ACIT, New Delhi V. M/s. Moudlar Construction, New Delhi

ITA 2049/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66036 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 21-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Retrospective amendment
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO. 2049/DEL/2012 ASSESSMENT YEAR: 2007-08 ACIT, CIRCLE 38(1), NEW DELHI. VS. MOUDLAR CONSTRUCTION, 9-B, MATHURA ROAD, JUNGPURA, NEW DELHI. PAN NO. AAMFM2486J (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SATPAL SINGH, SR. DR RESPONDENT BY: SH. BHARAT BERIWAL, ADV. O R D E R PER S.V. MEHROTRA, A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT(A) DATED 29/02/2012 FOR A.Y. 2007-08. 2. THE ASSESSEE FIRM, IN THE RELEVANT ASSESSMENT YE AR, WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. IT HAD FILED I TS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 9,68,122/-. 3. THE ASSESSING OFFICER NOTICED FROM THE TAX AUDIT REPORT THAT THE ASSESSEE HAD NOT DEDUCTED THE NECESSARY TAXES ON TH E PAYMENT OF RS. ITA NO. 2049/D/2012 2 44,53,905/-. HE, THEREFORE, REQUIRED THE ASSESSEE T O SHOW CAUSE WHY ITS CLAIM NOT DISALLOWED U/S 40(A). THE ASSESEE EXPLAI NED THAT DURING THE YEAR UNDER CONSIDERATION, IT HAD ENGAGED ITS SUPPLIER FO R SUPPLY AND FIXING OF SHUTTERING MATERIAL AND, THEREFORE, TDS WAS NOT DED UCTED. THE ASSESSEE ALSO POINTED OUT THAT IT HAD DEDUCTED THE TAXES AND DEPOSITED IN FAVOUR OF CENTRAL GOVERNMENT ACCOUNT FOR WHICH PROOF OF PAYME NT OF RS. 59,288/- WAS ALSO PRODUCED. THE AO, HOWEVER, DISALLOWED EXPENDIT URE AMOUNTING TO RS. 43,94,617/-, OBSERVING AS UNDER: - IN ABSENCE OF THE PROOF OF THE PAYMENT AND SATISFACTORY REPLY, WE HAVE NO OPTIONS LEFT OTHER T HAN TO DISALLOW THE EXPENDITURE AMOUNTING TO RS. 43,94,617/- (44,53,905 59,288) ON ACCOUNT OF NON- DEDUCTION OF TDS. 4. THE ASSESSING OFFICER ALSO DISALLOWED RS. 5,28,7 79/- OBSERVING THAT ASSESSEE FAILED TO DEDUCT THE TAXES ON PAYMENT OF R S. 4,74,662/- AND ON RS. 54,117/- TAX WAS LATE DEDUCTED. ACCORDINGLY, HE MA DE A DISALLOWANCE US/ 40(A)(IA) OF RS. 5,28,779/-. 5. LD. CIT(A) DELETED THE ADDITION OF RS. 44,53,905 /- AND RS. 5,28,779/- MADE BY THE AO AND RESTRICTED THE DISALLOWANCE U/S 40(A)(IA) TO RS. 6,39,233/- AS ADMITTED BY THE ASSESSEE. ITA NO. 2049/D/2012 3 6. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A), TH E DEPARTMENT HAS TAKEN FOLLOWING GROUNDS OF APPEAL: - THE LD. CIT(A) GROSSLY ERRED IN DELETING THE ADDITION OF RS. 13,51,536/- MADE BY THE AO U/S 40(A)(IA) ON ACCOUNT OF LATE DEPOSIT OF TDS MADE BY THE ASSESSEE W.R.T. LABOUR CHARGES NOT APPRECIATING THE FACT THAT THE AMENDMENT BROUGHT IN THE INCOME TAX ACT U/S 40(A)(IA) WAS ONLY EFFECTIVE FROM 01.04.2010 AND NOT RETROSPECTIVE IN NATURE. 7. THUS, DEPARTMENT IS AGGRIEVED ONLY WITH THE DELE TION OF ADDITION TO THE EXTENT OF RS. 13,51,536/- ONLY. 8. BRIEF FACTS APROPOS THIS ISSUE ARE THAT THIS AMO UNT COMPRISED IN THE TOTAL SUM OF RS. 44,53,905/-, AS PER FOLLOWING BIFU RCATION: - S.NO. PARTICULARS AMOUNT (RS.) 1. AMOUNT PAID FOR PURCHASE OF SHUTTERING MATERIAL (CONSUMABLES) 23,92,843/- 2. AMOUNT PAID FOR SHUTTERING RENT FOR THE PERIOD 01.06.2006 TO 31.03.2007 7,09,526/- 3. TOTAL (1 + 2) 31,02,369/- 4. AMOUNT PAID TO CONTRACTORS DEBITED IN THE P&L A/C UNDER THE HEAD LABOUR CHARGES AND ON WHICH TDS DEDUCTED AND DEPOSITED U/S 194C. 13,51,536/- GRAND TOTAL (3 + 4) 44,53,905/- 9. IN REGARD TO THE SUM OF RS. 13,51,536/-, THE ASS ESSEES SUBMISSIONS WERE AS UNDER: - 9. IT IS HUMBLY SUBMITTED THAT IN RESPECT OF THE SUM OF RS. 13,51,536/- PAID TO THE CONTRACTORS, THE ITA NO. 2049/D/2012 4 APPELLANT HAD DULY DEDUCTED TAX AT SOURCE AMOUNTING TO RS. 13789/- AT THE PRESCRIBED RATE, AN D DEPOSITED THE SAME TO THE ACCOUNT OF THE CENTRAL GOVERNMENT ON19/04/2007 AFTER A DELAY OF ONLY 12 DAYS FROM THE PRESCRIBED DATE I.E., 07/04/2007 BUT MUCH BEFORE 31/10/2007 I.E., THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. 10. IT IS MOSTLY RESPECTFULLY SUBMITTED THAT SECTI ON 40(A)(IA) AT THE ACT WAS AMENDED BY FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.2005 TO EXTEND THE PERIOD OF PAYMENT OF TAX FROM TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 TO DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139. 11. IT IS, THEREFORE, SUBMITTED THAT EVEN IF THE S AID SUM OF RS. 1351536/- WAS QUALIFIED IN THE AUDIT REPORT, THE SAME WAS ALLOWABLE AFTER THE AMENDMENT OF SECTION 40(A)(IA) OF THE ACT IN 2008 W.R.E.F. 01.04.2005, WHICH THE AO FAILED TO APPRECIATE AND ALLOW. FOR READY REFERENCE AND VERIFICATION BY YOU R HONOUR, WE ARE ENCLOSING A LIST OF ALL THE PARTIES IN RESPECT OF WHOM TDS WAS DEPOSITED LATE ALONG WITH A PHOTOCOPY OF THE PAYMENT CHALLAN AND THE DETAILS OF DEDUCTEES FILED WITH THE RETURN OF TDS FOR THE QUARTER ENDING 31.03.2007. 10. IN THE REMAND REPORT, THE AO DID NOT GIVE ANY A DVERSE COMMENT AND OBSERVED THAT THE MATTER NEEDS TO BE DECIDED ON MER ITS. ITA NO. 2049/D/2012 5 11. LD. CIT(A) DELETED THE DISALLOWANCE AS IT WAS N OT DISPUTED THAT THE TAX DEDUCTED HAD BEEN DEPOSITED BEFORE THE DUE DATE SPE CIFIED IN SUB-SECTION (1) OF SECTION 139. THEREFORE, IN VIEW OF THE AMEN DMENT OF SECTION 40(A)(IA) OF THE ACT IN 2008 W.E.F. 1/04/2005, THE ASSESSEES CLAIM WAS ALLOWABLE. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 12. IN THE RESULT, THE DEPARTMENTS APPEAL IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2012 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 14.12.2012 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR