Sh. Ashok Kumar Dhariwal, JODHPUR V. ACIT, BARMER

CO 18/JODH/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7485 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: U C JAIN
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.559/JODH/2010 ASSESSMENT YEAR: 2007-08 ASSTT. COMMISSIONER OF INCOME TAX, VS. SHRI ASH OK KUMAR DHARIWAL, CIRCLE-BARMER, PROP. M/S DHARIWAL TRADERS, BARMER. SUBHASH CHOWK, BARMER. (PAN: ACDPD 3936 B). C,O. NO.18/JODH/2011 (IN ITA NO.559/JODH/2010 ASSESSMENT YEAR: 2007-08 SHRI ASHOK KUMAR DHARIWAL, VS. ASSTT. COMMISSIONER OF INCOME TAX, PROP. M/S DHARIWAL TRADERS, CIRCLE-BARMER, BARMER . SUBHASH CHOWK, BARMER. (PAN: ACDPD 3936 B). (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI G.R. KOKANI, D.R. ASSESSEE BY : SHRI U.C. JAIN, A.R. DATE OF HEARING : 03.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 05.07.2012 ORDER PER BENCH : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION B Y THE ASSESSEE HAVE BEEN FILED AGAINST THE ORDER DATED 02.09.2010 PASSE D BY THE LD. CIT(A), JODHPUR FOR THE ASSESSMENT YEAR 2007-08. ITA NO.559/JODH/2010 & CO NO.18/JODH/2011 . 2 2. THE GROUNDS RAISED IN APPEAL BY THE REVENUE REA DS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.25,90,000/- MA DE U/S 40(A)(IA) OF THE I.T. ACT. THAT THE APPELLANT RESERVES ITS RIGHTS TO ADD, AMEN D OR ALTER THE GROUND OF APPEAL ON OR BEFORE DATE OF APPEAL IS FIN ALLY HEARD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) ON 9 TH NOVEMBER, 2009 AGAINST WHICH THE ASSESSEE FILED APP EAL BEFORE THE CIT(A). THE CIT(A) APPLIED G.P. RATE OF 10.50% ON GROSS RECEIPT S AND DIRECTED THE ASSESSING OFFICER TO VERIFY THE T.D.S. VICE HIS ORDER NO.138/ 2009-10 DATED 18.01.010. DURING THE VERIFICATION OF T.D.S., THE ASSESSING OF FICER (A.O.) NOTICED THAT THE ASSESSEE HAS PAID PAYMENT TO SHRI ARVIND KUMAR DHAR IWAL, SUB-CONTRACTOR ON VARIOUS DATES TOTALING TO RS.25,90,000/-. THE A.O. FOUND THAT SECTION 194C OF THE ACT IS CLEARLY APPLICABLE IN RESPECT OF PAYMENT MAD E TO SUB-CONTRACTOR, THEREFORE, TAX IS TO BE DEDUCTED AT SOURCE UNDER SECTION 194C OF THE ACT. THE A.O. FOUND THAT THE ASSESSEE DID NOT DEDUCT TAX ON THE PAYMENT MADE TO SHRI ARVIND KUMAR DHARIWAL AMOUNTING TO RS.25,90,000/-. THE A.O. DIS ALLOWED THE SAID AMOUNT OF RS.25,90,000/- UNDER SECTION 40(A)(IA) OF THE ACT. ITA NO.559/JODH/2010 & CO NO.18/JODH/2011 . 3 4. THE CIT(A) DELETED THE SAID ADDITION AS UNDER :- (PARAGRAPH NO.8 OF CIT(A)) 8. I HAVE GONE THROUGH FACTS OF THE CASE, CIT(A) O RDER DATED 18-1- 2010 AND ORDER DATED 19-7-2010 OF THE HON'BLE ITAT, JODHPUR BENCH, JODHPUR. ON PERUSAL OF GROUNDS OF APPEAL RAISED BE FORE THE HON'BLE ITAT IN ITA NO.153/JU/2010 FOR A.Y. 2007-08, IT IS FOUND THAT THE APPELLANT TOOK GROUND THAT THEN CIT(A) GROSSLY ERRE D IN UPHOLDING THE APPLICATION OF PROVISIONS OF SECTION.40(A)(IA) PART ICULARLY WHEN THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE IN HIS BOO KS OF ACCOUNTS IN RESPECT OF SUB CONTRACT AWARDED BY HIM. THEREFORE, NO DISALLOWANCE U/S 40(A)(IA) IS POSSIBLE. THE HON'BLE ITAT BY REL YING UPON DECISION OF HON'BLE HYDERABAD ITAT IN TEJA CONSTRUCTION (SUP RA) HAS ALLOWED GROUNDS OF APPEAL IN FAVOUR OF THE APPELLANT. IN VIEW OF THE SPECIFIC FINDING OF THE HON'BLE ITAT , JODHPUR BENCH, JODHPUR IN ORDER DATED 19-7-2010, THE DISALL OWANCE MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) IN THE ORDER DA TED 3-3-2010 DOES NOT SURVIVE. ACCORDINGLY, THE GROUNDS OF APPEAL OF THE APPELLANT IS ALLOWED AND THE APPELLANT GETS RELIEF OF RS.25,90,0 00/-. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL A SSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 9 TH NOVEMBER, 2009 AGAINST WHICH THE ASSESSEE FILED AP PEAL BEFORE THE CIT(A). THE CIT(A) DISPOSED OF THE APPE AL VIDE ORDER DATED 18.01.2010. IN RESPECT OF DISALLOWANCE OF RS.25,90 ,000/-, THE CIT(A) IN FIRST ROUND OF LITIGATION DIRECTED THE A.O. TO VERIFY THE FORM NO.16A AND DECIDE THE ISSUE ACCORDINGLY. BEFORE THE CIT(A), THE ASSESSEE MADE ALTERNATE SUBMISSION THAT ONCE THE BOOKS OF ACCOUNTS ARE REJECTED UNDER SECTION 14 5(3), NO DISALLOWANCE UNDER SECTION 40(A)(IA) CAN BE MADE. THE CIT(A) REJECTED THE ALTERNATE CONTENTION OF THE ITA NO.559/JODH/2010 & CO NO.18/JODH/2011 . 4 ASSESSEE. THE ASSESSEE AGAINST THAT PART OF THE OR DER OF THE CIT(A) FILED APPEAL BEFORE THE I.T.A.T. THE I.T.A.T. VIDE ITS ORDER DA TED 19 TH JULY, 2010 IN PARAGRAPH NO.7 FOLLOWING THE ORDER OF I.T.A.T., HYDERABAD BEN CH IN THE CASE OF TEJA CONSTRUCTION WHEREIN IT HAS BEEN HELD THAT ONCE THE BOOKS ARE REJECTED AND PROFIT IS ESTIMATED, FURTHER ADDITION BY INVOKING SECTION 40( A)(IA) AMOUNTS TO PUNISHING THE ASSESSEE FOR THE SAME OFFENCE ON DOUBLE OCCASION. THE ACTION OF THE DEPARTMENTAL AUTHORITIES IN INVOKING THE PROVISIONS OF SECTION 4 0(A)(IA) OF THE ACT FOR DISALLOWING RS.25,90,000/- WAS NOT IN ACCORDANCE WI TH LAW. IN SECOND ROUND OF LITIGATION WHEN THE ASSESSEE FILED APPEAL BEFORE TH E CIT(A) AGAINST THE ORDER OF A.O., WHICH WAS PASSED BY THE A.O. ON DIRECTION OF THE CIT(A). MEANWHILE, THE ALTERNATE CONTENTION OF THE ASSESSEE HAS BEEN DECID ED BY THE I.T.A.T. IN FAVOUR OF THE ASSESSEE. THE CIT(A) FOLLOWED THE SAID ORDER O F I.T.A.T. IN ITA NO.153/JU/2010 FOR THE A.Y. 2007-08 ORDER DATED 19. 07.2010. THUS, WE FIND THAT THE CIT(A) HAS FOLLOWED THE ORDER OF I.T.A.T. IN THE LIGHT OF THE FACT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). WE ACCO RDINGLY CONFIRM THE ORDER OF THE CIT(A) ON THE ISSUE. APPEAL OF THE REVENUE IS THUS DISMISSED. 6. THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF CIT(A). HOWEVER, AT THE TIME OF HEARING BEFORE US, THE LD. AUTHORISED ITA NO.559/JODH/2010 & CO NO.18/JODH/2011 . 5 REPRESENTATIVE HAS NOT PRESSED THE CROSS OBJECTION. THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE AND T HE CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/-S (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLAT E TRIBUNAL, JODHPUR TRUE COPY