ACIT, CHENNAI V. M/s. Sun Engineering Constructions, CHENNAI

ITA 1328/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64448 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 15-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRIRAMAN
• Assessee Lawyers: S DASGUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT ME MBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1328/MDS/2012 (ASSESSMENT YEAR: 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE V, ANNEXE BUILDING, 6 TH FLOOR, AAYAKAR BHAWAN, 121, M.G ROAD, CHENNAI-600 034. VS. M/S. SUN ENGINEERING CONSTRUCTIONS, PLOT NO.28, 2 ND STREET EXTENSION, JAI NAGAR, ARUMBAKKAM, CHENNAI-106. PAN:AAIFS 8529G (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SRIRAMAN, ADVOCATE RESPONDENT BY : MR. S.DASGUPTA, JCIT DATE OF HEARING : 24 TH SEPTEMBER, 2012 DATE OF PRONOUNCEMENT : 11 TH OCTOBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THE APPEAL HAS BEEN PREFERRED BY THE REVENUE IMPUGNING THE ORDER OF THE CIT(A)-VIII, CHENNAI DAT ED 15.03.2012. 2. THE REVENUE IS IMPUGNING THE ORDER OF THE CIT(A) DELETING THE DISALLOWANCE OF ` 1,81,93,006/- MADE UNDER SECTION 40(A)(IA) IN RESPECT OF LABOUR CHARGES PAID WITHOUT DEDUCTING TDS. THE ASSESSEE HAD FILED E-RETURN OF I NCOME ON 26.02.2010 RELEVANT TO THE ASSESSMENT YEAR 2008-09 ITA NO.1328/MDS/2012 2 DECLARING ITS INCOME OF ` 24,14,670/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE ON 19.08.2009. TH E ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 24.12 .2010 HAD MADE CERTAIN ADDITIONS ON ACCOUNT OF CHARGES PA ID WITHOUT DEDUCTION OF TAX AT SOURCE. THE ASSESSEE AGGRIEVED AGAINST THE ASSESSMENT ORDE R DATED 24.12.2010 PREFERRED AN APPEAL BEFORE THE CIT (A) INTER- ALIA, ASSAILING THE ADDITIONS MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) ON ACC OUNT OF PAYMENT OF LABOUR CHARGES WITHOUT DEDUCTION OF TAX AT SOURCE. THE CIT(A) VIDE ORDER DATED 15.03.2012 PARTLY ALLOW ED THE APPEAL OF THE ASSESSEE AND DIRECTED THE ASSESSING O FFICER TO DELETE THE ADDITION MADE UNDER SECTION 40(A)(IA) ON ACCOUNT OF LABOUR CHARGES. 3. NOW, AGGRIEVED AGAINST THE ORDER OF THE CIT(A), THE REVENUE HAS COME IN SECOND APPEAL BEFORE THE TRIBUN AL ASSAILING THE DELETION MADE BY THE CIT(A). 4. SHRI S.DASGUPTA, APPEARING ON BEHALF OF THE REVE NUE SUBMITTED THAT THERE HAS BEEN A VIOLATION OF THE PR OVISIONS OF ITA NO.1328/MDS/2012 3 SECTION 194C. ONCE THE PROVISIONS OF THE SAID SECTI ON ARE VIOLATED, THE DISALLOWANCE HAS TO BE MADE UNDER SEC TION 40(A)(IA) . THE PROVISIONS OF SECTION 40(A)(IA) WIL L APPLY WHETHER THE AMOUNTS ARE PAID OR PAYABLE. 5. ON THE OTHER HAND, THE COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND SUBM ITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT., REPORTED AS 16 ITR (TRIB) (1)(SB) . 6. WE HAVE PERUSED THE ORDERS PASSED BY THE AUTHORI TIES AND HAVE HEARD THE SUBMISSIONS MADE BY THE RESPECTI VE PARTIES. IT IS AN ADMITTED FACT THAT LABOUR CHARGES HAVE BEEN PAID BY THE ASSESSEE DURING THE RELEVANT PREVIOUS Y EAR AND NO TAX HAS BEEN DEDUCTED THEREON. IT IS ALSO ADMITT ED THAT THE ENTIRE AMOUNT HAS BEEN PAID AND NO AMOUNT IS PAYABL E. IN OUR CONSIDERED OPINION, THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT.,(SUPRA). ITA NO.1328/MDS/2012 4 THE LEARNED DR COULD NOT SHOW ANY OTHER CASE LAW TO THE CONTRARY. 7. IN VIEW OF THE ABOVE, WE UPHOLD THE FINDINGS OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE BEING DEVOID OF MERIT. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 11 TH DAY OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE) (VIK AS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 11 TH OCTOBER, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.