M/s. Zam Zam Exports Ltd., Mehsana V. The ACIT.,Patan Circle, Patan

ITA 3258/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60269 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMAIR TEKRIWAL

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.3258/AHD/2009 ( ( ( ( ( / / / / ASSESSMENT YEAR : 2006-07) M/S.ZAM ZAM EXPORTS LTD. OPP.AJIT SHANTI JAIN DERASAR UNJHA-SIDDHPUR STATE HIGHWAY AT BRAHMANWALA UNJHA, DIST.MEHSANA / VS. THE ASST.CIT PATAN CIRCLE PATAN ) #$ ./*+ ./ PAN/GIR NO. : AAACZ1430L ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / # / APPELLANT BY : SHRI MANISH J.SHAH -.), 0 / # / RESPONDENT BY : SHRI SAMAIR TEKRIWAL, SR.D.R. 1 0 '$ / / / / DATE OF HEARING : 16/4/12 23( 0 '$ / DATE OF PRONOUNCEMENT : 20.4.12 #4 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-GAN DHINAGAR DATED 11/09/2009 PASSED FOR A.Y. 2006-07. THE SUBSTANTI VE GROUNDS WHICH ARE ARGUED BEFORE US ARE GROUND NOS.1 & 2; REPRODUC ED BELOW:- 1. THE CIT(APPEALS) ERRED IN UPHOLDING THE ISSUE O F DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT AND ALSO FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 194A ARE NOT APPLICABLE TO TH E FACTS OF THE CASE. ITA NO.3258/AHD /2009 M/S.ZAM ZAM EXPORTS LTD. VS. ASST.CIT ASST.YEAR 2006-07 - 2 - 2. THE CIT(APPEALS) ERRED IN CONCLUDING THAT THE A SSESSEE WAS LIABLE TO DEDUCT TAX UNDER SECTION 194A OF THE ACT. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 26/1 2/2008 WERE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF MANUFACTURI NG OF PSYLIUM HUSK AND POWDER. IT WAS NOTED THAT THE ASSESSEE HAD SHO WN WORK PAYMENT OF RS.29,60,924/- TO M/S.ATLAS INDUSTRIES. ON THE SAI D JOB-WORK CHARGES, UNDISPUTEDLY TDS WAS DEDUCTED ON 31/03/2006 OF RS.6 5,468/-. LATER ON, IT WAS DEPOSITED ON 06/06/2006. THE ASSESSING OFFI CER HAS HELD THAT SINCE THE ASSESSEE HAVE GOT THE JOB-WORK DONE IN TH E PIECE-MEAL, THEREFORE, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO CREDIT ON THE LAST DAY OF THE YEAR. SINCE THERE WAS A DEFAULT, AS PER ASSESS ING OFFICER, HENCE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) THE JO B-WORK PAYMENT OF RS.29,22,591/- WAS DISALLOWED. EVEN THE FIRST APPE LLATE AUTHORITY HAS AFFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER, H OWEVER, IT WAS HELD THAT SINCE THE APPELLANT HAD DEDUCTED THE TAX IN TH E MONTH OF MARCH AND DEPOSITED THE SAME BEFORE FILING OF THE RETURN, THE REFORE THAT AMOUNT WAS EXCLUDED FROM THE TOTAL DISALLOWANCE. 3. IN THIS REGARD, IT WAS VEHEMENTLY CONTESTED BY T HE LD.AR MR.MANISH J.SHAH THAT NO PAYMENT FOR JOB-WORK WAS M ADE OR CREDITED BEFORE 31 ST MARCH. THE BILL OF JOB-WORK WAS RAISED BY THE SA ID CONTRACTOR ON 31 ST MARCH ONLY AND THE SAME WAS CREDITED ON THE SAME VERY DATE. CONSEQUENTLY, THE TDS WAS DEPOSITED ON 06/06/2006. THERE WAS ONLY ONE ENTRY OF JOB-WORK AS ON 31.3.2006. A BILL WAS SUBMITTED ITA NO.3258/AHD /2009 M/S.ZAM ZAM EXPORTS LTD. VS. ASST.CIT ASST.YEAR 2006-07 - 3 - BY M/S.ATLAS INDUSTRIES ON 31/03/2006 AND IT CONTAI NED DETAILS OF NUMBER OF BAGS. ON THOSE FACTS, A RELIANCE WAS PLACED ON A DECISION OF HON'BLE CALCUTTA HIGH COURT PRONOUNCED IN THE CASE OF CIT V S. VIRGIN CREATIONS (CIVIL NO. ITAT 302 OF 2011/GA/3200/2011 ORDER DATE D 23.11.11), WHEREIN THE HON'BLE CALCUTTA HIGH COURT HAS HELD AS UNDER:- THE LEARNED TRIBUNAL ON FACT FOUND THAT THE ASSESS EE HAS DEDUCTED TAX AT SOURCE FROM THE PAID CHARGES BETWEE N THE PERIOD APRIL 2,2005 AND APRIL 28,2006 AND THE SAME WERE PA ID BY THE ASSESSEE IN JULY AND AUGUST 2006, I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER C ONSIDERATION. THIS FACTUAL POSITION WAS UNDISPUTED. MOREOVER, THE SUPREME COURT, AS HAS BEEN RECORDED B Y THE LEARNED TRIBUNAL, IN THE CASE OF ALLIED MOTORS PVT. LTD. AND ALSO IN THE CASE OF ALOM EXTRUSIONS LTD, HAS ALREADY DECIDE D THAT THE AFORESAID PROVISION HAS RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPORTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROVISION, WHICH HAS INSERTED THE REMEDY TO MAKE TH E PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTION CAN BE GIVEN TO THE SECTI ON AS WELL. 3.1. WE HAVE ALSO NOTED THAT THE HON'BLE GUJARAT HI GH COURT IN THE CASE OF CIT VS. M/S.J.K. CONSTRUCTION CO. IN TAX APPEAL NO.706 OF 2010 ORDER DATED 18/07/2011 HAS HELD AS UNDER:- PLAINLY SPEAKING, ASSESSEE HAD TO MAKE DEDUCTION B EFORE 31 ST MARCH OF THE YEAR IN QUESTION AND AS LONG AS SUCH A MOUNTS WERE DEPOSITED BEFORE LAST DATE OF FILING OF THE RETURN, REQUIREMENTS OF LAW WOULD BE FULFILLED. IT WAS ON THIS BASIS THAT TRIBUNAL WAS OF THE OPINION THAT THE ASSESSEE COMMITTED NO WRONG AND WA S THEREFORE, ENTITLED TO SEEK DEDUCTION OF RS.32,94,149/- FROM T HE INCOME WHICH AMOUNT THE ASSESSEE HAD DEDUCTED FROM PAYMENTS OF C ONTRACTORS ITA NO.3258/AHD /2009 M/S.ZAM ZAM EXPORTS LTD. VS. ASST.CIT ASST.YEAR 2006-07 - 4 - AND HAD ALSO DEPOSITED WITH REVENUE BEFORE THE LAST DATE OF FILING OF THE RETURN. WE DO NOT FIND ANY ILLEGALITY IN OR DER OF TRIBUNAL. TAX APPEAL IS THEREFORE, DISMISSED. 3.2. A RELIANCE HAS ALSO BEEN PLACED ON ITAT A BE NCH AHMEDABAD IN THE CASE OF AAVKAR DEVELOPERS VS. ITO BEARING IT A NO.3165/AHD/2009 FOR A.Y. 2006-07 ORDER DATED 07/06 /2011 AND IN THAT ORDER ALSO, IT WAS HELD THAT THE AMENDMENT IN SECTI ON 40(A)(IA) BY THE FINANCE ACT, 2001 IS REMEDIAL IN NATURE AND SHOULD NOT CAUSE UNDUE HARDSHIP TO THE TAXPAYERS. IT WAS CONCLUDED THAT I N RESPECT OF PAYMENT FOR WHICH TDS WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN, THEN NO DISALLOWANCE WAS TO BE MADE U/S.40(A)(IA) OF THE I.T.ACT. FOLLOWING THESE DECISIONS, WE ARE OF THE VIEW THAT THE ISSUE IS DIRECTLY COVERED IN FAVOUR OF THE ASSESSEE. RESULTANTLY, THIS GROUND O F THE ASSESSEE IS HEREBY ALLOWED. 4. BEFORE WE PART WITH, IT IS WORTH TO MENTION THAT THERE WAS A DELAY IN FILING OF THIS APPEAL AND THROUGH AN AFFIDAVIT N OW IT IS EXPLAINED THE REASON FOR SHORT DELAY AND THE SAME WAS CONDONED BY US AD THE APPEAL WAS ADMITTED FOR ADJUDICATION. REST OF THE GROUNDS BEING TRIFLE IN NATURE NOT CONTESTED, HENCE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . SD/- SD/- ( ANIL CHATURVEDI ) ( MUKUL KR . SHRAWAT ) ACCOUNTANT MEMBER JUDI CIAL MEMBER AHMEDABAD; DATED 20/ 4 /2012 5'.., .../ T.C. NAIR, SR. PS ITA NO.3258/AHD /2009 M/S.ZAM ZAM EXPORTS LTD. VS. ASST.CIT ASST.YEAR 2006-07 - 5 - #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-GANDHINAGAR 5. 6;< - , , / DR, ITAT, AHMEDABAD 6. <= >1 / GUARD FILE. #4 #4 #4 #4 / BY ORDER, .6 - //TRUE COPY// ? ?? ?/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..16.4.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.4.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S20.4.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.4.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER