THE ITO, Ward-2(1), Ujjain V. M/S. DIVINE CITY PVT. LTD., Ujjain

ITA 27/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5754 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESH
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER INCOME TAX OFFICER, WD.2(1), UJJAIN VS. M/S.DIVINE CITY PRIVATE LIMITED, 105-A, DURGA PLAZA, DEWAS ROAD, UJJAIN .. ./ PAN: AACCD4627M / APPELLANT / RESPONDENT / APPELLANT BY SHRI MOHD. JAVED, SR. DR / RESPONDENT BY SHRI S. S. DESHPANDE, CA DATE OF HEARING 28.09.2016 DATE OF PRONOUNCEMENT 28.09.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), UJJAIN, [ HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 28.10.2015 AND PER TAINS TO .. . / I.T.A. NO.27/IND/2016 %' ' / ASSESSMENT YEAR: 2008-09 I.T.A.NO. 27/IND/2016-A.Y.2008-09 DIVINE CITY PRIVATE LIMITED PAGE 2 OF 6 ASSESSMENT YEAR 2008-09 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT DATE D 31.03.2014 OF ITO WARD 2(1) UJJAIN [HEREINAFTER REF ERRED TO AS THE AO]. 2. GROUND NOS. 1 & 2 RELATE TO DELETION OF ADDITION OF RS. 15,12,523/- MADE BY THE AO ON ACCOUNT OF ABSENCE OF SUPPORTING EVIDENCE AND NON DEDUCTION OF TAX AT SOU RCE U/S 40(A)(IA) OF THE ACT AND ADMITTING ADDITIONAL EVIDE NCE IN VIOLATION OF PROVISIONS OF RULE 46A(1) AND 46A(2) O F THE INCOME TAX RULES, 1962. 3. FACTS OF THE CASE ARE THAT THE ASSESSEE HAS INCURRE D FOLLOWING DEVELOPMENT EXPENSES :- S.NO. PARTICULARS AMOUNT 1. CEMENT PURCHASE 6,53,080/ - 2. BORE WELL, MATERIAL AND OTHER ITEMS 2,45,881/ - 3. PURCHASE OF ELECTRIC LINE MATERIAL 3,17,836/ - 4. BORE WELL, MATERIAL AND OTHER ITEMS 2,00,865/ - 5. PURCHASE OF PIPE AND CABLES 44,928 / - 6. SITE OFFICE EXP. 10,072/ - 7. RESISTIVITY SURVEY 7,000/ - 8. SITE MANAGEMENT EXP. 2,00,007/ - 9. WATER TANK EXP. 2,361/ - 10. BRICK EXP. 1,05,007/ - TOTAL 15,12,523/ - I.T.A.NO. 27/IND/2016-A.Y.2008-09 DIVINE CITY PRIVATE LIMITED PAGE 3 OF 6 4. THE ADDITION WAS MADE ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUCTED THE TDS ON THE PAYMENT MA DE AND NOT FURNISHING COPY OF LEDGER OR SUPPORTING VOUCHER S. 5. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THE DETAI LS OF ABOVE EXPENSES AND CLAIMED THAT THESE ARE NOTIONALL Y PURCHASED BILLS WHERE THE ASSESSEE NEED NOT TO DEDUC T THE TDS. THIS SUBMISSION MADE BY THE ASSESSEE WAS FORWARD ED TO THE AO FOR REMAND REPORT. THE AO VIDE HIS REMAND RE PORT DATED 26.5.2015 HAS NOT IDENTIFIED THE PAYMENT WHICH REQUIRES THE DEDUCTION OF TDS. THE AO VERIFIED THE LEDGER ACCOUNT OF PAYMENT MADE AMOUNTING TO RS. 15,12,523/ - AND NOT POINTED OUT ANY EXPENDITURE WHETHER TDS WAS REQUI RED TO BE DEDUCTED. THEREFORE, THE LD. CIT(A) HAS HELD THA T THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS AND, THEREFO RE, THE AO WAS NOT JUSTIFIED IN DISALLOWING THE EXPENSES U/S 40(A)(IA) OF THE ACT. 6. AGGRIEVED WITH THE ORDER, THE REVENUE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL CHALLENGING THE ACTION OF THE AO I.T.A.NO. 27/IND/2016-A.Y.2008-09 DIVINE CITY PRIVATE LIMITED PAGE 4 OF 6 AND ALSO CHALLENGING THE ADMISSION OF ADDITIONAL EV IDENCE IN VIOLATION OF RULES 46A OF THE INCOME TAX RULES 1962 . 7. HOWEVER, THE LD. SR. DEPARTMENTAL REPRESENTATIVE H AS NOT POINTED OUT THAT ON WHAT ACCOUNT THERE IS VIOLAT ION OF RULE 46A OF INCOME TAX RULES AND SIMPLY RELIED UPON THE ORDER OF THE AO. 8. WE HAVE CONSIDERED THE FACTS AND MATERIALS AVAILABL E ON RECORD. WE FIND THAT THE ASSESSEE HAS FURNISHED DETAILS OF EXPENSES AMOUNTING TO RS. 15,12,523/- PERTAINING TO SITE DEVELOPMENT EXPENSES, WHICH WERE ALSO REFLECTING AT PAGE 2 OF THE ASSESSMENT ORDER. WE ALSO NOTE THAT THE LD. CIT (A) HAS FORWARDED THE DETAILS TO THE AO FOR HIS COMMENTS AND EXAMINATION BY WAY OF REMAND REPORT. THE AO HAS ALSO EXAMINED THE SAME AND DID NOT FIND OUT ANY EXPENDIT URE WHERE THE TDS WAS REQUIRED TO BE DEDUCTED. THEREFORE , WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE DUE PROCEDURE OF LAW. THEREFORE, THERE APPEARS NO VIOL ATION OF RULE 46A OF THE I.T. RULES. FURTHER, THE DETAILS WERE ALSO AVAILABLE WITH THE AO, BUT ONLY DUE TO NON-PRODUCING OF THE COPY OF LEDGER ACC OUNT WHICH I.T.A.NO. 27/IND/2016-A.Y.2008-09 DIVINE CITY PRIVATE LIMITED PAGE 5 OF 6 ACCORDING TO THE ASSESSEE HAS NOT BEEN CALLED FOR F ILED BY THE AO FROM THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY MERITS IN THE APPEAL OF THE REVENUE. GROUND NOS. 1 & 2 OF THE REVENUE ARE REJECTED. 9. GROUND NO. 3 RELATES TO DELETION OF ADDITION OF RS. 2,00,864/- BY HOLDING THAT ABOVE PAYMENT WAS NOT LIA BLE TO DEDUCTION OF TAX AT SOURCE. 10. FACTS APROPOS OF THE ABOVE GROUND THAT THE ASSESSEE HAS MADE PAYMENT OF RS. 1,01,845 VIDE BILL DATED 28 .04.2007 AND RS. 99,019/- VIDE BILL DATED 28.04.2008 TO M/S . OBEROI TUBEWELL FOR DIGGING BOREWELL, ON WHICH NO TDS WAS D EDUCTED AND THE AO DISALLOWED THE SAME. BEFORE THE CIT(A), THE ASSESSEE CLAIMED THAT THE PAYMENT HAS BEEN MADE WITH OUT DEDUCTING THE TDS. IN THE DIGGING OF THE TUBE WELL, ALL THE PAYMENTS MADE TO THE PERSONS, WHO CARRY OUT THE TUBE WELL BORINGS, WHICH PAYMENTS INCLUDES SUBJECT TO M.S.PIPE S, WHICH IS NOTHING BUT MATERIAL PURCHASED. IN CASE OF MATER IAL PURCHASED, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT THE TDS WHILE MAKING THE PAYMENT. IT WAS ALSO CLAIMED THAT T HIS I.T.A.NO. 27/IND/2016-A.Y.2008-09 DIVINE CITY PRIVATE LIMITED PAGE 6 OF 6 AMOUNT HAS ALREADY BEEN INCLUDED IN ADDITION OF RS. 15,12,523/-. HENCE, THE SAME AMOUNTS TO DOUBLE ADDI TION ON THIS ACCOUNT. CONSIDERING THESE FACTS, THE LD. CIT( A) HAS DELETED THE ADDITION OF RS. 2,00,864/-. 11. WE HAVE CONSIDERED THE FACTS AND MATERIALS AVAILABL E ON RECORD. WE FIND THAT THE PAYMENT WAS MADE TOWARDS THE PURCHASE OF MATERIAL AS THE DIGGING OF TUBE WELL AL SO REQUIRED PURCHASE AND SUPPLY OF MATERIAL. THEREFORE, THERE A PPEARS NO LIABILITY ON ACCOUNT OF TDS AND MOREOVER, THE SAID AMOUNT HAS ALREADY BEEN INCLUDED IN THE ABOVE GROUND OF APPEAL . HENCE, THE FINDINGS OF THE LD. CIT(A) IS UPHELD. THIS GROU ND IS, THEREFORE, DISMISSED. 12. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 28 TH SEPTEMBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 28 TH SEPTEMBER, 2016. CPU*