The DCIT, Visakhapatnam V. Sri S. Vijaya Kumari, Visakhapatnam

ITA 305/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9016 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C V S MURTHY
• Section: 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 305/VIZ/2016 (ASST. YEAR : 2007-08) DCIT, CIRCLE-3(1), VISAKHAPATNAM. V. SHRI S. VIJAYA KUMAR, PROP. VIJAY NIRMAN COMPANY, 8-45-14/1, 4 TH LANE, VIDYA NAGAR, VISAKHAPATNAM. PAN NO. AJJPS 0703 L (APPELLANT) (RESPONDENT) C.O.NO.45/VIZ/2016 (ITA NO. 305/VIZ/2016) (ASST. YEAR : 2007-08) SHRI S. VIJAYA KUMAR, PROP. VIJAY NIRMAN COMPANY, 8-45-14/1, 4 TH LANE, VIDYA NAGAR, VISAKHAPATNAM. V. DCIT, CIRCLE-3(1), VISAKHAPATNAM. PAN NO. AJJPS 0703 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.V.S. MURTHY FCA. DEPARTMENT BY : SHRI M.N. MURTHY NAIK SR.DR DATE OF HEARING : 19/04/2017. DATE OF PRONOUNCEMENT : 19/04/2017. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, VISAKHAPATNAM, DATED 31/03/2016 FOR THE ASSESSMENT YEAR 2007-08. 2 ITA NO.305/VIZ/2016 (S. VIJAYA KUMAR) 2. THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPEAL IS DISALLOWANCE OF RS. 2,18,009/-. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE PAID INTEREST, AMOUNTING TO RS.2,18,009/- TO NON-BANKING FINANCE COMPANIES WITHOUT MAKING TDS. IN THIS REGARD, IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT DUE TO EMI CONCEPT, HE COULD NOT DEDUCT TDS. SINCE ASSESSEE FAILS TO COMPLY WITH THE PROVISIONS OF TDS, THE ASSESSING OFFICER DISALLOWED THE IMPUGNED AMOUNT OF RS. 2,18,009/- UNDER SECTION 40(A)(IA) OF THE ACT. 3 . ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTED BY THE ASSESSEE THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE DECISION OF ITAT, VIZAG BENCH IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS IN ITA NO. 657/VIZAG/2014, DATED 22/07/20185 AND ALSO RELIED ON THE ORDER IN HIS OWN CASE FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO. 131/VIZAG/2012. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, DIRECTED THE ASSESSING OFFICER TO ALLOW THE PAYMENTS ALREADY MADE DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. 4. ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. THE DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER. 6 . ON THE OTHER SIDE, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A) AND ALSO RELIED UPON THE ORDER OF SPECIAL BENCH, ITAT, VISAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT (136 ITD 23). 3 ITA NO.305/VIZ/2016 (S. VIJAYA KUMAR) 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE LD. CIT(A) BY CONSIDERING THE DECISION OF COORDINATE BENCH IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS (SUPRA) AND ALSO IN THE CASE OF ASSESSEE ITSELF FOR THE ASSESSMENT YEAR 2008-09, DIRECTED THE ASSESSING OFFICER TO ALLOW THE PAYMENTS ALREADY MADE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. FOR THE SAKE OF CONVENIENCE, RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREUNDER:- 6.3 I HAVE CAREFULLY CONSIDERED THE ABOVE. I HAVE ALSO PERUSED THE DECISION OF THE HON'BLE ITAT, VIZAG BENCH RELIED ON BY THE AR. THE HON'BLE ITAT, VIZAG BENCH IN THE CASE OF MUKUNDARA ENGINEERS, CONSIDERING THE DECISION OF THE HON'BLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF M/S. JANAPRIYA ENGINEERING SYNDICATE AND THE DECISION OF THE ITAT, SPECIAL BENCH, VISAKHAPATNAM IN THE CASE OF MERILY SHIPPING (136 ITD 23) HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT CANNOT BE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY PAID BEFORE THE END OF THE PREVIOUS YEAR. IN OTHER WORDS, THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE I.T. ACT IS RESTRICTED TO THE AMOUNTS REMAINING PAYABLE/OUTSTANDING ON THE LAST DAY OF THE PREVIOUS YEAR. SIMILAR VIEW WAS TAKEN BY THE HON'BLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2008-09. 6.3.1 RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE ITAT, VISAKHAPATNAM, I DIRECT THE AO TO RESTRICT THE DISALLOWANCE, IF ANY, TO THE AMOUNTS REMAINING PAYABLE ON 31/03/2008. IN OTHER WORDS, PAYMENTS ALREADY MADE DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR ARE DIRECTED TO BE ALLOWED. 9. WE FIND THAT THERE IS NO ERROR OR INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN DIRECTING THE ASSESSING OFFICER FOR ALLOWING THE PAYMENTS ALREADY MADE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, HENCE, NO INTERFERENCE IS REQUIRED. THUS, THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 4 ITA NO.305/VIZ/2016 (S. VIJAYA KUMAR) 10 . INSOFAR AS CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT WHILE PROCESSING THE RETURN OF INCOME, REFUND OF RS. 4,56,970/- ALONG WITH INTEREST UNDER SECTION 244A OF RS. 47,131/- WAS ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER NOTED THAT THE AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX OF RS.59,46,478/- AND HENCE, ASSESSEE WAS NOT ENTITLED FOR INTEREST UNDER SECTION 244A OF THE ACT. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER WITHDREW THE IMPUGNED INTEREST AMOUNT OF RS. 47,131/-. 11 . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING THAT THE ASSESSING OFFICER WITHDREW THE INTEREST MISTAKENLY GRANTED EARLIER UNDER SECTION 244A OF THE ACT WHILE PROCESSING THE RETURN UNDER SECTION 143(1) ON THE GROUND THAT REFUND IS LESS THAN 10% OF THE TAX LIABILITY AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, THIS GROUND OF CROSS OBJECTION RAISED BY THE ASSESSEE IS DISMISSED. 12 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND C.O. FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF APRIL, 2017. SD/- SD/- (G. MANJUNATHA) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH APRIL, 2017. VR/- 5 ITA NO.305/VIZ/2016 (S. VIJAYA KUMAR) COPY TO: 1. THE ASSESSEE- SHRI S. VIJAYA KUMAR, PROP. VIJAY NIRMAN COMPANY, 8-45-14/1, 4 TH LANE, VIDYA NAGAR, VISAKHAPATNAM. 2. THE REVENUE - DCIT, CIRCLE-3(1), VISAKHAPATNAM. 3. THE PCIT-1, VISAKHAPATNAM. 4. THE CIT(A)-1, VISAKHAPATNAM. 5. THE D.R., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER