The ITO, Ward-1(2), JUNAGADH V. Shri Mansukhlal B. Gajera,

ITA 30/RJT/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94035 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO. 3 0 / RJT /20 14 (ASSESSMENT YEAR: 200 6 - 0 7 ) THE I.T.O., WARD - 1(2), JUNAGADH A PPELLANT VS. SHRI MANSUKHLAL B. GAJERA, PROP. OF M/S. GUNJAN CONSTRUCTION, AT: BARADIA, TAL. VISAVADAR RESPONDENT PAN: A DIPG0816B / BY APPELLANT : SHRI AVINASH KUMAR , D.R. / BY RESPONDENT : NONE / DATE OF HEARING : 1 8 . 0 5 .2015 / DATE OF PRONOUNCEMENT : 20 . 0 5 .2 01 5 ORDER PER SHAILENDRA KUMAR YADAV, J.M: TH I S APPEAL HAS BEEN FILED BY REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I V , RAJKOT , DATED 31 . 1 0 . 20 1 3 FOR A.Y. 200 6 - 0 7 ON THE FOLLOWING GROUND S . 1. ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY AO I T A NO. 30 / RJT / 1 4 A.Y. 200 6 - 0 7 [ IT O VS. SHRI MANSUKHLAL B. GAJERA ] PAGE 2 FOR RS.57,99,827/ - WHICH WAS IN CONTRAVENTION OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT TDS WAS NOT DEDUCTED AND PAID IN TO GOVERNMENT ACCOUNT BY THE ASSESSEE BY MARCH 2006 IN RESPECT OF CONTRACT PAYMENTS OF RS.57,99,827/ - CREDITED TO CONTRACTOR S ACCOUNT IN FEBRUARY 2006. INSTEAD, THE ASSESSEE S TDS WAS DEDUCTED AN D PAID INTO GOVERNMENT ACCOUNT ON 31.05.2006. 2. ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION ON CONTRACT BASIS. HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 19.10.2006 DECLARING TOTAL INCOM E OF RS.2,60,620/ - . ASSESSMENT WAS COMPLETED VIDE ORDER U/S.143(3) OF THE ACT DATED 15.12.2008 ON A TOTAL INCOME OF RS.3,10,720/ - , WHEREIN RS.30,000/ - & RS.20,100/ - WERE DISALLOWED OUT OF LABOUR CHARGES AND MOBILE & VEHICLE EXPENSES RESPECTIVELY. SUBSEQU ENTLY, COMMISSIONER OF INCOME TAX III, RAJKOT INITIATED ACTION U/S.263 OF THE ACT BY ISSUING NOTICE DATED 09.03.2011 ON THE GROUND THAT DUE DATE OF MAKING PAYMENT OF TAX DEDUCTED TILL FEBRUARY, 2006 WAS 31.03.2006 AND ASSESSEE HAD NOT MADE PAYMENT OF TAX DEDUCTED FROM AD HOC PAYMENTS MADE TO SUB - CONTRACTOR TILL FEBRUARY 2006 BEFORE DUE DAE. LATER ON, CIT VIDE ORDER U/S.263 DATED 24.03.2011 SET ASIDE THE ORIGINAL ASSESSMENT ORDER DATED 15.12.2008 AND DIRECTED THE ASSESSING OFFICER TO REFRAME ASSESSMENT. S UBSEQUENTLY, ASSESSING OFFICER VIDE ORDER U/S.143(3) R.W.S. 263 OF THE ACT DATED 28.09.2011 ASSESSED THE TOTAL INCOME AT RS.61,10,550/ - , WHEREIN HE DISALLOWED SUBCONTRACT EXPENSES OF RS.57,99,827/ - I T A NO. 30 / RJT / 1 4 A.Y. 200 6 - 0 7 [ IT O VS. SHRI MANSUKHLAL B. GAJERA ] PAGE 3 U/S.40(A)(IA) OF THE ACT ON ALLEGED GROUND THAT TAX DEDUCT ED AT SOURCE FROM SUBCONTRACT EXPENSE WAS PAID AFTER DUE DATE. 2 . 1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY , WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERING THE SAME, CIT(A) OBSERVED THAT ASSESSEE HAD D EDUCTED TAX AND HAD REMITTED THE SAME TO GOVERNMENT ACCOUNT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. THEREFORE, THERE WAS NO LOSS TO THE EXCHEQUER. THE ONLY ISSUE IS FAILURE TO REMIT TAX WITHIN A MONTH OF ITS DEDUCTION, AS AGAINST REMITTANCE OF SAME BEFORE DUE DATE OF FILING OF RETURN. UNDER FACTS AND CIRCUMSTANCES, CIT(A) HAS ALLOWED THE SAME AFTER FOLLOWING JURISDICTION PRECEDENT ON THE ISSUE INCLUDING DECISION OF HON BLE CALCUTTA HIGH COURT IN CASE OF VIRGIN CREATIONS, WHICH IS FOLLOWED BY I TAT, RAJKOT IN CASE OF RANA BUILDERS 31 TAXMAN.COM 372. 2.2 THIS REASONED FACTUAL FINDING OF CIT(A) HAS BEEN OPPOSED ON BEHALF OF REVENUE BEFORE US INTER ALIA SUBMITTED THAT CIT(A) ERRED IN DELETING ADDITION MADE BY ASSESSING OFFICER FOR RS.57,99,827/ - WHICH WAS IN CONTRAVENTION OF PROVISIONS OF SECTION 40A(IA). ON OTHER HAND, NONE APPEARED ON BEHALF OF ASSESSEE BEFORE US INSPITE OF NOTICE SERVICE, SO MATTER IS BEING DECIDED ON THE BASIS OF ARGUMENT OF LEARNED DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD. 2 . 3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT ASSESSEE IN ENGAGED IN BUSINESS OF CIVIL I T A NO. 30 / RJT / 1 4 A.Y. 200 6 - 0 7 [ IT O VS. SHRI MANSUKHLAL B. GAJERA ] PAGE 4 CONSTRUCTION ON CONTRACT BASIS UNDER NAME AND STYLE OF M/S. GUNJAN CONSTRUCTION. IT IS UNDISPUTED THAT ASSESSEE HAS DEDUCTED TAX AND REMITTED THE SAME TO GOVERNMENT ACCOUNT BEFORE DUE DATE OF FILING OF RETURN, SO CIT(A) WAS JUSTIFIED IN GRANTING RELIEF TO ASSESSEE. THIS VIEW OF CIT(A) IS FORTIFIED BY JURISDICTIONAL PRONOUNCEMENT INCLUDING ITAT, RAJKOT BENCH DECISION IN CASE OF RANA BUILDERS (SUPRA), WHEREIN DECISION OF HON BLE CALCUTTA HIGH COURT IN CASE OF VIRGIN CREATIONS HAS BEEN FOLLOWED. ACCORDINGLY, ORDER OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 3 . IN THE RESULT, APPEAL FILED BY REVENU E IS DISM ISSED . PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF MA Y , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 20 /0 5 /2015 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT . 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT