The ACIT, Navsari Circle, Navsari V. Smt. Diptiben Sanjaykumar Naik, Navsari

ITA 1996/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0708 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TUSHAR HEMANIAR
• Keywords: Retrospective amendment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI R. P. TOLANI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 1996/AHD/2013 (ASSESSMENT YEAR: 2007-08) ASSTT. COMMISSIONER OF INCOME-TAX, NAVSARI CIRCLE, NAVSARI V/S SMT. DIPTIBEN SANJAYKUMAR NAIK PROP. OF SANJAY ENTERPRISE 408, SUNDERNAGAR, JAMALPORE, NAVSARI (APPELLANT) (RESPONDENT) PAN: ABWPN0887F APPELLANT BY : SHRI SANJAY KUMAR, SR. D.R . RESPONDENT BY : SHRI TUSHAR HEMANI,A.R. ( )/ ORDER DATE OF HEARING : 30 -08-201 6 DATE OF PRONOUNCEMENT : 05-09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A), VALSAD DATED 31.05.2013 PERTAINING TO A.Y. 2007-08. ITA NO. 1996 /AHD-2013 . A.Y. 2007-08 2 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD.CI T(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 93,43,893/- MADE U /S. 40(A)(IA) OF THE ACT. 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE ACTIVI TY OF CONSTRUCTION WORK UNDER THE PROPRIETARY CONCERN IN THE NAME AND STYLE OF SANJAY ENTERPRISE. THE RETURN FOR THE YEAR WAS FILED ON 31 .10.2007 DECLARING TOTAL INCOME AT RS. 11,47,110/-. THE ORIGINAL ASSES SMENT WAS MADE U/S. 143(3) OF THE ACT VIDE ORDER DATED 25.10.2009. 4. LATER ON, IT CAME TO THE NOTICE OF THE A.O. THAT TH E ASSESSEE, THOUGH, DEDUCTED TAX AT SOURCE ON ACCOUNT OF LABOUR AND REN T PAYMENTS BUT HAS NOT DEPOSITED WITHIN THE DUE DATE. THE A.O. OBS ERVED THAT THE ASSESSEE HAD DEDUCTED TAX AT SOURCE ON 15.06.2007 A ND DEPOSITED THE SAME ON 18.06.2007. THE A.O. WAS OF THE OPINION THA T THIS ACT OF THE ASSESSEE IS SQUARELY HIT BY THE PROVISIONS OF SECTI ON 40(A)(IA) OF THE ACT AND ACCORDINGLY DISALLOWANCE OF RS. 93,42,892/- WAS MADE. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND STRONGLY CONTENDED THAT THE PROVISIONS OF SECTION 40(A)(IA) AS AMENDED BY THE FINANCE ACT, 2010 WITH EFFECT FROM 01.04.2010 IS RE MEDIAL IN NATURE, DESIGNED TO ELIMINATE UNINTENDED CONSEQUENCES WHICH MAY CAUSE UNDUE HARDSHIP TO THE TAXPAYERS, THEREFORE, IT HAS TO BE TREATED AS HAVING RETROSPECTIVE EFFECT WITH EFFECT FROM 01.04. 2005. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND AFTER DRAWING SUPPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF ALLIED MOTORS PVT. LTD. 224 ITR 677 AND ALOM EXTRUSIONS LT D. 319 ITR 306, THE LD. CIT(A) DELETED THE ADDITION OF RS. 93,42,89 2/-. ITA NO. 1996 /AHD-2013 . A.Y. 2007-08 3 6. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 7. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSE E STATED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT OF GUJARAT IN THE CASE OF B.M.S. PROJECTS P. LTD. IN T AX APPEAL NO. 774 OF 2013. THE LD. D.R. FAIRLY CONCEDED TO THIS. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. IN THE LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA). THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS DEDUCT ED TAX AT SOURCE AND HAS DEPOSITED THE SAME BEFORE THE DATE OF FILIN G OF THE RETURN. THE QUESTION THEREFORE BEFORE US IS WHETHER THE PROVISO ADDED TO SECTION 40(A)(IA) HAS A RETROSPECTIVE EFFECT OR NOT. THIS Q UESTION HAS BEEN ANSWERED BY THE HONBLE JURISDICTIONAL HIGH COURT ( SUPRA) WHERE IT WAS SEIZED WITH THE FOLLOWING QUESTION AND ANSWER ACCOR DINGLY:- Q. (B) WHETHER THE HON'BLE INCOME-TAX APPELLATE TRI BUNAL IS RIGHT IN DELETING THE ADDITION MADE UNDER SECTION 40(A)(IA) OF THE INCOME -TAX ACT ON ACCOUNT OF PAYMENT OF TRANSPORTATION CHARGES OF RS. 11,36,949 AS THE PROV ISIONS IN THE FINANCE BILL, 2010, CLEARLY STATES THAT THE AMENDMENT BY THE FINANCE AC T, 2010, IS WITH EFFECT FROM APRIL 1, 2010, IS PROPOSED TO TAKE EFFECT FROM APRIL 1, 2010 , AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 2010-11 AND SUBSEQU ENT YEARS ?' ANS. THE SECOND QUESTION PERTAINS TO THE ADDITION M ADE UNDER SECTION-40(A)(IA) OF THE ACT BY THE ASSESSEE TO THE SUB-CONTRACTORS FOR THE PERIOD FROM APRIL, 2004, TO FEBRUARY, 2005, ON WHICH TDS HAS BEEN PAID ON MAY 2 4, 2005. THIS ISSUE HAS ALREADY BEEN ADDRESSED BY THIS COURT IN THE CASE OF CIT V. GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD. REPORTED IN [2013| 35 TAXMANN. COM 638 (CUJ) ; |2014| 361 ITR 192 (GUJ), AND IN TAX APPEAL NO. 412 OF 2013 AND ALLIED APPEA LS (C7T V. OMPRAKASH R. CHAUDHARY) WHEREIN, IT IS HELD THAT TH E AMENDMENT IN SECTION 40(A)(IA) OF THE INCOME-TAX ACT BY THE FINANCE ACT OF 2010 HAS RETROSPECTIVE EFFECT. ITA NO. 1996 /AHD-2013 . A.Y. 2007-08 4 REFERENCE ALSO NEEDS TO BE MADE TO A DECISION OF TH IS COURT IN TAX APPEAL NO. 706 OF 2010 DECIDED ON JULY 18, 2011 (CIT V. J.K. CONST RUCTION CO. [2014] 361 1TR 181 (GUJ)). SINCE THE ISSUE IS ALREADY ANSWERED, THE PRESENT T AX APPEAL REQUIRES NO FURTHER CONSIDERATION 9. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), WE DECLINE TO INTERFERE WITH THE FIN DINGS OF THE LD. CIT(A). APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 05 - 09- 20 16. SD/- SD/- (R.P. TOLANI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD