The Deputy Commissioner of Income tax, Jammu V. M/s. Jamkash Vehicleads P.Ltd., Jammu

ITA 304/ASR/2010

• Counselvise Citation: 30420914 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 28-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.304(ASR)/2010 ASSESSMENT YEAR:2006-07 PAN :AAACJ4126D DY. COMMR. OF INCOME-TAX, VS. M/S. JAMKASH VEHICLE ADES PVT. LTD. CIRCLE -2, JAMMU. JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. AMRIK CHAND, DR RESPONDENT BY:SH. R.K. GUPTA, CA DATE OF HEARING:18/09/2012 DATE OF PRONOUNCEMENT:25/09/2012 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), BATHINDA, DATED 26.04.2010 RELATING TO ASSESSMENT Y EAR 2006-07. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETI NG THE ADDITION MADE ON ACCOUNT OF EMPLOYEES SHARE OF PROVIDENT FUN D AS THE SAID PAYMENT HAS NOT BEEN MADE BEFORE THE DUE DATE AS PROVIDED IN EXPLANATION BELOW THE PROVISIONS OF CLA USE (VA) OF SUB-SECTION (1) OF SECTION 36 OF THE INCOME TAX ACT , 1961. 2. THAT THE LD. CIT(A) HAS ERRED HIMSELF TO HOLD TH AT THE EMPLOYEES SHARE OF PROVIDENT FUND IS ALLOWABLE WITH IN THE PROVISIONS OF SECTION 43B OF THE INCOME-TAX ACT, 19 61 WHICH IS ITA NO.304(ASR)/2010 2 IN CONTRAVENTION OF THE PROVISIONS OF SECTION 36(1) (VA) OF THE INCOME-TAX ACT, 1961. 3. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT DU E DATE AS MENTIONED IN SECTION 36(1)(VA) IS THE DATE AS DEFINED/MENTIONED U/S 139(1) OF THE INCOME TAX ACT, 1961 WHEN THE SAME HAS BEEN DEFINED IN EXPLANATION BELOW SUB CLAUSE (VA) OF THE SUB SECTION (1) OF SECTION 36. 4. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THE RET ROSPECTIVE OPERATION OF THE AMENDMENT OF SECTION 43B WHICH IS NOT QUITE CORRECT IN THE WAKE OF THE MADRAS HIGH COURT DECISI ON IN THE CASE OF CIT VS. SYNERGY FINANCIAL EXCHANGE LTD; 288 ITR (MAD) 336. SUCH A VIEW IS ALSO SUPPORTED BY THESE D ECISIONS OF OTHER HIGH COURTS: A) HITECH (I) PVT. LTD. VS. UOI 227 ITR (AP) 446 B) THE KERALA STATE FINANCE LTD. 225 ITR (KER) 999 C) CIT VS. SOUTH INDIA COOPERATIVE LTD. 242 ITR (KER) 114 D) CIT VS. MADRAS RADIATORS 264 ITR (MAD) 620 5. THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.15,60,000/- MADE ON ACCOUNT OF LEASE RENT U/S 40 (A)(IA) OF THE INCOME-TAX ACT, 1961. 6. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ACCEPTI NG THE MEMORANDUM OF UNDERSTANDING FILED BY THE ASSESSEE D URING APPELLATE PROCEEDINGS IN RESPECT OF LEASE RENT, WHE N THE ASSESSEE HAS FAILED TO FILE THE SAME DURING ASSESSMENT PROCE EDINGS. 7. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETIN G THE DISALLOWANCE OF EXPENSES OF RS.46,86,912/- U/S 40(A )(IA) ON ACCOUNT OF PAYMENTS TO DIFFERENT PARTIES UNDER DIFF ERENT HEADS. 8. THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS THA T THE TDS WAS REQUIRED TO BE DEDUCTED AT THE TIME OF CREDIT IN TH E ACCOUNT OF THE PAYEE IN THE MONTH OF JANUARY & FEBRUARY, 2006, WHEREAS THE ASSESSEE HAS DEDUCTED TDS ON 31.03.2006. ITA NO.304(ASR)/2010 3 9. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN IN DELE TING 50% OF THE DISALLOWANCES MADE ON ACCOUNT OF EXPENSES OF PERSON AL NATURE AND NON PRODUCTION OF VOUCHERS DURING ASSESSMENT PR OCEEDINGS. 10. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETI NG 50% OF THE DISALLOWANCES IN SPITE OF THE FACT THAT THE LD. CIT (A) HAS HIMSELF ADMITTED THAT I AM NOT SATISFIED SINCE NO P ROPER JUSTIFICATION/VOUCHERS ETC. HAVE BEEN PRODUCED. 3. THE BRIEF FACTS IN GROUNDS NO. 1 TO 4 OF THE REV ENUE ARE THAT THE ASSESSEE HAS DEPOSITED THE EMPLOYEES SHARE OF PROV IDENT FUND BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME BUT AFTER S PECIFIED DATE UNDER THE PROVIDENT FUND ACT. THE AO ACCORDINGLY ADDED THE SA ID AMOUNT OF RS.4,96,305/- TO THE INCOME OF THE ASSESSEE WHICH W AS DELETED BY THE LD. CIT(A) FOLLOWING THE DECISION OF THE ITAT, AMRITSA R BENCH IN THE CASE OF ACIT RANGE-II, JALANDHAR VS. M/S. PROXIMA STEEL FOR GE P. LTD. JALANDHAR IN ITA NO.280(ASR)/2008, ON THE IDENTICAL ISSUE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) AND THE ISSUE BEFORE US IS IDENTICAL TO THE FACTS OF THE CASE OF M/S. PROXIMA STEEL FORGE P. LTD. JALANDHAR (SUPRA) AND THEREFORE, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. WE FIND NO INFIRMITY IN H IS ORDER AND THE SAME IS UPHELD. THUS, GROUNDS NO. 1 TO 4 OF THE REVENUE ARE DISMISSED. 5. AS REGARDS GROUNDS NO. 5 & 6, THE AO DISALLOWED RENT OF RS.15,60,000/-, WHICH HAS BEEN INCURRED ON HIRING M ACHINERY @ ITA NO.304(ASR)/2010 4 RS.1,30,000/- P.M. ON THE GROUND THAT THE ASSESSEE- COMPANY HAS FAILED TO DEDUCT TAX UNDER SECTION 194(1) OF THE ACT AND THAT IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT., THE SAID AMOUNT I S NOT AN ALLOWABLE EXPENDITURE. 5.1. ON APPEAL, THE LEARNED CIT(A) FOLLOWING THE DE CISION OF THE ITAT, JAIPUR BENCH, IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DCIT (2009) 123 TTJ 888 DATED 30.04.2009 ALONGWITH OTHER DECISIONS OF VARIOUS COURTS OF LAW, DELETED THE ADDITION MADE BY THE A. O. NOW AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL B EFORE US. 5.2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEW OF THE LD. CIT(A) THAT FACT S IN PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DCIT (2009) 123 TTJ 888 (SUPRA) AND OTHER DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF M/S. TEJA CONSTRUCTIONS VS. AC IT, ORDER DATED 23.10.2009, IN ITA NO. 308/HYD/2009 ON THE IDENTICA L ISSUE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. ACCORDINGLY THE ORDER OF THE LD. CIT(A) IS UPHELD. THUS, GROUNDS NO. 5 & 6 ARE DISMISSED. 6. AS REGARDS GROUNDS NO. 7 & 8, THE AO HAS MADE TH E DISALLOWANCE OF RS.53,62,286/- U/S 40(A)(IA) ON ACCOUNT OF PAYMENTS MADE TO VARIOUS PARTIES UNDER DIFFERENT HEADS. THE LD. CIT(A) OBSERVED THA T THE ASSESSEE HAD ITA NO.304(ASR)/2010 5 FURNISHED DETAILS IN RESPECT OF AMOUNT OF RS.47,06, 006/- ONLY AND NO DETAILS FOR THE AMOUNT OF RS.6,56,280/- WERE SUBMITTED AND NO EXPLANATION TO THAT EXTENT WAS SUBMITTED BY THE ASSESSEE. THE ASSESSEE HAD INCURRED SUCH EXPENSES BEFORE 31.03.2006 AND TDS HAS BEEN DEDUCTE D AND DEPOSITED AFTER MARCH, 2006 AND THEREFORE, THE SAME IS BEING DISALL OWED AS PER SECTION 40(A)(IA) OF THE ACT. THE TAX HAS BEEN DEDUCTED AT SOURCE IN MARCH, 2006 AND THE SAME HAS BEEN PAID WELL BEFORE DUE DATE OF FILI NG THE RETURN OF INCOME IN THE MONTH OF MAY, 2006 & JUNE,2006. ACCORDINGLY, TH E LD.. CIT(A) RELYING UPON THE DECISION OF ITAT, JAIPUR BENCH, IN THE CAS E OF JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DCIT (2009) 123 TTJ 888 DATED 30.04.2009 AND DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF M/ S. TEJA CONSTRUCTIONS VS. ACIT, ORDER DATED 23.10.2009, IN ITA NO. 308/HY D/2009 DELETED THE ADDITION BY RESTRICTING THE DISALLOWANCE TO RS.1909 4/- FOR THE REASONS MENTIONED IN HIS ORDER. 6.1. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT TH E ASSESSEE HAS DEDUCTED TAX AT SOURCE BEFORE 31.03.2006 AND THE SAME HAS BE EN DEPOSITED IN THE MONTH OF MAY, 2006 & JUNE, 2006 WELL BEFORE THE DU E DATE OF FILING THE RETURN OF INCOME, IN VIEW OF THE DECISIONS RELIED U PON BY THE LD. CIT(A) OF ITAT JAIPUR BENCH, IN THE CASE OF VIDYUT VITRAN NIG AM LTD. VS. DCIT (2009) 123 TTJ 888 DATED 30.04.2009 AND ITAT, HYDE RABAD BENCH IN THE ITA NO.304(ASR)/2010 6 CASE OF M/S. TEJA CONSTRUCTIONS VS. ACIT, ORDER DAT ED 23.10.2009, IN ITA NO. 308/HYD/2009, ON THE IDENTICAL ISSUE. WE FIND N O INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY DELETED THE ADDI TION MADE BY THE AO. THUS, GROUND NOS. 7 & 8 OF THE REVENUE ARE DISMISSE D. 7. AS REGARDS GROUNDS NO. 9 & 10, THE BRIEF FACTS A RE THAT THE AO MADE AN ADDITION OF RS.1,76,014/- DUE TO THE FACT THAT T HE ASSESSEE HAS NOT PRODUCED ANY VOUCHERS BEFORE THE A.O. BEFORE THE LD . CIT(A) THE ASSESSEE SUBMITTED THE EXPLANATION AND DIVIDED THE ADDITION INTO THREE PARTS AND CONTENDED THAT THE CLAIM OF RS.1,60,014/- UNDER THE HEAD MISCELLANEOUS EXPENSES FOR RS.78265/-, UNDER THE HEAD BUSINESS PR OMOTION RS.20,950/- AND TRAVELING EXPENSES OF RS.60,799/-. THE LD.CIT(A) FO RWARDED THIS EXPLANATION TO THE AO FOR THE REMAND REPORT, WHO R EITERATED WHAT HAS BEEN SAID IN THE ASSESSMENT ORDER AND STATED THAT THE A SSESSEE HAD NOT AGITATED WHAT IS BEING STATED IN THE WRITTEN SUBMISSIONS BEF ORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE ADDITION ON ACCOUNT OF EXPE NSES RELATING TO THE DIRECTORS FOR THE REASONS MENTIONED IN HIS ORDER. A S REGARDS OTHER EXPENSES, THE LD. CIT(A) OBSERVED THAT THE AO WITHOUT BRINGIN G ANY SPECIFIC INSTANCE HAD DISALLOWED THE EXPENSES. ACCORDINGLY, THE AO WA S DIRECTED TO RESTRICT THE EXPENSES TO THE EXTENT OF RS.16,000/- AS CONCED ED BY THE ASSESSEE- COMPANY ITSELF AND IN ADDITION TO THIS, A FURTHER D ISALLOWANCE OF 50% OF THE REMAINING EXPENDITURE DISALLOWED BY THE AO, WHICH W ORKS OUT TO ITA NO.304(ASR)/2010 7 RS.80,007/- I.E. 50% OF RS.1,60,014/- THUS, THE ALL OWING RELIEF OF RS.80,007/- TO THE ASSESSEE. 7.1. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT TH E ASSESSEE HAD NOT PRODUCED THE VOUCHERS AND ACCORDINGLY 50% OF DISALL OWANCE HAS RIGHTLY BEEN SUSTAINED BY THE LD. CIT(A). IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND ACCORDINGLY, THE SAME IS UPHELD. THUS, GROUND NO. 9 & 10 OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA. NO. IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH SEPTEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. JAMKASH VEHICLEADES PVT. LTD. JAM MU 2. THE DCIT, R-2, JAMMU. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR)