EDAC Engineering Ltd., CHENNAI V. ACIT, CHENNAI

CO 58/CHNY/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8672 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S SRIRAMAN
• Assessee Lawyers: S DASGUPTA
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 153 /MDS/201 3 & C.O.NO.58/ MDS/2013 ( IN ITA NO.153/MDS/2013) (ASSESSMENT YEAR : 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-V(1), CHENNAI. VS. M/S. EDAC ENGINEERING LTD. SPIC HOUSE, 88 MOUNT ROAD, CHENNAI-600 032. PAN:AABCS0321G (APPELLANT) (RESPONDENT/CROSS OBJECTOR) APPELLANT BY : MR. S. DAS GUPTA, JCIT RESPONDENT BY : MR. A.S.SRIRAMAN, ADVOCATE DATE OF HEARING : 10 TH JUNE, 2013 DATE OF PRONOUNCEMENT : 10 TH JUNE, 2013 O R D E R PER CHALLA NAGENDRA PRASAD, JM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, CHEN NAI DATED 31.10.2012 FOR THE ASSESSMENT YEAR 2008-09. THE ONLY GRIEVANCE IN THE APPEAL OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) BY THE AS SESSING OFFICER RELYING ON THE SPECIAL BENCH DECISION OF ITA NO.153/MDS/2013 & C.O. NO.58/MDS/2013 2 VISAKHAPATNAM BENCH IN THE CASE OF MERILYN SHIPPING AND TRANSPORT VS. ADDL. CIT. 2. BRIEF FACTS ARE THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DISALLOWED PAYMENTS OF ` 20.90 CRORES MADE TO M/S. GULF SPIC ENGINEERING OF DUBAI TOWARDS CONTRACT FOR ERECTION OF BTG, BOP SYSTEMS AND PROCU REMENT ASSISTANCE ON THE GROUND THAT THE ASSESSEE FAILED T O DEDUCT TDS UNDER SECTION 194C OF THE ACT. IT WAS THE SUB MISSION OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 194C HA VE NO APPLICATION TO THE FACTS OF THE ASSESSEES CASE. HO WEVER, THE ASSESSING OFFICER REJECTED THE SUBMISSIONS OF THE A SSESSEE AND MADE DISALLOWANCE UNDER SECTION 40(A)(IA) OF TH E ACT FOR NON-DEDUCTION OF TDS UNDER SECTION 194C. THE ASSESS EE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCO ME TAX (APPEALS) AND THE COMMISSIONER OF INCOME TAX (APPEA LS) FOLLOWING THE SPECIAL BENCH DECISION OF VISAKHAPATN AM BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIP PING AND TRANSPORT VS. ADDL. CIT (136 ITD 23)(SB) DIRECTED T HE ASSESSING OFFICER TO DELETE THE DISALLOWANCES OF EX PENSES ITA NO.153/MDS/2013 & C.O. NO.58/MDS/2013 3 WHICH HAD ACTUALLY PAID BEFORE THE END OF THE FINAN CIAL YEAR AND CONSIDER FOR DISALLOWANCE ONLY THOSE EXPENSES W HICH WERE PAYABLE ON THE LAST DAY OF THE FINANCIAL YEAR AFTER VERIFICATION. AGAINST THIS ORDER OF THE COMMISSIO NER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL BEFO RE US IN DELETING THE DISALLOWANCE OF EXPENSES PAID BEFORE T HE END OF THE FINANCIAL YEAR. 3. THE ASSESSEE ALSO FILED CROSS OBJECTION AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CONTENDING THAT THE COMMISSIONER OF INCOME TAX (APP EALS) SHOULD HAVE HELD THAT THE PROVISIONS OF SECTION 194 C OF THE ACT HAVE NO APPLICATION TO THE FACTS OF THE ASSESSE ES CASE AND THEREFORE, NO DISALLOWANCE IS ATTRACTED UNDER T HE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 4. HEARD BOTH SIDES. PERUSED THE ORDERS OF THE LOWE R AUTHORITIES. IN VIEW OF THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. M.D.JAKIR HOSSAI N MONDAL IN ITAT NO.31 OF 2013 IN G.A.NO.320 OF 2013 VIDE OR DER DATED ITA NO.153/MDS/2013 & C.O. NO.58/MDS/2013 4 4TH APRIL, 2013, WHEREIN IT WAS HELD THAT THE SPEC IAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF MERILYN SHI PPING AND TRANSPORT VS. ADDL. CIT (SUPRA), IS NO MORE GOOD LA W ON THE ISSUE OF PAID OR PAYABLE CONCEPT, WE HOLD THAT THE COMMISSIONER OF INCOME TAX (APPEALS)S VIEW IN DIRE CTING THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF EXPENSES WHEREVER THE PAYMENTS WERE MADE BEFORE THE END OF T HE FINANCIAL YEAR IS NOT WELL FOUNDED. THEREFORE, WE R ESTORE THE ISSUE TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) TO DEAL WITH THE ISSUE ON MERITS. 5. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 10 TH DAY OF JUNE, 2013, CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE ) (CHALLA NAG ENDRA PRASAD) ACCOUNTANT MEMBER J UDICIAL MEMBER CHENNAI, DATED THE 10 TH JUNE, 2013. SOMU COPY TO: (1) ASSESSEE (4) CIT (A) (2) A.O. (5) D.R. (3) CIT (6) G.F.