M/s. Chopra Properties, New Delhi V. Addl. CIT, New Delhi

ITA 3099/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4815 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KR JIWANI
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.3099/DEL/2015 ASSESSMENT YEAR : 2008-09 CHOPRA PROPERTIES, C/O. M/S. RRA TAXINDIA, D- 28, SOUTH EXTENSION, PART- I, NEW DELHI. VS. ADDL. CIT, RANGE- 33, NEW DELHI. PAN : AAAFC8827B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SOMIL AGARWAL, ADV. SHRI DEEPESH GARG, ADV. DEPARTMENT BY : SHRI VIJAY KR. JIWANI, SR.DR DATE OF HEARING : 01-08-2018 DATE OF PRONOUNCEMENT : 01-08-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 23.03.2015 OF THE CIT(A)- 17, NEW DELHI RELATING TO ASSESSMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF COMMISSION AND INCOME FR OM OTHER SOURCES. IT FILED ITS RETURN OF INCOME ON 31.03.2009 DECLARING TOTAL INCOME OF RS.58,57,760/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.1,95,51,565/ - BY DISALLOWING AN AMOUNT OF RS.16,450/- BEING EXPENSES IN RELATION TO WHICH TDS OF RS.329/- REMAINED 2 ITA NO.3099/DEL/2015 UNPAID TILL 31.03.2008 AND AN AMOUNT OF RS.1,36,77, 355/- BEING EXPENSES PAYABLE AND SUNDRY CREDITORS AND SUB COMMISSION. 3. IN APPEAL, THE LD. CIT(A) NOTED THAT THERE IS VI OLATION OF PROVISIONS OF SECTION 40(A)(IA) IN SO FAR AS ASSESSEE HAS NOT DED UCTED TDS AND DEPOSITED THE SAME TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHIN THE STIPULATED TIME. HE, THEREFORE, ENHANCED THE INCOME OF THE ASSESSEE BY R S.1,35,00,000/-. HE HOWEVER GAVE CERTAIN RELIEF TO THE ASSESSEE ON ACCO UNT OF THE ADDITIONS MADE BY THE ASSESSING OFFICER. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION TO ENHANCE AND HAS ERRED IN MAKING THE AGGREGATE DISALLOWANCE OF RS.1,35,00,000/- U/S 40(A)(IA) AND IMPUGNED DISALLOWANCE HAS BEEN MADE BY RECORDING INCORRECT F ACTS AND FINDINGS AND WITHOUT GIVING ADEQUATE OPPORTUNITY OF HEARING AND WITHOUT CONSIDERING THE SUBMISSIONS AND EVIDENCES FILED BY THE ASSESSEE AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN MAKING AGGREGATE DISALLOWANCE OF RS.1,35,00,000/- 40(A)(IA ) OF THE ACT, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN MAKING THE IMPUGNED DI SALLOWANCE AND PASSING THE IMPUGNED ORDER WHICH IS CONTRARY TO LAW AND FACTS A ND WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF HEARING AND WITHOUT CONFRONTING THE ENTIRE ADVERSE MATERIAL WHICH WAS USED AGAINST THE ASSESSEE AND BY RECORDING INCORREC T FACTS AND FINDINGS AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THE AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS AND WHICH DESERVE S TO BE QUASHED. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL TH E ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 5. THE LD. COUNSEL FOR THE ASSESSEE MADE TWO-FOLD S UBMISSIONS. HE SUBMITTED THAT IN VIEW OF THE AMENDMENT TO THE PROV ISIONS OF SECTION 40(A)(IA) WHICH HAS BEEN HELD TO BE RETROSPECTIVE BY VARIOUS DECISIONS, ONLY 30% OF THE 3 ITA NO.3099/DEL/2015 AMOUNT ON WHICH TAX HAS NOT BEEN DEDUCTED SHOULD BE DISALLOWED AND NOT THE ENTIRE AMOUNT. HE FURTHER SUBMITTED THAT THE ASSES SING OFFICER MAY BE DIRECTED TO ALLOW SUCH DISALLOWANCE, WHICH HAS BEEN MADE IN THIS YEAR, SUBJECT TO VERIFICATION IN THE SUBSEQUENT YEAR. HE ALSO RELIE D ON THE FOLLOWING DECISIONS :- (I) SHRI RAJENDRA YADAV VS. ITO, ITA NO.895/JP/201 2 DT. 29.01.2016. (II) SMT. KANTA YADAV VS. ITO, ITA NO.6312/DEL/201 6 DT. 12.05.2017. (III) ACIT VS. GIRDHARI LAL BARGOTI, ITA NO.757/JP /2012 DT. 10.04.2015. (IV) SMT. SONU KHANDELWAL VS. ITO, ITA NO.597/JP/2 013 DT. 13.05.2016. (V) SHRI ARIDAMAN SINGH VS. ITO, ITA NO.391/JP/201 4 DT. 09.10.2015. 6. THE LD. DR ON THE OTHER HAND STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT SINCE THE ASSESSEE HAS VI OLATED THE PROVISIONS OF SECTION 40(A)(IA), THEREFORE, 100% DISALLOWANCE SHO ULD BE MADE. 7. AFTER HEARING BOTH THE SIDES, WE FIND THE ONLY I SSUE TO BE DECIDED IN THE GROUNDS OF APPEAL IS REGARDING THE RESTRICTION OF T HE DISALLOWANCE TO 30% OF THE ADDITION. WE FIND AN IDENTICAL ISSUE HAD COME UP B EFORE THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. KANTA YADAV VS. ITO. WE FIND THE TRIBUNAL IN ITA NO.6312/DEL/2016 ORDER DATED 12.05.2017 FOR ASSESSMENT YEAR 2012-13 HAS DECIDED THE IDENTICAL ISSUE AND HAS OBSERVED AS UNDER :- 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND FIND T HAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT JAIPUR BENCH IN TH E CASE OF SHRI RAJENDRA YADAV VS. ITO AND SMT. SONU KHANDELWAL VS. ITO. IN THESE ORDE RS IT WAS HELD THAT THE DISALLOWANCE U/S 40(A)(IA) TO BE RESTRICTED TO 30% OF THE ADDITION. IN THESE ORDERS THE TRIBUNAL HAS CONSIDERED THE AMENDED PROVISIONS OF S ECTION 40(A)(IA) OF I.T. ACT. IN THESE ORDERS THE ASSESSMENT YEARS INVOLVE WAS 2007 -08 AND 2008-09. IN THE PRESENT APPEAL THE ASSESSMENT YEAR IS 2012-13. THEREFORE FA CTS ARE IDENTICAL. IN THIS VIEW OF THE MATTER AND FOLLOWING THE ABOVE DECISIONS OF JAI PUR BENCH, WE SET ASIDE AND MODIFY THE ORDERS OF THE AUTHORITIES BELOW AND DIRE CT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 30% OF THE TOTAL ADDITION MADE ON A CCOUNT OF DEDUCTION OF TDS U/S 40(A)(IA) OF THE ACT. 4 ITA NO.3099/DEL/2015 8. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-OR DINATE BENCH OF THE TRIBUNAL, WE HOLD THAT THE DISALLOWANCE U/S 40(A)(I A) SHOULD BE RESTRICTED TO 30% OF THE TOTAL ADDITION ON ACCOUNT OF NON-DEDUCTION O F TDS. SO FAR AS THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT D IRECTION MAY BE GIVEN TO THE ASSESSING OFFICER TO ALLOW SUCH DISALLOWANCE MADE I N THIS YEAR IN THE ORDER OF THE SUBSEQUENT YEARS, WE HOLD THAT THE ASSESSEE MAY MOVE APPROPRIATE APPLICATION BEFORE THE ASSESSING OFFICER WHO SHALL DECIDE THE ISSUE AS PER FACT AND LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROU NDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON THIS 01 ST AUGUST, 2018. SD/- SD/- (BEENA A. PILLAI) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 01-08-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI