M/S SAGARMAL & CO., JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 20/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0567 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Section: 143(3); 234B; 40(a)(ia)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 20/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. M/S. SAGARMAL & CO., A-25, NEW LIGHT COLONY, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 6(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADFS 7629 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29.11.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/11/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 6 TH NOVEMBER, 2017 OF LD. CIT (A)-2, JAIPUR FOR THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN THE ORDER U/S 143(3) OF THE ACT DATED 31.12.2013 ARE BAD IN L AW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VAR IOUS OTHER REASONS AND HENCE, THE SAME KINDLY BE DELETED. 2. RS. 9,87,258/-: THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF RS. 9,87,258/- U/S 40(A)(IA) OF THE ACT. THE DISALLOWAN CE SO MADE AND CONFIRMED BY THE LD. CIT (A), IS TOTALLY CONTRA RY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE , THE ADDITION KINDLY BE DELETED IN FULL. 2 ITA NO. 20/JP/2018 M/S. SAGARMAL & CO., JAIPUR. 3. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B & 234C OF THE ACT. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARG ING. THE INTEREST SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 4. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. THE ONLY ISSUE ARISES IN THIS APPEAL OF THE ASSESSE E IS THE DISALLOWANCE MADE BY THE AO UNDER SECTION 40(A)(IA) OF THE IT ACT OF PAYMENT MADE FOR BRAND PROMOTION WAS CONFIRMED BY T HE LD. CIT (A). 2. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, THE LD. A/R OF THE ASSESSEE HAS POINTED OUT THAT THE RECIPIENT OF THE PAYMENT HAS CONSIDERED THE SAI D AMOUNT IN THE COMPUTATION OF TOTAL INCOME AND ALSO FILED THE RETURN OF INCOME. THUS THE LD. A/R HAS SUBMITTED THAT AS PER THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT, NO DISALLOWANCE CAN BE MADE UNDER SECTION 40(A)(IA) ONCE THE RECIPIENT HAS ALREADY CONSIDERED THE SAID AMOUNT AS PART OF THE INCOME AND FILED THE RETURN O F INCOME. THE LD. A/R HAS POINTED OUT THAT THE ASSESSEE FILED THE CERTIFICATE TO THE EFFECT THAT THE RECIPIENT HAS FILED THE RETURN OF INCOME, HOWEVER, THE LD. CIT (A ) HAS NOT CONSIDERED THE SAME ON TECHNICAL GROUND THAT THE ASSESSEE DID NOT PRODUCE THE SAME BEFORE THE AO. HE HAS RELIED UPON THE VARIOUS DECISIONS ON THIS POINT INC LUDING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF AC IT VS. M/S. VASTUVEDIK COLONIZERS & DEVELOPERS IN ITA NO. 320/JP/2015 DATED 24.10.201 8. 3. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 3 ITA NO. 20/JP/2018 M/S. SAGARMAL & CO., JAIPUR. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT ONCE THE ASSESSEE HAS PRODUCED THE RECORD TO SHOW THAT THE RECIPIENT OF THE AMOUNT HAS INCLUDED THE SAID PAYME NT IN THE COMPUTATION OF TOTAL INCOME AND ALSO FILED THE RETURN OF INCOME, THEN TH E BENEFIT OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS AVAILABLE TO THE AS SESSEE AS THE SAID AMENDMENT WAS HELD TO BE RETROSPECTIVE IN APPLICATION BY VARIOUS DECISIONS. IN A RECENT DECISION IN CASE OF ACIT VS. M/S. VASTUVEDIK COLONIZERS & DEVEL OPERS IN ITA NO. 320/JP/2015 DATED 24.10.2018 (SUPRA), THE COORDINATE BENCH OF T HIS TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 4.1 AS UNDER :- 4.1. THE SECOND DISALLOWANCE WAS MADE BY THE AO IN RESPECT OF INTEREST PAYMENT TO M/S. TATA MOTOR FINANCE. THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THE RECIPIENT HAS CONSIDERED THE SAI D AMOUNT IN ITS TOTAL INCOME AND PAID THE TAX, HOWEVER THIS ISSUE REQUIRE S VERIFICATION OF FACT AS THE ASSESSEE DID NOT FILE THE REQUISITE CERTIFICATE TO THE EXTENT THAT THE RECIPIENT HAS CONSIDERED THIS AMOUNT IN THE TOTAL INCOME AND PAID TAX ON THE SAME. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO FOR VERIFICATION OF THE FACT AND THEN DECIDING THIS ISSUE IN THE LIGHT OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., 234 TAXMAN 825 (DELHI) WHEREIN IT WAS HELD THAT THE AMENDMENT BROUGHT IN SECTION 40(A)(IA) OF THE ACT IS CURATIVE IN NATURE AND, THEREFORE, IT IS APPLICABLE RETROSPECTIVELY. THUS IT IS NOW SETTLED PROPOSITION OF LAW AS PER TH E VARIOUS DECISIONS OF HONBLE HIGH COURTS THAT THE SECOND PROVISO TO SECTION 40(A)(IA) IS CURATIVE IN NATURE AND IS APPLICABLE RETROSPECTIVELY. HAVING HELD THAT THE B ENEFIT OF SECOND PROVISO IS 4 ITA NO. 20/JP/2018 M/S. SAGARMAL & CO., JAIPUR. AVAILABLE TO THE ASSESSEE IF THE RECIPIENT OF AMOUN T HAS ALREADY TAKEN THE SAID AMOUNT IN ITS TOTAL INCOME AND FILED THE RETURN OF INCOME, WE DIRECT THE AO TO VERIFY THIS FACT AND DECIDE THE ISSUE IN THE LIGHT OF THE ABOVE OBSERVATIONS AND DECISIONS. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/11/2018 . SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/11/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. SAGARMAL & CO., JAIPUR. 2. THE RESPONDENT THE ITO WARD 6(4), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 20/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 20/JP/2018 M/S. SAGARMAL & CO., JAIPUR.