SHRI AMIT SOPAN PATIL, V. I.T.O. KHAMGAON, Khamgaon

ITA 333/NAG/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2126 (ITAT-NAGPUR)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS
• Assessee Lawyers: S C THAKAR

Judgement Text

1 ITA NO. 333/NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 333/NAG/2016. ASSESSMENT YEAR : 2006 - 07. SHRI AMIT SOPAN PATIL, THE INCOME - TAX OFFICER, DATALA, DIST. BULDHANA. VS. KHAMGAON. PAN AEIPP9757D. APPELLANT. RESPONDENT. APPELLANT BY : SHRI S.C. THAKAR. . RESPONDENT BY : SMT. AGNES P. THOMAS. DATE OF HEARING : 20 - 07 - 2016 DATE OF PRONOUNCEMENT : 20 TH JULY, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DA TED 20 - 11 - 2015 PERTAINING TO ASSESSMENT YEAR 2006 - 07. 2. THE ISSUE RAISED IS THAT THE AO ERRED IN DISALLOWING THE INTEREST AMOUNTING TO RS.84,000/ - U/S 40(A)(IA) AND SAME IS CONFIRMED BY LEARNED CIT(APPEALS). 3 . AT THE OUTSET IT IS NOTED THAT THERE IS DELAY OF 16 DAYS IN FILING THE APPEAL. UPON HEARING BOTH THE COUNSEL AND PERUSING THE RECORD, THE DELAY IS CONDONED. 4 . BRIEF FACTS OF THE CASE ARE THAT THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS TAKEN LOAN/DEPOSIT OF RS.14, 00,000/ - AT THE TIME OF SETTING UP OF PROPRIETARY BUSINESS OF AKSHAY PAPER PRODUCTS AND CREDITED INTEREST OF RS.84,000/ - ON THE DEPOSITS ON 3 1 - 03 - 2006 ON WHICH TAX HAS 2 ITA NO. 333/NAG/2016. NOT BEEN DEDUCTED AS PER PROVISIONS OF SECTION 194A(1) OF THE I.T. ACT. SINCE NO TDS U/ S 194A(1) OF THE ACT HAS BEEN MADE ON THE AMOUNT CREDITED ON ACCOUNT OF INTEREST, THE AO DISALLOWED THE INTEREST EXPENSES OF RS.84,000/ - U/S 40(A)(IA) OF THE I.T. ACT. 5 . THE ASSESSEES VARIOUS SUBMISSIONS BEFORE THE LEARNED CIT(APPEALS) THAT THE RECIPIENT HAS PAID TAX SO NO ADVERSE INFERENCE AGAINST THE ASSESSEE CAN BE DRAWN AS PER RATIO OF THE HONBLE APEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PVT. LTD. VS. CIT 293 ITR 226 WAS REJECTED BY THE LEARNED CIT(APPEALS) . LEARNED CIT(APPEALS) ALSO RE FERRED TO THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS 146 TTJ 1 AND ALSO REFERRED TO DECISION OF CALCUTTA HIGH COURT IN THIS REGARD. HE ALSO REFERRED TO ALLAHABAD HIGH COURT VERDICT IN VECTOR SHIPPING SERVICES P. LTD. AGAINST WHICH SLP WAS DISMISSED BY HONBLE SUPREME COURT . THE LEARNED CIT(APPEALS) CONCLUDED AS UNDER : IN VIEW OF THE ABOVE RATIO LAID DOWN BY THE HON. PUNJAB & HARYANA HIGH COURT, AFTER TAKING INTO CONSIDERATION THE DISMISSAL OF DEPARTMENTAL SLP BY THE HON. SUPREME COURT IN THE CASE OF VECTOR SHIPPING, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS COMMITTED THE DEFAULT BY NOT MAKING TDS ON INTEREST PAID HENCE HAS RENDERED HIMSELF LIABLE FOR DISALLOWANCE U/S 40(A)(IA) OF THE I.T. ACT. THEREFORE, THIS GROUND IS DISMISSED. 6 . AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7 . I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT LEARNED CIT(APPEALS) HAS CLEARLY ERRED IN COMING TO THE ABOVE DECISION. FIRSTLY THE DECISION OF HONBLE APEX COURT IN THE CASE OF HINUSTAN COCA COLA BEVERAGE PVT. LTD. IS CLEARLY IN FAVOUR OF THE ASSESSEE. SECONDLY SINCE THE AMOUNT INVOLVED HAS BEEN PAID AND NO AMOUNT IS OUTSTANDING, THE RATIO FROM ALLAHABAD HIGH COURT IN THE CASE OF VECTOR SHIP PING SERVICES PVT. LTD. ALSO IS IN FAVOUR OF THE ASSESSEE. DEPARTMENTS SLP AGAINST THIS DECISION HAS BEEN DISMISSED BY THE HONBLE APEX COURT. THIS ASPECT IN FACT GOES IN FAVOUR OF THE ASSESSEE AND NOT 3 ITA NO. 333/NAG/2016. THE REVENUE AS INFERRED BY THE LEARNED CIT(APPEALS). I ALSO NOTE THAT THERE IS NO DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE. HENCE THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS 188 ITR 192 IS TO BE INVOKED. THIS CASE LAW PROVIDES THAT WHEN TWO CONSTRUCTI ONS ARE POSSIBLE, THE ONE IN FAVOUR OF THE ASSESSEE IS TO BE ADOPTED . SINCE IN THE PRESENT CASE ALLAHABAD HIGH COURT DECISION IS IN FAVOUR OF THE ASSESSEE SLP AGAINST WHICH HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT, I FOLLOW THE ABOVE SAID DECISION A ND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF JULY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 20 TH JULY, 2016. COPY FORWARDED TO : 1. SHRI AMIT SOPAN PATIL, PROP. AKSHAY PAPER PRODUCTS, AT POST : DATALA, TAL. MALKAPUR, DIST. BULDHANA. 2. I.T.O., KHAMGAON. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.