Deepak Rajaram Patil, Kolhapur V. Income-tax Officer, Ward - 1(2), Kolhapur

ITA 1040/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6563 (ITAT-PUNE)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 08-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P S SHINGTE
• Keywords: Additional evidence
• Section: 143(3); 40(a)(ia); 263; 63

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1040 /P U N/201 8 / ASSESSMENT YEAR : 20 06 - 07 DEEPAK RAJARAM PATIL, PLOT NO. 58, A WARD, SAVITRI BUNGLOW, SHALINI PALACE AREA, KOLHAPUR PAN : ABDPP2232R ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 1(2), KOLHAPUR / RESPONDENT ASSESSEE BY : S HRI P.S. SHINGTE REVENUE BY : S HRI RAJESH GAWALI / DATE OF HEARING : 0 7 - 01 - 2019 / DATE OF PRONOUNCEMENT : 09 - 01 - 2019 / ORDER / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1, KOLHAPUR DATED 09 - 04 - 2018 FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN CHEMICALS AND TRANSPORT. 2 ITA NO .1040/PUN/2018, A.Y. 2006 - 07 CONSEQUENT TO REVISION PROCEEDINGS U/S. 2 63 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) , THE ASSESSING OFFICER PASSED ORDER DATED 11 - 07 - 2011 U/S. 143(3) R.W.S. 263 OF THE ACT . THE ASSESSING OFFICER MADE ADDITION OF RS.2,14,480/ - U/S. 40(A)(IA) OF THE ACT IN RESPECT OF INTEREST PAID BY THE ASSESSEE TO SHRI VENKATESH NAGRI SAHAKARI PAT SANSHTHA LTD. WITHOUT DEDUCTING TAX AT SOURCE , AS ENVISAGED U/S. 194A OF THE ACT. AGAINST THE AFORESAID ASSESSMENT OR DER THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER. NOW, THE ASSESSEE IS IN SECOND APPEAL ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APP EALS) IN CONFIRMING THE DISALLOWANCE. 3. SHRI P.S. SHINGTE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT ADMITTEDLY THE ASSESSEE PAID INTEREST TO SHRI VENKATESH NAGRI SAHAKARI PAT SANSHTHA LTD. AGAINST THE LOAN , WITHOUT DEDUCTING ANY TAX AT SOURCE. THE ASSESSEE WAS UNDER BONAFIDE BELIE F THAT ON PAYMENT OF INTEREST TO SHRI VENKATESH NAGRI SAHAKARI PAT SANSHTHA LTD. THE PROVISIONS OF TDS DOES NOT APPLY. THE LD. AR SUBMITTED THAT THE ASSESSEE IS NOW FILING FORM 26A AS ADDITIONAL EVIDENCE. THE PROVIS IONS OF SECTION 40(A)(IA) HAVE BEEN AMENDED BY THE FINANCE ACT, 2012 W.E.F. 01 - 04 - 2013 WITH THE INSERTION OF SECOND PROVISO. THE LD. AR SUBMITTED THAT THE PROVISO TO SECTION 40(A)(IA) INSERTED BY FINANCE ACT, 2012 IS CURATIVE IN NATURE AND IS OPERATIVE RE TROSPECTIVELY. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CALCUTTA EXPORT COMPANY REPORTED AS 93 TAXMANN.COM 51. THE LD. AR SUBMITTED THAT ADDIT IONAL EVIDENCE FILED BY THE ASSESSEE MAY KINDLY BE ADMITTED AND THEREAFTER REMITTED TO THE ASSESSING OFFICER FOR VERIFICATION. 3 ITA NO .1040/PUN/2018, A.Y. 2006 - 07 4. ON THE OTHER HAND SHRI RAJESH GAWALI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE SOLITARY ISSUE RAISED IN THE PRESENT APPEAL IS WITH RESPECT TO DISALLOWANCE OF INTEREST PAYMENT RS. 2,14,480/ - UNDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. UNDISPUTEDLY, THE ASSESSEE HAS PAID INTEREST TO SHRI VENKATESH NAGRI SAHAKARI PAT SAN SHTHA LTD. , A CO - OPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IT IS NO T THE CASE OF ASSESSEE THAT SHRI VENKATESH NAGRI SAHAKARI PAT SANSHTHA LTD. IS ENGAGED IN B ANKING BUSINESS. THE FINANCE ACT, 2012 HAS INSERTED SECOND PROVIS O TO SECTION 40(A)(IA) OF THE ACT WHICH READS AS UNDER : PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII - B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB - SECTION (1) OF SECTION 201, THEN, FOR THE PURPOSE OF THIS SUB - CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. 6. THOUGH THE SAID PROVISO HAS BEEN INSERTED W.E.F. 01 - 04 - 2013 , T HE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ANSAL LAND MARK TOWNSHIP (P) LTD. REPORTED AS 377 ITR 635 AND SUBSEQUENT LY, THE H ONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CALCUTTA EXPORT COMPANY (SUPRA) HAS HELD THAT THE AMENDMENT BY FINANCE ACT, 2010 TO THE PROVISIONS OF SECTION 40(A)(IA) ARE CURATIVE IN NATURE AND HENCE APPLIES RETROSPECTIVELY FRO M THE DATE OF INSERTION OF SAID PROVISION I.E. FROM THE ASSESSMENT YEAR 2005 - 06. 4 ITA NO .1040/PUN/2018, A.Y. 2006 - 07 THE ASSESSEE HAS FILED FORM 26A AS ADDITIONAL EVIDENCE TO CONTEND THAT THE RECIPIENT OF THE INTEREST HAS OFFERED THE AMOUNT TO TAX. THUS, IN VIEW OF RETROSPECTIVE APPLICABIL ITY OF SECOND PROVISO TO SECTION 40(A)(IA) , WE DEEM IT APPROPRIATE TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION. THE ASSESSING OFFICER SHALL DECIDE THIS ISSUE DE - NOVO AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING AND CO NSIDERING THE DOCUMENTS FURNISHED BY THE ASSESSEE, IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON W E D N E S D A Y , THE 0 9 T H D AY OF JANUARY, 2019 . SD/ - SD/ - ( R.S. SYAL ) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 0 9 T H J ANUARY, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1, KOLHAPUR 4. THE PR. COMMISSIONER OF INCOME TAX - 1, KOLHAPUR - 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / / T R U E C O P Y / / / BY ORDER, / PRIVATE SECRETARY, / PRIVATE SECRETARY, , / ITAT, PUNE