Hipolin Limited, Ahmedabad V. The ITO, Ward-2(1)(3), Ahmedabad

ITA 2601/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2013 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-09-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 24-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: TDS; Set aside
• Section: 143(3); 40(a)(ia)

Judgement Text

, A- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER . ITA NO. 2601/AHD/2017 / ASSTT. YEAR: 2013-14 HIPOLIN LTD. 4 TH FLOOR, 44 MADHUBAN NEAR MADALPUR UNDER BRIDGE, ELLIS BRIDGE, AHMEDABAD PAN:AAA CH3 876 J VS. ITO WARD- 2(1)(3), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P. M. MEHTA, AR REVENUE BY : SHRI S. K. DEV, SR. DR ' #$% /DATE OF HEARING : 05/09/2019 &' $% /DATE OF PRONOUNCEMENT: 06/09/2019 () / O R D E R PER MADHUMITA ROY- JM : THE INSTANT APPEAL FILED BY ASSESSEE IS DIRECTED AG AINST THE ORDER PASSED BY THE LD. CIT(A)-2, AHMEDABAD DATED 22.09.2017 ARISING OU T OF THE ORDER DATED 28.03.2016 PASSED BY THE ITO WARD-2(1)(3), AHMEDABAD UNDER SEC TION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FO R ASSESSMENT YEAR 2013-14. 2. THE SOLE ISSUE RAISED IN THIS APPEAL RELATES TO DISALLOWANCE OF RS. 35,64,706/- IN TERMS OF THE PROVISION OF 40(A)(IA) FOR NON-DEDUCTI ON OF TDS ON PAYMENT MADE TO MARKETING AGENCIES ON ACCOUNT OF PROMOTION. THE CA SE OF THE ASSESSEE IS THIS THAT PAYMENT MADE TO THE MARKETING AGENCIES ARE DULY INC LUDED IN THEIR RETURN OF INCOME AND ACCORDINGLY NO ADDITION IS JUSTIFIED IN VIEW OF THE AMENDED PROVISION OF SEC. 40(A)(IA) INSERTED BY FINANCE ACT 2012, WHEN THE RE CIPIENTS HAVE DULY OFFERED INCOME IN THEIR RETURN OF INCOME AND PAID TAX THEREON. ITA NO. 2601/AHD/2017 A.Y. 2013-14 2 3. AT THE TIME OF THE HEARING OF THE INSTANT APPEAL THE LD. COUNSEL APPEARING FOR THE ASSESSEE BEFORE US SUBMITTED THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO- ORDINATE BENCH WHEREBY AND WHEREUNDER THE ADDITION HAS BEEN RESTRICTED TO 30% OF THE TOTAL ADDITION MADE UNDER SECTION 40(A)(IA) OF THE ACT. THE ORDER PASSED BY THE CO-ORDINATE BENCH IN ITA NO. 1079/AHD/2016 & 1178/A HD/2016 FOR A.Y. 2012-13 HAS ALSO BEEN FURNISHED BEFORE US. HE THUS PRAYS F OR SIMILAR RELIEF. 4. ON THE CONTRARY, THE LD. DR RELIED UPON THE ORDE R PASSED BY THE AUTHORITIES BELOW. 5. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL S AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY CONSIDERED THE ORDER PASSED BY THE C O-ORDINATE BENCH ON THE IDENTICAL ISSUE; THE RELEVANT PORTION WHEREOF IS AS FOLLOWS:- 3. IT APPEARS FROM THE RECORDS THAT THE LEARNED AS SESSING OFFICER HAS DISALLOWED RS.52,45,749/- U/S 40(A)(IA) FOR NON-DEDUCTION OF T DS ON PAYMENT MADE TO THE MARKEING AGENCIES TOWARDS SALES PROMOTION EXPENSES. DISALLO WANCE OF RS.87,130/- AND RS.2,19,120/- WAS ALSO MADE U/S 40(A)(IA) OF THE ACT FOR NON-DEDU CTION OF TDS ON THE PAYMENT MADE TO KRISHNA CLEARING AGENCIES AND MAHESHWARI ENTERPRISE RESPECTIVELY TOWARDS TRANSPORTATION CHARGES. FURTHER THAT, AN AMOUNT OF RS.5,49,100/- W AS ALSO DISALLOWED BY THE LEARNED AO U/S 40(A)(IA) FOR NON-DEDUCTION OF TDS ON PAYMENT MADE TOWARDS CONSULTANCY CHARGES. SUCH DISALLOWANCE WERE ALSO CONFIRMED BY THE LEARNED CIT (A) IN APPEAL PREFERRED BY THE ASSESSEE. HENCE THE INSTANT APPEAL BEFORE US. 4. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED ADVOCATE APPEARING FOR THE ASSESSEE PRAYS BEFORE US FOR THE ADDITION TO BE RES TRICTED TO 30% OF THE TOTAL ADDITION MADE UNDER SECTION 40(A)(IA) OF THE ACT. IN SUPPORT OF H IS CONTENTION HE HAS ALSO RELIED UPON THE JUDGMENT OF DIFFERENT COURTS INCLUDING THE JUDGMENT PASSED BY THE LEARNED TRIBUNAL, DELHI BENCH IN THE MATTER OF SMT. KANTA YADAV-VS-ITO IN I TA NO.6312/DEL/2016 FOR A.Y. 2012-13. THE LEARNED REPRESENTATIVE APPEARING FOR THE REVENU E HAS FAILED TO CONTROVERT SUCH CONTENTION MADE BY THE ASSESSEE. 5. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD INCLUDING THE JUDGMENT RELIED UPON BY THE AUTHORIZE D REPRESENTATIVE APPEARING FOR THE ASSESSEE. THE RELEVANT PORTION OF THE SAID JUDGMENT PASSED BY THE HONBLE DELHI ITAT BENCH WHILE DEALING IN THE IDENTICAL ISSUE IS AS FOLLOWS: 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND FIND T HAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT JAIPUR BENCH IN THE C ASE OF SHRI RAJENDRA YADAV VS. ITO AND SMT. SONU KHANDELWAL VS. ITO. IN THESE ORDERS IT WAS HELD THAT THE DISALLOWANCE U/S 40(A)(IA) TO BE RESTRICTED TO 30% OF THE ADDITION. IN THESE ORDERS THE TRIBUNAL HAS CONSIDERED THE AMENDED PROVISIONS OF SECTION 40(A)(IA) OF I.T. ACT. IN THESE ORDERS THE ASSESSMENT YEAR'S INVOLVE WAS 2007 -08 AND 2008-09. IN ITA NO. 6312/ DEL/2016 SMT. KANTA YADAV VS. ITO THE PRESENT APPEAL THE ASSESSMENT YEAR IS 2012-13. THEREFORE FACTS ARE IDENTICAL. IN THIS VIE W OF THE MATTER AND FOLLOWING THE ABOVE DECISIONS OF JAIPUR BENCH, WE SET ASIDE AND M ODIFY THE ORDERS OF THE AUTHORITIES ITA NO. 2601/AHD/2017 A.Y. 2013-14 3 BELOW AND DIRECT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 30% OF THE TOTAL ADDITION MADE ON ACCOUNT OF DEDUCTION OF TDS U/S 40 (A)(IA) OF THE ACT. WE FIND SUBSTANCE IN THE CONTENTIONS AND/OR SUBMIS SIONS MADE BY THE ASSESSEES COUNSEL TAKING INTO CONSIDERATION THE OBSERVATION M ADE BY THE HONBLE ITAT DELHI BENCH AS ABOVE. IT ALSO APPEARS THAT THE ISSUE IS SQUARELY C OVERED BY THE AFORESAID JUDGMENT. HENCE, RESPECTFULLY FOLLOWING THE SAME WE SET ASIDE AND MO DIFY THE ORDERS PASSED BY THE AUTHORITIES BELOW. WE FURTHER DIRECT THE LEARNED AO TO RESTRICT THE ADDITION TO 30% OF THE TOTAL ADDITION MADE ON ACCOUNT OF DEDUCTION OF TDS U/S 40(A)(IA) O F THE ACT. WE FIND THAT THE IDENTICAL ISSUE HAS REALLY BEEN DECIDED BY THIS CO-ORDINATE BENCH. WE, THEREFORE, RESPECTFULLY MODIFY THE ORDER PASSED BY THE AUTHORITIES BELOW BY DIRECTING THE LD. AO TO RESTRICT THE ADDITION WITH 30% OF THE TOTAL ADDITION MADE ON ACCOUNT OF NON-DE DUCTION OF TDS UNDER SECTION 40(A)(IA) OF THE ACT. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. 6. WE FIND THAT THE IDENTICAL ISSUE HAS REALLY BEEN DECIDED BY THIS CO-ORDINATE BENCH. WE, THEREFORE, IN THE ABSENCE OF ANY CHANGE D CIRCUMSTANCES, RESPECTFULLY RELYING UPON THE SAME MODIFY THE ORDER PASSED BY TH E AUTHORITIES BELOW BY DIRECTING THE LD. AO TO RESTRICT THE ADDITION TO 30% OF THE T OTAL ADDITION MADE ON ACCOUNT OF NON-DEDUCTION OF TDS UNDER SECTION 40(A)(IA) OF THE ACT. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. [ORDER PRONOUNCED IN THE COURT ON 06-09-2019.] SD/- SD/- ( WASEEM AHMED ) ( MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 06/09/2019 TANMAY TRUE COPY ()$*+,(+ /COPY OF THE ORDER FORWARDED TO : () ' / BY ORDER - / . (DY./ASSTT. REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / / THE RESPONDENT. 3. ' 0 / CONCERNED CIT 4. ' 0 ( ) / THE CIT(A) 5. +12 , / DR, ITAT, 6. 234# / GUARD FILE.