Ragona Lubricant Technolgy Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(3), Ahmedabad

ITA 3104/AHD/2011

• Counselvise Citation: 310420514 RSA 2011
• Duration Of Justice: 3 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: S N DIVETIA
• Section: 143(3)

Judgement Text

ITA NO.3104/AHD/2011 ASSESSMENT YEAR: 2007-08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S.S. GODARA JM] ITA NO.3104/AHD/2011 ASSESSMENT YEAR: 2007-08 RAGONA LUBRICANT TECHNOLOGY PVT. LTD., ......... ...APPELLANT 34, CHITRAKUT BUNGLOW, NEHRU PARK, VASTRAPUR, AHMEDABAD [PAN: AABCR 0233 J] VS. INCOME TAX OFFICER, ........................RE SPONDENT WARD 5(3), AHMEDABAD. APPEARANCES BY: S.N. DIVETIA , FOR THE APPELLANT DINESH SINGH, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : APRIL 28, 2015 DATE OF PRONOUNCING THE ORDER : JULY 21, 2015 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CALLED INTO QUESTION CORRECTNESS OF THE LD. CIT(A)S ORDER DATED 30 TH SEPTEMBER, 2011 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), FOR THE ASSESSMENT YEAR 2007-08, ON THE FOLLOWING GROUNDS :- 1.1 THE ORDER OF ASSESSMENT PASSED U/S 250 ON 30.09 .2011 FOR A.Y. 2007-08 BY THE CIT(A)-XI, AHMEDABAD UPHOLDING THE DISALLOWANCE OF RS.93,406/- MADE BY THE AO IS WHOLL Y ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUST ICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE EXPLANATIONS FUR NISHED AND THE EVIDENCE PRODUCED BY THE APPELLANT. ITA NO.3104/AHD/2011 ASSESSMENT YEAR: 2007-08 PAGE 2 OF 3 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST U/S 40(A)(I A) OF RS.93,406/-. 2.2 THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) OUGHT TO HAVE MADE THE ABOVE SAI D DISALLOWANCE OF INTEREST U/S.40(A)(IA) OF RS.93,406 /-. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIA L FACTS NEED TO BE TAKEN NOTE OF. DURING THE COURSE OF THE ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSE HAS MADE INTEREST PAYMENTS AGGREGATING TO RS 93,406. THESE PAYMENTS, MADE TO G M NSIT (HUF), R G NSIT (H UF), C N NASIT AND RUPALI R NSIT, WERE MADE WITHOUT DEDUCTING TAX AT SOURCE. IT WAS EXPLAINED BY THE ASSESSE THAT IN THESE CASES FORM 15 G WERE FILED BY THE REC IPIENTS WHICH WERE DULY FILED IN THE OFFICE OF THE CHIEF COMMISSIONER OF INCOME T AX. HOWEVER, THE ASSESSING OFFICER REJECTED THIS SUBMISSION ON THE GROUND THA T THE COVERING LETTER, BY WAY OF WHICH THESE FORMS WERE SAID TO HAVE BEEN FILED B EFORE THE CCIT, DID NOT CONTAIN ALL THE DETAILS. IT WAS IN THIS BACKGROUND THAT A DISALLOWANCE UNDER SECTION 40(A)(IA) FOR RS 93,406 WAS MADE. AGGRIEVED , ASSESSE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS . THE CIT(A) HELD THAT AS THE AO HAD NOT ISSUED ANY CERTIFICATE UNDER SECTION 197 APPROVING THE NON DEDUCTION OF TAX AT SOURCE FOR THE PAYMENTS MADE TO THE RECIPIENTS IN QUESTION, THE ASSESSE WAS CLEARLY IN ERROR IN NOT DEDUCTING T AX AT SOURCE. THE DISALLOWANCE UNDER SECTION 40(A)(IA) WAS THUS UPHELD. LEARNED CI T(A) ALSO REJECTED ASSESSES RELIANCE ON THE TRIBUNALS DECISION IN THE CASE OF VAIBHAI KHANBHAI MANKAD VS DCIT (46 SOT 469) ON THE GROUND THAT THIS DECISION WAS IN THE CONTEXT OF SECTION 194 C AND NOT 194 A. THE ASSESSE IS AGGRIEVED AND I S IN FURTHER APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND WE HAVE DULY CONSIDERED THE FACTS OF THE CASE IN TH E LIGHT OF THE APPLICABLE LEGAL POSITION. ITA NO.3104/AHD/2011 ASSESSMENT YEAR: 2007-08 PAGE 3 OF 3 4. WE HAVE NOTED THAT IT IS AN UNDISPUTED POSITION THAT THE ASSESSE HAD DULY OBTAINED FORM 15G FROM THE RECIPIENTS OF INTEREST A ND IT IS ALSO NOT IN DISPUTE THAT THE PAYMENTS MADE TO THESE PERSONS INDIVIDUALL Y DONOT EXCEED MAXIMUM AMOUNT NOT LIABLE TO BE TAXED IN THE HANDS OF THE A SSESSE. THEREFORE, UNDER SECTION 197A(1A), THE ASSESSE DID NOT HAVE ANY OBLI GATION TO DEDUCT THE TAX AT SOURCE. THE LAPSE, IF AT ALL, IS IN RESPECT OF SUBM ISSION OF FORMS 15G IN THE INCOME TAX OFFICE. HOWEVER, AS IS THE SETTLED LEGAL POSITO N NOW IN THE LIGHT OF HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN THE CASE OF CIT VS VALIBHAI KHANBHAI MANKAD [(2013) 261 CTR 538 (GUJ)] SUCH A DEFAULT IS ONLY A VENIAL BREACH OF LAW AND DISALLOWANCE UNDER SECTION 40(A)(IA) CANNOT BE MADE IN RESPECT OF THE SAME. IN ANY CASE, THERE IS NO DISPUTE THAT RECIPIENTS HA VE TAKEN THIS AMOUNT INTO ACCOUNT IN COMPUTATION OF THEIR TAXABLE INCOME AND, THEREFORE, IN THE LIGHT OF DECISION OF THIS TRIBUNAL IN THE CASE OF RAJEEV KUM AR AGARWAL VS ACIT (149 ITD 363), THE DISALLOWANCE UNDER SECTION 40(A)(IA) CANN OT BE MADE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF TH E CASE, WE UPHOLD THE GRIEVANCE OF THE ASSESSE AND DELETE THE IMPUGNED DI SALLOWANCE OF RS 93,406. THE ASSESSE GETS THE RELIEF ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 21 ST DAY OF JULY 2015. SD/- SD/- S. S. GODARA PRAMOD KUM AR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 21 ST DAY OF JULY, 2015 COPIES TO: (1) THE APPELLANT (2) THE RESPON DENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD