Shri Malve Sanjay Digambar, Nashik V. Asstt. CIT Cir. 1 Nasik, Nashik

ITA 1336/PUN/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3134 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 27-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 1336/PN/2009 : A.Y. 2006-07 SHRI SANJAY D. MALVE 4 NAVRACHANA COMPLEX NEAR THANE JANTA BANK SAVARKAR NAGAR, GANGAPUR ROAD NASIK 422 013. PAN AFTPM 5169 A APPELLANT VS. ASSTT. CIT CIR. 1, NASIK RESPONDENT APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: MS. NEERA MALHOTRA ORDER PER SHALENDRA KUMAR YADAV, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-II NASIK DATED 16-9-2009 FO R A.Y. 2006-07 ON THE GROUND THAT THE CIT(A) HAS ERRE D IN DELETING THE ADDITIONS MADE U/S 40(A)(IA) OF THE ACT. THE ASSESSEE HAS ALSO RAISED A GROUND WITH RESPECT TO CONFIRMATION OF INTEREST LEVIED U/S 234B OF THE ACT . THE LEARNED COUNSEL FOR THE ASSESSEE HAS SOUGHT TO FILE AN ADDITIONAL GROUND VIDE LETTER DATED 7-8-2010 WHI CH STATES AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE JUDICIAL VIEWS ON THE ISSUES ABOUT APPLICABILITY OF SECTION 40(A)(IA) ARE AVAILABLE BY PAGE 2 OF 4 ITA NO. 1336/PN/2009 SANJAY D. MALVE A.Y. 2006-07 THE JUDGMENTS OF THE CO-ORDINATE BENCHES OF THE HYDERABAD AND JAIPUR BENCH REPORTED IN (2010) 36 DTR (HYD) (TRIB), 220 AND (2009) 123 TTJ (LP) 888 AND ALSO OF PUNE BENCHES JUDGMENTS THAT THE PROVISIONS OF SEC. 4-0(A)(IA) ARE NOT APPLICABLE WHERE PAYMENTS ARE ALREADY MADE AND DID NOT REMAIN PAYABLE AS AT THE END OF THE ASSESSMENT YEAR. IN SUCH CIRCUMSTANCES NO DISALLOWANCE IS CALLED FOR. THE ADDITION MADE INVOKING PROVISIONS OF SEC. 40(A)(IA) BE DELETED.). 2. THE ASSESSEE IS A CIVIL CONTRACTOR CARRYING ON T HE CIVIL CONSTRUCTION WORK IN THE NAME AND STYLE OF KAMAL D EVELOPERS AND BUILDERS. WHILE COMPLETING THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER MADE A DISALLOWANCE OF RS. 2,06,67,737/- U/S 40(A)(IA) OF THE ACT. ON APPEAL, THE CIT(A) DIRECTED THE ASSESSING OFFICER T O GO THROUGH THE WORKINGS GIVEN BY THE ASSESSEE AND TO RE-WORK T HE CORRECT AMOUNT OF DISALLOWANCE AS PER THE PROVISIONS OF SEC TION 40(A)(IA) OF THE ACT BY OBSERVING AS UNDER: I HAVE CONSIDERED APPELLANTS SUBMISSIONS AND THE REASONS GIVEN BY THE ASSESSING OFFICER IN THE ASSES SMENT ORDER. A PERUSAL OF THE WORKINGS GIVEN BY THE ASSE SSEE CLEARLY SHOWS THAT THE CORRECT AMOUNT IS RS. 1,25,08,214/- IN RESPECT OF LABOUR CHARGES AND RS. 71,31,753/- IN RESPECT OF TRANSPORT CHARGES. THE APPELLANT WORKED OUT THESE DETAILS EXCLUDING THE FI GURES FOR THE MONTH OF MARCH 2006, AS THEY ARE COVERED BY THE RETROSPECTIVE AMENDMENT TO SECTION 40(A)(IA) OF THE ACT BY THE FINANCE ACT, 2008. THOUGH THE ASSESSING OFFICE R ALSO CONSIDERED THE SAME, BUT CERTAIN MISTAKES CREPT IN WHILE WORKING OUT THE AMOUNTS. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO GO THROUGH THE WORKINGS GIVE N BY THE APPELLANT AND RE-WORK THE CORRECT AMOUNT OF DISALLOWANCE AS PER PROVISIONS OF SECTION 40(A)(IA) OF THE ACT PAGE 3 OF 4 ITA NO. 1336/PN/2009 SANJAY D. MALVE A.Y. 2006-07 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIN D THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS COVERED BY TH E DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF JAI PUR VIDYUT VITRAN NIGAM LTD. VS. DY. CIT IN (2009) 26 DTR 79 ( JPR) WHEREIN IT HAS BEEN HELD THAT THE PAYMENT COULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) AND THAT THE PRO VISIONS OF SEC. 40(A)(IA) OF THE ACT ARE NOT APPLICABLE FOR TH E REASON THAT THEY APPLY ONLY WHEN THE AMOUNT IS PAYABLE I.E. DUE WHEREAS THE ASSESSEE HAS MADE ACTUAL PAYMENT. ADMITTEDLY IN THE PRESENT CASE, THE ASSESSEE HAS INCURRED EXPENSE ON ACCOUNT OF LABOUR CHARGES, TRANSPORT CHARGES AND PROFESSIONAL FEES. HOWEVER, THE ASSESSEE HAD DEPOSITED THE TAX DEDUCTE D AT SOURCE FROM THESE PAYMENTS AFTER THE END OF THE FIN ANCIAL YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSI DERATION. FURTHER, IN THIS CASE, THE ASSESSMENT YEAR INVOLVED IS THE FIRST YEAR OF IMPLEMENTATION OF PROVISIONS OF SECTION 40( A)(IA) OF THE ACT AND THE DELAY IN PAYMENT OF THE TAX DEDUCTED AT SOURCE WAS MINOR AND INTEREST ON SUCH DELAYED PAYMENT HAS ALREADY BEEN RECOVERED BY THE REVENUE DEPARTMENT. AS RIGHT LY OBSERVED BY THE CIT(A) THE ASSESSING OFFICER HAS IN CORRECTLY WORKED OUT THE DISALLOWANCE U/S 40(A)(IA). IN THE INTEREST OF JUSTICE THEREFORE, WE RESTORE THIS ISSUE TO THE FIL E OF THE CIT(A) TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AN D FACTS PAGE 4 OF 4 ITA NO. 1336/PN/2009 SANJAY D. MALVE A.Y. 2006-07 AVAILABLE AT THE RELEVANT POINT OF TIME, AFTER GIVI NG DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. SINCE THE MAIN ISSUE OF DELETION OF ADDITION MAD E U/S 40(A)(IA) IS RESTORED TO THE FILE OF THE CIT(A) FOR ADJUDICATING AFRESH, THE ISSUE WITH RESPECT TO CONFIRMATION OF I NTEREST LEVIED U/S 234B IS ALSO RESTORED TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DECIDE THE SAME AFTER GIVING A FINDING ON THE MAIN ISSUE IN ACCORDANCE WITH LAW AND FACTS. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 25 TH NOVEMBER 2010. SD/- SD/- (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 25 TH NOVEMBER 2010 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- II NASIK 4. THE CIT- II NASIK 5. THE D.R, B BENCH, PUNE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE