Shri Parekh Pranjivan Devechand, Bhavnagar V. The ACIT.,Circle-2, Bhavnagar

ITA 2257/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89248 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H V GANDHI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2257/AHD/2011 ( / ASSESSMENT YEAR : 2008-09) M/S.PAREKH PRANJIVAN DEVECHAND NANAVATI BAZAR NANAVATI BAZAR MG ROAD BHAVNAGAR-364 001 / VS. THE ACIT CIRCLE-2 BHAVNAGAR ./ ./ PAN/GIR NO. : AACFP 5849 C ( # / APPELLANT ) .. ( $% # / RESPONDENT ) #& / APPELLANT BY : SHRI H.V. GANDHI, AR $% #'& / RESPONDENT BY : SHRI NIMESH YADAV, SR.DR ()'* / DATE OF HEARING 26/03/2015 +,-.'* / DATE OF PRONOUNCEMENT 10/04/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XX, AHMEDABA D (CIT(A) IN SHORT) DATED 11/02/2011 PERTAINING TO ASSESSMEN T YEAR (AY) 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.2257/AHD /2011 M/S.PAREKH PRANJIVAN DEVCHAND VS. ACIT ASST.YEAR 2008-09 - 2 - 1. THE HONBLE CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE DISALLOWANCE OF RS.3,03,000/- OUT OF TOTAL DISALLOW ANCE OF RS.3,71,500/- MADE BY THE LD.ASSESSING OFFICER U/S. 40(A)(IA) OF THE I.T.ACT, 1961. 2. THE HONBLE CIT(A) HAS ALSO ERRED IN NOT APPRECIATE D THE FACTS THAT THE AMOUNT OF TAX DEDUCTED AT SOURCE HAS BEEN PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S.139(1) AND SO IT WOULD NOT HAVE BEEN DISALLOWED. 3. THE HONBLE CIT(A) HAS ALSO ERRED IN LAW AND ON FAC TS IN NOT FOLLOWING THE DECISION OF THE HONBLE ITAT BENCH B , AHMEDABAD IN THE CASE OF SHRI KANUBHAI RAMJIBHAI MAKWANA, ANA ND, ITA NO.3983/AHD/2008 DATED 03/12/2010 FOR A.Y. 2005-06 THOUGH THE DECISION IS ON IDENTICAL ISSUE AND THE DECISION OF SUPERIOR FORUM. 4. THE HONBLE CIT(A) HAS ALSO ERRED IN LAW AND ON FAC TS IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE AMENDMENT MADE BY THE FINANCE (NO.2) W.E.F. 01-04-2010 WAS THE RETROSPECT IVE AND HELD THAT THE TRIBUNAL COULD NOT HOLD THAT THE AMENDMENT WAS RETROSPECTIVE. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 15/11/2010. THE AO WHILE FRAMING THE ASSESS MENT, NOTICED THAT THE PAYMENTS MADE BEFORE THE END OF THE MONTH OF FE BRUARY-2008, THE TDS HAS BEEN DEDUCTED ON 31 ST MARCH-2008 AND DEPOSITED INTO THE GOVERNMENT ACCOUNT ONLY AFTER THE END OF FY 2007-08 . THE AO OBSERVED THAT AS PER THE PROVISIONS OF SECTION 40(A )(IA) OF THE ACT, DEDUCTION ON ACCOUNT OF THESE PAYMENTS CANNOT BE CL AIMED FOR FY 2007- 08 BUT RATHER CAN BE CLAIMED ONLY IN FY 2008-09. T HEREFORE, THE AO MADE DISALLOWANCE OF THE EXPENSE AND ADDED BACK TO THE TOTAL INCOME OF ITA NO.2257/AHD /2011 M/S.PAREKH PRANJIVAN DEVCHAND VS. ACIT ASST.YEAR 2008-09 - 3 - THE ASSESSEE. THUS, THE AO MADE ADDITION OF RS.3,7 1,500/-. ASSESSEE FEELING AGGRIEVED BY THE ORDER OF THE LD.CIT(A), PR EFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS PARTLY ALLOWED THE APPEAL. WHILE PARTLY ALLOWING THE APPE AL, THE LD.CIT(A) CONFIRMED THE ADDITION OF RS.3,03,300/-. AGGRIEVE D BY THE ORDER OF THE LD.CIT(A), ASSESSEE PREFERRED THE PRESENT APPEAL. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HERE IS NO DISPUTE ON THE FACT THAT THE PAYMENT WAS MADE IN FEBRUARY-2 008, THE TAX WAS DEDUCTED ON 31/03/2008. HOWEVER, THE TAX WAS DEPOS ITED INTO THE GOVERNMENT ACCOUNT BEFORE THE DUE DATE OF FILING, I .E. ON 07/04/2008. HE DREW OUR ATTENTION TO EXHIBIT-B AT PAGE NO.20 OF TH E PAPER-BOOK BEING THE TAXPAYERS COUNTER-FOIL OF THE CHALLAN. THE LD.COUN SEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE GUJ ARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. J.K.CONSTRUCTION CO . REPORTED AT (2014) 361 ITR 181 (GUJ.). HE FURTHER SUBMITTED THAT THE ARBITRARINESS OF THE AUTHORITIES BELOW IS EVIDENT FROM THE FACT THAT THE LD.CIT(A) HAS IGNORED THE RATIO LAID DOWN BY THE TRIBUNAL (ITAT B BENCH AHMEDABAD) IN THE CASE OF SHRI KANUBHAI RAMJIBHAI MAKWANA, ANAND PASS ED IN ITA NO.3983/AHD/2008 FOR AY 2005-06, ORDER DATED 03/12 /2010. ITA NO.2257/AHD /2011 M/S.PAREKH PRANJIVAN DEVCHAND VS. ACIT ASST.YEAR 2008-09 - 4 - 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER OF THE AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E ASSESSEE HAD DEDUCTED THE TAX ON 31/03/2008. THE ASSESSEE HAD ALSO DEPOS ITED THE AMOUNT SO DEDUCTED INTO THE GOVERNMENT ACCOUNT ON 07/04/2008, I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. THE LD .CIT(A) SUSTAINED THE ADDITION ON THE BASIS THAT THE AMENDMENT TO THE PRO VISIONS CAME WITH EFFECT FROM 01/04/2010, HOWEVER, THE COORDINATE BEN CH OF THIS TRIBUNAL IN THIS CASE OF SHRI KANUBHAI RAMJIBHAI MAKWANA IN ITA NO.3983/AHD/2008 VIDE DATED 03/12/2010 HAD RULED TH AT THE EFFECT OF THE AMENDMENT WOULD BE RETROSPECTIVE. THE HONBLE GUJA RAT HIGH COURT IN THE CASE OF CIT VS. J.K.CONSTRUCTION (SUPRA) HAS OB SERVED AS UNDER:- 3. SECTION 40(A)(IA) OF THE ACT AS AMENDED WITH E FFECT FROM 1.4.2005 READ AS UNDER : '(IA) ANY INTEREST, COMMISSION, OR BROKERAGE,(RENT, ROYALTY) FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK(INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BE EN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION(1) OF SECTION 139.' 4.1 FURTHER, THE HONBLE GUJARAT HIGH COURT HELD A S UNDER:- ITA NO.2257/AHD /2011 M/S.PAREKH PRANJIVAN DEVCHAND VS. ACIT ASST.YEAR 2008-09 - 5 - 4. PLAINLY SPEAKING, ASSESSEE HAD TO MAKE DEDUCTI ON BEFORE 31 ST MARCH OF THE YEAR IN QUESTION AND AS LONG AS SUCH A MOUNTS WERE DEPOSITED BEFORE LAST DATE OF FILING OF THE RETURN, REQUIREMENTS OF LAW WOULD BE FULFILLED. IT WAS ON THIS BASIS THAT T RIBUNAL WAS OF THE OPINION THAT THE ASSESSEE COMMITTED NO WRONG AND WA S THEREFORE, ENTITLED TO SEEK DEDUCTION OF RS.32,94,149/- FROM T HE INCOME WHICH AMOUNT THE ASSESSEE HAD DEDUCTED FROM PAYMENTS OF C ONTRACTORS AND HAD ALSO DEPOSITED WITH REVENUE BEFORE THE LAST DATE OF FILING OF THE RETURN. WE DO NOT FIND ANY ILLEGALITY IN ORD ER OF TRIBUNAL. TAX APPEAL IS THEREFORE, DISMISSED. 4.2. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION. MOREOVER , IT IS OBSERVED THAT THE ASSESSEE RELIED UPON THE DECISION OF THE TRIBUNAL R ENDERED IN THE CASE OF SHRI KANUBHAI RAJIBHAI MAKWANA IN ITA NO.3983/AHD/2 008 FOR AY 2005-06, ORDER DATED 03/12/2010, WHEREIN IT HAS BEE N HELD THAT THE AMENDMENT MADE BY THE FINANCE (NO.2) W.E.F. 01/04/2 010 WAS IN RETROSPECTIVE IN NATURE. THE LD.SR.DR COULD NOT PR ODUCE ANY CONTRARY JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OR THE HONBLE SUPREME COURT. THEREFORE, IN THE LIGHT OF THE JUDG EMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. J.K.CONST RUCTION(SUPRA), WE HEREBY DIRECT THE AO TO DELETE THE DISALLOWANCE MAD E U/S.40(A)(IA) OF THE ACT. THUS, GROUNDS RAISED IN THE ASSESSEES APPEA L ARE ALLOWED. ITA NO.2257/AHD /2011 M/S.PAREKH PRANJIVAN DEVCHAND VS. ACIT ASST.YEAR 2008-09 - 6 - 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH DAY OF APRIL, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 10/ 04 /2015 2*..,(.../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XX, AHMEDABAD 5. 7(8$45 , *45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<) / GUARD FILE. ! / BY ORDER, %7$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 30/3/2015 (DICTATION-PAD 8+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..7.4.2015 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.10.4.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.4.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER