G.Balasubramanian, CHENNAI V. ITO, CHENNAI

ITA 3220/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4374 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 24-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SREENIVASAN JCIT
• Assessee Lawyers: T VASUDEVAN
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , , # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 3220/MDS/2016 / ASSESSMENT YEAR : 2012-13 SHRI G. BALASUBRAMANIAN, NO. 19/2, I STREET, GANAPATHY COLONY, GOPALAPURAM, CHENNAI 600 086. [PAN: AADPB 1110F] VS. INCOME TAX OFFICER, CORPORATE WARD 3(1), CHENNAI. ( / APPELLANT) ( / RESPONDENT) % & / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE )*% & / RESPONDENT BY : SHRI SREENIVASAN, JCIT & /DATE OF HEARING : 08.06.2017 & /DATE OF PRONOUNCEMENT : 09.06.2017 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI IN ITA NO. 15/2015- 16/A.Y.2012-2013/CIT(A)-4, DATED 26.08.2016. :-2-: I.T.A. N0. 3220/MDS/2016 2. SHRI G. BALASUBRAMANIAN, AN INDIVIDUAL, THE ASSE SSEE IS AN ENGINEERING CONTRACTOR UNDERTAKING CIVIL CONTRACT FOR BUILDING HOUSES IN THE NAME AND STYLE OF M/S. GEE KAY CONSTRUCTIONS. IN THE ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2012-13, THE ASSESSEE DEBITED RS. 9,10,000/- AS FLA T PROMOTION EXPENSES AND RS. 4,72,241/- AS ADVERTISEMENT EXPENSES IN THE P&L ACC OUNT. THE AO REQUIRED THE ASSESSEE TO PRODUCE LEDGER COPIES FROM WHICH HE NOT ICED THAT FOR THE FLAT PROMOTION EXPENSES OF RS. 3 LAKHS AND ADVERTISEMENT CHARGES OF RS 4,72,241/-, THE TDS WAS NOT DEDUCTED. HENCE, HE DISALLOWED THE M U/S. 40(A)(IA). AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A)-4, CHENNAI, PRIMARILY PLEADING THAT THE AO FAILED TO APPRECIATE THAT THE PAYMENTS WERE NOT MADE IN PURSUANCE OF A CONTRACT, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE TO THE PAYMENTS MADE BY THE ASSESSEE AND HENCE THE DISALLO WANCE MADE WAS UNTENABLE IN LAW ETC. THE CIT(A) DISMISSED THE APP EAL. AGGRIEVED, THE ASSESSEE FILED THIS APPEAL WITH THE PRIMARY GROUND THAT THE CIT(A) FAILED TO APPRECIATE THAT THE FLAT PROMOTION CHARGES OF RS. 3 LAKHS AND ADVE RTISEMENT EXPENSES OF RS. 4,72,241/- WERE NOT MADE PURSUANT TO CONTRACT AND T HE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE TO THE ASSESSEE AND HENCE I NVOKING SECTION 40(A)(IA) AND DISALLOWING THE AMOUNTS ARE UNJUSTIFIED AND UNTENAB LE IN LAW. 3. THE AR SUBMITTED THAT THE AO FAILED TO APPRECIAT E THE NATURE OF PAYMENTS AND INVOKED THE PROVISIONS OF SECTION 40(A)(IA). T HOUGH, THE ASSESSEE HAS TAKEN SPECIFIC PLEA BEFORE THE CIT(A), THE CIT(A) HAS NOT ADDRESSED THIS ISSUE BUT PROCEEDED TO DECIDE THE ISSUE ON THE BASIS OF RATIO LAID IN MERILYN SHIPPING & :-3-: I.T.A. N0. 3220/MDS/2016 TRANSPORTS VS ACIT (2012) AND CIT VS VETOR SHIPPING SERVICES P. LTD., ALLAHABAD HIGH COURT ETC. 4. WE HEARD THE RIVAL SUBMISSIONS AND FIND MERIT IN THE SUBMISSIONS OF THE AR. SINCE, THE AO HAS NOT EXAMINED THE NATURE OF T HE IMPUGNED PAYMENTS, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ISSUES ARE REMITTED BACK TO THE AO FOR DUE EXAMINATION. THE AO SHALL DECIDE THE ISSUES, A FRESH, AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 9 TH DAY OF JUNE, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) ! ' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 9 TH JUNE, 2017 JPV & )12 32 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 4 ( )/CIT(A) 4. 4 /CIT 5. 2 ) /DR 6. 7 /GF