The ITO, Ward-8(3), Ahmedabad V. M/s. Sambhu Textile Mills (P) Ltd., Ahmedabad

ITA 1475/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9400 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: M J SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 1475/AHD/2012 (ASSESSMENT YEAR: 2009-10) ITO, WARD-8(3), AHMEDABAD V/S M/S. SHAMBHU TEXTILE MILLS (P) LTD. KASHIRAM MILLS COMPOUND, NR. RANIPUR BUS STAND, NAROL, AHMEDABAD-382405 (APPELLANT) (RESPONDENT) PAN: AACCS 114L APPELLANT BY : SHRI R.P. MAURYA, SR. D.R. RESPONDENT BY : SHRI M. J. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 24 -02-201 6 DATE OF PRONOUNCEMENT : 26 -02-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A)-XIV, AHMEDABAD DATED 13.04.2012 PERTAINING T O A.Y. 2009-10. ITA NO. 1475 /AHD/2012 . A.Y.2009-10 2 2. THE FIRST GRIEVANCE OF THE REVENUE RELATES TO THE D ELETION OF THE ADDITION OF RS. 13,95,966/- BEING CLAIM OF REBATE A ND DISCOUNT. WHILE SCRUTINIZING THE RETURN OF INCOME AND VERIFYING THE PROFIT AND LOSS ACCOUNT, THE A.O NOTICED THAT THE ASSESSEE HAS DEBI TED RS. 25,05,495/- TOWARDS COMMISSION AND BROKERAGE UNDER THE HEAD SELLING AND DISTRIBUTION EXPENSES. ASSESSEE WAS ASK ED TO FURNISH THE DETAILS. THE ASSESSEE FURNISHED A LIST OF PARTIES T O WHOM COMMISSION AND DALALI EXPENSES WERE PAID. IT WAS EXPLAINED THA T OUT OF TOTAL AMOUNT OF RS. 25,05,496/-, RS.11,09,530/- WAS TOWAR DS COMMISSION PAID TO SALE AGENTS FOR THE JOB WORK RECEIVED THROU GH THEM, ON WHICH TAX WAS DEDUCTED AT SOURCE AND THE BALANCE AMOUNT O F RS. 13,95,966/- IS TOWARDS REBATE AND DISCOUNT ALLOWED TO THE CUSTOMERS WHICH IS INADVERTENTLY RECORDED IN THE COMMISSION A ND DALALI ACCOUNT INSTEAD OF REBATE AND DISCOUNT. 3. THIS EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOU R WITH THE A.O WHO WAS OF THE FIRM BELIEF THAT SINCE THE ASSESSEE WAS SHOWING REBATE AND DISCOUNT EXPENSES SEPARATELY AND SINCE THIS AMOUNT HAS NOT BEEN DEBITED IN THAT ACCOUNT, THE SAME CANNOT BE ALLOWED . THE A.O DISALLOWED RS. 13,95,966/-. ASSESSEE CARRIED THE MA TTER BEFORE THE LD. CIT(A) AND ONCE AGAIN CLAIMED WHAT HAS BEEN STATED BEFORE THE A.O. NECESSARY DETAILS WERE FILED. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE RELEVANT DOCUMENTARY EVIDENCES, THE LD. CIT(A) WAS CONVINCED WITH THE CLAIM AND DIRECTED THE A.O T O DELETE THE ADDITION. 4. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE LD . D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AU THORITIES. ITA NO. 1475 /AHD/2012 . A.Y.2009-10 3 5. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW AND WITH THE ASSISTANCE OF THE LD . COUNSEL, WE HAVE ALSO GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCE S BROUGHT ON RECORD BEFORE US IN THE FORM OF THE PAPER BOOK. A P ERUSAL OF THE SAME SHOWS THAT THE ASSESSEE HAD FILED COMPLETE DETAILS BEFORE THE A.O, THE REBATE AND DISCOUNT IN EACH BILL HAS BEEN ACCEPTED. WE ALSO FIND THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM ITS CUST OMERS WAS NET OF REBATE AND DISCOUNT SINCE ALL THESE FACTUAL DETAILS HAVE BEEN EXAMINED AND VERIFIED BY THE FIRST APPELLATE AUTHORITY. WE, THEREFORE, DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A), GROU ND NO. 1 IS ACCORDINGLY DISMISSED. 6. THE SECOND GROUND RELATES TO THE DELETION OF THE AD DITION OF RS. 1,63,14,603/- MADE U/S. 40(A)(IA) OF THE ACT. 7. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF VARIOUS EXPENSES DE BITED IN THE PROFIT AND LOSS ACCOUNT. ON VERIFICATION OF THE DETAILS, T HE A.O NOTICED THAT THE ASSESSEE HAS DEPOSITED THE TAX DEDUCTED AT SOUR CE IN CONTRAVENTION OF THE PROVISIONS OF SECTION 194A/194 C/194H/194J OF THE ACT. A DETAILED AND COMPREHENSIVE CHART HAS BEE N INCORPORATED BY THE A.O IN HIS ASSESSMENT ORDER AT PAGES 7 TO 17. T HE A.O MADE THE DISALLOWANCE OF RS. 1,63,85,218/- FOR NON COMPLIANC E. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND STRONGLY CONTENDED THAT SINCE THE ASSESSEE HAS PAID THE TAX DEDUCTED AT SOURCE BEFORE FILING THE RETURN OF INCOME. THE AMENDED PRO VISIONS OF SECTION ITA NO. 1475 /AHD/2012 . A.Y.2009-10 4 40(A)(IA) SQUARELY APPLY. THE LD. CIT(A) WAS CONVIN CED WITH THE CONTENTION OF THE ASSESSEE AND DIRECTED THE A.O TO DELETE THE IMPUGNED DISALLOWANCE. 9. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE LD . D.R. SUPPORTED THE ASSESSMENT ORDER. THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT THE ISSUE IS SQUARELY COVERED IN THE FAVOUR OF THE ASSE SSEE AND AGAIN THE REVENUE BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF OMPRAKASH R. CHAUDHARY 57 TAXMAN.COM 38. 10. A PERUSAL OF THE FACTUAL MATRIX INCORPORATED IN DET AIL BY THE A.O IN HIS ASSESSMENT ORDER AT PAGES 7 TO 17 CLEARLY SH OWS THAT THE ASSESSEE HAS DEPOSITED THE TAX DEDUCTED AT SOURCE B EFORE FILING OF THE RETURN OF INCOME WHICH IS 29.09.2009.THE AMENDMENT BROUGHT TO THE PROVISIONS OF SECTION 40(A)(IA) BY FINANCE ACT, 201 0 SQUARELY APPLY. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VIRG IN CREATIONS IN ITAT NO. 302 OF 2011 DATED 23.11.2011 HAS HELD THAT THE AMENDMENT IN SECTION 40(A)(IA) IS RETROSPECTIVE. THE HONBLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF OMPRAKASH CHAUDHARY (SUPRA) HAS ALSO TAKEN A SIMILAR VIEW. RESPECTFULLY FOLLOWING THE DECISIONS OF THE H ONBLE HIGH COURT (SUPRA), WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). GROUND NO. 2 IS DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 26 - 02 - 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY