Suman Sharma, Faridabad V. ITO, New Delhi

ITA 2863/DEL/2015

• Counselvise Citation: 286320114 RSA 2015
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 21-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YATENDRA SINGH
• Keywords: Opportunity of being heard
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SH. N. K. SAINI, AM ITA NO. 2863 /DEL/201 5 : ASSTT. YEAR : 2010 - 11 SUMAN SHARMA, L/H SURESH SHARMA, HOUSE NO. 715A, SEC - 23, FARIDABAD VS INCOME TAX OFFICER, WA RD - 11(1) , FARIDABAD (APPELLANT) (RESPONDENT) PAN NO. A QIPS3622E ASSESSEE BY : SH . VED JAIN , ADV. REVENUE BY : SH. YATENDRA SINGH , SR. DR DATE OF HEARING : 21 .0 7 .2015 DATE OF PRONOUNCEMENT : 05 .08 .2015 ORDER THIS IS AN APPEAL BY THE LEGAL HEIR OF THE DISEASED ASSESSEE AGAINST THE ORDER DATED 18.02.2015 OF LD. CIT (A), FARIDABAD . 2 . FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS.5,20,644/ - ON ACCOUNT OF INTEREST, MADE BY AO, ITA NO.2863 /DEL /2015 SUMAN SHARMA 2 INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ABOVE SAID DISALLOWANCE REJECTING THE CONTENTION OF THE ASSESSEE THAT T HE ASSESSEE CANNOT BE TERMED AS ASSESSEE IN DEFAULT IN VIEW OF THE FIRST PROVISO TO SUB - SECTION (1) OF SECTION 201 OF THE ACT. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3 . FROM THE ABOVE GROUNDS, IT IS GATHERED THAT ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS. 5,20,644/ - . 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2010, DECLARING AN INCOME OF RS. 7,09,442/ - . THE ASSESSEE EXPIR ED IN AN ACCIDENT ON 01.08.2012. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE WAS SENT TO THE LEGAL HEIR OF THE ASSESSEE U/S 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE AO DETERMINED THE INCOME AT RS. 13,30,086 / - BY MAKING A LUMP SUM ADDITION OF RS. 1,00,000/ - ON ACCOUNT OF EXPENSES OF NON - BUSINESS PURPOSE ON ESTIMATE BASIS OUT OF TOTAL EXPENSES CLAIMED TO COVER THE LEAKAGE OF REVENUE ON AGREED BASIS. THE AO ALSO MADE AN ADDITION OF RS. 5,20,644/ - ON ACCOUNT OF INTEREST PAID TO TATA ITA NO.2863 /DEL /2015 SUMAN SHARMA 3 MOTORS LTD. AGAINST PURCHASE OF TRUCKS ON LOAN , AS NO TDS HAD BEEN DEDUCTED ON INTEREST PAYMENT. 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAD PAID INTEREST BUT FAI LED TO DEDUCT TAX ON THE SAME, T HEREFORE, THE AO RIGHTLY MADE THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT. 6. BEING AGGRIEVED THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A PROVISO HAS BEEN INSERTED TO SECTION 201(1) OF THE ACT VIDE AMENDMENT MADE BY THE FINANCE ACT, 2012. IT WAS FURTHER STATED THAT THE CUMULATIVE IMPACT OF THIS AMENDMENT IS THAT IN CASE THE DEDUCTEE HAS INCLUDED THE AMOUNT ON WHICH TDS WAS DEDUCTIBLE WHILE COMPUTING ITS INCOME AND HAS FILED THE RETURN AND PAID THE TAXES THEREON THEN THE DEDUCTOR IS NOT CONSIDERED TO BE AN ASSESSEE IN DEFAULT AND CONSEQUENTLY NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT . IT WAS FURTHER STATED THAT IN THE PRESENT CASE, THE DEDUCTEE IS M/S TATA MOTORS LIMIT ED AND THE ASSESSEE HAS PAID OR CREDITED AN AMOUNT OF RS. 5,20,644/ - ON ACCOUNT OF INTEREST PAID AGAINST PURCHASE OF TRUCKS ON LOAN AND THAT THE TATA MOTORS LIMITED IS A PUBLIC LIMITED COMPANY WHICH FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONS IDERATION AND INCLUDED THE SAME AMOUNT IN ITS TAXABLE INCOME. IT WAS FURTHER STATED THAT THE AMENDMENT MADE BY ITA NO.2863 /DEL /2015 SUMAN SHARMA 4 THE FINANCE ACT, 2012 IS CLARIFICATORY IN NATURE AND HENCE APPLICABLE RETROSPECTIVELY. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: RAJEE V KUMAR AGARWAL VS ACIT, ITA NO. 337/AGR/2013 DATED 29.05.2014 ITAT AGRA ITO VS GAURIMAL MAHAJAN & SONS, ITA NO. 1852/PN/2012 DATED 06.01.2014 (ITAT, PUNE BENCHES) SEA FOOD PARK INDIA LTD. VS DCIT, ITA NO. 762/COCH/2012 DATED 31.03.2014 (ITAT, COCHIN BENCH ) DCIT VS ENTRACO POWERS SYSTEMS PVT. LTD., ITA NO. 1039/PN/2012 DATED 30.04.2014 (ITAT, PUNE BENCHES) SATISH CHAND AGARWAL VS JCIT, ITA NO. 339/AGRA/2013 DATED 29.05.2014 (ITAT, AGRA BENCH) DCIT VS ANSAL LANDMARK TOWNSHIPS PVT. LTD., ITA NOS. 2859, 2972 & 877/DEL/2013 DATED 22.07.2014 (ITAT DELHI BENCHES) ITO VS DR. JAIDEEP KUMAR SHARMA, ITA NOS. 3893, 5696/DEL/2011 DATED 25.07.2014 (ITAT DELHI BENCHES) SHRI G. SHANKAR VS ACIT, ITA NO. 1832/BANG/2013 DATED 10.10.2014 (ITAT BANGALORE BENCHES) DCIT VS JAIPUR VIDYUT VITRAN NIGAM LTD., ITA NO. 224/JP/2014 DATED 21.11.2014 (ITAT JAIPUR BENCH) 7 . IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 8 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT A PPEARS THAT THE DECISION OF THE ITAT AGRA BENCH RELIED BY THE ASSESSEE WAS NOT AVAILABLE EITHER THE AO OR THE LD. ITA NO.2863 /DEL /2015 SUMAN SHARMA 5 CIT(A). IT ALSO APPEARS THAT THE AUTHORITIES BELOW HAS NOT CONSIDERED T HIS FACT THAT THE AMENDMENT MADE BY THE FINANCE ACT, 2012 IS CLARIFICATORY IN NATURE AND HENCE APPLICABLE RETROSPECTIVELY . I, THEREFORE, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 05 /08 /2015 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DATED: 05 /08 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR