The ACIT,(OSD)Circle-9, Ahmedabad V. Shri Tehran Jonoob Jaihind Consortium, Ahmedabad

ITA 2206/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1717 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C S SHARMA
• Assessee Lawyers: D K PARIKH
• Keywords: Condonation of delay

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.2206/AHD/2012 WITH CO NO.56/AHD/2016 [ASSTT.YEAR 2009-10] ACIT(OSD) , CIR.9, AHMEDABAD. VS SHRI TEHRAN JONOOB JAIHIND CONSORTIUM 3 RD FLOOR, VENUS ATLANTIS CORPORATE PARK NR. RELIANCE PETROL PUMP ANANDNAGAR ROAD, VEJALPUR AHMEDABAD PAN : AABAT 3789 K )* / (APPELLANT) +, )* / (RESPONDENT) REVENUE BY : SHRI C.S. SHARMA , SR.DR ASSESSEE BY : SHRI D.K. PARIKH, AR / DATE OF HEARING : 26/04/2016 / DATE OF PRONOUNCEMENT: 02/05/2016 -./ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF THE LD.CIT(A)-XV, AHMEDABAD DATED 10.7.2012 PASSED FOR THE ASST.YEAR 2009-10. ITA NO.2206/AHD/2012 WITH CO 2 2. THOUGH REVENUE HAS TAKEN FIVE GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE, WHEREBY, IT HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANC E OF RS.46,45,956/- AND RS.2,09,760/- WHICH WAS ADDED BY THE AO WITH TH E AID OF SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TDS OUT OF INTEREST EXPENDITURE AS WELL AS BROKERAGE EXPENSES PAID BY T HE ASSESSEE. 3. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT THE LD.CIT(A) HAS DELETED THE DISALLOWANCE BY FOLLOWING THE ORDER OF THE ITAT SPECIAL BENCH DECISION IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ACIT, 146 TTJ 1 (VIZAG) . THIS DECISION DID NOT MEET THE APPROVAL OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. SIKANDARKHAN N TUNVAR IN TAX APPEAL NO.905 OF 2012 AND OTHERS. THE HONBLE HIGH COURT HAS FRAMED THE FOLLOWING QUESTIO NS OF LAW: 1. WHETHER DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 COULD BE MADE ONLY IN RESPECT OF SUCH AMO UNTS WHICH ARE PAYABLE AS ON 31ST MARCH OF THE YEAR UNDER CONSIDER ATION? 2. WHETHER DECISION OF SPECIAL BENCH OF THE TRIBUNA L IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (SUPRA) LAYS DOWN CORRECT LAW?' THE HONBLE HIGH COURT HAS ANSWERED BOTH THESE QUE STIONS IN FAVOUR OF THE REVENUE. THE OBSERVATION OF THE HONBLE HIGH C OURT CONTAINED IN PARA NO.39 AND 40 OF THE JUDGMENT READS AS UNDER: 39. WE ANSWER THE QUESTIONS AS UNDER:- QUESTION (1) IN THE NEGATIVE I.E. IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEES. QUESTION (2) ALSO IN THE NEG ATIVE I.E. IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEES. ITA NO.2206/AHD/2012 WITH CO 3 40. ALL TAX APPEALS ARE ALLOWED. DECISIONS OF THE T RIBUNAL UNDER CHALLENGE ARE REVERSED. IN THE EARLIER PORTION OF T HE JUDGMENT, WE HAD RECORDED THAT THE TRIBUNAL IN ALL CASES HAD PROCEED ED ONLY ON THIS SHORT BASIS WITHOUT ADDRESSING OTHER ISSUES. WE, THEREFOR E, PLACE ALL THESE MATTERS BACK BEFORE THE TRIBUNAL FOR FRESH CONSIDER ATION OF OTHER ISSUES, IF ANY, REGARDING DISALLOWANCE UNDER SECTIO N 40(A)(IA) OF THE ACT. ALL APPEALS ARE DISPOSED OF ACCORDINGLY. THUS, THE HONBLE HIGH COURT HAS OVERRULED THE OR DER OF THE SPECIAL BENCH IN THE CASE OF M/S. MERILYN SHIPPING & TRANSP ORTS VS. ACIT (SUPRA). ACCORDINGLY, THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE ORDER OF THE LD.CIT(A) DESERVES TO BE SET ASIDE. HOWEVER, HE FURTHER CONTENDED THAT THE HONBLE GUJARAT HIGH COURT HAS ALSO REMITT ED THE ISSUE TO THE TRIBUNAL FOR DECIDING THE ALTERNATIVE CONTENTIONS. IN THE PRESENT CASE ALSO, THE SECTION 40(A)(IA) HAS BEEN AMENDED BY INT RODUCTION OF PROVISO . SUCH PROVISO HAVE BEEN HELD AS APPLICABLE WITH RETROSPECTIVE EF FECT BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. REPORTED IN (2015) 61 TAXMAN N.COM 45(DELHI HIGH COURT). HE CONTENDED THAT IT IS TO BE ASCERTA INED THAT RECIPIENTS HAVE INCLUDED THESE AMOUNTS IN THEIR TAXABLE INCOME OR NOT. IF THEY HAVE INCLUDED, THEN, NO DISALLOWANCE UNDER SECTION 40(A) (IA) IS TO BE MADE. 4. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ER OF THE AO. 5. ON DUE CONSIDERATIONS OF THE FACTS AND CIRCUMSTA NCES, WE FIND THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ELECTRO NICALLY ON 29.9.2009 DECLARING TOTAL INCOME OF RS.5,50,04,201/-. ON SCR UTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS DEBITED A SUM OF RS.46,45,956/- AS INTEREST ON MOBILIZATION OF ADVAN CE TO GAIL. HE CALLED FOR EXPLANATION OF THE ASSESSEE. IN RESPONS E TO THE QUERY OF THE ITA NO.2206/AHD/2012 WITH CO 4 AO, IT WAS CONTENDED BY THE ASSESSEE THAT AS PER TH E CONTRACT AGREEMENT WITH GAIL (INDIA), THE CONTRACTOR HAS TO MAKE ADVAN CE PAYMENT TO THE ASSESSEE, AND ACCORDINGLY, THE ASSESSEE HAS TO PAY INTEREST TO THEM. THE FUNDS ARE USED FOR THE PURPOSE OF PROJECT FOR PROCU RING THE MATERIALS AND MAKE THE ADVANCE PAYMENT TO SUB-CONTRACTORS FOR GET TING THE WORK DONE. THE LD.AO WAS OF THE OPINION THAT AS PER SECTION 19 4A OF THE INCOME TAX ACT, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE OF SUCH INTERST PAYMENT AND DEPOSIT THE SAME INTO THE GOVERNMENT AC COUNT. SINCE THE ASSESSEE FAILED TO DEDUCT TDS, THEREFORE, IT IS NOT ENTITLED FOR DEDUCTION OF INTEREST EXPENDITURE UNDER SECTION 40(A)(IA) OF THE ACT. SIMILARLY, A SUM OF RS.2,09,760/- WAS DEBITED BY THE ASSESSEE UN DER THE HEAD BROKERAGE AND COMMISSION EXPENSES. IT FAILED TO DEDUCT TDS. THE AO HAS DISALLOWED BOTH THESE AMOUNTS. CONSIDERING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANS AL LAND MARK TOWNSHIP P.LTD. (SUPRA) AS WELL AS THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIKANDARKHAN N TUNVAR (SUPRA), WE ARE OF THE VIEW THAT THE LD.CIT(A) WAS REQUIRED TO CONS IDER THE ISSUE ON ALTERNATIVE SUBMISSIONS ALSO. THE LD.CIT(A) HAS SI MPLY DECIDED THE ISSUE ON THE STRENGTH OF THE ITAT DECISION. THEREFORE, THE ORDER OF THE LD.CIT(A) IS NOT SUSTAINABLE. THE ISSUE IS REQUIRED TO BE RESTO RED TO THE FILE OF THE LD.CIT(A). BUT THAT WOULD LEAD TO MULTIPLICITY OF LITIGATIONS. THE LD.CIT(A) SHALL HAVE TO CALL FOR A REMAND REPORT FROM THE AO IN ORDER TO VERIFY THE FACTS. THEREFORE, IN ORDER TO AVOID MULTIPLICITY OF PROCEE DINGS AT DIFFERENT LEVEL, WE DEEM IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FI LE OF THE AO FOR RE- ADJUDICATION. ITA NO.2206/AHD/2012 WITH CO 5 6. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR I NJURE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/ EXPLANATION OF THE ASSESSEE. THE ASSESSEE WILL BE AT LIBERTY TO RAISE ANY DEFENCE AND SUBMIT ANY EVIDENCE OR EXPLANATION IN SUPPORT OF ITS CLAIM. I N VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSE. 7. WE FIND THAT THE CROSS OBJECTION BEARING NO.56/A HD/2016 FILED BY THE ASSESSEE IS TIME BARRED BY 1239 DAYS. CO IS IN SUP PORT OF CIT(A)S ORDER. NO APPLICATION FOR CONDONATION OF DELAY IS BEING FILED . THEREFORE, THE CO IS NOT MAINTAINABLE, HENCE, REJECTED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 ND MAY, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER