LILY MINERALS, MUMBAI V. ACIT CIR 13(3), MUMBAI

ITA 256/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2761 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 21-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-01-2011
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO.256/M/2011 (ASSESSMENT YEAR: 2007 - 2008 ) M/S. LILY MINERALS, 1 ST FLOOR, MAHESH CHAMBERS, 391, NARSI NATHA STREET, MASJID BUNDER (W), MUMBAI - 09. / VS. ACIT 13(3), AAYAKAR BHAVAN, MUMBAI 400 020. ./ PAN : AAAFL2252K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY KOTHARI / RESPONDENT BY : SHRI A. RAMACHANDRAN, DR / DATE OF HEARING : 29.08.2016 / DATE OF PRONOUNCEMENT : 30 .09.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 11.1.2011 IS AGAINST THE ORDER OF THE CIT (A) - 24, MUMBAI DATED 30.11.2010 FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. THE LD CIT (A) ERRED IN DISALLOWING U/S 40(A)(IA) AN AMOUNT OF RS. 8,18,201/ - BEING THE AMOUNT OF TRANSPORTATION CHARGES PAID TO THE FOLLOWING TRANSPORTERS. 1. SHIVSHAKTI ROADWAYS RS. 1,780/ - 2. RAJA ROADWAYS RS. 3,706/ - 3. KAKA ROADWAYS RS. 42,340/ - 4. PEARL SHIPPING RS. 7,70, 375/ - TOTAL RS. 8,18,201/ - 2. THE LD CIT (A) ERRED IN CONFIRMING THE INTEREST CHARGED U/S 234B AND 234C OF THE ACT AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELLANT DENIES ITS LIABILITY FOR PAYMENT OF INTEREST UNDER AN Y OF THE PROVISIONS OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS ENGAGED IN THE BUSINESS OF EXPORT TRADE OF PROCESSED MINERALS , FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 90,91,430/ - . ASSESSME NT WAS COMPLETED U/S 143(3) OF THE ACT AND DETERMINED THE ASSESSED INCOME OF RS. 99,09,630/ - . IN THE ASSESSMENT, AO MADE DISALLOWANCE OF RS. 8,18,201/ - U/S 40(A)(IA) OF THE ACT IN RESPECT OF PAYMENTS OF TRANSPORTATION CHARGES. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 2 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) DISMISSED THE APPEAL . AGAIN AGGRIEVED WITH THE DECISION OF THE CIT (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE, BRINGING OUR ATTENTION TO THE GR OUNDS, MENTIONED THAT AO INVALIDLY INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IGNORING THE PROVISIONS OF SECTION 194(5) AND ITS PROVISO. THE PROVISO PROVIDES FOR QUANTUM LIMITS FOR NON - APPLICABILITY OF THE TDS PROVISIONS AND THEREFORE, THE PRO VISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE IF THE PAYMENTS ARE BELOW SUCH LIMITS . FURTHER, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO ADDED THE SUM OF RS. 8,18,201/ - IN AGGREGATION. SUBMITTING THAT IT HAS 4 DIFFERENT ITEMS AND AMOUNTS, LD AR MENTIONED THAT THE PAYMENTS OF RS. 1,780/ - ; RS. 3,706/ - AND RS. 42,340/ - ARE BELOW THE APPLICABLE LIMITATION OF RS. 50,000/ - RELEVANT FOR THE YEAR UNDER CONSIDERATION. LD DR AGREES WITH THE SAME. ACCORDINGLY, WE GRANT RELIEF TO THE ASSESSEE. 5. REFERRING TO THE PAYMENT OF 4 TH ITEM OF RS. 7,70,375/ - , LD AR SUBMITTED THAT THIS ISSUE CAN BE REMANDED TO THE FILE OF THE AO FOR EXAMINING THE SET PRINCIPLE IE NO TDS PROVISIONS APPLY, IF THE PAYMENT IN QUESTION CONSTITUTES REIMBURSEMENTS. REFERRING TO PAGE 6 O F THE ASSESSEES PAPER BOOK, LD AR SUBMITTED THAT IF REMANDED, THE AO WILL COME TO THE CONCLUSIONS THAT THE AMOUNT IN QUESTION CONSTITUTES A PAYMENT BY VIRTUE OF REIMBURSEMENT. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ISSUE SHOULD BE REMANDED TO T HE FILE OF THE AO FOR FRESH CONSIDERATION AND ASSESSMENT. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. THUS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 T H SEPTEMBER, 2016. S D / - S D / - ( SAKTIJIT DEY ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 3 0 .09.2016 . . ./ OKK , SR. PS 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI