ACIT, Ernakulam V. M/s.Time Ads & Publicity, Cochin

ITA 226/COCH/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81432 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 09-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K JOHN

Judgement Text

1 ITA NO. 226/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 226/COCH/2012 (ASSESSMENT YEAR 2008-09) ACIT, CIR.2(2) VS M/S TIME ADS & PUBLICITY ERANAKULAM PARAMMEL HOUSE SHENOY ROAD, KALOOR KOCHIN 682 017 PAN : AACFT2946A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. JOHN RESPONDENT BY : NONE DATE OF HEARING : 08-12-2014 DATE OF PRONOUNCEMENT : 22-12-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, KOCHI DATED 14 TH MAY, 2012 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. NO ONE APPEARED FOR THE ASSESSEE IN SPITE OF POS ITING THE CASE ON 08-12-2014 AT THE REQUEST OF THE LD.COUNSEL FOR THE ASSESSEE. THEREFORE, WE HEARD THE LD.DR AND PROCEEDED TO DISPOSE OF THE APPEAL ON MERIT. 2 ITA NO. 226/COCH/2012 3. THIS APPEAL OF THE ASSESSEE WAS EARLIER DISPOSED OF BY AN ORDER DATED 31-07-2013. HOWEVER, ON APPEAL BY THE ASSESS EE, THE HIGH COURT REMANDED BACK THE ISSUE OF DISALLOWANCE U/S 40(A)(I A) TO THE TRIBUNAL WITH A DIRECTION TO RECONSIDER THE MATTER AFRESH. ACCOR DINGLY, THE APPEAL IS TAKEN UP FOR HEARING. 4. SHRI K.K. JOHN, THE LD.DR SUBMITTED THAT THE ASS ESSEE PAID RENT TO THE EXTENT OF RS.10,75,000, PROFESSIONAL FEES OF RS .40,000 AND TECHNICAL SERVICES FEE OF RS.4,61,44,752. HOWEVER, NO TAX WA S DEDUCTED AS REQUIRED UNDER THE INCOME-TAX ACT. THE LD.DR SUBMI TTED THAT TAX REMAINED TO BE DEDUCTED COMES TO RS.12,15,836. THE LD.DR FU RTHER SUBMITTED THAT THE ASSESSEE ITSELF PAID THE TAX ON 29-06-2013 WHIC H FALLS IN THE SUBSEQUENT ASSESSMENT YEAR. THE LD.DR SUBMITTED TH AT SECOND PROVISO TO SECTION 40(A)(IA) IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE IN VIEW OF THE JUDGMENT OF THE KERALA HIGH COURT IN PRUDENTIAL LOGISTICS AND TRANSPORT IN ITA NO.1 OF 2014 DATED 13-01-2014. RE FERRING TO FIRST PROVISO TO SECTION 40(A)(IA), THE LD.DR SUBMITTED T HAT IF THE ASSESSEE HAS PAID THE TAX IN THE SUBSEQUENT ASSESSMENT YEAR, THE SAME HAS TO BE ALLOWED IN THE YEAR IN WHICH THE TAX WAS PAID BY TH E ASSESSEE. THEREFORE, ACCORDING TO THE LD.DR, EVEN THOUGH THE DISALLOWANC E WAS JUSTIFIED DURING THE YEAR UNDER CONSIDERATION, SINCE THE SAME WAS PA ID ON 29-06-2013 THE SAME NEEDS TO BE ALLOWED IN THE YEAR IN WHICH IT IS PAID. 3 ITA NO. 226/COCH/2012 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE TAX WAS NOT DEDUCTED. THE ASSESSING OFFICER AT PARAGRAPH 4 OF HIS ORDER HAS O BSERVED AS FOLLOWS: 4. AT THE TIME OF EXAMINATION IT IS NOTICED THAT D URING THE YEAR THE ASSESSEE HAS NOT DEDUCTED TAX FROM THE FOL LOWING PAYMENTS, ON WHICH TAX IS LIABLE TO BE DEDUCTED AT SOURCE, MADE ON VARIOUS DATES ARE DETAILED BELOW: AMOUNT TAX DEDUCTIBLE A) GROUND RENT - 10,75,000/- RS. 1,66,088 B) PROFESSIONAL FEES - 40,000/- RS. 4,120 C) TECHNICAL SERVICES 4,61,44,752/- RS.10,45,628 FEES ACCORDING TO ASSESSEE TAX DEDUCTIBLE AT SOURCE FROM THE ABOVE SAID PAYMENTS TOTALING TO RS.12,15,836/- HAS BEEN PAID TO GOVERNMENT ACCOUNT ON 29.06.2009, INCLUDING INTE REST FOR LATE PAYMENT, WHICH AMOUNTS TO RS.12,63,003/-. ON VERIFICATION IT IS NOTICED THAT THE AMOUNT OF TDS W AS NOT ACTUALLY MADE ON THE DATE OF MAKING PAYMENTS. THE TAX DEDUCTION PROCESS WAS NOT DONE FACTUALLY IN TIME IN THE COURSE OF BUSINESS ACTIVITY OF MAKING THE PAYMENTS TO PART IES CONCERNED. THE ASSESSEE CALCULATED THE AMOUNT OF T DS AND PAID TO GOVERNMENT ACCOUNT BELATEDLY ON 29.06.2009. 6. ADMITTEDLY, THE ASSESSEE PAID THE TAX ON 29-06-2 009. THEREFORE, IN VIEW OF FIRST PROVISO TO SECTION 40(A)(IA) THE EXPE NDITURE HAS TO BE ALLOWED IN THE YEAR IN WHICH THE TAX WAS PAID BY THE ASSESS EE. THOUGH SECOND 4 ITA NO. 226/COCH/2012 PROVISO TO SECTION 40(A)(IA) IS NOT APPLICABLE DURI NG THE YEAR UNDER CONSIDERATION, IN VIEW OF FIRST PROVISO TO SECTION 40(A)(IA), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CLAIM OF THE ASS ESSEE HAS TO BE ALLOWED IN THE ASSESSMENT YEAR 2009-10. AS FAR AS THE DISA LLOWANCE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IS CONCERNED, T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS R IGHTLY MADE THE DISALLOWANCE. THE CIT(A) HAS SIMPLY PLACED RELIANC E ON THE DECISION OF THE HYDERABAD BENCH OF THIS TRIBUNAL IN TEJA CONSTR UCTION VS ACIT (2010) 5 TAXMANN.COM 61 (HYD-ITAT). IN VIEW OF THE JUDGME NTS OF THE GUJARAT HIGH COURT IN CIT VS SIKANDARKHAN N TUNVAR ITA NOS 905 OF 2012, 709 & 710 OF 2012, 333 OF 2013, 832 OF 2012, 857 OF 2012, 894 OF 2012, 928 OF 2012, 12 OF 2013, 51 OF 2013, 58 OF 2013 AND 218 OF 2013 JUDGMENT DATED 02-05-2013 AND CALCUTTA HIGH COURT IN CRESCENT EXPO RTS SYNDICATE & ANOTHER IN ITA 20 OF 2013 AND GA 190 OF 2013 JUDGME NT DATED 03-04- 2013, THIS TRIBUNAL IS OF THE CONSIDERED OPINION TH AT THE DECISION OF THE HYDERABAD BENCH OF THIS TRIBUNAL IN TEA CONSTRUCTIO N (SUPRA) REFERRED BY THE CIT(A) AND THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL AT VISAKHAPATNAM IN MERILYN SHIPPING & TRANSPORTS VS A DDL CIT (2012) 70 DTR 81 MAY NOT BE APPLICABLE TO THE FACTS OF THIS C ASE. THEREFORE, THE CIT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF TH E ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THAT OF THE ASSESSING OFFICER IS RESTORED . IT IS MADE CLEAR THAT 5 ITA NO. 226/COCH/2012 SINCE ADMITTEDLY THE TAX WAS PAID ON 29-06-2006 AS OBSERVED BY THE ASSESSING OFFICER HIMSELF, THE SAME HAS TO BE ALLOW ED IN THE ASSESSMENT YEAR 2009-10. 7. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE R EVENUE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DECEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 12 TH DECEMBER, 2014 PK/- COPY TO: 1. ACIT, CIR.2(2), ERNAKULAM 2. M/S TIME ADS & PUBLICITY, PARAMMEL HOUSE, SHENOY ROAD, KALOOR, COCHIN 682 017 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH