Rajsujee International, CHENNAI V. DCIT, Tiruppur

ITA 32/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4926 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2017
• Court: TRIBUNAL
• Assessee Lawyers: S SATHYANARAYANAN

Judgement Text

, A/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO.32 /MDS./2017 ( / ASSESSMENT YEAR :2012-13) M/S.RAJUSUJEE INTERNATIONAL , 33, VINAYAKAPURAM LAYOUT, RAYAPURAM, TIRUPUR 641 606 VS. DCIT, CIRCLE-1, TIRUPUR. PAN AADFR 6679 M ( / APPELLANT ) ( / RESPONDENT ) ! ' # / APPELLANT BY : MR.S.SATHYA NARAYANAN,ADVOCATE $% ! ' # / RESPONDENT BY : MR.ASHISH TRIPATHI, JCIT, D.R & ' ' ( ) / DATE OF HEARING : 16.03.2017 *+ ' ( ) /DATE OF PRONOUNCEMENT : 05.04.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-3, DATED 24.10 .2016 PERTAINING TO ASSESSMENT YEAR 2012-13. ITA NO. 32/MDS/2017 2 2. THE MAIN GROUND IN THIS APPEAL IS WITH REGARD TO CONF IRM THE ADDITION OF ` 6,45,279/- BY INVOKING THE PROVISIONS OF THE SECTIO N 40(A)(IA) OF THE ACT IN RESPECT OF INTEREST PAID TO NBFCS (EX PENDITURE) PAID DURING THE YEAR UNDER CONSIDERATION, THOUGH SECOND PROVISO TO SECTION 40(A)(IA) IS EXPLANATORY IN NATURE. 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON PAYMENT OF ` 6,45,279/-. AS SUCH THE AO INVOKED THE PROVISIONS OF THE SECTION 40(A)(IA) OF THE ACT AND MADE AN ADDITION O F ` 6,45,279/-. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE WENT ON A PPEAL BEFORE THE LD.CIT(A). ON APPEAL THE LD.CIT(A) OBSERVED IN RESP ECT OF DISALLOWANCE U/S.40(A)(IA) OF THE ACT THAT IN VIEW OF UNAMBIGUOU S INTENT OF THE LEGISLATURE IN GIVING EFFECT TO THE SECOND PROVISO TO SECTION 40(A)(IA) W.E.F. 01.04.2013, THE SAME CANNOT BE STATED TO BE APPLICA BLE RETROSPECTIVELY FOR ASSESSMENT YEAR 2012-13 AND THE ADDITION MADE BY TH E AO IS SUSTAINED BY LD.CIT(A). AGAINST THIS, THE ASSESSEE IS IN APPEAL B EFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT WAS SUBMITTED BEFORE US THAT THE AMOUNT WAS ALREAD Y PAID IN ASSESSMENT YEAR UNDER CONSIDERATION AND IT WAS NOT O UTSTANDING AT THE END OF THE CLOSE OF FINANCIAL YEAR. ITA NO. 32/MDS/2017 3 4.1 IN OUR OPINION, THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHR I N.PALANIVELU VS. ITO REPORTED IN [2015] 40 ITR (TRIB) 325 [CHENNAI] VIDE O RDER DATED 29.04.2015 WHEREIN HELD THAT:- 4. WE HAVE HEARD BOTH SIDES AND PERUSED THE MATERI AL ON RECORD. WE FIND THAT THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS V. ADDL. CIT [2012] 16 ITR (TRIB) 1 (VISAKHAPATNAM) [SB] AND JUDGMENT OF THE GUJARAT HI GH COURT IN THE CASE OF CIT V. VECTOR SHIPPING SERVICES (P.) LTD. I N I. T. A. NOS. 122 OF 2013 DATED JULY 9, 2013 [2013] 357 ITR 642 (ALL) HE LD THAT SECTION 40(A)(IA) IS NOT APPLICABLE WHEN THERE IS NO OUTSTA NDING BALANCE AT THE END OF THE CLOSE OF THE YEAR RELEVANT TO THE ASSESS MENT YEAR IN RESPECT OF THESE PAYMENTS. HOWEVER, THE ASSESSEE HAS NOT BR OUGHT ON RECORD, THE DETAILS OF OUTSTANDING EXPENSES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WHETHER THE IMPUGNED AMOUNT IS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSE SSMENT YEAR EITHER IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENC E, IN THE INTEREST OF JUSTICE, WE ARE REMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE A SSESSEE AND THE ASSESSEE SHALL PLACE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM. 5. FURTHER, WE MAKE IT CLEAR THAT IF THE IMPUGNED A MOUNT IS NOT OUTSTANDING AT THE END OF THE CLOSE OF THE ASSESSME NT YEAR IN RESPECT OF THE EXPENSES EITHER AS OUTSTANDING EXPENSES OR A S SUNDRY CREDITORS, THIS AMOUNT CANNOT BE DISALLOWED. THIS GROUND IS RE MITTED BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION. ITA NO. 32/MDS/2017 4 4.2 IN VIEW OF THIS WE ARE INCLINED TO REMIT THE IS SUE TO THE FILE OF AO TO EXAMINE WHETHER THE IMPUGNED AMOUNT IS OUTSTANDING A T THE END OF THE CLOSE OF THE ASSESSMENT YEARS UNDER CONSIDERATION A ND DECIDE IN THE LIGHT OF ABOVE ORDER OF THE TRIBUNAL. THIS GROUND IS ALLOWE D FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED ON 05 TH APRIL, 2017 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 05 TH APRIL, 2017. K S SUNDARAM. , ' $(-. /.( / COPY TO: 1 . ! / APPELLANT 3. & 0( () / CIT(A) 5. .3 4 $(5 / DR 2. $% ! / RESPONDENT 4. & 0( / CIT 6. 4 6 7 ' / GF