ACIT, CHENNAI V. M/s. Shore to Shore Merchandise Identification Systems Pvt. Ltd., CHENNAI

ITA 321/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5152 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 22-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M SARAVANAN

Judgement Text

IN THE INCOME - TAX APPELLATE TRIBUNAL CHENNAI A BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A.M. I.T.A. NO. 321 / MDS/2011 ASSESSMENT YEAR: 200 5 - 0 6 THE ASSISTANT COMMISSIONER OF INCOME TAX , COMPANY CIRCLE VI(2), AAYAKAR BHAVAN, NEW BL OCK, M.G. ROAD, 7 TH FLOOR, CHENNAI 600 034. VS. M/S. SHORE TO SHORE MERCHANDISE IDENTIFICATION SYSTEMS PVT. LTD., A - 1, D & E INDUSTRIAL COMPLEX, MARAIMALAI NAGAR, CHENNAI 603 209. [PAN:A AGCS9485A ] C.O.NO. 57/MDS/2011 [IN I.T.A. NO. 321/MDS/2011] ASS ESSMENT YEAR: 2005 - 06 M/S. SHORE TO SHORE MERCHANDISE IDENTIFICATION SYSTEMS PVT. LTD., A - 1, D & E INDUSTRIAL COMPLEX, MARAIMALAI NAGAR, CHENNAI 603 209. THE ASSISTANT COMMISSIONER OF INCOME TAX , COMPANY CIRCLE VI(2), AAYAKAR BHAVAN, NEW BLOCK, M.G. R OAD, 7 TH FLOOR, CHENNAI 600 034. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI M. SARAVANAN ORDER PER U.B.S. BEDI, J.M . TH IS APPEAL OF THE DEPARTMENT AND CO OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED B Y THE LD. CIT(A) V , CHENNAI DATED 1 5 . 11 .2010 RELEVANT TO THE ASSESSMENT YEAR 200 5 - 0 6 , WHEREBY ACTION OF THE LD. CIT(A) IN DELETIN G THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF ` .29,32,417/ - ON THE GROUND THAT TDS WAS MADE IN THE LAST MONTH OF THE FINANCIAL YEAR AND TAX WAS REMITTED I.T.A. NO . 321 /MDS/1 1 & CO NO.57/MDS/11 2 BEFORE DUE DATE OF FILING OF RETURN AND ` .20,71,527/ - FOR NON - DEDUCTION OF TDS HAS BEEN CHALLENGED . 2. THE DISALLOWANCE UNDER SECTION 40(A)(IA) AMOUNTING TO ` .29,32,417/ - WAS MADE ON THE GROUND THAT TDS WAS NOT PAID TO THE GOVER NMENT ACCOUNT DURING THE PREVIOUS YEAR OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB - SECTION (1) OF SECTION 200 AND WITH REGARD TO SECOND ADDITION, THE ASSESSING OFFICER MADE THE DISALLOWANCE UNDER SECTION 40(A)(IA) SINCE NO DEDUCTION OF TAX AT SOURCE WAS MADE FROM THE PAYMENTS MADE WITH RESPECT TO PERFORMANCE INCENTIVE, PAYMENT AGAINST RAW MATERIALS, PRODUCTION INCENTIVE AND PRODUCTION INCENTIVE AGGREGATING TO ` .20,71,527/ - , WHICH WAS CHALLENGED BY THE ASSESSEE IN APPEAL AND THE LD. CIT(A) DELETED BOTH THE DISALLOWANCE S MADE BY THE ASSESSING OFFICER AGAINST WHICH THE DEPARTMENT HAS COME UP IN APPEAL. 3. THE LD. DR, WHILE RELYING UPON THE GROUNDS OF APPEAL AS FILED BY THE DEPARTMENT , HAS PLEADED FOR SETTING ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER WITH RESPECT TO BOTH THE ISSUES RAISED, WHEREAS THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND PLEADED FOR CONFIRMATION OF THE SAME. 4. AFTER HEARING BOTH THE SIDES , CONSIDERING THE MATERIAL ON RECORD AS WELL AS RELEVANT PROVISIONS OF LAW AND ORDERS OF BOTH THE AUTHORITIES BELOW, WE FIND THAT ACTION OF THE LD. CIT(A) IN DELETING BOTH THE DISALLOWANCE S IS VERY MUCH LEGAL AND FREE FROM ANY INFIRMITY OR FLOW . HE HAS TAK EN A CORRECT VIEW OF THE MATTER TO DELETE BOTH THE DISALLOWANCE S MADE BY THE ASSESSING OFFICER. I.T.A. NO . 321 /MDS/1 1 & CO NO.57/MDS/11 3 THEREFORE, WHILE CONCURRING WITH THE FINDING OF THE LD. CIT(A), WE UPHOLD HIS ORDER AND DISMISS THE APPEAL OF THE REVENUE ON BOTH THE ISSUES RAISED. 5. SINCE THE APPEAL OF THE REVENUE IS BEING DISMISSED AND CO OF THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD. CIT(A), WHICH HAS BECOME INFRUCTUOUS, THEREFORE, WE DISMISS THE CO OF THE ASSESSEE ALSO. 6. AS A RESULT, APPEAL OF THE REVENUE AND CO OF THE ASSESSE E IS DISMISSED. O RDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEARING ON 0 5 .05 .2011 . SD/ - SD/ - ( N.S. SAINI ) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE. 0 5 . 0 5 .2011 VM/ - TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R .