ACIT, CHENNAI V. M/s. S S Engineers & Builders, CHENNAI

ITA 1329/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64329 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2012
• 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: S DASGUPTA
• Assessee Lawyers: A S SRIRAMAN
• Section: 194C; 32; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1329/MDS/2012 (ASSESSMENT YEAR : 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE V, CHENNAI - 600 034 . (APPELLANT) V. M/S S.S. ENGINEERS & BUILDERS, NO.25/12, 19 TH STREET, JAI NAGAR, ARUMBAKKAM, CHENNAI - 600 106. PAN : ABKFS0845G (RESPONDENT) APPELLANT BY : SHRI S. DASGUPTA, JCIT RESPONDENT BY : SHRI A.S. SRIRAMAN, ADVOC ATE DATE OF HEARING : 24.09.2012 DATE OF PRONOUNCEMENT : 24.09.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E IS THAT CIT(APPEALS) DELETED A DISALLOWANCE OF ` 1,48,48,536/- MADE BY THE A.O. RELYING ON SECTION 40(A)(IA) OF INCOME-TAX ACT , 1961 (IN SHORT 'THE ACT'). 2. FACTS APROPOS ARE THAT ASSESSEE, ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, HAD CLAIMED ` 1,81,93,006/- AS LABOUR CHARGES. AS PER 2 I.T.A. NO. 1329/MDS/12 A.O., ON SUCH PAYMENT, ASSESSEE SHOULD HAVE DEDUCTE D TAX AS STIPULATED UNDER SECTION 194C OF THE ACT. HAVING F AILED TO DO SO, HE WAS OF THE OPINION THAT THE CLAIM OF EXPENSES COULD NOT BE ALLOWED. 3. IN ITS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT IN THE FIRST PLACE, THE AMOUNT CLAIMED WAS ONL Y ` 1,48,48,536/- AND NOT ` 1,81,3,006/-. FURTHER, AS PER ASSESSEE, SUCH EXPE NSES WERE NOT FALLING WITHIN SECTIONS 32 TO 38 OF THE ACT, BUT WE RE ALLOWABLE UNDER SECTION 28 OF THE ACT. ACCORDING TO IT, SECTION 40 (A)(IA) COULD BE APPLIED ONLY WHERE THE AMOUNTS WERE STANDING AS PAYABLE ON THE BALANCE SHEET DATE AND NOT ON AMOUNTS WHICH WERE PAID DURING THE RELEVANT PREVIOUS YEAR. CIT(APPEALS) WAS APPRECIATIVE OF THIS CONTEN TION OF THE ASSESSEE AND DELETED THE DISALLOWANCE MADE BY THE A.O. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT SECTION 40(A)(IA) COUL D BE APPLIED WHETHER AMOUNTS WERE PAID OR PAYABLE AS LONG AS TAX WAS NOT DEDUCTED AS WARRANTED UNDER THE PROVISIONS OF THE ACT. 5. PER CONTRA, LEARNED A.R. STRONGLY SUPPORTED THE ORDER OF CIT(APPEALS). 3 I.T.A. NO. 1329/MDS/12 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT THE LABOUR CHARGES WERE AL L PAID DURING THE RELEVANT PREVIOUS YEAR AND NOTHING REMAINED OUTSTAN DING AS AT THE END OF THE RELEVANT PREVIOUS YEAR. THIS BEING SO, WE A RE OF THE OPINION THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND T RANSPORT V. ACIT (2012) 16 ITR (TRIB.) 1 (SB), WHERE IT WAS HELD THA T SECTION 40(A)(IA) COULD BE APPLIED ONLY WHERE AMOUNTS WERE OUTSTANDIN G AT THE END OF THE YEAR AND NOT TO AMOUNTS WHICH WERE PAID DURING THE RELEVANT PREVIOUS YEAR. WE ARE, THEREFORE, OF THE OPINION THAT THE C IT(APPEALS) WAS JUSTIFIED IN DELETING THE DISALLOWANCE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON MONDAY, TH E 24 TH OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 24 TH SEPTEMBER, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-VIII, CHENNAI / CIT-VI, CHENNAI-34/D.R./GUARD FILE