M/s. Valdel Infra India Private Limited, Bangalore V. Deputy Commissioner Of Income Tax, Circle- 7(1)(2), Bangalore

ITA 1313/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3423 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-03-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 07-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIA. RAMESH KUMAR
• Assessee Lawyers: SHRI NARENDRA SHARMA
• Keywords: Principle of natural justice; Additional evidence; Commercial expediency; TDS; Set aside
• Section: 143(3); 142(1); 194C; 250; 201; 143(2); 40a(ia); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A BENCH: BANGALORE BEFORE SHRI A.K. GARODIA , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 1313 /BANG/201 9 (ASSESSMENT YEAR: 201 5 - 16 ) M/S. VALDEL INFRA INDIA PVT. LTD., NO.2/1, EMBASSY VOGUE, PALACE ROAD, VASANTHNAGAR, BANGALORE - 560 052 .APPELLANT PAN AADCV 5653J VS. DY . COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(2), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI NARENDRA SHARMA, ADVOCATE. REVENUE BY: SHRI A. RAMESH KUMAR, JCIT (D.R) DATE OF HEARING : 02.03 .20 20 DATE OF PRONOUNCEMENT : 06 .03 .20 20 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 7, BANGALORE PASSED UNDER SECTION 143(3) AND 250 OF THE INCOME TAX ACT, 1961 ('THE ACT'). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 ITA NO. 1313/BANG/2019 3 ITA NO. 1313/BANG/2019 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE, CONSTRUCTION AND INFRASTRUCTURE ACTIVITIES A ND FILED THE RETURN OF INCOME ON 30.10.2015 WITH TOTAL INCOME OF RS.63,03,047 / - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE UNDER SECTION 143(2) AND 142(1) WERE ISSUED. IN COMPLIANCE, THE LEARNED AUTHORIZED REPRESENTATIVE APPEARED FROM TIME TO TIME AND FILED THE RELEVAN T DETAILS. THE ASSESSING OFFICER ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT FOUND THAT THE AMOUNT OF RS.4 , 71,00,000 WAS DEBITED TO PROF IT AND LOSS ACCOUNT AS WARM SHELL CHARGES 4 ITA NO. 1313/BANG/2019 AND DETAILS WERE CALLED FOR. THE AS SESSING OFFICER ON PERU SAL OF DETAILS, FIND THAT THE PAYMENTS WERE MADE TO CONTRACTORS WITHOUT DEDUCTION OF TDS AS PER PROVISIONS OF SECTION 194C OF THE ACT . HENCE DISALLOWED THE EXPENSES FOR NON - DEDUCTION OF TDS UNDER PROVISIONS OF SECTION 40A (IA) OF THE ACT OF RS.1 , 41,30,000 / - AND ASSESSED TOTAL INCOME OF RS.2,04,36,047 / - AND PASSED ORDER UNDER SECTION 143(3) OF THE ACT DT.1.12.2 017. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED A N APPEAL WITH THE CIT(APPEALS).THE CIT ( APPEALS) IN THE COURSE OF HEARING PROCEEDINGS CO NSIDERED THE SUBMISSIONS OF THE ASSESSEE IN RESPECT OF DEDUCTION OF TAX UNDER SECTION 194C OF THE ACT. WHEREAS THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE, WHICH COULD NOT BE FILED BEFORE THE ASSESSING OFFICER AND THE REASONS WERE EXPLAINED . BUT APPELLATE AUTHORITY WAS NOT CONVI NCED WITH THE EXPLANATIONS AND DEALT AT PARA 4.1 AND 4.2 OF THE ORDER AND CONFIRMED TH E DISALLOWANCE UNDER SECTION 40A(IA) OF THE ACT AND ALSO R EJECTED THE ADDITIONAL EVIDENCE FILED IN THE COURSE OF APPELLATE PROCEEDINGS AND DISMISSED THE ASSESSEE APPEAL. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE CIT ( APPEALS) HAS ERRED IN CONFIRMING THE ACTION O F THE ASSESSING OFFICER AND FURTHER REJECTED THE ADDITIONAL EVIDENCES WHICH ARE VITAL FOR THE DECISION MAKING IN RESPECT OF PAYMENTS MADE TO CONTRACTORS AND ON APPLICABILITY OF PROVISIONS OF SECTION 194C OF THE ACT , AND PRAYED THAT THE ADDITIONAL EVIDENC E BE 5 ITA NO. 1313/BANG/2019 ADMITTED AND PROVIDE AN OPPORTUNITY TO SUBSTANTIATE THE CASE AND ALLOW THE APPEAL. CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF CIT(APPEALS). 5. WE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. THE LEA RNED AUTHORIZED REPRESENTATIVE EMPHASIZED ON ADMISSION OF ADDITIONAL EVIDENCE FILED, WHICH WAS REJECTED BY THE CIT(APPEALS) AS THE SAME WAS NOT FILED BEFORE THE ASSESSING AUTHORITY IN THE ASSESSMENT PROCEEDINGS, AND THESE EVIDENCES ARE IN RESPECT OF CONT RACTS ENTERED WITH THE SISTER CONCERNS FOR THE WORK S EXECUTED WITH BUSINESS PARTICIPATION AND ON COMMERCIAL EXPEDIENCY AND TDS PROVISIONS ARE NOT APPLICABLE. WE CONSIDERING THE SUBMISSIONS OF THELDAR AND PRINCIPLES OF NATURAL JUSTICE ARE OF THE OPINION THA T THE ASSESSEE SHOULD NOT BE DEPRIVED RIGHT OF SUBSTANTIATING THE DISALLOWANCES MADE BY THE ASSESSING OFFICER WITH VITAL EVIDENCES AVAILABLE. ACCORDINGLY , WE ADMIT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND SET ASIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE ENTIRE DISPUTED ISSUE TO THE FILE OF THE CIT(APPEALS) TO CONSIDER THE ADDIT IONAL EVIDENCES FILED AND ADJUDICATE A FRESH AND PASS A SPEAKING ORDER . FURTHER, THE ASSESSEE SHOULD BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING AND SHALL CO - OPERATE IN SUBMITTIN G THE INFORMATION FOR EARLY DISPOSAL OF APPEAL AND ALLOW THE GROUNDS OF APPEAL OF ASSESSEE FOR STATISTICAL PURPOSES. 6 ITA NO. 1313/BANG/2019 6. IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. S D / - S D / - ( A.K. GARODIA ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 6 .03 . 20 20 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE