The ITO,S.K.Ward-3, Himatnagar V. Shri Murtujabhai Hanifbhai Khanusia, Sabarkantha

ITA 279/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76803 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 03-02-2011
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Retrospective amendment
• Section: 194C

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !' # $% !' # $% !' # $% !' # $%, , , , & & & & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 279/AHD/2011 ASSESSMENT YEAR 2005-06 INCOME TAX OFFICER, S.K. WARD-3, HIMATNAGAR. VS MURTUJABHAI HANIFBHAI KHANUSIA, SABARKANTHA. PAN: ADAPK7129D '(/ APPELLANT *+'( / RESPONDENT REVENUE BY : SHRI K.C. MATHEWS, SR. DR ASSESSEE(S) BY : SHRI SUNIL H. TALATI, AR #!, - %/ // / DATE OF HEARING : 27/05/2014 ./0 - % / DATE OF PRONOUNCEMENT : 30/05/2014 1 1 1 1/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII, AHMEDABA D DATED 02.11.2010. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE DISAL LOWANCE OF RS 15,18,000/- MADE BY THE ASSESSING OFFICER U/S. 40(A )(IA) OF THE INCOME TAX ACT, 1961 HOLDING THAT PAYMENTS MADE BY THE ASSESSE E TO TWO PARTIES DID NOT FALL WITHIN THE PURVIEW OF SECTION 194C(2) OF T HE ACT. ITA NO. 279/AHD/2011 MURTUJABHAI H. KHANUSIA FOR A.Y. 2005-06 - 2 - 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MA DE PAYMENT OF RS 15,18,000/- TO THE FOLLOWING TWO PARTIES: 1. VASANT KUMAR NATHURAM RS 12,68,000/- 2. JAY ENTERPRISES RS 2,51,000/- WHO ARE THE SUB-CONTRACTORS OF THE ASSESSEE. HE OB SERVED THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE FROM THE ABOVE PAYME NTS MADE TO THE PARTIES AND THEREFORE, BY INVOKING THE PROVISIONS O F SECTION 40(A)(IA), HE DISALLOWED THE SUM OF RS 15,18,000/- IN THE COMPUTA TION OF INCOME OF THE ASSESSEE. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) DELETED THE ADDITION ON THE GROUND THAT IN ASSESSMENT YEAR 2006-07, HIS PREDECESSOR VIDE ORDER NO. CIT(A)-X/DCIT/HMT/67/08- 09 DATED 27.12.2009 HAD HELD THAT THE PROVISIONS OF CLAUSE (K) WHICH HA S BEEN INSERTED IN SUB- SECTION (1) OF SECTION 194C WITH EFFECT FROM 01.06. 2007 ARE NOT APPLICABLE AS PAYMENTS WERE MADE BY THE ASSESSEE DURING THE FINAN CIAL YEAR 2005-06 AND THAT THE PROVISIONS OF TAX DEDUCTED AT SOURCE UNDER SECTION 194C(1)(K) HAVE NOT BEEN BROUGHT IN THE ACT WITH RETROSPECTIVE EFFECT. 5. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE F ILED BEFORE US COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE PASSED IN THE ASSESSMENT YEAR 2006-07 AND SUBMITTED THAT THE TRIB UNAL HAD CONFIRMED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 40( A)(IA) FOR NOT DEDUCTING TAX AT SOURCE FROM PAYMENTS MADE TO SUB-CONTRACTORS ON THE GROUND THAT THE AMENDMENT BROUGHT IN SECTION 194C(1)(K) OF THE ACT BEING INTRODUCED WITH EFFECT FROM 01.06.2007 HAD NO APPLICABILITY IN ASSESSMENT YEAR 2007- ITA NO. 279/AHD/2011 MURTUJABHAI H. KHANUSIA FOR A.Y. 2005-06 - 3 - 08 AND THAT THE AMENDMENT WAS PROSPECTIVE AND APPLI CABLE FROM ASSESSMENT YEAR 2008-09. IT WAS, THEREFORE, THE SU BMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE PRESENT YEAR OF APPEAL BEFORE THE TRIBUNAL BEING ASSESSMENT YEAR 2005-06 W HICH IS PRIOR TO THE ASSESSMENT YEAR 2006-07 WHEREIN THE TRIBUNAL HAS DE LETED THE DISALLOWANCE OF EXPENDITURE MADE U/S. 40(A)(IA) OF THE ACT BY IN TRODUCING SUB-CLAUSE (K) ON 01.06.2007 WAS PROSPECTIVE AND HENCE APPLICABLE FROM ASSESSMENT YEAR 2008-09. THEREFORE, THE DISALLOWANCE MADE BY THE A SSESSING OFFICER WAS RIGHTLY DELETED BY THE COMMISSIONER OF INCOME TAX ( APPEALS). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL ON RECORD, WE FIND THAT THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE MADE PAYMENT OF RS 15,18,000/- TO TWO SUB- CONTRACTORS WITHOUT DEDUCTING TAX AT SOURCE FROM THE SAID PAYMENTS. TH E ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE U/S. 194C AND AS NO TAX AT SOURCE WAS DEDUCTED FROM THE PAYME NTS MADE TO THE SUB- CONTRACTORS, THEREFORE BY INVOKING THE PROVISIONS O F SECTION 40(A)(IA) OF THE ACT, HE DISALLOWED THE EXPENDITURE OF RS 15,18,000/ - CLAIMED BY THE ASSESSEE. ON APPEAL, THE COMMISSIONER OF INCOME TA X (APPEALS) DELETED THE DISALLOWANCE OBSERVING THAT SUB-CLAUSE (K) INTR ODUCED IN SECTION 194C(1) WITH EFFECT FROM 01.06.2007 WAS PROSPECTIVE AND HEN CE APPLICABLE FROM ASSESSMENT YEAR 2008-09. FURTHER, THE AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE HAS FILED BEFORE US COPY OF ORDER OF THE T RIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 DATED 31.10.2011 P ASSED IN ITA NO. 1856/AHD/2009 WHEREIN THE TRIBUNAL UPHELD THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DELETING THE DISALLOWANCE M ADE U/S. 40(A)(IA) OF THE ACT ON THE GROUND THAT SUB-CLAUSE (K) INTRODUCE D IN SECTION 194C(1) WITH EFFECT FROM 01.06.2007 WAS PROSPECTIVE IN NATURE AN D HENCE APPLICABLE FROM ASSESSMENT YEAR 2008-09. THE DEPARTMENTAL REPRESEN TATIVE HAS NOT CITED ANY CONTRARY DECISION TO THAT FILED BY THE AUTHORIZ ED REPRESENTATIVE OF THE ASSESSEE OR POINTED OUT ANY DISTINGUISHING FEATURES OR REASONS FOR WHICH THE ITA NO. 279/AHD/2011 MURTUJABHAI H. KHANUSIA FOR A.Y. 2005-06 - 4 - ABOVE ORDER OF THE TRIBUNAL PASSED IN THE CASE OF T HE ASSESSEE IN A LATER ASSESSMENT YEAR SHOULD NOT BE FOLLOWED IN THIS YEAR . HENCE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2006-07 IN ASSESSEES OWN CASE, WE CONFIRM THE ORDER OF THE CO MMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 40(A)(IA) OF THE ACT AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 30 TH OF MAY, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/05/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY 1 - *%2 320% 1 - *%2 320% 1 - *%2 320% 1 - *%2 320%/ COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. *+'( / THE RESPONDENT. 3. '' % #4 / CONCERNED CIT 4. #4() / THE CIT(A)-III, AHMEDABAD 5. 2!$7 *% , , / DR, ITAT, AHMEDABAD 6. 78 9, / GUARD FILE. 1# 1# 1# 1# / BY ORDER, : :: :/ // / '; '; '; '; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD