M/s. Lakshmi Engineering Works, Trichy V. ACIT, Trichy

ITA 175/CHNY/2013

• Counselvise Citation: 17521714 RSA 2013
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 28-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: T VASUDEVAN
• Keywords: Retrospective amendment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI [BEFORE DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI S.S. GODARA, JUDICIAL MEMBER] I.T.A.NO.175/MDS/2013 ASSESSMENT YEAR : 2008-2009 M/S. LAKSHMI ENGINEERING WORKS, NO.25, DEVELOPED PLOTS ESTATE, THUVAKUDI, TRICHY 620 015 . VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IV, TRICHY I.T.A.NO.228/MDS/2013 ASSESSMENT YEAR : 2008-2009 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-IV, TRICHY. VS M/S. LAKSHMI ENGINEERING WORKS, NO.25, DEVELOPED PLOTS ESTATE, THUVAKUDI, TRICHY 620 015 . [PAN AAAFL 1987H] (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. T. VASUDEVAN, ADVOCATE DEPARTMENT BY : SHRI. T.N. BETGERI, JCIT. DATE OF HEARING : 28-08-2013 DATE OF PRONOUNCEMENT : 28-08-2013 I.T.A.NOS.175&228/MDS/2013. :- 2 -: O R D E R PER S.S. GODARA, JUDICIAL MEMBER THESE CROSS-APPEALS FILED BY THE ASSESSEE AND TH E REVENUE RESPECTIVELY, ARISE FROM THE ORDER OF THE COMMISSIO NER OF INCOME TAX (APPEALS), TIRUCHIRAPALLI DATED 20.11.2012 PASSED I N ITA NO.305/2010- 2011, FOR ASSESSMENT YEAR 2008-2009, IN PROCEEDIN GS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 [IN SHORT THE AC T]. 2. IN THE COURSE OF HEARING, THE ASSESSEE IN ITA NO.17 5/MDS/2013 STRONGLY ARGUES THAT CIT(A) HAS WRONGLY CONFIRMED T HE DISALLOWANCES/ADDITIONS OF F.88,410/- IN THE NATURE OF MACHINING CHARGES AND F.1,00,000/- AS GENERAL EXPENSES. ACCO RDINGLY, THE ASSESSEE REITERATES THE PLEADINGS AND PRAYS FOR ACC EPTANCE OF THE APPEAL. 3. IN REPLY, THE REVENUE STRONGLY SUPPORTS THE CIT(A) S FINDING AND PRAYS FOR CONFIRMATION OF THE ABOVE SAID ADDITIONS. IN ITS APPEAL ITA NO.228/MDS/2013, IT STATES THAT CIT(A) HAS WRONGLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER OF F21,83,6 49/- AS LABOUR WAGES, F69,770/- DRILLING WAGES, F1,42,634/- FREIGH T CHARGES AND F3,62,592/- NDT PAYMENTS ETC., IN THE BACKGROUND OF PLEADINGS I.T.A.NOS.175&228/MDS/2013. :- 3 -: RAISED IN THE GROUNDS, IT ALSO PRAYS FOR ACCEPTANCE OF APPEAL ITA NO.228/MDS/2013. 4. IN REVENUES APPEAL, THE ASSESSEE STRONGLY SUPPORTS THE CIT(A)S ORDER IN THE LIGHT OF THE DECISION OF CHENNAI TRIB UNAL IN ITA NO.662/MDS/2010, DATED 07.01.2011, (ITS OWN CASE FO R ASSESSMENT YEAR 2006-2007). WE HAVE HEARD BOTH PARTIES, PERUSED THE CASE FILES AS WELL THE DECISION OF THE TRIBUNAL QUOTED HEREIN ABOVE. 5. THE ASSESSEE IS A COMPANY, ENGAGED IN THE BUSINESS OF FABRICATION WORK. FOR THE IMPUGNED ASSESSMENT YEAR , IT HAD FILED ITS RETURN ON 15.09.2008 DECLARING TOTAL INCOME OF F1 1,27,420/-. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER DISALLO WED/ADDED AN AMOUNT OF F21,83,649/- AS LABOUR WAGES, F69,770/- IN NATUR E OF DRILLING CHARGES, MACHINING CHARGES PAYMENT OF F88,410/- PAI D TO M/S. VIJAYA ENGINEERING, FREIGHT CHARGES OF F1,42,634/- AND NBT PAYMENTS OF F3,62,592/- FOR WANT OF DEDUCTION OF TDS. IN ADDIT ION TO THIS, HE ALSO REJECTED THE ASSESSEES CLAIM OF GENERAL EXPENSES O F F1,68,897/- TO THE EXTENT OF F1,00,000/- HOLDING THAT SOME OF THE VOUC HERS WERE SELF- MADE. ACCORDINGLY, IN THE ASSESSMENT ORDER DATED 2 3.12.2010, HE ASSESSED THE ASSESSEES TOTAL INCOME AS F40,74,475/ -. I.T.A.NOS.175&228/MDS/2013. :- 4 -: 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A). IT IS TO BE SEEN FROM THE CASE FILE THE CIT(A) HAS FOU ND THE ASSESSEE TO HAVE PAID THE TDS AMOUNT BEFORE THE DUE DATE OF FIL ING OF RETURN. ACCORDINGLY, HE PLACED RELIANCE ON THE CASE OF CI T VS ALUM EXTRUSIONS LIMITED 319 ITR 306, HOLDING THEREIN THAT IN THE SU BSTITUTION MADE BY THE FINANCE ACT, 2010 IN SECTION 40A(IA) SHOULD BE READ WITH RETROSPECTIVE EFFECT. IN THIS MANNER, THE CIT(A) HAS DELETED ALL ADDITIONS BY ISSUING NECESSARY DIRECTIONS TO THE AS SESSING OFFICER EXCEPT F 88,410/- AND F 1,00,000/- IN THE NATURE OF MACHINING CHARGES AND GENERAL EXPENSES(SUPRA). FURTHER, REGARDING MA CHINING CHARGES, HE OBSERVES THAT THE ASSESSING OFFICER SHOULD HAVE MADE DISALLOWANCE FOR WANT OF PROOF SUBMITTED BY THE ASSESSEE. IN THI S BACKDROP OF FACTS, BOTH PARTIES RAISE THEIR RESPECTIVE CONTENTIONS AGA INST THE ORDER OF THE CIT(A). 7. COMING TO ASSESSEES APPEAL ITA NO.175/MDS/2013, UNDISPUTEDLY, FOR THE DISALLOWANCES/ ADDITIONS OF M ACHINING CHARGES ABOVE SAID, THE CIT(A) HAS HELD THAT THE ASSESSING OFFICER SHOULD HAVE MADE THE DISALLOWANCE FOR WANT OF EVIDENCE INSTEAD OF THAT OF LACK OF DEDUCTION OF TDS. EVEN BEFORE US, THE ASSESSEE HAS FAILED TO PROVE I.T.A.NOS.175&228/MDS/2013. :- 5 -: THAT IT HAD FILED ANY MATERIAL TO SUPPORT THE CLAIM IN QUESTION. THEREFORE, THIS PLEA OF THE ASSESSEE IS REJECTED. 8. THE OTHER GROUND RAISED BY THE ASSESSE IS THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE WRONGLY ADDED AN AMOUNT OF F1,00,000/- OUT OF THE TOTAL CLAIM OF F1,68,897/- AS GENERAL EXPENSES. WE NOTICE FROM THE ASSESSMENT ORDER AS WELL AS THE CIT(A)S ORDER THAT FOR THE BALANCE AMOUNT OF F68,897/- THERE WAS NO OB JECTION MADE. IN OTHER WORDS, GENUINENESS OF THE EXPENSES HAS NOT BE EN DOUBTED BY THE LOWER AUTHORITIES. THEREFORE, TAKING INTO CONSI DERATION ALL THE FACTS AND CIRCUMSTANCES AND KEEPING IN MIND THE FACT THAT THE PAYMENT ARE FOR GENERAL EXPENSES, WE ACCEPT THE ASSESSEE CONTEN TIONS IN PART AND GRANT FURTHER RELIEF OF F50,000/- OUT OF THE TOTAL ADDITION OF F1,00,000/-. ITA NO.175/MDS/2013 IS THEREFORE, PART LY ACCEPTED. 9. COMING TO THE REVENUES APPEAL, UNDISPUTEDLY, THE C IT(A) HAS RECORDED THE FINDINGS OF FACT THAT ADDITIONS WERE M ADE FOR PAYMENT OF DIRECT WAGES, FREIGHT CHARGES, X-RAY AND NDT PAYMEN TS ETC., FOR FAILURE TO DEDUCT TDS AND THE ASSESSEE HAS MADE PAYMENTS OF THE TAX DEDUCTED WELL BEFORE FILING OF THE RETURN. SO, T HE ASSESSEE HAS BEEN GRANTED RELIEF IN VIEW OF THE CASE LAW ALUM EXTRUS IONS LIMITED (SUPRA). WE MAKE IT CLEAR THAT NO MATERIAL HAS BEEN PRODUCED BY THE REVENUE I.T.A.NOS.175&228/MDS/2013. :- 6 -: TO REBUT THE FINDINGS UNDER CHALLENGE THAT TDS AMOU NT HAD NOT BEEN DEPOSITED BY THE ASSESSEE BEFORE FILING THE RETURN . HENCE, THE ORDER OF THE CIT(A) IS CONFIRMED IN ITA NO.228/MDS/2013. 10. IN THE RESULT, ITA NO.175/MDS/2013 IS PARTLY ALLOWED AND ITA NO.228/MDS/2013 IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 28TH O F AUGUST 2013, AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (S.S. GODARA) JUDICIAL MEMBER DATED:28 TH AUGUST, 2013. K.V COPY TO: ASSESSEE/AO/CIT(A)/CIT/DR