M/s. NQ Solutions India Pvt. Ltd., Bhubaneswar V. ITO, Ward-1(2), Bhubaneswar

ITA 188/CTK/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5384 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: C PARIDA
• Keywords: Additional evidence

Judgement Text

1 ITA NO.188/CTK/2017 ASSESSMENT YEAR : 2013 - 2014 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.188/CTK/2017 ASSESSMENT YEAR : 2013 - 2014 M/S. NQ SOLUTIONS INDIA PT LTD., PLOT NO.146, SECTOR - A, ZONE - A, MANCHESWAR INDUSTRIAL ESTATE, BHUBANESWAR. VS. ITO, WARD 1(2), BHUBANESWAR PAN/GIR NO. AADCN 1814 D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI C.PARIDA, AR REVE NUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 04 /10 / 2017 DATE OF PRONOUNCEMENT : 04 /10 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2, BHUBANESWAR DATED 31.1.2017 FOR THE ASSESSMENT YEAR 2013 - 14. 2. GROUND NOS.1 & 4 OF APPEAL ARE GENERAL IN NATURE AND HENCE, REQUIRES NO SEPARATE ADJUDICATION BY ME. 3. IN GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,45,000/ - U/S.40(A)(IA) OF THE AC T FOR NON - DEDUCTION OF TDS BY THE ASSESSEE U/S.194 - I OF THE ACT. 2 ITA NO.188/CTK/2017 ASSESSMENT YEAR : 2013 - 2014 4. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MA DE PAYMENT OF RS.3,45,000/ - ON ACCOUNT OF RENT WITHOUT DEDUCTING THE TAX AT SOURCE. THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, HE DISALLOWED RS.3,45,000/ - . 5. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT AS NO OUTST ANDING AMOUNT PAYABLE AT THE END OF THE YEAR, THEREFORE, IN VIEW OF THE DECISION OF VISAKHAPATNAM BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS , 136 ITD 23 (VISKHAPATNAM SB) AND DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VECTOR SHIPPING SERVICES (P) LTD , 357 ITR 642 (ALL),NO DISALLOWANCE U/S.40(A)(IA) WAS WARRANTED. 6. THE CIT(A) FOLLOWING THE DECISION OF HONBLE H.P.HIGH COURT IN THE CASE OF PALAM GAS SERVICE VS CIT, 47 TAXMANN.COM 310(H.P), WHEREIN, IT WAS HELD THAT SECTION 40(A)(IA) WAS APPLICABLE BOTH THE AMOUNT WHICH WAS SHOWN OUTSTANDING AS AT END THE OF THE RELEVANT PREVIOUS YEAR AS WELL AS THE AMOUNT PAID DURING THE PREVIOUS YEAR, DISMISSED THE APPEAL OF T HE ASSESSEE. 7. BEFORE ME, LD A.R. HAS FILED A CERTIFICATE FROM THE CHARTERED ACCOUNTANT TO THE EFFECT THAT THE ASSESSEE M/S. NQ SOLUTIONS INDIA PRIVATE LIMITED HAS PAID RS.3,45,000/ - TO M/S. TRANSOCEANIC TOWARDS RENT U/S.194 - I OF THE ACT, AND THAT THE PAY EE HAS SHOWN THIS AMOUNT OF 3 ITA NO.188/CTK/2017 ASSESSMENT YEAR : 2013 - 2014 RS.3,45,000/ - AS ITS INCOME IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2013 - 14 AND PAID DUE TAX THEREON AND HENCE, NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT WAS WARRANTED IN THE HANDS OF THE ASSESSEE, 8. LD D.R. OPPOSI NG THE FILING OF C.A. CERTIFICATE BEFORE THE APPELLATE TRIBUNAL FOR THE FOR THE FIRST TIME SUBMITTED THAT IT WAS AN ADDITIONAL EVIDENCE AND THE SAME REQUIRES VERIFICATION AT THE ASSESSING OFFICERS END AND HENCE, MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THE SAME AND THEN ADJUDICATION OF THE ISSUE AFRESH. 9. IN THE REJOINDER, LD A.R. AGREED TO THE ABOVE SUBMISSION OF LD D.R. 10. IN VIEW OF ABOVE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND REMAND THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION OF THE ISSUE AFRESH AS PER LAW TAKING INTO CONSIDERATION THE C.A. CERTIFICATE FILED BY THE ASSESSEE TO EVIDENCE THAT THE PAYEE OF THE AMOUNT HAS SHOWN RS.3,45,000/ - AS ITS INCOME IN THE RETURN OF INCOME FILED AND PAID TAX FOR THE SAME AND, THEREFORE, NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT WAS WARRANTED. NEEDLESS TO MENTION HERE THAT THE ASSESSING OFFICER WILL ALLOW REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,000/ - ON ACCOUNT OF 4 ITA NO.188/CTK/2017 ASSESSMENT YEAR : 2013 - 2014 TRAVELING & CONVEYANCE EXPENSES MADE BY THE ASSESSING OFFICER ON ADHOC BA SIS. 12. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION ON ACCOUNT OF TRAVELLING AN D CONVEYANCE EXPENSES OF RS.36,932/ - AND THAT THE EXPENSES ARE SUPPORTED BY SELF MADE VOUCHERS. THEREFORE, HE MADE AN ESTIMATED DISALLOWANCE OF RS.5000/ - OUT OF EXPENSES CLAIMED BY THE ASSESSEE. 13. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESS ING OFFICER. 14. BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT ADHOC DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS NOT SUSTAINABLE AND HENCE, SAME SHOULD BE DELETED. 15. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 16. I FIND THAT JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF BALBIR SINGH VS ACIT (ITAT JAIPUR) IN ITA NO.121/ 13 ORDER DATED 21.1 0 .2015 HAS HELD THAT IT IS NOT OPEN FOR THE ASSESSING OFFICER TO MAKE ADDITION ON ESTIMATION BASIS WITHOUT VERIFYING THAT SAID EXPEN SES ARE GENUINE OR NOT. MERE FACT THAT PAYMENTS WERE MADE IN CASH ON SELF - MADE VOUCHERS, WAS NOT A CONCLUSIVE EVIDENCE TO DISALLOW THE EXPENSES. THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD ANY ADVERSE EVIDENCE THAT EXPENSES ARE NOT 5 ITA NO.188/CTK/2017 ASSESSMENT YEAR : 2013 - 2014 GENUINE. AND HENCE, THE DISALLOWANCE MADE WAS NOT SUSTAINABLE IN LAW. I FIND THAT IN THE INSTANT CASE, THE FACTS ARE SIMILAR TO THE FACTS WHICH WERE BEFORE THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF BALBIR SINGH (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE SAME, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE DISALLOWANCE OF RS.5000/ - MADE OUT OF TRAVELLING AND CONVEYANCE EXPENSES AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 17. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUN CED IN THE OPEN COURT ON 0 /10 /2017. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 04 /10 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT :M/S. NQ SOLUTIONS INDIA PT LTD., PLOT NO.146, SECTOR - A, ZONE - A, MANCHESWAR INDUSTRIAL ESTATE, BHUBANESWAR. 2. THE RESPONDENT. ITO, WARD 1(2), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//