Smt. Shashikala R. Pathak, Ahmedabad V. The Income Tax Officer, Ward-9(4), Ahmedabad

ITA 1780/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8678 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 14-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 18-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Additional evidence
• Section: 194C; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI S.S. GODARA JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1780/AHD/2013 / A.Y. 2009-10 SMT. SHASHIKALA R PATHAK, 37, SHARTHI COMPLEX, NARODA ROAD, NARODA, AHMEDABAD PAN : AQNPP 6594 P VS INCOME TAX OFFICER, WARD-9(4), AHMEDABAD (APPELLANT) (RESPONDENT) B Y APPELLANT : SHRI P.B. PARMAR, AR B Y RESPONDENT : SHRI MUD IT NAGPAL, SR DR / DATE OF HEARING : 14/08/2017 /DATE OF PRONOUNCEMENT: 22/08/2017 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 EMANATES AGAINST THE CIT(A)-XV, AHMEDABADS ORDER DATED 27.03.2013 I N CASE NO.CIT(A)- XV/ITO/9(4)/330/11-12, UPHOLDING ASSESSING OFFICER S ACTION IN DISALLOWING FREIGHT EXPENSES OF RS.3,80,17,770/- AN D PART DISALLOWANCE OF OVERHEAD DISALLOWANCE OF RS.5,52,673/- @ 20% COMING TO RS.1,10,534/-; RESPECTIVELY, IN PROCEEDINGS UNDER SECTION 144 OF T HE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. WE COME TO THE FIRST ISSUE OF SECTION 40(A)(IA) DISALLOWANCE OF RS.3,79,18,847/- AS MADE BY BOTH THE LOWER AUTHORIT IES ALLEGING ASSESSEES FAILURE IN DEDUCTING TDS ON CORRESPONDING FREIGHT P AYMENTS MADE TO TRANSPORTERS. THERE IS NO DISPUTE THAT THE ASSESSEE HAS OTHERWISE MADE THE IMPUGNED PAYMENTS IN THE NATURE OF LORRY HIRE EXPEN SES WITHOUT ITA NO. 1780/AHD/2013 SMT SHASHIKALA R PATHAK VS. ITO A.Y. 2009-10 - 2 - DEDUCTING TDS. ITS STAND THROUGHOUT HAS BEEN THAT THE PAYEES IN QUESTION HAVE NOT UNDERTAKEN ANY CONTRACTUAL LIABILITY SO AS TO RECOVER UNDER SECTION 194C OF THE ACT. THE ASSESSING OFFICER REC ORDED HER NON- COOPERATION IN INVOKING SECTION 40(A)(IA) OF THE AC T TO DISALLOW THE ENTIRE PAYMENTS OF RS.3,80,17,770/- IN EX-PARTE ASSESSMENT FRAMED ON 28.11.2011. 3. THE ASSESSEE PREFERS APPEAL. SHE CHOOSES TO FIL E ADDITIONAL EVIDENCE IN THE COURSE OF HEARING. THE CIT(A) SOUGHT A REMA ND REPORT. THE SAME CAME ON 22.02.2013 ONCE AGAIN REJECTING HER EXPLANA TION. THE CIT(A) THEREAFTER PARTLY CONFIRMED THE ABOVE DISALLOWANCE OF FREIGHT EXPENSES OF RS.3,80,17,770/- TO THE EXTENT OF RS.3,79,18,847/-. 4. THIS LEAVES THE ASSESSEE AGGRIEVED. 5. WE HAVE HEARD BOTH THE PARTIES. RELEVANT FINDIN GS PERUSED. THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT DEDUCTED TD S QUA THE IMPUGNED FREIGHT PAYMENTS MADE TO VARIOUS TRANSPORTERS. SHE APPEARS TO HAVE ARGUED IN THE COURSE OF LOWER APPELLATE PROCEEDINGS THAT SECTION 40(A)(IA) APPLIES ONLY TO EXPENSES PAYABLE AS ON CLOSING DATE OF THE RELEVANT ACCOUNTING PERIOD AND NOT QUA THOSE ALREADY PAID BE FORE THE SAID DATE. WE FIND NO FORCE IN THIS PLEA AS HONBLE JURISDICTI ONAL HIGH COURTS DECISION IN THE CASE OF CIT VS. SIKANDARKHAN N. TUNVAR [2013 ] 357 ITR 312 (GUJ) AS WELL AS HONBLE APEX COURTS RECENT DECISION IN THE CASE OF M/S. PALAM GAS SERVICE VS. CIT IN CIVIL APPEAL NO. 5512 OF 2017, D ECIDED ON 03.05.2017. WE, THEREFORE, FIND NO FAULT IN THE CIT(A)S ORDER REJECTING THE SAID CORRESPONDING ARGUMENT. 6. LEARNED COUNSEL REPRESENTING THE ASSESSEE AT THI S STAGE SUBMITS THAT THE CIT(A) DID NOT AFFORD REBUTTAL OPPORTUNITY AFTE R RECEIVING ASSESSING OFFICERS REMAND REPORT QUA ADDITIONAL EVIDENCE SUB MITTED IN COURSE OF LOWER APPELLATE PROCEEDINGS. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS ITA NO. 1780/AHD/2013 SMT SHASHIKALA R PATHAK VS. ITO A.Y. 2009-10 - 3 - TO DISPUTE THIS FACTUAL POSITION. WE FURTHER FIND T HAT THE ASSESSEE HAD RAISED ANOTHER LEGAL ARGUMENT QUOTING SECTION 40(A) (IA) SECOND PROVISO THAT THE IMPUGNED DISALLOWANCE PROVISION WOULD NOT APPLY IN CASE SHE IS NOT AN ASSESSEE IN DEFAULT UNDER SECTION 201 BY VIR TUE OF THE FACT THAT HER PAYEES HAD ALREADY BEEN ASSESSED QUA THE PAYMENTS I N QUESTION. THIS PROVISO WAS INSERTED IN THE ACT BY THE FINANCE ACT, 2012 WITH EFFECT FROM 01.04.2013. THE REVENUE STRONGLY ARGUES THAT WE AR E IN ASSESSMENT YEAR 2009-10; WHEREAS, THE ABOVE SECOND PROVISO TO SECTI ON 40(A)(IA) IS NOT APPLICABLE WITH RETROSPECTIVE EFFECT. WE FIND NO FO RCE IN THE PLEA SINCE THIS TRIBUNALS CO-ORDINATE BENCH DECISION IN RAJEEV KUM AR AGARWAL VS. ACIT (AGRA) HOLDS THE ABOVE PROVISO TO BE CURATIVE IN NATURE HAVING RETROSPECTIVE EFFECT. HONBLE DELHI HIGH COURTS D ECISION IN CIT VS. ANSAL LAND MARK TOWNSHIP (P.) LTD. ALSO HOLDS THE VERY VI EW BY AGREEING WITH THIS TRIBUNALS ABOVE DECISION EX-TEMPORE AS REPORTED IN (2015) 377 ITR 635 (DELHI). WE, THEREFORE, REJECT REVENUES LEGAL ARG UMENTS. 7. LEARNED COUNSEL REPRESENTING ASSESSEE AT THIS ST AGE SUBMITS THAT THE ASSESSEE WOULD PROVIDE ALL SUFFICIENT DETAILS BEFOR E THE LOWER AUTHORITIES IN ORDER TO PROVE THE PAYMENTS IN QUESTION TO HAVE BEE N DULY ASSESSED UNDER THE ACT. WE, THEREFORE, DEEM IT APPROPRIATE TO REM IT THE INSTANT ISSUE BACK TO THE CIT(A) FOR DECISION AFRESH IN ACCORDANCE WIT H LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE WHO SHALL BE AT LIBERTY TO RAISE ALL LEGAL AND FACTUAL PLEAS IN COURSE OF CONS EQUENTIAL PROCEEDINGS. ASSESSEES THIS SUBSTANTIVE GROUND, THEREFORE, SUCC EEDS FOR STATISTICAL PURPOSES. 8. ASSESSEES LATTER SUBSTANTIVE GROUND SEEKS TO RE VISE BOTH THE LOWER AUTHORITIES ACTION IN DISALLOWING 20% OF OVERHEAD E XPENDITURE OF RS.5,52,673/-; COMING TO RS.1,10,534/-. THE ASSESS ING OFFICER AS WELL AS CIT(A) IS OF THE VIEW THAT NO COGENT EVIDENCE HAD B EEN FILED IN COURSE OF ITA NO. 1780/AHD/2013 SMT SHASHIKALA R PATHAK VS. ITO A.Y. 2009-10 - 4 - LOWER APPELLATE PROCEEDINGS TO JUSTIFY THE IMPUGNED EXPENDITURE. THEY ARE FAIR ENOUGH IN NOT DISPUTING THE FACT THAT THE ASSESSEES TRANSPORTATION BUSINESS COMPRISES OF MANY CASH PAYMENTS/CASH VOUCH ERS TO BE PAID IN THE NATURE OF DRIVERS BATTA, DIESEL, SPARES AND OT HER MISCELLANEOUS EXPENSES WHEREIN IT MAY NOT BE NECESSARY TO PROVE T HE SAME BY WAY OF COGENT EVIDENCE OF THE ITEM. WE, HOWEVER, ARE VERY WELL CONSCIOUS OF THE FACT THAT THE ASSESSEE HAS NOT FILED ALL OF HER EVI DENCES IN EITHER OF THE LOWER APPELLATE PROCEEDINGS SUBSTANTIATING HER CLAI M. WE DEEM IT APPROPRIATE, IN VIEW OF THIS PECULIAR SITUATION, TH AT A LUMPSUM DISALLOWANCE OF RS.50,000/- IN FACTS OF THE INSTANC E CASE WOULD BE JUST AND PROPER. WE MAKE IT CLEAR THAT OUR INSTANT ESTIMATI ON WOULD NOT BE TREATED AS A PRECEDENT IN ANY PRECEDING OR SUCCEEDING ASSES SMENT YEAR AGAINST OR IN FAVOUR OF THE ASSESSEE. THIS LATTER SUBSTANTIVE GROUND IS, THEREFORE, PARTLY ACCEPTED. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND AUGUST, 2017 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/08/2017 *BT !' #' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. % & / CONCERNED CIT 4. & ( ) / THE CIT(A) 5. ) % , % , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD