Sampath Raj Karanraj, CHENNAI V. ITO Non Corporate Ward 5(1), CHENNAI

ITA 2447/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5066 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE
• Assessee Lawyers: K RAVI
• Keywords: Non-deduction of tax

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !, # !$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2447/MDS/2017 ' (' / ASSESSMENT YEAR : 2013-14 SHRI SAMPATH RAJ KARANRAJ, PROP: RAJ BIKES, NO.64, MADHAVARAM HIGH ROAD, MOOLAKADAI, CHENNAI - 600 118. PAN : AQYPK 9636 Q V. THE INCOME TAX OFFICER, NON CORPORATE WARD 5(1), CHENNAI. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI K. RAVI, ADVOCATE ,-*+ . / / RESPONDENT BY : SMT. RUBY GEORGE, CIT 0 . 1# / DATE OF HEARING : 28.12.2017 23( . 1# / DATE OF PRONOUNCEMENT : 05.01.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI , DATED 02.08.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THERE WAS A DELAY OF ONE DAY IN FILING THIS APPE AL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD.COUNSEL FOR THE ASSESS EE AND THE LD. 2 I.T.A. NO.2447/MDS/17 D.R. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR N OT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FO R NON-DEDUCTION OF TAX AT SOURCE. 4. SHRI K. RAVI, THE LD.COUNSEL FOR THE ASSESSEE, S UBMITTED THAT THE ASSESSEE PAID INTEREST TO M/S SUNDARAM PNB PARI BAS HOME FINANCE LTD. THE ASSESSING OFFICER DISALLOWED THE INTEREST PAYMENT UNDER SECTION 40(A)(IA) OF THE ACT. ACCORDING TO T HE LD. COUNSEL, THE RECIPIENT, NAMELY, M/S SUNDARAM PNB PARIBAS HOME FI NANCE LTD. DISCLOSED THE INTEREST INCOME AND PAID TAXES, THERE FORE, THERE CANNOT BE ANY DISALLOWANCE IN VIEW OF THE SECOND PR OVISO TO SECTION 40(A)(IA) OF THE ACT. 5. WE HEARD SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. SINCE THE ASSESSEE CLAIMS THA T THE RECIPIENT, NAMELY, M/S SUNDARAM PNB PARIBAS HOME FINANCE LTD. PAID THE TAXES ON THE INTEREST INCOME RECEIVED FROM THE ASSE SSEE, THIS 3 I.T.A. NO.2447/MDS/17 TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS RE- EXAMINATION BY THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE O F DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SH ALL RE-EXAMINE THE MATTER AND FIND OUT WHETHER THE RECIPIENT, NAME LY, M/S SUNDARAM PNB PARIBAS HOME FINANCE LTD. HAS DISCLOSE D THE INTEREST INCOME AND PAID TAXES, AND THEREAFTER DECI DE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASO NABLE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO AD- HOC DISALLOWANCE OF EXPENDITURE. 7. SHRI K. RAVI, THE LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ASSESSING OFFICER MADE CERTAIN DISALLOWANCES IN RESPECT OF SALARY, STAFF WELFARE AND CONVEYANCE. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER DISALLOWED 15% OF SALARY EXPE NSES ON THE GROUND THAT THE BILLS / VOUCHERS FURNISHED BY THE A SSESSEE ARE NOT IN ORDER. ACCORDING TO THE LD. COUNSEL, PAYMENT OF SA LARY IS NOT IN DISPUTE, THEREFORE, THERE CANNOT BE ANY DISALLOWANC E AT ALL. 4 I.T.A. NO.2447/MDS/17 8. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT IT IS FOR THE ASSESS EE TO FILE NECESSARY BILLS AND VOUCHERS FOR ESTABLISHING THE P AYMENT OF SALARY. SINCE PROPER BILLS AND VOUCHERS WERE NOT FURNISHED, THE ASSESSING OFFICER DISALLOWED 15% OF SALARY EXPENSES WHICH WAS RIGHTLY CONFIRMED BY THE CIT(APPEALS). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER DISALLOWED 15% OF THE SALARY CLAIM ON THE G ROUND THAT THE ASSESSEE HAS NOT FURNISHED BILLS AND VOUCHERS PROPE RLY. NO DOUBT, IT IS FOR THE ASSESSEE TO MAINTAIN BILLS AND VOUCHE RS FOR THE EXPENSES INCURRED. THE CIT(APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER FOR THE SAME REASON. THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE PAID SALA RY WHICH IS NOT IN DISPUTE, A DISALLOWANCE OF 10% OF TOTAL SALARY P AID WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE ORDERS OF TH E AUTHORITIES BELOW ARE MODIFIED. THE ASSESSING OFFICER IS DIRECTED TO DISALLOW ONLY 10% OF SALARY EXPENSES CLAIMED BY THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 5 I.T.A. NO.2447/MDS/17 ORDER PRONOUNCED ON 5 TH JANUARY, 2018 AT CHENNAI. SD/- SD/- ( ! ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 5 TH JANUARY, 2018. KRI. . ,167 87(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 91 () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-9, CHENNAI 5. 7: ,1 /DR 6. ' ; /GF.