Jaybee Hotels & Theatres Pvt Ltd, Hyderabad V. Asst. Commissioner of Income Tax, Central Circle-1, Hyderabad

ITA 185/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4801 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R LAXMAN
• Assessee Lawyers: A V RAGHURAM
• Keywords: Opportunity of being heard
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 175, 176, 177, 178 AND 179/HYD/13 ASSESSMENT YEARS: 2005-06, 2006-07, 2007-08, 2009- 10 & 2010-11 OLIVE VENTURES, ..APPELLANT HYDERABAD. (PAN AAAF09715C) VS. ASSTT. COMMISSIONER OF INCOME-TAX, RESPO NDENT CENTRAL CIRCLE - 1, HYDERABAD. AND ITA NOS. 185, 186, 187, 188, 189, 190 & 191/H/13 ASSESSMENT YEARS: 2004-05, 2005-06, 2006-07, 2008- 09, 2009-10 & 2010-11 JAYBEE HOTELS & THEATRES PVT. LTD., ...APPELLAN T HYDERABAD. (PAN AAACJ5076G) VS. ASSTT. COMMISSIONER OF INCOME-TAX, RESPO NDENT CENTRAL CIRCLE - 1, HYDERABAD. APPELLANT BY : SHRI A.V. RAGHURAM RESPONDENT BY : SHRI R. LAXMAN DATE OF HEARING : 03/09/2013 DATE OF PRONOUNCEMENT : 03/09/ 2013 ORDER PER BENCH: ALL THESE APPEALS FILED BY TWO DIFFERENT ASSESSEES ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT(A)-I, H YDERABAD DATED 28/12/2012 FOR THE ASSESSMENT YEARS 2004-05 T O 2010- 11. SINCE IDENTICAL ISSUE IS INVOLVED IN ALL THESE APPEALS, THEY 2 ITA NOS. 175 TO 179 & 185 TO 191/H/13 OLIVE VENTURES JAYBEE HOTELS & THEATRES PVT. LTD. WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A C OMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN ALL THESE ARE COMMON, WHIC H ARE AS FOLLOWS: 1. THE LEARNED CIT(A) HAS NOT FOLLOWED THE ESTABLIS HED PROCEDURE CALLING FOR THE REMAND REPORT TO CONFIRM THE ADDITION U/S 40(A)(IA). 2. THE LEARNED CIT(A) FAILED TO DISTINGUISH THAT IN DIVIDUAL PAYMENTS WHICH WERE LESS THAN RS. 20,000/- EACH FOR APPLYING THE PROVISIONS OF SECTION 40(A)(IA). 3. THE LEARNED CIT(A) OUGHT TO HAVE APPLIED THE RAT IO OF ITAT, SPECIAL BENCH, VISAKHAPATNAM IN THE CASE OF CARGO HANDLING PVT. WORKERS POOL VS. DCIT (ITA NO. 152 TO 156/VIZAG/2011, DATED 19/07/2011.) 3. THE ONLY GROUND INVOLVED IN ALL THESE APPEALS RE LATES TO THE DISALLOWANCE OF EXPENDITURE U/S 40(A)(IA) OF TH E ACT. THE AO DISALLOWED THE EXPENDITURE INCURRED BY THE ASSESSEE UNDER VARIOUS HEADS, NAMELY, ADVERTISEMENT, CONSULTANCY CHARGES, AUDIT FEES, FINANCIAL CHARGES, SALARIES ETC., INVOK ING THE PROVISIONS OF SECTION 40(A)(IA) ON THE GROUND THAT THE ASSESSEES HAVE NOT DEDUCTED TDS WHILE MAKING PAYMENTS ON ACC OUNT OF THE SAID EXPENSES AGAINST AFORESAID HEADS. 4. ON APPEAL, BEFORE THE CIT(A), THE AR OF THE ASSE SSEE SUBMITTED THAT THE INDIVIDUAL PAYMENTS MADE BY THE ASSESSEE WERE LESS THAN RS. 20,000/- IN EACH CASE. THE CIT(A ) HELD THAT THE CONTENTION OF THE ASSESSEE THAT THE PAYMENTS CO NCERNED WERE LESS THAN RS. 20,000/- EACH, WAS NOT RAISED BE FORE THE AO. HE FURTHER HELD THAT MOST OF SUCH EXPENDITURE WAS I NCURRED IN 3 ITA NOS. 175 TO 179 & 185 TO 191/H/13 OLIVE VENTURES JAYBEE HOTELS & THEATRES PVT. LTD. CASH ON VARIOUS DATES AND, THEREFORE, IN THE ABSENC E OF ANY THIRD PARTY EVIDENCE, THE CONTENTION THAT PAYMENTS OR THE CUMULATIVE PAYMENTS TO A PARTY DID NOT EXCEED RS. 2 0,000/- IS NOT VERIFIABLE. HE, THEREFORE, UPHELD THE ACTION OF THE AO IN INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5. AGGRIEVED THE ASSESSEES ARE IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING BEFORE US, THE LEARNED AR OF THE ASSESSEES CONTENDED THAT THE PLEA OF THE ASSESSEES THAT EACH PAYMENT FOR EXPENDITURE IS LESS THAN RS. 20,000/- AND, THEREFORE, THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE, HENCE, THERE C ANNOT BE ANY DISALLOWANCE, WAS REJECTED BY THE CIT(A) ON THE GRO UND THAT THE ASSESSEES HAVE NOT RAISED THE SAID PLEA BEFORE THE AO. HE, THEREFORE, PLEADED THAT THE ISSUE MAY BE REMITTED B ACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION AND EXAMINAT ION OF THE MATTER. 7. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THRO UGH THE ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY, THE A SSESSEE HAS TAKEN A PLEA THAT EACH PAYMENT OF EXPENDITURE IS LE SS THAN RS. 20,000/-, HOWEVER, THE CIT(A) DID NOT CONSIDER THE SAME ON THE GROUND THAT THE ASSESSEE HAS NOT TAKEN THE PLEA BEF ORE THE AO. AFTER CONSIDERING THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT TO MEET THE ENDS OF JUSTICE, IT IS APPROPRIATE TO C ONSIDER THE PLEA OF THE ASSESSEE AND, THEREFORE, WE REMIT THE E NTIRE ISSUE RAISED IN ALL THESE APPEALS TO THE FILE OF THE AO W ITH A DIRECTION TO DECIDE THE ISSUE DE-NOVO AFTER CARRYING OUT NECE SSARY 4 ITA NOS. 175 TO 179 & 185 TO 191/H/13 OLIVE VENTURES JAYBEE HOTELS & THEATRES PVT. LTD. ENQUIRY AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE M ATTER. 9. IN THE RESULT APPEALS IN ITA NOS. 175 TO 179/H/1 3 IN CASE OF OLIVE VENTURES AND IN ITA NOS. 185 TO 191/H/13 I N CASE OF JAYBEE HOTELS & THEATRES PVT. LTD. ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 03/09/2013. SD/- SD/- (SAKTIJIT DEY) (CHANDRA POOJRI) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 3 RD SEPTEMBER, 2013. KV COPY TO:- 1) OLIVE VENTURES & JAYBEE HOTELS & THEATRES PVT. LTD. C/O M/S MAHESH, VIRENDER & SRIRAM, CAS., 6-3- 788/36 & 37A, AMEERPET, HYDERABAD 2) ACIT, CENTRAL CIRCLE 1, HYDERABAD 3) CIT(A)-I, HYDERABAD 4) CIT (CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYD .