ACIT RG 22, NAVI MUMBAI V. PRAKASH ATLANT JOINT VENTURE, MUMBAI

ITA 1683/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56023 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D EVI SINGH
• Keywords: Retrospective amendment; Additional evidence
• Section: 194C; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH BEFORE SHRI D. MANMOHAN, VICE PRESIDENT & BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.1683/MUM/2010 A.Y 2006-07 DY. COMMISSIONER OF I.T. 22(2), MUMBAI. VS. M/S. PRAKASH ATLANTA JOINT VENTURE, 61/3, V. N. PURAV MARG, CHEMBUR, MUMBAI 400 071. PAN: AAAAP 1423 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEVI SINGH, CIT DR RESPONDENT BY : SHRI VIJAY MEHTA. DATE OF HEARING: 02-11-2011 DATE OF PRONOUNCEMENT: 18-11-2011. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE BY THE A.O ULS.40(A)(IA) FROM RS.2,16,53,440/- TO RS.36,55,9981- WITHOUT APPRECI ATING THE FACT THAT THE A.O, MADE THE SAID DISALLOWANCE AFTE R DUE VERIFICATION OF DETAILS FURNISHED AND CONSIDERING THE DUE DATE FOR PAYMENTS OF TDS IN TO GOVERNMENT TREASURY AS PE R PROVISIONS OF INCOME TAX ACT INCLUDING AMENDED PRO VISIONS OF SECTION 40(A)(IA). 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN RESTR ICTING THE ADDITION MADE BY THE A.O ON THE BASIS OF EVIDENCE S HOWING CHART WISE DETAILS OF TRANSPORT CHARGES AND TDS DED UCTED/PAID DURING THE COURSE OF APPELLATE PROCEEDINGS WHICH IS DIFFERENT FROM THE DETAILS SUBMITTED BY THE ASSESSEE DURING T HE COURSE OF ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY T HE A.O OF RS.73,74,982/- LAKHS RECEIVED BY THE ASSESSEE AS IN TEREST FROM MIS. PRAKASH ATLANTA LTD WHICH WAS NOT SHOWN AS INC OME BY THE ASSESSEE AND WHEN CONFRONTED THE ASSESSEE ADMIT TED THE MISTAKE AND THE A.O RIGHTLY TREATED THE AMOUNT AS I NCOME FROM OTHER SOURCES. ITA NO.1683 OF 2010 2 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ACCEPTING FRESH EVIDENCE, WHEN THER E WAS NO BONAFIDE REASON FOR THE ASSESSEE FOR NOT PRODUCING THE SAME AT THE TIME OF ASSESSMENT PROCEEDINGS. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO CALL FOR A REMAND - REPORT FROM TH E A.O WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O AND ENTERTAINING ADDITIONAL EVIDENCE IN VIOLATION O F RULE 46A OF THE I. T. RULES, 1961. 2. GROUNDS NO.1, 2 & 5 : AFTER HEARING BOTH THE PARTIES, WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS AO NOTICED T HAT THOUGH ASSESSEE HAS DEDUCTED TDS FROM ITS SUB-CONTRACTORS BUT THE SAME HAS NOT BEEN PAID AS REQUIRED BY THE LAW. THE AO FURTHE R OBSERVED THAT IN THE CASE OF PBA INFRASTRUCTURE LTD., THE SHORT-FALL WAS AS UNDER: TOTAL CREDIT DURING THE YEAR (1-4-05 TO 3 1-3-06) RS.150624829 CREDIT DURING THE MONTH OF MARCH 2006 RS. 7149707 IT MEANS CREDIT TILL 28-2-2006 RS. 143475122 IT MEANS CREDIT TILL 28-2-2006 RATE OF TDS IN CASE OF PBA WAS 0.3366% TDS AMOUNT WHICH REQUIRED TO BE DEDUCTED AND DEPOS ITED ON OR BEFORE 3 1-3-2006 RELATED TO CREDIT TILL 28-2 -06 RS. 4827937 ACTUAL TDS DEPOSITED TILL 3 1-3-2006 RS. 445249 DIFFERENCE RS. 37688 FROM THE ABOVE IT BECAME CLEAR THAT TDS AMOUNTING T O RS.37,688/- RELATED TO THE CREDIT OF RS.1,11,96,672/- WHICH WAS NOT DEPOSITED IN ACCORDANCE WITH THE PROVISIONS OF SEC.40[A][I][A] O N OR BEFORE 31-3- 2006 AND, THEREFORE, SAME WAS DISMISSED. SIMILAR WA S THE SITUATION REGARDING TWO OTHER PARTIES AND THEREFORE A TOTAL S UM OF RS.2,16,53,440/- WAS DISALLOWED. 3. BEFORE THE LD. CIT(A) IT WAS SUBMITTED AS UNDER: ITA NO.1683 OF 2010 3 3.01 RELEVANT SECTION.- PROVISION OF SECTION 40(A)(IA) AS INTRODUCED BY FIN ANCE (NO.2) ACT,2004 W.E.F. 1.4.2005 IS AS UNDER:- SECTION .40 NOTWITHSTANDING ANYTHING TO THE CONTRAR Y IN SECTIONS 30 TO [38], THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMP UTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUS INESS OR PROFESSION: (IA) ANY INTEREST, COMMISSION OR BROKERAGE, FEES FO R PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR, BEING RESIDENT, FOR C ARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, [HAS NOT BEEN PAID DU RING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME P RESCRIBED UNDER SUB- SECTION (1) OF SECTION 200. PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR, HAS BEEN DEDUCTED IN THE PREVIO US YEAR BUT PAID IN ANY SUBSEQUENT YEAR AFTER THE EXPIRY OF THE TIME PRESCR IBED UNDER SUB SECTION (1) OF SECTION 200, SUCH SUM SHALL BE ALLOWED AS A DEDUCTI ON IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCK TAX HAS B EEN PAID. SECTION 200 DUTY OF PERSON DEDUCTING TAX READS AS UNDER:- RELEVANT PORTION ONLY ) SECTION 200 (1) ANY PERSON DEDUCTING ANY SUM IN AC CORDANCE WITH THE FOREGOING PROVISIONS OF THIS CHAPTER SHALL PAY WITH IN THE PRESCRIBED TIME, THE SUM SO DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERN MENT OR AS THE BOARD DIRECTS TIME LIMIT FOR SECTION 200 IS PRESCRIBED IN RULE 30 . RELEVANT PORTION OF RULE 30 IS REPRODUCED AS UNDER: TIME AND MODE OF PAYMENT TO GOVERNMENT ACCOUNT OF TAX DEDUCTED AT SOURCE [OR TAX PAID UNDER SUB-SECTION (1A) OF SECTION 192] . 30. [(1) ALL SUMS DEDUCTED IN ACCORDANCE WITH THE P ROVISIONS OF SECTIONS 192 TO 194, SECTION 194A, SECTION 194B, SECTION 194 BB, SECTION 194C, SECTION 194D, SECTION 194E, SECTION 194EE, SECTION 194F, SE CTION 194G, SECTION 194H, SECTION 194J, SECTION 194K, SECTION 194LA, SE CTION 195, SECTION 196A, SECTION 1968, SECTION 196C AND SECTION 1960 SHALL B E PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT [A] IN THE CASE OF DEDUCTION BY OR ON BEHALF OF TH E GOVERNMENT, ON THE SAME DAY; [B]IN THE CASE OF DEDUCTION BY OR ON. BEHALF OF PE RSONS OTHER THAN THOSE MENTIONED IN CLAUSE (A), (I) IN RESPECT OF SUMS DEDUCTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 193, SECTION 194A, SECTION 194C, SECTION 194D, SECTION 194E, SECTION 194G, SECTION 194H, SECTION 194-!, SECTION 194J, SECTION 195, SECTION 196A, SECTION 196B, SECTION 196C AND SECTION 196D (1) WHERE THE INCOME BY WAY OF INTEREST ON SECURIT IES REFERRED TO IN SECTION 193 OR THE INCOME BY WAY OF INTEREST REFE RRED TO IN SECTION 194A OR THE SUM REFERRED TO IN SECTION 194C OR T HE INCOME BY WAY OF INSURANCE COMMISSION REFERRED TO IN SECTION 1 940 OR THE PAYMENT TO NON-RESIDENT SPORTSMEN OR SPORTS ASSOC IATIONS REFERRED TO IN SECTION 194E OR THE INCOME BY WAY O F COMMISSION, REMUNERATION OR PRIZE ON SALE OF LOTTERY TICKETS R EFERRED TO IN SECTION 194G OR THE INCOME BY WAY OF COMMISSION OR BROKER AGE REFERRED TO ITA NO.1683 OF 2010 4 IN SECTION 1 94H OR THE INCOME BY WAY OF RENT REF ERRED TO IN SECTION 194-I OR THE INCOME, BY WAY OF FEES FOR PROFESSION AL OR TECHNICAL SERVICES REFERRED TO IN SECTION 194J OR THE INTERE ST OR ANY OTHER SUM REFERRED TO IN SECTION 195 OR THE INCOME OF A FORE IGN COMPANY REFERRED TO IN SUB-SECTION (2) OF SECTION 1 96A OR THE INCO ME FROM UNITS REFERRED TO IN SECTION 1968 OR THE INCOME FROM FOREIGN CUR RENCY BONDS OR SHARES OF AN INDIAN COMPANY REFERRED TO IN SECTION 196C OR THE INCOME OF FOREIGN INSTITUTIONAL INVESTORS FROM SECURITIE S REFERRED TO IN SECTION 1 96D IS CREDITED BY A PERSON TO THE ACCO UNT OF THE PAYEE AS ON THE DATE UP TO WHICH THE ACCOUNTS OF SUCH PE RSON ARE MADE, WITHIN TWO MONTHS OF THE EXPIRATION OF THE MONTH I N WHICH THAT DATE FALLS; (2) IN ANY OTHER CASE, WITHIN ONE WEEK FROM THE LA ST DAY OF THE MONTH IN WHICH THE DEDUCTION IS MADE; RETROSPECTIVE AMENDMENT MADE IN SECTION-40(A)(IAJ W.E.F. L DAY OF APRIL,2005 BY FINANCE ACT,2008.RELEVANT AMENDMENT IN SECTION IS AS UNDER:-. IN SECTION 40 OF THE INCOME-TAX ACT, IN CLAUSE (A) , (A) IN SUB-CLAUSE (IA), WITH EFFECT FROM THE 1ST D AY OF APRIL, 2005, - (I) FOR THE WORDS, BRACKETS AND FIGURES HAS NOT B EEN PAID DURING THE PREVIOUS YEARS, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPILY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200, THE FOLLOWING WORDS, BRACKETS AND FIGURES SHALL BE SUBSTITUTED AND SHALL BE DEEMED TO HAVE BEEN SUBSTITUTED, NAMELY: - HAS NOT BEEN PAID, - (A) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO D EDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR, ON OR BEFORE T HE DUE DATE SPECIFIED IN SUB SECTION (1) OF SECTION 139; OR (B) IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEARS; (II) FOR THE PROVISO, THE FOLLOWING PROVISO SHALL BE SUBSTITUTED AND SHALL BE DEEMED TO HAVE BEEN SUBSTITUTED, NAMELY: - PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, T AX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDU CTED - (A) DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE SAID DUE DATE; (B) DURING ANY OTHER MONTH OF THE PREVIOUS YEAR BU T PAID AFTER THE END OF THE SAID PREVIOUS YEAR, SUCH SUM SHALL BE ALLO WED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN W HICH SUCH TAX HAS BEEN PAID. ; 3.01.1 FROM THE ABOVE, THE LEGAL POSITION FOR ALLO WABILITY OF THE EXPENSES RELATING TO SUB CONTRACT WORK FOR A Y 20 06-07 CAN BE SUMMARIZED AS UNDER: CREDIT GIVEN AS AT 31.03.2006 AND TDS DEDUCTED AT THE TIME OF CREDIT AND NO PAYMENT IS MADE TO THE PARTY. : TDS CAN BE PAID UPTO 31.05.06 AS PER OLD AND UP TO DUE DATE OF FILING THE RETUR N AS PER AMENDED PROVISION. CREDIT GIVEN IN THE MONTH OF MARCH AND PAYMENT IS MADE IN THE MONTH OF MARCH: TDS CAN PAID UP TO 07.04.2006 AS PER OL D PROVISION AND UP TO DUE DATE OF FILING THE RETURN AS PER AMENDE D PROVISION. 