Shri Shailesh Durgaprasad Yadav, Baroda V. The ACIT., Circle-2, Baroda

ITA 2622/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62934 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 06-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S JHA
• Section: 194C

Judgement Text

ITA NO 2622 /AHD/2010 A.YR.. 2005 -06 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AH MEDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T.A. NO.262 2/AHD/2010. (ASSESSMENT YEAR: 2005 06 ) MR. SHAILESH D. YADAV, 32 ZAVERCHAND PARK SOCIETY, OLD PADRA ROAD, BARODA. (APPELLANT) VS. THE INCOME TAX OFFICER, WARD 2(5), AAYAKAR BHAVAN, NEAR RACE COURSE CIRCLE, BARODA. (RESPONDENT) PAN: AAJPY 8593R APPELLANT BY : WRITTEN SUBMISSIONS. RESPONDENT BY : MR.S.S. JHA, SR.D.R. ( )/ ORDER DATE OF HEARING : 24-7-2012 DATE OF PRONOUNCEMENT : 7-9-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT (A)- V, BARODA DATED 22-6-2010 FOR THE ASSESSMENT YEAR 2 005-06. 2. THIS APPEAL WAS FIXED FOR HEARING ON 23-7-2012 W HEN NOBODY APPEARED ON BEHALF OF THE ASSESSEE AND THE MATTER W AS RE-FIXED ON 24-7- 2012. ON THE DATE OF HEARING NONE APPEARED BUT THE ASSESSEE FILED WRITTEN SUBMISSIONS. ON THE BASIS OF WRITTEN SUBMISSIONS FI LED ON 20-7-2012 WE PROCEED TO DISPOSE OF THIS APPEAL. ITA NO 2622 /AHD/2010 A.YR.. 2005 -06 2 3. THE ASSESSEE IS A PROPRIETOR OF 4 FIRMS VIZ M/S. SUMANGALAM DEVELOPERS, M/S. RAJLAXMI DEVELOPERS, M/S. SHRI RAJ DEVELOPERS AND M/S. RAJ RATNA DEVELOPERS, IN WHICH THE ASSESSEE CARRIED ON BUSINESS OF CONSTRUCTION. THE ASSESSEE FILED HIS RETURN OF INCO ME ON 30-10-2005 DECLARING TOTAL INCOME OF RS.87,000/-.THE CASE WAS TAKEN UP FOR SCRUTINY. A.O. OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE HAS MADE PAYMENTS TO VARIOUS CONTRACTORS ON WHICH T DS WAS NOT DEDUCTED. HE DISALLOWED THE SAME BY OBSERVING AS UN DER :- 7.1. ON PERUSAL OF THE ACCOUNTS OF M/S. RAJ RATNA DEVELOPERS, IT WAS OBSERVED THAT THE ASSESSEE HAS MADE PAYMENTS TO VARIOUS CONTRACTORS AS UNDER FROM WHICH HE WAS SUPPOSED TO DEDUCT TAX AT SOURCE U/S. 194C OF THE I.T. ACT. SHIV SHAKTI INDUSTRIES RS. 60,215/- RAMBHAROSE ELECTRICAL RS. 23,500/- ----------------- RS. 83,715 ========= 7.2. SECTION 40(A)(IA) OF THE INCOME TAX ACT PRESCR IBES THAT ANY INTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESS IONAL SERVICES OR FEES FOR TECHNICAL SERVICES, BEING RESIDENT, FOR CA RRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY W ORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVIIB AND SUCH T AX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID DUR ING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY O F THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 IS NOT ALLOWABLE. 7.3. SINCE THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS OF RS.83,715/- MADE TO CONTRACTORS, THE SA ID EXPENSES ARE HEREBY DISALLOWED IN VIEW OF THE PROVISIONS OF SECT ION 40(A)(IA) OF THE I.T. ACT. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NO 2622 /AHD/2010 A.YR.. 2005 -06 3 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT ( A). CIT (A) UPHELD THE ACTION OF ASSESSING OFFICER. 5. AGGRIEVED WITH THE ORDER OF CIT (A), THE ASSESSE E IS NOW IN APPEAL BEFORE US. 6. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. 7. ON THE BASIS OF MATERIAL ON RECORD, WE FIND THAT THE A.O. IN THE ASSESSMENT ORDER HAS GIVEN A FINDING THAT ASSESSEE HAD MADE THE PAYMENTS TO VARIOUS CONTRACTORS AND ON WHICH TDS WA S NOT DEDUCTED. 8. THE LD. D.R. COULD NOT CONTROVERT THIS FINDING B EFORE US. 9. THE A.O. WAS OF THE VIEW THAT SINCE THE ASSESSEE HAD NOT DEDUCTED TDS U/S.194C, EXPENDITURE CANNOT BE ALLOWED AS A DE DUCTION AND HE ACCORDINGLY DISALLOWED THE EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA). 10. SPECIAL BENCH OF ITAT VISHAKHAPATNAM IN THE CAS E OF MERILYN SHIPPING & TRANSPORTERS (SPL. BENCH) IN ITA NO.477/ VIZ./2008 HAS HELD AS UNDER:- THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE APPLICABLE ONLY TO THE AMOUNTS OF EXPENDITURE WHICH ARE PAYABLE AS ON THE DATE 31 ST MARCH OF EVERY YEAR AND IT CANNOT BE INVOKED TO DI SALLOW WHICH HAD BEEN ACTUALLY PAID DURING THE PREVIOUS YE AR, WITHOUT DEDUCTION OF TDS. ITA NO 2622 /AHD/2010 A.YR.. 2005 -06 4 11. ON THE BASIS OF MATERIAL ON RECORD WE FIND THAT IN THE ABOVE CASE, A.O. HAS GIVEN A FINDING THAT THE PAYMENTS HAVE BEE N MADE TO THE CONTRACTORS AND THERE IS NO AMOUNT OUTSTANDING AND IS PAYABLE AS ON 31-3- 2005. APPLYING THE RATIO OF THE DECISION IN THE CAS E OF MERILYN SHIPPING & TRANSPORTERS (SPL. BENCH), WE ARE OF THE VIEW THAT NO DISALLOWANCE CAN BE MADE AS THE ASSESSEE HAS FULLY PAID THE AMOUNT BEFO RE 31 ST MARCH,2005. IN VIEW OF THESE FACTS WE DELETE THE ADDITION MADE BY THE A.O. AND ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON 7 - 9 - 2012. SD/- SD/- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-V, BARODA. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO 2622 /AHD/2010 A.YR.. 2005 -06 5 1.DATE OF DICTATION 24 - 7 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 23 / 8 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 31 - 8 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 7 - 9 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 7 - 9 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 - 9 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..