Annamareddy Varahala Rao, Vakkapatlavani Palem V. THE ITO, Visakhapatnam

ITA 110/VIZ/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6568 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 110 / VIZ /201 5 (ASST. YEAR : 20 11 - 1 2 ) ANNAMAREDDY VARAHALA RAO, D.NO. 23 - 6 - 6, GAJULA STREET, NEAR POORNA MARKET, VISAKHAPATNAM . V . IT O , WAR D - 1(1), VISAKHAPATNAM. PAN NO. AANPA 8136 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI I. KAMASASTRY FC A. DEPARTMENT BY : SHRI M.N. MURTHY NAIK - DR DATE OF HEARING : 05 / 01 /201 7 . DATE OF PRONOUNCEMENT : 25 / 01 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 2 7 /0 2 /201 5 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE HAS NO T DEDUCTED TDS IN RESPECT OF PAYMENT S MADE TOWARDS COMMISSION OF 55,350/ - TO M/S. KARUNASRI ENTERPRISES AND FORKLIFT HIRE CHARGES OF 7,49,000/ - PAID TO M/S. RAINBOW ENTERPRISES , OUT OF WHICH 1,67,620/ - IS PAYABLE. ACCORDINGLY, THE ASSESSING OFFICER BY INVOKING THE 2 ITA NO. 110 / VIZ /201 5 PROVISIONS OF SECTION 40(A)(IA) , DISALLOWED THE ENTIRE EXPENDITURE CLAIMED BY THE ASSESSEE. 3 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5 . AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PAID THE AMOUNTS ON OR BEFORE 31 ST MARCH OF THE FINANCIAL YEAR AND THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL AT VISAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORT S V. ACIT [ 136 ITD 23 ] AND THE SAME HAS BEEN FOLLOWED BY THE VERY SAME COORDINATE BENCH IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS V. ACIT IN ITA NO. 657/VIZ/2014, DATED 22/07/2015 AND SUBMITTED THAT THE SAME MAY BE FOLLOWED. 6 . ON THE OTHER HAND, DE PARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. THE VERY SAME ISSUE HAS BEEN CONSIDERED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA) AND ALSO THE COORDINATE BENCH OF THIS TRIBUNAL HAS FOLLOWED THE SAME IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS (SUPRA), WHEREIN IT HAS BEEN HELD AS UNDER: - 3 ITA NO. 110 / VIZ /201 5 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT SPECIAL BENCH VISAKHAPATNAM AND ALSO IN THE L IGHT OF THE VIEW EXPRESSED BY THE HON'BLE AP HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERING SYNDICATE, WE ARE OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE MADE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY PAID BEFORE 31 ST M ARCH. IN OTHER WORDS, THE ASSESSING OFFICER IS DIRECTED TO RESTRICT THE DISALLOWANCE TO THE AMOUNTS PAYABLE AFTER 31 ST MARCH. WITH THESE OBSERVATIONS, GROUND NO.3 OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. 8 . RESPECTFULLY FOLLOWING THE DECISION OF T HE COORDINATE BENCH OF THIS TRIBUNAL IN MUKUNDARA ENGINEERS & CONTRACTORS (SUPRA), WE DIRECT THE ASSESSING OFFICER TO VERIFY THE PAYMENTS MADE. IF ASSESSEE HAS ALREADY MADE PAYMENTS ON OR BEFORE 31 ST MARCH OF THE FINANCIAL YEAR, THE SAME MAY BE ALLOWED AN D IF ANY PAYMENTS MADE SUBSEQUENT TO 31 ST MARCH, THE SAME MAY BE DISALLOWED. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 9 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 2 5 T H DAY OF JANUARY , 201 7 . S D / - S D / - ( G. MANJUNATHA ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 5 T H JANUARY , 201 7 . VR/ - 4 ITA NO. 110 / VIZ /201 5 COPY TO: 1 . THE ASSESSEE - ANNAMAREDDY VARAHALA RAO, D.NO. 23 - 6 - 6, GAJULA STREET, NEAR POORNA MARKET, VISAKHAPATNAM . 2 . THE REVENUE - ITO, WARD - 1(1), VISAKHAPATNAM. 3 . THE CIT - 1, VISAKHAPATNAM. 4 . THE CIT(A) - 1, VISAKHAPATNAM. 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., VISAKHAPATNAM