The Commissioner Of Income Tax vs Sri. S.Raghumathulla

[Cites 1, Cited by 0] Kerala High Court The Commissioner Of Income Tax vs Sri. S.Raghumathulla on 31 December, 2008 Author: C.N.Ramachandran Nair Bench: C.N.Ramachandran Nair IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HON'BLE MR. JUSTICE BABU MATHEW P.JOSEPH TUESDAY, THE 6TH DAY OF MARCH 2012/16TH PHALGUNA 1933 ITA.No. 315 of 2010 ( ) ----------------------- ITA.479/2009 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT(S)/APPELLANT/APPELLANT: -------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI. P.K.R.MENON, SENIOR STANDING COUNSEL BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S)/RSPONDENT: ------------------------ SRI. S.RAGHUMATHULLA, M/S. CEE AND CEE FOREX SHOP NO.17, HOORA CHAMBERS PAZHAVANGADI, THIRUVANANTHAPURAM-695023. BY ADV. SRI.K.SRIKUMAR BY ADV. SRI.K.MANOJ CHANDRAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 06-03-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.APPEAL. 315/2010 APPENDIX. ANNEXURE 'A': TRUE COPY OF THE ORDER U/S.143(3)OF THE ASSESSING OFFICER DATED 31.12.2008. ANNEXURE 'B' : TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 16.6.2009. ANNEXURE 'C' : TRUE COPY OF THE ORDER OF THE APPELLATE TRIBUNAL DATED 20.4.2010. // TRUE COPY // P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR & BABU MATHEW P. JOSEPH, JJ. ------------------------------------------------------------ I.T. Appeal No. 315 of 2010 ------------------------------------------------------------- Dated this the 6th day of March, 2012 JUDGMENT Ramachandran Nair, J. Heard Senior Counsel Sri. P.K.R. Menon appearing for appellant and Adv. Sri. K.Sreekumar appearing for respondent. The question raised in the Appeal is whether Tribunal is justified in cancelling disallowance made under Section 40A(3) of the Income Tax Act for payments made in excess Rs.20,000/- in cash. The disallowance made is at 20% of cash payments in excess of Rs.20,000/-. The Tribunal took the view that respondents was engaged in purchase and sale of SIM cards, Recharge coupons, BSNL cards etc., which are used in mobile communications. The Tribunal was of the view that these are purchase and sale of goods and so much so Section 40A(3) is not attracted. After hearing both sides, we are not able to uphold the Tribunal's I.T.Appeal No.315/2010] 2 finding because the transactions are not pure sale of goods as held by the Tribunal. On the other hand, it is by way of service and so much so, Section 40A(3) is attracted for the transaction. 2. The counsel for the respondent alternatively raised the contention that all the parties from whom respondent purchased SIM Cards, Recharge coupons etc. purchased articles from BSNL and for the entire supplies BSNL has collected TDS and issued Form 16A to the distributors from whom respondent purchased the articles. Based on these documents, the contention raised by respondent is that the department's apprehension of evasion of tax in cash transactions does not apply in this case. The Senior counsel appearing for the revenue submitted that the TDS recovery on the supplies as such does not grant any immunity to the respondent from the operation of Section 40A(3). 3. After hearing both the sides, what we feel is that the alternative contention raised by the respondent calls for detailed consideration by the Tribunal. Since the High Court is only hearing the appeal against orders of the Tribunal on merit, it would not be proper for us to decide this issue for the first time raised before us. We therefore feel an opportunity should be granted to the respondent to raise this contention before the Tribunal based I.T.Appeal No.315/2010] 3 on documents, Form 16A and other documents produced before us which may be produced by the appellant before the Tribunal. I.T.A is allowed vacating the Tribunal's order and by remanding the matter for decision of the appeal afresh on alternative grounds raised above, based on documents produced and after hearing the respondent. The Tribunal is directed to dispose of the appeal afresh after giving opportunity to both sides. Since we are restoring the Appeal to the Tribunal, no recovery should be made until disposal of the Appeal by the Tribunal. Sd/- C.N. RAMACHANDRAN NAIR, JUDGE Sd/- BABU MATHEW P. JOSEPH, JUDGE. krs.