M/s Vibgyor Estate Pvt. Ltd., Kolkata V. ITO, Ward 1(3), Kolkata, Kolkata

ITA 1605/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4134 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-08-2016
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY
• Section: 143(3); 194C

Judgement Text

1 ITA NO.1605/KOL/2016 VIBGYOR ESTATE (P) LTD., AY 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] I.T.A NO. 1605/KOL/2016 ASSESSMENT YEAR: 2011-12 M/S. VIBGYOR ESTATE (P) LTD. VS. INCOME-TAX OFFIC ER, WD-1(3), KOLKATA (PAN: AACCV9803B) (APPELLANT) (RESPONDENT) DATE OF HEARING: 24.11.2016 DATE OF PRONOUNCEMENT: 02.12.2016 FOR THE APPELLANT: SHRI ANIL KOCHAR, ADVOCATE FOR THE RESPONDENT: SHRI P. K. CHAKRABORTY, JC IT ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-1, KOLKATA VIDE APPEAL NO. 357/CIT(A)-1/WD-1(3)/2014-15 DATED 09.06.2016. ASSE SSMENT WAS FRAMED BY ITO, WARD- 1(3), KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2011-12 VIDE HIS ORDER DATED 27.03.2014. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT COULD BE MADE IN THE FACTS AND CIRCUMSTANCES OF THE CASE APART FROM EX PARTE ORDER PASSED BY THE LD. CIT(A). 3. BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS A REAL ESTATE DEVELOPER AND HAD MADE THE FOLLOWING PAYMENTS DURING THE YEAR UNDER REVIEW : SL. NO. NAME OF THE PARTY AMOUNT PAID REMARKS 1 DEEPAK CONSTRUCTION RS.6,31,305 AMOUNT PAID TO TH E CONTRACTOR FOR CIVIL WORK AND TDS WAS DEDUCTIBLE U/S. 194C OF THE ACT 2 RITA PRAKASH RS.4,80,000 RENT PAID TO RITA PRAKAS H, TDS WAS DEDUCTIBLE U/S. 194I OF THE ACT 3 BEST SECURITY & SERVICES RS. 96,000 PAYMENT MADE TO SECURITY SERVICE PROVIDER; TDS DEDUCTIBLE U/S. 194C OF THE ACT 2 ITA NO.1605/KOL/2016 VIBGYOR ESTATE (P) LTD., AY 2011-12 4 G4 SECURITY SERVICES (P) LTD. RS. 80,780 PAYMENT MADE TO SECURITY SERVICE PROVIDER; TDS DEDUCTIBLE U/S. 194C OF THE ACT TOTAL PAYMENT MADE RS.12,88,085 THE EXPENSES IS DISALLOWABLE U/S. 40(A)(IA) OF THE ACT. THE LD AO FOR VIOLATION OF THE PROVISIONS OF SECTIO N 194C AND 194-I OF THE ACT PROCEEDED TO INVOKE THE PROVISIONS OF SECTION 40(A)(IA) OF THE A CT AND DISALLOWED THE SAME. BEFORE THE LD. CIT(A) NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE APPEAL WAS DISMISSED EX PARTE FOR NON APPEARANCE WITHOUT GIVING ANY SPECIFIC FIND ING AND BY UPHOLDING THE ORDER OF LD AO. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. FOR THAT THE LD. CIT (A) HAS PASSED AN EX PART E ORDER DISMISSING THE APPEAL OF THE APPELLANT GIVING REASONINGS WHICH ARE ENTIRELY WRON G & UNCALLED FOR AND IN THIS VIEW OF THE MATTER, THE IMPUGNED ORDER DESERVES TO BE VACATED . 2. FOR THAT THE OBSERVATIONS MADE BY THE LD. CIT (A ) THAT THERE WAS NO COMPLIANCE IN RESPECT OF THE APPEAL FIXED ON 13.05.2016 AND ALSO ON 24.05 .2016 ARE TOTALLY INCORRECT OBSERVATIONS AS THE LD. CIT (A) FAILED TO TAKE NOTE OF THE RECORDS WHICH WOULD SHOW THAT THE APPELLANT HAD MADE COMPLIANCES AND HAD SUBMITTED PETITIONS IN RES PECT OF THE AFORESAID DATES OF HEARING WHICH HAVE TOTALLY BEEN NOT CONSIDERED BY THE LD. C IT (A) AND THUS EX PARTE ORDER FRAMED IS ARBITRARY. 3. FOR THAT THE LD. CIT(A) OUGHT TO HAVE REFERRED T O THE GROUNDS OF APPEAL AND WITH REFERENCE TO THE RECORDS OF THE APPELLANT THE LD.CIT (A) IS E XPECTED TO DISCUSS THE CASE ON MERITS EVEN WHILE DISPOSING OF THE APPEAL EX PARTE AND IN THIS VIEW OF THE MATTER, THE GROUNDS RAISED BY THE APPELLANT OUGHT TO HAVE BEEN ACCEPTED AND APPEAL AL LOWED. 4. FOR THAT THE ISSUE INVOLVED IN THE APPEAL BEFORE THE LD. CIT (A) RELATING TO DISALLOWANCE U/S 40 (A)(IA) OUGHT TO HAVE BEEN DECIDED WITH REFERENC E TO CALLING FOR THE RECORDS TO GIVE ADEQUATE AND NECESSARY RELIEF TO THE APPELLANT AND THAT THE DISMISSAL OF THE APPEAL PROCEEDS ON NON-CONSIDERATION OF THE GROUNDS PROPERLY. 4. THE LD. AR FAIRLY ADMITTED THAT HAVING SENT THE ADJOURNMENT REQUEST BEFORE THE LD. CIT(A) FOR HEARING SCHEDULED ON 24.05.2016 THE ASSE SSEE DID NOT BOTHER TO ASCERTAIN THE NEXT DATE OF HEARING FROM THE LD. CIT(A) AND ACCORD INGLY, THE CASE WAS DISMISSED EX PARTE. HOWEVER, ON MERITS HE PLACED THE COPY OF A CERTIFIC ATE FROM M/S. DEEPAK CONSTRUCTION TO WHOM A SUM OF RS.6,31,305/- WAS PAID BY THE ASSESSE E TOWARDS LABOUR CHARGES WHICH CLEARLY MENTIONED THAT THE SAID PARTY (PAYEE) HAD D ULY REFLECTED THE SAID SUM IN ITS RETURN OF INCOME AND PAID TAXES THEREON. SIMILARLY, THE ASS ESSEE ALSO PLACED COPIES OF INCOME TAX RETURN TOGETHER WITH INCOME TAX COMPUTATION STATEME NT FOR AY 2011-12 IN RESPECT OF RITA PRAKASH WHEREIN RENT OF RS.4,80,000/- PAID BY THE A SSESSEE HAS BEEN DULY DISCLOSED BY THE SAID PARTY AND TAXES PAID THEREON. HE ALSO PRAYED FOR SETTING ASIDE THE ENTIRE ISSUE TO THE FILE 3 ITA NO.1605/KOL/2016 VIBGYOR ESTATE (P) LTD., AY 2011-12 OF THE AO TO ASCERTAIN WHETHER THE PAYEES HAD DISCL OSED THE ENTIRE AMOUNTS PAID BY THE ASSESSEE IN THEIR RETURNS AND PAID TAXES THEREON IN THE LIGHT OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WHICH HAS BEEN HELD TO BE RETR OSPECTIVE IN OPERATION BY THE DECISION OF ANSAL LAND MARK TOWNSHIP (P) LTD., REPORTED IN 377 ITR 635 (DEL) AND WHICH WAS ALSO RECENTLY FOLLOWED BY THE HONBLE CALCUTTA HIGH COUR T IN THE CASE OF PRINCIPAL CIT VS. M/S. TIRUPATI CONSTRUCTION, GA NO. 2146 OF 2016 WITH ITA T NO. 287 OF 2016 DATED 23.08.2016. IN RESPONSE TO THIS, THE LD. DR FAIRLY AGREED FOR S ETTING ASIDE OF THIS ISSUE TO THE FILE OF THE LD AO FOR EXAMINATION. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT IN THE LIGHT OF THE ARGUMENTS A DVANCED BY THE LD. AR, THE ISSUE REQUIRES TO BE SET ASIDE TO THE FILE OF THE LD AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF EVIDENCE TO BE SUBMITTED BY THE ASSESS EE IN RESPECT OF PAYEES DISCLOSING THE SUBJECT MENTIONED RECEIPTS IN THEIR RESPECTIVE RETU RNS AND IF IT IS SO DONE, AS PER THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT, THE ASSESS EE SHOULD NOT BE TREATED AS ASSESSEE IN DEFAULT AND IN THE LIGHT OF SUCH AMENDMENT BEING HE LD TO BE RETROSPECTIVE IN OPERATION BY THE DECISIONS RELIED ON BY THE LD. AR, CITED SUPRA, NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT IS TO BE MADE IN THE HANDS OF THE ASSESSEE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISPOSED OF ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 02.12.2016 SD/- SD/- (S.S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :2ND DECEMBER, 2016 JD.(SR.P.S.) 4 ITA NO.1605/KOL/2016 VIBGYOR ESTATE (P) LTD., AY 2011-12 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. VIBGYOR ESTATE (P) LTD., 4, GANGAD HAR BABU LANE, KOLKATA-700 012. 2 RESPONDENT ITO, WARD-1(3), KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .