The DCIT, Circle-1(1), Baroda V. M/s. Bell Granito Ceramics Ltd., Baroda

ITA 2466/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85801 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 30-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: K D SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO . 2466/ AHD/201 1 A. Y . 200 5 - 0 6 DCIT, CIRCLE - 1 (1), BARODA VS M/S. BELL GRANITO CERAMICS LTD., VILLA GE GAVASAD, PO - MOBHA, TALUKA - PADRA, DISTRICT - BARODA. PAN: AAACB 9401D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI M.K. SINGH , SR.D.R. . ASSESSEE(S) BY : SHRI K.D. SHAH , A.R. / DATE OF HEARING : 10 / 0 3 /201 5 / DATE OF PRONOUNCEMENT: 13 / 0 3 /201 5 / O R D E R PER: MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LE ARNED CIT(A) - I , BARODA DATED 05 . 07 .201 1. T HE GROUND S RAISED BY THE REVENUE ARE REPRODUCED BELOW: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID . CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 1,86,94,606/ - U/S.40(A)(IA) OF TH E INCOME TAX ACT, 1961, HOLDING THAT THE PROVISIONS OF SECTION 40(A)(IA) AS AMENDED BY THE FINANCE ACT, 2010 W.E.F. 01.04.2010, ARE OF CLARIFICATORY N ATURE AND, THEREFORE, RETROSPECTIVE. 2. THE ID.CIT(APPEALS) ERRED IN NOT CONSIDERING THE FACT THAT THE REL EVANT PORTION OF THE MEMORANDUM EXPLAINING THE PROVISIONS IN FINANCE BILL, 2010 CLEARLY STATES THAT THIS AMENDMENT IS PROPOSED TO TAKE EFFECT FROM 01.04.2010 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2010 - 11 AND SUBSEQUENT YEARS . ITA NO. 2466 /AHD /201 1 D CIT, CIR - 1(1), B ARODA VS. M/S. BELL GRANITO CERAMICS LTD. FOR A.Y. 200 5 - 0 6 - 2 - 2 . FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT OR DER PASSED U/S. 143(3) R.W.S. 147 OF IT ACT DATED 10 .12 .20 0 9 WERE THAT THE ASSESSEE COMPANY HAS DISCLOSED A RETURN OF INCOME AT RS. NIL WHICH WAS ACCEPTED BUT LATER ON THE ASSESSMENT WAS REOPEN ED U/S.147 ON THE GROUND THAT THE ASSESSEE HAD NOT DEPOSITED THE TDS WITHIN THE TIME PRESCRIBED . O N ENQUIRY , THE ASSESSEE HAS FURNISHED THE DETAILS OF TDS DEDUCTED AND THE DATES OF PAYMENT. THE TDS WAS DEDUCTED FROM TRANSPORTERS, CONTRACTORS, ADVERTISERS, ON PAYMENT OF RENT, ETC. THE UNDISPUTED FACT AS NOTED BY THE AO WAS THAT THE TDS SO DEDUCTED WAS DEPOSITED BEFORE THE DUE DATE OF THE FILING OF THE RETURN. WE HAVE NOTED THAT IN THE ASSESSMENT ORDER A CHART WAS REPRODUCED SHOWING DETAILS OF NATURE OF PAYME NT, AMOUNT OF TDS DEDUCTED AND THE DATES OF PAYMENT. HOWEVER, THE AO WAS NOT CONVINCED AND MADE A DISALLOWANCE U/S.40(A)(IA) OF IT ACT OF RS.1,86,94,606/ - . 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS HELD THAT THE PROVISION WAS RETROSPECTIVELY APPLICABLE. A CCORDING TO WHICH THE ASSESSEE WAS REQUIRED TO DEPOSIT THE TDS BEFORE THE DUE DATE OF FILING OF THE RETURN, RELEVANT PORTION OF THE FINDING OF LEARNED CIT(A) ARE REPRODUCED BELOW: 2.2 REGARDING DISALLOWANCE U/S 40(A)(IA), FACTS OF THE CASE ARE THAT AO MADE DISALLOWANCE U/S 40(A)(IA) IN RESPECT OF EXPENSES CORRESPONDING TO TAX DEDUCTED AT SOURCE OF RS.9,77,707/ - UPTO 28.2.2005 WHICH WAS NOT DEPOSITED TO THE CREDIT OF GOVERNMENT BEFORE 31.3.2005. THOUGH TAX DEDUCTED AT SOURC E OF RS.9,77,707/ - WAS DEPOSITED TO THE CREDIT OF GOVERNMENT BEFORE DUE DATE OF FILING OF RETURN OF INCOME, DISALLOWANCE OF RS.1,86,94,606/ - WAS MADE BY THE AO U/S . 40(A)(IA) AS IT STOOD PRIOR TO AMENDMENT MADE BY FINANCE ACT, 2010. 2.3 IN APPEAL, RELIANC E WAS PLACED ON THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF KANUBHAI RAMJIBHAI MAKWANA (2011) 9 TAXMANN.COM 55. 2.4 I HAVE CONSIDERED THE MATTER. HON. ITAT, AHMEDABAD IN THE CASE OF KANUBHAI RAMJIBHAI MAKWANA (2011) 9 TAXMANN.COM 55, HELD THAT AMENDMENT MADE BY THE FINANCE ACT, 2010 IN SEC. 40(A)(IA) IS OF CLARIFICATORY NATURE AND IT WOULD, THEREFORE, APPLY RETROSPECTIVELY FROM 1.4.2005, THE DATE ITA NO. 2466 /AHD /201 1 D CIT, CIR - 1(1), B ARODA VS. M/S. BELL GRANITO CERAMICS LTD. FOR A.Y. 200 5 - 0 6 - 3 - ON WHICH SECTION 40(A)(IA) WAS INSERTED BY THE FINANCE (NO.2) ACT, 2004. IN VIEW OF THIS, EVEN THOUGH TAX DED UCTED AT SOURCE OF RS.9,77,707/ - UPTO 28.2.2005 WAS NOT DEPOSITED TO THE CREDIT OF GOVERNMENT BY 31.3.2005 AND WAS DEPOSITED TO THE CREDIT OF GOVERNMENT BEFORE DUE DATE OF FILING OF RETURN OF INCOME AS PER THE ASSESSMENT ORDER, DISALLOWANCE OF RS.1,86,94,6 06/ - IS CANCELLED. 4. WITH TH IS FACTUAL BACKGROUND, WE HAVE HEARD BOTH THE SIDES . FROM THE SIDE OF THE REVEN UE - DEPARTMENT, LEARNED SR.D.R. HAS PLACED RELIANCE ON THE FINDINGS OF THE AO. ON THE OTHER HAND, LEARNED A.R., MR. K.D. SHAH HAS CITED FEW DECISIO NS BEFORE US AS LISTED BELOW: 1. CIT VS. RAJENDRA KUMAR, TAX APPEAL NO.65/2013 ORDER DATED 1 ST JULY, 2013 BY DELHI HIGH COURT. 2. CIT VS. ROYAL BUILDERS, 220 TAXMANN 180 (GUJ) 3. VIRGIN CREATIONS (ITA NO.302 OF 2011/GA 3022/11 ORDER DATED 23 RD NOVEMBER, 2 011. 4.1 FURTHER HE HAS ALSO PLACED ON RECORD THE DATES ON WHICH THE IMPUGNED TDS WAS DEPOSITED. 5. HAVING HEARD THE SUBMISSION OF BOTH THE SIDES AND CONSIDERING THE LEGAL POSITION AS STOOD AFTER THE AMENDMENT TOOK PLACE IN THE PROVISIONS OF SECTION 40 (A)(IA) . W E ARE OF THE CONSCIENTIOUS VIEW THAT THE ISSUE INVOLVED IS NOW DULY COVERED BY FEW DECISIONS OF THE HON BLE COURTS. IN A SITUATION, WHEN THERE WAS NO DISPUTE THAT THE IMPUGNED TDS WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN THEN WE CAN HOLD THAT THE INTENTION BEHIND THE AMENDMENT U/S.40(A)(IA) WAS TO ENSURE THE DEPOSIT OF TDS AND THAT THE EVIDENCE OF DEPOSIT OF TAX SHOULD BE PLACED ALONG WITH RETURNED FILED. IN VIEW OF THE LEGAL POSITION AS DISCUSSED HEREINABOVE , WE ARE NOT INCLINED TO D ISTURB THE FACTUAL AS WELL AS LEGAL FINDING OF LEARNED CIT(A), AND THE SAME IS HEREBY CONFIRMED. WE FIND NO FORCE IN THE GROUND RAISED BY THE REVENUE; HENCE DISMISS ED . ITA NO. 2466 /AHD /201 1 D CIT, CIR - 1(1), B ARODA VS. M/S. BELL GRANITO CERAMICS LTD. FOR A.Y. 200 5 - 0 6 - 4 - 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 13 / 0 3 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD