in the case of INDIA FERRO ALLOY TNDUSTRY PVT. LTD. reported in (1993) 202 ITR 671 (CAL) that what is required is to complete the assessment within the period of limitation prescribed and not the service of the same on the assessee. Respectfully following the said decision of Hon ble jurisdictional High Court and considering the facts of the case before us, we are of the considered view that the assessment order was passed by the Assessing Officer on the date as stated in the assessment order i.e., 27.12.2007 and not thereafter although the same was serviced after a period of two months and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. It is observed that LM Co. also could not do better to market the products and accordingly the assessee Company marketed the symphony products received by M/s.LM Co., from Anarelecs (P) Ltd. It was contended before the learned CIT(A) that Anarelecs (P) Ltd., made profits of ₹ 5,52,314 on the selling of symphony products procured from the assessee-Company but this was objected to by the Principal of the assesee Company namely Symphony Comfort Systems Ltd.,, because the assessee Company as per agreement entered with Symphony Comfort Systems Ltd., was to sale the symphony products to M/s.Medicos Agencies only. It was contended that the said vary goods were subsequently sold to the customers of West Bengal aggregating to ₹ 23,82,420 and earned a profit of ₹ 10,80,822. The said products were earlier procured by M/s.LM Co., at ₹ 8,55,002 and sold them for ₹ 14,07,316 thereby earning a profit of ₹ 5,52,314. In nutshell, there was a total profit on the said symphony goods which were sold to others and not to M/s.Medicos Agency, the assessee Company and M/s.LM Co., made profits aggregating to ₹ 16,33,136. The assessee contended that M/s.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that one Anarelecs (P) Ltd., was also appointed as distributor for the State of West Bengal to market symphony products of Symphony Comfort Systems Ltd., in the State of West Bengal. We also observe that the said Anarelecs (P) Ltd., is stated to have appointed M/s.LM Co.,, the sister concern of the assessee Company to market such symphony products in the State of West Bengal. Apparently it appears to be contradictory. We also observe that the assessee company sold to M/s.LM Co., and the said concerns sold symphony goods to other persons. It also appears to be contrary to the agreement entered into by the assessee with Symphony Comfort Systems Ltd. Be that as it may, we observe that in the above process, there was a profit of ₹ 10,80,822 to the assessee company. M/s.LM Co., procured goods worth ₹ 8,55,000 from the assessee and it also made profit of ₹ 5,52,314. Thus, it is observed that out of the said aggregate profit of ₹ 16,33,166, M/s.LM Co., remitted a sum of ₹ 12,74,064 to Anarelecs (P) Ltd., stated to be towards marketing expenses and the assessee-Company contributed a sum of ₹ 6,62,922 to M/s.LM Co. However, the debit note, pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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