OM PRAKASH DANGAYAH, Jaipur V. ITO, Jaipur

ITA 140/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1970 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 16-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P P MEENA JCIT DHK
• Assessee Lawyers: MADHUKAR GARG
• Keywords: Additional evidence; Reassessment proceedings
• Section: 143(3); 201(1); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 140/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. SHRI OM PRAKASH DANGAYACH, C-18, TAKHTESHAHI ROAD, J.L.N. MARG, JAIPUR. CUKE VS. THE INCOME - TAX OFFICER, WARD 5(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGEPD 9935 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 279/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. THE INCOME - TAX OFFICER, WARD 5(1), JAIPUR. CUKE VS. SHRI OM PRAKASH DANGAYACH, C-18, TAKHTESHAHI ROAD, J.L.N. MARG, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGEPD 9935 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MADHUKAR GARG (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI P.P. MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF LD. CIT (A)-5, JAIPUR DATED 19.01.2016 PERTAINING TO ASSESSMENT YEAR 2009-10. FIRST, WE TAKE UP THE ASSESSEES APPEAL I N ITA NO. 140/JP/2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 ITA NO. 140 & 279/JP/2016 SHRI OM PRAKASH DANGAYACH, JAIPUR. 1. THAT LEARNED CIT (APPEALS) HAS ERRED IN HOLDING THA T THE ACTION OF THE ASSESSING OFFICER REGARDING INITIATION OF PROCE EDINGS U/S 147 IS IN ORDER AND ACCORDINGLY UPHOLDING THE SAME. THE SA ID ACTION IS ILLEGAL AND UNJUSTIFIED. 2. THAT THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIE D IN INITIATING REASSESSMENT PROCEEDINGS U/S 147 AND THE REASSESSME NT ORDER DESERVES TO BE CANCELLED. 3. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN HOLDING THAT THE PROVISIONS OF SECTION 40(A)(IA) WOULD BE APPLICABLE EVEN IN RESPECT OF AMOUNTS WHICH WERE NOT PAYABLE AT THE END OF THE YEAR AND DISALLOWANCE U/S 40(A)(IA) CAN BE MADE EVEN IF THER E IS NO AMOUNT OUTSTANDING AT THE END OF THE FINANCIAL YEAR. THE S AID FINDING IS ILLEGAL AND UNJUSTIFIED. 4. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRM ING ADDITION OF RS. 77,37,237/- IN RESPECT OF INTEREST PAID TO M/S. RELIANCE CAPITAL LIMITED RELYING ON THE PROVISIONS OF SECTION 40(A)( IA). THE ADDITION SUSTAINED IS ILLEGAL AND UNJUSTIFIED. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS RE- OPENED FOR ASSESSMENT AND THE ASSESSMENT UNDER SECT ION 143(3) READ WITH SECTION 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 06.12.2012. WHILE FRAMING THE ASS ESSMENT, THE AO FOUND THAT THE ASSESSEE HAD MADE INTEREST PAYMENT TO M/S. INDIABUL LS OF RS. 65,65,047/- AND M/S. RELIANCE CAPITAL LTD. OF RS. 77,37,237/- AND THE AS SESSEE HAS NOT DEDUCTED TAX AS PER SECTION 194A OF THE ACT THEREBY HE MADE DISALLO WANCE OF EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND ADDED A SUM OF RS. 1,43,02,284/-. AGGRIEVED BY THIS, THE ASSESSEE PRE FERRED AN APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY A LLOWED THE APPEAL. HE, THEREFORE, MADE DELETION OF ADDITION MADE ON ACCOUNT OF NON-DE DUCTION OF TAX IN RESPECT OF 3 ITA NO. 140 & 279/JP/2016 SHRI OM PRAKASH DANGAYACH, JAIPUR. INTEREST PAID TO M/S. INDIABULLS AND IN THE ABSENCE OF REQUISITE CERTIFICATE IN RESPECT OF INTEREST PAID TO M/S. RELIANCE CAPITAL LTD. THE DISALLOWANCE OF RS. 77,37,237/- WAS CONFIRMED. AGAINST THIS ORDER, NOW THE ASSESSE E IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NOS. 1 TO 3, THEREFORE, TH E SAME ARE DISMISSED AS NOT PRESSED. 4. GROUND NO. 4 IS AGAINST CONFIRMING THE ADDITION OF RS. 77,37,237/- IN RESPECT OF INTEREST PAID TO M/S. RELIANCE CAPITAL LTD. BY I NVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSION. HE SUBMITTED THAT IN VIEW OF ADDITIONAL EVIDENCE BY WAY OF ISSUING CERTIFICATE BY SHRI JITENDRA B. SANG HAVI, CA OF M/S. RELIANCE CAPITAL LTD. REMAINING DISALLOWANCE DESERVES TO BE DELETED. 4.1. ON THE CONTRARY, THE LD. D/R RELIED ON THE ORD ERS OF THE ASSESSING OFFICER. 4.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE TOTALITY OF FACTS AND THE DECISION OF HONBLE DELHI HIGH COURT RENDER ED IN THE CASE OF CIT VS. ANSAL LANDMARK TOWNSHIP (P) LTD. 377 ITR 635 (DELHI), WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION WITH REGARD TO THE CERTIFICATE AS FURNISHED BY THE ASSESSEE. THE AO AFTER VERIFYING THE SAME FROM M/S. RELIANCE CAPITAL LTD. WOULD DELETE THE DISALLOWANCE IN CASE THE CERTIFICATE IS FOUND IN ORDER. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO. 279/ JP/2016. THE FACTS IN THIS CASE ARE IDENTICAL TO ITA NO. 140/JP/2016, EXCEPT T HAT IN THIS CASE THE LD. CIT (A) 4 ITA NO. 140 & 279/JP/2016 SHRI OM PRAKASH DANGAYACH, JAIPUR. HAS DELETED THE DISALLOWANCE OF RS. 65,65,047/- IN RESPECT OF THE INTEREST PAID TO M/S. INDIABULLS. 6. THE ONLY EFFECTIVE GROUND IS AGAINST RESTRICTING THE DISALLOWANCE OF RS. 65,65,047/- AS AGAINST THE DISALLOWANCE OF RS. 1,43 ,02,284/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE LD. D/R SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE. 6.1. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD. CIT (A) AND SUBMITTED THAT THE LD. CIT (A) HAS FOLLOWIN G THE BINDING PRECEDENT. 6.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. THE LD. CIT (A) HAS DECIDED THE ISSUE IN PARA 3.4 OF HIS OR DER AS UNDER :- 3.4. IN THE CASE OF SH. GIRDHARI LAL BARGOTI (SUP RA) IT WAS FURTHER INDICATED THAT ONCE THE I.T. RETURNS ARE FILED BY T HE RECIPIENT NBFC, INCLUDING THEREIN THE INTEREST RECEIPTS FROM THE AS SESSEE THEN THE ASSESSEE WOULD NOT BE DEEMED TO BE IN DEFAULT. IT I S SEEN THAT THE CORRESPONDING PROVISIONS ARE IN 1 ST PROVISO TO SECTION 201(1) WHICH PROVIDES THAT THE ASSESSEE SHALL NOT BE DEEM3ED TO BE IN DEFAULT IF THE RECIPIENT OR LIABLE DEDUCTEE HAS FILED HIS RETURN T AKING INTO ACCOUNT THE AMOUNTS ON WHICH TDS WAS NOT DEDUCTED BY THE ASSESS EE AND PAYS DUE TAXES AND THE ASSESSEE FURNISHES THE REPORT OF C.A. IN THE SPECIFIED FORMAT TO THE ABOVE EFFECT. IF THE ASSESSEE FURNISH ES SUCH REPORT OF C.A., THE ASSESSEE SHALL BE DEEMED TO HAVE DEDUCTED AND PAID THE TAX ON THE DATE OF FURNISHING OF RETURN BY THE ABOVESTA TED RECIPIENT, IN TERMS OF 2 ND PROVISO TO SEC. 40(A)(IA). THE SAID PROVISO IS INS ERTED BY FINANCE ACT, 2012 W.E.F. 1.4.2013. HOWEVER, SEVERAL COURTS HAVE HELD THE SAME TO BE RETROSPECTIVE IN OPERATION. IN THE C ASE CIT VS. ANSAL 5 ITA NO. 140 & 279/JP/2016 SHRI OM PRAKASH DANGAYACH, JAIPUR. LAND MARK TOWNSHIP P. LTD. (2015) 377 ITR 635 (DEL. ), HONBLE DELHI HIGH COURT HAS HELD THAT THE INSERTION OF SECOND PR OVISO TO SEC. 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPECTIVE AFFECT FROM 1.4.2005. THE APPELLANT HAS FURNISHED T HE CERTIFICATE OF C.A. IN TERMS OF 1 ST PROVISO TO SECTION 201(1) ONLY IN RESPECT OF M/S. INDIABULLS. THEREFORE, RESPECTFULLY FOLLOWING THE J UDGEMENT OF HONBLE DELHI HIGH COURT (SUPRA) DEDUCTION FOR AMOUNT OF RS . 65,65,047 BEING INTEREST PAID TO M/S. INDIABULLS IS HEREBY ALLOWED TO THE APPELLANT SINCE THE RETURN FILED BY M/S. INDIABULLS SHOWING SUCH IN COME IS WITHIN TIME ALLOWED U/S 139(1). HOWEVER, IN THE ABSENCE OF ANY SUCH CERTIFICATE FROM M/S. RELIANCE CAPITAL LTD., THE DISALLOWANCE O F RS. 77,37,237/- IS CONFIRMED. THIS GROUND IS THEREFORE PARTLY ALLOWED. WE DO NOT FIND ANY INFIRMITY IN THE ABOVE FINDING O F LD. CIT (A) AS THE LD. CIT (A) HAS FOLLOWED THE JUDGMENT OF HONBLE DELHI HIGH COURT I N THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP P. LTD. (SUPRA). THE REVENUE HAS NO T BROUGHT ANY CONTRARY BINDING PRECEDENT, THEREFORE, WE DO NOT SEE ANY REASON TO I NTERFERE IN THE ORDER OF LD. CIT (A), THE SAME IS HEREBY AFFIRMED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES WHEREAS APPEAL OF THE REVENUE IS DISMISSED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 24.10.2 017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 24/10/2017. DAS/ 6 ITA NO. 140 & 279/JP/2016 SHRI OM PRAKASH DANGAYACH, JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI OM PRAKASH DANGAYACH, JAIPU R. 2. THE RESPONDENT THE ITO WARD 5(1), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 140 & 279/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT REGISTRAR 7 ITA NO. 140 & 279/JP/2016 SHRI OM PRAKASH DANGAYACH, JAIPUR.