Potru Srinivasa Rao, Kovvur V. The income Tax Officer, Ward-2, Tanuku

ITA 139/VIZ/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1001 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 27-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Agreed addition
• Section: 40(a)(ia); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO S . 139 & 140 / VIZ /201 8 (ASST. YEAR : 20 13 - 14 ) POTRU SRINIVASA RAO, 4 - 2 - 67/10, NANDAMURU ROAD, KOVVUR , W.G. DISTRICT . V S . IT O , WARD - 2 , TANUKU . PAN NO. BHVPS 8223 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM FC A. DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 19 / 1 1 /201 8 . DATE OF PRONOUNCEMENT : 28 / 1 1 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH E S E APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 3 , VISAKHAPATNAM , EACH DATED 12 /0 2 /201 8 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF LORRY T R ANSPORTS AND LIQUOR , BESIDES DERIVING INCOME FROM A PARTNERSHIP FIRM. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS 2 ITA NO S . 139 & 140/VIZ/2018 ( POTRU SRINIVASA RAO ) PURCHASED LORRIES BY OBTAINING FINANCE FROM M/S. L & T FINANCE . THE ASSESSEE HAS MADE INTEREST PAYMENTS AGGREGATING TO RS. 2,10,574/ - WITHOUT MAKING ANY TDS , H ENCE, THE SAME IS DISALLOWED BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3 . ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE IN THE PROFIT & LOSS ACCOUNT IN RESPECT OF FINANCE CHARGES PAID TO M/S. L & T FINANCE, THEREFORE, SECTION 40(A)(IA) HAS NO APPLICATION. THE LD. CIT(A) BY C ONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE, CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 4.4 I HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF THE APPELLANT AND ALSO THE DECISION OF THE ASSESSING OFFICER. IT IS SEEN AT PAGE NO. 2 FROM THE ASSESSMENT ORDER OF THE ASSESSING OFFICER PASSED ON 11/03/2016 WHEREIN IT IS MENTIONED THAT THIS ADDITION WAS MADE WITH THE CONSENT OF THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT. THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER: - I N RESPECT OF PURCHASE OF LORRIES MADE BY OBTAINING FINANCE FROM M/S. L & T FINANCE, THE ASSESSEE MADE INTEREST PAYMENTS AGGREGATING TO RS. 2,10,574/ - WITHOUT MAKING ANY TDS. HENCE, THE SAME IS DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT AND ADDED BACK, FOR WHICH THE AR AGREED. IN VIEW OF THE FACTUAL MATRIX, I DO NOT FIND ANY FAULT WITH THE ASSESSING OFFICER IN REJECTING THE CLAIM OF THE APPELLANT. ACCORDINGLY, THE GROUNDS RAISED BY THE APPELLANT ARE REJECTED AND THE ORDER OF THE ASSESSING OFFICER IS CONFIRMED. 3 ITA NO S . 139 & 140/VIZ/2018 ( POTRU SRINIVASA RAO ) 4 . ON APPEAL BEFORE US, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE IN THE PROFIT & LOSS ACCOUNT IN RESPECT OF FINANCE CHARGES PAID TO M/S. L & T FINANCE AND SECTION 40(A)(IA) IS APPLIES ONLY WHEN THE CLAIM IS MADE BY DEBITING THE EXPENSES TO THE PROFIT & LOSS ACCOUNT. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT AR AGREED FOR THE ADDITION BEFORE THE ASSESSING OFFICER . 6 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 7 . THE ASSESSEE HAS MADE CERTAIN INTEREST PAYMENTS TO M/S. L & T FINANCE, AGGREGATING TO RS. 2,10,574/ - WITHOUT MAKING ANY TDS , T HEREFORE, THE ASSESSING OFFICER HAS DISALLOWED THE SAME UNDER SECTION 40(A)(IA) OF THE ACT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS RECORDED THAT THE AR AGREED FOR THE ADDITION. ON APPEAL BEFORE THE LD. CIT( A), IT IS SUBMITTED THAT THE INTEREST PAYMENTS MADE BY THE ASSESSEE TO THE M/S. L & T FINANCE WAS NOT CLAIMED AS EXPENDITURE IN THE PROFIT & LOSS ACCOUNT, THEREFORE, SECTION 40(A)(IA) HAS NO APPLICATION. HOWEVER, LD. CIT(A) WITHOUT CONSIDERING THE EXPLANA TION GIVEN BY THE ASSESSEE, SIMPLY CONFIRMED THE ORDER ON THE GROUND THAT IT IS AN AGREED ADDITION. 4 ITA NO S . 139 & 140/VIZ/2018 ( POTRU SRINIVASA RAO ) WE FIND THAT WHEN THE ASSESSEE HAS SUBMITTED BEFORE THE LD.CIT(A) THAT HE HAS NOT CLAIMED ANY EXPENDITURE IN THE PROFIT & LOSS ACCOUNT, THE LD. CIT(A) OUGH T TO HAVE BEEN EXAMINED AND CONSIDERED THE ISSUE ON MERITS, SIMPLY BECAUSE COUNSEL AGREED FOR THE ADDITION, THE SAME CAN N OT BE CONFIRMED WHEN SPECIFIC GROUND IS TAKEN BY THE ASSESSEE. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE ISSUE BACK TO THE ASSESSING OFFICER TO CONSIDER THE EXPLANATION GIVEN BY THE ASSESSEE AND PASS AN ORDER AFRE SH IN ACCORDANCE WITH LAW. THUS, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 . SO FAR AS ITA NO. 140/VIZ/2018 IS CONCERNED, IT IS MERE ACADEMIC IN NATURE, NO ADJUDICATION IS REQUIRED, THEREFORE SAME IS DI S MISSED. 9. IN THE RES ULT, APPEAL FILED BY THE ASSESSEE IN ITA NO.139/VIZ/2018 IS ALLOWED FOR STATISTICAL PURPOSES ; AND ITA NO.140/VIZ/2018 IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 8 T H DAY OF NOV ., 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 8 T H NOVEMBER , 201 8 . VR/ - COPY TO: 5 ITA NO S . 139 & 140/VIZ/2018 ( POTRU SRINIVASA RAO ) 1. THE ASSESSEE - POTRU SRINIVASA RAO, 4 - 2 - 67/10, NANDAMURU ROAD, KOVVUR, W.G. DISTRICT. 2. THE REVENUE ITO, WARD - 2, TANUKU. 3. THE PR. CIT , RAJAMAHENDRAVARAM. 4. THE CIT(A) - 3, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.