4. PARTY WISE SUBMISSION IN VIEW OF THE ABOVE LEGA L POSITION IN THE C ASE OF THE ASSESSEE IS AS UNDER:- A] ATLANTA LIMITED: (RS.33,71, 152/-) ITA NO.1683 OF 2010 5 COPY OF THE LEDGER ACCOUNT OF ATLANTA LIMITED CON TRACTOR (PAYABLE) IS ENCLOSED HEREWITH AT PAGE 7 TO PAGE 12 OF PAPER BOOK. ADDITION MADE OF RS.33, 71, 152/- IN RESPECT OF THI S PARTY IS NOT CONTESTED. LAO HAS HIMSELF STATED THAT (RAGE 4 OF T HE ASSESSMENT ORDER) THE DISALLOWED AMOUNT WILL BE ALLOWED AS THE DEDUCTION IN A. Y. 2007-08. B] PBA INFRA LTD.:- (RS. 1,11,96,672/-) (I) COPY OF THE LEDGER ACCOUNT OF PBA LNFRA. LTD. -CONTRA CTOR(PAYABLE) IS ENCLOSED AT PAGE 13 TO PAGE 18 OF PAPER BOOK. ON ITS PERUSAL IT CAN BE NOTICED THAT THE TOTAL CREDITS IN THE MONTH OF MARCH 2006 IS AS UNDER:- DATE OF CREDIT AMT (RS.) IN RESPECT OF BILL FOR THE 31.03.2006 71,49,707 MONTH OF 31.03.2006 85,11,947 MARCH06 31.03.2006 1,40,46,038 FEBRUAIY06 TOTAL CREDITS IN THE MONTH OF MARCH 2,97,07,692 JANUARY06. (II) WHILE WORKING OUT THE CREDIT GIVEN PRIOR TO 28 FEBRUARY 2006, LAO HAS DEDUCTED ONLY RS. 71,49,707/- BEING THE BIL L FOR THE WORK DONE IN THE MONTH OF MARCH. BILL OF RS. 85, 11,947/ - PERTAINING TO WORK DONE IN FEBRUARY 2006( AS STATED IN NARRATION) AND BILL OF RS.1,40,46,038/- PERTAINING TO WORK DONE IN JANUARY (AS STATED IN NARRATION ) ARE NOT CONSIDERED BY THE LAO WHILE DED UCTING CREDIT DURING THE MONTH OF MARCH 2006 FROM TOTAL CREDIT O F RS. 15,06,24,829/- DURING 1.4.05(0 31.03.06. LAO HAS WO RKED OUT THE AMOUNT AS PER THE MONTH FOR WHICH THE BILLS PERTAIN TO AND NOT BY THE DATE WHEN THE ACCOUNT IS CREDITED OR THE PAYMENT IS MADE. (III) WE RESPECTFULLY SUBMIT THAT THE BILL FOR FEBR UARY IS APPROVED IN THE MONTH OF MARCH AND ACCORDINGLY CREDITED IN THE BOOK S IN THE MONTH OF MARCH (AFTER THE SAME IS APPROVED/PASSED). DUE TO S OME DISPUTES, BILL FOR WORK DONE IN JANUARY IS PASSED IN THE MONTH OF MARCH AND ACCORDINGLY SAME IS ENTERED IN THE BOOKS IN THE MON TH OF MARCH AFTER THE SAME ARE APPROVED. THUS BOTH THE BILLS ARE CRED ITED AFTER THE SAME ARE APPROVED IN THE MONTH OF MARCH. WE SUBMIT THE DETAILS OF PAYMENT DEBITS MADE BY THE ASSESSEE TO THIS PARTY IN THE MONTH OF MARCH 2006 IS AS UNDER.- DATE AMT (RS.) 6/03/2006 29,00,000 7/03/2006 12,50,000 18/03/2006 45,00,000 18/03/2006 19,25,000 31/03/2006 13,40,000 31/03/2006 6,25,000 TOTAL 1,25,40,000/- ITA NO.1683 OF 2010 6 (V) FROM THE ABOVE IT CAN BE SEEN THAT IN RESPECT OF CREDIT OF RS. 2,97,07,692/- GIVEN IN THE MONTH OF MARCH, THE AMO UNT OF RS. 1,25,40,000/- WAS PAID IN THE MONTH OF MARCH 2006 ONLY. (VI) AMOUNT OF RS. 12,65,898.50 WHICH IS THE CLOSI NG BALANCE IS ALSO OUT OF CREDIT MADE AS AT 31.03.2006 AND FOR WHICH PAYMENTS IS NOT MADE BY THE ASSESSEE. (VII) THUS FOR AMOUNT OF RS.1,25,40,000/- WHICH IS CREDITED AS WELL AS PAID IN MARCH 2006 TO THE SUB CONTRACTOR, TDS CAN B E PAID UP TO 7 OF APRIL 2006 AS PER OLD PROVISION AND UP TO DUE DATE OF FILING THE RETURN I.E.30. 10.2006 AS PER THE AMENDED PROVISION. IN TH AT CASE, NO DISALLOWANCE IS CALLED FOR U/S 40(A) (IA). (VIII) DETAILS OF TDS PAID IN RESPECT OF THESE BILL S ARE AS UNDER: AMT. (RS.) TDS AMT (RS.) TDS PAID ON 71,49,707 26541 24.04.2006 85,11,947 28652 07.04.2006 1,40,46,038 47279 20.03.2006 THUS ENTIRE TDS IS PAID BY THE ASESSEE UP TO 24.04. 2006. I.E. ENTIRE TDS IS PAID BY THE ASSESSEE BEFORE FILING OF RETURN . THUS AS PER AMENDED PROVISION, NO DISALLOWANCE IS CALLED FOR U/ S. 40(A)(IA) IN RESPECT OF THIS PARTY. IX) FINDING OF THE LAO AND THE ACTUAL POSITION IS A S UNDER:- S N 0. NARRATION AMT AS PER LAO AMT AS PER APPELLANT A) TOTAL CREDIT DURING THE YEAR (1.4.05 TO 31.03.06 RS. 150624829 RS. 150624829 B) CREDIT DURING THE MONTH OF MARCH, 2006 RS. 7149707 2,97,07,692 CREDIT TILL 28.02.2006 C) CREDIT TILL 28.02.2006 RS.143475122 120917137 D) TDS AMOUNT WHICH REQUIRED TO BE DEDUCTED AND DEPOSITED ON OR BEFORE 31.03.2006 RELATED TO CREDIT TILL 28.02.06. RS.482937 407007.08 E) ACTUAL TDS DEPOSITED TILL 31.03.2006 RS. 445249 445249 DIFFERENCE RS.37688 38241.92) X) IN VIEW OF THE ABOVE DISALLOWANCE , DISALLOWANCE MADE BY THE LAO IN RESPECT OF THIS PARTY IS BAD IN LAW AND THE SAME NE EDS TO BE DELETED. C) JITENDRA SINQH:- (RS. 24,390/-) (I) COPY OF THE LEDGER ACCOUNT OF JITENDRA GUPAT IS ENCLOSED AT PAGE 19 OF PAPER BOOK. THIS BEING THE SMALL AMOUNT, THIS ITEM IS NOT PRESSED FOR BY THE ASSESSEE. LAO HAS HIMSELF STATED THAT (P AGE 4 OF THE ASSESSMENT ORDER) THE DISALLOWED AMOUNT WILL BE ALL OWED AS THE DEDUCTION IN A. Y. 2007-08. ITA NO.1683 OF 2010 7 D) MAHESHKUMAR VISHWAKARMA:- (RS. 66,440/-) (I) COPY OF THE LEDGER ACCOUNT OF JITENDRA GUPAT IS ENCLOSED AT PAGE 20 TO PAGE 22 OF PAPER BOOK. THIS BEING THE SMALL A MOUNT IS NOT PRESSED FOR BY THE ASSESSEE. LAO HAS HIMSELF STATED THAT (PAGE 4 OF THE ASSESSMENT ORDER) THE DISALLOWED AMOUNT WILL BE ALL OWED AS THE DEDUCTION IN A. Y. 2007-08. E) PURL INTERNATIONAL LIMITED.- (RS.33,59, 177/- AN D RS.2997161/-) (I) COPY OF THE LEDGER ACCOUNT OF JITENDRA GUPAT IS ENCLOSED AT PAGE 23 TO PAGE 27 OF PAPER BOOK. (II) ON ITS PERUSAL IT CAN BE NOTICED THAT THE TOTA L CREDITS IN THE MONTH OF MARCH 2006 IS AS UNDER:- DATE OF CREDIT AMT (RS.) IN RESPECT OF BILL FOR THE MONTH OF 31.03.2006 2950494 MARCH 06 31.03.2006 2997161 FEBRUARY 06 31.03.2006 3359177 JANUARY06. TOTAL CREDITS IN THE MONTH OF MARCH 92,02,409 . F) FOR THE BILL OF JANUARY AND FEBRUARY, LAO HAS TA KEN THE DATE OF 31-01-2006 AND 28-02-2006 RESPECTIVELY AS PAYM ENT! CREDIT DATE WE RESPECTFULLY SUBMIT THAT BILL FOR THE MONTH OF F EBRUARY IS PASSED IN THE MONTH OF MARCH AND ACCORDINGLY CREDITED IN THE BOOKS IN THE MONTH OF MARCH. DUE TO SOME DISPUTES, BILL FOR WORK DONE IN JANUARY IS PASSED IN THE MONTH OF MARCH AND ACCORDINGLY SAME I S ENTERED IN THE BOOKS IN THE MONTH OF MARCH AFTER THE SAME ARE APPR OVED. THUS BOTH THESE BILLS THOUGH PERTAINING TO THE PERIOD BEFORE MARCH ARE ACTUALLY PASSED IN THE MONTH OF MARCH AND THUS CREDITED IN T HE BOOKS IN THE MONTH OF MARCH. THUS BOTH THE BILLS ARE CREDITED AF TER THE SAME ARE APPROVED IN THE MONTH OF MARCH. (I) LEDGER ACCOUNT SHOWS CLOSING BALANCE OF RS. 19, 87,503.04. THIS IMPLIES THAT OUT OF THE CREDIT GIVEN IN THE MONTH O F MARCH OF RS. 92,02,409/-, RS. 19,87,503.04 IS NOT PAID BY THE AS SESSEE. (II) HAVING SAID THAT WE SUBMIT THAT THE DETAILS OF PAYMENTS/DEBITS IN THE MONTH OF MARCH ARE AS UNDER:- DATE AMT(RS.) 31/03/2006 18,50,168 31/03/2006 70,64,986 31/03/2006 10,000 TOTAL 89,25,154 (III) THUS OUT OF TOTAL CREDIT OF RS.92,02,409/-, RS. 19,87,503.04 IS OUTSTANDING AND BALANCE AMOUNT OF RS. 72,14,906/- I S PAID BY THE ASSESSEE IN THE MONTH OF MARCH 2006. (IV) THUS BOTH THE AMOUNT DISALLOWED BY THE LAO VIZ . RS.3359177 AND RS.2997161/- ,ARE CREDITED AS WELL AS PAID IN THE M ONTH OF MARCH AND THUS THE TDS HAS TO BE PAID IN RESPECT OF THIS PAYM ENTS UP TO 7 APRIL, ITA NO.1683 OF 2010 8 06 AS PER OLD PROVISION AND UP TO THE DATE OF FILIN G THE RETURNS AS PER THE AMENDED SECTION. (V) DETAILS OF PAYMENTS OF TDS IS AS UNDER:- AMT(RS.) TOS AMT (RS.) TDS PAID ON 2950494 33105 07.042006 2997161 33628 07.04.2006 3359177 37690 07.04.2006 (VI) THUS ENTIRE TDS IN RESPECT OF PAYMENTS AND CRE DITS IN THE MONTH OF MARCH 2006 IS PAID BY THE ASSESSEE ON 7TH APRIL 2006. IN VIEW OF THIS NO DISALLOWANCE IS CALLED FOR U/S. 40(A)(IA) I S RESPECT OF THIS PARTY. (VII) IN VIEW OF THE ABOVE, DISALLOWANCE MADE BY TH E LAO IN RESPECT OF THIS PARTY IS BAD IN LAW AND NEEDS TO BE DELETED. G) SHRISHTRI CONTRACTING PVT LTD.(RS.613403/-) (I) COPY OF THE LEDGER ACCOUNT OF JITENDRA GUPAT IS ENCLOSED AT PAGE 28 TO PAGE 30 OF PAPER BOOK. ON ITS PERUSAL IT CAN BE NOTICED THAT THE TOTAL CREDITS IN THE MONTH OF MARCH 2006 IS AS UNDE R: DATE OF CREDIT AMT (RS.) IN RESPECT OF BILL FOR THE MONTH OF 3 1/03/2006 628194 MARCH 2006 31/03/2006 613403 FEBRUARY 2006 TOTAL CREDITS IN THE MONTH OF MARCH 1241597 (II) FOR THE BILL OF FEBRUARY, LAO HAS TAKEN THE DA TE OF 28-02-2006 AS PAYMENT/CREDIT DATE. WE RESPECTFULLY SUBMIT TH AT BILL FOR THE MONTH OF FEBRUARY IS PASSED IN THE MONTH OF MARCH A ND ACCORDINGLY CREDITED IN THE BOOKS IN THE MONTH OF MARCH. THUS T HOUGH THE BILL PERTAINS TO WORK DONE IN THE MONTH OF FEBRUARY 2006 , THE SAME IS PASSED IN THE MONTH OF MARCH AND THUS CREDITED IN T HE BOOKS IN THE MONTH OF MARCH. LAO HAS FAILED TO APPRECIATE THE FA CT WHILE TAKING THE DATES OF PAYMENT/CREDIT DATE WHILE PASSING THE OR DER. (III) HAVING SAID THAT WE SUBMIT THAT THE DETAILS O F PAYMENTS/DEBITS IN THE MONTH OF MARCH IS AS UNDER: DATE AMT(RS.) 22103/2006 20,000 31/03/2006 5,43,209 31/03/2006 1,23,793 31/03/2006 3,36,185 31/03/2006 49,439 TOTAL 10,72,626 (IV) THUS PAYMENT OF RS. 10,72,626/- IS MADE IN THE MONTH OF MARCH 2006 OUT OF TOTAL CREDIT OF RS. 12,41,597/- IN THE MONTH OF MARCH 2006. IT CAN BE SAID THAT IN RESPECT OF CREDIT OF RS. 1,6 8,971/-, PAYMENT IS MADE BEFORE MARCH AND ACCORDINGLY TDS PERTAINING TO THE SAID CREDIT ITA NO.1683 OF 2010 9 HAS TO BE PAID BEFORE MARCH 2006. AND FOR RS. 10,72 ,626/- FOR WHICH BOTH CREDIT AND PAYMENT ARE MADE IN THE MONTH OF MA RCH, TDS HAS TO BE. PAID UP TO 7TH APRIL, 2006 OR UP TO THE DATE OF FILING THE RETURN OF INCOME AS PER AMENDED PROVISION. (V) DETAILS OF PAYMENTS OF TDS IS AS UNDER:- AMT(RS.) TDS.AMT (RS.) TDS PAID ON 6,13,403 6,882 07.04.2006 6,28,194 7,048 07.04.2006 (VI) ENTIRE TDS IS PAID ON 7TH APRIL 06. AS TDS PER TAINING TO RS. 168971/- IS NOT PAID BEFORE MARCH 2006, AMOUNT OF R S. 1,68,971/- CAN BE THE MAXIMUM AMOUNT WHICH CAN BE DISALLOWED IN RE SPECT OF THIS PARTY AND THE SAME NEEDS TO BE ALLOWED TO THE ASSES SEE IN A Y 2007-08. (VII) IN VIEW OF THIS, DISALLOWANCE MADE BY THE LAO HAS TO BE RESTRICTED TO RS. 1,68,971/- IN REPECT OF THIS PART Y. DISALLOWANCE OF THE BALANCE AMOUNT OF RS.4444321-(RS.613403/- DISALLOWE D BY THE LAO MINUS RS. 168971/-PAID BEFORE MARCH)IN VIEW OF THE ABOVE, DISALLOWANCE MADE BY THE LAO IN RESPECT OF THIS PAR TY IS BAD IN LAW AND NEEDS TO BE DELETED. H) VIJY TRASPORT:- (RS. 25,045/-) (1) COPY OF THE LEDGER ACCOUNT OF JITENDRA GUPAT IS ENCLOSED AT PAGE 31 OF PAPER BOOK. THIS BEING THE SMALL AMOUNT THIS ITEM IS NOT PRESSED FOR BY THE ASSESSEE. TO SUMMARISE: 1 AS PER SECTION.40(A)(IA) (OLD PROVISION) TDS IS TO BE DEPOSITED TO THE CREDIT OF CENTRAL GOV T. IN RESPECT OF CREDIT AND/OR PAYMENTS MADE UPTO FEBR UARY 2006 AND FOR PAYMENT MADE IN MARCH 2006. WITHIN I WEEK FROM THE LAST DAY OF THE MONTH IN WHI CH THE DEDUCTION IS MADE. IN RESPECT OF CREDIT MADE AS AT 31.03.2006 AND NO P AYMENT IS MADE TO THE PARTY. WHERE THE INCOME IS CREDITED BY A PERSON TO THE ACC OUNT OF THE PAYEE AS ON THE DATE UPTO WHICH ACCOUNTS OF SUCH PERSON A RE MADE, TAX DEDUCTED HAS TO BE DEPOSITED IN GOVERNMENT ACCOUNT WITHIN 2 MONTHS OF THE EXPIRATION OF THE MONTH IN WHICH THAT DATE F AILS IN SIMPLE WORDS, FOR CREDIT MADE AS AT 31.03.2006, TDS CAN BE PAID U PTO 31.05.2006. AS PER AMENDED SECTION, IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIO US YEAR, ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139; OR IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY OF THE PR EVIOUS YEARS. IN SIMPLE WORDS, FOR CREDIT GIVEN AS AT 31.03.2006, TDS CAN BE PAID UPTO DUE DATE OF FILING THE RETURN AND FOR PAYMENT MADE IN MARCH 2006, TDS CAN BE PAID UPTO THE DUE DATE OF FILING THE RET URN OF INCOME. THUS IN THE CASE OF THE ASSESSEE OUT OF TOTAL DISAL LOWANCE OF RS.2, 16,53,440/-, AMOUNT OF RS. 17997442/- IS ALLOWABLE TO THE ASSESSEE IN A Y 2006-0 7 IT SELF AS THESE AMOUNTS REPRESENTS TH E AMOUNT IN RESPECT OF WHICH BOTH CREDIT AND PAYMENT IS MADE IN THE MON TH OF MARCH AND ACCORDINGLY TDS AS REQUIRED TO BE PAID BEFORE FILIN G THE RETURN I.E ITA NO.1683 OF 2010 10 30.10.2009 IS PAID BY THE ASSESSEE. (SUMMARISED CHA RT IS ATTACHED HEREWITH AS ANNEXURE A) 3.4 THE APPELLANT HAS ALSO SUBMITTED A SUMMARIZED C HART WITH REGARD TO THE APPLICABILITY OF THE TDS PROVISIONS AS UNDER: REMARKS . NAME OF THE PARTY AMT (RS.) DATE OF CREDIT) PAYMENT AS PER LEDGER DATE TAKEN BY THE LAO/ BASE FOR TAKING SUCH DATE TDS AMT(RS.) TDS PAID ON ATLANTA LTD. 33,71,152 NOT PRESSED FOR BY THE ASSE SSEE. THUS SHOULD BE ALLOWED IN AY 2007-08 PBA LNFR. LTD 1,11,96,672 MARCH 06 (MARCH CREDIT RS.2,97,07,692) MARCH PYMT (RS.L, 25,40,000/- ) TILL 28 FEB 06(BASED ON THE NARRATION) 37,688/-(ON RS.111,96,672 PERTAINING TO MARCH CREDIT AND MARCH PYMT) (ENTIRE TDS PAID UPTO 24 TH APRIL 06) BILL OF JAN AND FEB APPROVED IN MARCH ACCORDINGLY CREDITED AND PAID IN THE MONTH OF MARCH 06. TDS PAID WITHIN DUE DATE AS PER AMENDED SECTION 40(A)(IA).THUS NO DISALLOWANCE WARRANTED U/S.40(A)(IA) JITENDRA SINGH:- 24,390 NOT PRESSED FOR BY THE ASSESSEE. THUS SHOULD BE ALLOWED IN AY 2007-08 MAHESHKUMAR 66,440 NOT PRESSED FOR BY THE ASSESSEE. THUS SHOULD BE ALLOWED IN AY 2007 -08 V ISHWAKARMA PURI INTERNATIONAL LIMITED 33,59,177 AND RS.2997 161 MARCH 06. MARCH CREDIT.RS. 92,02,409) MARCH PYMT (RS 89,25,154/-.) CL BAL.RS 19,87,503.04 31 .01 .06 AND 28.02.2006 (BASED ON THE NARRATION) 33628 AND 37690 07.04.06 BILL OF JAN AND FEB APPROVED IN MARCH ACCORDINGLY CREDITED AND PAID IN THE MONTH OF MARCH 06. TDS PAID WITHIN DUE DATE AS PER OLD AND AMENDED SECTION 40(A)(IA). THUS NO DISALLOWANCE WARRANTED U/S.40(A)(IA) SHRISHTRI CONTRACTING PVT LTD. 613403 MARCH 06. (MARCH CREDIT RS. 1241597 ) MARCH PYRNT (RS 10,72,626) RS. 168971/- CREDITED IN MACRH , PAID BEFORE MARCH 06) 28,02.2006 (BASED ON THE NARRATION) 6,882 07.04.2006 BILL OF FEB APPROVED IN MARCH ACCORDINGLY CREDITED AND PAID IN THE MONTH OF MARCH 06. DISALLOWANCE SHOULD BE RESTRICTED TO RS. 168971/- (PAYMENT MADE BEFORE MARCH 06) AND TDS PADI ON 7TH APRIL 06 FOR THIS PAYMENT. FOR BALANCE AMOUNT OF RS.444432/-, TDS PAID WITHIN DUE DATE AS PER OLD AND AMENDED SECTION 40(A)(IA). THUS ITA NO.1683 OF 2010 11 NO DISALLOWANCE WARRANTED U/S.40(A)(IA). RS.168971/- SHOULD BE DISALLOWED IN AY 2007- 08. VIJAY TRASPORT 25045 NOT PRESSE D FOR BY THE ASSESSEE. THUS SHOULD BE ALLOWED IN AY 2007-08 FOR CREDIT AND PAYMENT BOTH IN MARCH : DUE DATE IS 7 APRIL 06 AS PER OLD PROVISION. FOR CREDIT AND PAYMENT IS MARCH 06: DUE DATE IS UPT O THE DATE OF FILING THE RETURN I.E.30. 10.2006, THUS OUT OF TOTAL DISALLOWANCE OF RS.2,1 6,53,440!- , AMOUNT OF RS.1 79974421- IS ALLOWABLE TO THE ASSESSEE IN A.Y 2006-07 IT SELF AND BALANCE AMO UNT OF RS.36,55,998L- SHOULD BE ALLOWED IN AY 2007-08. THE LD. CIT(A) AFTER EXAMINING THE ABOVE SUBMISSION S OBSERVED THAT SEC.40[A][IA] HAS TO BE READ TOGETHER WITH THE PROV ISIONS OF CHAPTER XVII-B AND THEREAFTER HE ALLOWED PARTIAL RELIEF VID E PARAS 4.1 AND 4.2 WHICH ARE AS UNDER: 4.1 FROM THE ABOVE, IT IS CLEAR THAT SECTION 40(A) (IA) IS TO BE READ TOGETHER WITH CHAPTER XVII B OF THE INCOME TAX ACT, 1961 WHEREIN PAYMENT OF INTEREST, COMMISSION OR BROKERAGE, FEES FOR TECHNICAL OR PROFESSIONAL SERVICE, PAYMENT TO CONTRACTORS OR SUB CONTRACTORS, ROYALTY & RENT IS CONCERNED. SECTION 193, 194A, 194 H, 194J, 194C AND 1941 OF THE INCOME TAX ACT, 1961 IN CHAPTER XVI I B CLEARLY DEFINE THE TIME OF DEDUCTION OF TAX ON THE PAYMENTS MENTIONED ABOVE AND THEN DEPOSIT IN THE GOVERNMENT TREASURY. ANY NO N-COMPLIANCE OF THE SAME INVITES CHARGING OF INTEREST AND PENALTY O N THE PERSON CONCERNED. THIS WOULD MEAN THAT THE APPELLANT IS OB LIGED TO EFFECT TDS ON ANY PAYMENT OR CREDIT THAT ATTRACTS IT. ANY NON- COMPLIANCE WOULD ATTRACT PENALTY / INTEREST. AS DETAILED IN THE ORDE R OF THE ASSESSING OFFICER, IT IS SEEN THAT THIS HAS NOT BEEN DONE BY THE APPELLANT. THIS FAILURE OF THE APPELLANT INVOKES THE PROVISIONS OF SECTION 40(A)(IA) ON IT. THE APPELLANT WHO IS GOVERNED BY CHAPTER XVII B IS EQUALLY GOVERNED BY SECTION 40(A)(IA). IT HAS BEEN HELD B THE HONBL E COURTS THAT SECTION 40(A)(IA) IS CONSTITUTIONALLY VALID AND THERE IS NO ARBITRARINESS, UNREASONABLENESS, OR DISCRIMINATION IN THE SAID PRO VISIONS. SECTION 40(A)(IA) CLEARLY STATES THAT WHEREVER TDS IS DEDUC TIBLE AND IS NOT. DONE OR AFTER DEDUCTION NOT PAID, THE ENTIRE EXPEND ITURE WILL NOT BE ALLOWED AS A DEDUCTION WHILE COMPUTING THE INCOME C HARGEABLE UNDER PROFITS & GAINS OF BUSINESS / PROFESSION. THIS SECT ION AUGMENTS THE TDS SECTION. IT ACTS AS A DETERRED TO THE ERRING AS SESSES AND ENSURES TIMELY DEPOSIT OF TDS IN GOVERNMENT TREASURY. IT IS ONLY WHEN IS A DEFAULT THAT SECTION 40(A)(IA) IS ATTRACTED. THE CU T OFF DATE FOR DEPOSIT OF TAX IS THE DATE SPECIFIED U/S 139(1) IN THE CASE WH EREIN THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONT H OF THE PREVIOUS YEAR AND IN OTHER CASES, THE CUT OFF DATE IS THE LA ST DATE OF THE PREVIOUS YEAR I.E. TO SAY THAT THE MONTH OF MARCH THE APPELL ANT GETS TILL PERIOD, ITA NO.1683 OF 2010 12 THE DATE FILING OF RETURN OF INCOME FOR DEPOSIT OF TAX DEDUCTED IN MARCH. FOR THE TDS DEDUCTIBLE IN APRIL TO FEBRUARY, THE CUT OFF DATE, FOR DEPOSIT WOULD BE 31ST MARCH. THE PROVISO CONTAI NED IN SECTION 40(A)(IA) WHICH HAS TO BE READ TOGETHER WITH THE MA IN PROVISIONS OF SECTION 40(A)(IA) PROVIDES A REMEDIAL MEASURES BY A LLOWING THE APPELLANT TO CLAIM DEDUCTION OF EXPENDITURE EITHER IN THE IMMEDIATE SUBSEQUENT YEAR OR IN THE ANY OTHER SUBSEQUENT YEAR TO THE RELEVANT YEAR IN WHICH THE DEFAULT COMMITTED. THIS WOULD MEAN THA T THE DISALLOWANCES IS A TEMPORARY PHENOMENON WHICH CAN B E CORRECTED BY THE APPELLANT HIMSELF. THE OBJECT OF SECTION 40(A)( IA) CAN THEREFORE BE SAID TO DETER AN ASSESSEE APPELLANT FROM COMMITTING DEFAULT ON A REGULAR BASE. 4.2 DURING THE COURSE OF APPELLATE PROCEEDINGS APPE LLANT HAS PREPARED AND FURNISHED A CHART AS REPRODUCED IN THE BODY OF THIS ORDER EARLIER. FROM A READING OF THE SUBMISSION AND THE CHART, I F IND THAT THE CONTENTION OF THE APPELLANT CAN BE ACCEPTED. FROM T HE CHART, IT IS CLEAR THAT OUT OF THE TOTAL DISALLOWANCE OF RS.2,16,53,44 0/-, AN AMOUNT OF RS.1,79,97,442/- IS ALLOWABLE IN ASSESSMENT YEAR 20 06-07 FOR THE REASON THAT THE APPELLANT HAS COMPLIED TO THE PROVI SIONS OF SECTION 40(A)(IA) BY DEDUCTING AND DEPOSITING THE TDS ON OR BEFORE THE DUE DATE PRESCRIBED UNDER SECTION 40(A)(IA) OF THE INCO ME TAX ACT, 1961. REGARDING THE BALANCE AMOUNT OF RS.36,55,998/-, THE DEDUCTION WILL BE ALLOWED ONLY IN ASSESSMENT YEAR 2007-08. THE ASSESS ING OFFICER IS DIRECTED TO GIVE BENEFIT OF DEDUCTION TO THE APPELL ANT FOR THE BALANCE AMOUNT I.E. RS.36,55,998/- IN THE ASSESSMENT YEAR 2 007-08 STRICTLY IN COMPLIANCE TO THE PROVISIONS OF SECTION 40(A)(IA), AFTER VERIFICATION.' 4. BEFORE US, LD. DR FILED WRITTEN SUBMISSIONS. IN THESE WRITTEN SUBMISSIONS FACTS AS DISCUSSED BY THE AO HAVE BEEN REPRODUCED. IT HAS BEEN EMPHASISED THAT NO TDS WAS DEDUCTED ON SOME PA YMENTS WHICH RELATED TO THE MONTH OF JANUARY & FEBRUARY, 2006 AN D, THEREFORE, DISALLOWANCE U/S.40[A][IA] WAS JUSTIFIED. IT HAS BE EN FURTHER EMPHASISED THAT CIT(A) HAS ALLOWED THE RELIEF ON TH E BASIS OF DETAILS WHICH HAVE BEEN DISCUSSED AT PARA 3 TO 4.2 WHICH WE RE NEVER FURNISHED BEFORE THE AO. 5. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT NEITHER IN GROUND NO.5 WHICH RELATES TO FILING OF A DDITIONAL EVIDENCES IN VIOLATION OF RULE 46A OF I.T.RULES, 1962, NOR IN HI S ARGUMENTS IT HAS BEEN POINTED OUT AS TO WHAT ARE THE ADDITIONAL DOCU MENTS WHICH WERE ITA NO.1683 OF 2010 13 NOT FURNISHED BEFORE THE AO. IN FACT, BOOKS OF ACCO UNTS WERE PRODUCED BEFORE THE AO AND EVEN COPIES OF LEDGER ACCOUNT FOR CONTRACTOR PARTIES WERE FURNISHED AND BEFORE CIT(A) ALSO SUCH ACCOUNTS HAVE BEEN FURNISHED. THE AO HAS WRONGLY READ THE SAME, WHEREA S THE CIT(A) HAS CORRECTLY READ THE COPIES OF LEDGER ACCOUNTS. HE PO INTED OUT THAT FOR EXAMPLE IN THE CASE OF PBA INFRASTRUCTURE LTD. BILL S PERTAINING TO MONTHS OF JANUARY & FEBRUARY, 2006 WERE ALSO CREDIT ED IN THE MONTH OF MARCH WHICH HAVE BEEN INTERPRETED BY THE AO AS I F SUCH BILLS HAVE BEEN CREDITED ONLY IN THE MONTH OF JANUARY & FEBRUA RY, 2006, WHICH IS NOT CORRECT. THE CREDIT IS GIVEN ONLY WHEN THE BILL S ARE FINALLY PASSED. IN THE CASE OF BILLS FOR JAN., 06 THERE WERE CERTAIN D ISPUTES AND BILLS WERE FINALLY PASSED ONLY IN THE MONTH OF MARCH,06 AND TH AT IS WHY SAME WERE CREDITED IN THE MONTH OF MARCH. AS FAR AS BILL S FOR FEBRUARY 06 ARE CONCERNED, SAME CAN BE PASSED ONLY IN THE MONTH OF MARCH, 06. ONCE IT IS ACCEPTED THAT SUCH BILLS WERE CREDITED IN THE MONTH OF MARCH, THEN PAYMENT OF TDS HAS BEEN CORRECTLY MADE BY THE ASSES SEE. THEREFORE, SIMPLY READING THE LEDGER ACCOUNT PROPERLY WILL NOT AMOUNT THAT SOME MORE DETAILS HAVE BEEN FILED BEFORE THE CIT(A) IN V IOLATION OF RULE 46A. HE ALSO CARRIED US THROUGH THE PROVISIONS OF SEC.40 [A][IA] AND POINTED OUT THAT AFTER THE RETROSPECTIVE AMENDMENT MADE W.E .F. 1-4-2005 BY THE FINANCE ACT, 2008, THE TIME LIMIT FOR DEPOSITIN G TAX WAS 31-5-2006 AND EVEN UPTO THE DATE OF FILING OF RETURN AS PER T HE AMENDED PROVISIONS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. ITA NO.1683 OF 2010 14 SEC.40[A][IA] AFTER AMENDMENT MADE BY THE FINANCE A CT, 2008, READS AS UNDER: ( IA ) ANY INTEREST, COMMISSION OR BROKERAGE, [RENT, ROY ALTY,] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDIN G SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BE EN DEDUCTED OR, AFTER DEDUCTION, [HAS NOT BEEN PAID, ( A ) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR , ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 ; OR ( B ) IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY OF T HE PREVIOUS YEAR:] WHEN THIS IS READ ALONG WITH RULE 30 WHICH PRESCRIB ES THE TIME LIMIT U/S.200 FOR PAYMENT OF TAXES, IT BECOMES CLEAR THAT TAXES CAN BE PAID AS PER CREDIT GIVEN AS AT 31.03.2006 AND TDS DEDUCT ED AT THE TIME OF CREDIT AND NO PAYMENT IS MADE TO THE PARTY. TDS CAN BE PAID UPTO 31.05.06 AS PER OLD PROVISION AND UP TO DUE DATE OF FILING THE RETURN AS PER AMENDED PROVISION. IF CREDIT IS GIVEN IN THE MO NTH OF MARCH AND PAYMENT IS MADE IN THE MONTH OF MARCH THEN TDS CAN PAID UP TO 07.04.2006 AS PER OLD PROVISION AND UP TO DUE DATE OF FILING THE RETURN AS PER AMENDED PROVISION. THE MAIN CONTROVERSY IS A RISING BECAUSE IN CASE OF SOME OF THE CONTRACTORS THE CREDIT FOR BILL S RELATING TO JANUARY & FEBRUARY, 2006 HAVE BEEN GIVEN IN THE MONTH OF MARC H, 2006. WE AGREE WITH THE SUBMISSIONS OF THE LD. COUNSEL OF TH E ASSESSEE THAT AS FAR AS THE BILLS FOR THE MONTH OF FEBRUARY, 2006 AR E CONCERNED, THE POSSIBILITY OF PASSING THEM ARISES ONLY IN THE MONT H OF MARCH, 2006. AS FAR AS BILLS FOR JANUARY, 2006 ARE CONCERNED, THERE MAY BE CASES WHERE THERE ARE SOME DISPUTES AND BILLS MIGHT HAVE BEEN P ASSED IN THE ITA NO.1683 OF 2010 15 MONTH OF MARCH, 2006. HOWEVER, THE LEDGER ACCOUNT C LEARLY SHOWS THAT CREDIT HAS BEEN GIVEN ONLY IN THE MONTH OF MARCH, 2 006. ONCE IT IS ACCEPTED THAT CREDIT HAS BEEN GIVEN IN THE MONTH OF MARCH, 2006 THEN CONSEQUENCES HAVE TO BE FOLLOWED AS THE AMOUNT WAS CREDITED IN THE MONTH OF MARCH, 2006. THEREFORE, IN OUR OPINION, CI T(A) HAS CORRECTLY DECIDED THE ISSUE AND NO FAULT CAN BE FOUND WITH HI S ORDER. ACCORDINGLY, WE CONFIRM THE SAME. 7. GROUNDS NOS.3 & 4 : AFTER HEARING BOTH THE PARTIES, WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS AO NOTICED THAT A SSESSEE HAD RECEIVED A SUM OF RS.73,74,982/- AS INTEREST FROM A TLANTA LTD., AND ASSESSEE HAS NOT SHOWN THIS AMOUNT AS INCOME. WHEN THE ATTENTION OF THE ASSESSEES REPRESENTATIVE WAS DRAWN TO THIS FAC T, THE MISTAKE WAS ADMITTED AND ACCORDINGLY AO ADDED THE SUM OF RS.73, 74,982/- TO THE TOTAL INCOME OF THE ASSESSEE. 8. BEFORE THE CIT(A) IT WAS MAINLY SUBMITTED THAT T HIS AMOUNT WAS NOT RECEIVED BY THE ASSESSEE BUT WAS ROUTED THROUGH THE ASSESSEE BY THE PARTNERS OF THE JOINT VENTURE AND THERE WAS NO INCOME. THE LD. CIT(A) AGREED WITH THIS SUBMISSION AND DELETED THE ADDITION VIDE PARA 5.3 WHICH IS AS UNDER: 5.3 I HAVE CAREFULLY CONSIDERED THE ORDER OF THE AS SESSING OFFICER AND THE SUBMISSION MADE BY THE APPELLANT. I FIND THAT THE EXPLANATION OFFERED BY THE APPELLANT CAN BE ACCEPTED. IT IS SE EN THAT INTEREST RECEIVED BY THE APPELLANT WAS DISTRIBUTED IN EQUA L PROPORTION AS THEIR RESPECTIVE SHARE OF INTEREST TO THE PARTNERS OF TH E JV NAMELY 1) PBA INFRASTRUCTURE LTD 2) ATLANTA LIMITED, AND THE AM OUNT WAS TRANSFERRED TO THEIR ACCOUNT DIRECTLY. IN SUPPORT OF HIS CONTE NTION, THE APPELLANT HAS SUBMITTED COPY OF ACCOUNTS TITLED INTEREST ON ADDL. MOB. ADV (NHAI), FROM WHICH THE ABOVE ISSUE GETS CLARIFIED. THE SAID ADDL. MOB ADV (NHAI) ACCOUNT IT IS SEEN THAT THE JV HAS RECEIVED A SUM OF R.1.47,49.962/- IN TOTAL FROM 3 0.4.05 TO 31.3.06 FROM NHAI. AS ON 31 3.06, THE JV HAS TRANS FERRED THE SAID ITA NO.1683 OF 2010 16 AMOUNT TO ITS PARTNERS I.E. ATLANTA LTD AND PBA I NFRASTRUCTURE LTD IN EQUAL PROPORTION. SINCE THE ACCOUNT WAS SQUARE D OFF AT THE END OF THE YEAR, THE SAME DID NOT REFLECT IN THE ACCOUNT OF THE JV NOR DID THE JV RECEIVE ANY INTEREST INCOME. THE INDIVIDUAL ACC OUNTS OF THE JOINT VENTURE PARTNERS REFLECT THE SAID RECEIPT. S INCE THE APPELLANT HAS BEEN ABLE TO EXPLAIN THE SAID TRANSACTION WITH SUP PORTING EVIDENCES, THE ADDITION SO MADE BY THE ASSESSING OFFICER ON T HE SAID ISSUE IS NOT WARRANTED. THUS, THE ADDITION MADE BY THE ASSESSI NG OFFICER AT RS.73,74,9821- IS DELETED AND THE GROUND OF APPEAL ON THIS ISSUE IS ALLOWED. 9. BEFORE US IN THE WRITTEN SUBMISSIONS FILED BY TH E LD. DR IT HAS BEEN SUBMITTED THAT ADDITION WAS MADE BASICALLY ON THE BASIS OF ADMISSION OF THE ASSESSEE. IT HAS BEEN FURTHER POIN TED OUT THAT NATURE OF RECEIPT WAS NOT EXPLAINED BEFORE THE AO OR THE C IT(A). 10. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT ASSESSEE WAS A JOINT VENTURE ORGANISATION FORMED TO TAKE CONTRACTS FROM NATIONAL HIGHWAY AUTHORITY OF INDIA [NHAI] FOR CONSTRUCTION OF ROADS ETC. APART FROM SHRI PRAKASH, ATLANTA LTD. WA S OTHER JOINT VENTURE PARTNER. THE ASSESSEES JOINT VENTURE HAS RECEIVED CERTAIN MOBILIZATION ADVANCES FROM NHAI. THESE ADVANCES WERE EQUALLY DIS TRIBUTED BETWEEN THE TWO JOINT VENTURE PARTNERS I.E. PBA INF RASTRUCTURE LTD. AND ATLANTA LTD. SINCE NHAI WAS CHARGING INTEREST ON TH ESE AMOUNTS, SAME WAS RECOVERED FROM THIS JOINT VENTURE PARTNERS AND WERE PAID TO NHAI SO ASSESSEE WAS MERELY ACTING AS A POST OFFICE FOR COLLECTION AND PAYMENT OF THESE INTEREST CHARGES AND NO EXPENDITUR E OR INCOME ON THIS ACCOUNT ACCRUED TO THE ASSESSEE. IN THIS REGAR D, HE FILED A CHART SHOWING DETAILS OF INTEREST PAID TO NHAI AND COLLEC TED FROM BOTH THE JOINT VENTURE PARTNERS IN VARIOUS YEARS. HE POINTED OUT THAT THIS POSITION HAS BEEN ACCEPTED BY THE REVENUE IN THE EA RLIER YEARS. HE ALSO ARGUED THAT THIS QUERY WAS RAISED TOWARDS THE FAG END OF THE ITA NO.1683 OF 2010 17 ASSESSMENT PROCEEDINGS AND ONLY ADMISSION MADE WAS THAT THIS ITEM HAS NOT BEEN ACCOUNTED FOR. SINCE THE NATURE OF ENT RY IS NOT THE NATURE OF INCOME, THEREFORE, THIS ADMISSION CANNOT BE A CO NCLUSIVE PROOF FOR ASSESSING THE INCOME. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. A CHART SHOWING THE COLLECTION AND PAYMENT OF INTEREST IN V ARIOUS YEARS READS AS UNDER: SR. NO. A.Y. PAID TO NHAI (RS.) RECEIVED FROM PBA (RS.) RECEIVED FROM ATLANTA (RS.) ACCEPTED BY THE A.O. IN ASSESSMENT ORDER PASSED 1 2004-05 40,49,732 20,24,866 20,24,866 U/S.143(3) DATED14.12.2006 2 2005-06 90,09,436 45,04,718 45,04,718 U/S. 143(1) 3 2006-07 1,47,49,962 73,74,980 73,74,982 4 2007-08 1,56,53,919 78,26,960 78,26,959 U/S.143(3) DATED 21.12.2009 5 2008-09 99,24,884 49,62,442 49,62,442 U/S.143(3) DATED 23.10.2010 THE ABOVE CLEARLY SHOWS THAT INTEREST HAS BEEN PAID TO NHAI WHICH HAS BEEN DISTRIBUTED AMONGST THE TWO PARTNERS OF THE JO INT VENTURE EQUALLY IN ALL THE YEARS. THIS POSITION HAS ALREADY BEEN AC CEPTED IN A.Y 2004-05 IN THE ASSESSMENT U/S.143[3] AND EVEN AGAIN IN A.YR S. 2007-08 ADDITION 2008-09 IN THE ASSESSMENTS MADE U/S.143[3] . THEREFORE, THIS ITEM CANNOT BE CONSTRUED IN THE NATURE OF INCOME. H OWEVER SINCE AO HAS MADE ADDITION ONLY ON THE BASIS OF ADMISSION OF THE ASSESSEE WITHOUT DISCUSSING THE DETAILS WE ARE OF THE OPINIO N THAT IN THE INTERESTS OF JUSTICE, THIS POSITION SHOULD BE VERIF IED BY THE AO, WHETHER INTEREST HAS ACTUALLY BEEN PAID TO NHAI AND SAME BE ING CONTRIBUTED BY THE TWO PARTNERS OF THE JOINT VENTURE AND IF SO, TH EN NO ADDITION IS ITA NO.1683 OF 2010 18 CALLED FOR. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE SAME TO THE FILE OF THE AO FOR VERIFICATI ON OF THE ABOVE FACTS. 12. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 18/11/2011. SD/- SD/- (D.MANMOHAN) (T.R.SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 18/11/2011. P/-*