M/s Rupraashi Sarees, Kolkata V. ITO, Wd-32(2), Kolkata, Kolkata

ITA 342/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1638 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BANIBRATA DUTTA
• Assessee Lawyers: SUDHINDRA NATH NAG
• Keywords: Business income; Depreciation; Retrospective amendment; Non-deduction of tax
• Section: 194C; 139

Judgement Text

ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI J.S UDHAKAR REDDY, AM ] ITA NO.342/KOL/2014 ASSESSMENT YEAR : 2009-10 M/S. RUPRAASHI SAREES -VERSUS- I.T.O., WARD- 32(2) ASANSOL KOLKATA (PAN: AAFFR 3309 G) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SUDHINDRA NATH NAG FOR THE RESPONDENT: SHRI BANIBRATA DUTTA, ADDL. CIT DATE OF HEARING : 17.08.2017. DATE OF PRONOUNCEMENT : 23.08.2017. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 20.12.2013 OF CIT(A)-XIX, KOLKATA RELATING TO AY 2009-10. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS PROJECTED IN THE FOLLOWING REVISED GROUNDS OF APPEAL : 1) RE.: DISALLOWANCES OF JOB WORK CHARGES OFRS. 21,24,890.0 0 U/S 40(A)(IA): THAT THE DISALLOWANCES OF RS. 21,24,890.00 BY LD. I TA AND UPHOLDING THE SAME BY LD. CIT (APPEALS) IGNORING SUBMISSIONS AND EVIDE NCES PRODUCED ARE ARBITRARY, WRONG AND BAD IN LAW SINCE DULY RECONCIL ED STATEMENTS OF 'PURCHASES' AND 'JOB WORK CHARGES', COPIES OF LEDGERS AND TDS R ETURNS SUBMITTED WERE IN AGREEMENT WITH AUDITED ACCOUNTS MOSTLY. ALL PAYMENT S WERE MADE BY CHEQUES WHICH PROVE GENUINENESS OF TRANSACTIONS. APPELLANT CRAVES LEAVE TO REFER AMENDED PROVISIONS OF FINANCE ACT 2008 AND 2010 (W. E.F. 01/04/2010) AND ORDERS OF (1) ITAT, MUMBAI BENCH RE: BANSAL PARIVAH AN- VS - ITO, WARD 8(1)- 2, MUMBAI [2011] 43 SOT 619[2010] AND (2) ITAT, AHM ADABAD 'B' BENCH RE: KANUBHAI RAMJIBHAI - VS - ITO (ITA NO. 3983/AHD/200 8 - AY 2005-06). DISALLOWANCES MADE BY ULTRA VIRES THE AMENDED PROVI SIONS OF THE ACT AND DECISIONS OF ITATS. 2) RE.: DISALLOWANCES OF ADVERTISEMENT CHARGES OF RS. 21,86,777.00 U/S 40(A)(IA): ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 2 THAT THIS DISALLOWANCE WAS MADE ARBITRARILY BY ITO AND UPHELD BY CIT (APPEALS) WITHOUT VERIFICATION OF TDS RETURNS SUBMITTED BEFOR E THE TDS CIRCLE AND WITHOUT CONSIDERING DEPOSITS OF TDS AND ADVERTISEMENT CHARG ES NOT LIABLE FOR DEDUCTION OF TAX. THE ITA FAILED TO CONSIDER EXTENSION OF DAT E BY CBDT FOR SUBMISSION OF ITR- V FOR 2009-2010 AY BY 60 DAYS VIDE CIRCULAR NO . 3/2009, DATED 21105/2009. LD. ITO ALSO DID NOT CONSIDER VARIOUS A MOUNTS OF TDS DEPOSITED AGAINST ADVERTISEMENT CHARGES AND ADDED BACK THE AD VERTISEMENT CHARGES TO THE TOTAL INCOME OF THE APPELLANT. APPELLANT CRAVES LEA VE TO REFER TO THE AMENDED PROVISIONS OF FINANCE ACT 2010 (W.E.F 01/04/2010) W HICH REFLECTS REMEDIES AVAILABLE TO THE ASSESSEE. 3) RE.: DISALLOWANCES OF SECURITY GUARD EXPENSES OF RS . 53,084.00 U/S 40(A)(IA): THAT THE DISALLOWANCE OF RS. 53,084.00 MADE BY ITO AND UPHOLDING THE SAME BY LD. CIT(APPEALS) IS ARBITRARY, BAD IN LAW AND MISCO NCEIVED. THE DEDUCTION OF TAX AND DEPOSIT OF THE SAME WERE MADE BY THE ASSESS E ON THE ACTUAL AMOUNT OF EXPENSES ON ACCOUNT OF SECURITY GUARD KEEPING ASIDE THE REIMBURSABLE EXPENDITURE. THE ADDITION IS NOT TENABLE IN VIEW OF THE VALUED OPINION AND ORDERS PASSED BY DIFFERENT IT ATS AND CONSIDERING THAT TAX WAS DEDUCTED AND DEPOSITED WITH THE CENTRAL GOVERNMENT. DETAILED LIST SUBMITTED IS SELF-EXPLANATORY. 4) RE.: DISALLOWANCES OF PROFESSIONAL FEES OF RS. 3,37 1.00 U/S 40(A)(IA): THAT THE ADDITION OF RS.3,371.00 IS TOTALLY MISCONC EIVED AS THE SAME WAS ALTHOUGH AN EXPENDITURE OF REIMBURSABLE IN NATURE ( BEING FILING EXPENSES), TAX WAS DEDUCTED U/S 194-J AND DEPOSITED. THIS WOULD BE EVIDENCED FROM TDS RETURN FILED. THE LD. ITO AND THE LD. 'CIT (APPEALS) FAILE D TO APPRECIATE THE FACTS IN THIS REGARD. 5) RE.: ADDITION ON ACCOUNT OF ALLEGED UNDISCLOSED PUR CHASE - RS. 2,96,258.00: THAT THE SUBJECT ADDITION MADE ON ASSUMPTION AND/OR PRESUMPTION IS LIABLE TO BE DELETED AS THE LD. ITO WITHOUT CONSIDERING THE EVID ENCES OF PURCHASES MADE FROM ONE NASIM MULLICK ADDED BACK RS. 2,96,258.00 TO THE TOTAL INCOME OF THE APPELLANT AS INCOME FROM UNDISCLOSED SOURCE INSPITE OF THE FACT .THAT THE PAYMENT WAS MADE BY CHEQUE AND SUCH PURCHASE WAS GENUINE AN D DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. 6) RE: ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIA TION ON PLY WOOD OF RS.9910.00: THAT YOUR PETITIONER CONTRADICTING WITH THE TOTAL A DDITION OF RS. 46,74,387/- AS INCOME RELATING TO THE A. Y. 2009-10 AS DISCUSSED A BOVE. ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 3 THE LD. LT.O. AT THE TIME OF PASSING ORDER HAS NOT GIVEN PROPER IMPORTANCE IN RESPECT OF VALUED JUDGEMENT PASSED BY THE HON'BLE A PPELLATE AUTHORITIES OF DIFFERENT STATES OF OUR COUNTRY IN RESPECT OF SECTI ON - 40(A)(IA). THE APPELLANT CRAVES LEAVE TO REFER TO THE JUDGEMENT AT THE TIME OF HEARING. ON THE BASIS OF OUR ABOVE SUBMISSION WE EXPECT THE JUSTICE AND RELIEF OF ADDITION UNDER THE HEAD BUSINESS INCOME AMOUNTING TO RS. 46, 74,387/- AND SIMULTANEOUSLY CLAIM OF RELIEF FROM TAX BURDEN OF RS. 19,78,790/-. FOR THAT THE APPELLANT RESERVES IT'S RIGHT TO ADDUC E FURTHER GROUND OR GROUNDS AND JUDGEMENT OF VARIOUS LD. COURTS OF INDIA IN SUPPORT OF OUR ABOVE GROUNDS AT THE TIME OF HEARING. 3. THE ASSESSEE IS A PARTNERSHIP FIRM. IT CARRIES O N THE BUSINESS OF RETAIL SALE OF SAREES. IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y.200 9-10, THE AO NOTICED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE TOTAL PURCHASE OF THE ASSESSEE DURING THE PREVIOUS YEAR WERE RS.3,08,22,452/- AND THAT INCLUD ED JOB WORK CHARGES OF RS.28,98,896/-. THE CASE OF THE AO WAS THAT ON THE JOB WORK CHARGES THE ASSESSEE WAS BOUND TO DEDUCT TAX AT SOURCE U/S 194C OF THE INCOM E TAX ACT, 1961 (ACT) AND FAILURE TO DEDUCT TAX AT SOURCE WOULD INVITE DISALLOWANCE U /S 40(A)(IA) OF THE ACT. THE CHART OF THE VARIOUS JOB WORK CHARGES ON WHICH TDS WAS NOT D EDUCTED BY THE ASSESSEE ARE AS FOLLOWS :- SL.NO. NAME OF THE PARTY TOTAL PAYMENT 1. RUBINA STICHING RS.2,86,146/- 2. SK.ALLAB ALI RS. 50,428/- 3. MD. AACHER ALI MISTRI RS. 71,100/- 4. ALPANA PRINT RS. 82,020/- 5. SK.ASHADUL RS. 75,500/- 6. NAJRUL ISLAM RS.1,54,480/- 7. SAIFUDDIN EMBROIDERY RS. 91,960/- 8. SK.MIZANUR ALI RS.1,50,382/- 9. ALI EMBROIDERY RS. 70,800/- 10. NISHANT KHAN RS. 87,450/- TOTAL RS.11,20,266 /- ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 4 APART FROM THE ABOVE JOB WORK CHARGES ON WHICH NO T DS WAS MADE, A SUM OF RS.70,415/- (RS.33,700/- + RS.36,715/-) PAID/CREDIT ED TO M/S. TAJSHWANI PRINTS AND KHIRUL WAS ALSO DONE WITHOUT DEDUCTION OF TAX. ACC ORDING TO THE AO, THIS SUM WAS ALSO LIABLE TO BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISION OF SECTION 40(A)(IA) READ WITH SECTION 19 4C OF ACT. 4. ANOTHER SUM OF RS.8,25,504/- WAS PAID AS JOB WORK CHARGES TO DIFFERENT PARTIES AND ON THOSE PAYMENTS, TAX WAS DEDUCTIBLE PRIOR TO THE LAST DAY OF THE LAST MONTH OF THE PREVIOUS YEAR AND THE ASSESSEE ALSO DEDUCTED TH E SUM PRIOR TO THE LAST MONTH OF THE PREVIOUS YEAR. ACCORDING TO THE AO THE ASSESSEE FA ILED TO PAY THE SUM INTO THE GOVERNMENT ACCOUNT ON OR BEFORE THE LAST DATE OF TH E PREVIOUS YEAR AND THEREFORE THE AFORESAID SUM WAS LIABLE TO BE DISALLOWED U/S 40(A) (IA) OF THE ACT. ACCORDING TO THE AO, SIMILARLY ANOTHER SUM OF RS.1,08,705/- WAS ALSO LIABLE TO BE DISALLOWED U/S 40(A)(IA) OF THE ACT FOR THE ASSESSEES FAILURE TO PAY THE TAX DEDUCTED AT SOURCE WITHIN THE DUE DATE SPECIFIED U/S 40(A)(IA) OF THE ACT, TH EREFORE THE AFORESAID SUM WAS ALSO LIABLE TO BE ADDED TO THE TOTAL INCOME OF THE ASSES SEE. 5. THUS THE SUM OF RS.21,24,890/- WHICH IS THE ADD ITION CHALLENGED IN GROUND NO.1 BY THE ASSESSEE WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE BREAK- UP OF THE ADDITION IS AS FOLLOWS :- RS.11,20266/- + 70,4 50/- + 8,25,504/ + 1,08,705/- ON APPEAL BY THE ASSESSEE THE CIT(A) CONFIRMED THE ORDER OF THE AO. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE AS SESSEE HAS RAISED GR.NO.1 IN THIS APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE RIVA L SUBMISSIONS ON THE JOB WORK CHARGES ON GROUND NO.1. A PERUSAL OF THE RECORD SHO WS THAT THE ASSESSEE NO DOUBT INITIALLY SUBMITTED BEFORE THE AO THAT THE JOB WORK CHARGES INCLUDED IN THE PURCHASES WAS A SUM OF RS.28,98,896/-. HOWEVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE CORRECT Q UANTUM OF JOB WORK CHARGES WAS RS.17,55,859/-. THE BREAK UP OF THE JOB WORK CHARGE S INCLUDED IN THE PURCHASE ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 5 ACCOUNT AS CLAIMED BY THE ASSESSEE BEFORE US IS GIV EN IN ANNEXURE-I TO THIS ORDER. OUT OF RS.17,55,859/- PAID TOWARDS JOB WORK CHARGES , THE TAX DEDUCTED AND DEPOSITED AS PER TDS RETURN FOR FOUR QUARTERS WERE AS FOLLOWS :- TAX DEDUCTED AMOUNTING TO RS.23,465/- AGAINST JOB WORK CHARGES OF RS.11,47,144/- WAS DEPOSITED WITHIN THE PRESCRIBED TIME LIMIT ALLOWED UNDER THE ACT. (BASED ON TDS RETURN FOR FOUR QUARTERS). TAX DEDUCTIBLE BUT NOT DEDUCTED AGAINST JOB WORK CHARGES ON BILLS ABOVE RS .20,000/- TOTALLING TO RS.4,64,825/-. TAX NOT DEDUCTIBLE AND NOT DEDUCTED AGAINST JOB WORK CHARGES PAID BELOW RS.20,000/- TOTALLING TO RS.1,43,890/-. HENCE AS PER THE ABOVE BREAK-UP THE TOTAL AMOUNT OF JOB WORK CHARGES IS RS.17,55,859/- (RS.11,47,144/- + RS.4,64,825/- + RS .1,43,890/-). A PARTY-WISE STATEMENT AND DATE OF PAYMENT OF TDS IN THIS RESPEC T IS ATTACHED AS ANNEXURE-II TO THIS ORDER. 7. IT IS CLEAR FROM THE AFORESAID SUBMISSIONS THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION OF A SUM OF RS.11,47,144/- WHICH WAS THE JOB WORK CHARGES ON WHICH TDS WAS DEDUCTED AND PAID ON OR BEFORE THE DUE DATE SPE CIFIED U/S 40(A)(IA) OF THE ACT. THE ADDITION TO THE AFORESAID EXPENDITURE IS LIABLE TO BE DELETED, IF THE ALLEGATION OF THE ASSESSEE REGARDING PAYMENT IS FOUND TO BE CORRECT. THE AO WILL VERIFY THIS ASPECT AND ALLOW RELIEF ACCORDINGLY. WE ALSO HOLD THAT THE ACT UAL JOB WORK CHARGES WAS RS.17,05,859/- AS THE SAME IS SUBSTANTIATED BY THE PURCHASES IN RESPECT OF THE REMAINING SUM. OUT OF THE ABOVE THE ASSESSEE HAS DE DUCTED TAX AT SOURCE WITHIN THE TIME ON A SUM OF RS..11,47,144/-. IN RESPECT OF JOB WORK CHARGES OF RS.1,43,890/- IT CAN BE SEEN FROM ANNEXURE-II TO THIS ORDER THAT THE PAYMENTS WERE BELOW RS.20,000/- AND DID NOT CALL FOR DEDUCTION OF TAX AT SOURCE. THIS ASPECT ALSO REQUIRES VERIFICATION BY THE AO AND THE AO IS DIRECTED TO VERIFY THIS ASP ECT AND ALLOW RELIEF, IF THE ALLEGATION IS FOUND TO BE CORRECT. THE ONLY DISALL OWANCE THAT CAN BE SUSTAINED IS A SUM OF RS.4,64,825/- WHICH IS ALSO GIVEN IN ANNEXURE-II TO THIS ORDER WHICH WAS JOB WORK CHARGES ON WHICH NO TAX WAS DEDUCTED. THE ADDITION TO THIS EXTENT ALONE IS SUSTAINED AND THE REMAINING ADDITIONS ARE DIRECTED TO BE DELE TED SUBJECT TO VERIFICATION BY THE AO AS AFORESAID. ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 6 8. AS FAR AS THE DISALLOWANCE OF CHARGES CHALL ENGED IN GROUND NO.2,3 AND 4 ARE CONCERNED, THE ISSUE REVOLVES AROUND THE QUESTION W HETHER TAX DEDUCTED AT SOURCE WHICH IS PAID ON OR BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT CAN BE ALLOWED AS DEDUCTION IN THE LIGHT OF SP ECIFIC PROVISION OF SECTION 40(A)(IA) OF THE ACT. AS FAR AS GROUND NO.3 IS CONCERNED THE DETAILS OF ADVERTISEMENT CHARGES ON WHICH TDS WAS NOT DEDUCTED AT SOURCE AND DISALLOWED BY THE AO. THE DETAILS ARE AVAILABLE IN ANNEXURE-III TO THIS ORDER. ANNEXURE-III GIVES ADVERTISEMENT EX PENSES INCURRED BY THE ASSESSEE AT A SUM OF RS.23,35,543/- AND RS.21,86,777/- AS DISALLOWED BY THE REVENUE AUTHORITIES. A PERUSAL OF ANNEXURE-I II TO THIS ORDER SHOWS THAT THE ADVERTISEMENT CHARGES ON WHICH TDS WAS REQUIRED TO BE DEDUCTED BY THE ASSESSEE WAS ONLY RS.23,14,113/-. THE REMAINING SUM OF RS.21,430 /- WERE PAYMENTS BELOW RS.20,000/- AND THEREFORE DOES NOT ATTRACT THE PROV ISION OF TDS. AS FAR AS THE TDS ON ADVERTISEMENT CHARGES ARE CONCERNED IT IS NOT IN DI SPUTE THAT BY VIRTUE OF CBDT CIRCULAR NO.3/2009 DATED 21.05.2009 THE DUE DATE FO R FILING THE RETURN OF INCOME FOR A.Y.2009-10 WAS EXTENDED BY 60 DAYS. A PERUSAL OF A NNEXURE-III SHOWS THAT TDS HAD BEEN PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME FOR A.Y.2009-10. 9. ON THE QUESTION WHETHER THE DEDUCTION CAN BE AL LOWED EVEN WHEN THE TAX DEDUCTED AT SOURCE PAID AFTER THE LAST DATE OF THE PREVIOUS YEAR THE ISSUE IS NO LONGER RES INTEGRA AND HAD BEEN CONCLUDED BY THE HONBLE CALCUTTA HIGH COURT. THE QUESTION WHETHER SECTION 40(A)(IA) AMENDED BY THE FINANCE ACT, 2010 WITH EFFECT FROM 01.04.2010 IS RETROSPECTIVE FROM 01.04.2005 OR PROSPECTIVE FROM T HE DATE SPECIFIED, IS THE QUESTION DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN ITA N O. 302 OF 2011 GA 3200/2011 DECIDED ON 23.11.2011, 10. THE LEGISLATIVE HISTORY OF THE PROVISION. SE CTION 40 HAS CERTAIN CLAUSES PROVIDING FOR THE AMOUNTS WHICH ARE NOT DEDUCTIBLE. SUB-CLAUS E (IA) OF CLAUSE (A) OF SECTION 40 WAS INSERTED BY THE FINANCE (NO.2) ACT, 2004 WITH E FFECT FROM 1 ST APRIL, 2005 READING AS UNDER:- ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 7 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SE CTIONS 30 TO 38, THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTED THE INCOME CHARGEABLE UNDER THE HEAD `PROFITS AND GAINS OF BUS INESS OR PROFESSION. .. (IA) ANY INTEREST, COMMISSION OR BROKERAGE, FEES FO R PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDEN T, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT A NY WORK), ON OR, AFTER DEDUCTION, HAS NOT BEEN PAID DURING THE PREVIOUS YE AR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESC RIBED UNDER SUB- SECTION (1) OF SECTION 200 : PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR, HAS BEEN DEDUCT ED IN THE PREVIOUS YEAR BUT PAID IN ANY SUBSEQUENT YEAR AFTER THE EXPI RY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200, SU CH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF T HE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. EXPLANATION. FOR THE PURPOSES OF THIS SUB-CLAUSE, - (I) COMMISSION OR BROKERAGE SHAL L HAVE THE SAME MEANING AS IN CLAUSE (I) OF THE EXPLANATION TO SECT ION 194H; (II) FEES FOR TECHNICAL SERVICES S HALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB- SECTION (1) OF SECTION 9; (III) PROFESSIONAL SERVICES SHALL HAV E THE SAME MEANING AS IN CLAUSE (A) OF THE EXPLANATION TO SECTION 194J ; (IV) WORK SHALL HAVE THE SAME MEANIN G AS IN EXPLANATION III TO SECTION 194C; 11. THE MEMORANDUM EXPLAINING THE PROVISIONS IN TH E FINANCE BILL EXPLAINED THE RATIONALE OF THE INSERTION OF THE NEW PROVISION IN FOLLOWING WORDS :- WITH A VIEW TO AUGMENT COMPLIANCE OF TDS PROVISIONS, IT IS PROPOSED TO EXTEND THE PROVISIONS OF SECTION 40(A)( I) TO PAYMENTS OF INTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESS IONAL SERVICES OR FEES FOR TECHNICAL SERVICES TO RESIDENTS, AND PAYMENTS T O A RESIDENT CONTRACTOR OR SUB-CONTRACTOR FOR CARRYING OUT ANY W ORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION, HAS NOT BEEN PAID BEFO RE THE EXPIRY OF THE ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 8 TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 20 0 AND IN ACCORDANCE WITH THE OTHER PROVISIONS OF CHAPTER XVII-B. IT IS ALSO PROPOSED TO PROVIDE THAT WHERE IN RESPECT OF PAYMENT OF ANY SUM , TAX HAS BEEN DEDUCTED UNDER CHAPTER XVII-B OR PAID IN ANY SUBSEQ UENT YEAR, THE SUM OF PAYMENT SHALL BE ALLOWED IN COMPUTING THE IN COME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. THE PROPOSED AMENDMENT WILL TAKE EFFECT FROM 1ST DA Y OF APRIL, 2005 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASS ESSMENT YEAR 2005- 2006 AND SUBSEQUENT YEARS. [CLAUSE 11] 12. THEREAFTER THE FINANCE ACT, 2008 MADE AMENDMEN T TO CLAUSE (A) IN SUB-CLAUSE (IA) IN SECTION 40 WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2005. THE SECTION AS AMENDED BY THE FINANCE ACT, 2008 READ AS UNDER:- (IA) ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTO R, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR F OR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER C HAPTER XVII-B AND SUCH TAX HAS NOT BEEN PAID,- (A) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR , ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 13 9 ; OR (B) IN ANY OTHER CASE, ON OR BEFORE THE LAST D AY OF THE PREVIOUS YEAR. PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN D EDUCTED- (A) DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE SAID DUE DATE ; OR (B) DURING ANY OTHER MONTH OF THE PREVIOUS YEA R BUT PAID AFTER THE END OF THE SAID PREVIOUS YEAR, SUCH SUM SHALL B E ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS Y EAR IN WHICH SUCH TAX HAS BEEN PAID. ; 13. THE FINANCE ACT, 2008 BROUGHT OUT AMENDMENT T O SECTION 40(A)(IA) W.R.E.F. 1.4.2005 BY RELAXING EARLIER POSITION TO SOME EXTEN T. IT MADE TWO CATEGORIES OF DEFAULTS CAUSING DISALLOWANCE ON THE BASIS OF THE PERIOD OF THE PREVIOUS YEAR IN WHICH TAX WAS DEDUCTIBLE. THE FIRST CATEGORY OF DISALLOWANCES INC LUDED THE CASES IN WHICH TAX WAS ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 9 DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONT H OF THE PREVIOUS YEAR BUT THERE WAS FAILURE TO PAY SUCH TAX ON OR BEFORE THE DUE DA TE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. IN OTHER WORDS, IF ANY AMOU NT ON WHICH TAX WAS DEDUCTIBLE DURING LAST MONTH OF THE PREVIOUS YEAR, THAT IS MAR CH 2005, BUT WAS PAID BEFORE 31 ST OCTOBER, 2005, BEING THE DUE DATE U/S 139(1), THE D EDUCTIBILITY OF THE AMOUNT WAS KEPT INTACT. THE SECOND CATEGORY INCLUDED CASES OTHER TH AN THOSE GIVEN IN CATEGORY FIRST. TO PUT IT SIMPLY, IF TAX WAS DEDUCTIBLE AND WAS SO DED UCTED DURING THE FIRST ELEVEN MONTHS OF THE PREVIOUS YEAR, THAT IS, UP TO FEBRUARY, 2005 , THE DISALLOWANCE WAS TO BE MADE IF THE ASSESSEE FAILED TO PAY IT BEFORE 31 ST MARCH, 2005. 14. THEN CAME THE AMENDMENT TO SECTION 40(A)(IA) B Y THE FINANCE ACT, 2010 WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2010. THE PROVISION SO AMENDED, NOW READS AS UNDER :- (IA) ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTO R, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR F OR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER C HAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR; AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCT ED DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139, SUCH SUM SHALL BE ALLOWED AS A DEDUCTI ON IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS B EEN PAID. 15. FROM THE ABOVE PROVISION AS AMENDED BY THE F INANCE ACT, 2010 WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2010 IT CAN BE SEEN THAT THE ONLY DIFFERENCE WHICH THIS AMENDMENT HAS MADE IS DISPENSING WITH THE EARL IER TWO CATEGORIES OF DEFAULTS AS PER THE FINANCE ACT, 2008, AS DISCUSSED IN THE EARL IER PARA, CAUSING DISALLOWANCE ON THE BASIS OF THE PERIOD OF THE PREVIOUS YEAR DURING WHICH TAX WAS DEDUCTIBLE. THE FIRST CATEGORY OF DISALLOWANCES INCLUDED THE CASES IN WHI CH TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT THERE WAS FAILURE TO PAY SUCH TAX ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECT ION (1) OF SECTION 139. THE FINANCE ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 10 ACT, 2010 HAS NOT TINKERED WITH THIS POSITION. THE SECOND CATEGORY OF THE FINANCE ACT, 2008 WHICH REQUIRED THE DEPOSIT OF TAX BEFORE THE C LOSE OF THE PREVIOUS YEAR IN CASE OF DEDUCTION DURING THE FIRST ELEVEN MONTHS, AS A PRE- CONDITION FOR THE GRANT OF DEDUCTION IN THE YEAR OF INCURRING EXPENDITURE, HAS BEEN ALTE RED. THE HITHERTO REQUIREMENT OF THE ASSESSEE DEDUCTING TAX AT SOURCE DURING THE FIRST E LEVEN MONTHS OF THE PREVIOUS YEAR AND PAYING IT BEFORE THE CLOSE OF THE PREVIOUS YEAR UP TO 3 1 ST MARCH OF THE PREVIOUS YEAR AS A REQUIREMENT FOR GRANT OF DEDUCTION IN THE YEAR OF INCURRING SUCH EXPENDITURE, HAS BEEN EASED TO EXTEND SUCH TIME FOR PAYMENT OF T AX UP TO DUE DATE U/S 139(1) OF THE ACT. AS PER THE NEW AMENDMENT, THE DISALLOWANCE WIL L BE MADE IF AFTER DEDUCTING TAX AT SOURCE, THE ASSESSEE FAILS TO PAY THE AMOUNT OF TAX ON OR BEFORE THE DUE DATE SPECIFIED IN SUBSECTION (1) OF SECTION 139 OF THE A CT. THE EFFECT OF THIS AMENDMENT IS THAT NOW THE ASSESSEE DEDUCTING TAX EITHER IN THE L AST MONTH OF THE PREVIOUS YEAR OR FIRST ELEVEN MONTHS OF THE PREVIOUS YEAR SHALL BE E NTITLED TO DEDUCTION OF THE EXPENDITURE IN THE YEAR OF INCURRING IT, IF THE TAX SO DEDUCTED AT SOURCE IS PAID ON OR BEFORE THE DUE DATE U/S 139(1). THIS IS THE ONLY DI FFERENCE WHICH HAS BEEN MADE BY THE FINANCE ACT, 2010. 16. THE QUESTION AS TO WHETHER THE AMENDMENT BY T HE FINANCE ACT, 2010 AS AFORESAID IS PROSPECTIVE OR RETROSPECTIVE FROM 1.4. 2005 CAME UP FOR CONSIDERATION BEFORE THE MUMBAI SPECIAL BENCH ITAT IN THE CASE OF BHARATI SHIPYARD LTD. BEFORE THE SPECIAL BENCH IT WAS ARGUED THAT THE AMENDMENT WAS MADE WITH A VIEW TO REMOVE THE UNNECESSARY HARDSHIP CAUSED TO THE ASSESSEE BY THE EARLIER PROVISION. THE SPECIAL BENCH BY ITS ORDER DATED 9.9.2011 HOWEVER HELD THAT THE AMENDMENT CARRIED OUT BY THE FINANCE ACT, 2010 WITH RETROSPECTIVE EFFECT FROM AS SESSMENT YEAR 2010- 2011 CANNOT BE HELD TO BE RETROSPECTIVE FROM ASSESSMENT YEAR 20 05-2006. THE SPECIAL BENCH HELD THAT THE AMENDMENT BROUGHT OUT BY THE FINANCE ACT, 2010 TO SECTION 40(A)(IA) W.E.F. 01.04.2010, IS NOT REMEDIAL AND CURATIVE IN NATURE. 17. PRIOR TO THE DECISION OF THE SPECIAL BENCH, IDENTICAL ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE ITAT KOLKATA BENCH IN THE CASE OF VIRGIN CREATIONS VS. ITO, ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 11 WARD 32(4), KOLKATA ITA NO. 267/KOL/2009 FOR AY 05- 06 THE ISSUE THAT AROSE FOR CONSIDERATION WAS DISALLOWANCE OF EXPENSES U/S.40(A )(IA)CLAIMED AS DEDUCTION WHILE COMPUTING INCOME FROM BUSINESS BEING EMBROIDERY CHA RGES, DYEING CHARGES, INTEREST ON LOAN AND FREIGHT CHARGES WITHOUT DEDUCTING TAX A T SOURCE. THE EMBROIDERY CHARGES WERE PAID BETWEEN 22 ND MAY, 2004 TO 30.11.2004. TAX HAD BEEN DEDUCTED AT SOURCE BUT WERE PAID TO THE GOVERNMENT ONLY ON 28.10.2005 AND NOT WITHIN THE TIME CONTEMPLATED BY SECTION 200(1) OF THE ACT. THE DYE ING CHARGES WERE PAID BETWEEN 5.4.2004 TO 20.8.2004. TAX WAS DEDUCTED AT SOURCE BUT WAS PAID TO THE GOVERNMENT ONLY ON 28.10.2005. FREIGHT OUTWARD CHARGES WERE P AID WITHOUT DEDUCTION OF TAX AT SOURCE. INTEREST ON LOANS WERE CREDITED TO THE CRE DITORS ACCOUNT ON 31.3.2005 TO THE EXTENT THEY WERE PAID AFTER THE DUE DATE FOR FILING RETURN OF INCOME U/S.139(1) OF THE ACT, THE DISALLOWANCE WAS MADE U/S.40(A)(IA) OF THE ACT. BEFORE THE TRIBUNAL, THE ASSESSEE CONTENTED THAT THE AMENDMENT BY THE FINANC E ACT, 2010 WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2010 WHEREBY AMOUNT OF TAX DEDUCTED AT THE T IME OF MAKING PAYMENT IN RESPECT OF EXPENDITURE REFERRED TO IN SE C.40(A)(IA) OF THE ACT, IF PAID TO THE GOVERNMENT ON OR BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME DUE DATE U/S 139(1) OF THE ACT SHOULD BE ALLOWED AS A DEDUCTION. IN OTHER WORDS IT WAS ARGUED THAT THE AMENDMENT BY THE FINANCE ACT, 2010 TO THE PROVI SIONS OF SEC.40(A)(IA) HAS TO BE HELD TO BE RETROSPECTIVE W.E.F. 1-4-2005. THE ITAT KOLKATA BENCH BY ITS ORDER DATED 15.12.2010, HELD AS FOLLOWS: 8. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAR EFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, KEEPING IN VIEW OF T HE FACT THAT THOUGH THE LD.D.R. SUBMITTED THAT THE DECISIONS OF THE COO RDINATE BENCHES ARE NOT BINDING AND THE KOLKATA BENCHES MAY TAKE A DIFF ERENT VIEW, SINCE MUMBAI BENCH AFTER ANALYZING THE PROVISIONS OF SEC. 40(A)9IA) SINCE ITS INCEPTION AND VARIOUS AMENDMENTS MADE TO THE SAME I NCLUDING THE SUGGESTION MADE BY THE INDUSTRY IN THE FORM OF REPR ESENTATION IN THEIR PRE-BUDGET MEMORANDUM TO THE HONBLE FINANCE MINIST ER AND BY APPLYING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF ALOM EXTRUSIONS LTD., HAS OBSERVED THAT THE PROVISIONS OF SECTION 40(A)(IA) AS STOOD PRIOR TO THE AMENDMENTS MADE BY THE FINANC E ACT 2010 THUS WERE RESULTING INTO UNINTENDED CONSEQUENCES AND CAU SING GRAVE AND GENUINE HARDSHIPS TO THE ASSESSES WHO HAD SUBSTANTI ALLY COMPLIED WITH THE RELEVANT TDS PROVISIONS BY DEDUCTING THE T AX AT SOURCE AND BY PAYING THE SAME TO THE CREDIT OF THE GOVERNMENT BEF ORE THE DUE DATE OF ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 12 FILING OF THEIR RETURNS U/S.139(1). IN ORDER TO RE MEDY THIS POSITION AND TO REMOVE THE HARDSHIPS WHICH WAS BEING CAUSED TO THE ASSESSEE BELONGING TO SUCH CATEGORY, AMENDMENTS HAVE BEEN MA DE IN THE PROVISIONS OF SECTION 40(A)(IA) BY THE FINANCE ACT, 2010. THE SAID AMENDMENTS, IN OUR OPINION, THUS ARE CLEARLY REMEDI AL/CURATIVE IN NATURE AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF ALLIED MOTORS PVT.LTD. (SUPRA) AND MOM EXTRUSIONS LTD. (SU PRA) AND THE SAME THEREFORE WOULD APPLY RETROSPECTIVELY W.E.F. 1 ST APRIL, 2005. IN THE CASE OF R.B.JODHA MAL KUTHIALA 82 ITR 570, IT WAS HELD B Y THE HONBLE SUPREME COURT THAT A PROVISO WHICH IS INSERTED TO R EMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, RE QUIRES TO BE TREATED AS RETROSPECTIVE IN OPERATION SO THAT A REA SONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE. IN THE PRE SENT CASE, THE AMOUNT OF TAX DEDUCTED AT SOURCE FROM THE FREIGHT CHARGES DURING THE PERIOD 01/04/2005 TO 28/02/2006 WAS PAID BY THE ASSESSEE IN THE MONTH OF JULY AND AUGUST 2006 I.E., WELL BEFORE THE DUE DATE OF FILING OF ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THIS B EING THE UNDISPUTED POSITION, WE HOLD THAT THE DISALLOWANCE MADE BY THE A.O. AND CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF FREIG HT CHARGES BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) IS NOT SUSTAINABLE AS PER THE AMENDMENTS MADE IN THE SAID PROVISIONS BY THE FINAN CE ACT, 2010 WHICH, BEING REMEDIAL/CURATIVE IN NATURE, HAVE RETR OSPECTIVE APPLICATION, WE FIND NO REASON TO DEVIATE FROM THE DECISIONS OF THE ITATS MUMBAI BENCH AND AHMEDABAD BENCH, IN THE ABS ENCE OF A CONTRARY VIEW, EXCEPT THE OTHER BENCES DECISIONS OR ANY OTHER HIGH COURT. THEREFORE, RESPECTFULLY FOLLOWING THE DECIS ION OF THE COORDINATE BENCHES (SUPRA), WE ALLOW THE GROUND NOS. I TO 3 OF THE ASSESSEES APPEAL. 18. AS AGAINST THE AFORESAID DECISION THE REVENU E PREFERRED APPEAL BEFORE THE HONBLE CALCUTTA HIGH COURT. THE HONBLE CALCUTTA HIGH COURT IN ITA NO. 302 OF 2011 GA 3200/2011 DECIDED ON 23.11.2011, HELD AS FOLLOWS: WE HAVE HEARD MR. NIZAMUDDIN AND GONE THROUGH THE IMPUGNED JUDGMENT AND ORDER. WE HAVE ALSO EXAMINED THE POINT FORMULATED FOR WHICH THE PRESENT APPEAL IS SOUGHT TO BE ADMITTED. IT IS ARGUED BY MR. NIZAMUDDIN THAT THIS COURT NEEDS TO TAKE DECISION A S TO WHETHER SECTION 40(A)(IA) IS HAVING RETROSPECTIVE OPERATION OR NOT. THE LEARNED TRIBUNAL ON FACT FOUND THAT THE ASSESSE E HAD DEDUCTED TAX AT SOURCE FROM THE PAID CHARGES BETWEEN THE PERIOD APRIL 1, 2005 AND APRIL 28, 2006 AND THE SAME WERE PAID BY THE ASSESS EE IN JULY AND AUGUST 2006, I.E. WELL BEFORE THE DUE DATE OF FILIN G OF THE RETURN OF ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 13 INCOME FOR THE YEAR UNDER CONSIDERATION. THIS FACTU AL POSITION WAS UNDISPUTED. MOREOVER, THE SUPREME COURT, AS HAS BEE N RECORDED BY THE LEARNED TRIBUNAL, IN THE CASE OF ALLIED MOTORS PVT. LTD. AND ALSO IN THE CASE OF ALOM EXTRUSIONS LTD., HAS ALREADY DECIDED T HAT THE AFORESAID PROVISION HAS RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPORTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROVISION, WHICH HAS INSERTED THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DEDUCTIO N CAN BE GIVEN TO THE SECTION AS WELL. IN VIEW OF THE AUTHORITATIVE PRONO UNCEMENT OF THE SUPREME COURT, THIS COURT CANNOT DECIDE OTHERWISE. HENCE WE DISMISS THE APPEAL WITHOUT ANY ORDER AS TO COSTS. 19. IN VIEW OF THE AFORESAID DECISION, WE ARE OF T HE VIEW THAT THE ADDITION ON ACCOUNT OF ADVERTISEMENT CHARGES IS LIABLE TO BE DELETED AS THE TDS HAS BEEN PAID ON OR BEFORE THE DUE DATE FOR FILING RETURN OF INCOME. HENCE TH E ADDITION IS DIRECTED TO BE DELETED. 20. AS FAR AS THE DISALLOWANCE SECURITY GUARD EX PENSES OF RS.53,084/- U/S 40(A)(IA) OF THE ACT, THE ACTUAL FIGURES OF SECURITY CHARGES GIVEN BY THE AO IS NOT CORRECT. THE DETAILS OF THE SECURITY CHARGES PAID BY THE ASSESSE E ARE GIVEN AS ANNEXURE-IV TO THIS ORDER. THE PAYMENT OF TDS IN QUESTION HAVE BEEN MAD E ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT. THEREFORE THERE IS NO REASON WHY THE AMOUNT IN QUESTION SHOULD BE DISALLOWED U/S 40(A)(I A) OF THE ACT. THE DISCUSSION MADE ON THE APPLICABILITY OF THE AMENDMENT TO SECTION 40 (A)(IA) WITH RETROSPECTIVE EFFECT WHILE DECIDING GROUND NO.2 EQUALLY APPLIES TO THIS GROUND ALSO. 21. AS FAR AS GROUND NO.4 IS CONCERNED, THERE WAS TAX DEDUCTION AT SOURCE AND THE SAME IS DULY REFLECTED IN THE TDS RETURNS AND THE A DDITION MADE U/S 40(A)(IA) OF THE ACT IS CONTRARY TO THE FACTS ON RECORD. THE DETAIL S OF THE PAYMENT OF TDS IN THIS REGARD ARE FOUND IN ANNEXURE-V TO THIS ORDER. THE DISCUSSION MADE ON THE APPLICABILITY OF THE AMENDMENT TO SECTION 40(A)(IA) WITH RETROSPECTIVE EFFECT WHILE DECIDING GROUND NO.2 EQUALLY APPLIES TO THIS GROUND ALSO. ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 14 22. AS FAR AS GROUND NO.5 IS CONCERNED THE AO M ADE AN ADDITION OF RS.2,96,252/- AS UNACCOUNTED PURCHASE WHEREAS THE COPY OF THE LEDGER ACCOUNT PURCHASES CLEARLY INCLUDES THIS PURCHASE MADE FROM NASIM MALIK. THE L EDGER ACCOUNT AND PURCHASE LEDGER IS GIVEN AS ANNEXURE-VI TO THIS ORDER . THE ADDITION MADE BY THE REVENUE AUTHORITIES CANNOT THEREFORE BE SUSTAINED. 23. AS FAR AS GROUND NO.6 IS CONCERNED, THE DIS ALLOWANCE ON DEPRECIATION WAS MADE ON THE GROUND THAT EXPENSES OF RS.1,98,199/- INCURR ED ON LABOUR CHARGES UNDER THE HEAD DEPRECIATION FOR MAKING PARTITION WALL BY U SING PLY WOOD WAS NOT SUBSTANTIATED BY EVIDENCE. THE CLAIM OF THE ASSESS EE WAS THAT THOSE LABOUR CHARGES WERE PAID IN THE SUBSEQUENT ASSESSMENT YEAR. THE C LAIM OF THE ASSESSEE HAS TO BE ACCEPTED BECAUSE THE USE OF THE FURNITURE AND FIXTU RES DURING THE PREVIOUS YEAR HAS BEEN ACCEPTED AND IF THE LABOUR EXPENSES HAVE NOT BEEN INCURRED IT WAS NOT POSSIBLE TO USE THE PARTITION WALL. HENCE THE DISALLOWANCE O N DEPRECIATION IS DIRECTED TO BE DELETED. 24. IN THE RESULT THE APPEAL OF THE ASSESSEE I S PARTLY ALLOWED. O RDER PRONOUNCED IN THE COURT ON 23.08.2017. SD/- SD/- [J.SUDHAKAR REDDY] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23.08.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. RUPARAASHI SAREES, 87L, PARK STREET, GROUND FLOOR, KOLKATA-700016. 2.I.T.O.-WARD-32(2), KOLKATA. 3. C.I.T.(A)- XIX, KOLKATA 4. C.I.T- KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.342/KOL/2014-M/S. RURAASHI SAREES A.Y.2009-1 0 15