PRADEEP KUMAR , RANCHI V. DCIT CIR-3 , RANCHI

ITA 213/RAN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1954 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY JCITSR
• Section: 194C

Judgement Text

1 ITA NO. 213 /RAN/20 17 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 213 / RAN/20 1 7 ASSESSMENT YEAR : 20 13 - 20 14 PRADEEP KUMAR, PROP.:TRIBHUVAN SONS JEWELLERS, KUMAR TOLI, I RGU ROAD, RANCHI - 834001 V S DCIT, CIRCLE - 3, RANCHI PAN/GIR NO. : A FAPK 0247 C (APPELLANT ) .. RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI A.K.MOHANTY, JCIT(SR. DR) DATE OF HEARING : 19 . 11 .201 8 DATE OF PRONOUNCEMENT : 20 . 11 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH E ASSESSEE HAS FI LED THIS APPEAL AGAINST THE ORDER OF CIT(A) , RANCHI , DATED 07.06.2017 FOR THE ASSESSMENT YEAR 2013 - 2014 ON THE FOLLOWING GROUNDS OF APPEAL : - 1. THE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWING THE ADVERTISEMENT EXPENSES ON ACCOUNT OF NON - DEDUCTION OF TDS AND THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE. 2. THE OTHER AND FURTHER GROUNDS SHALL BE URGED AT THE TIME OF HEARING. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS CALLED FOR HEARING, NEITHER ANY ADJOURNMENT PETITION HAS BEEN FILED BY 2 ITA NO. 213 /RAN/20 17 THE ASSESSEE. HENCE, THE BENCH DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING SUBMISSIO NS OF LD. DR AND THE MATERIAL EVIDENCE AVAILABLE ON RECORD. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF JEWELLERY UNDER THE NAME AND STYLE OF M/S TRIBHUVAN SONS JEWELLERS. A SURVEY OPERATION WAS CONDUCTED IN THIS CASE ON 13 TH FEBRUARY, 2013. AT THE TIME OF SURVEY, THERE WAS A DIFFERENCE OF STOCK OF RS.1,4613,773/ - AND RS.80,00,000/ - WAS DISCLOSED AS UNDISCLOSED INCOME BY THE ASSESSEE. ACCORDINGLY, THE ASSESSEE FILED RETURN OF INCOME ON 29.11.2013 DECLARING TOTAL IN COME OF RS.1,12,76,250/ - . UPON SELECTION OF THE CASE FOR SCRUTINY NOTICES U/S.143(2)/142(1) OF THE ACT WERE ISSUED. ON EXAMINATION OF EVIDENCES FILED BY THE ASSESSEE AND THE INFORMATION GATHERED DURING THE COURSE OF SURVEY OPERATIONS, THE AO MADE VARIOUS A DDITIONS ASSESSING TOTAL INCOME AT RS.2,90,36,690/ - AND PASSED ORDER U/S.143(3) OF THE ACT DATED 04.03.2016. 4 . AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE AR OF THE ASSESSEE APPEARED AND ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE BEFORE THE AO . THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE FINDINGS OF AO, ALLOWED THE CLAIM OF THE ASSESSEE ON ACCOUNT OF INCOME IN STOCK AND DISALLOWANCE OF SECURITY GUARD AN D 3 ITA NO. 213 /RAN/20 17 SWEEPER EXPENSES AND DISMISSED THE GROUND RELATING TO DISALLOWANCE OF ADVERTISEMENT EXPENSES AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 6 . NONE APPEARED ON BEH ALF OF THE ASSESSEE. 7 . CONTRA, LD. DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES AND PRAYED FOR DISMISSAL OF THE APPEAL. 8 . WE HAVE HEARD THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL ON RECORD. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE IS IN R ESPECT OF DISALLOWANCE CONFIRMED BY THE CIT(A) FOR NON - DEDUCTION OF TDS ON ADVERTISEMENT EXPENSES. LD. DR SUBMITTED THAT THE AO HAS CALLED FOR THE INFORMATION IN RESPECT OF DISALLOWANCE U/S.194C OF THE ACT BUT THERE WAS NO COMPLIANCE . ON PERUSAL OF THE ASS ESSMENT ORDER AT PAGE 14 PARA 3.2, WE FIND THAT THE ASSESSEE WAS ASKED TO SUBMIT THE LEDGER ACCOUNT COPY AS WELL AS TDS PARTICULARS IN RESPECT OF ADVERTISEMENT EXPENSES AND APPLICABILITY OF THE PROVISIONS OF SECTION 194C OF THE ACT. SINCE THE ASSESSEE HAS NOT DEDUCTED TDS , THE AO HAS MADE ADDITION AND WAS CONFIRMED BY THE CIT(A). WE FIND T HE SECOND PROVISO TO SECTION 40 SUB - CLAUSE (IA) OF CLAUSE (A) , WHICH WAS INSERTED BY THE FINANCE ACT, 20 12 WITH EFFECT FROM 1ST APRIL, 20 13 WHICH READS AS UNDER: 40(A)(I A). NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTIONS 30 TO 38, THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTED THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' 4 ITA NO. 213 /RAN/20 17 ** ** ** (IA) THIRTY PER CENT OF ANY SUM PAYA BLE TO A RESIDENT, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB - SECTION (1) OF SECTION 139. PROVIDED FURTHER THAT WHERE AN ASS ESSEE FAILED TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISION OF CHAPTER - XVII - B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB - SECTION (1) OF SECTION 201, THEN FOR THE PURPOSE OF THI S SUB - CLAUSE IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON WHICH SUM OF THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. 9 . WE FOUND THE ABOVE PROVISION IS EFFECTIVE RETROSPECTIVELY AS PER THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. [2015] 61 TAXMANN.COM 45 (DELHI) , WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THE PROVISO ADDED U/S.40(A)(IA) OF THE INCOME TAX ACT,1961 WAS RETROSPEC TIVE IN OPERATION AND THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE SAME. CONSIDERING THE OVERALL ASPECTS AND THE FACT THAT THE ASSESSEE HAS NOT DEDUCTED TDS AND ON APPLYING THE PROVISIONS IF THE CONTRACTOR COULD ABLE TO SUBSTANTIATE BEFORE THE AO THAT TH E INCOME FROM ADVERTISEMENT WORKS HAS BEEN OFFERED IN H IS HANDS FOR INCOME TAX PURPOSE AND THE ASSESSEE CANNOT BE TREATED AS ASSESSEE IN DEFAULT. ACCORDINGLY, WE REMIT THIS DISPUTED ISSUE TO THE FILE OF THE AO AND THE ASSESSEE SHALL COOPERATE AND SUBMIT TH E INCOME TAX PARTICULARS OF CONTRACTORS BEFORE THE AO FOR THE EARLY DISPOSAL AND THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO. 213 /RAN/20 17 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 / 11 /201 8 S D/ - SD/ - (N.S.SAINI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 20 / 11 /2018 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORD ER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT PRADEEP KUMAR, PROP.:TRIBHUVAN SONS JEWELLERS, KUMAR TOLI, IRGU ROAD, RANCHI - 834001 2. THE RESPONDENT DCIT, CIRCLE - 3, RANCHI 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.