The ITO, Ward-9(4), Ahmedabad V. M/s. Andhra Roadways, Ahmedabad

ITA 333/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89728 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Additional evidence; Corroborative evidences
• Section: 37(1); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER . ITA. NO. 333 /AHD/20 1 2 (ASSES SMENT YEAR: 2 00 8 - 0 9 ) INCOME - TAX OFFICER, WARD 9(4), AHMEDABAD APPELLANT VS. M/S. ANDHRA ROADWAYS, PATEL ESTATE, NR. CHANDOLA OCTROI NAKA, JAMALPUR, AHMEDABAD - 382405 RESPONDENT PAN: AAHFA3070D / BY APPELLANT : SHRI NARENDRA SINGH, SR. D.R. / BY RESPONDENT : NONE (APPLICATION REJECTED) / DATE OF HEARING : 0 2 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 22 . 0 7 .201 5 I T A NO . 333 /AHD/ 1 2 A.Y. 0 8 - 0 9 [ IT O VS. M/S. ANDHRA ROADWAYS ] PAGE 2 ORDER PER SHAILENDRA KUM AR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - X V , AHM E DABAD, DATED 2 1 ST NOVEMBER, 20 1 1 FOR A.Y. 200 8 - 0 9 ON FOLLOWING GROUNDS: 1. THE L D. COMMISSIONER OF INCOME - TAX (APPEALS ) - XV, AHMEDABAD HAS ERRED IN LAW AND ON FCTS IN ADMITTING ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A AND ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6,10,58,022/ - MADE BY THE ASSESSING OFFICER U/S. 40(A)(IA) OF THE ACT AS THE ASSESSEE HAD NOT PRODUCED ANY SUPPORTING EVIDENCE(S) (I.E. DETAILS REGARDING TDS MADE U/S. 194C OF THE ACT) (WHICH WERE REQUIRED U/S. 37(1) OF THE ACT) AT THE TIME OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. 2). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE L D. CO MMISSIONER OF INCOME - TAX (APPEALS ) - XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3). IT IS THEREFORE, PRAYED THAT THE ORDER OF L D. COMMISSIONER OF INCOME - TAX (APPEALS ) - XV, AHMEDABAD MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFF ICER BE RESTORED. 2. THE ONLY ISSUE IN APPEAL IS WITH REGARDS TO ADDITION OF RS.6,10,58,022/ - MADE BY ASSESSING OFFICER U/S. 40(A)(IA) OF THE ACT. ASSESSING OFFICER MADE DISALLOWANCE OF RS.6,14,48,552/ - U/S. 40(A)(IA) BY OBSERVING AS UNDER: THE ADDITI ON IS WARRANTED NOT JUST U/S. 40(A)(IA) BUT ALSO U/S. 37(1) AS ASSESSEE HAS NOT PRODUCED ANY SUPPORTING EVIDENCE TO PROVE ASSESSEES CLAIM. I T A NO . 333 /AHD/ 1 2 A.Y. 0 8 - 0 9 [ IT O VS. M/S. ANDHRA ROADWAYS ] PAGE 3 ACCORDINGLY, DISALLOWANCE IN QUESTION WAS MADE. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHERE IN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CALLED FOR REMAND REPORT CIT(A) HAS GRANTED RELIEF TO ASSESSEE, WHICH HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE INTER ALIA SUBMITTING THAT CIT(A) ERRED IN LAW AND ON FACTS IN ADMITTI NG ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A AND ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6,10,58,022/ - MADE BY ASSESSING OFFICER U/S. 40(A)(IA) OF THE ACT. ACCORDINGLY, ORDER OF CIT(A) BE SET ASIDE AND THAT ASSESSING OFFICER BE RESTOR ED. ON OTHER HAND, NONE APPEARED ON BEHALF OF ASSESSEE BUT ADJOURNMENT APPLICATION HAS BEEN MOVED ON BEHALF OF ASSESSEE. A DJOURNMENT APPLICATION IS DISMISSED AS SAME HAS NO SUBSTANCE AND MATTER IS BEING DECIDED ON THE BASIS OF LEARNED DEPARTMENTAL REPRES ENTATIVE AND MATERIAL ON RECORD. 2.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT ASSESSING OFFICER HAS NOT DOUBTED THE AUTHENTICITY OF FREIGHT EXPENSES DEBITED, HE HAS MADE VERIFICATIONS ON THE BASIS OF DETAILS FURNISHED A T REMAND REPORT STAGE, AND HAS FOUND PAYMENTS TOTALING TO RS.3,90,530/ - EXCEEDING THE SPECIFIED LIMIT OF RS.50,000/ - WARRANTING TDS DEDUCTION WHICH WAS NOT DONE BY ASSESSEE. THEREFORE, CIT(A) RESTRICTED THE ADDITION TO RS.3,90,530/ - U/S.40(A)(IA). THE BAL ANCE WAS DIRECTED TO BE DELETED ON THE BASIS OF VERIFICATIONS MADE BY ASSESSING OFFICER AT THE REMAND REPORT STAGE AND ALSO I T A NO . 333 /AHD/ 1 2 A.Y. 0 8 - 0 9 [ IT O VS. M/S. ANDHRA ROADWAYS ] PAGE 4 IN VIEW OF FACT THAT ONCE FORM NO.15 - I WERE COLLECTED, 15 - J WAS JUST A PROCEDURAL FORMALITY, WHICH IF NOT FULFILLED WOULD NOT WARRAN T A DISALLOWANCE. AT REMAND REPORT STAGE, ASSESSEE SUBMITTED COPY OF LETTER ADDRESSED TO ITO(TDS), WARD, AHMEDABAD, DATED 25.06.2008 THROUGH WHICH FORM NO. 15 - J WAS SUBMITTED TO THE DEPARTMENT. AS THE FORM NO. 15 - I WAS COLLECTED BY ASSESSEE, DETAILS OF W HICH WERE SUBMITTED . A UTHENTICITY OF FORM NO. 15 - J SUBMITTED TO THE DEPARTMENT HAS BEEN DOUBTED BY ASSESSING OFFICER. ONCE FORM NO. 15 - I IS NOT SUBMITTED, IT HAS TO DEDUCT TAX. CONVERSELY WHERE FORM NO. 15 - I IS SUBMITTED TO ASSESSEE BY THE SUB - CONTRACTOR S THE TAX IS NOT DEDUCTIBLE AND ONCE TAX IS NOT DEDUC TI BLE NO ADDITION U/S. 40(A)(IA) CAN BE MADE. NON FURNISHING OF FORM NO.15 - J TO THE COMMISSIONER IS AN ACT POSTERIOR IN TIME TO PAYMENTS MADE T O SUB - CONTRACTORS. THIS CANNOT BY ITSELF UNDO THE ELIGIBIL ITY OF EXEMPTION CREATED BY SECOND PROVISO BY VIRTUE OF WHICH SUB - CONTRACTORS HAVE SUBMITTED FORM NO.15 - I. THEREAFTER FOUND LIMITED TO APPLICABILITY OF SECOND PROVISO ONLY BECAUSE IT IS AT THAT POINT OF TIME OF ASSESSEE HAS TO DECIDE WHETHER IT HAS TO DED UCT THE TAX OR NOT. WHERE FORM NO. 15 - I IS NOT SUBMITTED, IT HAS TO DEDUCT THE TAX. CONVERSELY WHERE FORM NO. 15 - I SUBMITTED TO ASSESSEE BY THE SUB - CONTRACTORS THE TAX IS NOT DEDUCTIBLE AND ONCE TAX WAS NOT DEDUCTIBLE NO ADDITION U/S. 40(A)(IA) CAN BE MA DE. FROM THIS, IT FOLLOWS THAT THIRD PROVISO TO SECTION 194C(3)(1) WHICH REQUIRES ASSESSEE TO SUBMIT FORM NO. 15 - J IS ONLY PROCEDURAL FORMALITY AND WHAT HAS BEEN DONE BY SECOND PROVISO. NON SUBMISSION OF FORM NO. 15 - J TO THE I T A NO . 333 /AHD/ 1 2 A.Y. 0 8 - 0 9 [ IT O VS. M/S. ANDHRA ROADWAYS ] PAGE 5 COMMISSIONER WITHIN THE TIME PRESCRIBED IN RULE 29D CANNOT HAVE ANY EFFECT ON DECIDING AS TO WHETHER TAX WAS DEDUCTIBLE OR NOT DEDUCTIBLE FROM THE PAYMENTS MADE BY ASSESSEE TO THE SUB - CONTRACTORS. FOR INVOKING PROVISIONS OF S ECTION 40(A)(IA) IT IS TO BE DECIDED WHETHER TAX WAS DEDUCT IBLE OR NOT, IF YES, WHETHER DEDUCTED / PAID OR NOT. WHEN WE LOOK INTO SECTION 194C(3)(I) FOR THE PURPOSES OF INVOKING 40(A)(IA) , WE FIND THAT ONLY SECOND PROVISO TO IT IS SUFFICIENT TO DECIDE WHETHER TAX WAS DEDUCTIBLE OR NOT. TIME FACTOR INVOLVED FOR COM PLIANCE OF THE CONDITIONS MENTIONED IN TWO PROVISIONS ARE DIFFERENT. SECOND PROVISO IS TO BE COMPLIED WITH AT THE TIME OF MAKING PAYMENT TO THE SUB - CONTRACTOR, WHEREAS COMPLIANCE OF THIRD PROVISO CAN BE DEFERRED TILL 30 TH JUNE OF NEXT FINANCIAL YEAR . IN OT HER WORDS , THE CONTRACTOR CAN WAIT TO COMPLY WITH THIRD PROVISO TILL 30 TH JUNE OF NEXT FINANCIAL YEAR AFTER COMPLYING WITH SECOND PROVISO. HOWEVER, THE DECISION ON DEDUCIBILITY OF TAX FROM THE PAYMENT MADE TO THE SUB - CONTRACTOR CANNOT BE DEFERRED TILL 30 TH JUNE OF NEXT FINANCIAL YEAR . HE HAS TO TAKE THIS DECISION (ABOUT DEDUCTIBILITY OF TAX FROM PAYMENTS BEING MADE BY IT TO THE SUB - CONT R ACTORS) JUST AT THE TIME WHEN HE IS RELEASING THE PAYMENTS TO THE SUB - CONTRACTORS. IT IS AT THIS POINT OF TIME SECOND PROV ISO WOULD COME INTO PLAY AND WHEN FORM NO. 15 - I ARE SUBMITTED BY THE SUB CONTRACTORS TO THE CONTRACTOR THEN CONTRACTOR WA S NOT REQUIRED TO DEDUCT TAX FROM SUCH PAYMENTS. ONCE DEDUCTIBILITY OF TAX DEPENDS UPON SUBMISSION OR NON - SUBMISSION OF FORM NO. 15 - I F ROM THE SUB - CONTRACTOR TO THE ASSESSEE THEN NON - COMPLIANCE OF THIRD PROVISO BECOMES MERELY I T A NO . 333 /AHD/ 1 2 A.Y. 0 8 - 0 9 [ IT O VS. M/S. ANDHRA ROADWAYS ] PAGE 6 TECHNICAL WITHOUT AFFECTING IN SUBSTANCE THE DEDUCTIBILITY OR NON - DEDUCTIBILITY OF TAX ON PAYMENTS MADE BY THE ASSESSEE TO THE SUB - CONTRACTORS. IN VIEW OF ABOVE, NON - COMPLIANCE OF THIRD PROVISO BECOMES MERELY A TECHNICAL DEFAULT WHICH REMAINED NON - COMPLIED WOULD NOT AFFECT THE PROVISION OF SECTION 40(A)(IA). IN VIEW OF ABOVE, CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO RS.3,90,530/ - AND RIGHTLY GRANTED RE LIEF OF RS.6,10,58,022/ - . SAME IS UPHELD. 3. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF JULY , 201 5 . SD/ - SD/ - (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTA NT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22 /0 7 /2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO: - 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. BY ORDER / , / ,