Shri Perumal Ramaraju, Surat V. The Income Tax Officer, Ward-1(2)(6), Surat

ITA 2609/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2157 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J K CHANDNANI
• Assessee Lawyers: RAJESH M UPADHYAY ITP
• Keywords: Reopening of assessment; Retrospective amendment; TDS
• Section: 40(a)(ia)

Judgement Text

SHRI PERUMAL RAMARAJU V. ITO, WARD-1(2)(6) V. ITO, WARD 6(2), SURAT/I.T.A. NO.2609 & 2610/AHD/2016/A.YS.2008-09 & 09-10 PAGE 1 OF 6 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NOS.2609 & 2610/AHD/2016/SRT / ASSESSMENT YEARS : 2008-09 & 2009-10 SHRI PERUMAL RAMARAJU, PROPRIETOR OF M/S.WESTERN TRADERS, 343, ARIHANT COMPLEX, UDHNA, SURAT -394 210. [PAN: ADNPR 2050B] VS. THE INCOME TAX OFFICER, WARD-1(2)(6), SURAT. APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAJESH M. UPADHYA Y , ITP /REVENUE BY SHRI J.K.CHANDNANI, SR.DR / DATE OF HEARING: 2 1 .06.2018 /PRONOUNCEMENT ON 05 .0 7 .2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THESE TWO APPEALS FILED BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT (IN SHORT THE CIT (A)) IN TWO SEPARATE ORDERS DATED 01.07.2016 PERTAINING TO ASSESSMENT YEAR 2008-09 AND 13.07.2016 PERTAINING TO THE ASSESSMENT YEAR 2009-10 WHICH IN TURN HAS ARISEN FROM THE SHRI PERUMAL RAMARAJU V. ITO, WARD-1(2)(6) V. ITO, WARD 6(2), SURAT/I.T.A. NO.2609 & 2610/AHD/2016/A.YS.2008-09 & 09-10 PAGE 2 OF 6 ASSESSMENT ORDERS PASSED UNDER SECTION 143 (3) R.W.S. 147 OF INCOME TAX ACT,1961 (IN SHORT THE ACT) BY THE INCOME TAX OFFICER, WARD-1(2)(6) SURAT (IN SHORT THE AO) DATED 03.12.2015. 2. GROUND NO.1 AND 2 ARE NOT PRESSED, HENCE SAME ARE TREATED AS DISMISSED NOT PRESSED. 3. GROUND NO.3 RELATES TO ADDITION U/S.40(A)(IA) OF THE ACT FOR RS.2,26,664/- BEING INTEREST PAYMENT TO NBFCS. 4. IT WAS NOTICED THAT THE ASSESSEE HAS TAKEN LOAN AMOUNTING TO RS.2,33,270/- FROM GE MONEY FINANCE AND RS.11,40,811/- FROM INDIA BULLS AND MADE PAYMENTS OF RS.2,24,664/- OF INTEREST THEREON BUT NO TDS AS PER PROVISIONS OF SECTION 194A OF THE ACT WAS DEDUCTED, HENCE, SAME WERE DISALLOWED U/S.40(A)(IA) OF THE ACT 5. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHEREIN IT WAS CLAIMED THAT TDS OF RS.22,679/- BEING 10% OF RS.2,24,644/- WAS DEDUCTED AND SAME WAS PAID TO GOVERNMENT ACCOUNT ON 19.04.2008, THEREFORE, DISALLOWANCE U/S.40(A)(IA) OF THE ACT ARE INCORRECT. HOWEVER, THE CIT(A) OBSERVED THAT THE SCHEDULE-E TO AUDIT REPORT OF BALANCE SHEET SHRI PERUMAL RAMARAJU V. ITO, WARD-1(2)(6) V. ITO, WARD 6(2), SURAT/I.T.A. NO.2609 & 2610/AHD/2016/A.YS.2008-09 & 09-10 PAGE 3 OF 6 SHOWN UNPAID TDS OF RS.22,679/- UNDER THE HEAD PROVISIONS. THEREFORE, THE APPELLANT HAD NOT DEDUCTED THE TDS AS CLAIMED IN THE REPLY FILED BEFORE THE AO ON 17.08.2015. FURTHER, THE SCANNED COPY OF CHALLAN PAID HAS BEEN EXAMINED AND FOUND THAT THE CHALLAN FOR A.Y. 2008-09 WAS PAID ON 19.04.2008 WHICH IS RELEVANT FOR A.Y. 2009-10, HENCE, THE CLAIM OF THE APPELLANT IS INCORRECT. THE CIT(A) FURTHER OBSERVED THAT AMENDMENT IN SECTION 40(A)(IA) BY FINANCE ACT 2010 IS EFFECTIVE FROM 01.04.2010 WHICH IS PROSPECTIVE FROM THE DATE SPECIFIED. THEREFORE, THE DISALLOWANCE MADE BY THE AO HAS BEEN RIGHTLY MADE, ACCORDINGLY SAME WAS CONFIRMED. 6. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TDS OF RS.22,679/- WERE DULY DEDUCTED AND THE SAME WAS PAID TO GOVERNMENT ACCOUNT ON 19.042008. THEREFORE, NO DISALLOWANCE IS REQUIRED TO BE MADE AS PER SECTION PROVISO TO SECTION 40(A)(IA). VARIOUS COURTS HAVE HELD THAT THE SECOND PROVISO INSERTED BY FINANCE ACT 2012 WITH EFFECT FROM 01.04.2013 IS IN RETROSPECTIVE IN NATURE, THEREFORE THE PAYMENT OF TDS DEDUCTED AND PAID THE SAME BEFORE THE DATE OF FURNISHING A RETURN OF INCOMED IS ALLOWABLE DEDUCTION. SHRI PERUMAL RAMARAJU V. ITO, WARD-1(2)(6) V. ITO, WARD 6(2), SURAT/I.T.A. NO.2609 & 2610/AHD/2016/A.YS.2008-09 & 09-10 PAGE 4 OF 6 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS DEDUCTED TDS ON PAYMENT OF INTEREST TO NBFCS ASPER PROVISIONS OF SECTION 194A AND ALSO DEPOSITED THE SAID TDS BEFORE THE DATE OF FURNISHING OF RETURN OF INCOME. THEREFORE, NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT CAN BE MADE AS THE SECOND PROVISO INSERTED BY FINANCE ACT 2012 WITH EFFECT FROM 01.04.2013 IS DECLARATORY AND CURATIVE IN NATURE AND AS RETROSPECTIVE EFFECT FROM 01.04.2005 AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND MARK TOWNSHIP PVT. LTD. [2015] 377 ITR 635 (DEL). THEREFORE, DISALLOWANCE MADE BY THE LOWER AUTHORITIES ARE DELETED. 8. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 2610/AHD/2016/SRT FOR A.Y.2009-10: 9. GROUND NO.1 & 2 RELATING TO REOPENING OF ASSESSMENT U/S.147 AND PROPER OPPORTUNITY NOT PROVIDED, ARE NOT PRESSED BEFORE US, HENCE, THE SAME ARE TREATED AS DISMISSED AS NOT PRESSED. 10. GROUND NO.3 RELATES TO DISALLOWANCE U/S.40(A)(IA) OF THE ACT FOR RS.1,99,156/- BEING INTEREST PAYMENT TO NBFCS. SHRI PERUMAL RAMARAJU V. ITO, WARD-1(2)(6) V. ITO, WARD 6(2), SURAT/I.T.A. NO.2609 & 2610/AHD/2016/A.YS.2008-09 & 09-10 PAGE 5 OF 6 11. BRIEF FACTS ARE THAT THE AO NOTICED THAT THE ASSESSEE FILED TO DEDUCT THE TDS ON PAYMENT OF INTEREST OF RS.1,99,156/-, THEREFORE, SAME ARE DISALLOWED U/S.40(A)(IA) OF THE ACT. IN APPEAL ALSO THIS WAS CONFIRMED. 12. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THE LD.CIT(A), WHEREIN THE LD.CIT(A) UPHELD THE ORDER OF AO. 13. THE LD.COUNSEL SUBMITTED THAT THE TDS OF RS.21,210/- WERE DEDUCTED ON THE INTEREST PAYMENT OF RS.1,95,156/- AND SAME WAS DEPOSITED ON 29.09.2009 I.E. BEFORE THE DATE OF FURNISHING RETURN OF INCOME, THEREFORE, NO DISALLOWANCE COULD BE MADE IN THE LIGHT SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WHICH RETROSPECTIVE IN NATURE. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS DEDUCTED TDS ON PAYMENT OF INTEREST TO NBFCS ASPER PROVISIONS OF SECTION 194A AND ALSO DEPOSITED THE SAID TDS BEFORE THE DATE OF FURNISHING OF RETURN OF INCOME. THEREFORE, NO DISALLOWANCE U/S.40(A)(IA) OF THE SHRI PERUMAL RAMARAJU V. ITO, WARD-1(2)(6) V. ITO, WARD 6(2), SURAT/I.T.A. NO.2609 & 2610/AHD/2016/A.YS.2008-09 & 09-10 PAGE 6 OF 6 ACT CAN BE MADE AS THE SECOND PROVISO INSERTED BY FINANCE ACT 2012 WITH EFFECT FROM 01.04.2013 IS DECLARATORY AND CURATIVE IN NATURE AND AS RETROSPECTIVE EFFECT FROM 01.04.2005 AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND MARK TOWNSHIP PVT. LTD. [2015] 377 ITR 635 (DEL). THEREFORE, DISALLOWANCE MADE BY THE LOWER AUTHORITIES ARE DELETED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 16. FINALLY, IN THE RESULT, BOTH APPEALS FILED BY THE ASSESSEE FOR THE A.YS. 2008-09 & 2009-10 ARE PARTLY ALLOWED. 17. THE ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2018. SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED: 5 TH JULY, 2018 / SGR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) THE CIT(A), 4. . /PR. CIT 5. , / D.R.-ITAT; 6. / GUARD FILE ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT