ACIT, CHENNAI V. M/s. Sri Sakthi Cabs, CHENNAI

ITA 1123/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64135 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 1123/MDS/2012 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IX, CHENNAI - 600 006. (APPELLANT) V. M/S SRI SAKTHI CABS, NO.86, JANI JAN KHAN ROAD, ROYAPETTAH, CHENNAI - 600 014. PAN : AAOFS9450Q (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : NONE DATE OF HEARING : 08.08.2012 DATE OF PRONOUNCEMENT : 08.08.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E, RAISED THROUGH NINE GROUNDS, IS THAT THE CIT(APPEALS) DELETED A DI SALLOWANCE MADE BY THE A.O. RELYING ON SECTION 40(A)(IA) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. FACTS APROPOS ARE THAT ASSESSEE-FIRM, ENGAGED IN TRAVEL BUSINESS, HAD FILED ITS RETURN FOR THE IMPUGNED ASSESSMENT YE AR ADMITTING AN INCOME OF ` 4,22,840/-. ASSESSEE HAD PAID CAR HIRE CHARGES OF ` 24.11 2 I.T.A. NO. 1123/MDS/12 LAKHS DURING THE RELEVANT PREVIOUS YEAR. ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE HAD FAILED TO DEDUCT TAX AT S OURCE ON SUCH PAYMENTS AND RELYING ON SECTION 40(A)(IA), HE MADE A DISALLOWANCE OF SUCH CAR HIRE CHARGES CLAIMED. RESULT WAS AN ADDIT ION OF ` 18,67,073/-. 3. IN ITS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT SECTION 40(A)(IA) WAS APPLICABLE ONLY FOR EXPE NSES COMING WITHIN SECTIONS 30 TO 38 OF THE ACT AND NOT FOR DIRECT EXP ENSES WHICH WAS ALLOWABLE UNDER SECTION 28 OF THE ACT. RELIANCE WA S ALSO PLACED ON THE DECISION OF HYDERABAD BENCH OF THIS TRIBUNAL IN THE CASE OF TEJA CONSTRUCTION V. ACIT (2010) 39 SOT 13 (HYD.). CIT( APPEALS) WAS APPRECIATIVE OF THIS CONTENTION OF THE ASSESSEE AND DELETED THE DISALLOWANCE. 4. NOW BEFORE US, LEARNED D.R. FAIRLY ADMITTED THAT IN VIEW OF THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF MERILYN SHIPPING AND TRANSPORT V. ACIT (2012) 16 ITR (TRIB.) 1 (SB), DISALLOWANCE UNDER SECTION 40(A)(IA) WOULD NOT STAND. 5. NO ONE APPEARED ON BEHALF OF ASSESSEE DESPITE IS SUE OF NOTICE FOR HEARING. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE LEARNE D D.R. THERE IS NO DISPUTE THAT THE HIRE CHARGES ON WHICH DISALLOWA NCE WAS MADE, WAS 3 I.T.A. NO. 1123/MDS/12 PAID BY THE ASSESSEE DURING THE RELEVANT YEAR. ASS ESSING OFFICER HIMSELF HAS NOTED THAT ASSESSEE HAD PRODUCED LEDGER COPIES IN SUPPORT OF HIRE CHARGES PAID. ONCE AN AMOUNT STOOD PAID, I N OUR OPINION, IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF MER ILYN SHIPPING AND TRANSPORT (SUPRA), SECTION 40(A)(IA) CANNOT BE APPL IED. RIGOURS OF SECTION 40(A)(IA) WOULD ATTRACT ONLY WHERE AMOUNTS STOOD PAYABLE AS AT THE END OF RELEVANT PREVIOUS YEAR AND NOT WHERE AMO UNTS WERE PAID DURING THE PREVIOUS YEAR. IN THIS VIEW OF THE MATT ER, WE ARE OF THE OPINION THAT THE ORDER OF CIT(APPEALS) COULD NOT BE FAULTED. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT( APPEALS). 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON WEDNESDAY, THE 8 TH OF AUGUST, 2012, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 8 TH AUGUST, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-IX, CHENNAI-34 (4) CIT-VIII, CHENNAI-6 (5) D.R. (6) GUARD FILE