Riviera Polymers Pvt.Ltd., Ahmedabad V. The Dy.CIT.,Range-5, Ahmedabad

ITA 2512/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1956 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 12-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P R GHOSH SRDR
• Assessee Lawyers: PAMIL H SHAH
• Keywords: Wrong claim; TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.2512/AHD/2010 ASSESSMENT YEAR:2005-06 DATE OF HEARING:4.3.11 DRAFTED:9.3.11 RIVIERA POLYMERS PVT. LTD. 203, NR. HOUSE, OPP. POPULAR HOUSE, ASHRAM ROAD, AHMEDABAD 380 009 PAN NO.AABCR2901F V/S. DY. COMMISSIONER OF INCOME-TAX, RAANGE- 5, C.U. SHAH BUILDING, AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI PAMIL H SHAH, AR RESPONDENT BY:- SHRI P.R. GHOSH, SR-DR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX(APPEALS)-XVI, AHMEDABAD IN APPEAL NO.CIT (A)XVI/ DCIT. R.5/648 /2009-10 DATED 01-07-2010 FOR THE ASSESSMEN T YEAR 2005-06 CONFIRMING THE PENALTY U/S.271(1)(C) OF THE IT ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME WAS FILED BY ASSESSEE DECLARING TOTAL INCOME OF RS.13,69,730/- A ND ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS.18,21,020/-. THE AD DITION WAS MADE BY ASSESSING OFFICER IN THE ASSESSMENT ORDER WAS CHALL ENGED BEFORE LD. CIT(APPEALS), WHO CONFIRMED FOLLOWING ADDITIONS:- ITA NO.2512/AHD/2010 A.Y. 2005-06 RIVIERA POLYMERS PVT. LTD. V. DCIT RNG-5, ABD PAGE 2 I) DISALLOWANCE OUT OF LEGAL AND PROFESSIONAL CHARG ES RS. 21,678/- II) DISALLOWANCE OF VEHICLE EXPENSES RS. 9,9 36/- III) DISALLOWANCE OF REPAIRING EXPENSES RS.1,89,500/- THE ASSESSING OFFICER LEVIED THE PENALTY U/S.271(1) ON THE ABOVE THREE ADDITIONS. THE PENALTY IMPOSED ON AMOUNT OF RS.21,6 78/- AND RS.9,936/- WAS DELETED BY LD. CIT(A) WHILE PENALTY IMPOSED ON THE ADDITION OF RS.1,89,500/-- WAS CONFIRMED BY HIM BY OBSERVING AS UNDER:- 4.1 FURTHER THE DISALLOWANCE OF BUILDING REPAIRING EXPENSES OF RS.1,89,500/- WAS MADE BY THE AO ON THE GROUND THAT IT WAS A BOGUS CLAIM. THE APPELLANT HAS NOT FURNISHED ANY EV IDENCE IN SUPPORT OF THE REPAIRING / CONSTRUCTION EXPENSES. T HE AO ALTERNATIVELY OBSERVED THAT EVEN IF THE PAYMENT WAS MADE TO THE CONTRACTOR, THEN THE APPELLANT WAS LIABLE TO DEDUCT TAX AT SOURCE AS THE APPELLANT HAS NOT DEDUCTED ANY TAX AT SOURCE. T HEREFORE HE HELD THAT EVEN OTHERWISE THE AMOUNT OF RS.1,89,500/ - IS DISALLOWABLE U/S.40(A)(IA) OF THE ACT. ON THE OTHER HAND, THE CONTENTION OF THE APPELLANT IS THAT SINCE THE AMOUN T HAS BEEN WRITTEN BACK IN A.Y. 2007-08, THE APPELLANT HAD NO INTENTION TO FURNISH INACCURATE PARTICULARS THEREOF. BEFORE ME T HE AUTHORIZED REPRESENTATIVE RELIED UPON THE FINDING OF THE CIT(A ) IN QUANTUM ORDER, AS PER WHICH THE CIT(A) HAS DIRECTED THE AO TO TAX THE AMOUNT OF RS.1,89,500/- IN AY 2005-06 AND NOT IN AY 2007-08. IN MY OPINION IT DOES NOT ABSOLVE THE APPELLANT FROM T HE CHARGE OF FURNISHING INACCURATE PARTICULARS. THE APPELLANT IS BOUND TO FILE THE DETAILS OF SUCH EXPENSES SUCH AS TO WHOM SUCH AMOUN T WERE PAID AND WHAT WERE THE REPAIRS CARRIED OUT BY THE APPELL ANT. NO DETAILS WHATSOEVER WERE FURNISHED EITHER BEFORE THE AO OR B EFORE ME. FURTHER THE FACT THAT OUT OF RS.1,89,500/- RS.1,86, 500/- HAS BEEN WRITTEN BACK BY THE APPELLANT IN AY 2007-08 GOES TO SHOW THAT THE CLAIM OF REPAIR EXPENSES OF RS.1,89,500/- IN AY 200 5-06 WAS NOT GENUINE. IN MY VIEW THE APPELLANT HAS FURNISHED INA CCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.1,89,500/ - ON WHICH PENALTY U/S.271(1)(C) IS LEVIABLE. THE PENALTY ON T HE ADDITION OF RS.1,89,500/- IS THEREFORE CONFIRMED. FURTHER AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. ITA NO.2512/AHD/2010 A.Y. 2005-06 RIVIERA POLYMERS PVT. LTD. V. DCIT RNG-5, ABD PAGE 3 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE CASE RECORDS, WE FIND THAT AGAINST THE ADDITION OF RS.1,89,500/-, TH E ASSESSEE HAD FIELD APPEAL BEFORE LD. CIT(A) WHO DEALT WITH THE ISSUE A S UNDER:- 7. THE 6 TH GROUND OF APPEAL IS DIRECTED AGAINST THE ADDITION OF RS.1,89,500/- ON ACCOUNT OF DISALLOWANCE OUT OF BUI LDING REPAIR EXPENSES. THE SAID ADDITION HAS BEEN MADE BY THE A. O OBSERVING THAT THE DEDUCTION FOR THE PAYMENT TO A CONTRACTOR OR SUB- CONTRACTOR IS NOT DEDUCTIBLE IF THE TAX HAS NOT BEE N DEDUCTED AT SOURCE ON SUCH PAYMENT IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND SINCE THE APPELLANT HAS NO T DEDUCTED TAX AT SOURCE ON THE PAYMENT OF RS.1,89,500/- CREDITED TO THE ACCOUNT OF THE SAID PARTY, THE EXPENSES CLAIMED TO THE EXTENT OF RS.1,89,500/- ARE DISALLOWED. 7.1 THE A.R OF THE APPELLANT HAS CONTENDED THAT THE SAID CONTRACT WAS NOT CARRIED OUT AND ACCORDINGLY AN AMOUNT OF RS .1,86,500/- OUT OF TOTAL AMOUNT OF RS.1,89,500/- WAS DEBITED TO THE PARTY ACCOUNT AND OFFERED AS INCOME IN A.Y 2007-08. THE A BOVE FACT WAS ALSO SATED BEFORE THE A.O VIDE LETTER DATED 29/ 11/2007 AND HENCE SINCE THE SAID AMOUNT HAS BEEN DISALLOWED I T HE YEAR UNDER CONSIDERATION, THE A.O BE DIRECTED TO PASS AN APPRO PRIATE ORDER REDUCING THE INCOME OF A.Y 2007-08 BY RS.1,86,500/- IN ORDER TO AVOID DOUBLE TAXATION WHICH IS NOT PERMISSIBLE UNDE R THE I.T ACT. 7.2 THE SUBMISSIONS MADE BY THE A.R OF THE APPELLAN T HAVE BEEN PERUSED. THE OBSERVATIONS OF THE ASSESSING OFFICE I N THE ASSESSMENT ORDER HAVE ALSO BEEN EXAMINED. THE FACT THAT THE AMOUNT OF RS.1,89,500/- HAS BEEN CLAIMED BY THE APP ELLANT AS EXPENDITURE AND CREDITED TO THE PARTY ACCOUNT IS NO T IN DISPUTE. THE FACT THAT NO TDS HAS BEEN DEDUCTED FROM THE SAID PA YMENT AT THE TIME OF CREDITING THE ACCOUNT OF THE SAID PARTY IS ALSO NOT IN DISPUTE. IN HIS CIRCUMSTANCES, I AM OF THE VIEW THAT THE A.O HAS RIGHTLY MADE THE ADDITION AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. HOWEVER, I AGREE WITH THE CONTENTION OF THE AP PELLANT THAT SINCE OUT OF RS.1,89,500/- AN AMOUNT OF RS.1,86,500 /- HAS BEEN REVERSED AND OFFERED AS INCOME IN THE PREVIOUS YEAR RELEVANT TO A.Y 2007-08 AND PAYMENT OF ONLY RS.3,000/- BEING MA DE, THE APPELLANT IS ENTITLED FOR DEDUCTION OF THE SAID AMO UNT FROM ITS TOTAL INCOME IN A.Y 2007-08. THE A.O IS DIRECTED ACCORDIN GLY. ITA NO.2512/AHD/2010 A.Y. 2005-06 RIVIERA POLYMERS PVT. LTD. V. DCIT RNG-5, ABD PAGE 4 IT IS CLEAR FROM THE ABOVE THAT IN THE QUANTUM APPE AL, ASSESSEE DID NOT CHALLENGE THE ADDITION ON MERITS. HE ONLY SOUGHT DI RECTION FROM LD. CIT(A) TO AVOID DOUBLE TAXATION. THUS, ASSESSEE HAD CONCEDED THAT THE PAYMENT SHOWN AGAINST REPAIR EXPENSES AMOUNTING TO RS.1,89,500/- WAS NOT GENUINE. SINCE THE ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.1,89,500/ - PENALTY U/S.271(1)(C) OF THE IT ACT HAS RIGHTLY BEEN IMPOSED AND THEREFOR E THE ORDER PASSED BY LD. CIT(A) CONFIRMING THIS PENALTY IS HEREBY UPHELD . 4. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11/03/2011 SD/- SD/- (A.N.PHAUJA) (D.K. TYAG I) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 11/03/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XVI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD