The ITO, Ward-5(2), Baroda V. M/s. Dhruv Advertisers, Baroda

ITA 3143/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1531 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Keywords: Business income; Non-deduction of tax; Tax effect
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , ! BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.3143/AHD/2011 ( / ASSESSMENT YEAR : 2007-08) THE INCOME TAX OFFICER WARD-5(2) BARODA / VS. M/S.DHRUV ADVERTISERS 1 ST FLOOR, KRISHNA COMPLEX SARDAR BHAVAN LANE RAOPURA, BARODA-390 001 & ./ ./ PAN/GIR NO. : AABFD 3660 B ( &) / APPELLANT ) .. ( *+&) / RESPONDENT ) AND CROSS OBJECTION NO.46/AHD/2012 AY 2007-08 (IN ITA NO.3143/AHD/2011 AY 2007-08) M/S.DHRUV ADVERTISERS BARODA-390 001 / VS. THE ITO WARD-5(2), BARODA (CROSS OBJECTOR) .. ( *+&) / RESPONDENT ) ASSESSEE BY : WRITTEN SUBMISSION REVENUE BY : SHRI ALBINUS TIRKEY, SR.DR , - / DATE OF HEARING 18/5/2016 ./01 - / DATE OF PRONOUNCEMENT 20/05/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-V, BARODA DATE D 06/09/2011 ITA NO.3143/AHD/2011 (BY REVENUE) AND CO NO.46/AHD/2012 (BY ASSESSEE) ITO VS. M/S.DHRUV ADVERTISERS, BARODA ASST.YEAR 2007-08 - 2 - FOR THE ASSESSMENT YEAR 2007-08 AND THE ASSESSEE IS IN CROSS OBJECTION THEREOF. 2. THE GROUNDS RAISED BY THE REVENUE IN THE PRESENT APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, (I) THE LEARNED CIT(A) ERRED IN HOLDING THAT PROVISIONS OF SECTION 40(A)(IA) IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE. (II) THE LD.CIT(A) FAILED TO APPRECIATE THAT THE PAYMENT S WERE MADE BY ONE AGENT TO OTHER AGENTS, I.E. AGENCY TO A GENCY AND NOT DIRECTLY TO ANY PRINT MEDIA OR ELECTRONIC M EDIA, AND NON-DEDUCTION OF TAX THEREFORE IS A CLEAR VIOLA TION OF PROVISIONS OF SECTION 194C OF THE IT ACT. 2. THE APPELLANT CRAVES TO ADD TO, AMEND OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. 2.1. IN CROSS OBJECTION, THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS:- 1. BECAUSE THE DEPARTMENTAL APPEAL IS BAD IN LAW A S WELL AS ON FACTS, IT IS LIABLE TO BE DISMISSED. 2. BECAUSE THE LEARNED ITO, WARD 5(2), BARODA HAS F AILED TO UNDERSTAND AND APPRECIATE THE FACT THAT, LEARNED CI T- APPEALS HAS NO WHERE IN THE ORDER STATED THAT THE PROVISIONS OF SECTION 40(A)(IA) AND/OR THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE TO THE ASSESSEE BUT, AS THE EXPENSES WERE NOT DEBIT ED TO PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FIRM, THE UNJUSTIF IED DISALLOWANCE ITA NO.3143/AHD/2011 (BY REVENUE) AND CO NO.46/AHD/2012 (BY ASSESSEE) ITO VS. M/S.DHRUV ADVERTISERS, BARODA ASST.YEAR 2007-08 - 3 - MADE BY THE APPELLANT U/S 40(A)(IA) WAS DELETED BY THE LEARNED CIT-APPEALS. 3. BECAUSE THE LEARNED APPELLANT HAS FAILED TO UNDE RSTAND AND APPRECIATE THE LANGUAGE AND WORDINGS OF SECTION 40( A)(IA) OF THE INCOME TAX ACT WHICH PRESUPOSSES THAT AN EXPENDITUR E CAN BE DISALLOWED UNDER THIS SECTION PROVIDED THAT SUCH EX PENDITURE HAS BEEN DEBITED TO PROFIT AND LOSS ACCOUNT AND A DEDUC TION HAS BEEN CLAIMED BY THE ASSESSEE UNDER SECTION 30 TO 38 WHIL E COMPUTING HIS INCOME UNDER THE HEAD 'PROFITS AND GAINS FROM B USINESS OR PROFESSION'. 4. BECAUSE THE LEARNED APPELLANT HAS FAILED TO UNDE RSTAND AND APPRECIATE THE DECISIONS PASSED BY THE HONOURABLE I TAT, AHMEDABAD IN THE CASE OF ITO VS M/S. HARIOM ORGANIZ ERS PVT. LTD. (ITA NO.1946/AHD/2009 DATED 06/05/2011) AND SU MILON INDUSTRIES LTD. VS. ITO (ITA NO.3296 AND 3297/AHD/2 008 DATED 12.11.2010) WHEREIN THE HONOURABLE TRIBUNAL HAS CLE ARLY HELD THAT DISALLOWANCE OF EXPENDITURE U/S 40(A)(IA) CAN BE MADE ONLY IF SUCH EXPENDITURE HAS BEEN DEBITED IN THE PROFIT AND LOSS ACCOUNT AND A DEDUCTION HAS BEEN CLAIMED U/S 30 TO 38 WHILE COMPUTING THE BUSINESS INCOME OF THE ASSESSEE. 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF ASSESSEE, HOWEVER, WRITTEN SUBMISSIONS DATED 21 ST DECEMBER, 2015 HAVE BEEN FILED, WHEREIN IT IS SUBMITTED THAT THE APPEAL OF THE REVE NUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. THE WORKIN G OF TAX EFFECT WAS ALSO WORKED OUT IN THE LETTER. THE LD. SR.D.R. FAIR LY ADMITTED THAT THE TAX EFFECT ON THE IMPUGNED ADDITIONS IS LESS THAN THE L IMIT PRESCRIBED BY THE CBDT CIRCULAR OF 10.12.2015 BEARING NO. 21 OF 2015. ITA NO.3143/AHD/2011 (BY REVENUE) AND CO NO.46/AHD/2012 (BY ASSESSEE) ITO VS. M/S.DHRUV ADVERTISERS, BARODA ASST.YEAR 2007-08 - 4 - 4. WE HAVE HEARD THE LD. SR.D.R. AND PERUSED WRITTE N SUBMISSIONS AS WELL AS THE MATERIAL ON RECORD. ON PERUSING THE GRO UNDS OF APPEAL RAISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED B Y THE AGGREGATING ADDITION OF RS.13,93,841/- THE TAX EFFECT OF WHICH IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.2015 (CIRCULAR NO. 21 OF 2015), NO DEPA RTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFO RE THE INCOME TAX TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS RS. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. IN THE PRESENT CASE, SINCE IT IS A N UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSENCE OF ANY MATERIAL ON RECORD BY THE REVENUE TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTIONS SPECIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCU LAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INST RUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. IN SUCH CIRCUMSTANCES, W E DISMISS THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTAT ION OF THE TAX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT C IRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. ITA NO.3143/AHD/2011 (BY REVENUE) AND CO NO.46/AHD/2012 (BY ASSESSEE) ITO VS. M/S.DHRUV ADVERTISERS, BARODA ASST.YEAR 2007-08 - 5 - IN SUCH CIRCUMSTANCES, WE DISMISS THE APPEAL OF REV ENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. 5. AS FAR AS THE CROSS OBJECTION NO.46/AHD/2012 FOR AY 2007-08 FILED BY THE ASSESSEE IS CONCERNED, AS PER WRITTEN SUBMISSION DATED 21 ST DECEMBER-2015 PLACED ON RECORD THROUGH ITS AUTHORIZ ED REPRESENTATIVE, IT IS SUBMITTED THAT IF THE APPEAL OF REVENUE IS DISMI SSED, THE CROSS OBJECTION OF ASSESSEE IS WITHDRAWN. IN VIEW OF TH E AFORESAID SUBMISSION, THE CROSS OBJECTION FILED BY THE ASSES SEE IS DISMISSED AS WITHDRAWN. 6. IN THE RESULT, REVENUES APPEAL AND CROSS OBJECT ION FILED BY THE ASSESSEE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/05/2016 SD/- SD/- ( ) ( ) (SHAILENDRA KUMAR YADAV) ( ANIL CHATUR VEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/ 05 /2016 4.., .../ T.C. NAIR, SR. PS ITA NO.3143/AHD/2011 (BY REVENUE) AND CO NO.46/AHD/2012 (BY ASSESSEE) ITO VS. M/S.DHRUV ADVERTISERS, BARODA ASST.YEAR 2007-08 - 6 - !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPELLANT 2. *+&) / THE RESPONDENT. 3. 567 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-V, BARODA 5. 9:; *67 , 67 1 , 5 / DR, ITAT, AHMEDABAD 6. ;= >, / GUARD FILE. / BY ORDER, +9 * //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 18.5.16(COVERED MATTER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.5.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.20.5.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.5.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER