M/s. Shivratna Motors, Solapur V. Assistant Commissioner of Income tax, Solapur

ITA 1313/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6300 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 23-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 40(a)(ia)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1313/PUN/2017 / ASSESSMENT YEAR : 2012-13 M/S. SHIVRATNA MOTORS, A/P SHANKARNAGAR, TAL : MALSHIRAS, DIST. SOLAPUR 413 101. PAN : AAJFS8979H. . / APPELLANT V/S THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-1, SOLAPUR. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI RAJESH GAWALI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 7, PUNE DATED 12.01.2017 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE HAVING DEALER SHIP OF BAJAJ TEMPO, TRADING BUSINESS OF OIL AND SPARES AND WO RKSHOP SERVICING. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2012-13 ON 30.09.2012 DECLARING TOTAL INCOME OF RS.19,14,931 /-. THE / DATE OF HEARING : 18.12.2018 / DATE OF PRONOUNCEMENT: 25.01.2019 2 ITA NO.1313/PUN/2017 CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSME NT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.26.03.2015 AND THE TOT AL INCOME WAS DETERMINED AT RS.44,43,840/-. AGGRIEVED BY THE ORDER OF A O, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.12.01 .2017 (IN APPEAL NO.PN/CIT(A)-7/CIR-1/104/2015-16) DISMISSED THE APP EAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPE AL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAI NING THE DISALLOWANCE OF INTEREST PAID OF RS.2,28,909/- TO V IJAY GRAMIN PATSANSTHA U/S 40(A)(IA) WITHOUT APPRECIATING THE P ROVISO TO SECTION 40(A)(IA) READ WITH PROVISO TO SEC.201(1) W.E.F., 0 1.04.2013. 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN CONSI DERING THE FACTS OF THE ASSESSEE CASE AND THE FACTS OF THE CITATIONS. 3. THE HONOURABLE CIT ERRED BY REGARDING DISALLOWAN CES U/S 40(A)(IA) BY NOT PROVIDING ENOUGH OPPORTUNITY FOR SUBMISSION OF FORM 26A. 4. THE APPELLANT PRAYS THAT THE ADDITION/DISALLOWAN CE OF RS.25,28,909/- BE DELETED. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. THE CASE FILE REVEALS THAT ON EARLIER OCCASION I.E., 17.09.20 18 THE CASE WAS ADJOURNED TO 16.10.2018 AT THE REQUEST OF THE ASSESSEE. ON 16.10.2018 NONE APPEARED ON BEHALF OF THE ASSESSEE NOR A NY ADJOURNMENT APPLICATION WAS FILED AND THE CASE WAS ADJOUR NED TO THE PRESENT DATE. ON THE DATE OF PRESENT HEARING ALSO, NON E APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WA S FILED. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE BASED ON THE MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD.D.R. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICE D THAT ASSESSEE HAD TAKEN LOAN FROM VIJAY GRAMIN BIGAR SAHAKAR I PATSANSTHA 3 ITA NO.1313/PUN/2017 AND HAD PAID TOTAL INTEREST OF RS.25,28,909/-. AO NOTICED THAT ASSE SSEE HAD NOT DEDUCTED TDS U/S 194A OF THE ACT ON THE AFORE SAID INTEREST PAID BY THE ASSESSEE. AO WAS THEREFORE OF THE VIEW THA T NON-DEDUCTION OF TDS WOULD RESULT INTO ATTRACTION OF PROVISIONS OF SEC.40( A)(IA) OF THE ACT. HE ACCORDINGLY INVOKED THE PROVISIONS OF SEC.40(A)(IA) O F THE ACT AND MADE ADDITION OF RS.25,28,909/- FOR THE INTEREST ON ACC OUNT OF NON-DEDUCTION OF TDS. AGGRIEVED BY THE ORDER OF AO, ASSE SSEE CARRIED THE MATTER BEFORE LD.CIT(A) WHO UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN AP PEAL BEFORE US. 6. BEFORE US, LD.D.R. SUBMITTED THAT NO EVIDENCE HAS BEEN PLACED BY ASSESSEE TO DEMONSTRATE THAT THE PAYEE HAS ALREADY IN CLUDED THE INTEREST RECEIVED FROM ASSESSEE AS ITS INCOME AND HAS PA ID TAXES ON IT. HE THUS, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO DISAL LOWANCE OF EXPENDITURE U/S 40(A)(IA) OF THE ACT. IT IS AN UNDISPUTED FAC T THAT ASSESSEE HAD PAID INTEREST OF RS.25,28,909/- TO VIJAY G RAMIN BIGAR SHETI SAHAKARI PATSANSTHA IN THE YEAR UNDER CONSIDERATIO N, ON WHICH TDS U/S 194A OF THE ACT WAS NOT DEDUCTED BY THE ASS ESSEE. IT IS ASSESSEES SUBMISSION THAT IN THE RETURN OF INCOME FILED BY VIJAY GRAMIN BIGGER SHETI SAHAKARI PATSANSTHA I.E., PAYEE HAS INC LUDED THE INTEREST PAID BY THE ASSESSEE AS ITS INCOME AND HAS PAID THE TAX ON SUCH INTEREST. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT NO 4 ITA NO.1313/PUN/2017 DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS NOT CALLED FOR IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PVT. LTD., REPORTED IN (2015) 377 ITR 635, WHEREIN IT HAS HELD THAT INSERTION OF SECOND PROVISO TO SEC.40(A)(IA) OF T HE ACT IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPECTIV E EFFECT FROM 01.04.2005. IT HAS FURTHER HELD THAT AS LONG AS PAYEE OR RESIDENT HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT RECEIVED B Y AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS ALSO PAID TAXES ON SUCH INCOME, THEN NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT. HOWEVER, BEFORE US, APART FROM THE SUBMISSIONS MADE BEFORE LD.CIT(A), NO MATERIAL HAS BEEN PLACED BY ASSESSEE TO DEMONSTRATE THAT THE PAYEE HAS INCLUDED THE AMOUNT OF INTEREST IN ITS INCOME. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT THE AFORESAID CONTENTION NEEDS V ERIFICATION BY AO. WE THEREFORE RESTORE THE ISSUE TO THE FILE OF AO FOR V ERIFICATION. IN CASE THE ASSESSEES CONTENTION IS FOUND CORRECT, THEN IN VIEW OF THE AFORESAID DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (SUPRA), NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS CALLED FOR. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 25 TH DAY OF JANUARY, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 25 TH JANUARY, 2019. YAMINI 5 ITA NO.1313/PUN/2017 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-7, PUNE. PR. CIT-6, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.