ITO, CHENNAI V. Gemini Paints, CHENNAI

ITA 1542/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9598 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2016
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 03-07-2015
• Court: TRIBUNAL
• Department Lawyers: MRS S VIJAYA PRABHA
• Keywords: Revised return
• Section: 131

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 1 542 /MDS/2015 / ASSESSMENT YEAR :20 1 0 - 11 THE INCOME TAX OFFICER, NON - CORPORATE WARD 3(1), 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 600 034. VS. M/S. GEMINI PAINTS, TF 3, CORDEL APARTMENTS, 29, PYCRAFTS ROAD, CHENNAI 6. [PAN: AAAFG0571A] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MRS. S. VIJAYA PRABHA, JCIT / RESPONDENT BY : NONE / DATE OF HEARING : 05 . 04 .201 6 / DATE OF P RONOUNCEMENT : 26 .04 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 4 , CHENNAI , DAT ED 2 5 . 0 2 .20 1 5 RELEVANT TO THE ASSESSMENT YEAR 20 1 0 - 11 . T HE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS WITH REGARD TO DELETION OF DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . I.T.A. NO . 1542 /M/ 15 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF PAINTS AND ALLIED PRODUCTS AND FILED ITS RETURN OF INCOME ADMITTING NIL INCOME ON 30.09.2010. SUBSEQUENTLY, IN THE REVISED RETURN OF INCOME FILED ON 07.10.2010, THE ASSESSEE HAS ADMITTED AN INCOME OF .97,58,260/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS DULY SERVED ON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAVE BEEN VERIFIED AND ON VERIFICATION OF THE BOOKS OF ACCOUNTS, THE ASSESSING OFFICER HAS FOUND THAT THE ASSESSEE HAS MADE PAYMENT TO VARIOUS SIX PARTIES UNDER THE HEAD FREIGHT CHARGES TO THE EXTENT OF .35,22,100/ - . IT WAS ALSO FOUND THAT TDS WAS NOT DEDUCTED ON THE PAYMENTS MADE TO THE ABOVE SIX PARTIES. ACCORDINGLY, THE PARTIES WERE SUMMONED UNDER SECTION 131 OF THE ACT. OUT OF SIX PERSONS, FIVE PERSONS APPEARED AND SWORN STATEMENTS WERE RECORDED FROM THEM. ALL THESE PERSONS WERE EMPLOYEES OF ONE TRANSPORT COMPA NY CALLED M/S. BHAVANI GOODS TRANSPORT AND AS PER THE STATEMENT GIVEN BY THESE PERSONS, THE AMOUNTS WERE PAID ON ACCOUNT OF THE SERVICES RENDERED BY BHAVANI GOODS TRANSPORT. SINCE THE ASSESSEE HAS FAILED TO DEDUCT TAX ON PAYMENTS MADE UNDER THE HEAD FREIGH T CHARGES, THE TOTAL AMOUNT OF .35,22,100/ - ON WHICH THE TAX WAS DEDUCTIBLE WAS DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. I.T.A. NO . 1542 /M/ 15 3 3. ON APPEAL, AFTER CONSIDERING THE ALTERNATIVE PLEA RAISED BY THE ASSESSEE, BY FOLLOWING THE DECISION IN THE CASE OF CIT V. VECTOR SHIPPING SERVICES (P) LTD. 357 ITR 642 (ALL), ALLOWED THE GROUND RAISED BY THE ASSESSEE. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND THE LD. DR HAS RELIED ON BOARD S CIRCULAR NO. 10/DV/2013 (DEPARTMENT VIEW) IN F.NO. 279/MISC/M - 61/2012 - 13 - ITJ (VOL. II) DATED 16.12.2013 AND PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERTED. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE, WE PROCEEDED TO DECIDE THE APPEAL AFTER HEARING TO THE LD. DR AND CONSIDERING THE FACTS AND MA TERIALS AVAILABLE ON RECORD. 6. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER DISALLOWED A SUM OF .35,22,100/ - , WHICH WAS PAID TO VARIOUS PARTIES UNDER THE HEAD FREIGH T CHARGES AND NO TDS WAS DEDUCTED AND THEREBY SECTION 40(A)(IA) OF THE ACT WAS INVOKED. ON APPEAL, THE LD. CIT(A) HAS HELD THAT THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE IN VIEW OF THE DECISION IN THE CASE OF CIT V. VECTOR SHIPPING SERVICES (P) LTD. (SUPRA) AND DIRECTED THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE MADE SINCE THE PAYMENT OF .35,22,100/ - WERE ALREADY MADE BY THE ASSESSEE DURING THE YEAR ITSELF AND NOTHING WAS OUTSTANDING AS ON 31.03.2010. I.T.A. NO . 1542 /M/ 15 4 7. A GAINST THE DECISION OF THE HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. VECTOR SHIPPING SERVICES P. LTD. , THE DEPARTMENT HAS PREFERRED SLP BEFORE THE HON BLE SUPREME COURT AND THE HON BLE SUPREME COURT HAS DISMISSED THE SLP IN CC NO. 8068/2014 VIDE ORDER DATED 02.07.20 14. IN VIEW OF THE DISMISSAL OF THE SLP FILED BY THE DEPARTMENT, THE ORDER PASSED BY THE HON BLE ALLAHABAD HIGH COURT HAS BECOME FINAL. THEREFORE, IT CAN BE SAFELY CONCLUDED THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. UNDER THE ABOVE FACTS AND CIR CUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED ON THE 26 TH APRIL , 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 26 . 0 4 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / C IT , 5. / DR & 6. / GF.