Shri Dipak R. Gondaliya, Surat V. The Income tax Officer, Ward-1(2)(6), Surat

ITA 3313/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9145 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 30-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: K R GHEEWALA
• Keywords: Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 3313 & 3314/AHD/2015 (ASSESSMENT YEAR: 2012-13) DIPAK R. GONDALIYA 23, RAMKRISHNA IND. SOC., NR. RANCHHOD NAGAR, UDHNA, SURAT-394210 PAN NO. AKAPG4496L ASHWINBHAI R. GONDALIYA 23, RAMKRISHNA IND. SOC., NR. RANCHHOD NAGAR, UDHNA, SURAT-394210 PAN NO. AEYPG7063H V/S V/S INCOME TAX OFFICER, WARD- 1,(2)(6), SURAT INCOME TAX OFFICER, WARD- 1,(2)(6), SURAT (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.R. GHEEWALA, AR RESPONDENT BY : SMT. SONIA KUMAR SR. D.R. ( )/ ORDER DATE OF HEARING : 14 -03-201 6 DATE OF PRONOUNCEMENT : 16 -03-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THESE TWO APPEALS BY TWO DIFFERENT ASSESSEES ARE DI RECTED AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-II, SURAT DATED 0 6.10.2015. ITA NOS. 331 3 & 3314/AHD/2015 . A.Y. 2012-20 13 2 2. AS BOTH THESE APPEALS INVOLVE COMMON ISSUES, THESE WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE. 3. THE COMMON GRIEVANCE IN BOTH THESE APPEALS RELATES TO THE HOLDING THAT THE AMENDMENT TO SECTION 40(A)(IA) BY THE FINA NCE ACT, 2012 W.E.F. 01.04.2013 IS PROSPECTIVE AND BY HOLDING SO THE ASSESSEE IS AGGRIEVED BY THE DISALLOWANCE OF INTEREST EXPENDITU RE. 4. WHILE SCRUTINIZING THE RETURN OF INCOME, THE A.O NO TICED THAT THE ASSESSEE HAS TAKEN LOAN FOR PURCHASE OF PROPERTY FR OM RELIANCE CAPITAL AND HAS ALSO TAKEN CAR LOAN FROM KOTAK MAHINDRA LTD . THE A.O FURTHER NOTICED THAT THE ASSESSEE HAS MADE INTEREST PAYMENT TO THESE PARTIES WITHOUT MAKING ANY DEDUCTION OF TAX AT SOURCE. ASSE SSEE WAS ASKED TO EXPLAIN ON THE DISALLOWANCE OF INTEREST EXPENDITURE SHOULD NOT BE MADE U/S. 40(A)(IA) OF THE ACT. 5. ASSESSEE FILED A DETAILED REPLY CLAIMING THAT IF TH E PAYEES HAVE OFFERED THE INCOME FOR TAX AND HAS PAID TAXES THEREON PROVI SIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE BECAUSE OF THE AMENDME NT BROUGHT IN THE EXPLANATION. HOWEVER, THIS CLAIM OF THE ASSESSEE D ID NOT FIND FAVOUR WITH THE A.O, WHO WAS OF THE FIRM BELIEF THAT THE A MENDMENT IS APPLICABLE FROM A.Y. 2013-14 ONWARDS AND ACCORDINGL Y MADE THE DISALLOWANCE OF INTEREST. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. BEFORE US, THE LD. COUNSEL FOR THE ASSESSE E STATED THAT THE ISSUE IS NO MORE RES INTEGRA AS THE HONBLE HIGH CO URT OF DELHI HAS HELD THAT APPLICABILITY OF SECOND PROVISO TO SECTIO N 40(A)(IA) HAS ITA NOS. 331 3 & 3314/AHD/2015 . A.Y. 2012-20 13 3 RETROSPECTIVE EFFECT. PER CONTRA, THE LD. D.R. DREW OUR ATTENTION TO THE DEPARTMENTAL VIEW OF CBDT VIDE CIRCULAR NO. 10/DV/2 013 DATED 16.12.2013. IT IS THE SAY OF THE LD. D.R. THAT IN T HE LIGHT OF THE SAID CIRCULAR, THE DISALLOWANCE MADE BY THE A.O AND CONF IRMED BY THE LD. CIT(A) SHOULD BE UPHELD. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. AT THE VERY OUTSET, WE HAVE TO SAY THAT THE RELIANC E ON THE CIRCULAR BY THE D.R. IS MISPLACED AS THAT CIRCULAR REFERS TO TH E DECISION OF THE TRIBUNAL SPECIAL BENCH, VISHAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ADDL. CIT. THE CIRCULAR A LSO REFERS TO THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT, HIGH COURT OF ALLAHABAD WHICH ALL RELATES TO THE ISSUE RELATING TO PAID OR PAYABLE WHEREAS THE ISSUE BEFORE US RELATES TO THE AMENDMENT OF SECOND PROVISO TO SECTION 40(A)(IA) WHICH HAS BEEN HELD TO HAVE A RETROSPECTI VE EFFECT BY THE HONBLE HIGH COURT OF DELHI IN THE CASE OF ANSAL LA NDMARK TOWNSHIP PVT. LTD. 279 CTR 384. 8. HOWEVER, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILES OF THE A.O. THE ASSESSEE IS DIRECTED T O FURNISH NECESSARY EVIDENCES TO SHOW THAT THE PAYEE HAS FILED RETURNS AND OFFERED THE SUM RECEIVED TO TAX. THE A.O IS DIRECTED TO VERIFY THE SAME AND DECIDE THE ISSUE IN THE LIGHT OF THE RATIO LAID DOWN BY TH E HONBLE HIGH COURT OF DELHI (SUPRA). ITA NOS. 331 3 & 3314/AHD/2015 . A.Y. 2012-20 13 4 9. IN THE RESULT, BOTH THESE APPEALS BY THE ASSESSEE A RE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 16 - 03 - 2016 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD