Manoj Kumar, Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 260/LKW/2014

• Counselvise Citation: 26023714 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 28; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.260/LKW/2014 ASSESSMENT YEAR:2009-10 A.C.I.T., RANGE-3, LUCKNOW. VS SHRI MANOJ KUMAR, B-1/15, SECTOR-G, ALIGANJ, LUCKNOW. PAN:AQRPS7141M (RESPONDENT) (APPELLANT) SHRI RAKESH GARG, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, D.R. RESPONDENT BY 10/09/2015 DATE OF HEARING 16/10/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-I, LUCKNOW DATED 17/12/2013 FOR THE ASSESSME NT YEAR 2009-2010. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. BECAUSE THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS.80,46,144/- U/S 40(A)(IA) OF THE ACT THAT REPRESENT HOARDING CHARGE S PAID BY THE ASSESSEE TO THE SEVERAL PERSONS ON THE GROUN D THAT TAX AT SOURCE WAS NOT DEDUCTED AS PER CBDT CIR CULAR 715 DATED 08.08.1995 WITHOUT SPECIFYING THE SPECIFI C SECTION APPLICABLE TO SUCH CHARGES PAID BY THE APPE LLANT. 2. BECAUSE THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICT IONAL HIGH COURT IN THE CASE 229 ITR 229 (ALL) ON THE GRO UND THAT WHEREBY IT WAS HELD BY THE HON'BLE COURT THAT ONCE THE BOOKS OF ACCOUNT ARE REJECTED AND THE INCOME WA S TO BE ESTIMATED THEN NO SEPARATE DISALLOWANCE CAN BE M ADE WITH REFERENCE TO SEC. 40A (3) OF THE ACT WHICH WOU LD 2 APPLY MUTANDIS MUTATIS TO THE SIMILAR DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. 3. BECAUSE THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN APPLYING THE PROVISION OF SEC. 40(A)(IA) WITH REFER ENCE TO THE AMOUNT PAID WHEREAS THIS SECTION IS APPLICABLE IN RESPECT OF THE AMOUNTS 'PAYABLE' WHEREAS THE ASSESS EE HAS PAID THE HORDING CHARGES AND NOTHING REMAINED PAYABLE AT THE END OF THE YEAR WHICH IS DIRECTLY CO VERED IN FAVOUR OF THE APPELLANT BY THE JUDGMENT OF JURIS DICTION HIGH COURT IN THE CASE OF CIT V. VECTOR SHIPPING SE RVICES (P) LTD. (2013) 357 ITR 642 (ALL). 4. BECAUSE THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE CONTENTION OF THE ASSESSEE THA T HOARDING CHARGES ARE DIRECT EXPENSES DEDUCTABLE U/S 28 OF THE ACT TO WHICH SEC. 40(A)(IA) IS NOT APPLICABL E AS HELD BY THE HON'BLE ITAT IN THE CASE OF 3. DURING THE COURSE OF HEARING, IT WAS POINTED OUT BY THE BENCH THAT THE ISSUE RAISED BY THE ASSESSEE AS PER GROUND NO. 2 IS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. M/S G. S. TIWARI AND CO. IN INCOME TAX APPEAL NO. 5 OF 2008 DATED 30/05/2013 AND IN THIS JUDGMENT, HON'BLE ALLA HABAD HIGH COURT HAS ALREADY CONSIDERED ITS EARLIER JUDGMENT RENDERED IN THE CASE OF CIT VS. BANWARI LAL BANSHIDHAR 229 ITR 229 (ALL). IN REPLY , LEARNED A.R. OF THE ASSESSEE HAD NOTHING TO SAY BUT HE SUBMITTED THAT A S PER THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CI T VS. ANSAL LAND MARK TOWNSHIP (P) LTD. IN I.T.A. NO.160 & 161 OF 2015 DA TED 26/08/2015, COPY AVAILABLE ON PAGE NO. 33 TO 42 OF THE PAPER BOOK, T HE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT OF THIS JUDGMENT. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN VIEW OF THE RECENT JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT REN DERED IN THE CASE OF 3 CIT VS. M/S G. S. TIWARI AND CO. (SUPRA), THERE IS NO MERIT IN GROUND NO. 2 RAISED BY THE ASSESSEE. ACCORDINGLY, GROUND NO. 2 IS REJECTED. 6. REGARDING THE ISSUE ON MERIT REGARDING DISALLOWA NCE U/S 40 (A) (IA), WE FIND FORCE IN THE SUBMISSION OF LEARNED A.R. OF THE ASSESSEE THAT IN VIEW OF THIS JUDGMENT OF HON'BLE DELHI HIGH COURT RENDER ED IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD. (SUPRA), THE MATTER SHO ULD GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AND IF THE ASSESSEE IS ABLE TO ESTABLISH THAT THE PAYEE OR DEDUCTEE HAS FURNISHED HIS RETURN OF INCOME U/S 139 OF THE ACT AND HAS TAKEN INTO ACCOUNT THE AMOUN T PAID BY THE ASSESSEE FOR COMPUTING INCOME IN SUCH RETURN OF INCOME AND H AS PAID THE TAX DUE ON THE INCOME DECLARED BY THE PAYEE AS PER SUCH RETURN OF INCOME THEN AS PER THE SECOND PROVISO TO SECTION 40(A)(IA), WHICH IS H ELD TO BE RETROSPECTIVE IN NATURE, NO DISALLOWANCE IS CALLED FOR. WE SET ASID E THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO ASSESSING OFFI CER FOR FRESH DECISION AS PER ABOVE DISCUSSION IN THE LIGHT OF THIS JUDGMENT OF HON'BLE DELHI HIGH COURT NOTED ABOVE AFTER PROVIDING REASONABLE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED:16/10/2015 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REG ISTRAR