ITO, Tuticorin V. M/s. Alexander Fernando & Sons, Tuticorin

ITA 340/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64448 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V D GOPAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 340/MDS/2012 ASST. YEAR : 2007-08 THE INCOME TAX OFFICER, WARD-I(1), TUTICORIN. PAN : AABFA7165P (APPELLANT) V. M/S. ALEXANDER FERNANDO & SONS, 43, BEACH ROAD, TUTICORIN. (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, ADDL.CIT RESPONDENT BY : SHRI V.D. GOPAL DATE OF HEARING : 11 TH OCT 2012 DATE OF PRONOUNCEMENT : 11 TH OCT. 2012 O R D E R PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, MA DURAI DATED 14.12.2011 IN ITA NO.0117/10-11 DATED 14.12.2011 FO R THE ASST. YEAR 2007-08. THE ONLY GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL ITA 340/MDS/11 2 IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN RESTRICTING THE DISALLOWANCE MADE UNDER SEC.40(A)(I A) OF THE I.T. ACT ON SURVEY CHARGES, TAILOR HIRE CHARGES AND CFS CHAR GES WHICH ARE REMAINING PAYABLE AT THE END OF THE ACCOUNTING YEAR . 2. AT THE TIME OF HEARING BOTH THE DEPARTMENTAL REPRESENTATIVE AS WELL AS THE COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THIS ISSUE IN APPEAL IS SQUARELY COVERED BY TH E SPECIAL BENCH DECISION OF VIZAG BENCH OF ITAT IN THE CASE OF MERI LYN SHIPPING AND TRANSPORTS V. ACIT REPORTED IN 16 ITR (TRIB) 1 (SB) . THE COUNSEL FOR THE ASSESSEE ALSO PLACED ON RECORD A COPY OF THE OR DER OF CO- ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.80/MDS/20 11 DATED 26.7.2012 IN THE CASE OF HALLMARK ENGINEERS WHEREIN FOLLOWING THE DECISION OF THE SPECIAL BENCH (SUPRA) IT WAS HELD T HAT NO DISALLOWANCE CAN BE MADE UNDER SEC.40(A)(IA) OF THE ACT ON THE A MOUNTS REMAINING PAYABLE ON THE LAST DATE OF THE ACCOUNTIN G YEAR. ITA 340/MDS/11 3 3. WE HAVE PERUSED THE ORDER OF THE SPECIAL BENCH IN THE CASE OF MERLIN SHIPPING AND TRANSPORTS V. ACIT (SUP RA). IN THIS DECISION IT WAS HELD THAT THE PROVISIONS OF SEC.40( A)(IA) ARE APPLICABLE ONLY TO THE AMOUNTS OF EXPENDITURE WHICH ARE OUTSTA NDING AND PAYABLE AS ON THE LAST DATE OF THE PREVIOUS YEAR AN D THESE PROVISIONS WOULD NOT APPLY TO A CASE WHERE THE EXPENSES HAVE A LREADY BEEN PAID BY THE ASSESSEE AS ON THE LAST DATE OF THE PRE VIOUS YEAR. THEREFORE, IN VIEW OF THE ABOVE DECISION OF THE SPE CIAL BENCH, NO DISALLOWANCE CAN BE MADE UNDER SEC.40(A)(IA) ON THE AMOUNTS REMAINING PAYABLE ON THE LAST DATE OF THE ACCOUNTIN G YEAR ON THE EXPENDITURE INCURRED TOWARDS SURVEY CHARGES, TAILOR HIRE CHARGES AND CFS CHARGES. THE COMMISSIONER OF INCOME TAX (A PPEALS) RESTRICTED THE DISALLOWANCE ONLY TO THE AMOUNTS REM AINING PAYABLE AS ON THE LAST DATE OF THE ACCOUNTING YEAR WHICH IS IN ACCORDANCE WITH THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL. 4. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. ITA 340/MDS/11 4 5. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARIN G ON FRIDAY, THE 11 TH OCTOBER 2012. ( DR. O.K. NARAYANAN) (CHALLA NAGEND RA PRASAD) VICE PRESIDENT JUDICIAL MEMB ER CHENNAI, DATED : 11 TH OCTOBER 2012. JLS. COPY TO:- (1) APPELLANT (2) RESPONDENT (3) CIT(A)-II, COIMBATORE (4) CIT-III, COIMBATORE (5) D.R. (6) GUARD FILE