The Innovative Pipe Concepts, Secunderabad, Hyderabad V. ITO, Ward-10(3), Hyderabad, Hyderabad

ITA 1521/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6093 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 11-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 143(3)

Judgement Text

ITA NO 1521 OF 2016 THE INNOVATIVE PIPE CONCEPTS SE CUNDERABAD PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1521/HYD/2016 (ASSESSMENT YEAR: 2012-13) M/S. THE INNOVATIVE PIPE CONCEPTS SECUNDERABAD PAN: AADFT 6421 B VS INCOME TAX OFFICER WARD 10(3) HYDERABAD FOR ASSESSEE : SHRI A. SRINIVAS FOR REVENUE : SMT. SUMAN MALIK, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2012-13 AGAIN ST THE ORDER OF THE CIT (A)-6 HYDERABAD, DATED 22.08.2 016 DELETING THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) OF TH E ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM DEALING IN PLUMBING PIPES MADE OF STAINLESS STEEL A ND OTHER PLUMBING EQUIPMENT. IT FILED ITS RETURN OF INCOME O N 27.09.2012 FOR THE A.Y 2012-13 ADMITTING TOTAL INCOME OF RS.10, 27,860. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE I.T. ACT, THE AO OBSERVED THAT THE ASSESSEE HAS MADE PAYMENT OF R S.8,12,442 TOWARDS INTEREST TO VARIOUS NON-BANKING FINANCIAL I NSTITUTIONS, BUT HAS NOT DEDUCTED TDS THEREFROM. THEREFORE, A SHOW-C AUSE LETTER DATE OF HEARING : 28.02.2017 DATE OF PRONOUNCEMENT : 15.03.2017 ITA NO 1521 OF 2016 THE INNOVATIVE PIPE CONCEPTS SE CUNDERABAD PAGE 2 OF 3 DATED 10.02.2015 WAS ISSUED TO THE ASSESSEE AS TO W HY THE AMOUNT OF RS.8,12,442 SHOULD NOT BE DISALLOWED U/S 40(A)(IA) OF THE ACT. THE ASSESSEE, VIDE HIS LETTER DATED 24.02. 2015, STATED THAT THE INTEREST HAS BEEN PAID TO REPUTED ORGANIZA TIONS AND THEREFORE, THE SAME MAY BE ALLOWED. IN SUPPORT OF T HIS CONTENTION, THE ASSESSEE RELIED UPON THE DECISIONS OF THE VARIO US BENCHES OF THE INCOME TAX APPELLATE TRIBUNAL INCLUDING THE DEC ISION OF THE SPECIAL BENCH OF THE TRIBUNAL AT VISAKHAPATNAM IN T HE CASE OF MERILYN SHIPPING & TRANSPORT (136 ITD 23). THE AO W AS HOWEVER, NOT CONVINCED WITH THE ASSESSEES CONTENTIONS AND O N THE BASIS OF THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN TH E CASE OF TUBE INVESTMENTS OF INDIA LTD & ANR. V. ACIT & ORS, WHEREIN IT WAS HELD THAT SECTION 40(A)(IA) OF THE ACT IS CONST ITUTIONALLY VALID HE DISALLOWED THE SUM OF RS.8,12,441 U/S 40(A)(IA) OF THE ACT. HE ALSO MADE ANOTHER ADDITION OF RS.73,411/-. AGGRIEVE D, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN 2 ND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORI TIES BELOW AND SUBMITTED THAT THOUGH THE DECISION OF THE SPECI AL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT (136 ITD 2 3), HAS BEEN STAYED BY THE HON'BLE JURISDICTIONAL HIGH COURT, TH E HON'BLE HIGH COURT IN THE SUBSEQUENT JUDGMENT IN THE CASE OF JAN APRIYA ENGINEERS SYNDICATE IN ITTA NO.352 OF 2014, DATED 2 4.6.2014 HAS HELD THAT THE TRIBUNAL CAN TAKE A DECISION ON SIMIL AR ISSUE. FURTHER, WE FIND THAT THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES LTD, REPORTED IN 3 57 ITR 647, HAS DISMISSED THE SLP FILED BY THE REVENUE AGAINST THE ORDER OF ITA NO 1521 OF 2016 THE INNOVATIVE PIPE CONCEPTS SE CUNDERABAD PAGE 3 OF 3 THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF VEC TOR SHIPPING SERVICES LTD REPORTED IN (2013)262 CTR (ALL) 545) W HICH HAS APPROVED THE DECISION OF THE SPECIAL BENCH IN THE C ASE OF MERILYN SHIPPING & TRANSPORT (SUPRA). IN VIEW OF THE SAME, AND ALSO IN VIEW OF THE FACT THAT THE INTEREST HAS BEEN PAID AN D THERE WAS NOTHING PAYABLE AS ON THE DATE OF FILING OF THE RET URN OF INCOME, WE HOLD THAT NO DISALLOWANCE U/S 40(A)(IA) IS TO BE MA DE. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 15 TH MARCH, 2017. VINODAN/SPS COPY TO: 1 M/S. THE INNOVATIVE PIPE CONCEPTS, C/O PRAKASH CH OKDA, CAS, SHOP NO.61, RAGHAVA RATNA TOWERS, CHIRAG ALI LANE, HYDERABAD 500001 2 INCOME TAX OFFICER WARD 10(3) HYDERABAD 3 CIT (A)-6 HYDERABAD 4 PR. CIT 6 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER