ACIT, New Delhi V. M/s. Western Electric & Trading Co., Delhi

ITA 3421/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86631 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 28-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN GARG
• Assessee Lawyers: B R R KUMAR

Judgement Text

1 ITA 3420 & 3421/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K.: JUDICIAL MEMBER ITA NO. 3420 & 3421/DEL/2013 A.Y. 2007-08 & 2008-09 ACIT, CIRCLE-29(1), VS. M/S WESTERN ELECTRIC & TRA DING CO., NEW DELHI. 358, BULAQI BEGUM STREET, ESPLANADE ROAD, DARIBA KALAN, DELHI-110006. PAN: AAAFW 0865 H ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI ARUN GARG CA RESPONDENT BY : SHRI B.R.R. KUMAR SR. DR DATE OF HEARING : 29-01-2015 DATE OF ORDER : 30-01-2015. O R D E R PER GEORGE GEORGE K, J.M:- THESE APPEALS, PREFERRED BY THE DEPARTMENT, ARE DI RECTED AGAINST CIT(A)S ORDERS, BOTH DATED 12-3-2013. THE RELEVANT ASSESSMENT YEARS ARE 2007-08 & 2008-09. 2. THE SOLITARY ISSUE, THAT IS RAISED IN THESE APPE ALS, IS, WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITIONS OF RS . 17,29,699/- FOR A.Y. 2007-08 AND RS. 12,06,889/- FOR A.Y. 2008-09, MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 2 ITA 3420 & 3421/DEL/2013 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASS ESSEE IS A FIRM. IT IS ENGAGED IN CONTRACT WORK AND WAS MAKING PAYMENTS TO SUB-CONTRACTORS. THE ASSESSEE WAS DEDUCTING TDS, WHILE MAKING PAYMENTS T O THE SUB-CONTRACTORS. THE AO WAS OF THE VIEW THAT ASSESSEE WAS SUPPOSED T O DEDUCT TDS ON CREDITING THE ACCOUNTS OF THE SUB-CONTRACTORS OR ON THE PAYMENTS OF SUCH AMOUNTS, WHICH EVER WAS EARLIER. ACCORDINGLY, FOR A .Y. 2006-07, ASSESSMENT WAS REOPENED AND AO MADE THE DISALLOWANCE OF PAYMEN TS MADE TO SUB- CONTRACTORS AMOUNTING TO RS. 80,15,216/-. THE ASSE SSEE DID NOT APPEAL AGAINST THIS DISALLOWANCE MADE BY A.O. FOR A.Y. 200 6-07. 4. THE ASSESSEE DURING AY 2007-08 HAS CLAIMED THE C ONTRACT PAYMENTS OF RS. 38,92,390/- U/S 40(A)(IA), ON WHICH THE TDS HAS BEEN PAID BY THE ASSESSEE OUT OF TOTAL DISALLOWANCE OF RS. 80,15,216 /- OF THE AY 2006-07. BUT THE AO HAS ALLOWED THE DEDUCTION/ CONTRACT PAYMENTS OF RS. 21,62,691/- ONLY AS AGAINST THE CLAIM OF RS. 38,92,390/-. THE A O HAS REFUSED TO ALLOW THE DEDUCTION OF RS. 17,29,699/- (RS. 38,92,390/- ( -) RS. 21,62,691/-). 5. SIMILARLY DURING THE AY 2008-09 THE ASSESSEE HAS CLAIMED THE CONTRACT PAYMENTS OF RS. 19,42,816/- U/S 40(A)(IA) ON WHICH THE TDS HAS BEEN PAID BY THE ASSESSEE. BUT THE AO HAS ALLOWED T HE DEDUCTION/ CONTRACT PAYMENTS OF RS. 7,35,927/- ONLY AS AGAINST THE CLAI M OF RS. 19,42,816/-. THE AO HAS REFUSED TO ALLOW THE DEDUCTION OF ARS. 12,06 ,889/- ( RS. 19,42,816/- (-) RS. 7,35,927/-) 6. THE ASSESSEE, BEING AGGRIEVED BY THE DISALLOWANC E OF RS. 17,29,699/- AND RS. 12,06,889/- FOR AY 2007-08 AND 2008-09 RESP ECTIVELY, FILED APPEALS 3 ITA 3420 & 3421/DEL/2013 BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) AL LOWED THE APPEALS OF THE ASSESSEE. 7. THE REVENUE, BEING AGGRIEVED IS IN APPEAL BEFOR E US. THE LD. DR SUPPORTED THE ORDER OF THE AO. 8. ON THE OTHER HAND, THE AR HAD FILED A LETTER, SE EKING ADJOURNMENT OF THE CASE. HOWEVER, WE REJECTED THE ADJOURNMENT APPL ICATION AND PROCEEDED TO DISPOSE OF THE CASE ON MERITS. 9. WE HAVE HEARD LD. DR AND PERUSED THE MATERIAL ON RECORD. THE CIT(A), WHILE ALLOWING THE APPEAL OF THE ASSESSEE H AD CATEGORICALLY FOUND THAT THE ASSESSEE HAD DEDUCTED TDS ON CONTRACT PAYM ENTS, FOR WHICH DEDUCTION IS CLAIMED IN A.Y. 2007-08 AND 2008-09. T HE RELEVANT FINDING OF THE CIT(A) READS AS UNDER: 5.5. I HAVE CONSIDERED THE ORDERS OF THE AO AND TH E SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE AO IS NOT JUSTI FIED TO DISALLOW THE CLAIM OF DEDUCTION OF THE CONTRACT PAY MENTS ON WHICH THE TDS HAS BEEN MADE AND PAID TO THE GOVERNM ENT U/S 40(A)(IA) ON PAYMENT BASIS. AFTER CONSIDERING ALL T HE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT TH E AO IS NOT JUSTIFIED TO MAKE THE DISALLOWANCE OF RS. 17,29,69 9/- IN THE AY 2007-08 AND RS. 12,06,889/- IN THE AY 2008-09 AND ACCORDINGLY, THE ADDITIONS/ DISALLOWANCES MADE BY T HE AO ARE DELETED. 10. THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE ABOVE FINDINGS OF THE CIT(A) BY PLACING ON RECORD ANY MATERIAL/ EVIDENCE . THEREFORE, WE CONFIRM 4 ITA 3420 & 3421/DEL/2013 THE ORDER OF THE CIT(A) AS CORRECT AND IN ACCORDANC E WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDING LY. 11. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30-01-2015. SD/- SD/- ( S.V. MEHROTRA ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30-01-2015. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR