Shri Janak Bhupatrai Parekh(HUF), Vapi V. The Income tax Officer,Vapi Ward-2, Vapi

ITA 2891/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9694 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Section: 143(3)

Judgement Text

I.T.A. NO. 2891 /AHD/ 201 1 ASSESSMENT YEAR: 200 7 - 08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD A BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND S S GODARA JM] I.T.A. NO. 2891 /AHD/201 1 A SSESSMENT Y EAR : 20 0 7 - 08 JANAK BHU P ATRA I PAREKH (HUF) .APPELLANT PROP. O F VRAJ MONETRY, 1 ST FLOO R, VRAJBHUMI COMPLEX, DAMAN ROAD, CHALA, VAPI . [P AN: AADHJ 5733 J ] VS. INCOME TAX OFFICER . RESPONDENT VAPI WARD - 2, VAPI. APPEARANCES BY: HARDIK VORA , FOR THE A PPELLANT DINESH SINGH , FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING: DEC EMBER 2 ND , 201 5 DATE OF PRONOUNCING THE ORDER : JANUARY 22 ND , 201 6 O R D E R PER PRAMOD KUMAR , AM : BY WAY OF THIS APPEAL, THE A SSESS EE HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 18 TH AUGUST , 201 1 PASSED BY THE LEARNED CIT(A), IN THE MATTE R OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTE R), FOR THE ASSESSMENT YEAR 200 7 - 0 8, ON THE GROUND THAT ON THE FACTS AND CIRCUMSTANCES OF THE C A SE T HE L EANED COMMISSIONER OF INCOME TAX ( APPEALS) HAS ERR E D IN CONFIRMIN G DISALLOWANCE OF RS.10,45,400/ - M A DE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 40 ( A ) (IA) READ WITH SECTION 194D . 2. BRIEFLY STATED, THE RELEVANT M ATERIAL F A C T S ARE LIKE THIS. T HE A SSESS E E DERIVES INCOME FROM I NSURANCE COMMISSION. OUT OF THE COMMI SSION HE SO RECEIVES, THE ASSESSEE HAS CLAIMED TO HAVE PAID R.10,45,400/ - AS REFERRAL COMMISSION TO FOUR INDIVIDUALS. ADMITTEDLY , HOWEVER , NO T AX W A S DEDUCTED AT SOURCE FROM THE PAYMENTS SO MADE. IT WAS IN THIS BACK I.T.A. NO. 2891 /AHD/ 201 1 ASSESSMENT YEAR: 200 7 - 08 PAGE 2 OF 3 DROP THAT THE ASSESSING OFFICER DISALL OWED , BY INVOKING SECTION 40 ( A ) (IA) , PAYMENT OF COMMISSION AMOUNTING TO RS.10,45,400/ - . AGGRIEVED , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. W E HAVE NOTED THAT A S H E LD BY T HE HON BLE DELHI HIGH COURT IN THE CA S E OF CIT VS. ANSAL L A NDMA RK TOWNSHIP (P) LTD, 377 ITR 635 (DELHI) TH E SECOND PROVISO TO SECTION 40(IA) EVEN THOUGH IT IS STATED TO BE EFFECTIVE FROM 01.04.2013 IS TO BE TAKEN AS RETROSPECTIVE IN EFFECT AND , THEREFORE, AS LONG AS RECIPIENTS OF THE INCOME HAVE DISCHARGED THEIR TAX L IABILITY, DISALLOWANCE UNDER SECTION 40A(IA) CANNOT BE MADE. AS WE NOTE THIS LEGAL PROPO S ITION , WE ARE ALIVE TO THIS FACT THAT THE AUTHORITIES BELOW HAVE NOT ADDRESSED THEMSELVES TO THIS ASPECT OF THE MATTER. IN VIEW OF THIS LEG A L A ND F A CTUAL POSITION, W E DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF ASSESSING OFFICER FOR T HE FACTUAL VERIFICATION AS EMBEDDED IN THE ABOVE LEGAL PROPOSITION ON THE FACT OF THIS CASE. IN THE EVENT OF RECIPIENTS OF REFERRAL COMMISSION HAVING DULY DISCHARGED THEIR TAX LIABILITIES , OBVIOUSLY THERE CANNOT BE ANY OCC ASION FOR DISALLOWANCE UNDER SECTION 40 ( A ) (IA) OF THE ACT. IN ANY OTHER CASE, THE MATTER IS TO BE EXAMINED ON MERITS AND THE ARGUMENTS THAT THE ASSESSEE SEEKS TO ADVANCE REGARDING NON APPLICATION OF SECTIO N 194D ON FACT OF THIS CASE MAY ALSO TO BE EXAMINED BY THE A SS E SSING OFFIC E R. OUR DEALING WITH THE AR G UMEN T S OF THE ASSESSEE IN RESPECT OF NON APPLICATION OF SECTION 194D WILL BE SOMEWHAT ACADEMIC AT THIS STAGE. WE, THEREFORE, REFRAIN FROM MAKING ANY OBS ERVATION ON MERITS AND REMIT THE MATTER TO THE FILE OF ASSESSING OFFICER WITH OUR DIRECTIONS AS ABOVE. 4 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. P RONOUNCED IN THE OPEN COURT TODAY ON 22 ND JANUARY, 2016 . SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 22 ND DAY OF JANUARY , 201 6 . I.T.A. NO. 2891 /AHD/ 201 1 ASSESSMENT YEAR: 200 7 - 08 PAGE 3 OF 3 PBN/ * COPIES TO : ( 1) THE APPE LLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD