CHOUDHARY YATRA COMPANY PVT. LTD., Jaipur V. ACIT, Jaipur

ITA 177/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5142 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Section: 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH ,-MH- TSU U;KF;D LNL; DS LE{K BEFORE: SHRI A.D. JAIN, JUDICIAL MEMBER VK;DJ VIHY LA- @ ITA NO. 177/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2010-11 M/S CHOUDHARY YATRA COMPANY PVT. LTD., 232, VASUNDHARA COLONY, TONK ROAD, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACC 7487 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDEN T FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/09/2016 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/09/2016 VKNS'K@ ORDER PER: A.D. JAIN, J.M. THIS IS ASSESSEES APPEAL FOR A.Y. 2010-11 FILED AG AINST THE ORDER DATED 15/12/2015 PASSED BY THE LD. CIT(A)-5, JAIPUR AGAINST CONFIRMATION OF DISALLOWANCE OF RS. 6,94,574/- U/S 40(A)(IA) OF T HE INCOME TAX ACT, 1961 (IN SHORT THE ACT), ON ACCOUNT OF NON-DEDUCT ION OF TAX AT SOURCE ON INTEREST PAID TO NBFCS. ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 2 2. THE FACTS ARE THAT IN ITS PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE DEBITED A SUM OF RS. 6, 94,574/- TOWARDS INTEREST PAID TO NBFCS AS UNDER:- (I) CHOLA MANDALAM RS. 162813.00 (II) SARASWAT CO-OPERATIVE BANK RS. 265640.00 (III) SARASWAT CO-OPERATIVE BANK RS. 266121.00 3. THE LD. ASSESSING OFFICER IN THE ASSESSMENT ORDER , HELD AS UNDER:- ON EXAMINATION, IT HAS BEEN NOTICED THAT ASSESSEE HAS NOT DEDUCTED TDS WHILE MAKING PAYMENT OF INTEREST TO THE SE NBFC. THE ASSESSEE HAS SUBMITTED THAT PAYMENT TO THE SE NBFC ARE IN THE NATURE OF PAYMENT TO BANK AND THESE ARE HAVING NO DEDUCTION CERTIFICATE, HOWEVER NO SUCH CER TIFICATE HAS BEEN SUBMITTED BY THE ASSESSEE. ACCORDING TO PR OVISION OF SECTION 194A PAYMENT OF INTEREST IS REQUIRED FOR DEDUCTION OF TAX AT SOURCE EXCEPT THE CASES WHERE PA YMENT HAS BEEN MADE TO BANK OR FINANCIAL INSTITUTION. PAY MENT MADE TO NBFC IS NEITHER FALLING IN THE CATEGORY OF BANK OR FINANCIAL INSTITUTION, HENCE PREVISION OF SECTION 4 0(A)(IA) IS APPLICABLE IN THIS CASE. LANGUAGE OF PROVISION OF S ECTION 40(A)(IA) IS VERY MUCH CLEAR THAT WHERE PAYMENT REL ATES TO INTEREST, CONTRACT, RENT, PROFESSIONAL SERVICES AND TAX IS DEDUCTIBLE BUT NOT DEDUCTED OR AFTER DEDUCTION NOT ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 3 DEPOSITED, THAN THE SAID AMOUNT OF EXPENSES IS NOT ALLOWABLE AS DEDUCTION. IN THIS CASE ASSESSEE HAS MA DE PAYMENT OF INTEREST BUT NO TAX WAS DEDUCTED, HENCE T HE AMOUNT OF RS.6,94,574/- IS DISALLOWED U/S 40(A)(IA) AND ADDED TO TAXABLE INCOME OF ASSESSEE. 4. THE LD. CIT(A) WHILE CONFIRMING THE DISALLOWANCE HA S HELD AS UNDER:- 3.3 I HAVE PERUSED THE FACTS OF THE CASE, ASSESSME NT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ISSUE AS TO WHETHER THE TERM PAYABLE USED IN SEC. 40A(IA) WOULD INCLUDE THE AMOUNTS WHICH ARE PAID DURING THE YEAR, HAS COME UP FOR CONSIDERATION IN VARIOUS CASES BEFO RE VARIOUS COURTS. IN THE CASE OF MERIIYN SHIPPING & TRANSPORT V. ADDL. CIT [2012] 20 TAXMANN.COM 244 (VISHAKHAPATNAM) IT WAS HELD BY SPECIAL BENCH OF ITAT, VISHAKHAPATNAM, THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WOULD APPLY ONLY TO THE AMOUNT WHICH REMAINED PAYABLE AT THE END OF THE RELEVANT FINANCIAL YEAR AND COULD NOT BE INVOKED TO DISALLOW THE AMOUNT WHICH HAD ACTUALLY BEEN PAID DURING THE PREVIOUS YEAR WITHOUT DEDUCTION OF TAX AT SOURCE. THE ORDER OF THE SPECIAL BENCH HAS SINCE BEEN PUT UNDER INTERIM SUSPENSION BY THE ANDHRA PRADESH HIGH COURT . ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 4 3.3.1 THE HONBLE CALCUTTA HIGH COURT AND HONBLE GU JARAT HIGH COURT IN THE CASES OF COMMISSIONER OF INCOME-T AX, KOLKATA-XI V. CRESCENT EXPORTS SYNDICATE [2013] 33 TAXMANN.COM 250 (CALCUTTA) AND COMMISSIONER OF INCOME-TAX-IV V. SIKANDARKHAN N TUNVAR [2013] 33 TAXMANN.COM 133 (GUJRAT) RESPECTIVELY, HAVE HELD THAT SECTION 40(A)(IA) OF THE ACT WOULD COVER NOT ONLY TH E AMOUNTS WHICH ARE PAYABLE AT THE END OF THE PREVIOU S YEAR BUT ALSO WHICH ARE PAYABLE AT ANY TIME DURING T HE YEAR. THE HONBLE HIGH COURTS HAVE FURTHER HELD THAT THE INTENTION OF THE LEGISLATION WAS TO DISALLOW CERT AIN TYPES OF EXPENSE, SUBJECT TO PROVISIONS OF CHAPTER XVIL- B WHICH ARE PAYABLE AT ANY TIME DURING THE YEAR BUT NO TAX WAS DEDUCTED AT SOURCE OR IF DEDUCTED WAS NOT PAI D WITHIN THE STIPULATED TIME. THERE IS NO SUCH CONDITIO N THAT AMOUNT SHOULD REMAIN PAYABLE AT THE END OF THE YEAR. 3.3.2 THE HONBLE ALLAHABAD HIGH COURT IN CIT V. VECT OR SHIPPING SERVICE (P) LTD. [2013}38 TAXMANN.COM 77 (ALLAHABAD) HAS AFFIRMED THE DECISION OF THE SPECIA L BENCH IN MERILYN SHIPPING THAT FOR DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT, THE AMOUNT SHOULD BE PAYABLE AND NOT WHICH HAS BEEN PAID DURING THE YEAR. HOWEVER, THE DECISIONS OF THE HONBLE GUJRAT AND CALCUTTA HIGH COURTS (SUPRA) WERE NOT BROUGHT TO THE ATTENTION OF THE HONBLE ALLAHABAD HIGH COURT, ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 5 RENDERING THE DECISION OF THE HONBLE ALLAHABAD HIG H COURT PER INCURIAM. 3.3.3 IN THE CASE OF ACIT, CIRCLE 4(2), MUMBAI V. R ISHI STOCK AND SHARES PVT. LTD. IN ITA NO. 112/MUM/2012, HONBLE ITAT, MUMBAI IN ITS ORDER DATE 2-8-2013 HAS EXAMINED THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT (SUPRA) AS REGARDS SECTION 40(A)(IA) OF THE A CT AND CONCLUDED THAT THE SAME WAS AN ORBITER DICTA WHILE THE DECISIONS OF THE HONBLE GUJARAT AND CALCU TTA HIGH COURT (SUPRA) WERE RATIO DECIDENDI . THE ITAT ACCORDINGLY APPLIED THE VIEW TAKEN BY THE HONBLE GUJRAT AND CALCUTTA HIGH COURT AS RATIO DECIDENDI PREVAILS OVER ORBITER DICTA. 3.3.4 C.B.D.T CIRCULAR NO. 10/DV/2013, DATED, 16-12 -2013, STATES THAT- AFTER CAREFUL EXAMINATION OF THE ISSUE, THE BOARD IS OF THE CONSIDERED VIEW THAT THE PROVISION OF SECTION 40(A)(IA) OF THE ACT WOULD COVER NOT ONLY THE AMOUNTS WHICH ARE PAYABLE AS ON 31ST MARCH OF A PREVIOUS YEAR BUT ALSO AMOUNTS WHICH ARE PAYABLE AT ANY TIME DURING THE YEAR. THE STATUTORY PROVISIONS ARE AMPLY CLEAR AND IN THE CONTEXT OF SECTION 40(A)(IA) OF THE ACT THE TERM 'PAYABLE WOULD INCLUDE AMOUNTS WHICH ARE PAID DURING THE PREVIOUS YEAR. ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 6 3.3.5 IN THE DECISION DATED 10/4/2015 IN THE CASE O F SHRI GIRDHARI LAL BARGOTI FOR A.Y. 2009-10 IN ITA NO. 757/JP/2012, HONBLE ITAT, JAIPUR HAS HELD AS FOLLOWS : WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. ON ISSUE OF AMOUNT ALREADY PAID DURING THE YEAR OR AMOUNT SHOWN PAYABLE AS ON 31 S ' MARCH OF EVERY YEAR, THE VARIOUS COURTS HAVE DIFFERENT VIEW I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE ASSES SEE. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. (SUPRA) HAS HELD THAT WHEN THERE ARE TO VIEWS ON AN ISSUE, THE VIEW IN FAVOUR OF THE ASSESSEE HAS TO BE PREFERRED. THEREFORE, WE CONFIRM THE ORDER OF THE LD. CIT(A). FURTHER THE RECIPIENT ARE NBFC, THEREFORE, NOT POSSIBLE TO NOT BE ASSESSED TO TAX, THESE PAYMENTS WERE RELATED FOR A.Y. 2009-10 AND RETURN FOR A.Y. 2009-10 ALREADY MIGHT HAVE BEEN FILED BY THESE NBFC BY INCLUDING THESE INTERESTS RECEIPTS AS THEIR INCOME. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A). IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. 3.3.6 AS OBSERVED EARLIER, THE JUDGEMENT OF HONBL E ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES P LTD. (SUPRA) WAS PER INCURIAM, SINCE THE DECISIONS OF HONBLE GUJARAT HIGH COURT AND HON BLE ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 7 CALCUTTA HIGH COURT CITED SUPRA WERE NOT BROUGHT TO THE NOTICE OF THE HONBLE ALLAHABAD HIGH COURT. THE FACT THAT THE DECISION OF THE HONBLE ALLAHABAD HIGH COU RT WAS PER INCURIAM WAS ALSO NOT BROUGHT TO THE NOTICE O F HONBLE ITAT, JAIPUR WHILE THE ABOVEMENTIONED DECISION IN THE CASE OF GIRDHARI LAL BARGOTI WAS RENDERED. THIS HAS LED TO THE DECISION OF HONBLE IT AT, JAIPUR BEING PER INCURIAM, AND HENCE IT CEASES TO HAVE BINDING PRECEDENCE. FURTHER, THE FACT THAT HONBLE ALLAHABAD HIGH COURTS DECISION WAS AN OBITER DICTA AND NOT RATIO DECIDENDI ON THE SUBJECT MATTER OF SEC. 40A(IA), WAS ALSO NOT BROUGHT TO THE NOTICE OF HONB LE ITAT, JAIPUR. IN VIEW, OF THE ABOVE STATED FACTS, THE RE WERE NO TWO VIEWS OF HIGH COURTS IN THIS MATTER. IN FA CT ALL HIGH COURTS HAVE RULED IN FAVOUR OF REVENUE AND IN ACCORDANCE WITH THE C.B.D.T CIRCULAR (SUPRA) ON THIS ISSUE ONCE THE VIEW OF THE HONBLE ALLAHABAD HIGH COURT, BEING PER INCURIAM AND AN OBITER DICTA IS EXCLUDED. IN FACT, IN A SUBSEQUENT JUDGEMENT HONBL E PUNJAB AND HARYANA HIGH COURT, AFTER ANALYZING THE ABOVE CITED JUDGEMENTS IN THE CASE OF P.M.S. DIESEL S VS. CIT [374 ITR 562] HAS AFFIRMED THE VIEW TAKEN BY THE HONBLE GUJRAT AND CALCUTTA HIGH COURTS IN RULI NG THAT THE TERM PAYABLE WOULD INCLUDE AMOUNTS PAID DURING THE YEAR. THUS, RESPECTFULLY FOLLOWING THE JUDGEMENTS OF HONBLE HIGH COURTS OF GUJARAT, CALCU TTA ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 8 AND PUNJAB & HARYANA, FOR THE REASONS CITED ABOVE, IT IS HELD THAT THE TERM PAYABLE WOULD INCLUDE THE AMOUNTS PAID DURING THE YEAR IN QUESTION. 3.4 IN THE CASE OF SH. GIRDHARI LAI BARGOTI (SUPRA) IT WAS FURTHER INDICATED THAT ONCE THE I.T. RETURNS ARE FIL ED BY THE RECIPIENT NBFC, INCLUDING THEREIN THE INTEREST RECEIPTS FROM THE ASSESSEE THEN THE ASSESSEE WOULD N OT BE DEEMED TO BE IN DEFAULT. IT IS SEEN THAT THE CORRESPONDING PROVISIONS ARE IN 1 ST PROVISO TO SECTION 201(1) WHICH PROVIDES THAT THE ASSESSEE SHALL NOT BE DEEMED TO BE IN DEFAULT IF THE RECIPIENT OR LIABLE DEDUCTEE HAS FILED HIS RETURN TAKING INTO ACCOUNT T HE AMOUNTS ON WHICH IDS WAS NOT DEDUCTED BY THE ASSESSEE AND PAYS DUE TAXES AND THE ASSESSEE FURNISHES THE REPORT OF C.A. IN THE SPECIFIED FORMA T TO THE ABOVE EFFECT. IF THE ASSESSEE FURNISHES SUCH RE PORT OF C.A., THE ASSESSEE SHALL BE DEEMED TO HAVE DEDUCTED AND PAID THE TAX ON THE DATE OF FURNISHING OF RETURN BY THE ABOVE STATED RECIPIENT, IN TERMS OF 2 ND PROVISO TO SEC. 40(A)(IA). THE SAID PROVISO IS INSER TED BY FINANCE ACT,2012 W.E.F. 1.4.2013. HOWEVER, SEVERAL COURTS HAVE HELD THE SAME TO BE RETROSPECTIVE IN OPERATION. BE THAT AS IT MAY, THE MOOT POINT IS WHET HER THE ASSESSEE HAS FURNISHED THE SAID CERTIFICATE OF C.A. IN TERMS OF 1 ST PROVISO TO SEC. 201(1). THE APPELLANT HAS EXPRESSED INABILITY TO FURNISH SUCH CERTIFICATE, IN THE ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 9 ABSENCE OF WHICH THE 2 ND PROVISO TO SEC. 40(A)(IA) DOES NOT COME TO ITS RESCUE. IT IS THEREFORE EVIDENT THA T THE APPELLANT HAS COMMITTED DEFAULT WITHIN THE MEANING O F SEC. 40(A)(IA) HAVING NOT DEDUCTED THE DUE TAXES AT ALL. THE DISALLOWANCE OF RS. 6,94,574 MADE BY THE A.O. IS THEREFORE CONFIRMED. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THIS BENCH. 6. THE LD. COUNSEL FOR THE ASSESSEE, AS ALSO STATED IN THE WRITTEN SUBMISSIONS FILED, HAS SUBMITTED THAT ISSUE OF APPL ICABILITY OF SECTION 40(A)(IA) OF THE ACT HAS BEEN DECIDED BY THE HONBL E JAIPUR BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 10/4/2015 PASSED IN IT A NO. 757/JP/2012 FOR A.Y. 2009-10 IN THE CASE OF ACIT VS GIRDHARI LA L BARGOTI, HOLDING THAT THERE ARE DIFFERENT VIEWS OF DIFFERENT COURTS ON THE ISSUE OF AMOUNT ALREADY PAID DURING THE YEAR OR AMOUNT SHOWN PAYABLE AS ON 31 ST MARCH OF EVERY YEAR; THAT AS SUCH, KEEPING IN VIEW THE DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PROD UCTS LTD., 88 ITR 192 (SC), THE VIEW IN FAVOUR OF THE ASSESSEE NEEDS T O BE PREFERRED; THAT THE LD CIT(A) HAS GONE WRONG IN HOLDING THAT THERE AR E NO TWO VIEWS IN THE MATTER AND THAT OF THE HON'BLE HIGH COURTS HAVE DECIDED THE ISSUE IN FAVOUR OF THE DEPARTMENT; THAT THE SECOND PROVISO T O SECTION 40(A)(IA), INSERTED BY THE FINANCE ACT, 2012 W.E.F. 01/4/2013, PROVIDES THAT WHERE ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 10 AN ASSESSEE FAILS TO DEDUCT TAX ON THE SUM PAID TO THE RESIDENT, BUT SUCH RESIDENT/PAYEE HAS FURNISHED THE RETURN, HAS TAKING INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME AND HAS PAID THE TAX DUE O N THE INCOME DECLARED BY HIM, THEN IT WILL BE DEEMED THAT THE ASS ESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISH ING OF RETURN BY THE RESIDENT/PAYEE; THAT ALL THE FINANCE COMPANIES TO WH ICH THE ASSESSEE HAD PAID INTEREST, ARE ASSESSED TO TAX, THEREFORE, THE PRESUMPTION IS THAT THESE COMPANIES HAVE INCLUDED THE INTEREST PAID BY THE ASSESSEE TO THEM IN THEIR INCOME AND HAVE PAID TAX THEREON; THAT THE ITAT, JAIPUR BENCH IN THE CASE OF ACIT VS. GIRDHARI LAL BARGOTI (SUPRA), H AS HELD THAT SINCE THE RECIPIENTS ARE NBFCS, THEY ARE NOT TO BE ASSESSED T O TAX; THAT THESE PAYMENTS WERE RELATED TO A.Y. 2009-10 AND THE RETURN FOR THE SAID YEAR ALREADY MIGHT HAVE BEEN FILED BY THESE NBFCS, BY IN CLUDING THESE INTEREST RECEIPTS AS THEIR INCOME; THAT AS SUCH NO DISALLOWAN CE U/S 40(A)(IA) OUGHT TO BE MADE IN THE HANDS OF THE ASSESSEE; THAT SECOND PROVISO TO SECTION 40(A)(IA) INSERTED W.E.F. 01/4/2013, AS RETR OSPECTIVE EFFECT; THAT THE DEPARTMENTAL APPEAL AGAINST THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING S ERVICE PVT. LTD. 38 TAXMANN.COM 77 (ALL) WAS DISMISSED BY THE HON'BLE SU PREME COURT; THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THAT IN THE CB DT CIRCULAR NO. ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 11 10/DV/2013 DATED 16/12/2013, IT HAS BEEN OBSERVED T HAT WHERE ANY HIGH COURT DECIDES AN ISSUE CONTRARY TO THE DEPARTM ENTAL VIEW, THE DEPARTMENTAL VIEW THEREON SHALL NOT BE OPERATIVE IN THE AREA FALLING IN THE JURISDICTION OF THE RELEVANT HIGH COURT; THAT THE H ON'BLE SUPREME COURT DISMISSED THE DEPARTMENTS SLP IN THE CASE OF VECTO R SHIPPING SERVICE P. LTD. (SUPRA), POST THE ISSUANCE OF THE AFORESAID CB DT CIRCULAR; AND THAT OTHERWISE TOO, SARASWAT COOPERATIVE BANK TO WHOM INTER EST OF RS. 5,31,761/- WAS PAID, IS A SCHEDULED COOPERATIVE BANK , TO WHICH THE PROVISIONS OF SECTION 194A OF THE ACT ARE NOT APPLI CABLE, DUE TO WHICH, THE DISALLOWANCE, TO THIS EXTENT, IS NOT SUSTAINABLE . 7. ON THE OTHER HAND, THE LD DR HAS STRONGLY RELIED ON THE IMPUGNED ORDER, HAS CONTENDED THAT AS CORRECTLY OBSERVED BY THE LD CIT(A), IN THE CASE OF VECTOR SHIPPING (SUPRA) IS PER INCURIUM D ECISION OF HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. CRESCENT E XPORT SYNDICATE 33 TAXMANN.COM 250 (KOL) AND THAT OF THE HONBLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS. SIKANDAR KHAN N. TUNVAR 357 ITR 312 (G UJ) WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT SECTION 40(A)(IA) OF THE ACT WOULD COVER NOT ONLY THE AMOUNTS, WHICH ARE PAYABLE AT THE END O F THE PREVIOUS YEAR, BUT ALSO WHICH ARE PAYABLE AT ANY TIME DURING THE Y EAR; THAT THE INTENTION ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 12 OF THE LEGISLATION WAS TO DISALLOW CERTAIN TYPES OF EXPENSES, SUBJECT TO THE PROVISIONS OF CHAPTER XVII-B, WHICH ARE PAYABLE AT ANY TIME DURING THE YEAR, BUT NO TAX WAS DEDUCTED AT SOURCE, OR IF D EDUCTED, IT WAS NOT PAID WITHIN THE STIPULATED TIME AND THAT THERE IS NO SUCH CONDITION THAT THE AMOUNT SHOULD REMAIN PAYABLE AT THE END OF THE YEAR; THAT IN THE CASE OF ACIT, CIRCLE-4(2), MUMBAI VS. RISHTI STOCK A ND SHARES PVT. LTD. VIDE ORDER DATED 02/8/2013 IN ITA NO. 112/MUM/2012 HAS EXAMINED THE DECISION IN THE CASE OF VECTOR SHIPPING (SUPRA) AND HAS CONCLUDED THAT THE SAME WERE ORBITER DICTA, WHEREAS THOSE DECISION S IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE AND CIT VS. SIKANDAR KHAN N. TUNVAR (SUPRA) WERE RATIO DECIDENDI; THAT IT WAS NEVER CO NTENDED BEFORE THE ITAT, JAIPUR BENCH IN THE CASE OF ACIT VS. GIRDHARI L AL BARGOTI (SUPRA) THAT VECTOR SHIPPING WAS PER INCURIUM; THAT THEREF ORE, DECISION IN THE CASE OF GIRDHARI LAL BARGOTI IS ALSO PER INCURIUM AND IT HAS NOT BINDING EFFECT; THAT SINCE THE DECISIONS IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE AND CIT VS. SIKANDAR KHAN N. TUNVAR (SUPRA) HAVE BEEN HELD TO BE ORBITER DICTA AND NOT RATIO DECIDENDI, IT CANNOT BE SAID, AS CORRECTLY OBSERVED BY THE LD CIT(A) THAT THERE ARE A NY TWO VIEWS OF DIFFERENT HIGH COURTS WITH REGARD TO THE ISSUE IN QU ESTION; THAT MOREOVER, DECISION IN THE CASE OF PMS DIESELS VS CIT 374 ITR 56 2 (P&H) EVEN THE ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 13 HONBLE PUNJAB & HARYANA HIGH COURT HAS AFFIRMED TH E VIEW TAKEN BY THE HONBLE GUJARAT HIGH COURT AND THE HONBLE KOLKATA HIGH COURT, HOLDING THAT PAYABLE WOULD INCLUDE AMOUNTS PAID DURING THE YEAR; SO FAR AS REGARDS THE PRESENT ASSESSEE, IT HAS NOT FURNISHED THE REQUISITE CERTIFICATES, DUE TO WHICH, THE SECOND PROVISO TO SE CTION 40(A)(IA) DOES NOT AID THE ASSESSEE AND THE DEFAULT U/S 40(A)(IA) OF THE ACT SUBSISTS THE SECOND PROVISO TO SECTION 40(A)(IA) HAVING BEEN HEL D TO BE RETROSPECTIVE IN OPERATION. 8. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN TH E CASE OF GIRDHARI LAL BARGOTI (SUPRA), IT HAS BEEN HELD THAT CONSIDERING THE ISSUE OF AMOUNT ALREADY PAID DURING THE YEAR OR AMOUNT SHOWN AS PAY ABLE AS ON 31 ST MARCH OF EVERY YEAR, DEALING WITH THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, DIFFERENT COURTS HAVE TAKEN MUTUALLY DIVER GENT VIEWS AND AS SUCH, THERE IS A DIVERSION OF LEGAL OPINION, WHICH I S BOTH IN FAVOUR OF THE ASSESSEE AND IN FAVOUR OF THE DEPARTMENT. IN SUCH A SITUATION, THE JAIPUR TRIBUNAL HAS FOLLOWED THE HON'BLE SUPREME COURT DECIS ION IN THE CASE OF VEGETABLE PRODUCTS LIMITED (SUPRA) TO DECIDE THE MA TTER IN FAVOUR OF THE ASSESSEE. HERE, IT IS SEEN THAT CLEARLY, THE DECISI ON IN THE CASE OF VECTOR ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 14 SHIPPING (SUPRA) IS IN FAVOUR OF THE ASSESSEE, WHERE AS THE DECISIONS THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE, CIT VS. SI KANDAR KHAN N. TUNVAR AND PMS DIESELS VS CIT (SUPRA) ARE IN FAVOUR O F THE DEPARTMENT. THEREFORE, EVIDENTLY, THERE IS A CLEAVAGE OF JUDICIA L OPINION ON THE ISSUE. IN SUCH A SITUATION, THE MANDATE OF THE LAW, AS PER DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VEGETABLE PROD UCTS LTD. (SUPRA) IS TO FOLLOW THE VIEW IN FAVOUR OF THE ASSESSEE. THAT B EING SO, BY RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINAT E BENCH OF JAIPUR ITAT IN THE CASE OF GIRDHARI LAL BARGOTI (SUPRA), THE IS SUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 9. IN VIEW OF THE ABOVE, THE GRIEVANCE RAISED BY THE ASSESSEE BY WAY OF SOLE EFFECTIVE GROUND TAKEN, IS ACCEPTED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/09/2016. SD/- , - MH TSU (A.D. JAIN) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 TH SEPTEMBER, 2016 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: ITA 177/JP/2016_ M/S CHOUDHARY YATRA CO. P. LTD. VS ACIT 15 1. VIHYKFKHZ@ THE APPELLANT- M/S CHOUDHARY YATRA COMPANY PVT. LTD. , JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-6, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 177/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR