M/s Calcutta Iron Foundry, Kolkata V. ITO, WD-34(3), KOLKATA, Kolkata

ITA 1563/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4230 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-08-2016
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: SHIKA AGARWAL ACA LD
• Section: 143(3)

Judgement Text

1 ITA NO.1563/KOL/2016 M/S. CALCUTTA IRON FOUNDRY, AY 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] I.T.A NO. 1563/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. CALCUTTA IRON FOUNDRY VS. INCOME-TAX OFFICE R, WD-34(3), KOLKATA. (PAN: AABFC5707F) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 22.11.2016 DATE OF PRONOUNCEMENT: 30.11.2016 FOR THE APPELLANT: SMT. SHIKA AGARWAL, ACA, LD . AR FOR THE RESPONDENT: MD. GHAYAS UDDIN, JCIT, SR . DR ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-10, KOLKATA VIDE APPEAL NO. 271/CIT(A)-10/WD-34(3)/14-15/KOL DATED 31.05.20 16. ASSESSMENT WAS FRAMED BY ITO, WARD-34(3), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2011-12 VIDE HIS ORDER DATED 24.0 3.2014. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS AS TO WHETHER THE AMENDMENT BROUGHT IN THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS TO BE CONSTRUED AS RETROSPECTIVE IN OPERATION OR NOT. 2.1. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAD PAID A SUM OF RS.42,080/- TOWARDS MOTOR CAR HIRE CHARGES WITHOUT DEDUCTION OF TAX AT SOURCE AND DISA LLOWED THE SAME U/S. 40(A)(IA) OF THE ACT. THE ACTION OF THE AO WAS UPHELD BY THE LD. CIT(A) I N FIRST APPEAL 2.2. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) ERRED IN NOT DELETING THE D ISALLOWANCE OF RS.42,080/- IN VIEW OF THE SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT INSERTE D BY THE FINANCE ACT 2012. THE SECOND PROVISO IS CURATIVE IN NATURE AND ASSESSEE CANNOT B E HELD AS DEFAULTER FOR NOT DEDUCTING TAX AT SOURCE, IF THE PAYEE HAS INCLUDED THE RECEIPTS IN I TS INCOME AND HAS PAID TAX ON THE SAME. HENCE, THE ADDITION IS WRONG AND LIABLE TO BE DELET ED. 2 ITA NO.1563/KOL/2016 M/S. CALCUTTA IRON FOUNDRY, AY 2011-12 2.3. DURING THE COURSE OF HEARING THE LD. AR ARGUE D THAT THE PAYEE OF THE HIRE CHARGES HAD DULY OFFERED THE SAID RECEIPT IN HIS RETURN OF INCOME WHICH ASPECT MAY KINDLY BE DIRECTED TO BE VERIFIED BY THE AO. SHE ALSO ARGUED THAT IN VIEW OF THE AMENDMENT TO SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT, WHICH IS H ELD AS RETROSPECTIVE IN APPLICATION BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., REPORTED IN 377 ITR 635 (DEL), W HICH WAS LATER FOLLOWED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF TIRUPATI CONSTR UCTION IN G.A. NO. 2146 OF 2016 WITH ITAT NO. 287 OF 2016 DATED 23.08.2016, SHE PRAYED F OR TREATING THE ASSESSEE AS NOT IN DEFAULT WARRANTING DISALLOWANCE U/S. 40(A)(IA) OF T HE ACT. IN RESPONSE TO THIS, THE LD. DR FAIRLY AGREED FOR SETTING ASIDE THIS ISSUE TO THE F ILE OF AO. 2.4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THRO UGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT IN THE LIGHT OF THE DECISION OF THE HONBLE DELHI HIGH COURT AND HONBLE CALCUTTA HIGH COURT CITED SUPRA, IF THE PAYEE HAS D ISCLOSED THE SAID HIRE CHARGES RECEIPT IN HIS RETURN AND PAID TAXES THEREON THE ASSESSEE SHOU LD NOT BE INVITED WITH DISALLOWANCE U/S. 40(A)(IA) OF THE ACT BY TREATING HIM AS THE ASSESSE E IN DEFAULT. WE DIRECT THE AO TO VERIFY THE SAME AND DISPOSE OF THE ISSUE ACCORDINGLY. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.11.201 6 SD/- SD/- (S.S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :30TH NOVEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. CALCUTTA IRON FOUNDRY, 18, R. N. M UKHERJEE ROAD, KOLKATA-700 001 2 RESPONDENT ITO, WARD-34(3), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .