M.Arunachalam & Co., CHENNAI V. ACIT, CHENNAI

ITA 1279/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8168 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Revised return
• Section: 143(3); 142(1); 133(6); 139

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 1 2 79 /MDS/201 6 / ASSESSMENT YEAR :20 08 - 09 M/S. M. ARUNACHALAM & CO., 107/76, LLOYDS ROAD, (AVVAI SHANMUGAM ROAD), ROYAPETTAH, CHENNAI 600 01 4 . [PAN: A AAFM6851F ] VS. THE ASSISTANT COMMISSIONE R OF INCOME TAX, BUSINESS CIRCLE V III , CHENNAI. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. SRIDHAR , ADVOCATE / RESPONDENT BY : SHRI SUPRIYO PAL , J CIT / DATE OF HEARING : 02 . 0 8 .201 6 / DATE OF P RONOUNCEMENT : 21 . 1 0 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEA LS ) 13 , CHENNAI , DATED 0 8 . 0 2 .20 1 6 RELE VANT TO THE ASSESSMENT YEAR 20 08 - 09 . IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GROUNDS: (I) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF .34,12,582/ - AS ADDITIONAL PROFIT FROM THE CONTRACT EXECUTED FOR M/S. DOLLAR BISCUITS CO. P. LTD. I.T.A. NO . 1279 /M/ 16 2 (II) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF .50,74,399/ - AS ADDITIONAL PROFIT FROM THE CONTRACT EXECUTED FOR M/S.DIAB CORE MATERIALS CO. PVT. LTD. (III) THE LD. CIT(A) ERRED IN SUST AINING THE ADDITION OF .4,69,201/ - FOR WANT OF TDS . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ENGINEERS & CONTRACTORS AND FILED ITS RETURN OF INCOME ON 29.09.2008 DECLARING TOTAL INCOME OF .1,56,75,872/ - . THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT [ ACT IN SHORT] WAS ISSUED ON 09.09.2009 AND SUBSEQUENTLY NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED ALONG WITH QUESTIONNAIRE ON 18.09.2009. FURTH ER, THE ASSESSEE HAS FILED ITS REVISED RETURN OF INCOME ON 29.09.2009 ADMITTING ITS INCOME AT .2,38,99,386/ - . AGAIN, THE RETURN WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 26.08.2010 AND ALSO NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED ON 08.11.2010. IN RESPONSE THERETO, THE ASSESSEE FILED ALL DETAILS A ND ALSO STATED THAT THE ASSESSEE FOLLOWS PERCENTAGE COMPLETION METHOD OF ACCOUNTING TO ARRIVE THE PROFITS. THE ASSESSING OFFICER HAS CALLED FOR INFORMATION UNDER SECTION 133(6) OF THE ACT FROM THE CLIENTS OF THE ASSESSEE TO ASCERTAIN THE CONTRACT VALUE OF EACH CONTRACT EXECUTED AS PER THE CONTRACT AGREEMENT AND RUNNING BILLS SUBMITTED, ACTUAL RECEIPTS, ETC. ON PERUSAL OF THE SAME, THE ASSESSING OFFICER FOUND THAT THERE WAS DIFFERENCE IN THE TOTAL I.T.A. NO . 1279 /M/ 16 3 RECEIPTS IN RESPECT OF TWO OF THE ASSESSEE S CLIENTS . ACCORDI NGLY, HE WORKED OUT THE CONTRACT VALUE, RECALCULATED THE PROFIT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND TREATED THE SAME AS UNDISCLOSED PROFIT AND BROUGHT TO TAX IN ADDITION TO OTHER DISALLOWANCE. THUS, THE ASSESSING OFFICER HAS COMPLETED THE ASSES SMENT UNDER SECTION 143(3) OF THE ACT BY ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT .3,28,55,840/ - . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FACTS OF THE CASE, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. ON BEING AGGRIEVED, THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS BEEN FOLLOWING REGULAR METHOD OF ACCOUNTING CONSISTENTLY AND ACCEPTED BY THE DEPARTMENT IN THE EARLIER ASSESSMENT YEARS AND THEREFORE, THE ADDITIONS M ADE IN THE ASSESSMENT YEAR UNDER CONSIDERATION IS UNWARRANTED AND PLEADED THAT THE ADDITIONS/DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. ON THE OTHER HAND, THE LD. DR HAS STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE H EARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WITH REGARD TO THE ADDITIONS OF .34,12,582/ - AND .50,74,399/ - IN RESPECT OF PROFITS FROM THE CONTRACTS I.T.A. NO . 1279 /M/ 16 4 EXECUTED FOR M/S. DOLLAR BISCUITS CO. P. LTD. AND M/ S. DIAB CORE MATERIALS CO. P. LTD., IN ORDER TO VERIFY THE PROFITS DECLARED BY THE ASSESSEE, THE ASSESSING OFFICER OBTAINED DETAILS UNDER SECTION 133(6) OF THE ACT FROM THE ABOVE CLIENTS OF THE ASSESSEE AND EXAMINED THE SUBMISSIONS OF THE CLIENTS AS WELL A S REPLY OF THE ASSESSEE AND NOTICED THE DIFFERENCE IN THE TOTAL RECEIPTS, WHICH ARE GIVEN AS UNDER: NAME RECEIPT AS PER ASSESSEE TOTAL CONTRACT VALUE AS PER 133(6) DOLLAR BI S CUIT S COMPANY P. LTD. 3,64,23,286 4,62,72,746 DIAB CORE MATERIAL P. LT D . 6,53 ,56,588 7,92,90,651 ON VERIFICATION OF THE REPLY DATED 13.12.2010 SUBMITTED BY THE DOLLAR BISCUITS CO. P. LTD., THE ASSESSING OFFICER HAS FOUND THAT THE TOTAL CONTRACT VALUE WAS .5,70,93,596/ - . HOWEVER, THE ASSESSEE HAS MENTIONED THE TOTAL CONTRACT RECE IPTS AT .3,64,23,286/ - . FROM THE ABOVE REPLY OF DOLLAR BISCUITS CO. P. LTD., THE ASSESSING OFFICER HAS ASCERTAINED THAT THE STEEL AND CEMENT WERE SUPPLIED BY THE ABOVE FIRM ITSELF AND THE SAME WAS DEBITED TO THE ASSESSEE S ACCOUNT. HENCE THE TOTAL CONTRAC T VALUE WAS CALCULATED AS UNDER: PARTICULARS AMOUNT ( .) TOTAL CONTRACT VALUE AS PER AGREEMENT 5,70,93,596 LESS : SUPPLY OF CEMENT 46,13,910 LESS : SUPPLY OF IRON 62,06,940 CONTRACT VALUE 4,62,72,746 DUE TO THE DIFFERENCE IN THE CONTRACT VALUE AS C LAIMED BY THE ASSESSEE AND AS PER THE CALCULATED CONTRACT VALUE AS ABOVE BASED ON THE CONFIRMATION RECEIVED FROM DOLLAR BISCUITS CO. P. LTD., THE ASSESSEE WAS ASKED TO EXPLAIN I.T.A. NO . 1279 /M/ 16 5 AS TO WHY THE TOTAL CONTRACT VALUE SHOULD NOT BE TAKEN AS .4,62,72,746/ - . IN RE PLY DATED 30.12.2010, THE ASSESSEE HAS SUBMITTED THE FOLLOWING: DOLLAR BISCUITS CO. P. LTD. 2007 - 08 2008 - 09 2009 - 10 TOTAL NET RECEIPTS AS PER PROFIT & LOSS ACCOUNT SCHEDULE - 8 3,29,61,842 24,02,026 10,59,418 3,64,23,286 ADD: SERVICE TAX DEDUCTED FROM R ECEIPTS 17,09,588 97,974 40,582 18,48,144 GROSS RECEIPTS AS PER ACCOUNTS 3,46,71,430 25,00,000 11,00,000 3,82,71,430 LESS: MATERIALS SUPPLIED BY THE CLIENTS DEBITED TO OUR ACCOUNT AS PER STATEMENT FURNISHED U/S 133(6) BY THE AO - 31.03.2008 SUPPLY OF C EMENT BY DOLLAR BISCUITS DEBITED TO OUR A/C. - 31.03.2008 SUPPLY OF STEEL BY DOLLAR BISCUITS DEBITED TO OUR A/C. 46,13,910 46,13,910 62,06,940 62,06,940 4,54,92,280 25,00,000 11,00,000 4,90,92,280 AMOUNT RECEIVED IN FY 2010 - 11 ON 09.09.2 010 AGAINST OUTSTANDING DUE OF .64,40,582 75,55,851 ADD: SERVICE TAX DEDUCTED FROM RECEIPTS 3,08,188 78,64,039 TOTAL AMOUNT RECEIVED AS PER M. ARUNACHALAM & CO. 5,69,56,319 5 .1 FROM THE ABOVE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER HAS OBSERVED AS UNDER: I. IN T HE AGREEMENT ENTERED BY M. ARUNACHALAM & CO. WITH DOLLAR BISCUITS CO. P. LTD., DATED 16.04.2007, PARA 1 OF PAGE 1, IT IS CLEARLY MENTIONED THAT THE TOTAL CONTRACT VALUE IS EXCLUDING SERVICE TAX. THE AGREEMENT IS REPRODUCED AS FOLLOWS: .FOR THE PURPOSE OF CONTRACT AND TO CALCULATE MOBILIZATION ADVANCE, SECURITY DEPOSIT ETC., THE ORDER VALUE IS .5,32,00,000/ - (RUPEES FIVE CRORE TWENTY THREE LAKHS ONLY) EXCLUDING SERVICE TAX. THIS VALUE IS ARRIVED AT WITH YOUR FINAL NEGOTIATED PRICE. (THE TOTAL CONTRACT VALUE OF .5,23,00,000/ - WAS SUBSEQUENTLY INCREASED TO .5,70,93,596/ - AS PER THE REPLY DATED 13.12.2010 BY DOLLAR BISCUITS CO. P. LTD.). II. FOR CALCULATING THE PERCENTAGE COMPLETION METHOD THE SERVICE TAX SHOULD NOT BE ADDED IN THE CONTRACT VALUE. I.T.A. NO . 1279 /M/ 16 6 IN VIEW OF THE ABOVE, BY TAKING THE CONTRACT VALUE AS .4,62,72,746/ - , THE ASSESSING OFFICER HA S RECALCULATED THE PROFIT FOR THE ASSESSMENT YEAR 2008 - 09 AT .34,12,852/ - AND CONSIDERED IT AS UNDISCLOSED PROFIT OF THE ASSESSEE RECEIVED IN THE CASE OF DOLLAR BISCUITS CO. P. LTD. AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. DIAB CORE MATERIALS P. LTD. 5 .2 ON VERIFICATION OF THE REPLY DATED 30.11.2010 SUBMITTED BY DIAB CORE MATERIALS P. LTD., THE ASSESSING OFFICER HAS NOTICED THAT THE TOTAL CONTRACT VALUE WAS .8,30,15,752/ - . HOWEVER, THE ASSESSEE HAS MENTIONED THE TOTAL CONTRACT RECEIPTS AS .6,53 ,56,588.61. AS PER THE ABOVE REPLY OF DIAB CORE MATERIALS P. LTD., THE ASSESSING OFFICER HAS ASCERTAINED THE TOTAL BILL VALUE RAISED BY THE ASSESSEE TO DIAB CORE MATERIALS P. LTD. WAS .7,92,90,651/ - WHICH INCLUDES SERVICE TAX. SINCE THERE WAS DIFFERENCE B ETWEEN THE CONTRACT VALUE AS CLAIMED BY THE ASSESSEE AND AS PER THE CALCULATED CONTRACT VALUE BASED ON THE CONFIRMATION RECEIVED FROM DIAB CORE MATERIALS P. LTD., THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE TOTAL CONTRACT VALUE SHOULD BE TAKEN AT .7,9 2,90,651/ - . ACCORDINGLY, VIDE ITS REPLY DATED 30.12.2010, THE ASSESSEE HAS SUBMITTED AS UNDER: DIAB CORE MATERIALS P. LTD. 2007 - 08 2008 - 09 2009 - 10 TOTAL NET RECEIPTS AS PER PROFIT & LOSS ACCOUNT SCHEDULE - 8 2,5051,046 3,78,99,841 24,05,701 6,53,56,588 A DD: SERVICE TAX DEDUCTED FROM RECEIPTS 12,74,106 33,64,815 96,053 47,34,974 GROSS RECEIPTS AS PER ACCOUNTS 4,40,707 10,68,345 0 15,09,052 I.T.A. NO . 1279 /M/ 16 7 2,67,65,859 4,23,33,001 25,01,754 7,16,00,614 AMOUNT RECEIVED IN FY 2010 - 11 ON 21.09.2010 AGAINST OUTSTANDING DUE OF .33,00,000/ - 38,31,907 ADD: SERVICE TAX DEDUCTED FROM RECEIPTS 4,95,016 WCT DEDUCTED FROM RECEIPTS 1,73,077 GROSS RECEIPTS 45,00,000 TOTAL AMOUNT RECEIVED AS PER M. ARUNACHALAM & CO. 7,61,00,616 AMOUNT AS PER DIAB CORE MATERIALS P. LTD. AMOUNT PAID AS PER DIAB CORE MATERIALS P. LTD. 7,47,41,554 TDS 13,60,060 AMOUNT DEBITED BY DIAB NOT CONSIDERED BY M. ARUNACHALAM & CO. - 1,000 TOTAL AMOUNT AS PER DIAB CORE 7,61,00,614 5 .3 FROM THE ABOVE REPLY OF THE ASSESSEE, TH E ASSESSING OFFICER HAS OBSERVED AS UNDER: I. IN THE AGREEMENT ENTERED INTO BETWEEN DIAB CORE MATERIALS P. LTD. AND THE ASSESSEE, PARA 1.2 OF PAGE 3, IT IS MENTIONED THAT THE TOTAL CONTRACT VALUE IS EXCLUDING SERVICE TAX, WHICH IS REPRODUCED HERE: . DIA B HEREBY COVENANT TO PAY TO THE CONTRACTOR THE SUM OF .8,30,15,725/ - (RUPEES EIGHT CRORE THIRTY LAKHS FIFTEEN THOUSAND SEVEN HUNDRED AND TWENTY FIVE ONLY) EXCLUDING TAXES OR SUCH OTHER SUM AS SHALL BECOME PAYABLE AT THE TIMES AND IN THE MANNER SPECIFIED I N THE CONTRACT IN CONSIDERATION OF THE EXECUTION, COMPLETION, MAINTENANCE AND GUARANTEE OF THE WORKS . II. FOR CALCULATING THE PERCENTAGE COMPLETION METHOD THE SERVICE TAX SHOULD NOT BE ADDED IN THE CONTRACT VALUE. IN VIEW OF THE ABOVE, BY TAKING THE CONTRACT VALUE AS .7,45,55,677/ - , THE ASSESSING OFFICER HAS RECALCULATED THE PROFIT FOR THE ASSESSMENT YEAR 2008 - 09 AT .50,74,399/ - AND CONSIDERED IT AS UNDISCLOSED PROFIT OF THE ASSESSEE I.T.A. NO . 1279 /M/ 16 8 RECEIVED IN THE CASE OF DOLLAR BISCUITS CO. P. LTD. AND ADDED TO THE TOTAL INCOME O F THE ASSESSEE. 5.4 AFTER CONSIDERING THE STATEMENT OF CALCULATION, THE LD. CIT(A) SOUGHT FOR THE REPORT FROM THE ASSESSING OFFICER. AFTER OBTAINING THE REMAND REPORT, THE SAME WAS FORWARDED TO THE ASSESSEE AS WELL AS ITS CLIENTS FOR CLARIFICATION. T HE CL IENT M/S. DOLLAR BISCUITS P. LTD. VIDE ITS LETTER DATED 11.12.2012 CLARIFIED THAT THE TOTAL CONTRACT PAYMENTS TO THE ASSESSEE WAS .5,48,56,124.58 EXCLUDING SERVICE CHARGES. SIMILARLY, THE OTHER CLIENT M/S. DIAB CORE MATERIALS PVT. LTD. ALSO CLARIFIED VIDE ITS LETTER DATED 31.10.2012 THAT THE REVISED BILL OF QUANTITIES TO THE ASSESSEE WAS .8,30,15,725/ - EXCLUDING SERVICE CHARGES. HOWEVER, THE LD. CIT(A) HAS ALSO OBSERVED IN THE COMPUTATION THAT THE ASSESSEE HAS NOT DEDUCTED THE SERVICE CHARGES AND ALSO THE COST OF MATERIALS SUPPLIED BY THE CLIENT. SINCE FOR CALCULATING THE PERCENTAGE COMPLETION METHOD THE SERVICE TAX SHOULD NOT BE ADDED IN THE CONTRACT VALUE AND AFTER CONSIDERING THE WORKING OF COMPUTATION OF PROFIT IN THE PROJECT COMPLETION METHOD, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED PROFIT IN THE HANDS OF THE ASSESSEE . ON PERUSAL OF THE RECORDS, WE FIND THAT THE ASSESSEE HAS MENTIONED THE TOTAL CONTRACT RECEIPTS AS .3,64,23,286/ - , WHEREAS, THE TOTA L CONTRACT VALUE ADMITTED UNDER SECTION 133(6) OF THE ACT BY THE CLIENT M/S. DOLLAR BISCUITS CO. P. LTD. WAS .5,70,93,596/ - A FTER EXCLUDING THE COST OF I.T.A. NO . 1279 /M/ 16 9 SUPPLY OF IRON AND CEMENT OF .1,08,20,850/ - [ .62,06,940 + .46,13,910], THE ASSESSING OFFICER HAS TAK EN THE CONTRACT VALUE AT .4,62,72,746/ - AND WORKED OUT THE DIFFERENCE IN PROFIT, WHICH COMES TO .34,12,852/ - AND DISALLOWED THE SAME. SIMILARLY, THE OTHER CLIENT M/S. DIAB CORE MATERIALS P. LTD. HAS ADMITTED THE CONTRACT VALUE AT .7,92,90,651/ - . B Y EXCL UDING THE SERVICE TAX COMPONENT AT .47,34,974/ - , THE ASSESSING OFFICER HAS TAKEN THE CONTRACT VALUE OF .7,45,55,677/ - AND WORKED OUT THE DIFFERENCE IN PROFIT AT .50,74,399/ - AND DISALLOWED THE SAME. SINCE THE COST OF MATERIAL SUPPLIED BY THE CLIENT OF THE ASSESSEE AND SERVICE TAX IS NOT INCLUDABLE IN THE CONTRACT VALUE, WE ARE OF THE CONSIDERED OPINION THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS RIGHTLY CONFIRMED BY THE LD. CIT(A) AND T HUS, THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE S A RE CONFIRMED AND THE GROUND S RAISED BY THE ASSESSEE ARE DISMISSED. 6. THE NEXT ISSUE RELATES TO SUSTENANCE OF THE ADDITION OF .4,69,201/ - FOR WANT OF TDS ON THE APPLICATION OF SECTION 40(A)(IA) OF THE ACT IN THE COMPUTATION OF TAXABLE TOTAL INCOME. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF TDS COLLECTED AND DEPOSITED WITHIN THE TIME LIMITS PRESCRIBED BY THE RELEVANT PROVISIONS OF THE ACT. IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, WHERE TAX ES WERE DEDUCTIBLE AT SOURCE BUT HAD NOT BEEN DEDUCTED OR WHERE SUCH TAXES WERE NOT PAID AFTER DEDUCTION BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER I.T.A. NO . 1279 /M/ 16 10 SUB - SECTION 1 OF SECTION 200 OF THE ACT, THE CORRESPONDING EXPENDITURE WHICH WAS THE SUBJECT MATTER OF D EDUCTION OF TAX AT SOURCE WOULD NOT BE ALLOWABLE AS DEDUCTION FROM THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY, THE ASSESSEE WAS ASKED TO FURNISH DETAILS IN THIS REGARD. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS OBSERVE D THAT ON AN INTEREST EXPENDITURE OF .4,69,201/ - , THE ASSESSEE HAS FAILED TO SATISFY THE CONDITIONS LAID DOWN IN THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, CONTRAVENTION OF WHICH RAISED THE ISSUE OF DISALLOWANCE OF DEDUCTION OF .4,69,201/ - UNDER THE SAID PROVISIONS. SINCE THE ASSESSEE IS IN DEFAULT IN PAYING TAX DEDUCTED AT SOURCE BEYOND THE DUE DATE, WHICH WAS MANDATORY TO DISALLOW THE CORRESPONDING CLAIM OF EXPENDITURE AS PER THE PROVISIONS OF THE SECTION 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER DISALLOWED THE SAME UNDER SECTION 40(A)(IA) OF THE ACT. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER SINCE THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM WITH EVIDENCE S. 6.1 BEFORE US, BY FILING COPIES OF THE RETURN OF INCOME IN RESPECT OF PARTIES TO WHOM INTEREST PAYMENTS WERE MADE BY THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE INCOME OF THE PARTIES ARE BELOW TAXABLE LIMIT AND PLEADED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW. I.T.A. NO . 1279 /M/ 16 11 6.2 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING COPIES OF THE RETURN OF INCOME IN RESPECT OF PARTIES TO WHOM INTEREST PAYMENTS WERE MADE BY THE AS SESSEE, FILED IN THE PAPER BOOK. ON PERUSAL OF THE SAME, WE FIND THAT THE INTEREST RECIPIENTS INCOME IS BELOW TAXABLE LIMIT. SINCE THE RECEIPT OF INTEREST INCOME WAS MORE THAN .10,000/ - , THE INTEREST RECIPIENTS HAVE FILED FORM 15G, WHICH WAS NOT DISPUTED BY THE DEPARTMENT. ON PERUSAL OF THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 29.09.2008, I.E., WITHIN THE TIME LIMIT ALLOWED UNDER THE ACT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE IS IN DEFAUL T IN PAYING THE TAX DEDUCTED AT SOURCE BEYOND THE DUE DATE. HOWEVER, IT IS NOT CLEAR FROM THE ASSESSMENT ORDER AS TO WHETHER THE ASSESSEE HAS PAID THE TAX DEDUCTED AT SOURCE BEFORE FILING THE RETURN OF INCOME UNDER SECTION 139 OF THE ACT OR NOT. EVEN THOUG H THE ASSESSEE HAS PAID THE TAX DEDUCTED AT SOURCE BEYOND THE DUE DATE, BUT IF PAID THE SAME BEFORE FILING OF THE RETURN OF INCOME UNDER SECTION 139 OF THE ACT, THEN THE DISALLOWANCE IS NOT WARRANTED. MOREOVER, THE COPIES OF THE RETURN OF INCOME IN RESPECT OF PARTIES TO WHOM INTEREST PAYMENTS WERE MADE BY THE ASSESSEE WERE NOT FILED BEFORE THE ASSESSING OFFICER FOR VERIFICATION. ACCORDINGLY, WE REMIT THE MATTER BACK TO THE ASSESSING OFFICER FOR VERIFICATION AND DECIDE THE ISSUE AFRESH AFTER ALLOWING SUFFICI ENT OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO . 1279 /M/ 16 12 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 21 ST OCTOBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 21 . 1 0 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / C IT(A) , 4. / CIT , 5. / DR & 6. / GF.