ACIT 25(2), MUMBAI V. VIVEK RAMRAO PARASKAR, MUMBAI

ITA 2808/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2715 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 10-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VISHWAS S JADHAV
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A NO.2808/MUM/2013 (AY 2009-10) ACIT- 25(2), C-11, PRATYAKSHA KAR BHAVAN, R.NO. 108, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 VS. SHRI VIVEK RAMRAO PARASKAR, RAMLATA GAS AGENCY, SHOP NO.1, DATTAKRUPA, BUILDING, DATTA PRASAD, HOUSING SOCIETY, NEAR GORAI BUS DEPO, INFRONT OF GORAI DUMPING GR OUND, GORAI ROAD, BORIVALI, MUMBAI-400092 PAN: AGUPP5590J (APPELLANT) (RESPONDENT) REVENUE BY : SHRI VISHWAS S. JA DHAV (DR) ASSESSEE BY : NONE DATE OF HEARING : 03.11.2015 DATE OF PRONOUNCEMENT : 06.11.2015 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL FILED BY THE REVENUE AGAINST TH E ORDER DATED 02.01.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 35, MUMBAI (CIT(A) FOR SHORT) IN RESPECT OF ASSESSMENT YEAR S 2009-10 ON THE FOLLOWING GROUNDS OF APPEAL: I) 'ON THE FACT AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.27,83,327/- ON ACCOUNT OF NON DEDUCTION OF TDS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO DEDUCT TDS AS PER PROVISIONS OF SECTION 194A OF THE IT ACT IN THE CASE OF CREDIT CO-OP SOCIETY & CO-OP CREDIT SOCIETY.' II) 'ON THE FACT AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ACCEPTING NEW EVIDENCE IN VIOLATION OF RUL E 46A OF INCOME TAX RULES,1962 RELATING TO REGISTRATION OF NISHANT CRED IT CO-OP SOCIETY & BULDANA CO-OP SOCIETY WITHOUT ALLOWING OPPORTUNITY TO EXAMINE THE EVIDENCE. MOREOVER THE ASSESSEE HAS FAILED TO PROVE THAT THESE SOCIETIES ARE NON BANKING FINANCIAL INSTITUTION.' 2 ITA NO.2808/MUM/2013 SHRI VIVEK RAMRAO PARASKAR. III) THE APPELLANT PRAYS THAT THE ORDER OF THE LD.C IT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED.' IV) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER A NY GROUND OR ADD A NEW GROUND.' 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WHO IS INDIVIDUAL AND IS PROPRIETOR OF (I) RAMLATA GAS AGE NCY, (II) M/S. PARASKAR DEVELOPERS, (III) PARASKAR CONSTRUCTI ONS, (IV) M/S. MOTORBIKES & (IV) M/S. HOTEL RAMLATA PALACE, E NGAGED IN THE BUSINESS OF GAS AGENCY, BUILDING & CONSTRUCTION , CIVIL CONSTRUCTION, DEALER IN HERO HONDA MOTORCYCLE AND SERVICE/MAINTENANCE AND RUNNING A HOTEL, FILED HIS RETURN OF INCOME ON 29.09.2009 DECLARING TOTAL INCOME OF RS.5 8,29,200/. 3. THE RETURN WAS SELECTED FOR SCRUTINY AND AFTER GIVI NG AN OPPORTUNITY, A DISALLOWANCE U/S 40(A)(IA) OF THE AC T OF RS. 27,83,327/- WAS MADE WHILE NOTING THAT ASSESSEE HAS AVAILED A LOAN FROM NON-BANKING FINANCIAL INSTITUTION AND HAD PAID INTEREST ON THE SAME. THE ASSESSEE HAS AVAILED LOAN OF RS. 8,17,401/- FROM NISHANT CREDIT CO-OP. SOCIETY AND R S. 19,65,926/- FROM BULDANA CO-OP. CREDIT SOCIETY AND ON THE INTEREST PAID BY THE ASSESSEE, THE ASSESSEE HAS NOT DEDUCTED TDS ON THE INTEREST PAID TO NON-BANKING FINANCIAL INSTI TUTION. 4. FURTHER DISALLOWANCE OF RS. 71,612/- WAS MADE ON A CCOUNT OF TELEPHONE AND MOBILE EXPENSES BEING 15% OF THE TOTAL OF RS. 4 ,77,413/- WHICH WAS DEBITED BY THE ASSESSEE AND FURTHER A SUM OF RS. 1, 00,000/- WAS DISALLOWED AS SALE PROMOTION, ADVERTISEMENT EXPENSES OUT OF TO TAL SALE PROMOTION EXPENSES OF RS. 7,31,926/- IN THE ASSESSMENT ORDER DATED 29.12.2011 AGAINST WHICH AN APPEAL WAS FILED BEFORE THE FIRST APPELLAT E AUTHORITY (FAA)/CIT(A), THE CIT(A) WHILE DEALING WITH THE APP EAL OF THE ASSESSEE DELETED THE DISALLOWANCE U/S 40(A)(IA), RESTRICTED TO 5% OF TOTAL TELEPHONE AND MOBILE EXPENSES AND FURTHER RESTRICTED THE DISA LLOWANCE OF SALE PROMOTION EXPENSES TO 5% IN THE IMPUGNED ORDER DATE D 02.01.2013 AGAINST WHICH THE PRESENT APPEAL IS FILED BEFORE US. 3 ITA NO.2808/MUM/2013 SHRI VIVEK RAMRAO PARASKAR. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE REP EATED CALLS. WE HAVE HEARD THE DEPARTMENTAL REPRESENTATIVE (DR) OF THE R EVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 6. DR OF THE REVENUE HAS VEHEMENTLY ARGUED THAT THE CI T(A) HAS ACCEPTED THE EVIDENCE IN VIOLATION RULE 46 A OF IT RULE 1962. 7. THE CIT(A) IN PARAGRAPH 5.2 OF ITS ORDER REPRODUCED THE WRITTEN COMMENTS OF THE ASSESSEE WHEREIN THE REFERENCE OF THE COPY OF REGISTRATION OF SOCIETIES (NISHANT CREDIT CO-OP. SOCIETY) AND BULDA NA CO-OP. CREDIT SOCIETY), THE DETAILS OF INTEREST PAID AND COPY OF EXEMPTION GRANTED TO NBFC WAS MENTIONED . 8. THE CIT)A) IN PARAGRAPH 5.3 HAS OBSERVED AS UNDER: I HAVE CONSIDERED THE STAND OF AO AS WELL AS APPEL LANT'S SUBMISSIONS. THE AO HAS DISALLOWED THIS AMOUNT BECAUSE HE WAS OF THE VIEW THAT SECTION 194A WAS APPLICABLE TO THE CASE OF THE APPE LLANT, THEREFORE HE DISALLOWED THE INTEREST PAID TO THE TUNE OF RS.27,8 3,327/- U/S.40(A)(IA)OF THE I.T.ACT, 1961. HOWEVER, IT IS SEEN THAT THE APP ELLANT WAS DE11ER IN HERO HONDA MOTOR BIKES AND HAD TAKEN LOAN FROM NISH ANT CREDIT CO- OPERATIVE SOCIETY AND BULDANA URBAN CREDIT CO-OPERA TIVE SOCIETY FOR CARRYING OUT BUSINESS ACTIVITIES. DURING THE A.Y.20 09-10, THE APPELLANT PAID INTEREST UNDER CONSIDERATION AMOUNTED TO RS.8, 17,401/- AND RS, 19,65,926/- TO BOTH THE CO-OPERATIVES CREDIT SOCIET Y RESPECTIVELY, AS PER SECTION 194A, THE PROVISION OF TDS DEDUCTION SHALL NOT APPLY TO SUCH INCOME CREDITED OR PAID TO ANY BANKING COMPANY TO W HICH THE BANKING REGULATION ACT, 1949 APPLIES OR ANY CO-OPERATIVE SO CIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING (INCLUDING A CO -OPERATIVE LAND MORTGAGE BANK). HENCE THE APPELLANT WAS NOT UNJUSTI FIED IN NOT DEDUCTING THE TDS ON INTEREST PAID TO SUCH CO-OPERA TIVE SOCIETY. I HAVE ALSO GONE THROUGH SECTION 194A