TURBHE CHEMICALS P.LTD, MUMBAI V. ACIT CIR 10(2), MUMBAI

ITA 3483/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92885 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3483/M/2012 ASSESSMENT YEAR: 2009-10 M/S. TURBHE CHEMICALS PVT. LTD., 409, BEZZOLA COMPLEX, OPP. SUMAN NAGAR, SION TROMBAY ROAD, CHEMBUR, MUMBAI - 400071 PAN: AAACT 3205F VS. ACIT, CIRCLE -10(2), MUMBAI, ROOM NO.432, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI SUBODH RATNAPARKHI, A.R. REVENUE BY : SHRI NEIL PHILIP, D.R. DATE OF HEARING : 18.06.2015 DATE OF PRONOUNCEMENT : 18.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 14.02.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2009-10. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE HON . CIT(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS .14,50,835/- U /S 40(A)(IA) OF THE I.T. ACT 1961 FOR NON-DEDUCTION O F TAX AT SOURCE ON PA Y MENTS WHICH WERE IN THE NATURE OF REIMBURSEMENT OF EXPENSES TO M / S. K . T. LOGISTICS/ M/S. S.K. ARORA & SONS AND FOR W HICH SEPARATE BILLS WERE RAISED B Y THE SAID PARTIES. 2. THE HON. CIT(APPEALS) ERRED IN NOT APPRECIATING THE CONTENTION OF YOUR APPELLANT THAT IN THE COURSE OF ASST. PROCEEDINGS, THE LD. A.O NEVER CALLED FOR ANY FURTHER EVIDENCES TO SUPPORT THE CLAIM OF REIMB URSEMENT OF EXPENSES AND ITA NO.3483/M/2012 M/S. TURBHE CHEMICALS PVT. LTD. 2 THEREFORE THERE WAS NO FAILURE ATTRIBUTABLE TO THE APPELLANT. 3. THE HON. CIT (APPEALS) ERRED IN NOT ADMITTING TH E EVIDENCES PERTAINING TO REIMBURSEMENT OF EXPENSES U/R 46A OF THE I.T RULES. 4. THE LD. CIT (APPEALS) ERRED IN SUSTAINING THE DI SALLOWANCE U/S 40(A)(IA) IN RESPECT OF AMOUNTS 'PAID' BY THE APPELLANT IN THE Y EAR UNDER APPEAL, IGNORING THE FACT THAT SUCH DISALLOWANCE AS PER THE PROVISIO NS OF SEC. 40(A)(IA) COULD BE MADE ONLY IN RESPECT OF AMOUNTS 'PAYABLE' AND TH EREFORE THE DISALLOWANCE OF RS.14,50,835/- U/S 40(A)(IA) WAS NO T JUSTIFIED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR VARY ANY OF THE ABOVE GROUNDS OF APPEAL AT ANY TIME BEFORE THE DECI SION OF THE APPEAL . 3. THE ASSESSEE IS AGGRIEVED BY CONFIRMATION OF DIS ALLOWANCE OF RS.14,50,835/- UNDER SECTION 40(A)(IA) OF THE INCOM E TAX ACT FOR NON DEDUCTION OF TAX AT SOURCE ON THE PAYMENTS MADE. T HE CONTENTION OF THE ASSESSEE THAT THE SAID PAYMENTS WERE MAINLY ON ACCO UNT OF REIMBURSEMENT OF EXPENSES HAS BEEN REJECTED BY THE LOWER AUTHORITIES . AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS BR OUGHT OUR ATTENTION TO GROUND NO.3 OF THE APPEAL BY WHICH THE ASSESSEE HAS AGITATED THE ACTION OF THE LD. CIT(A) IN NOT ADMITTING THE ADDITIONAL EVIDENCE S PERTAINING TO REIMBURSEMENT OF EXPENSES. 4. WE FIND IN THE ORDER OF THE LD. CIT(A) THAT CERT AIN BILLS AND EVIDENCES WERE PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A) SO AS TO EXPLAIN THAT THE EXPENSES IN NATURE WERE, IN FACT, REIMBURSEMENT OF EXPENSES AND HENCE TDS WAS NOT REQUIRED TO BE DEDUCTED ON THE SAID EXPENSE S. HOWEVER, THE LD. CIT(A) REJECTED THE ADDITIONAL EVIDENCES PRODUCED B EFORE HIM OBSERVING THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE REASONABLE C AUSE BEHIND NON SUBMISSION OF THESE EVIDENCES IN ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO). HE, THEREFORE , UPHELD THE DISALLOWANCE MADE BY THE AO UNDER SECTION 40(A)(IA) OF THE ACT. ITA NO.3483/M/2012 M/S. TURBHE CHEMICALS PVT. LTD. 3 5. THE LD. A.R. OF THE ASSESSEE HAS INVITED OUR ATT ENTION TO PAGE 1 OF THE PAPER BOOK WHICH IS A LETTER TO THE LD. CIT(A) WHER EIN IT HAS BEEN SUBMITTED THAT THE AO NEVER ASKED THE ASSESSEE TO SUBMIT ANY FURTHER EVIDENCES TO SUPPORT THE CLAIM OF REIMBURSEMENT. THE CLAIM THAT THE EXPENSES IN NATURE WERE REIMBURSEMENT OF EXPENSES WAS PUTFORTH BY THE ASSESSEE BEFORE THE AO. HOWEVER, THE AO DID NOT CALL FOR ANY FURTHER EVIDEN CES, HENCE THE EVIDENCES IN QUESTION WERE NOT SUBMITTED TO THE AO. THE ASSESSE E IN THE SAID LETTER HAS SUBMITTED TO THE LD. CIT(A) THAT IN THE INTEREST OF JUSTICE HE MAY BE GIVEN AT LEAST ONE FAIR CHANCE/OPPORTUNITY TO PRESENT HIS SA Y IN THE MATTER WHICH HAS BEEN GROSSLY DENIED BY THE AO AT SCRUTINY LEVEL. W E FIND THAT THE ABOVE SUBMISSIONS OF THE ASSESSEE HAVE NOT PROPERLY BEEN CONSIDERED BY THE LD. CIT(A). 6. IN OUR VIEW, WHILE REFUSING TO TAKE INTO CONSIDE RATION THE RELEVANT DOCUMENTS WHICH WERE VERY MUCH NECESSARY FOR THE JU ST DECISION OF THE CASE, LD. CIT(A) FAILED TO EXERCISE HIS APPELLATE JURISDI CTION U/S 250 OF THE ACT. THE DUTY WAS ALSO CAST UPON THE LD. CIT(A) TO ADMIT AND CONSIDER THE EVIDENCE PRODUCED BEFORE HIM BY THE ASSESSEE. THE HON'BLE BO MBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI S.SHAH V. CIT [(1998) 231 ITR 1 (BOM.)] HAS HELD THAT THE POWERS CONFERRED ON THE FIRST APPELLATE AU THORITY UNDER SUB-SECTION (4) OF SECTION 250 OF THE ACT, BEING A QUASI-JUDICIAL P OWER, IT IS INCUMBENT ON HIM TO EXERCISE THE SAME, IF THE FACTS AND CIRCUMSTANCE S JUSTIFY. 6.1 EVEN OTHERWISE UNDER RULE 46A(4) OF THE INCOME TAX RULES, THE LD. CIT(A) HAS BEEN GIVEN POWER TO CALL FOR PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF ANY WITNESSES TO ENABLE HIM TO DISPO SE OF THE APPEAL. THERE IS NO DOUBT ABOUT THE LEGAL POSITION THAT IF ANY DOCUM ENT FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A) IS IN THE NATURE OF CLINCHING EVIDENCE WHICH GOES TO THE ROOT OF THE CASE THEN IN THE INTEREST O F JUSTICE SUCH TYPES OF EVIDENCE ITA NO.3483/M/2012 M/S. TURBHE CHEMICALS PVT. LTD. 4 SHOULD NOT BE REJECTED. THE DOCUMENTS RELIED UPON B Y THE ASSESSEE ARE VERY MUCH RELEVANT AND NECESSARY FOR THE JUST AND PROPER DECISION OF THE CASE, HENCE, WE SET ASIDE THE FINDINGS OF THE CIT(A) ON T HESE ISSUES AND REMAND BACK THE MATTER TO THE FILE OF AO WITH A DIRECTION TO AD MIT THE ADDITIONAL EVIDENCES SOUGHT TO BE FURNISHED BY THE ASSESSEE, DECIDE THE ISSUES AFRESH AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND SUBMIT THE NECESSARY DOCUMENTS ETC. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18.06.201 5. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 21.10.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.