Shri Rameshchandra R.Brahmbhatt, Baroda V. The Income Tax Officer,Ward-2(2) Now Ward-1(2)(2), Baroda

ITA 2667/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94818 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 21-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2667/AHD/2015 / ASSESSMENT YEAR: 2006-07 RAMESHCHANDRA R. BRAHMBHATT, PROP. PANCHARATNA TRANSPORT CO., 24, KUBERNAGAR SOCIETY MANJALPUR, BARODA .. APPELLANT PAN : ABXPB 7921 M VS ITO WARD (2)(2), BARODA .. RESPONDENT ASSESSEE(S) BY : SHRI M.K. PATEL , AR REVENUE BY : SHRI ANIL KUMAR BHARDWAJ , SR - DR / DATE OF HEARING 26/11/2015 /DATE OF PRONOUNCEMENT 08/12/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, VADODAR A DATED 30.07.2015 FOR ASSESSMENT YEAR 2005-06, ON THE FOLL OWING GROUNDS:- 1 THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS AGAINST LAW AND FACTS OF THE CASE, 2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ] - II, BARODA ERRED IN CONFIRMING THE ORDER OF THE ASS ESSING ITA NO. 2667/AHD /2015 RAMESHCHANDRA R. BRAHMBHATT VS. ITO AY 2006-07 - 2 - OFFICER ASSESSING THE APPELLANT ON A TOTAL INCOME O F RS.12,84,240/- U/S 143(3) OF THE I T ACT, 1961. 3 THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN CONFIRMING THE DISALLOWANCE OF RS.10,96,928/- MADE U/S.40(A)(IA) OF THE INCOME TAX ACT, 1961. 4 THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN HOLDING THAT THE SECOND PROVISO TO SECTION 4)(A)(IA ) DOES NOT OPERATE RETROSPECTIVELY AND IS EFFECTIVE ONLY F ROM 1ST APRIL, 2013. 5 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-II, ERRED IN NOT PROPERTY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. 6 IT IS PRAYED THAT THE ADDITION OF RS.10,96,928/ - U/S 40(A)(IA) BE DELETED. 2. AT THE TIME OF HEARING, THE LD. AUTHORIZED REPRE SENTATIVE FOR THE ASSESSEE POINTED OUT THAT SIMILAR ISSUE ARO SE BEFORE THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI KAUSHIKKUMAR VRAJLAL PATADIA VS. ITO IN ITA NO.631/AHD/2015 FOR ASSESSMENT YEAR 2008-09, WHEREI N SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASS ESSEE BY OBSERVING AS UNDER:- 10. THIS LEAVES US WITH THE SECOND ISSUE OF SECTIO N 40(A)(IA) DISALLOWANCE OF RS.7,38,096/- OF INTEREST EXPENDITURE FOR WANT OF TDS DEDUCTION. THE ASSESSEE S CASE THROUGH OUT IS THAT THE IMPUGNED DISALLOWANCE IS NOT APPLICABLE QUA THE AMOUNTS ALREADY PAID AND THE SAM E HAS TO BE CONFINED QUA THE SUMS REMAINING AS PAYABL E AS ON 31.03.2008. THERE IS NO DISPUTE THAT TRIBUNALS SPECIAL BENCH DECISION IN MERYLIN SHIPPING & TRANSPORT VS. ADDL. CIT 146 TTJ 1 (VIZAG) ACCEPTED THIS PLEA. THE HONB LE JURISDICTIONAL HIGH COURT IN CIT VS. SIKANDAR KHAN N ITA NO. 2667/AHD /2015 RAMESHCHANDRA R. BRAHMBHATT VS. ITO AY 2006-07 - 3 - TUNVAR (2013) 33 TAXMANN.COM 33 HAS REVERSED THE TRIBUNALS DECISION AND HOLDS THAT SECTION 40(A)(IA ) COVERS BOTH PAID AND PAYABLE AMOUNTS ON THE CLOSING DAY OF RELEVANT ACCOUNTING PERIOD. THEREFORE, WE REJECT TH IS FIRST ARGUMENT OF THE ASSESSEE. THE LOWER AUTHORITIES A CTION IS ACCORDINGLY UPHELD ON THIS COUNT. THE ASSESSEES NEXT ARGUMENT IS THAT IT HAD PROVIDE D ALL PAN AND INCOME TAX DETAILS OF ITS TWO INTEREST PAYEES I.E. M/S. RELIANCE CAPITAL AND GE MONEY QUA PAYMENT S MADE OF RS.2,50,931/- AND RS.4,87,165/- RESPECTIVEL Y SUBJECT MATTER TOTALING TO RS.7,38,096/- IN QUESTIO N. THE ASSESSEES CASE ACCORDINGLY RESTS ON APPLICATION OF SECOND PROVISO TO SECTION 40(A)(IA). IT QUOTES A CO-ORDINA TE BENCH DECISION IN RAJIV KUMAR AGARWAL VS. ADDL. CIT ITA N O. 337/AGRA/2013 DECIDED ON 29.05.2013 HOLDING THAT TH E ABOVE STATED PROVISO IS CURATIVE IN NATURE. AND SEC TION 40(A) (IA) DISALLOWANCE IS NOT SUSTAINABLE AS LONG AS AN ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAUL T. THE HONBLE DELHI HIGH COURT IN ITA 160/2015 CIT VS. AN SAL LAND TOWNSHIPS DECIDED ON 26.08.2015 UPHOLDS THE TRIBUNALS REASONING HEREINABOVE AFTER ALMOST REPRO DUCING THE ENTIRE OPERATIVE PART IN EXTEMPORE. THE ASSESSE E SUBMITS ACCORDINGLY THAT ITS PAYEE ALREADY STAND AS SESSED QUA THE IMPUGNED INTEREST INCOME AND HE CANNOT BE H ELD AS THE ASSESSEE IN DEFAULT BY VIRTUE OF APPLICATION OF SECOND PROVISO TO SECTION 40(A)(IA) R.W.S. 201 OF T HE ACT. THE REVENUE FAILS TO CONTROVERT THIS FACTUAL POSITI ON. WE NOTICE FROM THE CASE FILE THAT THE ASSESSEE HAS RAI SED THIS PLEA IN PRINCIPLE BEFORE THE LOWER AUTHORITIES AS W ELL. HOWEVER, SAME HAS NOT BEEN CONSIDERED IN DETAIL. WE ACCORDINGLY ACCEPT ASSESSEES ARGUMENT IN PRINCIPLE AND DIRECT THE LD. ASSESSING OFFICER TO PASS A FRESH OR DER AS PER LAW BY TAKING INTO ACCOUNT ALL THE NECESSARY FACTS AND THE ABOVE STATED CASE LAW. THIS SECOND SUBSTANTIVE GROU ND IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER. 11. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ITA NO. 2667/AHD /2015 RAMESHCHANDRA R. BRAHMBHATT VS. ITO AY 2006-07 - 4 - 2.1. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, W E RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER WITH SIMILAR DIRECTIONS. 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 8TH OF DECEMBER, 2 015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 08/12/2015 *BT / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD