Mrs. Kiran Suri, New Delhi V. ITO, New Delhi

ITA 2327/DEL/2010

• Counselvise Citation: 232720114 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI G.D. AGARWAL, HONBLE VICE PRESIDENT & SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO. 2327/DEL/2010 ASSESSMENT YEAR: 2007-08 MRS. KIRAN SURI, VS. ITO, K-12, LAJPAT NAGAR, WARD 37(3), PART-III, NEW DELHI. NEW DELHI AOHPS3541R (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAJIV SAXENA, ADV. RESPONDENT BY : MS. Y. KAKKAR, DR ORDER PER SMT. DIVA SINGH, J.M. : BY THIS APPEAL AGAINST THE ORDER DATED 24.02.2010 OF CIT(A)-XXVIII, NEW DELHI, PERTAINING TO 2007-08 ASSESSMENT YEAR TH E ASSESSEE RAISES VARIOUS GROUNDS AGITATING AGAINST THE ORDER OF CIT( A) IN CONFIRMING THE DISALLOWANCE U/S 40(A)(IA) AMOUNTING TO RS. 26,34,0 00/-. 2. WHEREAS, THE LD. AR RELYING UPON THE JUDGMENT O F THE SPL. BENCH IN THE CASE OF ITA NO. 477/ VIZ/ 2008 IN THE CASE OF M ERILYN SHIPING & TRANSPORTS, VISAKHAPATNAM VS. ADDITIONAL COMMISSION ER OF INCOME TAX, RANGE-1, VISAKHAPATNAM (COPY PLACED ON RECORD) STAT ED THAT NO DISALLOWANCE COULD HAVE BEEN MADE AS THE AMOUNTS STOOD PAID AND THE DISPUTE OF PAYABLE AND PAID HAS BEEN SETTLED BY THE SAID O RDER. ITA NO. 2327/D/2010 2 3. THE LD. SR. DR, MS. Y. KAKKAR RELYING UPON THE ORDERS OF THE AUTHORITIES BELOW CONTENDED THAT IN THE FACTS OF TH E PRESENT CASE, SECTION 194J IS APPLICABLE AND THE CASE OF THE DEPARTMENT IS FOR TIFIED BY THE FOLLOWING JUDGMENTS: DEDICATED HEALTH CARE SERVICES TPA (INDIA) PVT. LTD . & OTHERS VS. ACIT & OTHERS, 324 (2010) ITR 345 (MUM.); AND MEDI ASSIST INDIA TP A PVT. LTD. VS. DCIT & OTHERS, 324 ITR 356 (KARN.). 4. LD. AR APART FROM RELYING UPON THE ORDER OF THE SPL. BENCH CONTENDED THAT IN THE FACTS OF THE PRESENT CASE, THE AMOUNT S O SOUGHT TO BE BROUGHT TO TAX IN FACT WAS NEVER THE INCOME OF THE ASSESSEE IN TER MS OF SECTION 4 & 5 OF THE INCOME TAX ACT, AS ASSESSEE RECEIVES INCOME FROM TH E CLIENTS BY RAISING OF THE BILLS IN ITS OWN NAME AND APART FROM THIS THE A SSESSEE ALSO RECEIVES FROM ITS CLIENT FEES MEANT FOR THE SR. ADVOCATES FOR WHI CH PURPOSE UNDER A BILL RAISED FOR THE SPECIFIC PURPOSE AND IT IS THIS FEES SO RECEIVED WHICH IS PAID TO THE SR. ADVOCATES. BILLS ARE RAISED BY THE ASSESSEE FOR THE SR. ADVOCATES WHO ARE PAID ON THE RECEIPT OF THE FEES RECEIVED BY THE ASSESSEE ON BEHALF OF THE SR. ADVOCATES. AS SUCH, AT NO POINT OF TIME IT IS THE INCOME OF THE ASSESSEE. SINCE RELEVANT DOCUMENTS IN SUPPORT OF THE SAID CLA IM WERE NOT AVAILABLE WITH THE LD. AR LOOKING AT THE AMOUNT INVOLVED. HE CONF INED HIS PLEA TO THE SETTLED LEGAL PRINCIPLE I.E. THAT THE AMOUNT STOOD PAID DUR ING THE FINANCIAL YEAR AS SUCH DISALLOWANCE COULD NOT HAVE BEEN MADE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE ASSESSMENT O RDER SHOWS THAT THE ASSESSEE DECLARED THE INCOME OF RS. 9,95,150/- BY W AY OF FILING OF RETURN WHICH WAS PROCESSED U/S 143(1) AND AFTER ISSUANCE O F NOTICE U/S 143(2) IT WAS SUBJECTED TO A SCRUTINY ASSESSMENT. THE ASSESSEE I N THE FACTS OF THE PRESENT CASE IS AN ADVOCATE BY PROFESSION AND DERIVED PROFE SSIONAL AND INTEREST INCOME DURING THE YEAR UNDER CONSIDERATION. THE AO ON A PERUSAL OF THE DETAILS FILED, OBSERVED THAT AMOUNTS PAID TO THE SR . ADVOCATES MENTIONED IN ITA NO. 2327/D/2010 3 PAGE 2 OF HIS ORDER DURING THE RELEVANT F.Y. I.E. F ROM 01.04.2006 TO 31.03.2007 AMOUNT EXCEEDED RS. 20,000/- AND ON THIS NO TAX HAD BEEN DEDUCTED WHICH IN TERMS OF SECTION 194J THE ASSESSEE WAS REQUIRED TO DEDUCT. ACCORDINGLY, AFTER CONSIDERING THE SUBMISSIONS ON BEHALF OF THE ASSESS EE THE DISALLOWANCE U/S 40(A)(IA) OF RS. 26,34,000/- WAS MADE. THE TABLE S ET OUT IN PAGE 2 OF THE ASSESSMENT ORDER IS REPRODUCED HEREUNDER: - S.NO. NAME OF SR. ADVOCATE DATES OF PAYMENTS PAYMENTS (IN RS.) TOTAL AMOUNT PAID 1. RAJIV DHAWAN 10.05.2006 8,80,000 2,22,000 2. HARISH SALVE 26.10.2006 27.10.2006 13.02.2007 90,000 44,000 88,000 2,22,000 3. K.K. VENUGOPAL 18.07.2006 24.07.2006 04.08.2006 01.08.2006 28.08.2006 1,20,000 1,20,000 1,20,000 2,40,000 1,20,000 7,20,000 4. U.U. LALIT 29.08.2006 30,000 30,000 5. RAKESH 29.11.2006 1,00,000 1,00,000 6. RF NARIMAN 27.09.2006 1,0,000 1,10,000 7. DUSHYANT DAVE 10.11.2006 50,000 1,00,000 1,50,000 8. J.L. GUPTA 19.03.2007 1,60,000 1,60,000 TOTAL 26,34,000 6. THE SAID ACTION WAS CONFIRMED IN APPEAL BEFORE THE CIT(A). ON CONSIDERATION OF THE ABOVE FACTUAL MATERIAL WHICH I S NOT DISPUTE, WE ARE OF THE VIEW THAT THE JUDGMENTS RELIED UPON BY THE LD. SR. DR HAVE NO RELEVANCE AS THE APPLICABILITY OF SEC. 194J IS NOT DISPUTED BY T HE ASSESSEE. THE LEGAL ISSUE PAID WITHIN THE TIME STANDS DECIDED IN ASSESSEES FAVOUR BY THE ORDER OF THE SPL. BENCH IN THE CASE OF M/S MERILYN SHIPING & TRA NSPORTS, VISAKHAPATNAM. AS SUCH IN THE AFOREMENTIONED PECULIAR FACTS AND CI RCUMSTANCES, THE CLAIM OF THE ASSESSEE HAS TO BE ALLOWED. ITA NO. 2327/D/2010 4 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4 TH MAY, 2012. SD/- SD/- (G.D. AGARWAL) (DIVA SINGH) VICE PRESIDENT JUDICIAL MEMB ER DATED: 4.5.12 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR ITA NO. 2327/D/2010 5