CAROL INFO SERVICES LTD, MUMBAI V. ADDL CIT 10(3), MUMBAI

ITA 2145/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3217 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RONAK G DOSHI; ABHITAN MEHTA
• Keywords: Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.2145/M/2014 ASSESSMENT YEAR: 2008-09 M/S. CAROL INFO SERVICES LTD., WOCKHARDT TOWERS, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI 400 051 PAN: AAACW1299E VS. ADDITIONAL COMMISSIONER OF INCOME TAX 10(3), AAYAKAR BHAVAN, M.K. ROAD, NEW MARINE LINES, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RONAK G. DOSHI, A.R. & SHRI ABHITAN MEHTA, A.R. REVENUE BY : DR. S. PANDIAN, D.R. DATE OF HEARING : 31.03.2016 DATE OF PRONOUNCEMENT : 31.03.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 13.01.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2008-09. 2. THE ASSESSEE HAS TAKEN TWO EFFECTIVE GROUNDS OF APPEAL. VIDE FIRST GROUND OF APPEAL, THE ASSESSEE HAS AGITATED THE FIN DING OF THE LOWER AUTHORITIES THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURC E ON THE AMOUNT PAID TOWARDS STAFF SUPPORT SERVICES TO THE GROUP COMPANY. 3. THE LD. A.R. HAS STATED AT BAR THAT AS PER THE I NSTRUCTIONS OF HIS CLIENT, HE DOES NOT WANT TO PRESS THIS GROUND. THIS GROUND IS ACCORDINGLY DISMISSED AS NOT PRESSED. ITA NO.2145/M/2014 M/S. CAROL INFO SERVICES LTD. 2 4. THE ASSESSEE IN THE SECOND/ALTERNATE GROUND HAS TAKEN THE PLEA THAT THOUGH THE ASSESSEE HAD NOT DEDUCTED THE TAX AT SOU RCE, HOWEVER, RECIPIENT HAD OFFERED THE INCOME IN ITS COMPUTATION IN THE RETURN OF INCOME AND THEREFORE THE DISALLOWANCE IS NOT ATTRACTED IN THE CASE OF THE AS SESSEE AS PER THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. HE, WHILE RELYING UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS . ANSAL LAND MARK TOWNSHIP (P) LTD. (2015) 61 TAXMAN.COM 45 (DELHI) WHEREIN IT HAS BEEN HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) IS DEC LARATORY AND CURATIVE AND IT HAS A RETROSPECTIVE EFFECT FROM 01.04.05. 5. WE HAVE CONSIDERED THE ABOVE SUBMISSION OF THE L D. A.R. AND HAVE ALSO GONE THROUGH THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. (SUPRA). TH E HONBLE DELHI HIGH COURT, CONSIDERING THE NATURE AND SCOPE OF THE SECO ND PROVISO TO SECTION 40(A)(IA), HAS CATEGORICALLY HELD THAT THE SECOND P ROVISO IS DECLARATORY AND CURATIVE AND HAS RETROSPECTIVE EFFECT. UNDER THESE CIRCUMSTANCES, IF THE PAYEE HAS TAKEN INTO CONSIDERATION THE INCOME RECEIVED FR OM THE ASSESSEE WHILE FILING ITS RETURN OF INCOME, THEN NO DISALLOWANCE WOULD BE ATTRACTED IN THE HANDS OF PAYER I.E. THE ASSESSEE BEFORE US. HOWEVER, THIS F ACT NEEDS VERIFICATION AT THE HANDS OF THE AO. THE LD. A.R., AT THIS STAGE, HAS STATED THAT THE PAYEE I.E. M/S. WOCKHARDT LTD. HAS REDUCED THE AMOUNT RECEIVED FROM THE ASSESSEE ON ACCOUNT OF SUPPORT SERVICES FROM ITS SALARY COST EXPENDITUR E. HE HAS ALSO PRODUCED A COPY OF THE FORM 26A ISSUED BY THE DIRECTOR OF THE COMPANY ALONG WITH CERTIFICATE OF THE CA OF THE M/S. WOCKHARDT LTD. WH EREIN IT HAS BEEN MENTIONED THAT THE AMOUNT OF RS.90 LAKH UPON WHICH TDS WAS NOT DEDUCTED HAD BEEN REDUCED FROM THE SALARY COST. WE ACCORDIN GLY DIRECT THE AO TO VERIFY THAT IF THE AMOUNT RECEIVED FROM THE ASSESSEE HAS B EEN INCLUDED BY THE PAYEE IN THE RECEIPTS AND REDUCED FROM THE DEDUCTABLE EXPEND ITURE AND THUS CONSIDERED WHILE COMPUTING THE INCOME, THEN TO ALLOW THE CLAIM OF THE ASSESSEE ACCORDINGLY. ITA NO.2145/M/2014 M/S. CAROL INFO SERVICES LTD. 3 6. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31.03.2016. SD/- SD/- (RAMIT KOCHAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.03.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.