D.C.I.T. CHANDRAPUR Circle, Chandrapur V. M/s GAJANAN CONSTRUCTION CO., Chandrapur

ITA 138/NAG/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2181 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: L S DEWANIK P DEWANI

Judgement Text

1 ITA NO. 138/NAG/2015 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 1 38/NAG/2015. ASSESSMENT YEAR : 200 8 - 09 . DY. COMMISSIONER OF INCOME - TAX, M/S GAJANAN CONSTRUCTION CO. CHANDRAPUR CIRCLE, CHANDRAPUR. VS. CHANDRAPUR. PAN AA BFG770 0Q. APPELLANT. RESPONDENT. APPELLANT BY : SHRI A.R. NINAWE. RESPONDENT BY : S HRI L.S. DEWANI/K.P.DEWANI. DATE OF HEARING : 16 - 06 - 2016 DATE OF PRONOUNCEMENT : 1 6 T H JUNE, 2016 O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I V , NAGPUR DATED 03 - 02 - 2015 AND PERTAINS TO ASSESSMENT YEAR 200 8 - 09 . THE GROUND OF APPEAL READ S AS UNDER : WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS.74,47,000/ - MADE BY THE AO U/S 40(A)(IA) OF THE IT ACT, 1961 TO RS.4,11,012/ - . 2. IN THIS CASE THE AO HELD THAT THE AS SESSEE HAS DEBITED HIRE CHARGES BUT HAS FAILED TO DEDUCT TDS U/S 194C. HENCE THE AO WAS OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE . ACCORDINGLY THE AO ADDED A SUM OF RS. 7 4,11,000/ - TO THE INCOME OF THE ASSESSEE. 3. UPON ASSESSE ES APPEAL, LEARNED CIT(APPEALS) HELD THAT IN VIEW OF THE VARIOUS JUDGMENTS DISCUSSED BY HIM, THE DISALLOWANCE U/S 40(A)(IA) IS TO BE 2 ITA NO. 138/NAG/2015 LIMITED TO THE AMOUNT UNPAID AS ON 31 ST MARCH, 2008 WHICH IN THE CASE OF THE ASSESSEE WAS RS.4,11,012/ - OUT OF THE TOTAL OF RS.74,47,000/ - . ACCORDINGLY THE LEARNED CIT(APPEALS) GRANTED RELIEF OF RS.70,35,000/ - . 4. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTE D THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF M/S CHADDA TRANSPORT IN ITA NO. 333/NAG/2014 VIDE ORDER DATED 25 TH FEBRUARY, 2016. 6. PER CONTRA LEARNED D.R. RELIED UPON THE ORDER OF THE AO. 7. UPON CAREFUL CONSIDERATION WE FIND THAT IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE ABOVE MENTIONED DECISION OF THE TRIBUNAL AND THE TRIBUNAL HA S HELD AS UNDER : 12. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. FIRST WE DEAL WITH THE ISSUE ON THE GROUND THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED INASMUCH AS THE ENTIRE FREIGHT EXPENDITURE IS PAID AND NOTHING IS PAYABLE AS ON 31 - 03 - 2007. THE FACTS IN THIS REGARD ARE UNDISPUTED. THE ASSESSEES PLEA IS THA T THE ENTIRE FREIGHT AMOUNT WAS PAID AND NOTHING IS PAYABLE AS ON 31 - 03 - 2007, AND THAT THIS IS DULY REFLECTED BY A PERUSAL OF THE BALANCE SHEET/PROFIT & LOSS ACCOUNT WHERE NO AMOUNT IS PAYABLE AS ON 31 - 03 - 2007. IN THIS REGARD LEARNED COUNSEL OF THE ASSESSE E HAS PLACED RELIANCE UPON CIT VS. VECTOR SHIPPING SERVICES (P) LTD. 357 ITR 642 (ALL.). IN THE SAID CASE HONBLE ALLAHABAD HIGH COURT HAS UPHELD THE FINDING THAT WHEN THE EXPENSES INCURRED BY THE ASSESSEE IS TOTALLY PAID AND NOT REMAINED PAYABLE AS AT THE END OF THE RELEVANT ACCOUNTING PERIOD, PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE. THE HIONBLE HIGH COURT IN PARA 10 OF THE ORDER HAS CONCLUDED AS UNDER : IT IS TO BE NOTED THAT FOR DISALLOWING EXPENSES FROM BUSINESS AND PROVISION ON THE GROUND THAT TDS HAS NOT BEEN DEDUCTED, THE AMOUNT SHOULD BE PAYABLE AND NOT WHICH HAS BEEN PAID BY THE END OF THE YEAR. 13. REVENUES APPEAL AGAINST THE ABOVE SAID DECISION OF THE HONBLE ALLAHABAD HIGH COURT WAS DISMISSED BY THE HONBLE APEX COURT IN CC 3 ITA NO. 138/NAG/2015 NO. 80 68/2014 VIDE ORDER DATED 02 - 07 - 2014. THE HONBLE APEX COURT HAS HELD AS UNDER : HEARD MR. MUKUL ROHATGI, LEARNED ATTORNEY GENERAL, FOR THE PETITIONER. DELAY IN FILING AND REFILLING SPECIAL LEAVE PETITION IS CONDONED. SPECIAL LEAVE PETITION IS DISMISSED. WE ARE ALSO AWARE THAT THERE ARE CERTAIN OTHER HONBLE HIGH COURT DECISIONS WHEREIN THIS PROPOSITION HAS NOT BEEN UPHELD THAT PROVISIONS OF SECTION 40(A)(IA) ARE ATTRACTED ONLY WHEN THE AMOUNT IS PAYABLE. HOWEVER, WE NOTE THAT THERE IS NO JURISDICTIONAL HIGH COURT DECISION ON THIS ISSUE. IN SUCH A SITUATION WE NOW HAVE A HONBLE ALLAHABAD HIGH COURT DECISION WHICH IS IN FAVOUR OF THE ASSESSEE. REVENUE DEPARTMENTS PETITION FOR SPECIAL LEAVE TO APPEAL HAS BEEN DISMISSED BY THE HONBLE APEX COURT BY CONDONING THE DELAY IN FILING THE LEAVE PETITION. IN SUCH A SITUATION, IN OUR CONSIDERED OPINION, THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. 188 ITR 192 HAS TO BE FOLLOWED. IN THE SAID DECISION THE HONBLE APEX COURT HAS EXPOUNDED THAT IN CASE THERE ARE TWO VIEWS POSSIBLE, THE VIEW IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED. ACCORDINGLY IN ABSENCE OF ANY JURISDICTIONAL HIGH COURT DECISION, WE RESPECTFULLY FOLLOW THE DECISION OF HONBLE ALLAHABAD HIGH COUR T IN THE CASE OF VECTOR SHIPPING SERVICES (P) LTD. AS ABOVE. ACCORDINGLY SINCE NO AMOUNT OF THE FREIGHT WAS UNPAID OR WAS PAYABLE AS ON 31 - 03 - 2007 WE HOLD THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED AND IN THIS VIEW OF THE MATTER WE ARE OF T HE OPINION THAT REVENUES APPEAL IS LIABLE TO BE DISMISSED. 8. IN THE LIGHT OF THE ABOVE DISCUSSION AND PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 9. IN THE RESULT, THIS APPEAL BY THE REV ENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF JUNE, 2016. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NA GPUR, DATED: 16 TH JUNE, 2016. 4 ITA NO. 138/NAG/2015 COPY FORWARDED TO : 1. M/S GAJANAN CONSTRUCTION CO., KOTWALI WARD, CHANDRAPUR - 442402. 2. D. .C.I.T., CHANDRAPUR CIRCLE, CHANDRAPUR. 3. C.I.T. I II/IV ,NAGPUR. 4. CIT(APPEALS), IV , NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.