Appeal details
Counselvise Citation
[2018] 112 COUNSELVISE.COM (IT) 5416 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-10-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Assessment Year
2013-2014
Appeal Filed On
09-05-2018
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , , % BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NOS. 1553 & 1554/CHNY/2018 / ASSESSMENT YEARS : 2012-13 & 2013-14 SMT. REKHA MUSADDY, FLAT G-1, SRI RAMS, NO 6, FOURTH STREET, NANDANAM EXTENSION, CHENNAI - 600 035. [PAN: ADBPR 6907R] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 2(3), CHENNAI 34. ( / APPELLANT) ( &'( /RESPONDENT ) ASSESSEE BY : SHRI. M. KARUNAKARAN, ADVOCATE REVENUE BY : SHRI. SRINIVASA RAO VANA, JCIT 1 /DATE OF HEARING : 30.10.2018 1 /DATE OF PRONOUNCEMENT : 30.10.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THESE APPEALS AGAINST THE CONSOL IDATED ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI IN ITA NOS. 154/15-16 & 112/16-17 DATED 20.02.2018 FOR ASSESSMENT YEARS 2 012-13 & 2013-14, RESPECTIVELY. :-2-: ITA NOS. 1553 & 1554/CHNY/2018 2. SMT. REKHA MUSADDY, THE ASSESSEE, A PROPRIETOR A ND CARRYING ON BUSINESS IN TRADING AND IMPORTING OF EARTHMOVING SP ARES IN THE NAME AND STYLE OF AYUSH EARTHMOVERS. WHILE MAKING THE ASS ESSMENTS FOR ASSESSMENT YEAR 2012-13 & 2013-14, THE ASSESSING OF FICER NOTICED, INTER ALIA, THAT THE ASSESSEE DID NOT DEDUCT TDS ON THE I NTEREST PAID TO RELIANCE CAPITAL LTD., AND RELIANCE HOME FINANCE LT D., DURING THE RELEVANT ASSESSMENT YEARS 2012-13 & 2013-14, RESPEC TIVELY. WHEN THE AO PROPOSED TO DISALLOW SUCH SUM, THE ASSESSEE CONT ENDED THAT ACCORDING TO PROVISIO OF SECTION 201(1), AS THE PAY EES HAVE PAID THE TAXES DUE ON THEM. HOWEVER, THE AO HELD THAT IN TH E ASSESSMENT FOR ASSESSMENT YEAR 2012-13, PROVISIONS OF SECTION 201( 1) HAS BEEN INSERTED IN THE FINANCE ACT, 2012 ONLY W.E.F. 01.07.2012, TH EREFORE IT IS PROSPECTIVE IN NATURE AND HENCE SECTION 40A(IA) GET S ATTRACTED AND ACCORDINGLY, HE DISALLOWED RS. 15,65,563/-. FOR AS SESSMENT YEAR 2013- 14, THE AO HELD THAT SINCE, THE ASSESSEE COULD NOT PRODUCE THE REQUIRED CERTIFICATE, DISALLOWANCE U/S. 40A(IA) IS WARRANTED AND HENCE DISALLOWED. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE CI T(A) AND THE LD. CIT(A) DISMISSED THE APPEALS. 3. AGGRIEVED, THE ASSESSEE FILED THESE APPEALS WITH THE FOLLOWING COMMON GROUNDS: :-3-: ITA NOS. 1553 & 1554/CHNY/2018 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.15,65,560/- MADE UN DER SECTION 40(A)(IA) OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE FIRST PROVISO TO SECTION 201(1) WAS PROSPECTIVE IN NATURE AND EFFECTIVE ONLY FROM 1/7/2012 AND HENCE THE SAME IS NO T APPLICABLE TO THE ASSESSMENT YEAR 2012-13. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THERE ARE VARIOUS DECISIONS OF THE TRIBUNALS AND HIGH COURTS TO THE EFFECT THAT THE AMENDMENT MADE BY FINANCE ACT, 2012 TO SECTIONS 201(1) AND 40(A)(IA) ARE ONLY CURATIVE IN NATURE AN D WILL HAVE RETROSPECTIVE EFFECT FROM 1/4/2005. 4. THE AUTHORITIES BELOW OUGHT TO HAVE APPRECIATED THE FACT THAT THE PAYEES HAVE DISCHARGED THEIR TAX OBLIGATIONS INCLUD ING THE AMOUNT PAID BY THE APPELLANT AS INTEREST AND THEREFORE THERE IS NO OBLIGATION ON THE PART OF THE APPELLANT TO DEDUCT TDS IN THE LIGHT OF THE DECI SION OF THE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA (293 ITR 226) AN D ALSO IN THE LIGHT OF THE AMENDMENTS MADE BY FINANCE ACT, 2012. 5. THE APPELLANT THEREFORE PRAYS THAT THE DISALLOWA NCE OF RS. 15,65,560/- MADE U/S 40(A)(IA) MAY BE DELETED. 4. THE AR INVITING OUR ATTENTION TO THE COPIES OF L ETTER ISSUED BY RELIANCE CAPITAL LTD. (COMMERCIAL FINANCE) DATED 19 .02.2016 AND ITS ENCLOSURES ISSUED BY JITENDRA SANGHAVI & CO., DATED 04.04.2016 AND RELIANCE HOME FINANCE LTD., DATED 19.02.2016 AND IT S ENCLOSURES ISSUED BY JITENDRA SANGHAVI & CO., DATED 05.04.2016, AND S UBMITTED THAT THE INTEREST PAID TO BOTH THE COMPANIES WERE ADMITTED B Y THEM IN THEIR RETURNS FOR ASSESSMENT YEARS 2012-13 & 2013-14, RES PECTIVELY. FURTHER, THE AR RELIED ON THIS TRIBUNAL DECISION IN THE CASE OF UDAYAKUMAR RUDRAKUMAR VS ACIT IN ITA NO. 2756/MDS/2016, DATED 10.10.2017 AND :-4-: ITA NOS. 1553 & 1554/CHNY/2018 PLEADED THAT THE ABOVE DISALLOWANCES MAY BE DELETED . PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIE S. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. IN VIEW OF THE DECISIONS RELIED ON BY TH E ASSESSEE, WE CONSIDER IT APPROPRIATE THAT THE MATTER TO BE RE-EXAMINED BY THE AO TO THE EXTENT THE ASSESSEE IS ABLE TO ADDUCE EVIDENCE, WHICH MAY AT HIS OPTION BE VERIFIED BY THE AO, OF THE IMPUGNED PAYMENTS AS FOR MING PART OF THE INCOME OF THE PAYEES, DULY RETURNED AND TAX PAID TH EREON, THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT AND ACC ORDINGLY, SECTION 40(A)(IA) WOULD STAND EXCLUDED TO THAT EXTENT. THE APPEALS ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE ASSESSEES APPEALS ARE TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2018 AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ! /ACCOUNTANT MEMBER /CHENNAI, 6 /DATED: 30 TH OCTOBER, 2018 JPV 1&89:9 /COPY TO: 1. (/ APPELLANT 2. &'( /RESPONDENT 3. < ) (/CIT(A) 4. < /CIT 5. 9& /DR 6. /GF
