ACIT, Circle-7(1), Hyd, Hyderabad V. Sri Sairam Transport, Nalgonda, Nalgonda District

ITA 1209/HYD/2015

• Counselvise Citation: 120922514 RSA 2015
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 15-10-2015
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1209/HYD/2015 ASSESSMENT YEAR : 2007-08 THE ASST. C OMMISSIONER OF INCOME TAX, CIRCLE-7(1), HYDERABAD VS M/S. SRI SAIRAM TRANSPORT, DONDAPADU VILLAGE, NALGONDA DISTRICT [PAN: ABGFS2683A] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI B. KURMI NAIDU , DR FOR ASSESSEE : NONE DATE OF HEARING : 17 - 1 1 - 201 5 DATE OF PRONOUNCEMENT : 27 - 1 1 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS A REVENUE APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, HYDERABAD D ATED 07-08-2015. THE ISSUE INVOLVED IS WITH REFERENCE TO DISALLOWANCE U/S. 40(A)(IA) OF THE INCOME TAX ACT [ACT]. REVENU E HAS RAISED THE FOLLOWING GROUNDS: 2. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWAN CE OF RS. 28,98,549/-, MADE BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT. 3. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF EXPENDITURE U/S. 40(A)(IA) OF THE ACT, HOLDING THAT THE AMOUNTS ARE NOT PAYABLE AS AT THE END OF THE YEAR, IGNORING THAT THE PROVISIONS ARE APPLICABLE IN RESPECT OF PAYMENTS MA DE DURING THE YEAR WITHOUT TDS BEING MADE. I.T.A. NO. 1209/HYD/2015 M/S. SRI SAIRAM TRANSPORT :- 2 -: 4. THE LD. CIT(A) ERRED IN RELYING UPON THE DECISIO N OF HON'BLE ITAT, SPECIAL BENCH, VISAKHAPATNAM, IN THE CASE OF MERYLIN SHIPPING & TRANSPORT NOT CONSIDERING THE CIRCULAR O F CBDT IN NO. 10/DV.2013 [F.NO. 279/MISC./M-61/2012-ITJ DATED 16.12.2013]. 5. THE LD. CIT(A) ERRED IN RELYING UPON THE DECISIO N OF HON'BLE ITAT, SPECIAL BENCH, VISAKHAPATNAM, IN THE CASE OF MERYLIN SHIPPING & TRANSPORTING, NOT CONSIDERING THE FACT T HAT SAID DECISION IS PLACED UNDER INTERIM SUSPENSION BY HON' BLE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF T ELANGANA AND STATE OF ANDHRA PRADESH. GROUND NOS. 1 & 6 ARE GENERAL IN NATURE. 2. BRIEFLY STATED, ASSESSEE IS A PARTNERSHIP FIRM E NGAGED IN THE BUSINESS OF TRANSPORT CONTRACTS. IT DECLARED TOTAL INCOME OF RS. 3,41,730/-. ASSESSING OFFICER (AO) MADE A DISALLOW ANCE OF RS. 28,98,549/- U/S. 40(A)(IA). THE SAME WAS DELETED B Y THE CIT(A) STATING AS UNDER: 5. GROUND NO. 6 RELATES TO DISALLOWANCE OF RS. 28,98,549/- U/S. 40(A)(IA) OF THE ACT. IN THIS REG ARD, IT WAS SUBMITTED BY THE APPELLANT THAT NO PAYMENT WAS REMA INING OUTSTANDING AT THE END OF THE YEAR AND HAS BEEN PAI D DURING THE YEAR. THE APPELLANT HAS CONTENDED THAT DISALLO WANCE CANNOT BE MADE WITH REGARD TO PAYMENTS ALREADY MADE DURING THE YEAR AS HELD BY THE HON'BLE ITAT SPECIAL BENCH, VISAKHAPATNAM IN THE CASE OF MERILYIN SHIPPING AND TRANSPORT VS. ACIT IN ITA NO. 477/VIZ/2008 DT. 29.03.2012. T HE SUBMISSIONS OF THE APPELLANT HAS BEEN CONSIDERED. RESPECTFULLY FOLLOWING THE DECISION RELIED ON BY TH E APPELLANT IT IS HELD THAT NO DISALLOWANCE CAN BE MADE IN RESPECT OF THE AMOUNTS WHICH ARE NOT OUTSTANDING AT THE END OF THE YEAR AS PAYABLE U/S. 40(A)(IA) OF THE ACT. ACCORDINGLY, TH E ADDITION MADE IS DELETED. I.T.A. NO. 1209/HYD/2015 M/S. SRI SAIRAM TRANSPORT :- 3 -: 3. ASSESSEE WAS NOT PRESENT WHEN THE CASE WAS TAKEN UP. THEREFORE, APPEAL IS DECIDED AFTER CONSIDERING THE ARGUMENTS OF THE LD. DR. 4. THE ONLY DISPUTE IS WHETHER AO CAN DISALLOW THE AMOUNT WITH REGARD TO THE PAYMENTS ALREADY MADE DURING THE YEAR WITHOUT TDS AND ARE NOT REMAINING OUTSTANDING AT THE END OF THE YEAR. 4.1. WITH REFERENCE TO THE DISPUTE WHETHER THE AMOU NTS ARE COVERED BY THE PROVISIONS OF SECTION 40(A)(IA) AS A RGUED BY THE LD. DR, WE ARE OF THE OPINION THAT THE DECISION OF THE HON'BLE SPECIAL BENCH OF THE ITAT IN THE CASE OF MERILYIN SHIPPING & TRANSPORT VS. ACIT IN ITA NO. 477/VIZ/2008 DT. 29-03-2012 IS BINDING ON THE CO-ORDINATE BENCH OF ITAT. THUS, AS THERE IS NO AM OUNT OUTSTANDING AT THE END OF THE ACCOUNT YEAR, NO AMOU NT CAN BE DISALLOWED UNDER THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT. BE THAT AS IT MAY, THIS ISSUE WAS CONSIDERED BY THE HO N'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING S ERVICES (P) LTD., [38 TAXMANN.COM (ALL)], WHICH AFFIRMED THE SAID DEC ISION OF THE SPECIAL BENCH IN MERILYIN SHIPPING & TRANSPORT VS. ACIT IN ITA NO. 477/VIZ/2008 (SUPRA) THAT FOR DISALLOWANCE U/S. 40(A)(IA) OF THE ACT, THE AMOUNT SHOULD BE PAYABLE OR NOT WHICH HAS BEEN PAID DURING THE YEAR. THIS FACT WAS ALSO ACCEPTED BY TH E CBDT IN CIRCULAR NO. 10/DV/2013 DT. 16-12-2013. HON'BLE S UPREME COURT OF INDIA HAS AFFIRMED THE DECISION OF THE HON 'BLE HIGH COURT OF ALLAHABAD AS REGARDS THE APPLICABILITY OF SECTIO N 40(A)(IA) OF THE ACT. IN VIEW OF THIS, WE ARE OF THE OPINION THAT T HE CO-ORDINATE BENCH HAS TO FOLLOW THE DECISION OF THE SPECIAL BEN CH, MORE SO, THE OPINION EXPRESSED BY THE SPECIAL BENCH IS ULTIMATEL Y APPROVED BY THE HON'BLE SUPREME COURT. FOR THESE REASONS, WE A RE OF THE I.T.A. NO. 1209/HYD/2015 M/S. SRI SAIRAM TRANSPORT :- 4 -: OPINION THAT ON THE FACTS OF THE CASE, THERE CAN BE NO DISALLOWANCE U/S. 40(A)(IA). 4.2. IN THE CASE OF ACIT VS. M/S. JANAPRIYA PROPERT IES PVT. LTD., IN ITA NOS. 1614 & 1622 TO 1624/HYD/2012 DT. 19-01-201 5, THE CO-ORDINATE BENCH HAS CONSIDERED SIMILAR ISSUE AND HELD AS UNDER: 7. UPON HEARING THE RIVAL SUBMISSIONS, WE ARE OF T HE VIEW THAT THE DECISION OF THE ITAT SPECIAL BENCH IS BINDING ON THE TRIBUNAL, PARTICULARLY IN VIEW OF THE CLARIFICA TORY ORDER PASSED BY THE HON'BLE HIGH COURT OF JUDICATURE AT H YDERABAD IN THE INSTANT CASE, AND THUS, WE RESPECTFULLY FOLL OW THE DECISION OF SPECIAL BENCH IN THE CASE OF MERILYIN S HIPPING & TRANSPORT (SUPRA), AND HOLD THAT THE PROVISIONS OF S. 40(A)(IA) CANNOT BE INVOKED WHERE THE PAYMENTS WERE ALREADY M ADE BY THE ASSESSEE. WE DIRECT THE ASSESSING OFFICER ACCO RDINGLY. IN THE RESULT, APPEALS OF THE REVENUE INSOFAR AS THE A BOVE ISSUE IS CONCERNED, ARE HEREBY DISMISSED. 5. AFTER PERUSING THE ORDERS OF CIT(A) AND THE PRIN CIPLES OF LAW INVOLVED THEREIN, WE DO NOT SEE ANY REASON TO INTER FERE WITH THE ORDER OF THE LD. CIT(A). GROUNDS ARE REJECTED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 27 TH NOVEMBER, 2015 TNMM I.T.A. NO. 1209/HYD/2015 M/S. SRI SAIRAM TRANSPORT :- 5 -: COPY TO : 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-7(1 ), 2 ND FLOOR, B-BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABA D. 2. M/S. SRI SAIRAM TRANSPORT, D.NO. C/56/102(10), SEETHARAMPURAM, OPP: VISHNU CEMENTS LTD., DONDAPADU VILLAGE, NALGONDA DISTRICT. 3 . CI T ( APPEAL S ) - 7 , HYDERABAD. 4. THE PR. CIT-7, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.