ACIT, CHENNAI V. M/s. Sell More Marketing, CHENNAI

ITA 1109/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64511 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S JAYARAMAN
• Assessee Lawyers: R VAI DYANATHANC A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI (BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ) .. I.T.A. NO. 1109/MDS/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE V, CHENNAI. PAN : AADFS 7833 C (APPELLANT) V. M/S.SELLMORE MARKETING, NO.4/26,SARATHY NAGAR, 5 TH STREET, VELACHERY, CHENNAI 42. (RESPONDENT) APPELLANT BY : SHRI S. JAYARAMAN RESPONDENT BY : SHRI R.VAI DYANATHAN,C.A DATE OF HEARING : 05.11.12 DATE OF PRONOUNCEMENT : 06.11.12 O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VIII, CHENNAI DATED 22.02.2012. ITA NO.1109/MDS/12 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A) IS OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) ERRED IN DELETING ADDITIONS OF RS.25,59,268/- MADE BY THE A.O UNDER SECTION 40(A)( IA) FOR NON-PAYMENT OF TDS. 3. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE NOT ES ON CLAUSES OF FINANCE BILL,2010 WHEREIN IT IS VERY CLE ARLY STATED THAT THIS AMENDMENT WILL TAKE EFFECT RETROSPECTIVELY FROM 1 ST APRIL 2010, AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 2010-11 AN D SUBSEQUENT YEARS ONLY. 3. THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ONLY ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE WAS THAT THE CIT(A) ERRED IN DELETING THE ADDITIONS OF ` 25,59,268/- MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) FOR DELAYED PAYMENT OF TDS WITHOUT CONSIDERING THE FACT THAT NOTES ON CLAUSES OF FINAN CE BILL, 2010 CLEARLY STATED THAT THE AMENDMENT MADE IN SECTION 4 0(A)(IA) THAT NO DISALLOWANCE OF EXPENDITURE ON ACCOUNT OF COMMISSIO N OR BROKERAGE, WAS TO BE MADE ON WHICH TAX IS DEDUCTABLE AT SOURCE UNDER CHAPTER ITA NO.1109/MDS/12 3 XVIIB AND SUCH TAXES AFTER DEDUCTION HAS BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTIO N 139, WAS TO TAKE EFFECT WITH EFFECT FROM FIRST APRIL, 2010 AND ACCO RDINGLY, WAS APPLICABLE IN RELATION TO ASSESSMENT YEAR 2010-11 A ND SUBSEQUENT YEARS ONLY. THE ASSESSMENT YEAR IN THE CASE OF THE ASSESSEE WAS 2008-09 AND HENCE, THE SAID AMENDMENT WAS NOT APPLI CABLE IN THE CASE OF ASSESSEE. HE, THEREFORE, SUBMITTED THAT TH E ORDER OF CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICE R SHOULD BE RESTORED. 4. ON THE OTHER HAND, THE A.R. OF ASSESSEE SUPPORT ED THE ORDER OF CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . THE UNDISPUTED FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CO NSIDERATION THE ASSESSEE CLAIMED EXPENDITURE ON ACCOUNT OF BROKERAG E AND COMMISSION OF ` 12,26,008/- AND LABOUR CHARGES OF ` 13,23,260/- ON WHICH TDS OF ` 1,27,308/- AND ` 27,259/- WAS DEDUCTED RESPECTIVELY ITA NO.1109/MDS/12 4 AND THE TDS SO DEDUCTED WAS PAID TO THE CREDIT OF T HE CENTRAL GOVERNMENT ON 08.04.2008. THE ASSESSING OFFICER DI SALLOWED THE CLAIM FOR DEDUCTION OF EXPENDITURE ON ACCOUNT OF BR OKERAGE AND COMMISSION, AND LABOUR CHARGES TOTALING TO ` 25,59,268/- ON THE GROUND THAT THE TDS DEDUCTED ON THE SAID EXPENDITUR E WAS NOT PAID TO THE CREDIT OF CENTRAL GOVERNMENT BEFORE THE END OF THE FINANCIAL YEAR ON 31.03.2008 AND SUCH TDS WAS DEPOSITED WITH THE GOVERNMENT ON 08.04.2008. 6. ON APPEAL BY THE ASSESSEE, THE CIT(A) DELETED T HE DISALLOWANCE ON THE GROUND THAT THE TDS DEDUCTED ON PAYMENTS MADE FOR BROKERAGE & COMMISSION AND LABOR CHARGES W AS PAID BY THE ASSESSEE TO THE CREDIT OF THE CENTRAL GOVERNMENT ON 08.04.2008, WHICH WAS BEFORE THE DUE DATE OF FILING OF THE RETU RN BY THE ASSESSEE UNDER SECTION 139(1) OF THE ACT. THE CIT(A) FOLLOW ED THE ORDER OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATIONS WHEREIN IT WAS HELD BY HONBLE CALCUTTA HIGH COURT VIDE ORDER DATED 23 RD NOVEMBER, 2011 IN ITAT NO.302 OF 2011, GA NO.3200/ 2011 THAT THE AMENDMENT BROUGHT IN FINANCE ACT, 2010 THAT IF THE TDS IS ITA NO.1109/MDS/12 5 DEPOSITED BEFORE DUE DATE OF FILING OF RETURN, THE DISALLOWANCE UNDER SECTION 40(A)(IA) SHALL NOT BE MADE, WAS RETROSPECT IVE IN NATURE. THE D.R. COULD NOT BRING ON RECORD ANY CONTRADICTOR Y DECISION OF THE HIGH COURT OR SUPREME COURT, WHICH WAS IN FAVOUR OF THE REVENUE THAN THE DECISION OF THE HONBLE CALCUTTA HIGH COUR T, WHICH WAS FOLLOWED BY THE CIT(A). WE THEREFORE, DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF T HE COMMISSIONER OF INCOME TAX(A). IT IS CONFIRMED. THE GROUNDS OF APP EAL OF REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON TUESDAY , THE 6 TH NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH NOVEMBER, 2012. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA NO.1109/MDS/12 6