M/s. H.C.Sons, Ahmedabad V. The ACIT, Circle-12, Ahmedabad

ITA 2713/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9381 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Retrospective amendment; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 40(a)(ia); 192; 113

Judgement Text

ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] ITA NO.2713/AHD/2013 ASSESSMENT Y EAR : 200 9 - 10 H.C. SONS ..... .......... .APPELLANT 3 1, N EW FRUIT MARKET, NARODA ROAD, AHMEDABAD 380 025. [PAN: AA BFH 0130 P ] VS. ASSISTANT COMMISSIONER OF INCOME TAX , CIRCLE 12, AHMEDABAD . ................ RESPONDENT APPEARANCES BY: P.K. PARIKH FOR THE APPELLANT K. MADHUSUDAN FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 2 3 . 12 .201 6 DATE OF PRONOUNCING THE ORDER : 25 .01.2017 O R D E R 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 19.09.2013 , PASSED BY THE LD. CIT(A) , IN THE MATTER OF ASSESSMENT UND ER SECTION 143(3) OF THE I NCOME TAX ACT, 1961 , FOR THE ASSESSMENT YEAR 2009 - 10. 2. ALTHOUGH ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS OF APPEAL, THERE ARE ONLY TWO GRIEVANCES WHICH REQUIRE ADJUDICATION BY ME FIRST, WHETHER OR NOT THE LEARNED CIT(A) W AS JUSTIFIED IN UPHOLDING DISALLOWANCE OF RS.18,45,187/ - UNDER SECTION 40 (A)(IA) OF THE ACT AND SECOND; WHETHER OR NOT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) W AS JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.18,45,187/ - UNDER SECTION 40 A(2) OF THE ACT. ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 2 OF 7 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE BEFORE ME IS A WHOLESALE FRUIT TRADING COMMISSION AGENT AND ALSO RUNS COLD STORAGE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTED T HAT THE ASSESSEE HAD PAID A SUM OF RS.18,45,187/ - TO M/S H.C. FRUITS , A PARTNERSHIP CONCERN , IN WHICH THE ASSESSEE IS ALSO A PARTNER. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID PAYMENT IS IN THE NATURE OF COMMISSION AND SINCE THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE FROM THESE PAYMENTS THE AMOUNT S ARE TO BE DISALLOWED UNDER SECTION 40 (A)(IA) OF THE ACT. THE ASSESSING OFFICER WAS FURTHER OF THE VIEW THAT SINCE THE ASSESSEE HAS NOT PAID MARGIN MONEY ON ANY OTHER TRANSACTION , CLEARLY, THE PAYMENT SO MADE IS ALSO TO BE DISALLOWED UNDER SECTION 40 A(2)(B) OF THE ACT. IT WAS IN THIS BACKDROP THAT THE AMOUNT OF RS.18,45,187/ - WAS DISALLOWED BY THE ASSESSING OFFICER. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOU T ANY SUCCESS. THE LEARNED CIT(A) WAS OF THE VIEW THAT SINCE THE PAYMENT MADE TO M/S. H.C. FRUITS WAS IN RESPECT OF PRODUCTS OF FRUITS AND IS REQUIRED TO BE TREATED AS COMMISSION, THE DISALLOWANCE UNDER SECTION 40 (A ) (IA) WAS PERFECTLY IN ORDER. THE LEARN ED CIT(A) WAS FURTHER OF THE VIEW THAT SO FAR A DISALLOWANCE UNDER SECTION 40 A(2 )(B) IS CONCERNED, THE PAYMENT MADE BY THE ASSESSEE WAS EXCESSIVE AND THE ASSESSEE HAS FAILED TO FURNISH THE SAME IN THE NORMAL COURSE OF BUSINESS. THE DISALLOWANCE WAS THUS C ONFIRMED. AGGRIEVED BY WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. SO FAR AS FIRST GRIEVANCE I.E. DISALLOWANCE HAVING BEEN MADE UNDER SECTION 40(A)(IA) IS CONCERNED, I FIND THAT THIS ISSUE IS NOW COVERED BY THE JUDGEMENT OF HON BLE DELHI H IGH COURT IN THE CASE OF CIT VS . ANSAL LANDMARK TOWNSHIPS PVT . LTD . [(2015) 377 ITR 635 (DEL)] WHEREIN IT IS HELD THAT AS LONG AS THE RECIPIENT HAS PAID DUE TAXES ON THE INCOME EMBEDDED IN SUCH PAYMENTS, DISALLOWANCE UNDER SECTION 40(A)(IA) CANNOT BE INVOKED. EXPLAINING THE SAME, A DIVISION BENCH OF THIS TRIBUNAL, IN THE CASE OF RKP & ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 3 OF 7 CO . VS . ITO (ITA NO.106/AHD/2016; ORDER DATED 24 TH JUNE 2016), IT HAS BEEN STATED THUS: - 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. DUR ING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED A SUM OF RS 6,48,456, BEING PAYMENT MADE TO NBFCS ON ACCOUNT OF INTEREST CHARGES WITHOUT DEDUCTION OF TAX AT SOURCE, UNDER SECTION 40(A)(IA). AGGRIEVED, ASSESSEE CARRIED THE MAT TER IN APPAL, AND RELIED UPON, INTER ALIA, HON BLE DELHI HIGH COURT S JUDGMENT IN THE CASE OF CIT VS ANSAL LANDMARK TOWNSHIPS PVT LTD [(2015) 377 ITR 635 (DEL)], BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVES, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. NONE HAS APPEARED FOR THE ASSESSEE BUT AS THE ISSUE IN APPEAL IS A SHORT L EGAL ISSUE, SET OUT IN A NARROW COMPASS OF FACTS, WHICH CAN BE DISPOSED OF EVEN WITHOUT THE BENEFIT OF ASSISTANCE FROM THE ASSESSEE, WE CONSIDER IT APPROPRIATE TO PROCCED WITH THE MATTER EX PARTE QUA THE ASSESSEE. 4. WE FIND THAT HON BLE DELHI HIGH COURT HAS SPECIFICALLY APPROVED THE STAND TAKEN BY A COORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF RAJEEV KUMAR AGARWAL VS ACIT [(2014) 149 ITD 363 (AGRA)], AND UPHELD THE ACTION OF THE TRIBUNAL IN FOLLOWING THE SAME. 9. . NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE ENOUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNINTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME WHEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSION S, AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER, WE CANNOT SUBSCRIBE TO THE VIEW THAT IT COULD HAVE BEEN AN INTENDED CONSEQUENCE TO PUNISH THE ASSESSEES FOR NON DEDUCTION OF TAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS, EVE N WHEN THE CORRESPONDING INCOME IS DULY BROUGHT TO TAX. THAT WILL BE GOING MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY, WE HOLD THAT THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RET ROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. 10. IN VIEW OF THE ABOVE DISCUSSIONS, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSES SING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF OUR ABOVE OBSERVATIONS AND AFTER CARRYING OUT NECESSARY VERIFICATIONS REGARDING RELATED PAYMENTS HAVING BEEN TAKEN INTO ACCOUNT BY THE RECIPIENTS IN COMPUTATION OF THEIR INCOME, REGARDING PAYMENT OF TAXES IN RESPECT OF SUCH INCOME AND REGARDING FILING OF THE RELATED INCOME TAX RETURNS BY THE RECIPIENTS. WHILE GIVING ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 4 OF 7 EFFECT TO THESE DIRECTIONS, THE ASSESSING OFFICER SHALL GIVE DUE AND FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE, DECIDE THE MATTER IN ACCORDA NCE WITH THE LAW AND BY WAY OF A SPEAKING ORDER. WE ORDER SO 5. IN EFFECT THUS, THEIR LORDSHIPS HAVE APPROVED THE ACTION OF THE TRIBUNAL IN REMITTING THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ASCERTAIN WHETHER THE RECIPIENT HAS TAKEN INTO ACCOUNT RELATED PAYMENTS INTO COMPUTATION OF HIS INCOME AND OFFERING THE SAME TO TAX, AND, IF SO, DELETE THE DISALLOWANCE UNDER SECTION 40(A)(IA) IN RESPECT OF THE SAME. 6. WHEN, HOWEVER, WE ASKED THE LEARNED DEPARTMENTAL REPRESENTATIVE AS TO WHY WE SHOULD ALSO NOT REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH THE SAME DIRECTIONS, HE, ALONGWITH HIS SENIOR COLLEAGUE SHRI DARHAN SINGH, WHO HAPPENS TO BE THE CIT(A) AUTHORING THE IMPUGNED ORDER AND WHO WAS ON DUTY AS CIT(DR) BEFORE US , HAD THREE POINTS TO MAKE - FIRST, THAT THERE ARE DECISIONS IN SUPPORT OF THE STAND OF THE ASSESSING OFFICER S STAND, BY WAY OF HON BLE KERALA HIGH COURT S DECISION IN THE CASE OF THOMAS GEORGE MUTHOOT VS CIT [(2015) 63 TAXMANN.COM 99 (KERALA)]; SECOND, TH AT EVEN IF INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) CAN BE CONSTRUED AS RETROSPECTIVE IN EFFECT, THE CORRESPONDING RULE IN THE INCOME TAX RULES 1962 IS NOT, AND HAS NOT BEEN HELD TO BE, RETROSPECTIVE, AND THE SECOND PROVISO TO SECTION 40(A)(IA) CAN NOT, THEREFORE, BE GIVE RETROSPECTIVE EFFECT; AND, THIRD, THAT THERE IS NO DECISION ON THIS ISSUE BY HON BLE JURISDICTIONAL HIGH COURT AND, AS SUCH, THE STAND OF THE ASSESSING OFFICER CANNOT BE FAULTED. 7. AS FOR HON BLE KERALA HIGH COURT S DECISION IN TH E CASE OF THOMAS GEORGE MUTHOOT (SUPRA), UNDOUBTEDLY, OUTSIDE THE JURISDICTION OF HON BLE KERALA HIGH COURT AND OUTSIDE THE JURISDICTION OF HON BLE DELHI HIGH COURT - WHICH HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, THERE ARE CONFLICTING DECISIONS ON THE ISSUE OF RESTROSPECTIVITY OF SECOND PROVISO TO SECTION 40(A)(IA). IT IS THUS EVIDENT THAT VIEWS OF THESE TWO HIGH COURTS ARE IN DIRECT CONFLICT WITH EACH OTHER. CLEARLY, THEREFORE, THERE IS NO MEETING GROUND BETWEEN THESE TWO JUDGMENTS. THE DIFFICULTY ARISES AS TO WHICH OF THE HON BLE NON JURISDICTIONAL HIGH COURT IS TO BE FOLLOWED BY US IN THE PRESENT SITUATION. IT WILL BE WHOLLY INAPPROPRIATE FOR US TO CHOOSE VIEWS OF ONE OF THE HIGH COURTS BASED ON OUR PERCEPTIONS ABOUT REASONABLENESS OF THE RESPECTI VE VIEWPOINTS, AS SUCH AN EXERCISE WILL DE FACTO AMOUNT TO SITTING IN JUDGMENT OVER THE VIEWS OF THE HIGH COURTS SOMETHING DIAMETRICALLY OPPOSED TO THE VERY BASIC PRINCIPLES OF HIERARCHICAL JUDICIAL SYSTEM. WE HAVE TO, WITH OUR HIGHEST RESPECT OF BOTH THE HON BLE HIGH COURTS, ADOPT AN OBJECTIVE CRITERION FOR DECIDING AS TO WHICH OF THE HON BLE HIGH COURT SHOULD BE FOLLOWED BY US. WE FIND GUIDANCE FROM THE JUDGMENT OF HON BLE SUPREME COURT IN THE MATTER OF CIT VS. VEGETABLE PRODUCTS LTD. [(1972) 88 ITR 192 ( SC)]. HON BLE SUPREME COURT HAS LAID DOWN A PRINCIPLE THAT 'IF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISIONS ARE POSSIBLE, THAT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED'. THIS PRINCIPLE HAS BEEN CONSISTENTLY FOLLOWED BY THE VARIOUS AUT HORITIES AS ALSO BY THE HON BLE SUPREME COURT ITSELF. IN ANOTHER SUPREME COURT JUDGMENT, PETRON ENGG. CONSTRUCTION (P) LTD. & ANR. VS. CBDT & ORS. (1988) 75 CTR (SC) 20 : (1989) 175 ITR 523 (SC), IT HAS BEEN REITERATED THAT THE ABOVE PRINCIPLE OF LAW IS WE LL ESTABLISHED AND THERE IS NO DOUBT ABOUT THAT. HON BLE SUPREME COURT HAD, HOWEVER, SOME OCCASIONS TO DEVIATE FROM THIS GENERAL PRINCIPLE OF INTERPRETATION OF TAXING STATUTE WHICH CAN BE CONSTRUED AS EXCEPTIONS TO THIS GENERAL RULE. IT HAS BEEN HELD THAT THE RULE OF RESOLVING AMBIGUITIES IN FAVOUR OF TAX - PAYER DOES NOT ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 5 OF 7 APPLY TO DEDUCTIONS, EXEMPTIONS AND EXCEPTIONS WHICH ARE ALLOWABLE ONLY WHEN PLAINLY AUTHORISED. THIS EXCEPTION, LAID DOWN IN LITTMAN VS. BARRON 1952(2) AIR 393 AND FOLLOWED BY APEX COURT IN MANGALORE CHEMICALS & FERTILIZERS LTD. VS. DY. COMMR. OF CT (1992) SUPPL. (1) SCC 21 AND NOVOPAN INDIA LTD. VS. CCE & C 1994 (73) ELT 769 (SC), HAS BEEN SUMMED UP IN THE WORDS OF LORD LOHEN, 'IN CASE OF AMBIGUITY, A TAXING STATUTE SHOULD BE CONSTRUED IN F AVOUR OF A TAX - PAYER DOES NOT APPLY TO A PROVISION GIVING TAX - PAYER RELIEF IN CERTAIN CASES FROM A SECTION CLEARLY IMPOSING LIABILITY'. THIS EXCEPTION, IN THE PRESENT CASE, HAS NO APPLICATION. THE RULE OF RESOLVING AMBIGUITY IN FAVOUR OF THE ASSESSEE DOES NOT ALSO APPLY WHERE THE INTERPRETATION IN FAVOUR OF ASSESSEE WILL HAVE TO TREAT THE PROVISIONS UNCONSTITUTIONAL, AS HELD IN THE MATTER OF STATE OF M.P. VS. DADABHOY S NEW CHIRMIRY PONRI HILL COLLIERY CO. LTD. AIR 1972 (SC) 614. THEREFORE, WHAT FOLLOWS IS THAT IN THE PECULIAR CIRCUMSTANCES OF THE CASE AND LOOKING TO THE NATURE OF THE PROVISIONS WITH WHICH WE ARE PRESENTLY CONCERNED, THE VIEW EXPRESSED BY THE HON BLE DELHI HIGH COURT IN THE CASE OF ANSAL LANDMARK (SUPRA), WHICH IS IN FAVOUR OF ASSESSEE, IS R EQUIRED TO BE FOLLOWED BY US. REVENUE DOES NOT, THEREFORE, DERIVE ANY ADVANTAGE FROM HON BLE KERALA HIGH COURT S DECISION IN THE CASE OF THOMAS GEORGE MUTHOOT (SUPRA). 8. THE SECOND ISSUE IS WITH RESPECT TO THE SECOND PROVISO TO SECTION 40(A)(IA) BEING HE LD TO BE RETROSPECTIVE, WITHOUT CORRESPONDING ENABLING PROVISION IN THE RULES BEING HELD TO BE RETROSPECTIVE. THAT IS A HYPER TECHNICAL ARGUMENT AND TOO PEDANTIC AN APPROACH. THE SECOND PROVISO TO SECTION 40(A)(IA) WAS HELD TO BE RETROSPECTIVE IN THE CONTE XT OF FINDING SOLUTION TO THE PROBLEM TO THE TAXPAYER, AND THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS ABOUT FACTUAL VERIFICATIONS ON THE RECIPIENT HAVING INCLUDED THE SAME IN THE RECEIPTS BASED ON WHICH TAXABLE IN COME IS COMPUTED, AND THE INCOME HAVING BEEN OFFERED TO TAX. IT IS THIS ACTION OF THE COORDINATE BENCH THAT WAS UPHELD BY THE TRIBUNAL AND THE COURSE OF ACTION SO ADOPTED BY THE COORDINATE BENCH APPROVED BY THEIR LORDSHIPS. IT IS IMPERMISSIBLE TO PICK UP O NE OF THE ASPECTS OF THE DECISION OF THE JUDICIAL AUTHORITY AND READ THE SAME IN ISOLATION WITH OTHER ASPECTS. THE DECISION IS NOT ON THE RETROSPECTIVITY OF THE PROVISO ALONE, ITS ALSO ON DELETION OF DISALLOWANCE IN THE EVENT OF THE RECIPIENT HAVING TAKEN INTO ACCOUNT THESE RECEIPTS IN THE COMPUTATION OF INCOME. THE JUDGE MADE LAW IS AS BINDING ON THE AUTHORITIES BELOW AS IS THE LEGISLATED STATUE. THE HYPER TECHNICAL STAND OF THE DEPARTMENTAL REPRESENTATIVES, THEREFORE, DOES NOT MERIT OUR APPROVAL. 9. AS REGARDS LACK OF GUIDANCE FROM HON BLE JURISDICTIONAL HIGH COURT, THAT CAN NOT BE REASON ENOUGH TO DISREGARD THE DECISIONS FROM NON - JURISDICTIONAL HIGH COURTS. HON BLE COURTS ABOVE, BEING A HIGHER TIER OF THE JUDICIAL HIERARCHY, BIND THE LOWER FORUMS NOT ON LY IN THE JURISDICTION OF RESPECTIVE HIGH COURTS, BUT UNLESS, THERE IS ANYTHING CONTRARY THERETO BY THE JURISDICTIONAL HIGH COURTS, OTHER JURISDICTIONS AS WELL. THERE CANNOT BE ANY DISPUTE ON THE FUNDAMENTAL PROPOSITION THAT IN THE HIERARCHICAL JUDICIAL SY STEM THAT WE HAVE, BETTER WISDOM OF THE COURT BELOW HAS TO YIELD TO HIGHER WISDOM OF THE COURT ABOVE, AND THEREFORE WE HAVE TO HUMBLY BOW BEFORE THE VIEWS EXPRESSED BY HON BLE COURTS ABOVE. SUCH A HIGH COURT BEING A NON - JURISDICTIONAL HIGH COURT DOES NOT A LTER THE POSITION AS LAID DOWN BY HON BLE BOMBAY HIGH COURT IN THE MATTER OF CIT VS. GODAVARI DEVI SARAF ([1978) 113 ITR 589 (BOM)] AND AS ANALYSED BY A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS AURANGABAD HOLIDAY RESORTS PVT LTD [(2009) 118 ITD 1 (PUNE)]. ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 6 OF 7 10. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR LIMITED VERIFICATION ON THE ASPECT AS TO WHETHER RECIPIENT OF PAYMENT HAS INCLUDED THE SAME IN HIS COMPUTATION OF BUSINESS INCOME OFFERED TO TAX, AND, IF FOUND TO BE SO, DELETE THE DISALLOWANCE IN QUESTION. WITH THESE DIRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER . 5 . LEARNED REPRESENTATIVES F AIRLY AGREED THAT THE ISSUE IS COVERED TO THE EXTENT ABOVE AND THE MATTER CAN B E REMITTED TO THE FILE OF THE A SSESSING OFFICER FOR THE LIMITED VERIFICATION OF THE FACT THAT THE RECIPIENT HAS INCLUDED THE RECEIPT FROM THE ASSESSEE IN THE COMPUTATION OF INCO ME ON WHICH TAXES HAVE BEEN PAID. THE ASSESSEE MAY OBTAIN FROM THE RECIPIENT CONCERNED A CERTIFICATE TO THIS EFFECT AND FILE THE SAME BEFORE THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, AND WITH THE CONSENT OF BOTH THE PARTIES, THE MATTER STANDS REST ORED TO THE FILE OF THE A SSESSING OFFICER FOR LIMITED VERIFICATION AS STATED ABOVE. 6 . AS REGARDS THE SECOND FACET OF DISALLOWANCE I.E. UNDER SECTION 40 A(2 )( B) OF THE ACT , I FIND THAT THE ISSUE IS NOW COVERED IN FAVOUR O F THE ASSESSEE BY THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PWS ENGINEER S LIMITED VS. DCIT - TAX APPEAL N O.209 OF 2015 , JUDGEMENT DATED 06.06.2 016 WHEREIN T HEIR L ORDSHIPS HAVE INTER ALIA HELD THAT AS LONG AS THE AMOUNTS PAID BY THE ASSESSEE TO THE SPECIFIC PERSONS AR E TAXED IN THE HANDS OF SPECIFIC PERSON S AT THE SAME RATE, DISALLOWANCE UNDER SECTION 40 A(2 )( B) WILL BE MEANINGLESS INASMUCH AS PERMITTING THE R EVENUE TO TAX THE SAME INCOME AGAIN AT THE SAME RATE IN THE HANDS OF THE PRINCIPAL PAYER WOULD AMOUNT TO DOUBLE TAXATION . ON THIS ASPECT ALSO , THEREFORE , I THINK THE PROPER COURSE OF ACTION WILL BE TO REMIT THE MATTER TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION OF FACTUAL ASPECT AS TO WHETHER OR NOT THE SAID AMOUNT IS BROUGHT TO TAX IN THE HANDS OF THE RE CIPIENT AT THE SAME RATE. IF THAT BE SO, TH E DISALLOWANCE WILL STAND DELETED. ITA NO.2 713 /AHD/201 3 A SSESSMENT Y EAR: 20 0 9 - 10 PAGE 7 OF 7 7 . WITH THE DIRECTIONS AS ABOVE, I REMIT THE MATTER TO THE FILE OF THE ASSESSING O FFICE R FOR FRESH ADJUDICATION STRICTLY IN THE LIGHT OF THE OBSERVATIONS ABOVE. 8 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF JANUARY, 2017 . SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 25 TH DAY OF JANUARY, 2017 . PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD