ACIT, UDAIPUR V. Shri Ravinder Kumar Yadav, UDAIPUR

ITA 342/JODH/2012

• Counselvise Citation: 34223314 RSA 2012
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Keywords: Retrospective amendment
• Section: 194C; 139

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. I.T.A. NO. 342/JODH/2012 ASSESSMENT YEARS:2008-09 THE A.C.I.T VS SHRI RAVINDER KUMAR YADAV CIRCLE-2, UDAIPUR PROP: M/S PRATAP CAR RIES/AARKY ENTERPRISES, 115, KHAROL COLONY, UDAIPUR. PAN NO. AABPY5373M [APPELLANT] [RESPONDENT] ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : D.R. DEEPAK SEHGAL (D.R.) DATE OF HEARING : 01/08/2013. DATE OF PRONOUNCEMENT : 05/08/2013 O R D E R PER N.K. SAINI, A.M. : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 29/06/2012 OF LD. CIT(A), UDAIPUR. THE ONLY GROUND RAISED IN THIS APPEAL READ AS UNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 2,42,50,582/-. 2. FACTS OF THE CASE IN BRIEF, ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME ON 31/10/2006 DECLARING AN INCOME OF RS. 9,9 3,911/-, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (H EREINAFTER TO BE REFERRED 2 AS THE ACT). LATER ON, THE CASE WAS SELECTED FOR SC RUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT AS PE R INCOME AND EXPENDITURE STATEMENT, THE ASSESSEE RECEIVED RS. 2, 61,37,745/- AS TRUCK HIRE INCOME AND CLAIMED RS. 2,48,10,067/- AS TRUCK HIRE EXPENSES. THE A.O. ASKED THE ASSESSEE TO PRODUCE FOLLOWING DETAILS, DO CUMENTS AND EXPLANATION: 1. AS PER PROVISIONS OF SECTION. 40(A)(IA) OF THE I NCOME TAX ACT TDS IS REQUIRED TO BE DEPOSITED INTO GOVT. ACCOUNT AS DETAILED BELOW:- A. IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS S O DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR, ON OR B EFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139; O R B. IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEAR. IN VIEW OF ABOVE PROVISIONS, YOU WERE REQUIRED TO D EPOSIT THE AMOUNT OF TDS DEDUCTED/DEDUCTIBLE ON AMOUNT OF RS. 2,42,50,582/- ON ACCOUNT OF TRUCK HIRE EXPENSES PAID/CREDITED BEFORE 1 ST DAY OF LAST MONTH BY LAST DAY OF THE PREVIOUS YEAR. ON PERUSAL OF TDS DETAILS, IT IS NOTICED THAT YOU FAILED TO DEPOSIT THE TDS DEDUCTED /DEDUCTIBLE ON THE ABOVE EXPENDITURE DURING THE PREVIOUS YEAR ITSELF. THEREFORE, YOU ARE REQUESTED TO EXPLAIN WHY THE ABOVE EXPENDITURE AMOU NTING TO RS. 2,42,50,582/- ON ACCOUNT OF TRUCK HIRE EXPENSES MAY NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE IT ACT. IN VIEW OF ABOVE SINCE THE PAYMENT OF RS. 2,42,50,5 82/- WERE MADE BEFORE 1 ST OF LAST MONTH OF THE PREVIOUS YEAR AND TDS OF RS. 2,75,604/- WAS DEPOSITED ON 07/4/2010. THE ASSESSEE WAS ISSUED SHOW CAUSE AS TO WHY THIS PAYMENT OF RS. 2,42,50,58 2/- NOT BE DISALLOWED U/S 40(A)(IA) OF THE I.T. ACT, 1961 AS T HE ASSESSEE HAS NOT DEPOSITED THE TDS AMOUNT UP TO 31/3/2008 AS PRESCRI BED IN THIS SECTION. 3. THE ASSESSEE VIDE REPLY DATED 16/11/2010 SUBMITT ED TO THE A.O. AS UNDER:- THE ASSESSEE HAS PASSED JOURNAL ENTRY AND ACTUAL DE DUCTION WAS MADE FOR RS. 2,75,604/- AT THE END OF THE YEAR I.E. IN THE MONTH OF 3 MARCH. THE LIABILITY OF TDS WAS NOT THEIR AS PER LA W BUT AS THE ISSUE WAS SUBJECT MATTER OF LITIGATION IN MANY CASES AT T HAT TIME SO TO AVOID LITIGATION AND TO BUY PIECE THE PARTY WAS ADVISED F OR SUCH JOURNAL ENTRY AND ACCORDINGLY PAYMENT WAS MADE. THE PAYMENT WAS M ADE ALONGWITH INTEREST ON 07/04/2008. AS PER SECTION. 4 0A(IA)(A), IF TAX IS DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR AND PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN AS PER SECT ION 139(1), THEN SUCH SUM SHALL BE ALLOWED AS DEDUCTION. IN CASES WHERE T AX IS DEDUCTED OTHER THAN THE LAST MONTH OF THE PREVIOUS YEAR BUT IS DEPOSITED BEFORE THE LAST DAY OF THE PREVIOUS YEAR, THEN IT WILL BE ALLOWED AS DEDUCTION. THEREFORE, THE CONDITION FOR ALLOWABILITY OF DEDUCT ION ARE PRESCRIBED U/S 40(A)(IA) ITSELF AND CHAPTER XVII AND SECTION 194C ARE NOT RELEVANT. THE TRIBUNAL OBSERVED THAT IF THE CONDITION OF DEDU CTION AND PAYMENT PRESCRIBED UNDER SECTION 194C/CHAPTER XVII ARE HELD APPLICABLE FOR DISALLOWANCE OF DEDUCTION UNDER SECTION 40(A)(IA), THEN SECTION 40(A)(IA) WILL BE RENDERED MEANINGLESS, ABSURD AND OTIOSE. SINCE THE ASSESSEE HAD (BELATEDLY) DEDUCTED TAX IN THE LAST M ONTH OF THE PREVIOUS YEAR I.E MARCH, 2005 AND DEPOSITED THE SAM E BEFORE THE DUE DATE OF FILING THE RETURN U/S 139(1), DEDUCTION HAD TO BE ALLOWED U/S 40(A)(IA)(A). KINDLY REFER BAPUSAHEB NANASAHEB DHUM AL VS. ACIT (ITAT MUMBAI). 4. THE ASSESSEE ALSO SUBMITTED THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WERE NOT APPLICABLE TO THE EXPENDITURE PAID AND IT WAS APPLICABLE ONLY IF EXPENDITURE WAS PAYABLE AND THAT THE PAYMENT OF TAX BY DEDUCTEE DISCHARGES THE DEDUCTOR FROM HIS LIABILITY. IT WAS FURTHER STATED THAT THE ASSESSEE DEDUCTED THE TAX ON 31 ST MARCH, 2008 AND DEPOSITED THE SAME ON 07 TH APRIL, 2008 AND THE LIABILITY OF THE ASSESSEE WAS TO PAY THE TAX ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 4 1. COMMISSIONER OF INCOME TAX VS. UNITED RICE LAND LTD. (2008) 217 CTR (P&H) 332. 2. CITY TRANSPORT CORPN. VS. INCOME TAX OFFICER (20 07) 13 SOT 479 (MUMBAI). 3. MYTHRI TRANSPORT CORPORATION VS. ASSTT. CIT (200 9) 124 TTJ 970 (VISAKHA). 4. JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DEPUTY COMMI SSIONER OF INCOME TAX (2009) 123 TTJ (JAIPUR) 888. 5. HINDUSTAN COCA COLA BEVERAGES LTD. (2007) 293 I TR 226 (SC). 5. THE A.O. WAS NOT SATISFIED FROM THE SUBMISSIONS OF THE ASSESSEE AND HELD THAT THE PAYMENTS OF RS. 2,42,50,582/- WERE LI ABLE FOR TDS (AS THE ASSESSEE HIMSELF DEDUCTED TDS ON THOSE PAYMENTS) AN D THAT THE TDS AMOUNT ON THESE PAYMENTS, WHICH WERE PAID UP TO FE BRUARY, 2008 SHOULD HAVE BEEN DEPOSITED BEFORE 31/3/2008. HE, THEREFORE MADE THE ADDITION OF RS. 2,42,50,582/- U/S 40(A)(IA) OF THE ACT. 6. THE ASSESSEE CARRIED THE MATTER TO THE LEARNED C IT(A) AND SUBMITTED THAT THE ASSESSEE DEDUCTED THE TAX OF RS. 2,75,604/ - ON THE PAYMENTS OF RS. 2,42,50,582/- ON 31 ST MARCH, 2008 AND DEPOSITED ON 07 TH APRIL, 2008. NO DISALLOWANCE WAS CALLED FOR. RELIANCE WAS PLACED ON THE FOLLOWING CASES. 1. KANUBHAI RAMJIBHAI VS. ITO (2011) 49 DTR (AHD. ) (TRIB) 70. 2. BAPUSAHEB NANSAHEB DHUMAL VS. ACIT, ITAT MUMBAI (B) BENCH (2010) 132 TTJ (MUMBAI) 694. 3. H.S. MOHINDRA TRADERS VS. ITO, ITAT (DELHI)(C) B ENCH (2010) 132 TTJ (DEL) 701. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, DELETED THE ADDITION MADE BY THE A.O. BY OBSERVING IN PARA 2.3 OF THE IMPUGNED ORDER AS UNDER:- 5 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AS WELL AS THE ASSESSMENT ORDER. IT IS SEEN THAT THE APPELLANT HAS DEDUCTED THE TAX AT SOURCE AMOUNTING TO RS. 2,75,604/- OUT OF THE PAYMENTS OF RS. 2,42,50,582/-MADE TO TRANSPORTERS UP TO FEBRUARY, 2008. THE SAME WAS DEP OSITED ON 07/04/2008 I.E. BEFORE THE DUE DATE OF FILING THE RETURN UNDER SECTION 139(1). HOWEVER, THE A.O. HAS DISALLOWED THE EXPENSES HOLDING THAT TAX A MOUNT WAS NOT DEPOSITED AT END OF PREVIOUS YEAR I.E. BEFORE 31/3/2008 FOR P AYMENTS MADE UPTO FEBRUARY,2008. IN THIS REGARD, THE APPELLANT HAS PO INTED OUT THAT PROVISIONS OF SECTION 40(A)(IA) HAVE BEEN AMENDED BY FINANCE ACT, 2010 TO ALLOW THE DEDUCTION OF EXPENSES IF THE TAX IS PAID BEFORE THE DUE DATE OF FILING OF THE RETURN, WHICH HAS BEEN DONE BY THE APPELLANT. THE A PPELLANT HAS EXPLAINED THAT IT HAS BEEN HELD IN THE CASE OF KANUBHAI RAMJI BHAI VS. ITO 2011 49 DTR (AHD.) (TRIB) 70 THAT PROVISIONS OF SECTION 40(A)(I A) AS AMENDED BY THE FINANCE ACT, 2010 ARE REMEDIAL AND CLARIFICATORY IN NATURE AND ARE TO BE TREATED AS HAVING RETROSPECTIVE APPLICATION W.E.F. 1/4/2005. SIMILAR VIEW HAS BEEN HELD IN THE CASE OF CIT VS. VIRGIN CREATIONS B Y THE HON'BLE CALCUTTA HIGH COURT IN ORDER DATED 23/11/2011. BASED ON THE SAME, THE HON'BLE ITAT, MUMBAI IN THE CASE OF SHRI PIYUS C. MEHTA VS. ACIT, I.T.A. NO. 1321/MUM/2009 IN ORDER DATED 11/09/2011 HAS HELD AS UNDER: IN VIEW OF THE ABOVE, WE HOLD FOLLOWING THE DECIS ION OF THE HON'BLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISION S OF SECTION 40(A)(IA) OF THE ACT, BY THE FINANCE ACT, 2010 IS R ETROSPECTIVE FROM 01.4.2005. CONSEQUENTLY, ANY PAYMENT OF TAX DEDUCTE D AT SOURCE DURING PREVIOUS YEARS RELEVANT TO AND FROM A.Y. 200 5-06 CAN BE MADE TO THE GOVERNMENT ON OR BEFORE THE DUE DATE FOR FIL ING RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. IF PAYMENTS ARE MA DE AS AFORESAID, THEN NO DEDUCTION UNDER SECTION 40(A)(IA) OF THE AC T CAN BE MADE. ADMITTEDLY IN THE PRESENT CASE, THE ASSESSEE HAD DE POSITED THE TAX DEDUCTED AT SOURCE ON OR BEFORE THE DUE DATE FOR FI LING RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT AND THEREFORE, THE IMPUGNED DISALLOWANCE DESERVES TO BE DELETED. WE ORDER ACCOR DINGLY AND ALLOW THE APPEAL BY THE ASSESSEE. 6 IN VIEW OF ABOVE DECISIONS, IT IS APPARENT THAT DED UCTION ON ACCOUNT OF EXPENDITURE FOR WHICH TDS AMOUNT OF RS.2,75,604/- HAS BEEN DEPOSITED BEFORE FILING THE RETURN IS ALLOWABLE AND NOT DISALLOWABLE UNDER SECTION 40(A)(IA) OF THE ACT. EVEN OTHERWISE ALSO, THE DISALLOWANCE MADE BY THE A .O. UNDER SECTION 40(A)(IA) IS NOT SUSTAINABLE EXCEPT RS. 52,990/- RE MAINING PAYABLE IN VIEW OF THE LATEST DECISION OF THE HON'BLE ITAT, SP ECIAL BENCH, VISAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRA NSPORT VS. ADDL. CIT RANGE-1, VISKHAPATANAM IN I.T.A. NO. 447/VIZAG/ 2008, ASSESSMENT YEAR 2005-06 DATED 09.04.2012 (70 DTR (S B) 81 WHERE IT HAS BEEN HELD THAT TDS PROVISIONS IS ONLY APPLICABL E IN RESPECT OF THE AMOUNT OF EXPENDITURE WHICH REMAINED PAYABLE AS ON THE DATE OF BALANCE SHEET AND NOT ON THE AMOUNT OF EXPENDITURE ALREADY PAID. IN THE CASE OF THE APPELLANT, THE AMOUNT OF EXPENDITUR E REMAINS PAYABLE AS ON 31.3.2008 IS ONLY RS. 52,990/- AND THEREFORE, DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT EXCEEDING ABOVE AMOUNT OF RS. 52,990/- IS NOT SUSTAINABLE. FURTHER, THE ISSUE IN DETAIL HAS BEEN CONSIDERED I N THE ORDER IN APPEAL NO. 370/IT/UDR/2008-09 DATED 29/06/2012 FOR THE ASSESSMENT YEAR 2006-07 AND THE DISALLOWANCE MADE UNDER SECTIO N 40(A)(IA) HAS BEEN DELETED. THE REASONS GIVEN IN THIS ORDER ON AB OVE ISSUES ARE APPLICABLE IN THIS YEAR ALSO AND THEREFORE THE DISA LLOWANCE OF RS. 2,42,50,582/- IS NOT TENABLE AND THE SAME IS DELETE D. THIS GROUND OF APPEAL IS ALLOWED. NOW THE DEPARTMENT IS IN APPEAL. 8. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 01/10/2012 OF THIS BENCH OF THE TRIBUNAL IN THE CAS E OF ITO VS. SHRI NEM 7 CHAND JAIN FOR THE ASSESSMENT YEAR 2005-06. COPY OF THE SAID ORDER WAS FURNISHED. 9. IN HIS RIVAL SUBMISSIONS, THE LEARNED D.R. STRON GLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 10. AFTER CONSIDERING SUBMISSIONS OF BOTH THE PARTI ES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT AN IDENTICA L ISSUE HAVING SIMILAR FACT HAS ALREADY BEEN ADJUDICATED BY THIS BENCH OF THE TRIBU NAL VIDE ORDER DATED 01/10/2012 IN THE AFORESAID REFERRED TO CASE OF ITO VS. SHRI NEM CHAND JAIN WHEREIN RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 2 .7, WHICH READS AS UNDER:- AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THIS M ATTER IS SQUARELY COVERED BY THE DECISION OF ITAT BANGALORE BENCH (WH EREIN ONE OF US- ACCOUNTANT MEMBER IS AUTHOR)IN THE CASE OF ACIT VS. M.K. GURUMURTHY (2012) 32 CCH 49 (BANG.) ((SUPRA)) WHEREIN IT HAS B EEN HELD AS UNDER:- IN THE PRESENT CASE, IT IS NOT IS DISPUTE THAT THE ASSESSEE DEDUCTED TDS WHICH WAS NOT PAID TO THE ACCOUNT OF C ENTRAL GOVT. WITHIN THE PRESCRIBED TIME, HOWEVER, IT WAS PAID BE FORE THE DUE DATE OF FILING THE RETURN SPECIFIED IN SECTION 139(1) OF TH E ACT. ON A SIMILAR ISSUE, THE HON'BLE CALCUTTA HIGH COURT HELD THAT A MENDMENTS IN SECTION 40(A)(IA) IS HAVING RETROSPECTIVE OPERATIO N AND UPHELD THE ORDER OF THE ITAT IN THE CASE OF CIT VS. VIRGIN CRE ATIONS, I.T.A. NO. 302 OF 2011, JUDGMENT DATED 23/11/2011. ALTHOUGH THE AF ORESAID JUDGMENT WAS RELATING TO THE ISSUE AS TO WHETHER THE AMENDME NT IN SECTION 40(A)(IA) WAS HAVING RETROSPECTIVE EFFECT OR NOT, B UT FROM THE RATIO LAID DOWN IN THE SAID CASE, IT IS CLEAR THAT ADDITION U/ S 40(A)(IA) OF THE ACT CANNOT BE MADE IF THE PAYMENT OF TAX DEDUCTED AT SO URCE HAS BEEN BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IN THE PRESENT CASE, PAYMENT OF TDS HAS BEEN MADE BEFORE THE DUE DATE OF FILING OF THE RETURN U/S 139 (1) OF THE ACT, THEREFORE, THE LEARNED CIT(A) WAS FULLY JUSTIFIED I N DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY FOLLOWING THE DECI SION OF ITAT 8 MUMBAI BENCH IN THE CASE OF BAPUSAHEB NANASAHEB DHU MAL VS. ACIT (2010)40 SOT 361 (MUM.). 11. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE AFORESAID REFERRED TO CASE, SO RESPECTFULLY FOLLOWING THE ABOVE SAID O RDER DATED 01/10/2012 PASSED IN I.T.A. NO. 384/JODH/2011 FOR THE ASSESSM ENT YEAR 2005-06 IN THE CASE OF ITO VS. SHRI NEM CHAND JAIN, WE DO NOT SEE ANY MERIT IN THE APPEAL OF THE DEPARTMENT. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/08/2013. ) SD/- S D/- (HARI OM MARATHA) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 05/08/2013 *RANJAN COPY TO : 1. THE APPELLANT- THE A.C.I.T, CIRCLE-2, UDAIPUR. 2. THE RESPONDENT- SHRI RAVINDER KUMAR YADAV, UDAIP UR. 3. THE CIT 4. THE CIT(A) 5. THE DR 6. THE GUARD FILE I.T.A. NO.342/JODH/2012. ASSISTANT REGISTRAR