AND ITS VARIOUS CLAU SES AND COMPARED ITS APPLICABILITY WITH DIFFERENCE TO THE FACTS OF THE C ASE OF THE APPELLANT AND COME TO A CONCLUSION THAT SECTION 194A IS NOT APPLI CABLE TO THE FACTS OF THE CASE OF THE APPELLANT. UNDER THE CIRCUMSTANCES THE DISALLOWANCES MADE BY THE AO UNDER SECTION 40(A)(IA) OF THE I.T. ACT CANNOT BE SUSTAINED. ACCORDINGLY, THE DISALLOWANCE OF RS.27,8 3,327/0 IS DELETED. IN THE RESULT THE APPELLANT'S GROUND ON THE ABOVE ISSU E IS ALLOWED. 9. WE HAVE SEEN THE ORDER OF THE CIT(A), WHEREIN THE LD. CIT(A) HAS NOT RECORDED IN WRITING THE REASONS FOR ADMISSION OF TA KING SUCH DOCUMENT WITHOUT GIVING AN OPPORTUNITY TO THE REVENUE. THE O RDER OF LD. CIT(A) IS TOTALLY SILENT ABOUT THE EVIDENCE TAKEN ON RECORD F ROM THE ASSESSEE. 4 ITA NO.2808/MUM/2013 SHRI VIVEK RAMRAO PARASKAR. 10. RULE 46A OF THE INCOME-TAX RULES, 1962 IS READ AS UNDER: 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, TH E COMMISSIONER (APPEALS)], ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER TH AN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE [AS SESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH I S RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER AP PEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELL ANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, TH E COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE [ASSESSING OFFICER] H AS BEEN ALLOWED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DEPUTY COMMIS- SIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMM ISSIONER (APPEALS)] TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANT IAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER O N HIS OWN MOTION OR ON THE REQUEST OF THE [ASSESSING OFFICER]) UNDER CLAUSE (A ) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271. ] 11. WE FIND THAT ORDER OF CIT(A) FOR ACCEPTING FRESH EV IDENCE/DOCUMENT FROM ASSESSEE IS IN VIOLATION OF RULE 46A OF INCOME-TAX RULES, 1962, AND THERE IS NO SATISFACTION OF THE CIT(A) ON RECORD ABOUT THE ADMISSION OF EVIDENCE WHICH WAS FILED BEFORE HIM BY THE ASSESSEE, ON THE BASIS OF WHICH AN ADDITION OF RS. 27,83,327/- WAS DELETED. 5 ITA NO.2808/MUM/2013 SHRI VIVEK RAMRAO PARASKAR. 12. IN THE ABOVE CIRCUMSTANCES, WE ACCEPT THE APPEAL OF THE REVENUE ON THE GROUND NOS. 1 & 2 AND RESTORE THE MATTER TO THE FIL E OF AO TO CONSIDER/ANALYZE THE DOCUMENT/EVIDENCE FILED BEFORE THE CIT(A). 13. THE AO FURTHER DIRECTED TO GIVEN AN ADEQUATE OPPORT UNITY TO THE ASSESSEE WHILE CONSIDERING THE ABOVE DIRECTIONS. 14. IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/1 1/ 2015 SD/- SD/- (B. R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 06.11.2015 SK PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT- CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY// BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI