The ITO, Ward-3, Mehsana V. Shri Jacob Jhon Kurishiakal, Gandhinagar

ITA 2786/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2021 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 09-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Retrospective amendment; TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI A.N.PHAUJA, ACCOUNTANT MEMBER ITA NO.2786/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING:14.12.09 DRAFT ED: 15.12.09 INCOME TAX OFFICER, WARD-3, MEHSANA V/S. SHRI JACOB JHON KURSHIAKAL, PROP. J.J. ENGINEERS, 9, UMIYA PARK SOCIETY, KALOL, DIST. GANDHINAGAR PAN NO.AAXPJ3006G (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI C.K. MISHRA, SR. DR RESPONDENT BY:- NONE O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-GANDHINAGAR IN APPEAL NO. CIT(A )/GNR/225/2008-09 DATED 17-07-2009. THE ASSESSMENT WAS FRAMED BY THE INCOME TAX OFFICER,, WARD-3, MEHSANA U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 17-12-2008 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF DEDUCTION OF EXPENSES U/S.40A(IA) OF THE ACT FOR AN AMOUNT OF RS.7,19,577/- AS THE ASSESSEE FAILED TO D EDUCT TDS. 3. WE HAVE HEARD THE LD. SR. DEPARTMENTAL REPRESENT ATIVE AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE RECORDS. W E HAVE ALSO PERUSED THE CASE ITA NO.2786/AHD/2009 A.Y. 2006-07 ITO WD-3, MEHSANA V. SH. JACOB J KURISHIAKAL PAGE 2 RECORDS INCLUDING THE ASSESSMENT ORDER AS WELL AS T HE ORDER OF CIT(A). THE BRIEF FACTS LEADING TO THE ISSUE ARE THAT IN ACCOUNTS THE ASSESSEE DEBITED LABOUR EXPENSES TO THE TUNE OF RS.90,44,058/- IN PROFIT & LOSS A/C. AND ON VERIFICATION THE ASSESSING OFFICER FOUND THAT IN TEN INSTANCES INVOLVING A SUM OF RS.15,56,875/-, THE ASSESSEE HAD DEPOSITED THE TAX DEDUCTED AT SOURCE BEYOND THE DUE DATE STIPULATED BY THE ACT. ACCORDINGLY, THE ASSESSING OFFICER MADE THE ADDITIO N U/S.40(A)(IA) OF THE ACT. BEFORE THE CIT(A) THE ASSESSEE STATED THAT IN THE PRECEDIN G ASSESSMENT YEAR A SIMILAR ADDITION AMOUNTING TO RS.19,29,062/- HAD BEEN MADE AND SUSTAINED BY THE CIT(A) BUT PARTLY ALLOWED IN ASSESSMENT YEAR 2005-06 DATED 31-12-2008 DUE TO OPERATION OF THE RETROSPECTIVE AMENDMENT OF SECTION 40(A)(IA) BY FINANCE ACT, 2008. IT WAS FURTHER CLAIMED THAT SINCE THE AMOUNT OF RS.7,19,47 7/- WHOSE ADDITION HAD BEEN CONFIRMED IN TRIBUNAL STAGE IN PRECEDING YEAR, STOO D PAID IN THE GOVT. TREASURY DURING THE YEAR UNDER CONSIDERATION AND THE SAID DEDUCTION MAY BE ALLOWED. THE MATTER WAS CONSIDERED BY THE CIT(A) AND DELETED THE ADDITI ON BY STATING IN PARA-2.3 AS UNDER:- 2.3 THE MATER HAS BEEN CONSIDERED. AS THE CHART RE PRODUCED IN THE ASSESSMENT ORDER SHOWS, NONE OF THE PAYMENT IN QUESTION PERTAI NED TO MARCH 2006 AND THEREFORE THE THE BENEFIT CONTAINED IN THE AMENDED PROVISION 40(A)(IA) CANNOT BE EXTENDED O HE APPELLANT. HOWEVER, THE APPELLANT HAD , DURING HE COURSE OF ASSESSMENT, ASKED FOR HE DEDUCTION OF RS.19,29,062/ -, THE AMOUNT WHICH HAD BEEN DISALLOWED IN HE PRECEDING YEAR U/S.40(A)(IA) ON THE GROUND THAT IT HAD BEEN PAID DURING THIS YEAR. SOME HOW THAT ISSUE HAS NO A T ALL BE DEALT WITH BY THE ASSESSING OFFICER. THE SECTION IS VERY CLEAR IN AS MUCH AS IF THE DISALLOWANCE IS FOR LATE PAYMENT OF THE DS DEDUCED, THE SAME SHALL BE ALLOWED IN THE YEAR IN WHICH IT IS DEPOSITED. NOW THAT BY THE OPERATION O F HE AMENDED PROVISIONS, THE APPELLANT HAS GOT A RELIEF OF RS.12,09,475/- IN HE PRECEDING YEAR ITSELF, I IS HE BALANCE AMOUNT OF RS.7,19,577/- WHICH NEEDS TO BE C ONSIDERED FOR DEDUCTION. FROM THE PRESENT ASSESSMENT ORDER AS WELL AS FROM H E EARLIER ASSESSMENT ORDER AS ALSO FROM THE TRIBUNALS ORDER REFERRED TO ABOVE , THE FACT THAT HE SAID AMOUNT HAD BEEN PAID IN THE ACCOUNTING YEAR 2005-06 SANDS ESTABLISHED AND THEREFORE HE ASSESSEE IS ENTITLED FOR THE DEDUCTION OF RS.7,1 9,577/- DURING THE PRESENT ASSESSMENT YEAR. AFTER HEARING THE LD. SR. DR AND GOING THROUGH THE CASE RECORDS, WE FIND THAT IN THE TRIBUNAL IN ITA NO.2779/AHD/2008 (SUPRA) HAS DECIDED THIS ISSUE AS UNDER IN PARA-4 AS UNDER:- 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND, PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE FIND THAT SECTION 40(A)(IA) H AS BEEN ITA NO.2786/AHD/2009 A.Y. 2006-07 ITO WD-3, MEHSANA V. SH. JACOB J KURISHIAKAL PAGE 3 AMENDED WITH EFFECT FROM 1-4-2005 I.E. WITH EFFECT FROM AY 2005- 06 BY WHICH THE WORDS HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME P RESCRIBED UNDER SUB- SECTION (1) OF SECTION 200 HAVE BEEN SUBSTITUTED B Y THE FOLLOWING WORDS: CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, [HAS NOT BEEN PAID, - (A) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR , ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139; OR (B) IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEAR;] [PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TA X HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCT ED (A) DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE SAID DUE DATE; OR (B) DURING ANY OTHER MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE END OF THE SAID PREVIOUS YEAR, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTI NG THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS B EEN PAID.] IN VIEW OF THESE PROVISIONS WE ARE OF THE VIEW THAT IN CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR, THE ASSESSEE HAS PAID THE TAX BE FORE THE DUE DATE OF FILING OF THE RETURN, THE ASSESSEE WILL BE ENTITLED FOR THE DEDUCTION OF THE EXPENDITURE IN RESPECT OF WHICH TD S HAS BEEN DEDUCTED. SINCE THE ASSESSEE IN THE INSTANT CASE HA S CREDITED A SUM OF RS.27,14,218/- IN THE LAST MONTH OF THE PREV IOUS YEAR I.E. IN MARCH, 2005, AND ACCORDINGLY DEDUCTED THE TDS, T DS SO DEDUCTED WAS PAID BY THE ASSESSEE ON 02-05-2005 AND 20-05- 2005, I.E., PRIOR TO THE DATE OF FILING OF THE RETU RN, THEREFORE, IN OUR OPINION, THE ASSESSEE WILL BE ENTITLED FOR THE DEDU CTION OF RS.27,14,218/- AND THE DISALLOWANCE MADE OF RS.34,5 7,556/- WILL GET REDUCED TO RS.7,43,338/-. WE ACCORDINGLY DELETE THE ADDITION OF RS.27,14,218/-. THUS, THIS ISSUE RELATING TO THE DEDUCTIBILITY OF RS.34,57,556/- IS PARTLY ALLOWED. 4. IN VIEW OF THE ABOVE FACTS, WE FIND THAT THE CIT (A) HAS RIGHTLY ALLOWED THE RELIEF AS THE ASSESSEE HAS MADE PAYMENT OF TDS IN THIS YEA R. ACCORDINGLY, WE CONFIRM THE ITA NO.2786/AHD/2009 A.Y. 2006-07 ITO WD-3, MEHSANA V. SH. JACOB J KURISHIAKAL PAGE 4 ORDER OF CIT(A) DELETING THE ADDITION AND THIS ISSU E OF REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23/12/2009 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SI NGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED :23/12/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-GANDHINAGAR 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD