EXOTIC CUISINES P.LTD, NAVI MUMBAI V. ASST CIT RG 10(2), MUMBAI

ITA 3522/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3682 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV , JM AND SHRI RAJESH KUMAR, ./ I.T.A. NO . 3522 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 09 - 10 ) M/S EXOTIC CUISINES PVT LTD., PLOT NO.16, SECTOR 19 - D, VASHI NAVI MUMBAI - 400705 / VS. ASSTT. COMMISSIONER OF INCOME TAX - 1 0 ( 2), AYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AABCE4131E / APPELLANT BY: SHRI NARESH KUMAR / RESPONDENT BY SHRI VACHASPATI TRIPATHI / DATE OF HEARING : 9.6. 201 6 / DATE OF PR ONOUNCEMENT : 12. 08. 2016 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 21 , MUMBAI D ATED 20.1.2013 PERTAINING TO A.Y. 20 09 - 10 . 2. ONLY ISSUE RAIS ED IN THE SOLE GROUND OF APPEAL IS AGAINST THE SUSTAINING T HE DISALLOWANCE OF RS. 33,63,116/ - BY LD.CIT(A) AS MADE BY THE AO UNDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 FOR NON DEDUCTION OF TAX AT SOURCE. ITA NO . 3522 / M/1 3 2 3 . BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.9.2009 DECLARING TOTAL INCOME OF RS. 2,28,48,303/ - WHICH WAS REVISED ON 22.1.2010 DECLARING THE SAME INCOME . THE RETURN SO FILED BY THE ASSESSEE WAS PROCESSED U/S 143( 1 ) OF THE ACT . THEREAFTER, SCR UTINY PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE AND STATUTORY NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. THE AO D URING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HA S NOT DEDUCTED TDS ON CERTA IN EXPENSES OR SHORT DEDUCTED THE TAX AND ACCORDINGLY ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE PROVISIONS OF S ECT I O N 40(A)(IA) OF THE ACT SHOULD NOT BE INVOKED, WHICH WAS REPLIED BY THE ASSESSEE VIDE ITS LETTER DATED 22.12.2011 BY GIVING DETAILS OF EXPENSES ON WHICH NO DEDUCTION OF TAX AT SOURCE /SHORT DEDUCTION OF TAX WERE MADE . THE AO AFTER CONSIDERING THE REPLY OF THE ASSESSEE CALCULATED THE DISALLOWANCE AT RS.33,74,617/ - U/S 40(A)(IA ) OF THE ACT AFTER GIVING OBSERVATIONS AS INCORPORA TED IN PARA 4.2 OF THE ASSESSMENT ORDER AND COMPLETED THE ASSESSMENT VIDE ORDER DATED 26.12.2011 BY ASSESSING THE INCOME AT RS.2,62,22,920/ - AFTER ALLOWING THE SET OFF OF BROUGHT FORWARD BUSINESS LOSSES OF RS.11,02,900/ - . AGGRIEVED BY THE ORDER OF THE AO , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE BY REJECTING THE CONTENTION THAT THE PAYMENT WAS MADE BEFORE THE CLOSING OF FINANCIAL YEAR IN MOST OF THE CASES AND FURTHER SUBMITTED THAT THE DECISION AS RE LIED UPON BY THE ASSESSEE OF THE SPECIAL BENCH OF VISHAKAPATNAM TRIBUNAL IN THE CASE OF MERLYN SHIPPING TRANSPORT CO IN ITA NO.384 OF 2012 WAS STAYED BY THE HONBLE ITA NO . 3522 / M/1 3 3 ANDHRA PRADESH HIGH COURT AND ACCORDINGLY DISMISSED T HE APPEAL OF THE ASSESSEE BY HOL DING THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE WAS RIGHTLY INVOKED TO MAKE THE DISALLWOANCE . 4 . WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE PARTIES, PERUSED THE MATERIAL PLACED BEFORE US INCLUDING TH E ORDERS OF AUTHORITIES BELOW . WE FIND THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS DEDUCTION OF TAX AT SOURCE ON THE VARIOUS EXPEN SES INCURRED BY THE ASSESSEE DURING THE YEAR AND THE AO DISALLOWED THE EXPEN SES TO THE TUNE OF RS.33,74,617/ - BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT WHICH WAS UPHELD BY THE LD.CIT(A) ON THE GROUND THAT THE DECISION RELIED UPON BY THE LD.AR IN THE CASE OF MERLYN SHIPPING TRANSPORT CO(SUPRA) HAS BEEN STAYED BY THE HONBLE ANDHRA PRADESH HIGH COURT AND ACCORDING UPHELD THE ORDER PASSED BY THE AO ON THIS ISSUE. THE LD. AR DREW OUR ATTENTION TO PAGES 1 TO 3 OF THE ASSESSEES PAPER BOOK WHICH CONTAINS THE DETAILS OF VARIOUS EXPENSES ON WHICH NO DEDUCTION OF TAX AT SOURCE OR SHORT DEDUCT ION WAS MADE AND ALSO GIVING DETAILS OF DATES ON WHICH THE SAID EXPENSES WERE PAID ARGUING THAT SINCE THESE EXPENSES WERE PAID PRIOR TO THE END OF THE FINANCIAL YEAR AND THEREFORE THE SAME BE ALLOWED. THE ALTERNATIVE PLEA OF THE LD.AR WAS THAT IN VIEW OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT THE EXPEN SES AS DISALLOWED BY THE AO BE DELETED IN VIEW OF THE FACTS THAT THE PAYEE S HAVE PAID THEIR DUE TAX THE SAID AMOUNTS BY SHOWING THE SAID PAYMENTS IN THE RETURN OF INCOME. WE DO NOT FIND MER IT IN THE SUBMISSIONS OF THE LD.AR THAT ITA NO . 3522 / M/1 3 4 THE EXPENDITURE BE ALLOWED ON THE GROUND THAT THESE WERE PAID BEFORE THE END OF THE FINANCIAL YEAR. HOWEVER, WE DEFINITELY AGREE WITH THE CONTENTION OF THE LD.AR THAT THE ISSUE IS COVERED BY THE SECOND PROVIS O TO SECTION 40 (A)(IA) OF THE ACT WHICH PROVIDES THAT IF PAYEE HAS SHOWN THE AMOUNT RECEIVED IN THE RETURN OF INCOME AND PAID DUE TAXES THEREON THEN NO DISALLOWANCE U/S 40(A)(IA) IS CALLED FOR. HOWEVER, WE ARE OF THE VIEW THAT THE ISSUE WHETHER THE PAYEES HAVE SHOWN THE AMOUNTS RECEIVED FROM THE ASSESSEE IN THEIR RETURN OF INCOME AND PAID TAXES THEREON REQUIRED TO VERIFIED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE FACTS AND ACCORDINGLY DECIDE THE MATTER . 5 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12TH AUG , 2016 . 12TH AUG, 2016 SD SD ( SHAILENDRA KUMAR YADAV ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 12TH AUG , 2016 . . . ./ SRL , SR. PS ITA NO . 3522 / M/1 3 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI