Shri Bachubhai Jivanbhai Soni, Ahmedabad V. The DCIT, Circle-5(3), Ahmedabad

ITA 1009/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3074 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-10-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DRUV PATEL
• Keywords: Bonafide belief; TDS
• Section: 143(3); 40(a)(ia); 194C; 201; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI BACHUBHAI JIVABHAI SONI, 18, DIPAWALI SOCIETY, VISHWAKUNJ SOCIETY, PALDI, AHMEDABAD PAN: ACLPS2933B (APPELLANT) VS THE DCIT , CIRCLE - 5 ( 3) , 1 ST FLOOR, NATURE VIEW BUILDING, OFF: ASHRAM ROAD, AHMEDABAD VADODARA (RESPONDE NT) REVENUE BY : S H RI VIDHYUT TRIVEDI , SR. D . R. ASSESSEE BY: SHRI DRUV PATEL DATE OF HEARING : 24 - 10 - 2 019 DATE OF PRONOUNCEMENT : 18 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A), AHMEDABAD - 5 DATED 02 - 02 - 2 018 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITAR Y GROUND OF APPEAL OF THE ASSESSEE IS PERTAINED TO THE ISSUE OF CONFIRMING THE ADDITION OF RS. 1 , 96 , 769/ - , ADVERTISEMENT EXPENSES PAID TO JEM S & JEWEL LE RY EXPORT PROMOTION COUNCIL UNDER RULE 40(A)(IA) OF THE ACT. I T A NO . 1009 / A HD/20 18 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 1009 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI BACHUBHAI JIVABHAI SONI VS. DCIT 2 3. THE FACT IN BRIEF IS THAT IN THIS CASE T HE ASSESSMENT ORDER U/S. 143(3) OF THE ACT WAS FINALIZED ON 19 TH FEB, 2016. THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 1 , 96 , 769/ - U /S. 40(A) (IA) OF THE ACT ON THE GROUND THAT ASSESSEE HAS DEDUCTED TAX U/S. 194C OF THE ACT AS AGAINST CORRECT DEDUTABLE AMOUNT U/S. 194J OF THE ACT. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD RIVAL CONTENTION ON THIS ISSUE. AFTER PERUSAL OF THE MATERIAL ON RECORD, IT IS NOTI CED THAT ASSESSEE HAS PAID AN AMOUNT OF RS. 1 , 96 , 769/ - ON ACCOUNT OF RENT/SPACE ALLOTTED BY THE JEM S & JEWEL LE RY FOR EXHIBITION WHERE THE ASSESSEE HAS PARTICIPATED IN THE EXHIBI TION. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS DEDUCTED TDS @ 1% ON THE AFORESAID PAYMENT U/S. 194C OF THE ACT, HOWEVER , THE ABOVE PAYMENT WAS COVERED UNDER THE PROVISION OF SECTION 194I OF THE ACT. THE RE FORE, THE ASSESSING OFFICER HAS DISALLOWED THE WHOLE PAYMENT U/S. 40(A)(IA) OF THE ACT AFTER FOLLOWING THE DECISION OF HON BLE HIGH COURT OF KERALA IN THE CASE OF CIT - 1 VS. PVS MEMORIAL HOSPITAL LTD. (2015 - 60 - TAXMAN.COM 69). 6. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS BROUGHT TO OUR NOTICE THAT THE HON BLE HIGH COURT OF CALCUTTA I N THE CAS E OF CIT VS. S.K. TEKRIWAL 3 61 ITR 432 (C A L) HELD THAT ONCE TAX IS DEDUCTED AND PAID IN WRONG SECTION WITH BONAFIDE BELIEF THEN SECTION 40(A)(IA) WOULD NOT BE APPLIED AS IT DID NOT SATISFY T W O LIMBS OF SAID SECTION HENCE SECTION 40(A)(IA) CANNOT BE APPLIED . THE LD. COUNSEL HAS FURTHER REFERRED THE DECISION I.T.A NO. 1009 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI BACHUBHAI JIVABHAI SONI VS. DCIT 3 OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. 19 88 ITR 192 (SC) THAT WH ERE THERE ARE TWO JUDGMENTS OF TWO HIGH COURTS , THE JUDGMENT FAVOURABLE TO ASSESSEE MAY BE FOLLOWED . THE ASSESSEE HAS DEMONSTRATED IN HIS SUBMISSION REPORTED AT PARA 5.2 IN THE ORDER OF THE LD. CIT(A) THAT THE ASSESSEE HAS MADE PAYMENT FOR BOOKING THE STALL IN EXHIBITION OF JEWELLERY ORGANIZED BY THE GEM S & JEWELLERY EXPORT PROMO TION C OUNSEL WHICH INCLUDED VA RIOUS CHARGES I.E. REGISTRATION CHARGES, BADGES, HOUSE KEEPING CHARGES ETC. AFTER CONSIDERING THE BREAKUP OF VARIOUS EXPENSES, WE CONSIDER THAT ASSESSING OFFICER HAS DEDUCTED TAX @ 1% WITH BONAFIDE BELIEF THAT THE PAYMENT WAS MADE FOR THE COMPOSITE CONTRA CT OF ADVERTISING PRODUCT OF JEWELLERY , THEREFORE, AFTER FOLLOWING THE DECISION OF HON BLE HIGH COURT IN THE CASE OF CIT VS. S.K. TEKRIVAL 361 ITR 432 (CAL), THE DISALLOWANCE IS DELETED AND APPEAL OF THE ASSESSEE IS ALLOWED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 11 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 18 /11 / 2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 1009 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI BACHUBHAI JIVABHAI SONI VS. DCIT 4 BY ORDER/ , / ,