M/s. Murlidhar Engineers, Ahmedabad V. The Income tax Officer,Ward-9(2), Ahmedabad

ITA 2792/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2034 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: 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.2792/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING:14.12.09 DRAFTED: 15.12.09 M/S. MURLIDHAR ENGINEERS, B/5, MEERA PARK, NR. GHEVAR COMPLEX, SHAHIBAUG, AHMEDABAD-380 004 PAN NO.AAGFM4862N V/S. INCOME TAX OFFICER, WARD- 9(2), AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI KALPESH SHAH, AR RESPONDENT BY:- SHRI C.K. MISHRA, SR. DR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-XV, AHMEDABAD IN APPEAL NO. CI T(A)/XV/ITO.9 (2)/ 77/ 08-09 DATED 21-07-2009. THE ASSESSMENT WAS FRAMED BY THE INCOME TAX OFFICER, WARD- 9(2), AHMEDABAD U/S.143(3) OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 20-11-2008 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF DEDUCTION OF EXPENS ES U/S.40A(IA) OF THE ACT FOR AN AMOUNT OF RS.25,02,508/-, AS THE ASSESSEE FAILED T O DEDUCT TDS. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE RECORDS. WE HAVE ALSO PE RUSED THE CASE RECORDS INCLUDING THE ASSESSMENT ORDER AS WELL AS THE ORDER OF CIT(A). THE BRIEF FACTS LEADING TO THE ISSUE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM IS ENGAGED IN THE BUSINESS OF ITA NO.2792/AHD/2009 A.Y. 2006-07 M/S. MURLIDHAR ENGINEERS V.ITO WD-9(2) ABD PAGE 2 CIVIL CONSTRUCTION AND THE ASSESSEE FILED RETURN OF INCOME OF RS.64,980/- ALONG WITH AUDIT REPORT U/S. 44AB AND ON VERIFICATION THE ASSE SSING OFFICER MADE DISALLOWANCE U/S.40(A)(IA) OF THE ACT AS THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE ON THE FOLLOWING AMOUNTS:- PARTICULARS AMT. TOTAL INCOME AS PER RETURN OF INCOME ADD:- DISALLOWANCE OF LABOUR CHARGES FOR LATE PAYMENTS OF TDS BY INVOKING PROVISION OF SECTION 40(A)(IA) 64,980 2,502,508 ASSESSED INCOME 2,567.488 THE ASSESSING OFFICER HAS ISSUED SHOW CAUSE NOTICE DATED 14-03-2008 AND PROPOSED DISALLOWANCE OF LABOUR CHARGES FOR LATE PA YMENT OF TDS U/S.194C AND THE ASSESSEE HAS SUBMITTED REPLY DATED 17-11-2008. BUT THE AO HAS NOT CONSIDERED THE REPLY OF ASSESSEE AND MADE ADDITIONS FOR LABOUR CHA RGES FOR LATE PAYMENT OF TDS. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE CIT( A). 4. THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER WITHOUT GIVING ANY FINDING IN PARA-5 OF HIS APPELLATE ORDER AS UNDER:- 5. IN THE ASSESSMENT ORDER (PARA4) THE AO HAS WORK ED OUT THE DISALLOWANCE AT RS.25,20,508 WHEREAS IN THE COMPUTATION OF INCOM E THE FIGURE HAS BEEN TAKEN AT RS.25,02,508. THIS WAS POINTED OUT TO THE AR DURING THE COURSE OF APPELLATE PROCEEDINGS. THE AR ARGUED THAT AS PER BR EAK-UP CHART THE DISALLOWANCE WORKED OUT TO ONLY RS.25,20,499/- IN VIEW OF THIS FACTUAL POSITION THE ASSESSMENT ORD ER MAY BE TREATED RECTIFIED TO THE EXTENT THAT THE FIGURE OF DISALLOWANCE MENTI ONED IN THE COMPUTATION SHOULD BE READ AS RS.25,20,508 WHICH IS THE FIGURE MENTIONED IN THE BODY OF THE ASSESSMENT ORDER. HOWEVER AS PER CHART ENCLOSED WITH THIS ORDER THE DISALLOWANCE OF RS.25,20,499 IS UPHELD. THE APPELLANT GETS RELIEF OF RS.9 THAT IS (RS.25,20 ,508 RS.25,20,499) 5. IN VIEW OF THE ABOVE FACT THAT THE CIT(A) HAS NO T DELIBERATED ON THE FACTS OF THE CASE, WE ARE SETTING ASIDE THIS ISSUE TO THE FI LE OF THE CIT(A) TO DECIDE AFTER PASSING A SPEAKING ORDER AND ALSO TO LOOK INTO THE DECISION OF THIS TRIBUNAL IN THE CASE OF M/S. SWATI CONSTRUCTION CO. BARODA V. ITO WARD-2(2) BARODA IN ITA ITA NO.2792/AHD/2009 A.Y. 2006-07 M/S. MURLIDHAR ENGINEERS V.ITO WD-9(2) ABD PAGE 3 NO.2779/AHD/2008 DATED 23-01-2009 FOR THE ASSESSMENT YEAR 2005-06, WHEREIN IT IS HELD 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 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 ITA NO.2792/AHD/2009 A.Y. 2006-07 M/S. MURLIDHAR ENGINEERS V.ITO WD-9(2) ABD PAGE 4 OF RS.27,14,218/-. THUS, THIS ISSUE RELATING TO THE DEDUCTIBILITY OF RS.34,57,556/- IS PARTLY ALLOWED. ACCORDINGLY, THIS APPEAL OF THE ASSESSEE IS SET ASI DE TO THE FILE OF CIT(A) AND ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23/12/2009 SD/- SD/- (A.N.PHAUJA) (MAHAVIR SINGH) (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)-XV, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD