Sri S Vijaya Kumar, Visakhapatnam V. The Addl. CIT, Range-1, Visakhapatnam, Visakhapatnam

ITA 131/VIZ/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2065 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I SARISH KUMARDR
• Assessee Lawyers: C V S MURTHYAR

Judgement Text

ITA NO.131/VIZAG/2012 S. VIJAYA KUMAR, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.131/VIZAG/2012 ( / ASSESSMENT YEAR: 2008-09) S. VIJAYA KUMAR VISAKHAPATNAM VS. ADDL. CIT, RANGE - 1 VISAKHAPATNAM [PAN: AJJPS0703L ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI C.V.S. MURTHY,AR / RESPONDENT BY : SHRI I. SARISH KUMAR,DR / DATE OF HEARING : 18.01.2016 / DATE OF PRONOUNCEMENT : 02.03.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 24.2.2012 FOR THE ASSES SMENT YEAR 2008- 09. ITA NO.131/VIZAG/2012 S. VIJAYA KUMAR, VISAKHAPATNAM 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE PAID FINANC E CHARGES AND INTEREST IN THE FORM OF EQUATED MONTHLY INSTALMENTS TO THE FINANCE COMPANIES FROM WHOM THE LOANS WERE OBTAINED. THE A .O. HAS INVOKED SECTION 40A(IA) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER CALLED AS 'THE ACT') AND DISALLOWANCE IS MADE. 3. ON APPEAL, IT WAS SUBMITTED BEFORE THE CIT(A) TH AT THE FINANCE COMPANIES HAVE TAKEN POST DATED CHEQUES BY WAY OF MONTHLY INSTALMENTS OF THE ENTIRE LOAN AMOUNT AND HENCE IT IS NOT POSSIBLE FOR THE ASSESSEE TO SEPARATELY DEDUCT TAX. IT IS ALSO FURT HER SUBMITTED BEFORE THE CIT(A) THAT FINANCE CHARGES WERE TAKEN FOR PURC HASE OF VEHICLES, TDS PROVISIONS ARE NOT ATTRACTED ON THE FINANCE CHA RGES LEVIED. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASS ESSEE, HE HAS CONFIRMED THE ORDER OF THE A.O. BY NOTING THAT TDS PROVISIONS ARE APPLICABLE TO THE INTEREST PAID ON VEHICLE FINANCIN G ALSO AND IT IS THE RESPONSIBILITY OF THE ASSESSEE WHO IS PAYING THE IN TEREST/FINANCE CHARGES TO DEDUCT TAX AT SOURCE. 4. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT ALREADY PAID AND NO A MOUNT IS PAYABLE, AS PER THE ORDER OF VISAKHAPATNAM BENCH OF THE TRIB UNAL IN THE CASE OF ITA NO.131/VIZAG/2012 S. VIJAYA KUMAR, VISAKHAPATNAM 3 MUKUNDARA ENGINEERS & CONTRACTORS, VISAKHAPATNAM IN ITA NO.657/VIZAG/2014 DATED 22.7.2015, IN WHICH THE ISS UE IS SQUARELY COVERED AND SUBMITTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE ALLOWED. 5. THE LD. D.R. SIMPLY RELIED ON THE ORDER PASSED B Y THE AUTHORITIES CONCERNED. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE T DS HAS TO BE DEDUCTED IN RESPECT OF FINANCE CHARGES AND INTEREST ALREADY PAID. THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MUKUNDARA ENGI NEERS & CONTRACTORS (SUPRA) HAS CONSIDERED THE ISSUE AND HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE APPLICABLE IN RESPEC T OF AMOUNTS ALREADY PAID BEFORE 31 ST MARCH AND ALLOWED THE APPEAL FILED BY THE ASSESSEE . THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HERE UNDER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT SPECIAL BENCH VISAKHAPATNAM AND ALSO IN THE LIGHT OF THE VIEW EXP RESSED BY THE HONBLE A.P. HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERIN G SYNDICATE, WE ARE OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT CANNOT BE MADE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY P AID BEFORE 31 ST MARCH. IN OTHER WORDS, THE A.O. IS DIRECTED TO RESTRICT THE DISALLOWANCE TO THE AMOUNTS PAYABLE AFTER 31 ST MARCH. WITH THESE OBSERVATIONS, GROUND NO.3 OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ITA NO.131/VIZAG/2012 S. VIJAYA KUMAR, VISAKHAPATNAM 4 7. IN THE PRESENT CASE, THE A.O. HAS NOT DISPUTED T HAT PAYMENTS ARE PENDING. ACCORDING TO THE LD. COUNSEL FOR THE ASSE SSEE, THE PAYMENTS ARE ALREADY PAID BEFORE 31 ST MARCH. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO KEEPING IN VIEW OF THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL, THIS GROUND OF AP PEAL RAISED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 2 ND MAR16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 2.3.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI S. VIJAYA KUMAR, PROP: M/S. VIJAY NIRMAN COMPANY, 10-50-19, 2 ND FLOOR, SOUDAMANI, SIRIPURAM, VISAKHAPATNAM-530 0 03 2. / THE RESPONDENT THE ADDL. CIT, RANGE-1, VISAKHA PATNAM 3. ) / THE CIT-1, VISAKHAPATNAM 4. ) ( ) / THE CIT(A), VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM