ACIT, Central Circle-3(2), Hyd, Hyderabad V. Hill County Properties Ltd., (formerly Maytas Properties Ltd.), Hyd, Hyderabad

ITA 1001/HYD/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5229 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 07-04-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 11-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROJIT MAJUMDAR
• Assessee Lawyers: S RAMA RAO
• Keywords: TDS
• Section: 143(3); 40(a)(ia); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 1001 /HYD/201 6 (ASSESSMENT YEAR : 2011 - 12) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 3(2), HYDERABAD. VS. M/S. HILL COUNTY PROPERTIES LIMITED, (FORMERLY MAYTAS PROPERTIES LIMITED) MAYTAS HILL COUNTY, BACHUPALLY, MIYAPUR, HYDERABAD. PAN AAECM2732Q APPELLANT RESPONDENT APPELLANT BY : SHRI ROJIT MAJUMDAR (D.R) RESPONDENT BY : SHRI S. RAMA RAO. DATE OF HEARING : 07.04. 2021. DATE OF PRONOUNCEMENT : 29 .04.2 021. O R D E R PER SHRI S.S. GODARA, J.M. : THIS ASSESSEES APPEAL FOR THE ASST. YEAR 2014 - 15 ARISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS) - 11 , HYDERABAD S ORDER DT. 29.02.2016 PASSED IN CASE NO. 084/CR - 3/CIT(A) - 11/14 - 2 I TA NO. 1001/HYD/2016 15 I N THE PROCEEDINGS UNDER SECTION 143(3) OF INCOME TAX ACT, 1961 (THE ACT). HE ARD BOTH THE PARTIES . C ASE FILE PERUSED. 2. THE REVENUES SIDE PROPOSE S THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE A.O.TO VERIFY THAT WHETHER THE COMPANY ON WHOSE NAME BILLS WERE THERE, HAS CLAIMED THE EXPENDITURE TO THE TUNE OF RS.5,64,273/ - WHICH WAS DISALLOWED U/S.37(1) AS BILLS WERE NOT IN THE NAME OF ASSESSEE COMPANY. 2. THE LEARNED CIT(A) ERRED IN DIRECTING THE AO TO ALLOW THE PAYMENTS MADE THROUGH BANKING CHANNELS THAT IS A BEARER CHEQUE ETC., AND DISALLOW ONLY 10% OF THE EXPENDITURE OF THE CASH EXPENDITURE OF RS.2,67,10,513/ - WHICH WAS DISALLOWED U/S37(1) FOR NON - SUBM ISSION OF BILLS OF EXPENDITURE. 3. THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS.9,10,000/ - MADE BY AD BEING THE PRIOR PERIOD EXPENDITURE WHICH NOT RELATABLE TO AY IN CONSIDERATION. 4. THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,42,02,401/ - MADE U/S 40(A)(IA) OF THE IT ACT. 3 I TA NO. 1001/HYD/2016 A. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.1 ,00,00,000/ - MADE U/S40(A)(IA) OF THE LT. ACT ON THE GROUND THAT IT IS A MERE PROVISION AND HENCE NO TAX IS DEDUCTIBLE AT SOURCE. B. THE CIT (A) OUGH T TO HAVE ENHANCED THE INCOME, AS THE SAID EXPENDITURE IS NOT AN ASCERTAINED LIABILITY AND ITS BEING A MERE PROVISION. 5. THE EARNED CIT(A) ERRED IN DELETING THE ADDITION MADE U/S40(A)(IA) FOR SHORT DEDUCTION OF TAX, OBSERVINQ THAT SHORT DEDUCTION OF TAX DOES NOT ATTRACT THE PROVISION OF SECTION 40(A)(IA) OF THE IT. ACT. 3. WE COME TO THE REVENUES FIRST THREE SUBSTANTIVE GROUNDS SEEKING TO REVIVE SECTION 37(1) EXPENDITURE DISALLOWANCE OF RS.5,64,273 ; 10% ESTIMATED EXPENDITURE DISALLOWANCE OF CASH PAYM ENT AND PRIOR PERIOD EXPENDITURE DISALLOWANCE OF RS.9,10,000 ; RESPECTIVELY EMERGES THAT THE CIT(APPEALS) HAS FOLLOWED THE T RIBUNALS ORDER IN ASSESSEE'S CASE IN A.Y. 2008 - 09 RESTORING THE VERY ISSUE S BACK TO THE ASSESSING OFFICER FOR HIS AFRESH NECESSARY FACTUAL VERIFICATION. WE THUS FIND NO MERIT IN THE REVENUES INSTANT FORMER GRIEVANCE AS THE 4 I TA NO. 1001/HYD/2016 CIT(APPEALS) HAS FOLLOWED JUDICIAL CONSISTENCY IN ISSUING NECESSARY VERIFICATION DIRECTION S TO THE ASSESSING OFFICER. THE REVENUE FAILS IN ITS INSTANT FORMER T WO SUBSTANTIVE GROUND S THEREFORE . 4. N EXT COMES PRIOR PERIOD EXPENDITURE DISALLOWANCE OF RS.9,10,000 WHEREIN THE CIT(APPEALS) HAS FOLLOWED THE T RIBUNAL ORDER IN A.Y. 2010 - 11 WHIL ST HOLDING THAT THE ASSESSEE HAD CLAIMED THE IMPUGNED EXPENDITURE BECAUSE OF THE FACT THAT THE CORRESPONDING BILL S HAS BEEN RECEIVED IN THE RELEVANT PREVIOUS YEAR ONLY. WE DECLINE THE REVENUES ARGUMENT IN VIEW OF THE FACT THAT THE ASSESSEE'S IMPUGNED EXPENDITURE HA S CRYSTALLIZED IN ITS RELEVANT PREVIOUS YEAR AS THE RECIPIENT H AD ISSUED THE CORRESPONDINGLY BILL MUCH LATER. THE THIRD SUBSTANTIVE GROUND IS ALSO DECLINED THEREFORE . 5. WE NEXT PROCEED TO DEAL WITH SECTION 40(A)(IA) ISSUE WHICH INVOLVING A SUM OF RS.14,20,62,401 ( INCLUDING AN AMOUNT OF RS.1 CRORE IN THE NATURE OF PROVISION ) . S UFFICE TO SAY, IT HAS COME ON RECORD THAT THE IMPUGNED SUM REPRESENT S O N LY A PROVISION MADE BY THE ASSESSEE IN THE RELEVANT PREVIOUS YEAR 5 I TA NO. 1001/HYD/2016 WITHOUT ANY CORRESPONDING PAYMENT OR ANY DETAILS OF THE BILLS AS IT COULD NOT HAVE DEDUCTED TDS IN ABSENCE OF ANY PAYEE; WHATSOEVER. WE THUS OBSERVE THAT THE ASSESSEE / DEDUCTOR COULD NOT HAVE COMPLIED WITH CHAPTER XVII PROVISIONS SINCE SUCH COMPLIANCE INVOLVES THE LATTER PARTY IN WHOSE HANDS THE INCOME I S ADMITTEDLY ASSESSED. WE THUS DECLINE THE REVENUES ARGUMENT SEEKING TO REVIVE 40(A)(IA) DISALLOWANCE FOR THIS PRECISE REASON ALONE. 6. LEARNED DEPARTMENT REPRESENTATIVE NEXT CONTENDED THAT THE CIT(APPEALS) OUGHT TO HAVE ENHANCED THE ASSESSEE'S INCOME S INCE THE SAID EXPENDITURE IS NOT AN ASCERTAINED LIABILITY AND ALSO HIS POWERS ARE CO - TERMINUS WITH THAT OF ASSESSING OFFICER. WE FIND NO SUBSTANCE IN REVENUES ARGUMENT SINCE IT CAN HELD TO BE AN AGGRIEVED PARTY HAVING LOCUS STANDI TO CHALLENGE CORRECTNESS OF CIT(APPEALS)S IN ACTION; IF ANY THAN AN ACTION DECIDING THE ISSUE IN TAX PAYERS FAVOUR. THIS REVENUES ARGUMENT IS ALSO FAILS THEREFORE. 7. MR. MAJUMDAR LASTLY SUBMITTED THAT THE CIT(APPEALS) OUGHT TO HAVE UPHELD THE IMPUGNED 40(A)(IA) DIS ALLOWANCE IN 6 I TA NO. 1001/HYD/2016 THE CASE OF SHORT DEDUCTION OF TDS . H ONBLE KOLKATA HIGH COURT IN DCIT VS. S. K. TAKRI WAL 361 ITR 432 ( CA L) HOLDS THAT SEC.40(A)(IA) DOES NOT APPLY ITS CASE INVOLVING SHORT DEDUCTION OF TDS . WE THUS UPH O LD THE CIT(APPEALS)S ACTION DELETING THE IMPUGNED DISALLOWANCE ON THIS LAST COUNT AS WELL. 7.1 NO OTHER GROUND HAS BEEN PRESSED BEFORE US . 8. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH APRIL , 2021. SD/ - SD/ - (LAXMI PRASAD SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 29 .0 4 .2021. * REDDY GP COPY TO : 1. M/S. HILL COUNTY PROPERTIES LIMITED, (FORMERLY MA YTAS PROPERTIES LIMITED) , MAYTAS HILL COUNTY, BACHUPALLY, MIYAPUR, HYDERABAD. 2. ACIT, CENTRAL CIRCLE 3(2), HYDERABAD. 3. PR. C I T (CENTRAL) , HYDERABAD. 4. CIT(APPEALS) - 11, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. B Y ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.