MILIND LAXMAN SALUNKHE, MUMBAI V. ACIT 23(1)(1), MUMBAI

ITA 1543/MUM/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92625 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 21-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2009
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEERLA SR
• Assessee Lawyers: JITENDRA SINGH
• Section: 43B; 143(3)

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO.1543/M/2009 ( AY: 2005 - 2006 ) MR. MILIND LAXMAN SALUNKHE, 5066, 5 TH FLOOR, BHANDUP INDUSTRIAL ESTATE, PANNALAL COMPOUND, LBS MARG, BHANDUP (W), MUMBAI - 400078. / VS. ASST. CIT 23(1)(1), MUMBAI. ./ PAN : AAFPS 8330 J ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI JITENDRA SINGH / RESPONDENT BY : SHRI PAVAN KUMAR BEERLA, SR. AR / DATE OF HEARING : 21.5 .2015 / DATE OF PRONOUNCEMENT :29 .5.2015 / O R D E R PER G.S. PANNU, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) - XXIII, MUMBAI DATED 23.12.2008 FOR THE ASSESSMENT YEAR 2005 - 2006 IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE AC T) , DATED 24.12.2007. 2. IN THIS APPEAL, THE FIRST GROUND OF APPEAL RAISED BY THE ASSESSEE IS WITH REGARD TO DISALLOWANCE OF RS. 1,97,871/ - SUSTAINED BY THE CIT (A) BY INVOKING SECTION 43B OF THE ACT ON ACCOUNT OF THE FACT THAT THE EMPLOYEES CONTRIBUTION OF PROVIDENT FUND HAS BEEN DEPOSITED BEYOND THE DUE DATE PRESCRIBED U/S 36(1)(VA) OF THE ACT. 3. AT THE TIME OF HEARING, THE LD REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE SAID DISALLOWANCE WAS UNSUSTAINABLE IN VIEW OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN ORGANICS CHEMICALS LTD [201 4] 366 ITR 1 (BOMBAY) . IN THIS CONTEXT, WE FIND THAT THE CHANGES MADE TO SECTION 43B OF THE ACT WITH EFFECT FROM 1.4.2004 W ERE CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN ORGANICS CHEMICALS LTD (SUPRA) AND I N TERMS OF THE 2 RATIO LAID DOWN BY THE HONBLE HIGH COURT, IT HAS TO BE HELD THAT THE SAID DISALLOWANCE IS UNSUSTAINABLE AND ACCORDINGLY IT IS DIRECTED TO BE DELETED. 4. IN SO FAR AS THE G ROUND NOS.3, 4 AND 5 RELATING TO THE DISALLOWANCES OF RS. 21,725/ - ; RS. 14,918; RS. 28,798/ - AND RS. 19,698/ - ON ACCOUNT OF INTEREST, CAR, TELEPHONE AND PRIOR PERIOD EXPENSES AND STAFF WELFARE EXPENSES RESPECTIV ELY ARE CONCERNED, THEY HAVE NOT BEEN PRESSED AT THE TIME OF HEARING AND ARE ACCORDINGLY DISMISSED. 5. THE LAST G ROUND OF APPEAL IS AGAINST A DISALLOWANCE OF RS. 18,57,039/ - SUSTAINED BY THE CIT (A) ON ACCOUNT OF APPLICATION OF SECTION 40(A)(IA) OF THE ACT . AS PER THE DETAILS CONTAINED IN PARA 9 OF THE ASSESSMENT ORDER, AN AMOUNT OF RS. 23,28,052/ - WAS DISALLOWED OUT OF VARIOUS EXPENSES ON THE GROUND THAT THE CORRESPONDING TAX WAS NOT DEDUCTED AT SOURCE OR REQUISITE TAX DEDUCTED AT SOURCE WAS NOT DEPOSISTE D IN THE GOVERNMENT EXCHEQUER WITHIN THE PRESCRIBED PERIOD. BEFORE US, LD REPRESENTATIVE FOR THE ASSESSEE HAS ASSAILED THE SUSTENANCE OF DISALLOWANCE BY THE CIT (A) TO THE EXTENT OF RS. 14,83,461/ - , WHICH IS DETAILED AS UNDER: S.NO. PARTICULARS AMOUNT WH ETHER TDS PAID 1. SUB - CONTRACT 12,24,008/ - PAID ON 14.6.2005 2. PROFESSIONAL CHARGES 2,59,453/ - PAID ON 14.6.2005 6. AT THE TIME OF HEARING, THE ONLY PLEA RAISED BY THE ASSESSEE IS WITH REGARD TO THE EXPENDITURE REPR ESENTED BY PAYMENTS TO DEPUTIES - RS. 12,24,008/ - AND FOR PROFESSIONAL CHARGES RS. 2,59,453/ - . IN THIS CONTEXT, THE LD REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE CORRESPONDING TDS WAS PAID ON 14.6.2005 AS NOTED BY THE ASSESSING OFFICER IN P ARA 9 OF THE ASSESSMENT ORDER, AND T HEREF ORE, IN TERMS OF THE RATIO OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAJINDER KUMAR [2013] 362 ITR 241 (DELHI), DATED 1.7.2013 THE SAID PAYMENTS DO NOT ATTRACT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 7. IN THIS CONTEXT, IT IS OBSERVED THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF RAJINDER KUMAR (SUPRA) NOTED THAT THE ASSESSEE HAD DEDUCTED THE TDS IN MARCH 2007 I.E., LAST MONTH OF THE PREVIOUS YEAR AND PAID THE SAME BEFORE THE DUE DATE ON WHICH THE RETURN OF INCOME U/S 139(1) OF THE ACT WAS TO BE FILED THEN THE PROVISIONS 3 OF SECTION 40(A)(IA) OF THE ACT COULD NOT BE INVOKED. IN THE CASE BEFORE US, THE AFORESAID TDS WAS DEPOSITED TO BY THE ASSESSEE ON 14.6.2005, WHICH IS PRIOR TO THE DATE ON WHICH RETURN OF INCOME U/S 1 39(1) OF THE ACT WAS TO BE FILED FOR THE CURREN T ASSESSMENT YEAR AND THEREFORE TO THE SAID EXTEN T , THE PROVISION OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVOKED BY THE ASSESSING OFFICER. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT (A) AND DIRECT THE ASSESSING OFFICER TO REWORK THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT, IF ANY, AFTER CONSI DERING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF RAJINDER KUMAR (SUPRA) AS PER THE LAW. THUS, GROUND NO.6 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNC ED IN THE O PEN COURT ON 29 TH MAY, 2015. SD/ - SD/ - ( SANJAY GARG ) ( G.S. PANNU ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 29 .5 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI