Dy.CIT, Circle-1(1), Hyderabad V. M/s Aditya Construction Company India P Ltd., Hyderabad

ITA 1319/HYD/2014

• Counselvise Citation: 131922514 RSA 2014
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: K A SAI PRASAD
• Section: 40A(3); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1319/HYD/2014 ASSESSMENT YEAR 2010-2011 THE DCIT, CIRCLE 1(1), HYDERABAD. VS. M/S. ADITYA CONSTRUCTION COMPANY INDIA P. LTD., HYDERABAD. PAN AAFCA7323J (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAJAT MITRA FOR ASSESSEE : MR. K.A. SAI PRASAD DATE OF HEARING : 26.11.2014 DATE OF PRONOUNCEMENT : 28.11.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS REVENUE APPEAL AGAINST THE ORDER OF LD. CIT(A)-II, HYDERABAD DATED 12.05.2014. REVENUE HAS RAISED ONLY ONE GROUND ON THE REASON THAT INSERTION OF SEC OND PROVISO W.E.F. 01.04.2013 TO SECTION 40(A)(IA) IS ONLY PROS PECTIVE IN NATURE AND NOT RETROSPECTIVE. 2. BRIEFLY STATED, ASSESSEE HEREIN IS ENGAGED IN T HE BUSINESS OF REAL ESTATE, CONSTRUCTION AND SALE OF F LATS. WHILE MAKING THE ASSESSMENT, A.O. INVOKED PROVISIONS OF S ECTION 40(A)(IA) TO AN EXTENT OF RS.2,36,84,849 AND ALSO D ISALLOWANCE UNDER SECTION 40A(3) OF RS.12,62,040. THE AMOUNT ON WHICH 40(A)(IA) WAS INVOKED WAS INTEREST PAYMENTS TO DIWA N HOUSING FINANCE LTD., AND INDIA BULLS FINANCIAL SERVICES LT D., AND HDFC BANK. THE LD. CIT(A) WHILE HOLDING THAT DISALL OWANCE OF 2 ITA.NO.1319/HYD/2014 M/S. ADITYA CONSTRUCTION CO. INDIA P. LTD., HYDERABA D. INTEREST TO HDFC BANK CANNOT BE SUSTAINED AS THE PA YMENTS TO SUCH BANK ARE NOT COVERED BY THE PROVISIONS OF S ECTION 194A, HOWEVER, CONSIDERING THE EXPLANATION OF ASSES SEE AND PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT IN TH E CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD., VS. CIT 293 I TR 226 (SC) DIRECTED THE A.O. TO GIVE AN OPPORTUNITY TO AS SESSEE TO FILE CERTIFICATE TO THE EFFECT THAT OTHER PARTIES HAVE O FFERED THE AMOUNTS AND PAID THE TAX ALSO. IF ALL THE CONDITION S ARE SATISFIED, A.O. IS DIRECTED TO ALLOW THE AMOUNTS UN DER SECTION 40(A)(IA). LD. CIT(A) ALSO OBSERVED THAT IN CASE O F FAILURE ON THE PART OF ASSESSEE TO FURNISH SUCH CERTIFICATES, THE DISALLOWANCE STANDS CONFIRMED. WHILE DIRECTING THE SAME, LD. CIT (A) TOOK INTO CONSIDERATION THE SECOND PROVISO TO SECTION 40 (A)(IA) WHICH INTENDED TO REMOVE THE HARDSHIP TO ASSESSEE. IT IS ON THIS OBSERVATION OF LD. CIT(A), REVENUE IS IN APPEAL. 3. WE DO NOT FIND ANY MERIT IN REVENUE APPEAL AS T HE LD. CIT(A) DIRECTED ASSESSEE TO FURNISH NECESSARY C ERTIFICATES AS PER PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT I N THE CASE OF HINDUSTAN COCA COLA BEVERAGES P. LTD., (SUPRA) W HEREIN IT WAS HELD THAT IF THE PAYEES HAVE ADMITTED THE RECEI PT OF INCOME, THERE IS NO NEED FOR THE PAYEE TO DEDUCT TH E TDS. SINCE THE PROVISIONS OF SECTION 201(1) ALLOW SUCH A SSESSEE TO BE NOT AN ASSESSEE IN DEFAULT, CONSEQUENTLY, THE SECOND PROVISO TO SECTION 40(A)(IA) ALSO COMES INTO OPERAT ION EVEN THOUGH THE SAID PROVISION WAS INTRODUCED FROM 01.04 .2013. SINCE, IT IS FOR REMOVAL OF HARDSHIP THAT MAY ALSO BE APPLIED FOR PENDING PROCEEDINGS. MOREOVER, THE DIRECTIONS OF LD . CIT(A) ARE ALSO CATEGORICAL. IN CASE, THERE IS FAILURE ON THE PART OF ASSESSEE TO FURNISH SUCH CERTIFICATES, DISALLOWANCE STANDS C ONFIRMED. SINCE, IT HAS TO BE EXAMINED BY A.O. WE ARE OF THE OPINION THAT 3 ITA.NO.1319/HYD/2014 M/S. ADITYA CONSTRUCTION CO. INDIA P. LTD., HYDERABA D. REVENUE APPEAL IS NOT MAINTAINABLE ON THE FACTS OF THE CASE AND GROUND RAISED BY REVENUE IS DISMISSED. 4. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH NOVEMBER, 2014 VBP/- COPY TO 1. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), 4 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. M/S. ADITYA CONSTRUCTION COMPANY INDIA P. LTD., H.NO.8-2-293/82/F/A/12, PLOT NO.A/12, ROAD NO.12, JUBILEE HILLS, HYDERABAD. 3. CIT(A)-II, HYDERABAD 4. CIT-I, HYDERABAD 5. D.R. ITAT B BENCH, HYDERABAD.