Silverline Developers, Baroda V. The Income tax Officer,Ward-2(5), Baroda

ITA 2640/AHD/2010

• Counselvise Citation: 264020514 RSA 2010
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 07-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: SURESH THAKKAR
• Keywords: Business expenditure; Retrospective amendment

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . . . . , , , , ! ! ! ! ' #$ ' #$ ' #$ ' #$ , , , , % % % % BEFORE S/SHRI N.S. SAINI, ACCOUNTANT MEMBER AND KUL BHARAT, JUDICIAL MEMBER) ITA NO.2640/AHD/2010 [ASSTT.YEAR : 2005-2006] SILVERLINE DEVELOPERS ANKUR APARTMENT, GROUP FLOOR JETALPUR ROAD, VADODRA. /VS. ITO, WARD-2(5) VADODARA. ( (( ('( '( '( '( / APPELLANT) ( (( ()*'( )*'( )*'( )*'( / RESPONDENT) +$ , - / ASSESSEE BY : SHRI SURESH THAKKAR / , - / REVENUE BY : SHRI D.K. MISHRA, SR.DR '0 , $1/ DATE OF HEARING : 25 TH OCTOBER, 2013 234 , $1/ DATE OF PRONOUNCEMENT : 31.10.2013 5 / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT( A)-V, BARODA DATED 12.6.2010. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS THAT T HE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO DIS ALLOWING ITA NO.2640/AHD/2010 -2- BUSINESS EXPENDITURE (PAYMENT TO CONTRACTORS) OF ` 7,56,360/- ON ACCOUNT OF PAYMENT ON TDS. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT AN AMOUNT OF ` 7,56,360/- ON ACCOUNT OF CONTRACTUAL PAYMENT, TDS DEDUCTED WAS DEPOSITED TO THE CREDIT OF THE CENTRAL GOVERNMENT BELATEDLY THAN THE DUE DATE PRESCRIBED IN THE ACT F OR THE DEPOSIT OF THE SAME WITH THE CENTRAL GOVERNMENT. HE, THERE FORE, DISALLOWED THE DEDUCTION FOR THE SAME IN COMPUTING THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE LEARNED CIT(A) OBSERVED THAT THE ONLY AMOUNT WHICH SHOULD HAVE BEEN DISALLOWED SHOULD BE ` 7,03,188/- AND NOT ` 7,56,360/-, AS THERE WAS A COMPUTATIONAL ERROR BY THE AO. HE CONFIRMED THE DISALLOWANCE TO THE EXTENT OF ` 7,03,188/- ON THE GROUND THAT THE TDS WAS NOT DEPO SITED IN TIME TO THE CREDIT OF THE CENTRAL GOVERNMENT. 5. BEFORE US, THE LEARNED AR OF THE ASSESSEE ARGUED AND SUBMITTED THAT THE DUE DATE FOR FILING OF THE RETUR N OF INCOME BY THE ASSESSEE WAS 30.10.2005, AND IT WILL BE OBSERVE D FROM THE ASSESSMENT ORDER THAT THE TDS ON CONTRACTUAL PAYMEN T OF ` 7,03,188/- DISALLOWED BY THE LEARNED CIT(A) WAS DEP OSITED BEFORE THAT DATE, AND THEREFORE, THE DISALLOWANCE M ADE WAS NOT JUSTIFIED, AND FOR THIS, HE PLACED RELIANCE ON THE DECISION OF THE MUMBAI BENCH OF THE ITAT IN THE CASE OF PIYUSH C. M EHTA VS. CIT, 52 SOT 27 (MUM) AND STATE COOPERATIVE FEDERATI ON OF ITA NO.2640/AHD/2010 -3- HOUSING BUILDING SOCIETY LTD. VS. DCIT, 23 TAXMANN. COM, 5 SOT 19 (URO)(CHD.). ON THE OTHER HAND, THE LEARNE D DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON REC ORD. IN THE INSTANT CASE, THE AO DISALLOWED EXPENDITURE OF ` 7,03,188/- BEING THE PAYMENT MADE TO CONTRACTORS, AS THE ASSESSEE FA ILED TO DEPOSIT THE TDS ON THE SAID AMOUNT WITHIN THE DUE DATE PRES CRIBED UNDER THE INCOME-TAX ACT WITH THE CENTRAL GOVERNMENT. TH IS WAS CONFIRMED IN APPEAL BY THE LEARNED CIT(A). THE CON TENTION OF THE AR OF THE ASSESSEE IS THAT IF THE TDS DEDUCTED WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF THE RETURN UNDER S ECTION 139(1) OF THE ACT, THEN NO DISALLOWANCE OF THE EXPENDITURE CA N BE MADE. WE FIND THAT IT IS NOT IN DISPUTE THAT THAT TDS DED UCTED FROM THE CONTRACTORS PAYMENT WAS DEPOSITED BEFORE THE DUE D ATE OF FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, WHICH IN THE CASE OF THE ASSESSEE WAS 30.10.2005. THE HONB LE DELHI HIGH COURT IN THE CASE OF CIT VS. RAJINDRAKUMAR IN TAX APPEAL NO.65 OF 2013 ORDER DATED 1 ST JULY, 2013 HAS HELD THAT PROVISO TO SECTION 40(A)(IA) OF THE ACT AMENDED BY FINANCE ACT , 2010 HAS RETROSPECTIVE EFFECT. THE HONBLE HIGH COURT HAS H ELD THAT IF THE TDS DEDUCTED FROM THE PAYMENTS TO WHICH PROVISION O F SECTION 40(A)(IA) ARE APPLICABLE, WAS DEPOSITED TO THE CRED IT OF THE CENTRAL GOVERNMENT, BEFORE THE DUE DATE OF FILING OF THE RE TURN AS PER SECTION 139(1) OF THE ACT, THEN NO DISALLOWANCE OF THE EXPENDITURE CAN BE MADE, BY INVOKING THE PROVISIONS OF SECTION ITA NO.2640/AHD/2010 -4- 40(A)(IA) OF THE ACT. RESPECTFULLY FOLLOWING THE S AID DECISION OF THE HONBLE DELHI HIGH COURT, WE DELETE THE DISALLO WANCE OF ` 7,03,188/- AND ALLOW THIS GROUND OF THE ASSESSEE. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( ' #$ ' #$ ' #$ ' #$ /KUL BHARAT /JUDICIAL MEMBER . .. . . . . . /N.S. SAINI /ACCOUNTANT MEMBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD