M/s. Neel Infrastructure, Ahmedabad V. The Income tax Officer,Ward-9(1), Ahmedabad

ITA 1090/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1378 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 17-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER . / ITA NO. 1090 /AHD/201 2 / ASSESSMENT YEAR : 2007 - 08 M/S. NEEL INFRASTRUCTURE, 10 TH FLOOR, PRESIDENT HOUSE, OPP. C.N. VIDHYALAYA, AMBAWADI, AHMEDABAD - 15 PAN : AAGFN 3146 G VS INCOME TAX OFFICER, WARD 9 (1), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.M. MEHTA WITH SHRI G.M. THAKORE, AR REVENUE BY : SHRI K. MADHUSUDAN, SR DR / DATE OF HEARING : 13 / 0 6 /201 6 / DATE OF PRONOUNCEMENT: 13 / 06 /201 6 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME - TAX (APPEALS) - XV , AHMEDABAD DATED 24 . 0 2 .201 2 FOR ASSESSMENT YEAR 2007 - 08. 2. E FFECTIVE GROUND S ARE TO THE EFFECT THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS: - ( I ) IN CONFIRMING THE DISALLOWANCE U/S 40(A)(IA) FOR RS.14,15,221/ - ( II ) HAVING DISALLOWED THE EXPENDITURE, THE ABOVE AMOUNT HAS BEEN ASSESSED AS TAXABLE INCOME IN THIS YEAR WHICH IS CONTRARY TO LAW AS THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD. BESIDES, DEDUCTION U/S 80IB(10) SHOULD HA VE BEEN GIVEN AS THE ASSESSEE IS ELIGIBLE TO IT. 3. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE TDS PAYMENT IN QUESTION HAS BEEN MADE ON 22.05.2007. AT THE RELEVANT TIME, THE LEGAL SMC - ITA NO. 1090/AHD/ 2012 M/S. NEEL INFRASTRUCTURE VS. ITO AY : 2007 - 08 2 INTERPRETATION OF THE PROVISION WAS TO THE EFFECT THAT PAYMENT SHOULD BE MADE BEFORE THE FINANCIAL YEAR. HOWEVER, SUBSEQUENTLY THE LAW HAS BEEN AMENDED PRESCRIBING THAT THE PAYMENT SHOULD BE MADE BEFORE THE DUE DATE OF FILING OF THE RETURN, WHICH IN THE CASE OF THE ASSESSEE IS 30. 10.2007; THUS, THE ASSESSEES PAYMENT OF TD S HAS BEEN MADE ON 22.05.2007 WHICH IS BEFORE THE DUE DATE OF FILING OF THE RETURN. THEREFORE, NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA). RELIANCE IS PLACED ON HONBLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF CIT VS. STANDARD BUILDCON, IN TAX APPEAL NO .993 OF 2013, HOLDING THAT THE AMENDMENT BROUGHT FORWARD BY THE FINANCE ACT , 2010 HAS RETROSPECTIVE EFFECT, BY FOLLOWING OBSERVATION: - 7. THE SECOND QUESTION PERTAINS TO ADDITION MADE UNDER SECTION 40(A)(IA) OF THE ACT BY THE ASSESSEE TO THE SUB - CONTRAC TORS FOR THE PERIOD FROM APRIL 2004 TO FEBRUARY 2005 ON WHICH TDS HAS BEEN PAID ON 24 TH MAY 2005. THIS ISSUE HAS ALREADY BEEN ADDRESSED BY THIS COURT IN THE CASE OF CIT VS. GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD [2013] 35 TAXMANN.COM 638/217 TAXMAN 11 4 (GUJ.) AND IN TAX APPEAL NO.412 /2013 & ALLIED APPEALS, WHEREIN, IT IS HELD THAT AMENDMENT IN SECTION 40(A)(IA) OF THE INCOME - TAX ACT BY THE FINANCE ACT OF 2010 HAS RETROSPECTIVE EFFECT. REFERENCE ALSO NEEDS TO BE MADE TO A DECISION OF THIS COURT IN TAX A PPEAL NO.706/2010 DECIDED ON 18 TH JULY 2011. SINCE THE ISSUE IS ALREADY ANSWERED, THE PRESENT TAX APPEAL REQUIRES NO FURTHER CONSIDERATION. 4. L D. DEPARTMENTAL REPRESENTATIVE IS HEARD. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS MADE THE IMPUGNED TDS ON 22.05.2007 WHICH IS EARLIER TO THE DA TE OF FILING OF THE RETURN, I.E., 30.10.2007. THIS BEING SO, RESPECTFULLY FOLLOWING THE HONBLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF STANDARD BUILDCON (SUPRA), THE DISALLOWANCE MADE SMC - ITA NO. 1090/AHD/ 2012 M/S. NEEL INFRASTRUCTURE VS. ITO AY : 2007 - 08 3 BY THE ASSESSING OFFICER U/S 40(A)(IA) IS DELETED. SINCE THE DISAL LOWANCE IS DELETED, THE ALTERNATIVE GROUND BECOMES ACADEMIC. 6 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 1 3 T H JUNE , 201 6 AT AHMEDABAD. SD/ - R.P. TOLANI ( JUDICIAL MEMBER ) AHMEDABAD; DATED 1 3 / 0 6 /201 6 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD