Vishnukant Inani (HUF), Hyderabad V. Income Tax Officer, Hyderabad

ITA 1423/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5519 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 30-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Section: 143(3); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 1423/HYD/2013 ASSESSMENT YEAR: 2005-06 VISHNUKANT INANI (HUF), APPELLANT HYDERABAD. (PAN AAAH13857B) VS. INCOME-TAX OFFICER, RESPONDENT WARD 7(4), HYDERABAD. ASSESSEE BY : SHRI LAXMINIWAS SHARMA REVENUE BY : SMT. K. HARITHA DATE OF HEARING : 12/03/2014 DATE OF PRONOUNCEMENT : 14/03/2 014 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAI NST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 29/07/2013 CONFIR MING THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) OF THE IT ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A HUF AND IS IN THE BUSINESS OF DEALING WITH DEPB. ASSESS EE FILED ITS RETURN OF INCOME FOR THE RELEVANT AY ON 27/10/2005 DECLARING INCOME OF RS. 1,41,620/-. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED FROM THE PROFIT AND LOSS A/C OF THE ASSESSEE THAT THE ASSESS EE HAD PAID BROKERAGE & COMMISSION AND CONSULTANCY CHARGES TO T HE VARIOUS PARTIES WITHOUT DEDUCTION OF TAX AT SOURCE . HE HELD THAT THESE PAYMENTS ARE LIABLE FOR TDS AND THE SAID PAYMENTS ITA NO. 1423/HYD/13 VISHNUKANT INANI (HUF) 2 ATTRACT THE PROVISIONS OF SECTION 194H AND SINCE TH E ASSESSEE HAD FAILED TO DEDUCT THE TAX AT SOURCE, DISALLOWANC E ON THE SAID CLAIM OF PAYMENT IS TO BE MADE U/S 40(A)(IA) O F THE ACT. HE ACCORDINGLY MADE A DISALLOWANCE OF THE SAID PAYM ENTS AND BROUGHT IT TO TAX. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A), WHO CONFIRMED THE ORDER OF THE AO AND THE A SSESSEE IS IN SECOND APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI LAXMINIWAS SHARMA, SUBMITTED THAT THE RECIPIENTS OF THE PAYMENTS HAVE INCLUDED THESE PAYMENTS AS INCOME IN THEIR RETURNS OF INCOME AND HAVE PAID THE TAX ACCORDINGLY . IN THIS CONNECTION, HE INVITED OUR ATTENTION TO PAGES 7 TO 206 OF THE PAPER BOOK FILED BY THE ASSESSEE AND SUBMITTED THAT THESE PAPERS CONSISTS OF CONFIRMATION LETTERS FROM THE PA RTIES TO WHOM THE ASSESSEE HAS MADE THE PAYMENTS AND ALSO CONFIRMATION OF TAXES PAID, THEIR RETURN OF INCOME, LEDGER EXTRACTS ETC. HE SUBMITTED THAT IN VIEW OF THE INSE RTION OF PROVISO TO SECTION 40(A)(IA) OF THE IT ACT, WHICH H AS BEEN HELD TO BE RETROSPECTIVE IN NATURE BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF DCIT VS. IVRCL INFRASTRUCTU RE & PROJECTS LTD., IN ITA NO. 1220/HYD/2003 FOR AY 2005 -06 VIDE ORDER DATED 20/12/2013 AND IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD. VS. CIT, 293 ITR 226 (SC). THE LEA RNED AO SHOULD BE DIRECTED TO EXAMINE THE EVIDENCE FILED BY THE ASSESSEE AND IF IT IS FOUND THAT THE RECIPIENTS HAV E PAID TAX ITA NO. 1423/HYD/13 VISHNUKANT INANI (HUF) 3 ON THE SAID RECEIPTS, THE SAME SHOULD NOT BE DISALL OWED U/S 40(A)(IA) OF THE ACT. 5. THE LEARNED DR, SMT. K. HARITHA, HOWEVER, SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE JUDICIAL PRECEDENTS ON THE ISSUE, WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA-COLA BE VERAGES (P) LTD. (SUPRA) HELD THAT IN VIEW OF THE PROVISO T O SECTION 201(1) AN ASSESSEE CANNOT BE DEEMED TO BE AN ASSES SEE IN DEFAULT U/S 201(1) OF THE IT ACT IF THE RECIPIENTS HAVE PAID THE TAXES ON THE PAYMENTS MADE BY THE ASSESSEE WITHOUT DEDUCTING TAX AT SOURCE AND THAT THE INTEREST U/S 2 01(1A) IS PAYABLE BY THE ASSESSEE TILL THE DATE OF FILING OF THE RETURNS BY THE RECIPIENTS. SIMILAR AMENDMENTS WERE MADE TO SECTION 40(A)(IA) OF THE IT ACT AND THIS TRIBUNAL IN THE CA SE OF IVRCL (SUPRA) HAS HELD IT TO BE RETROSPECTIVELY APPLICABL E. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO REMIT THE I SSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE SAME IN THE LIGHT OF THE ABOVE JUDICIAL PRECEDENTS AS WELL AS THE EVI DENCE FILED BY THE ASSESSEE. IF THE AO, AFTER GOING THROUGH THE MATERIAL FILED BY THE ASSESSEE IS SATISFIED THAT THE RECIPIE NTS HAVE PAID TAXES ON THE RELEVANT RECEIPTS AS PART OF THEIR INC OME, THEN NO DISALLOWANCE SHALL BE MADE U/S 40(A)(IA). NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN FAIR OPPOR TUNITY OF HEARING. ACCORDINGLY, THE GROUNDS RAISED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1423/HYD/13 VISHNUKANT INANI (HUF) 4 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 14/03/2014. SD/- SD/- (CHANDRA POOJARI) (P. MADHAV I DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED:14/03/2014 KV COPY TO:- 1) VISHNUKANT INANI HUF, C/O M/S LAXMINIWAS NEETH & CO., MOGHULS COURT, BASHEERBAG, HYDERABAD. 2) ITO, WARD 7 (4), HYDERABAD. 5) CIT(A)-VI, HYDERABAD 4) THE CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A. T., HYDERABAD.