ASIA PACIFIC INTERNATIONAL, TIRUPPUR V. DCIT CIRCLE 1, TIRUPPUR

ITA 3001/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3674 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Depreciation; TDS; Set aside
• Section: 143(3); 40(a)(ia); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.3001/CHNY/2018 / ASSESSMENT YEAR: 2009-10) M/S. ASIA PACIFIC INTERNATIONAL, NO.736, P.N. ROAD, TIRUPPUR 641 602. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, TIRUPPUR. PAN: AAEFA9605K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI V.S. JAYAKUMAR, ADVOCATE / RESPONDENT BY : SHRI CLEMENT RAMESH KUMAR, ADDL.CIT /DATE OF HEARING : 06.03.2019 /DATE OF PRONOUNCEMENT : 08.03.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMBATORE, DATED 21.08.2018 IN APPEAL NO.433/16-17 FOR THE ASSESSMENT YEAR 2009-10 PASSED U/S.250(6) R.W.S. 143(3) R.W.S. 147 OF THE ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 2 ITA NO.3001/CHNY/2018 1) THE ORDER OF THE CIT(A) IS CONTRARY TO THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2) REOPENING U/S 147 (A) THE CIT(A) ERRED IN CONFIRMING THE REASSESSMENT MADE ON THE APPELLANT. (B) THE CIT(A) N FAILED TO NOTE THAT THERE IS NO NON-DISCLOSURE ON THE PART OF THE APPELLANT WHILE FILING THE ORIGINAL RETURN OF INCOME. (C) THE CIT(A) FAILED TO NOTE THAT PRE CONDITIONS TO JUSTIFY THE REASSESSMENT HAVE NOT BEEN FULFILLED IN THE INSTANT CASE. (D) THE CIT(A) SHOULD HAVE APPRECIATED THAT THE ASSESSMENT MADE EARLIER HAS NOT BEEN REOPENED IN ACCORDANCE WITH LAW AND WELL SETTLED PRINCIPLES LAID DOWN BY VARIOUS COURTS. 3) DISALLOWANCE UNDER SEC. 40(A)(IA)-RS.18,38,745/- (A) THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF RS. 18,38,745/- AS THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE. (B) THE CIT(A) HAVING APPRECIATED THAT THE RECIPIENT HAS PAID THE TAXES ON THE AMOUNT RECEIVED FROM THE APPELLANT AND HE OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO LOOK INTO THE MATTER AND CROSS VERIFIED THE SAME FROM THE COUNTERPART ASSESSING OFFICER AND GRANTED APPROPRIATE RELIEF TO THE APPELLANT. ( C ) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THERE IS NO LOSS OF REVENUE AS THE TAXES DUE ON THE AMOUNT HAS BEEN PAID TO THE COFFERS OF THE DEPARTMENT. (D) THE CIT(A) SHOULD HAVE ALLOWED THE CLAIM BASED ON THE PRINCIPLES LAID DOWN BY THE CBDT CIRCULAR AND ,THE DECISION OF SUPREME COURT IN HINDUSTHAN COCO COLA BEVERAGE P LTD V CIT (2007)293 ITR 226 (SC) 4) THE APPELLANT CRAVES LEAVE TO ADDUCE ADDITIONAL GROUNDS OF APPEAL AT THE TIME. 3 ITA NO.3001/CHNY/2018 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF HOSIERY GARMENTS IN THE NAME AND STYLE M/S. ASIA PACIFIC INTERNATIONAL, FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 08.10.2009 ADMITTING TOTAL INCOME OF RS.48,59,430/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ASSESSMENT WAS COMPLETED ON 28.12.2011 ASSESSING THE INCOME OF THE ASSESSEE AT RS.60,22,530/-. SUBSEQUENTLY THE CASE WAS REOPENED BY ISSUE OF NOTICE U/S.148 OF THE ACT ON 28.12.2015. FINALLY ASSESSMENT WAS COMPLETED U/S.147 R.W.S 148 OF THE ACT ON 23.12.2016 WHEREIN THE LD.AO MADE DISALLOWANCE OF EXPENDITURE AMOUNTING TO RS.18,38,745/- TOWARDS NON DEDUCTION OF TDS TOWARDS PAYMENT OF LAB TESTING FEE INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND RS.40,596/- TOWARDS DISALLOWANCE OF DEPRECIATION. 4. BEFORE US THE LD.AR SUBMITTED THAT THE PARTY TO WHOM THE ASSESSEE HAD MADE PAYMENT TOWARDS LAB TESTING FEE HAD REMITTED THE TAX AND THEREFORE ADDITION MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IS NOT JUSTIFIED. THE LD.AR FURTHER SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.AO FOR VERIFYING THE SAME. THE LD.AR ALSO POINTED OUT THAT IN THE CASE 4 ITA NO.3001/CHNY/2018 OF THE ASSESSEE, ON IDENTICAL FACTS FOR THE ASSESSMENT YEAR 2012- 13, THIS BENCH OF THE TRIBUNAL HAD REMITTED BACK THE MATTER TO THE FILE OF LD.AO FOR SUCH VERIFICATION. ON THE OTHER HAND, THE LD.DR ARGUED BY STATING THAT THE FACTS ARE NOT IDENTICAL IN THE CASE DECIDED BY THE TRIBUNAL ON THE EARLIER OCCASION IN THE CASE OF THE ASSESSEE. IT WAS THEREFORE PLEADED THAT THE ORDER OF THE LD.REVENUE AUTHORITIES MAY BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. WE FIND MERIT IN THE SUBMISSIONS OF THE LD.AR. THIS BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2012-13 IN ITA NO.3110/CHNY/2017 HAD REMITTED BACK THE MATTER TO THE LD.AO BY OBSERVING AS UNDER:- 5. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. THE FACT WHETHER THE RECIPIENT HAS PAID THE TAX HAS TO BE VERIFIED AND ASCERTAINED BY THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER SHALL RE- EXAMINE THE MATTER IN THE LIGHT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER AND FIND OUT WHETHER THE RECIPIENT HAS PAID THE TAX ON THE AMOUNT RECEIVED FROM THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. THOUGH WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE ASSESSEE FOR NOT DEDUCTING THE TAX AT SOURCE IN ACCORDANCE WITH THE 5 ITA NO.3001/CHNY/2018 PROVISIONS OF THE ACT, SINCE ON THE EARLIER OCCASION THIS BENCH OF THE TRIBUNAL HAD REMITTED THE MATTER BACK TO THE FILE OF LD.AO FOR RE- EXAMINING THE MATTER ON THE SAME ISSUE, AND IN THE INTEREST OF JUSTICE FOR THE RELEVANT ASSESSMENT YEAR ALSO WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD.AO WITH SIMILAR DIRECTION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED ON THE 08 TH MARCH, 2019 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 08 TH MARCH, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF