SOURABH AGRAWAL, KORBA(CG) V. DY. CIT- CIRCLE- KORBA, KORBA(CG)

ITA 31/BIL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1385 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: R B DOSHI
• Section: 143(3); 147; 6; 2

Judgement Text

ITA NO . 31 / R PR /201 4 ASSESSMEN T Y EAR: 20 0 7 - 08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, SMC , RAIPUR [CORAM : PRAMOD KUMAR AM ] ITA NO . 31 / R PR /201 4 AS SESSMENT Y EAR : 20 0 7 - 08 SOURABH AGRAWAL .APPELLANT PROP. O F M/S. B.P. AGRAWAL, NEAR AGRASEN BHAWAN, KORBA (C.G .) [P AN: A FDPA 6889 B ] VS. DY. COMMISSIONER OF INCOME TAX, KORBA. ... . RESPONDENT APPEARANCES BY: R.B. DOSHI , FOR THE APPELLANT S.K.MEENA , F OR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JUNE 2 1 ST , 201 6 DATE OF PRONOUNCING THE ORDER : JUNE 22 ND , 201 6 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS C HALLENGED CORRECTNESS OF THE ORDER DATED 27.12.2013 , PASSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 1 4 7 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 20 07 - 08 . 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD . CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS.1,64,920/ - MADE BY THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 40A(IA). DISALLOWANCE MADE BY THE ASSESSING OFFICER IS ILLEGAL AND NOT JUSTIFIED. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS.1,00,000/ - MADE BY THE ASSESSING OF FICER INVOKING THE PROVISIONS OF SECTION 40A(IA), HOLDING THAT TDS U/S 194J, WAS REQUIRED TO ITA NO . 31 / R PR /201 4 ASSESSMEN T Y EAR: 20 0 7 - 08 PAGE 2 OF 3 BE MADE. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS ILLEGAL AND NOT JUSTIFIED. 3. LD . CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS.2,11,000/ - MADE BY THE ASSESSING OFFICER OUT OF TRANSPORTATION CHARGES INVOKING PROVISIONS OF SECTION 40A(IA ) . THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THE GROUND OF NON - FILING OF FORM NO.15I IS ILLEGAL AND NOT JUSTIFIED. 3. BRIEFLY STATED, THE RELEVANT MATERIAL FAC TS, WHICH ARE IN A VERY NARROW COMPASS, ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , ASSESSING O FF ICER NOTED THAT ASSESSEE HAS MADE SHORT DEDUCTION OF TAX AT SOURCE FROM THE PAYMENT M ADE BY THE ASSESSEE ON ACCOUNT OF LEGAL FEES. THE ASSESS ING OFFICER DISALLOWED THE LEGAL FEES TO THE EXTENT OF SHORT DEDUCTION OF TAX AT SOURCE ON PRORATA BASIS. IT WAS ALSO NOTED THAT THE ASSESSEE HAS REMITTED A SUM OF RS.2,15,829/ - ON ACCOUNT OF TRANSPORT CHARGES AND HAS MADE A PAYMENT OF RS.2,11,000/ - TO ON E SHRI S . K . SA W AL WITHOUT DEDUCTING TAX AT SOURCE. THIS PAYMENT, OUT OF THE TRANSPORT CHARGES, WAS ALSO DISALLOWED BY THE ASSESSING OFFICER UNDER SECTION 40 ( A ) (IA) OF THE AC T. AGGRIEVED BY THIS DISALLOWANCE, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE T HE L EARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE A SSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE ME. 4 . I HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MA T ERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CA S E IN THE LI GHT OF APPLICABLE LEGAL POSI TION . I FIND THAT SO FAR AS QUESTION OF DISALLOWANCE UNDER SECTION 40 ( A ) (IA) IN RESPECT OF SHORT DEDUCTION OF TAX AT SOURCE IS CONCERNED, THE LEGAL POSITION IS FAIRLY VERY SETTLED. HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. S . K . TEKRIWAL , 361 ITR 432 HAVE CONFIRMED THE DECISION OF CO - ORDINATE BENCH OF THIS TRIBUNAL HOLDING THAT DISALLOWANCE UNDER SECTION 40 ( A ) (IA) COULD NOT BE MADE IN THE CASE OF SHORT DEDUCTION OF TAX AT S OURCE. THE DECISION OF THE CO - OR DINATE BENCH IN THE CASE OF DCIT VS. S.K. TEKRI W AL , 48 SOT 515 THUS STAND APPROVED BY THEIR LORDSHIPS . I N THIS VIEW OF THE MATTER AND SEEING NO ITA NO . 31 / R PR /201 4 ASSESSMEN T Y EAR: 20 0 7 - 08 PAGE 3 OF 3 REASON TO DEVIATE FROM THE STAND TAKEN BY THE CO - O RDINATE BENCH WHICH NOW HAS APPROVAL OF HON BLE CALCUTTA HIGH COURT, WE HOLD THAT DISALLOWANCE EVEN ON PRORAT A BASIS CANNOT BE MADE IN THE CASE OF SHORT DEDUCTION OF TAX AT SOURCE. T HE ASSESSEE MUST , THEREFORE, SUCCEED ON THIS POINT. I HAVE ALSO NOTED THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LIMITED (377 ITR 63 5) HAS HELD THAT SECOND PROVISO TO SECTION 40 ( A ) (IA) IS RETROSPECTIVE IN EFFECT AND THEREFORE AS LONG AS THE RECIPIENT OF INCOME EMBEDDED IN PAYMENT HAS OFFERED THE SAME TO TAX, DISALLOWANCE UNDER SECTION 40 ( A ) (IA) CANNOT BE INVOKED. HOWEVER, SINCE THIS A SPECT OF THE MATTER HAS NOT BEEN EXAMINED BY THE ASSESSING OFFICER, I DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF ASSESSING OFFICER FOR LIMITED PURPOSES OF VERIFICATION OF THIS FACTUAL ASPECT. ON THIS ISSUE , THEREFORE , MATTER STANDS RESTORED TO THE FILE OF ASSESSING OFFICER. 5. IN THE RESULT, APPEAL IS PARTLY ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JUNE , 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT M EMBER) DATED: THE 22 ND DAY OF JUNE, 2016 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR