La Electroamps, Kolkata V. I.T.O Wd - 40(1),kolkata., Kolkata

ITA 185/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83182 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 28-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMITABHA ROY
• Assessee Lawyers: K M ROY
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER ITA NO. 185 /KOL/ 2013 ASSESSMENT YEAR: 2005 - 06 LA ELECTROAMPS 22 - C, MOTILAL BASAK GARDEN LANE, KOLKATA 700 054 [ PAN NO.AABFL 6851 D ] / V/S . INCOME TAX OFFICER WARD - 40(1), PODDAR COURT, KOLKATA 700 001 / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI K.M. ROY, FCA / BY RESPONDENT SHRI AMITABHA ROY, JCIT, DR / DATE OF HEARING 19 - 11 - 2014 / DATE OF PRONOUNCEMENT 19 - 11 - 2014 / O R D E R PER SHAMIM YAHYA , ACCOUNTANT M EMBER : - THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - XXXII, KOLKATA DATED 27 - 03 - 2009 AND PERTAINS TO ASSESSMENT YEAR 2005 - 06 AND GROUNDS OF APPEAL IS AS UNDER: - 1. THAT THE LD CIT(A) HAS ERRED IN SUSTAINING TH E DISALLOWANCE OF RS.5,77,770/ - DUE TO LATE DEPOSIT OF TAX DEDUCTED AT SOURCE IGNORING THE BINDING JUDGMENT OF JURISDICTIONAL HIGH COURT OF KOLKATA. ITA NO.185/KOL/2013 A.Y. 2005 - 06 LA ELECTROAMPS V. ITO WD - 40(1) KOL PAGE 2 2. THAT THE DISALLOWANCE OF RS.27,383/ - TOWARDS PERSONAL USE OF MOTOR CAR IS PERVERSE. 2. APROPOS DISALLOWANCE OF RS.5,77,770/ - . T HIS ISSUE PERTAINS TO TOTAL DISALLOWANCE OF A SUM OF RS.6,30,997/ - MADE BY THE ASSESSING OFFICER U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). THE AO OBSERVED THAT THE ASSESSEE HAD DEDUCT ED TAX AT SOURCE ON THE PAYMENTS MADE BY IT FOR LABOUR CHARGES, BUT DID NOT DEPOSIT THE SAME IN GOVERNMENT ACCOUNT BY THE DUE DATE, THEREFORE, HE DISALLOWED THE SAME UNDER THE PROVISIONS OF SECTION 40(A)(IA). DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) REPRESENTATIVE OF THE ASSESSEE (THE AR) SUBMITTED THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE ON THE LABOUR CHARGES PAID BUT DEPOSITED THE SAME WITH THE GOVERNMENT ACCOUNT ON 07 - 10 - 2005, I.E. BEFORE THE DUE DATE OF FILING OF THE RETURN ALTHOUGH TH E DUE DATE OF DEPOSITING TDS WAS 31 - 05 - 2005. HE FURTHER SUBMITTED THAT IN LIGHT OF THE AMENDMENT BROUGHT INTO SECTION 40(A)(IA) AND PROVISO THEREOF W.E.F. 01.04.2005 THE TAX DEDUCTED AT SOURCE IS TO BE ALLOWED EVEN THOUGH THE SAME IS DEPOSITED BEYOND THE D UE DATE, PROVIDED THE SAME IS PAID BEFORE THE DUE DATE OF THE FILING OF THE RETURN. 3. CONSIDERING THE ABOVE, LD. CIT(A) HELD AS UNDER: - A PERUSAL OF THE SECTION 40(A)(IA) AS AMENDED, SHOWS THAT THE AMOUNT ON WHICH THE TAX DEDUCTED AT SOURCE EVEN IF DEPO SITED AFTER THE DUE DATE HAS BEEN PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, MAY BE ALLOWED AS EXPENDITURE IF THE TDS WAS DEDUCTIBLE, AND WAS DEDUCTED, DURING THE LAST MONTH OF THE PREVIOUS YEAR (I.E MONTH OF MARCH). ACCORDINGLY, THE AR WAS R EQUIRED TO PROVIDE THE DETAILS OF PAYMENTS IN RESPECT OF WHICH TDS WAS DEDUCTIBLE, AND WAS DEDUCTED, DURING THE MONTH OF MARCH, 20005. AS PER THE DETAILS SUPPLIED BY THE AR AMOUNT OF SUCH PAYMENTS WAS RS.53,227/ - ONLY. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO ALLOW SUCH EXPENDITURE TO THE EXTENT OF RS.53,227/ - AFTER VERIFYING THE CLAIM OF THE AR REGARDING THE DEDUCTIBILITY AND DEDUCTION OF TAX AT SOURCE DURING THE MONTH OF MARCH, 2005. THE BALANCE AMOUNT HAS ITA NO.185/KOL/2013 A.Y. 2005 - 06 LA ELECTROAMPS V. ITO WD - 40(1) KOL PAGE 3 RIGHTLY BEEN DISALLOWED BY THE AO AND TH E DISALLOWANCE TO THAT EXTENT IS CONFIRMED. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH LD. COUNSEL AND PERUSED THE RECORDS. WE FIND THAT AS PER THE AMENDMENT BROUGH T INTO SECTION 40(A)(IA) OF THE ACT AND PROVISO THER EOF WITH EFFECT FROM 01 - 04 - 2005, THE TAX DEDUCTED AT SOURCE IS TO BE ALLOWED EVEN THOUGH THE SAME IS DEPOSITED BEYOND THE DUE DATE, PROVIDED THE SAME IS PAID BEFORE THE DUE DATE OF THE FILING OF RETURN. IN THIS CASE ASSESSEE HAS PAID THE ENTIRE TAX DEDUCTE D AT SOURCE BEFORE DUE DATE OF FILING OF ITS RETURN. THERE IS NO DISPUTE IN THIS REGARD. HENCE, THERE IS NO REASON WHY THE EXPENDITURE CLAIMED OF RS.6,30,997/ - SHOULD NOT BE ALLOWED. HENCE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND HOLD THAT THE ENTIRE AMOU NT INVOLVED IS TO BE ALLOWED. 5. APROPOS SECOND ISSUE OF DISALLOWANCE OF RS.27,383/ - . O N THIS ISSUE ASSESSING OFFICER NOTED THAT ASSESSEE HAS INCURRED VEHICLE RUNNING EXPENSES , INTEREST ON CAR LOAN AND DEPRECIATION ON CAR ALL TOTALING RS.1,36,195/ - . AO AS KED THE ASSESSEE TO PRODUCE LOG BOOK OF THE CAR. IN ABSENCE THEREOF, AO DISALLOWED 20% OF TOTAL EXPENSE I.E RS.27,383/ - TO PREVENT LECKAGE OF REVENUE BY CLAIMING PERSONAL EXPENSE IN PROFIT AND LOSS ACCOUNT. UPON ASSESSEE S APPEAL, LD. CIT(A) AFFIRMED THE A CTION OF AO. 6. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH LD. COUNSEL AND PERUSED THE RECORD. UPON CAREFUL CONSIDERATION, WE NOTE THAT AO HAS MADE THE DISALLOWANCE ON ESTIMATE BASIS @ 20% OF THE TOTAL EXPENDITURE . IN OUR CONSIDERED OPINION, DISALLOWANCE @ 10% IN ITA NO.185/KOL/2013 A.Y. 2005 - 06 LA ELECTROAMPS V. ITO WD - 40(1) KOL PAGE 4 THIS REGARD WOULD SERVE THE INTEREST OF JUSTICE. ACCORDINGLY, AO IS DIRECTED TO MAKE THE DISALLOWANCE @ 10% UPON THE EXPENDITURE INVOLVED. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 / 1 0/2014 SD/ - SD/ - ( MAHAVIR SINGH ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEM BER KOLKATA, *DKP - 19 / 1 0/2014 / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT LA ELECTROAMPS, 22 - C MOTILAL BASAK GARDEN LANE, KOLKATA - 5 2 . / RESPONDENT ITO WARD - 40(1), PODDAR COURT, KOLKATA - 01 3 . / CONCERNED CIT 4 . - / CIT (A) 5 . , / DR, ITAT, KOLKATA 6 . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,