M.A. FABRICS, THANE V. ITO WD 1(2), KALYAN

ITA 3525/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3245 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 18-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 06-05-2013
• Court: TRIBUNAL
• Assessee Lawyers: DR P DANIEL
• Keywords: Retrospective amendment
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI MAHAVIR SINGH , JM ./ ITA NO. 3525 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 5 - 2006 ) M/S M. A.FABRICS, 1257, SHAMBU COMPOUND, GAIBI NAGAR, BHIWANDI. VS. ITO WARD - 1(2), KALYAN ./ ./ PAN/GIR NO. : A ALFM 1691 G ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : DR. P.DANIEL /REVENUE BY : SHRI SANJEEV JAIN / DATE OF HEARING : 29 /0 3 /2016 / DATE OF PRONOUNCEMENT 08/06 /201 6 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF C IT(A) - MUMBAI, FOR THE ASSESSMENT YEAR 20 0 5 - 20 06, CONFIRMING THE DISALLOWANCE MADE BY THE AO U/S.40(1)(IA) OF THE I.T.ACT, AMOUNTING TO RS. 17,56,817/ - . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO ASKED FOR DISALLOW ING PAYMENT MADE FOR JOB CHARGES AMOUNTING TO RS.26,65,480/ - . IN RESPONSE TO THE SAME, THE ASSESSEE SUBMITTED THE COPIES OF CERTIFICATES ISSUED BY THE AO U/S.194C(4) IN FAVOUR OF JOB WORKERS FOR LOWER DEDUCTION OF TAX. AFTER CONSIDERING A SSESSEES CONTENTION THE AO REJECTED THE DISALLOWANCE OF RS. 17,56,817/ - IN RESPECT OF JOB WORKERS, WHO HAD FURNISHED CERTIFICATE ITA NO. 3525 /13 2 U/S.194C TO THE EFFECT THAT TAX IS TO BE DEDUCTED AT 0.25% OF THE AMOUNT EXCEEDING RS.5 LAKHS. 3. BY THE IMPUGNED ORDER, THE C IT(A) CONFIRMED THE ACTION OF AO, AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT WAS CONTENDED BY LD. AR THAT ALL THE JOB WORKS DULY INCLUDED THEIR PAYMENT MADE BY ASSESSEE IN THEIR TRADING ACCOUNT AND HAD ALSO FILED THEIR RETURN. THUS THERE IS NO LOSS OF REVENUE. OUR ATTENTION WAS ALSO INVITED TO THE ASSESSMENT FRAMED IN THE CASE OF JOB WORKERS DULY INCORPOR ATING THE INCOME RECEIVED BY THE ASSESSEE. IT WAS INTER ALIA CONTENDED BY ASSESSEE THAT IN VIEW OF THE INSERTION OF SECOND PROVISO TO SE CTION 40(A)(IA) BY THE FINANCE ACT 2012, AND IN VIEW OF THE FACT THAT THE RECIPIENTS OF THE INTEREST HAVE ALREADY INCLUDED THE INCOME EMBEDDED IN THESE PAYMENTS IN THEIR TAX RETURNS FILED UNDER SECTION 139, DISALLOWANCE UNDER SECTION 40(A)(IA) COULD NOT BE INVOKED IN THIS CASE. IT WAS ALSO CONTENDED THAT EVEN THOUGH THIS PROVISO IS STATED TO BE EFFECTIVE 1 ST APRIL 2013, SINCE THE AMENDMENT IN DECLARATORY AND CURATIVE IN NATURE, AND, THEREFORE, IT SHOULD BE GIVEN RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND FOUND THAT SIMILAR ISSUE HAS BEEN DECIDED BY AGRA BENCH OF THE TRIBUNAL IN CASE OF RAJEEV KUMAR AGARWAL, ITA NO.337/AGRA/2013, ORDER DATED 29 - 5 - 2013, WHEREIN IN SIMILAR CIRCUMSTANCES MATTER WAS RESTORED BACK TO THE FILE OF AO. KEEPING IN VIEW ITA NO. 3525 /13 3 THE SUBMISSION OF ASSESSEE THAT ALL THE JOB WORKS HAVE DUL Y INC LUDED THEIR RECEIPTS IN T HEIR INCOME SO OFFERED TO THE DEPARTMENT , FOLLOWING THE DECISION OF THE COORDINATE BENCH (SUPRA), WE ALSO RESTORE THIS ISSUE BACK TO THE FILE OF AO FOR DECIDING AFRESH AFTER CONSIDERING THE FACT THAT ALL THE RECIPIENT HAVE DUL Y OFFERED THE INCOME IN THEIR RESPECTIVE RETURN OF INCOME. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 08/06 / 201 6 . SD/ - ( MAHAVIR SINGH ) S D/ - ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08/06 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPON DENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//