ACIT, CHENNAI V. Shri L.Sundaragopal, CHENNAI

ITA 1136/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61310 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 23-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VI KRAMADITYA
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 1136/MDS/2012 ASSESSMENT YEAR: 2007- 08 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE XIV, 6 TH FLOOR, NEW BLOCK, 121, MAHATMA GANDHI ROAD, CHENNAI 600 034. VS. SHRI L. SUNDARAGOPAL, C/O M/S. LAKPAD COMFORT AIRCON SYSTEMS, NO. 9/2, C BLOCK, 10 TH STREET, ANNA NAGAR EAST, CHENNAI 192. [PAN: APDPS0990K] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIKRAMADITYA, JCIT RESPONDENT BY : NONE DATE OF HEARING : 24.07.2012 DATE OF PRONOUNCEMENT : 24.07.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) XII, CHENNAI D ATED 20.02.2012 IN ITA NO. 291/2009-10 FOR THE ASSESSMENT YEAR 2007-08 . SHRI VIKRAMADITYA, JCIT REPRESENTED ON BEHALF OF THE REVENUE. NONE APP EARED ON BEHALF OF THE ASSESSEE DESPITE ISSUE OF NOTICE, WHICH WAS RETURNE D UNSERVED WITH POSTAL REMARK AS LEFT. HENCE WE PROCEEDED TO DECIDE THE APPEAL AFTER HEARING THE COUNSEL FOR THE REVENUE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.11 1111 113 33 36 66 6/M/ /M/ /M/ /M/1 11 12 22 2 2 2. THE ONLY ISSUE IN THE GROUNDS OF APPEAL OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE EXPENSES DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT IN RE SPECT OF PAYMENTS TO CONTRACT LABOURS ON WHICH NO TAX WAS DEDUCTED AT SO URCE. 3. FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF AIR-CONDITIONING JOB WORK, FILED RETURN OF INCOME F OR THE ASSESSMENT YEAR 2007-08 ON 12.11.2007 ADMITTING INCOME OF ` .9,68,590/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 31 .12.2009 DETERMINING THE INCOME AT ` .35,80,035/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER DISALLOWED ` .26,11,445/- BEING PAYMENTS MADE UNDER THE HEAD LABOUR CHARGES FOR NON-DEDUCTION OF TDS APPL YING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) ALLOWED THE APPEAL OF THE ASSESSEE ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE ONLY WHERE THE EXPENSES ARE PAYABLE AND OUTSTANDING AS ON 31 ST DAY OF MARCH OF THE RELEVANT FINANCIAL YEAR AND SINCE THE ASSESSEE PAID THE LABOUR CHARGES AND NOTHING IS OUTSTANDING AS ON THE 31 ST DAY OF MARCH OF THE RELEVANT FINANCIAL YEAR, THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED. THE COMMISSIONER OF INCOME TAX (APPEALS) RELIED ON THE DECISION OF THE ITAT HYDERABAD BENCH I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.11 1111 113 33 36 66 6/M/ /M/ /M/ /M/1 11 12 22 2 3 IN THE CASE OF TEJA CONSTRUCTION V. ACIT [39 SOT 13 (HYD)] WHILE COMING TO SUCH CONCLUSION. 5. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE HAS COME UP IN APPEAL BEFORE US. AT THE TIM E OF HEARING, THE COUNSEL FOR THE REVENUE THOUGH FAIRLY CONCEDED THAT THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE SPECIAL BENCH OF ITAT , VISAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ADDL. CIT [136 ITD 23], THE PRESENT APPEAL MAY BE DECIDED ON MERITS. 6. WE HAVE HEARD THE COUNSEL FOR THE REVENUE AND P ERUSED THE MATERIALS AVAILABLE ON RECORD AND THE ORDER OF THE SPECIAL BENCH OF ITAT, VISHAKAPATNAM IN THE CASE OF MERILYN SHIPPING & TRA NSPORTS VS. ADDL. CIT (SUPRA). THE SPECIAL BENCH OF THE TRIBUNAL HELD THA T THE PROVISIONS OF SECTION 40(A)(IA) COMES INTO OPERATION ONLY IF THE AMOUNTS REMAIN PAYABLE AT THE END OF THE ACCOUNTING YEAR. IN THIS CASE, SINCE THE RE WAS NO AMOUNT REMAINED PAYABLE BY THE ASSESSEE AT THE END OF THE ACCOUNTING YEAR, PROVISIONS OF SECTION 40(A)(IA) CANNOT BE INVOKED. THEREFORE, RESPECTFULLY FOLLOWING THE SPECIAL BENCH DECISION OF THE TRIBUNA L IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA), WE DISMISS THE APPEA L OF THE REVENUE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.11 1111 113 33 36 66 6/M/ /M/ /M/ /M/1 11 12 22 2 4 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 24 TH JULY, 2012 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE - PRESIDENT (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 24.07.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.