SUNITA NARESH YADAV, NAVI MUMBAI V. ITO 22(3)(4), VASHI

ITA 1901/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0471 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2014
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Assessee Lawyers: DEEPAK RAJE
• Keywords: Opportunity of being heard
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1901/MUM/2014 ASSESSMENT YEAR: 2009 - 1 0 M/S. SUNITA NARESH YADAV VS. ITO - 22(3)(4 ), 108, CHAWLA COMPLEX, PLOT NO.18 , ROOM NO. 310, 3 RD FLOOR, TOWER NO.6, SECTOR - 15, CBD BELAPUR, . VASHI STATION COMP L EX, VASHI NAVI M UMBAI 400614 PAN NO. ABHPY6755A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEEPAK RAJE , AR REVENUE BY: SHRI K. RAVI KIRAN , DR DATE OF HEARING : 16 /05/2017 DATE OF PRONOUNCEMENT: 31/05/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10. THE APPEAL IS DIRECTED AGAINST THE ORDER COMMISSIONER (APPEALS) 33 , MUMBAI AND ARISES OUT OF ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE GROUNDS OF APP EAL FILED BY THE ASSESSEE READ AS UNDER: - ITA NO. 1901/MUM/2014 2 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS 'LD. CIT(A)J ERRED IN PASSING THE ORDER DATED 02.12.2013 UPHOLDING THE ORDER DATED 23.11.2011 PASSED BY LD. A.O. DISALLOWING AN AMOUNT OF RS.10,82,906/ - UNDER SECTION 40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE DISALLOWANCE OF AMOUNTS UNDER SECTION 40(A)(IA) OF THE ACT IS NOT JUSTIFIED AND SAME MAY BE DELETED. 2. THE IA. CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAS TAX HAS NOT BEEN DEDUCTED ONLY ON THE RE - IMBURSEMENT OF EXPENSES WHICH HAVE BEEN BILLED SEPARATELY TO THE APPELLANT. THEREFORE, THE DISALLOWANCE OF AMOUNTS OF RS.10,82,906/ - UNDER SECTION 40(A)(IA) OF THE ACT IS NOT JUSTIFIED AND SA ME MAY BE DELETED. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAS FURNISHED AN EXPLANATION WITH RESPECT TO THE AMOUNTS PAID AS RE - IMBURSEMENTS DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS. THEREFORE, THE DISALLOWANCE OF A MOUNTS OF RS.10,82,906/ - UNDER SECTION 40(A)(IA) OF THE ACT IS NOT JUSTIFIED AND SAME MAY BE DELETED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE NATURE OF BUSINESS OF THE ASSESSEE IS THAT A CLEARING AND FORWARDING AGENCY. THE ASSESSING OFFICER (A.O.) ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT FOUND THAT THE ASSESSEE HAD NOT MADE TDS ON FREIGHT CHARGES PAID TO SHANTI ENTERPRISES AMOUNTING TO RS.10,82,905/ - . IN RESPONSE TO A QUERY RAISED BY THE A.O., THE ASSESSEE SUBMITTED THAT THE AMOUNT PAID IN THE FORM THE RE - IMBURSEMENT EXPENSES IS NOT LIABLE TO TDS. HOWEVER, THE A.O. WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE. THE A.O. RELIED ON THE CBDT CIRCULAR NO. 715 DATED 08.08.1995 W HEREIN IT IS CLARIFIED VIDE ANSWER TO QUESTION NUMBER 30 THAT SECTION 194C AND 194J REFER TO ANY SUM PAID, THEREFORE, THE IMBURSEMENT CANNOT BE DEDUCTED OUT OF THE BILL AMOUNT FOR THE PURPOSE OF TAX DEDUCTION AT SOURCE. THUS, IF A CONSOLIDATED BILL IS GIVE N BY PROFESSIONAL/CONSULTANT FOR HIS FEES AS WELL AS OUT OF POCKET EXPENDITURE, THEN THE ENTIRE AMOUNT IS SUBJECT TO ITA NO. 1901/MUM/2014 3 TDS. THEREFORE, THE A.O. MADE A DISALLOWANCE OF RS.10,82,906/ - U/S 40(A)(IA) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE A.O. THE ASSESSE E FILED AN APPEAL BEFORE THE LD. CIT(A) . WE FIND THAT THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE AFTER PERUSING THE INVOICES THAT THE ASSESSEE HAD MADE PAYMENTS ON ACCOUNT OF FREIGHT CHARGES / AGENCY CHARGES, HOWEVER, THE SAID INVOICES WERE NOT SUPPORTED BY DOCUMENTARY EVIDENCE. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILES COPY OF INVOICE OF RE - IMBURSEMENT EXPENSES. HE ALSO RELIES ON THE DECISION IN THE CASE OF MAMATA MACHINERY PVT. LTD. VS. DCIT (2013) 37 CCH 0376 AHD TRIB AND DCIT VS. DHAANYA SEEDS PVT. LTD. (2013) 37 CCH 0411 BANG TRIB. 6. ON THE OTHER HAND, THE LD. DR RELIES ON THE ORDER PASSED BY THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN ORDINARY PARLANCE, RE - IMBU RSEMENT MEANS RE - PAYMENT OF WHAT HAS BEEN SPENT. TO RE - IMBURSE IS TO RE - PAY WHAT IS EXPENDED. IN TATA IRON & STEEL CO. LTD. VS. UNION OF INDIA (2001) 2 SCC 41, PARA 16, IT IS EXPLAINED THAT THE WORD RE - IMBURSEMENT MEANS AND IMPLIES RESTORATION OF AN EQUI VALENT FOR SOMETHING PAID OR EXPENDED. WE FIND THAT THE BILLS AND THE RELATED DOCUMENTS WOULD ONLY CLARIFY THE ISSUE IN THE INSTANT APPEAL. NEITHER THE A.O. NOR THE LD. CIT(A) HAS EXAMINED THE SAME. IN VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE IT TO THE FILE OF THE A.O. TO PASS AN ORDER AS PER OUR OBSERVATIONS MADE HERE - IN - ABOVE AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE BEFORE THE A.O. THE CONCERNED BILLS AND RELATED DOCUMENTS. ITA NO. 1901/MUM/2014 4 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31/05/2017 SD/ - SD/ - ( MAHAVIR SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 31/05/2017 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI