Income Tax Officer, Ward-7(2), Hyderabad V. M/s Indian Public Travels, Hyderabad

ITA 1627/HYD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2494 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 17-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2012
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Keywords: Reopening of assessment; Depreciation
• Section: 194C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI K. NARSIMHA CHARRY, JUDICIAL MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 1461/HYD/12 2007-08 M/S. INDIA PUBLIC TRAVELS, HYDERABAD [PAN: AAAFI9005P] INCOME TAX OFFICER, WARD-7(2), HYDERABAD 1627/HYD/12 2007-08 INCOME TAX OFFICER, WARD-7(2), HYDERABAD M/S. INDIA PUBLIC TRAVELS, HYDERABAD [PAN: AAAFI9005P] FOR ASSESSEE : NONE FOR REVENUE : SMT U. MINICHANDRAN, DR DATE OF HEARING : 31-05-2017 DATE OF PRONOUNCEMENT : 31-05-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE CROSS-APPEALS ARE BY ASSESSEE AND REVENUE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI , HYDERABAD, DATED 17-08-2012. INSPITE OF GIVING VARIOUS NOTICES, NONE APPEARED ON BEHALF OF ASSESSEE. SINCE CROSS-APPEALS ARE PEN DING, NOTICES WERE SENT THROUGH THE DR EVEN IN ASSESSEES APPEAL. A CCORDINGLY, THE CASES WERE POSTED ON 27-02-2017, 09-03-2017, 17-0 4-2017 AND 17-05-2017. EVEN THOUGH THE ADDRESS TO WHICH NOTI CES ARE BEING SENT, IS THAT OF CHARTERED ACCOUNTANT, NOTICES W ERE ALSO SENT I.T.A. NOS. 1461 & 1627/HYD/2012 :- 2 - : TO ASSESSEES ADDRESS AS AVAILABLE IN THE RECORD OF TH E DEPARTMENT. INSPITE OF ISSUING VARIOUS NOTICES, NONE APPEARED WH EN THE CASE WAS CALLED-UPON TO-DAY I.E., ON 31-05-2017. ACCORDI NGLY, THE APPEALS ARE CONSIDERED EX-PARTE ASSESSEE ON MERITS, AFTER HEARING THE LD.DR. 2. BRIEF STATED FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR AY.2007-08 DECLARING TOTAL INCOME AT RS. 1,46,228/ -. SUBSEQUENTLY, ASSESSMENT WAS REOPENED U/S. 147 OF THE INCOME TAX ACT [ACT] AND NOTICE U/S. 148 WAS ISSUED. THE RE ASONS WERE ALSO COMMUNICATED BY THE LETTER DT. 12-09-2011, HOWEVE R, AFTER PASSING THE ASSESSMENT ORDER. IN THE ASSESSMENT, THE TOT AL INCOME WAS DETERMINED AT RS. 46,63,244/-. LD.CIT(A) AFTER CONSIDERING THE OBJECTIONS OF ASSESSEE, RELYING ON VARIOUS CASE LAW HELD THAT ASSESSMENT HAS BEEN REOPENED VALIDLY AND SO THERE CA N BE NO REASON TO HOLD THAT THE NOTICE U/S. 148 WAS INVALID . ONE OF THE ADDITIONS MADE U/S. 40(A)(IA) TO AN EXTENT OF RS. 60, 56,048/- IS WITH REFERENCE TO PAYMENT MADE TOWARDS HIRE CHARGES WH ICH ARE TAX DEDUCTIBLE UNDER CHAPTER-XVIIB. LD.CIT(A) FOLLO WING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MERILY N SHIPPING AND TRANSPORT LTD., VS. ACIT REPORTED AS 136 ITD 23 (SB) [16 ITR 1] (SB)(VISAKHA.)(TRIB.) DIRECTED THE AO TO RESTRICT THE DI SALLOWANCE TO AN EXTENT OF AMOUNTS OUTSTANDING AND PAYABLE AS ON 31-0 3-2007 OUT OF THE TOTAL HIRE CHARGES CLAIMED. THE GROUND WAS P ARTLY ALLOWED. WITH REFERENCE TO DISALLOWANCE OF RS. 72,000 /- OF INSURANCE CHARGES PAID, SINCE ASSESSEE FAILED TO FUR NISH ANY PROOF OF SUCH PAYMENT, THE DISALLOWANCE WAS UPHELD. THE OTH ER DISALLOWANCE IS WITH REFERENCE TO RS. 8,22,020/- DEBI TED TOWARDS RTA TAXES WHICH WERE ALLOWED BY THE LD.CIT(A). 20% D ISALLOWANCE I.T.A. NOS. 1461 & 1627/HYD/2012 :- 3 - : OF DIESEL EXPENSES TO AN EXTENT OF RS. 2,76,584/- WAS ALSO UPHELD. LIKE-WISE, 20% DISALLOWANCE OF OWN BUS MAINTENANCE TO AN EXTENT OF RS. 5,40,215/- WAS HOWEVER ALLOWED. ADDITION OF RS. 7,71,386/- BEING SUNDRY CREDITORS WAS DELETED BY THE CIT(A). C IT(A) ALSO ALLOWED THE DEPRECIATION CLAIM MADE BY ASSESSEE WHICH WAS DISALLOWED BY THE AO IN THE ORDER. BOTH THE PARTIES A RE AGGRIEVED ON THAT ORDER. 3. IN ASSESSEES APPEAL, ASSESSEE IS CONTESTING THE REOPENING OF ASSESSMENT U/S. 147 ALONG WITH INVOCATION OF PROVISION S OF SECTION 40(A)(IA), AND THAT PROVISIONS OF SECTION 194C ARE NOT APPLICABLE. ASSESSEE IS ALSO CONTESTING THE DISALLOWANCE OF RS. 72 ,000/- AND RS. 2,76,584/- WHICH ARE CONFIRMED BY THE LD.CIT(A). REVENUE, HOWEVER, IN ITS APPEAL CONTESTING THE DIRECTION OF LD. CIT(A) ABOUT THE AMOUNT OF DISALLOWANCE U/S. 40(A)(IA), RESTRICTED TO OUTSTANDING AMOUNT PAYABLE BY ASSESSEE. 4. ASSESSEE HAS NOT PLACED ANY FURTHER EVIDENCE IN SU PPORT OF THE CONTENTIONS. HENCE, ON PERUSING THE ORDER OF THE CI T(A), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DETAILED ORDE R OF THE CIT(A). ACCORDINGLY, THE GROUNDS RAISED BY ASSESSEE ARE REJECTED. 5. COMING TO THE GROUND RAISED BY REVENUE ON THE ISSU E OF AMOUNT OF DISALLOWANCE TO THE OUTSTANDING AMOUNT PAYBL E, THE CIT(A) HAS RELIED ON ORDER OF THE SPECIAL BENCH IN T HE CASE OF MERILYN SHIPPING AND TRANSPORT LTD., VS. ACIT REPORTED AS [136 ITD 23 (SB)] [16 ITR 1] (SB)(VISAKHA.)(TRIB.) WHIC H HAS SINCE BEEN REVERSED BY THE HON'BLE SUPREME COURT IN THE CASE OF P ALAM GAS SERVICES VS. CIT IN CIVIL APPEAL NO. 5172 OF 2017 D T. 03-05-2017. I.T.A. NOS. 1461 & 1627/HYD/2012 :- 4 - : IN VIEW OF THAT, THE ORDER OF THE CIT(A) TO THAT EXTENT NE EDS MODIFICATION. AO HAS DISALLOWED AN AMOUNT OF RS. 60, 56,048/- U/S. 40(A)(IA). WHETHER THE AMOUNTS ARE TO BE COVERED U /S. 194C OR 194-I DOES NOT MAKE ANY DIFFERENCE AS CONTENDED IN AS SESSEE APPEAL, AS ASSESSEE HAS NOT MADE ANY TDS ON THE IMPUG NED AMOUNTS. THERE IS NO EVIDENCE ON RECORD THAT ASSESSE E HAS DEDUCTED ANY TAX EITHER U/S. 194C OR U/S. 194-I. IN VIEW OF THAT EVEN THOUGH ASSESSEE RAISED THE ISSUE IN GROUND NO. 4 , WHETHER AMOUNTS ARE COVERED U/S. 194C OR 194-I THAT DISPUTE IS NOT MATERIAL FOR DISALLOWING THE AMOUNT U/S. 40(A)(IA), A S ASSESSEE HAS NOT MADE ANY TDS ON THE AMOUNTS PAID. IN VIEW OF THA T, THE DISALLOWANCE PER SE U/S. 40(A)(IA) IS WARRANTED. ACCORDINGLY, THE ORDER OF AO IS RESTORED BY SETTING ASIDE THE DIRECTIONS OF CIT(A) TO THAT EXTENT. REVENUE GROUND IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED AND APPEAL OF REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2017 UPON CONCLUSION OF HEARING SD/- SD/- (K. NARSIMHA CHARRY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 31 ST MAY, 2017 TNMM I.T.A. NOS. 1461 & 1627/HYD/2012 :- 5 - : COPY TO : 1. M/S. INDIA PUBLIC TRAVELS, HYDERABAD. C/O. SAMU EL NAGADESI, CHARTERED ACCOUNTANT, 302, GOLDEN GREEN APARTMENTS, ERRAM MANZIL COLONY, PUNJAGUTTA, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-7(2), HYDERABAD. 3. CIT (APPEALS)-VI, HYDERABAD. 4. CIT-VI, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.