SHRI TRUP AYAZ AHMED, CHENNAI V. ACIT, NCC-14(1), CHENNAI

ITA 2837/CHNY/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5313 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 08-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; TDS
• Section: 40(a)(ia)

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी मनोज क ु मार अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2837/CHNY/2019 िनधाᭅरण वषᭅ /Assessment Year:2014-15 Shri Trup Ayaz Ahmed, No.12, Easwaran Koil Street, Alandur, Chennai – 600 016. PAN: AABPA 2581M v. The ACIT, Non-Corporate Circle -14(1), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri S. Sridhar, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri G. Johnson, Addl. CIT स ु नवाई कȧ तारȣख/Date of Hearing : 31.03.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 04.04.2022 आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by assessee is arising out of the order of the learned Commissioner of Income Tax (Appeals)-14, Chennai in ITA No.166/16-17 dated 14.08.2019. The assessment was framed by the ACIT, Non-Corporate Circle 14(1), Chennai for the assessment year 2014-15 u/s.143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dated 29.11.2016. 2 ITA No.2837/Chny/2019 2. The first issue in this appeal of assessee is as regards to the order of CIT(A) partly sustaining the addition of Rs.2,19,909/- being the difference arising from VAT return in the computation of taxable total income as disclosed in the return of income. 3. We have heard rival contentions and gone through the facts and circumstances of the assessee. We noted that the assessee has shown purchases in the profit & loss account at Rs.3,23,42,295/- but in the VAT return, the same is reflected at Rs.3,11,53,325/-. The AO required the assessee to explain the difference of Rs.11,88,970/- as disclosed in the profit & loss account and the VAT returns i.e., purchases. The AR could explain the incidental expenses amounting to Rs.4,89,478/- but could not reconcile the remaining difference of Rs.6,99,492/-. Accordingly, the AO added the difference. Aggrieved, assessee preferred appeal before CIT(A). Before CIT(A), the assessee filed further reconciliation stating that the assessee company had accounted VAT credit disallowed for AY 2012-13 of Rs.1,37,130/- and for AY 2013-14 of Rs.1,35,858/-. These two VAT credits have been debited by the assessee to the purchase account. Similarly, the assessee company had also reversed the VAT claim rejected amounting to Rs.2,06,595/- in relation to VAT refund claimed for 3 ITA No.2837/Chny/2019 financial year 2012-13. All these three amounts, totaling to Rs.4,79,583/-. The assessee further stated that he has been able to reconcile the un-reconciled difference between VAT return and financials as per income tax return. The CIT(A) accordingly directed the AO to delete this difference of Rs.4,79,583/- reconciled by the assessee and balance of Rs.2,19,909/- is confirmed. Aggrieved, now assessee is in second appeal. 4. The assessee now before us only stated that one more change be given to reconcile the VAT returns because there are receivables and credit ledger entries, the assessee could lay hand but are not readily available. Hence, he requested for setting aside this particular addition of Rs.2,19,909/- to the file of the AO. The ld. Senior DR opposed for setting aside. 5. After hearing rival contentions and going through the fact that the assessee could reconcile the purchases shown in the profit & loss account out of the difference of Rs.11,88,970/- to the extent of Rs.4,89,478/- before the AO and further a sum of Rs.4,79,583/- before CIT(A). The balance difference of Rs.2,19,909/-, the claim of the assessee is that this difference arose as a result of disallowance of VAT credit / refund made by VAT authorities which 4 ITA No.2837/Chny/2019 was added to the purchase cost debited to the profit & loss account a shown in the accounts of the assessee filed with the return of income. Now, the ld.counsel for the assessee before us pleaded that the assessee has collected some evidences in regard to the difference in purchases and VAT credit claimed on the same and the same may kindly be remitted back. We noted that the plea of the assessee is reasonable and hence, we direct the AO to allow one more opportunity to reconcile the difference of Rs.2,19,909/-. Accordingly, this issue is remitted back to the file of the AO. 6. The next issue in this appeal of assessee is as regards to the order of CIT(A) confirming the disallowance of job work charges for non-deduction of TDS by the AO amounting to Rs.92,104/- by invoking the provisions of section 40(a)(ia) of the Act. 6.1 We have heard rival contentions and gone thorugh the facts and circumstances of the case. We noted that now the ld.counsel for the assessee made only submission that the second proviso to section 40(a)(ia) of the Act, which is retrospective, the assessee should be allowed to take the benefit of the same. The ld.counsel for the assessee stated that the requisites as noted in the CBDT circular and rules relating to second proviso to section 40(a)(ia) of 5 ITA No.2837/Chny/2019 the Act is ready to fulfill as he has gathered information that the recipient parties has already declared the job work charges in their respective returns of income. The ld. Counsel stated before us that the job work payments were made only to one party i.e., VRV Zips & Process. The ld. Senior DR has no serious objection in setting aside the matter. As the assessee claimed that the recipient party has disclosed the income in their return of income, in view of second proviso to section 40(a)(ia) of the Act, we remit this issue back to the file of the AO. This issue of assessee’s appeal is allowed for statistical purpose. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 04 th April, 2022 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य /ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 04 th April, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.