M/s. Mother Mira Industries Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2135/CHNY/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8208 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURAI
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Non-deduction of tax

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !' .$%$&, ( ') BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2135/MDS/2013 & +& / ASSESSMENT YEAR : 2009-10 M/S MOTHER MIRA INDUSTRIES LTD., C/O M/S SUBBARAYA AIYAR PADMANABHAN & RAMAMANI ADVOCATES, NEW NO.75A (OLD NO.105A), DR. RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI - 600 004. PAN : AACCM 2392 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(2), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SH. R. VIJAYARAGHAVAN, ADVOCATE /0-. 1 2 / RESPONDENT BY : SH. DURAI PANDIAN, JCIT 3 1 4( / DATE OF HEARING : 12.09.2016 56+ 1 4( / DATE OF PRONOUNCEMENT : 28.10.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, CHEN NAI, DATED 24.10.2013 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2 I.T.A. NO.2135/MDS/13 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FO R NON-DEDUCTION OF TAX IN RESPECT OF LEASE RENT PAID. 3. SH. R. VIJAYARAGHAVAN, THE LD. COUNSEL FOR THE A SSESSEE, SUBMITTED THAT THE ASSESSEE HAS PAID A SUM OF ` 3,40,68,670/- TOWARDS LEASE RENT TO M/S MOHAN BREWERIES AND DISTI LLERIES LIMITED. IN FACT, THE ASSESSEE TOOK VEHICLES ON LEASE AND PA ID THE LEASE RENTAL. HOWEVER, NO TAX WAS DEDUCTED. REFERRING T O THE CERTIFICATE ISSUED BY M/S MOHAN BREWERIES AND DISTILLERIES LIMI TED ON 03.02.2015, THE LD. COUNSEL SUBMITTED THAT M/S MOHA N BREWERIES AND DISTILLERIES LIMITED HAS ACCOUNTED THE LEASE RE NTAL TO THE EXTENT OF ` 2,40,67,200/-, THEREFORE, IN RESPECT OF LEASE RENT AL ACCOUNTED BY M/S MOHAN BREWERIES AND DISTILLERIES LIMITED CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. THE LD. COUNSEL PLACED HIS RELIANCE ON THE JUDGEMENT OF DELHI HIGH COURT IN CIT V. ANSAL L AND MARK TOWNSHIP (P) LTD. (20150 93 CCH 214 AND SUBMITTED T HAT SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WAS RETROSP ECTIVE IN OPERATION, THEREFORE, WHEN THE RECIPIENT HAS PAID T HE TAXES, THERE CANNOT BE ANY DISALLOWANCE IN THE HANDS OF THE ASSE SSEE. 3 I.T.A. NO.2135/MDS/13 4. WE HAVE HEARD SHRI DURAI PANDIAN, THE LD. DEPART MENTAL REPRESENTATIVE, ALSO. ADMITTEDLY, THE ASSESSEE HAS PAID A SUM OF ` 3,01,08,357/- TOWARDS LEASE RENTAL TO M/S MOHAN BRE WERIES AND DISTILLERIES LIMITED. ADMITTEDLY, NO TAX WAS DEDUC TED. NOW THE ASSESSEE FILED A COPY OF CERTIFICATE SAID TO BE ISS UED BY M/S MOHAN BREWERIES AND DISTILLERIES LIMITED ON THE GROUND TH AT THEY HAVE ACCOUNTED THE LEASE RENTAL TO THE EXTENT OF ` 2,40,67,200/- IN THEIR ACCOUNTS FOR THE PURPOSE OF COMPUTATION OF TAX LIAB ILITY. IN VIEW OF THE JUDGEMENT OF DELHI HIGH COURT IN ANSAL LAND MAR K TOWNSHIP (P) LTD. (SUPRA), THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT WHEN THE RECIPIENT HAS PAID THE TAXES ON THE AMOUNT RECEIVED FROM THE ASSESSEE, THERE MAY NOT BE ANY DISALLOWANCE IN THE HANDS OF THE ASSESSEE. HOWEVER, WHEN THE ASSESSEE CLAIMS THAT A SUM OF ` 3,01,08,357/- WAS PAID TOWARDS LEASE RENTAL, WHAT W AS CERTIFIED BY M/S MOHAN BREWERIES AND DISTILLERIES LIMITED IS ONL Y TO THE EXTENT OF ` 2,40,67,200/-. THEREFORE, IT HAS TO BE EXAMINED WH AT HAPPENED TO THE BALANCE AMOUNT. MOREOVER, IT NEEDS TO BE VERIF IED WHETHER TAX WAS ACTUALLY PAID BY M/S MOHAN BREWERIES AND DISTIL LERIES LIMITED AS CLAIMED BY THEM. SINCE BOTH THE AUTHORITIES BEL OW HAVE NOT EXAMINED THIS ISSUE, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT 4 I.T.A. NO.2135/MDS/13 THE MATTER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE DI SALLOWANCE OF ` 3,01,08,357/- IS REMITTED BACK TO THE FILE OF THE A SSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER A ND FIND OUT WHETHER ANY TAX WAS PAID BY M/S MOHAN BREWERIES AND DISTILLERIES LIMITED IN RESPECT OF THE AMOUNT RECEIVED FROM THE ASSESSEE TOWARDS LEASE RENTAL AND THEREAFTER DECIDE THE ISSU E IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016 AT CHENNAI. SD/- SD/- ( !' .$%$& ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ( / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 28 TH OCTOBER, 2016. KRI. 1 /49: ;:+4 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. 3 <4 () /CIT(A)-II, CHENNAI 4. 3 <4 /CIT-II, CHENNAI 5. := /4 /DR 6. & > /GF.