TULSI ENTERPRISES, MUMBAI V. ITO WD 29(3)(2), MUMBAI

ITA 1119/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3870 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-02-2015
• Court: TRIBUNAL
• Keywords: Retrospective amendment

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A CCOUNTANT MEMBER ./ ITA NO . 1119 /MUM /20 1 5 ( / ASSESSMENT YEAR : 20 10 - 20 11 ) M/S TULSI EN TERPRISES, U/18, AKRUTI ELEGANCE, 90 FEET ROAD, GAVANPADA, MULUND(E), MUMBAI - 400081 VS. ITO - 23(3)(4), BANDRA(E), MUMBAI - 51 ./ ./ PAN/GIR NO. : A A FFT 9438 G ( / APPELLANT ) .. ( / RESPONDENT ) /ASS ESSEE BY : SHRI BHADRESH DOSHI /REVENUE BY : MS. BHARATI SINGH / DATE OF HEARING : 04 / 0 8 /2016 / DATE OF PRONOUNCEMENT 11 /0 8 /201 6 / O R D E R TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAI NST THE ORDER OF C IT (A) FOR ASSESSMENT YEAR 20 10 - 2011 . 2. IN GROUND NO.1, ASSESSEE IS AGGRIEVED FOR CONFIRMING THE ADDITION OF LABOUR CHARGES OF RS. 3,40,210/ - U/S.40A(3). 3. NEXT GRIEVANCE OF THE ASSESSEE RELATES TO CONFIRMING T HE ADDITION OF LABOR CHARGE S U/S.40(A)(IA). 4. THE AO DISALLOWED FOLLOWING PAYMENT MADE TO THE PARTIES ON ACCOUNT OF LABOUR CHARGES ON THE PLEA THAT NO TAX HAS BEEN DEDUCTED AT SOURCE U/S.40(A)(IA) : - 1. PRAKASH ENTERPRISES RS.2,80,596/ - 2. REDDY ENTERPRISES RS. 42,956/ - 3. KVS EN TERPRISES RS. 93,778/ - TOTAL RS.4,17,330/ - 5. LD. AR DREW OUR ATTENTION TO THE CERTIFICATES FILED BEFORE THE CIT(A) TO THE EFFECT THAT RECIPIENT OF LABOUR CHARGES HAVE ALREADY OFFERED THE ITA NO. 1119 /2015 2 SAME IN THEIR RETURN OF INCOME AND THESE ARE PLACED ON RECORD AT PAGE 87 OF THE PAPER BOOK. 6. I FOUND THAT ASSESSEE HAS FILED DECLARATION IN FORM 26A AS WELL AS CERTIFICATE BY CA OF THE RESPECTIVE RECIPIENTS OF INCOME INDICATING THE AMOUNT RECEIVED AND THE TAX PAID THEREON. THE CERTIFICATE SO ISSUED BY THE CA DULY INDICATES THAT THE RETURN OF INCOME FILED BY RESPECTIVE RECIPIENTS, WHEREIN AMOUNT RECEIVED BY THE ASSESSEE WAS INCLUDED AND DUE TAXES WERE PAID THEREON. SIMILAR CERTIFICATES HAVE BEEN FILED WITH RESPECT TO ALL THE THREE PARTIES. WE FOUND THAT IN VIEW OF THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) BY THE FINANCE ACT 2012, AND IN VIEW OF THE FACT THAT THE RECIPIENTS OF THE INCOME HAVE ALREADY INCLUDED THE INCOME EMBEDDED IN THESE PAYMENTS IN THEIR TAX RETURNS FILED UNDER SECTION 139, DISALLOWANCE U NDER SECTION 40(A)(IA) COULD NOT BE MADE . E VEN THOUGH THIS PROV ISO IS STATED TO BE EFFECTIVE FROM 1 ST APRIL 2013, SINCE THE AMENDMENT IS DECLARATORY AND CURATIVE IN NATURE, AND, THEREFORE, IT SHOULD BE GIVEN RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEIN G THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. 7. IN VIEW OF THE ABOVE, I RESTORE THE ISSUE BACK TO THE FILE OF AO FOR CONSIDERING THE ABOVE EVIDENCES FILED BEFORE THE CIT(A) AND FOR DECIDING THE ISS UE AFRESH IN TERMS OF MY ABOVE OBSERVATION. 8. THE ASSESSEE IS ALSO AGGRIEVED FOR DISALLOWANCE OF RS.3,40,210/ - OUT OF TOTAL PAYMENT OF RS. 8,98,875/ - TO FOLLOWING FOUR PARTIES : - ITA NO. 1119 /2015 3 SL. NO PAYEE TOTAL EXPENDITURE DISALLOWED U/S.40A(3) 1. LALJI JAISAWAR 3,30, 240 1,88,905 2. RUPESH PATIL 49,330 49,330 3. DATTATRAY VISHNU PAWAR 45,545 45,545 4. ALAM RAJA 56,430 56,430 8,98,875 3,40,210 9. THE CONTENTION OF LD. AR WAS THAT THE PAYMENT WAS MADE TO THE GROUP LEADER WHEREAS AMOUNT PAID TO EACH LABOURERS WAS LESS THAN RS.20,000/ - . IN THE INTEREST OF JUSTICE AND FAIR - PLAY, WE RESTORE THIS GROUND ALSO BACK TO THE FILE OF AO FOR EXAMINING ACTUAL AMOUNT PAID TO THE GROUP LEADER IN RESPECT OF EACH LABOURERS. IF THE AO FINDS THAT AMOUNT PERTAINING TO EACH LABOURER I S LESS THAN RS.20,000/ - , NO DISALLOWANCE U/S. 4 0A(3) SHOULD BE MADE. WE DIRECT ACCORDINGLY. 10. GROUND NO.3 WAS NOT PRESSED BY LD. AR, THE SAME IS THEREFORE, DISMISSED IN LIMINE AS NOT PRESSED. 1 1 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 11 /0 8 / 201 6 . SD/ - ( R.C.SHARMA ) / ACCOUNTANT MEMBER MUMBAI ; DATED 11 /0 8 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//