The Dy. Commissioner of Income-tax, Srinagar V. M/s. Khazir Sons, Srinagar

ITA 296/ASR/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2471 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.296(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN:AADFK6412F DEPUTY COMMR. OF INCOME TAX, VS. M/S. KHAZIR SONS, CIRCLE-3, SRINAGAR. NIGEEN, SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. S.S. KANWAL, DR RESPONDENT BY:NONE DATE OF HEARING: 31/12/2015 DATE OF PRONOUNCEMENT: 05/01/2016 ORDER PER A.D. JAIN, JM; THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2007-08, AGAINST THE ORDER DATED 12.02.2013, PASSED BY THE L D. CIT(A), JAMMU. THE SOLE GROUND RAISED BY THE REVENUE IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT (A) WAS RIGHT IN DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) W. E.F. 01.04.2010 BY THE FINANCE ACT,2010, AS HAVING RETROSPECTIVE AP PLICATION W.E.F. 01.04.2010 WHEREAS THE SAID AMENDMENT IS PROSPECTIV E IN NATURE. 2. DESPITE ISSUANCE OF RPAD NOTICE OF HEARING ON 3 1.12.2015, WHICH HAS NOT BEEN RETURNED UNSERVED, NONE PUT IN APPEARA NCE ON BEHALF OF THE ASSESSEE. FINDING THAT THE MATTER CAN BE PROCEEDED WITH IN THE ABSENCE OF THE ASSESSEE, WE ARE DOING SO. 3. THE FACTS OF THE CASE ARE THAT THE AO MADE ADDIT IONS OF RS.34,20,000/- U/S 40(A)(IA) OF THE I.T. ACT, 1961 ( IN SHORT, THE ACT), IN RESPECT OF RENT PAID UPTO FEBRUARY, 2007, REGARDING WHICH, TDS WAS NOT DEPOSITED DURING THE PREVIOUS YEAR, BUT WAS DEPOSIT ED IN THE SUBSEQUENT ITA NO.296/ASR/2013 ASSTT. YEAR: 2007-08 2 YEAR, THOUGH BEFORE THE DUE DATE OF FILING OF THE R ETURN. THE LD. CIT(A) DELETED THE ADDITIONS. 4. THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS CORRECTLY MADE BY THE A.O; AND THAT WHILE DOING SO, THE LD. CIT(A) HAS FURTHER ERRED IN TREATING THE AMENDMENT MADE IN SECTION 40(A)(IA) OF THE ACT, W.E.F. 01.04.2010, AS HAVING RETROSPECTIVE APPLICATION, WHEREAS THE SAME IS PROSPECTIVE IN NATURE. 5. WE HAVE HEARD THE LD. DR AND HAVE PERUSED THE MA TERIAL ON RECORD. THE PROVISIONS OF SECTION 40(A)(IA) READ AS FOLLOWS: 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SE CTIONS 30 TO 38, THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMP UTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, - (A) IN THE CASE OF ANY ASSESSEE- (IA) ANY INTEREST, COMMISSION OR BROKERAGE, RENT, R OYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK INCLUDING SUPPL Y OF LABOUR FOR CARRYING OUT ANY WORK, ON WHICH TAX IS DEDUCTIBLE A T SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE D ATE SPECIFIED IN SUB-SECTION(1) OF SECTION 139. 6. IN THE ABOVE SECTION, THE WORDS HAS NOT BEEN P AID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTI ON 139 HAVE BEEN INSERTED BY SUBSTITUTION, BY THE FINANCE ACT, 2010, W.E.F. 1.4.2010. IN THE CASE OF BHARTI SHIPYARD LTD. VS. DCIT, VIDE ORDER DATED 12.09.2011, IN ITA NO.2404/MUM/2009, THE SPECIAL B ENCH OF THE ITAT, MUMBAI, HELD THE AFORESAID AMENDMENT TO BE PROSPECT IVE IN NATURE. HOWEVER, THE HONBLE CALCUTTA HIGH COURT, IN THE CA SE OF CIT VS. VIRGIN CREATIONS, GA NO. 3200/2011, VIDE ORDER DATED 23.1 1.2011, HELD THE AFORESAID AMENDMENT TO BE RETROSPECTIVE IN NATURE. THE LD. CIT(A), WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE, HAS F OLLOWED VIRGIN CREATIONS (SUPRA). ITA NO.296/ASR/2013 ASSTT. YEAR: 2007-08 3 7. IT IS PERTINENT TO NOTE THAT THE SPECIAL BENCH D ECISION OF THE TRIBUNAL, IN THE CASE OF BHARTI SHIPYARD LTD. (SU PRA), IS DATED 12.09.2011 WHEREAS, VIRGIN CREATIONS (SUPRA), IS OF 23.11.2011. THEREFORE, VIRGIN CREATIONS (SUPRA), OF THE HON BLE HIGH CALCUTTA COURT IS POSTERIOR IN TIME TO THE SPECIAL BENCH TRIBUNAL DECISION IN BHARTI SHIPYARD LTD. (SUPRA). ON BEHALF OF THE DEPARTMENT , NO DECISION CONTRARY TO VIRGIN CREATIONS (SUPRA), HAS BEEN PLACED BEF ORE US. IN VIRGIN CREATIONS (SUPRA), THE HONBLE CALCUTTA HIGH COURT HAS FOLLOWED THE HONBLE SUPREME COURTS DECISION IN THE CASE OF CI T VS. ALOM EXTRUSIONS LTD., 319 ITR 306, HOLD THE PROVISIONS OF SECTION 40(A)(IA) AS REQUIRED TO BE TREATED WITH RETROSPECTIVE OPERATION, SO THAT A REASONABLE DEDUCTION CAN BE GIVEN THERETO. MOREOVER, THE AMRITSAR BENCH OF THE TRIBUNAL, IN THE CASE OF FIL INDUSTRIES LIMITED, SRINAGAR VS. A DDL. CIT, R-III, SRINAGAR, IN ITA NO.415/ASR/2009, DATED 27.06.2012 , RELYING ON ALOM EXTRUSIONS LTD. (SUPRA), DECIDED THE ISSUE REGARDI NG DEPOSIT OF EMPLOYEES CONTRIBUTIONS OF PROVIDENT FUND IN FAVOUR OF THE ASSESSEE. 8. IN VIEW OF THE ABOVE, WE FIND NO ERROR WHATSOEVE R IN THE ORDER OF THE LD. CIT(A). THE SAME IS HEREBY UPHELD, REJECTIN G THE GRIEVANCE SOUGHT TO BE RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/01/2016 SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 05/01/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. KHAZIR SONS, NIGEEN, SRINAGAR . 2. THE DCIT, CIRCLE-3, SRINAGAR. 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER