ACIT, Faridabad V. Sh. Varun Soni, Faridabad

ITA 1236/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3974 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 10-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B SENIOR
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.1236/DEL./2011 (ASSESSMENT YEAR : 2005-06) ACIT, CIRCLE II, VS. SHRI VARUN SONI, FARIDBAD. 314A, DABUA NAWADA ROAD, DABUA COLONY, FARIDABAD. (PAN : AMAPS8914R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TARUN KUMAR, ADVOCATE REVENUE BY : SHRI KISHORE B., SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES OUT OF THE ORDER OF CIT (APPEALS), FARIDABAD DATED 15.12.2010. THE GROUNDS OF APPEAL READ AS UNDER:- 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETIN G THE ADDITION OF RS.24,97,751/- MADE BY THE ASSESSING OF FICER U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 IN HOLDING TH AT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2010 TO SE CTION 40(A)(IA) IS CURATIVE IN NATURE AND RETROSPECTIVE A ND THEREFORE APPLICABLE FOR ALL EARLIER YEARS, FAILING TO TAKE C OGNIZANCE OF AMENDED PROVISIONS OF SECTION 40(A)(IA) WHICH WAS S UBSTITUTED ITA NO.1236/DEL/2011 2 BY THE FINANCE ACT, 2010 W.E.F. 01.04.2010. THE LEG ISLATURE IN ITS WISDOM HAS CHOSEN NOT TO AMEND IT RETROSPECTIVE BY EVEN SPECIFYING THE DATE OF APPLICABILITY SECTION 40(A)( IA) W.E.F. 01.04.2010.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETIN G THE ADDITION OF RS.24,97,751/- MADE BY THE ASSESSING OF FICER U/S 40 (A)(IA) OF THE INCOME TAX ACT, 1961 IN EQUATING THE PROVISIONS OF SECTION 40(A)(IA) WITH THE PROVISIONS OF SECTION 43B BY HOLDING THAT THE AMENDMENT IN SECTION 40(A)( IA) IS SIMILAR TO THE PROVISIONS OF SECTION 43B REGARDING WHICH THE SUPREME COURT HAS HELD IN THE CASE OF CIT VS ALOM E XTRUSION LTD. (319 ITR 306) TO BE RETROSPECTIVE IN OPERATION DISREGARDING THE FACT THAT THE CITATION OF 319 ITR 306 IS TOTALL Y MISPLACED HERE AS IT TALKS ABOUT SECTION 43B WHEREAS IN THE P RESENT CASE, QUESTION IS ABOUT SECTION 40(A)(IA) OF THE INCOME T AX ACT, 1961.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETIN G THE ADDITION OF RS.24,97,751/- MADE BY THE ASSESSING OF FICER U/S 40 (A)(IA) OF THE INCOME TAX ACT, 1961 EVEN THOUGH THE PROVISIONS OF SECTION 40 (A)(IA) OF THE INCOME TAX ACT, 1961 WAS NOT COMPLIED WITH BY THE ASSESSEE.' 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. THE ONLY ISSUE INVOLVED IN THE APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.24,97,751/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE INCOME- TAX ACT, 1961. THE ASSESSEE IS ALSO A PROPRIETOR O F ASEAN ENGINEERING, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING ENGINEE RING GOODS. ITA NO.1236/DEL/2011 3 4. BOTH THE SIDES WERE HEARD. THE REVENUE HAS NOT DISPUTED THE FACTS RECORDED BY THE CIT (A) IN HIS ORDER. 5. AFTER HEARING BOTH THE SIDES AND GOING THROUGH T HE ORDER OF THE CIT (A), WE FIND THAT THE CIT (A) DELETED THE ADDITION IN VIEW OF THE AMENDMENT W.E.F. 1.4.2005 BY THE FINANCE ACT, 2008. THE CIT (A) DELETED THE ADDITION BY HOLDING AS UNDER :- THE PROVISIONS OF SEC 40(A)(IA) WERE SUBSTITUTED B Y FINANCE ACT 2008 W.R.E.F. 1.4.2005 AND THEY PROVIDE THAT; 'IN THE CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS S O DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR, TDS OUG HT TO BE DEPOSITED ON OR BEFORE THE DUE DATE SPECIFIED IN SE CTION 139(1)'. IT IS THEREFORE CLEAR THAT AS PER THE APPLICABLE PR OVISIONS OF LAW WHERE DEDUCTION HAS BEEN MADE IN THE MONTH OF MARCH , THE SAME CAN BE DEPOSITED TILL THE DUE DATE SPECIFIED U /S 139(1) TO PREVENT DISALLOWANCE U/S 40(A)(IA). IN THE IMPUGNED CASE THE TAX HAS BEEN DEDUCTED IN THE MONTH OF MARCH AND DEPOSIT ED IN MAY 2005 I.E. WELL BEFORE THE DUE DATE SPECIFIED U/S 13 9(1). THEREFORE THERE IS NO CASE FOR ANY DISALLOWANCE TO BE MADE U/S 40(A)(IA). MOREOVER DISALLOWANCE U/S 40(A)(IA) IS R ESTRICTED ONLY TO AMOUNTS WHICH ARE 'PAYABLE' AND HENCE EVEN IF TD S HAS NOT BEEN DEDUCTED ON EXPENSES COVERED U/S 40(A)(IA) AND PAID DURING THE YEAR, NO DISALLOWANCE CAN BE MADE. AS IS EVIDENT IN THE CASE OF ASSESSEE FROM THE COPY OF ACCOUNTS SUBM ITTED OF THE CONCERNED PARTIES, OUT OF THE AMOUNT OF RS.24,97,75 1/- ATTRACTING DISALLOWANCE, CERTAIN AMOUNT HAS BEEN PA ID DURING THE YEAR ITSELF .. THEREFORE IN ANY CASE THE DISALL OWANCE IF ANY OUGHT TO BE RESTRICTED TO ONLY THE AMOUNT WHICH IS PAYABLE. AS FOR REPORTING MADE IN TAX AUDIT REPORT, THE DEDUCTI ON DATE MENTIONED RELATES TO THE MONTH IN WHICH BILL WAS RA ISED AND RECEIVED AND NOT ACTUAL DATE OF CREDIT OF THE BILL TO THE ACCOUNT OF PARTY WHICH DUE TO DISPUTE WAS DONE ON 3151 MARC H 2005. NO ADVERSE VIEW CAN HENCE BE TAKEN FROM THE INFORMA TION ITA NO.1236/DEL/2011 4 GATHERED FROM TAX AUDIT REPORT. ]N VIEW OF THE ABOV E SUBMISSIONS IT IS AMPLY CLEAR THAT THE ASSESSEE DOC S NOT ATTRACT PROVISIONS OF SECTION 40(A)(IA) AND HENCE DISALLOWA NCE OF RS.24,97,75L/- MAY BE DELETED. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY FAULT IN T HE ORDER OF THE CIT (A) AND SUSTAIN THE SAME. BY DOING SO, WE DISMISS THE REVE NUES APPEAL. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF MAY, 2011. SD/- SD/- (I.P. BANSAL) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 13 TH DAY OF MAY, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A), FARIDBAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT, NEW DELHI.