VEEKAY PLAST, Jaipur V. DCIT, Jaipur

ITA 1132/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2199 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 26-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAGDISH CHAND KULHATI JCIT DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 1132/JP/2016 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 M/S VEEKAY PLAST, F-25-26, KARTARPURA INDUSTRIAL AREA, JAIPUR. CUKE VS. D.C.I.T., CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAFV 9808 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (DATE WAS NOTED) JKTLO DH VKSJ LS@ REVENUE BY : SHRI JAGDISH CHAND KULHATI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 23/01/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A), ALIGARH AT JAIPUR (CAMP OFFICE) DATE D 14/10/2016 FOR THE A.Y. 2010-11, WHEREIN THE ASSESSEE HAS RAISED FOLLOWI NG GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST AMOUNTING TO RS. 2,87,765 MADE BY DEPUTY COMMISSION ER OF INCOME TAX. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF FREIGHT OF ITA 1132/JP/2016_ VEEKAY PLAST VS DCIT 2 RS. 3,26,199 MADE BY DEPUTY COMMISSIONER OF INCOME TAX. AS THE ASSESSEE HAS NOT DEDUCTED TDS ON FREIGHT PAYMEN T OF RS. 3,26,199. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN DISREGARDING THE DECISION OF JURISDICTIONAL JAIPUR ITAT IN THE CASE OF JAIPUR VI DYUT VITRAN NIGAM LIMITED VS. DCIT (2009) [123 TTJ (JP) 888]. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DISREGARDING THE DECISION OF SPECIAL BENCH OF VISAKHAPATNAM INCOME TAX APPELLATE TRIBUNA L IN THE CASE OF MERILYN SHIPPING &TRANSPORTS (ITA NO. 477/V IZ/2008). 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS ON DISREGARDING THE ARGUMENT TH AT ONLY EXPENDITURE PAYABLE AT THE END OF YEAR SHALL BE DIS ALLOWED. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS IN NOT CONSIDERING THE ARGUMENT THAT M/S R ELIANCE CAPITAL IS CARRYING ON THE BUSINESS OF INSURANCE AN D HENCE OUT OF THE AMBIT OF THE PROVISIONS OF SECTION 194AOF TH E INCOME TAX ACT, 1961. 7. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN RELYING UPON THE DECISIONS O F GUJARAT HIGH COURT IN THE CASE OF CIT V/S SIKANDARKHAN N. T UNVAR (2013) 357 ITR 312 AND CALCUTTA HIGH COURT IN THE C ASE OF CIT V/S CRESCENT EXPORT SYNDICATES ITA NO. 20 OF 2013. 2. EARLIER, THE PRESENT APPEAL OF THE ASSESSEE HAS ALSO BEEN DISMISSED BY THIS BENCH VIDE ITS ORDER DATED 23/02/ 2017 FOR WANT OF PROSECUTION AS WELL AS ON ACCOUNT OF NON-REMOVAL OF THE DEFECTS AS POINTED OUT BY THE REGISTRY OF THE ITAT, JAIPUR. ITA 1132/JP/2016_ VEEKAY PLAST VS DCIT 3 3. AGAINST THE ORDER OF THE ITAT, THE ASSESSEE HAS F ILED MISC. APPLICATION BEING M.A. NO. 52/JP/2017 AND VIDE ITS ORDER DATED 10/11/2017, THE ITAT HAS RECALLED ITS ORDER DATED 23 /02/2017 AND FIXED THE CASE FOR REGULAR HEARING. 4. IN THIS APPEAL, THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL. BUT THE MAIN GROUNDS OF APPEAL IS AGAINST CONFIRMIN G THE DISALLOWANCE OF INTEREST AMOUNTING TO RS. 2,87,765/- AND CONFIRMING THE DISALLOWANCE OF FREIGHT OF RS. 3,26,100/-. THE LD. CIT(A) HAS DEALT BOTH THE ISSUES BY HOLDING AS UNDER: 5.3 DECISION DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT NO TDS WAS MADE FROM THE INTEREST PAID TO M/S RELIANCE CAPITAL INDIA AMOUNTING TO RS. 1,78,951/-, M/S BAJAJ AUTO FINANCE LTD. AMOU NTING TO RS. 1,03,707/- AND M/S G.E. COUNTRYWIDE AMOUNTING TO R S. 5,107/-. THE EXPLANATION GIVEN BY THE APPELLANT IN THIS REGARD W AS NOT FOUND SATISFACTORY BY THE AO. THUS, HE INVOKED THE PROVIS IONS OF SECTION 40(A)(IA) AND MADE ADDITION OF RS. 2,87,765/- . THE APPELLANT HAS HOWEVER SUBMITTED THAT THE PROVI SIONS OF SECTION 40(A) (IA) WILL BE APPLICABLE ONLY IF THE AMOUNT RE MAINS PAYABLE AT THE YEAREND. IN THIS REGARD, JUDGEMENT OF M/S MERILYN S HIPPING AND TRANSPORT COMPANY (20 TAXMAN 244) AND JAIPUR VIDYUT VITRAN NIGAM LTD. V/S DCIT (123 TTJ 888) HAVE BEEN CITED. HOWEVE R, THIS CONTENTION OF THE APPELLANT IS NOT ACCEPTABLE AS GUJARAT HIGH COURT IN THE CASE OF CIT V/S SIKANDARKHAN N TUNVAR [2013] 357 1TR 312 AN D CALCUTTA HIGH ITA 1132/JP/2016_ VEEKAY PLAST VS DCIT 4 COURT IN THE CASE OF CIT V/S CRESCENT EXPORT SYNDIC ATES ITA NO. 20 OF 2013 AND JAKIR HOSSAIN MONDAL IT A NO. 31 OF 2013 H AVE HELD THAT SECTION 40(A) (IA) COVERS NOT ONLY THE AMOUNT WHICH ARE PAYABLE AS ON 31 ST MARCH BUT ALSO AMOUNTS PAYABLE AT ANY TIME DURING THE YEAR. ALSO, ON THE DEPARTMENTS APPEAL TO THE HIGH COURT, THE H IGH COURT HAS VIDE ORDER DATED 8.10.2012 DIRECTED INTERIM SUSPENSION OF THE SPECIAL BENCH VERDICT IN THE CASE OF M/S MERILYN SHIPPING T RANSPORT V/S ACIT (SUPRA). AS AN ALTERNATIVE PLEA, THE APPELLANT HAS SUBMITTE D THAT UNDER THE PROVISIONS OF SECTION 194A, PAYMENT TO A COMPANY CA RRYING ON THE BUSINESS OF INSURANCE IS OUT OF AMBIT OF THE PROVIS IONS FOR DEDUCTION OF TAX. IT HAS BEEN SUBMITTED THAT AS PER THE WEBSITE OF M/S RELIANCE CAPITAL, IT IS ENGAGED IN THE BUSINESS OF LIFE AND GENERAL INSURANCE. I HAVE PERUSED THAT EXTRACT OF THE WEBSITE AS QUOTED BY THE APPELLANT IN THE WRITTEN SUBMISSION. IT IS SEEN THAT AS PER THE INFORMATION GIVEN IN THE WEBSITE RELIANCE CAPITAL HAS INTEREST IN LIFE A ND GENERAL INSURANCE BUT THAT DOES NOT MEAN THAT IT IS INDEED ENGAGED IN THE BUSINESS OF INSURANCE. AS THE APPELLANT HAS FAILED TO PROVIDE C LEAR EVIDENCE TO SUPPORT ITS CLAIM THAT RELIANCE CAPITAL IS INVOLVED IN INSURANCE BUSINESS, THIS ARGUMENT OF THE APPELLANT IS NOT ACC EPTABLE. IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION, IT IS HELD THAT THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 40 (A ) (IA) AND THUS, THE ADDITION OF RS. 2,87,765/- MADE ON THIS ACCOUNT IS HEREBY CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 5.6. DECISION THE AO HAD DISALLOWED THE AMOUNTS PAID AS FREIGHT. IT HAS BEEN EXPLAINED THAT AS PER THE PROVISIONS OF SECTION 194 C, PAYMENTS ITA 1132/JP/2016_ VEEKAY PLAST VS DCIT 5 EXCEEDING RS. 20,000/- MADE TO TWO TRANSPORTERS SHO ULD HAVE BEEN SUBJECTED TO TDS. AS NO TAX WAS DEDUCTED ON THESE P AYMENTS, THE AO HAS DISALLOWED THESE EXPENSES. IN THE WRITTEN SUBMI SSION, THE APPELLANT HAS SUBMITTED THAT THE AO HAS MADE DISALL OWANCE OF THE FREIGHT PAYMENT U/S 40(A) (I) AND THE PROVISIONS OF THAT SECTION RELATE ONLY TO PAYMENTS MADE TO NONRESIDENT. IT HAS BEEN A RGUED THAT THE TWO COMPANIES IN RESPECT OF WHICH DISALLOWANCE HAS BEEN MADE ARE NOT NON- RESIDENT COMPANIES. IN MY OPINION, THOUGH THE AO HAS MENTIONED ABOUT THE PROVISIONS OF SECTION 40(A)(I) BUT THAT IS APPARENTLY A TYPOGRAPHICAL ERROR AND HE ACTUALLY ME ANT THAT THE EXPENSES ARE DISALLOWABLE IN VIEW OF PROVISIONS OF SECTION 40(A) (IA). IN MY OPINION, INADVERTENT REFERENCE TO WRONG PROVISIO NS WOULD NOT MAKE THE DISALLOWANCE BAD IN LAW AS LONG AS THERE I S ANOTHER PROVISION WHICH IS ACTUALLY APPLICABLE IN THE GIVEN FACTS. TH E APPELLANT HAS NOT DENIED THAT TAX WAS DEDUCTIBLE ON THE PAYMENTS MADE TO THE TWO COMPANIES U/S 194A. IT HAS ALSO NOT BEEN DENIED THA T THE TAX WAS NOT DEDUCTED FROM SUCH PAYMENTS. WHEN THE TAX WAS DEDUC TIBLE AND THE SAME HAS NOT BEEN DEDUCTED, IT IS OBVIOUS THAT IN V IEW OF PROVISIONS OF SECTION 40(A)(IA), SUCH EXPENSES CANNOT BE ALLOWED. IN VIEW OF THE ABOVE, THE DISALLOWANCE OF RS. 3,26 ,199/- IS BEING CONFIRMED AND THIS GROUND IS BEING DISMISSED. 5. IN THIS TIME ALSO, NONE ATTENDED ON BEHALF OF TH E ASSESSEE TO PURSUE ITS CASE AFTER BEING DATE WAS NOTED. THE LD DR WAS HEARD. 6. AFTER HEARING THE LD. DR AND CONSIDERING THE FAC TS AND CIRCUMSTANCES OF THE CASE, THE BENCH FIND NO ANY CO NTRARY MATERIAL IN THE ORDER OF THE LD. CIT(A). THE ORDER OF THE LD. CIT (A) IS A SPEAKING ITA 1132/JP/2016_ VEEKAY PLAST VS DCIT 6 ORDER, THEREFORE, SAME IS HEREBY UPHELD. IT IS UNDI SPUTED FACT THAT IN THIS TIME AS WELL AS EARLIER TIME WHEN THE APPEAL OF THE ASSESSEE CAME UP FOR HEARING, NONE ATTENDED ON BEHALF OF THE ASSESSE E BEFORE THE BENCH, THEREFORE, THE ASSESSEE HAS NOT INTERESTED TO PURSU E ITS CASE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/01/2018. SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23 RD JANUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S VEEKAY PLAST, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1132/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR