The ITO, Ward- 1(4), RAJKOT-GUJARAT V. M/s. Bhoomi Construction, RAJKOT-GUJARAT

ITA 354/RJT/2011

• Counselvise Citation: 35424914 RSA 2011
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 15-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: SUMIT C SHINGALAC A
• Keywords: Retrospective amendment

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K . SRIVASTAVA, AM ITA NO. 354/RJT/2011 / ASSESSMENT YEAR 2006-07 ITO, WARD 1(4). V M/S. BHOOMI CONSTRUCTION RAJKOT. 1 ST FLOOR, SHRADDHA COMPLEX OPP: GANGA HALL, AMIN MARG, RAJKOT. PAN: AACFB0164G. CROSS-OBJECTIONS NO.61/RJT./2011 M/S BHUMI CONSTRUCTION V. ITO (CROSS-OBJECTOR) (RESPONDENT) DATE OF HEARING : 20-04-2012. DATE OF PRONOUNCEMENT : 30-04-2012. REVENUE BY: SH RI M. K. SINGH, D.R ASSESSEE BY: SHRI SUMIT C. SHINGALA,C.A. / / / / ORDER . .. . . . . . / D. K. SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT AND THE MEMORANDUM OF CROSS-OBJECTIONS FILED BY THE ASS ESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 20-06-2011. FOR THE S AKE OF CONVENIENCE, THEY ARE BEING DISPOSED OFF BY A CONSOLIDATED ORDER. 2. THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS O F APPEAL:- 1. THE LEARNED CIT(A)-I HAS ERRED IN LAW AND ON F ACT OF THE CASE IN DELETING THE ADDITION TO THE EXTENT OF RS.57,48,265 /- U/S. 40(A)(IA) MADE BY THE AO ON ACCOUNT OF TAX NOT BEEN DEDUCTED OR PAID DURING THE PREVIOUS YEAR. . 2. THE LEARNED CIT(A)-I, HAS ALSO ERRED ON FACT OF THE CASE DELETING THE ADDITION OF RS.57,48,265/- U/S.40(A)(IA) MADE BY TH E AO, AS THE DATE ON WHICH TAX WAS DEDUCTED IS NOT AVAILABLE ON RECORD A ND EVEN DURING THE COURSE OF ASSESSMENT FAILED TO SUBMIT SUCH EVIDENC E REGARDING THE DATE ON WHICH TAX WAS ACTUALLY DEDUCTED. 3. ON FACT OF THE CASE, LEARNED CIT(A)-I, OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 4. IT IS, THEREFORE PRAYED THAT THE ORDER OF THE LE ARNED CIT(A)-I MAY BESET- A-SIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 3. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF CROSS-OBJECTIONS: ITA 354/2011. 2 1. LD. ITO HAS ERRED IN LAW AS WELL AS IN FACTS IN CHALLENGING THE ORDER OF LD. CIT(A) THAT DATE ON WHICH TAX DEDUCTED IS NOT A VAILABLE IN RECORDS AND WAS NOT FURNISHED BY THE ASSESSEE, WHEREAS THE FACT IS ALL THE DETAILS INCLUDING THE DATE OF DEDUCTION WAS FURNISHED AND T HE SAME IS FILED O RECORD. 2. LD. ITO HAS ERRED IN NOT CONSIDERING THE FACTS T HAT THE TAX IS DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR UNDER RE FERENCE AND THE SAME WAS PAID BEFORE DUE DATE OF FILING RETURN OF INCOME. 3. THE LD. ITO HAS ERRED IN LAW IN NOT READING THE SEC.40(A)(IA) IN HARMONY WITH INTENTION OF ITS ENACTMENT AS WELL AS OTHER PROVISIONS OF THE ACT AND VARIOUS JUDICIAL PRONOUNCEMENTS. 4. PURSUANT TO THE DECISION OF A SPECIAL BENCH OF T HIS TRIBUNAL IN MERILYN SHIPPING & TRANSPORT IN ITA NO.304/VIZ./2008, THE A SSESSEE HAS TAKEN THE FOLLOWING ADDITIONAL GROUND: SEC.40(A)(IA) APPLIES ONLY TO AMOUNTS PAYABLE AN D CANNOT BE INVOKED IN CASES OF AMOUNTS PAID. 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE T HAT THE ASSESSEE CLAIMED DEDUCTION FOR RS.57,48,265/- BEING THE AMOUNT PAID ON 12.5.2005 AND 8.11.2005 FOR GETTING CONSTRUCTION JOB WORK DONE. TAX WAS DEDUCTE D AT SOURCE OUT OF THE AFORESAID PAYMENTS BUT WAS NOT PAID TO THE GOVERNMENT WITHIN THE STIPULATED PERIOD OF TIME. AFTER HEARING THE ASSESSEE IN THE MATTER, THE A.O. HELD THAT THE IMPUGNED PAYMENTS WERE HIT BY SECTION 40(A)(IA) AND THEREFORE DISALLO WED THE SAME. ON APPEAL, THE LD. CIT(A) HAS DELETED THE IMPUGNED DISALLOWANCE WITH T HE FOLLOWING OBSERVATIONS: 3.2 I HAVE CAREFULLY CONSIDERED THE FINDING GIVEN BY THE ASSESSING OFFICER AND THE SUBMISSION OF THE AR OF THE APPELLANT. I F IND FORCE IN THE SUBMISSION OF THE AR OF THE APPELLANT. THE AR POINTED OUT THAT SECTION 40(A)IA) WAS AMENDED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1/4/2005, AND THEREFORE, THE A.O. WAS NOT CORRECT IN INVOKING PROVISIONS OF SECTION 40(A)(IA) AS IT STOOD PRIOR TO THE SAID AMENDMENT. THE AR CONTENDED THAT THE TAX SO DEDUCTED HAS BEEN DEPOSITED BEFORE THE DUE D ATE OF FILING RETURN OF INCOME FOR THE RELEVANT YEARS, I.E. 31/10/2006. TH E AR ALSO POINTED OUT THAT THE PROVISIONS OF SECTION 40(A)(IA) HAVE BEEN FURTH ER AMENDED BY THE FINANCE ACT, 2010 W.E.F. 1/4/2010, WHICH ALSO SUPPORTS THE ABOVE CONTENTIONS OF THE APPELLANT. I HAVE NOTICED THAT WHILE PASSING ORDER U/S.143(3) R.W.S.147 OF THE ACT ON 29/7/2010 THE A.O. WRONGLY APPLIED THE PROVI SIONS OF SECTION40(A)(IA) AS IT STOOD PRIOR TO AMENDMENT BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT OF 1/4/2005. THEREFORE, FOR A.Y. 2006-2007 AMENDED PROVISIONS WERE APPLICABLE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT, B BENCH, AHMEDABADS DECISION IN ITA NO.3983/AHD/2008 IN THE CASE OF SHRI ITA 354/2011. 3 KANUBHAI RAMJIBHAI MAKWANA FOR A.Y. 2005-06. I HOL D THAT THE AO WAS NOT CORRECT IN INVOKING THE PROVISIONS OF SECTION 40(A) (IA) AND THEREBY DISALLOWING THE EXPENDITURE OF RS.57,48,265/-. THE ADDITION MA DE BY THE A.O. IS ORDERED TO BE DELETED. 6. AGGRIEVED BY THE ORDER OF THE C.I.T.(A), THE DEP ARTMENT IS NOW IN APPEAL BEFORE THIS TRIBUNAL. AT THE TIME OF HEARING, THE L D. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE INVITED OUR ATTENTION TO THE DECISION OF A SPECIAL BENCH OF THIS TRIBUNAL IN M/S. MERILYN SHIPPING & TRANSPORTS V. A.C.I.T., ITA NO.477/VIZ./2008 IN WHICH IT HAS BEEN HELD THAT SEC. 40(A)(IA) WOULD APPLY ONLY TO T HE EXPENDITURE WHICH IS PAYABLE AS ON 31 ST MARCH AND NOT TO THE EXPENSES WHICH HAVE ALREADY B EEN PAID DURING THE YEAR ITSELF. HE CLAIMED THAT THE ASSESSEE HAS NOT S HOWN ANY OF THE AFORESAID EXPENSES AS PAYABLE AS ON 31 ST MARCH OF THE RELEVANT PREVIOUS YEAR AND THEREFORE, NO DISALLOWANCE WAS CALLED FOR. 7. IN REPLY, THE LD. DEPARTMENTAL REPRESENTATIVE SU PPORTED THE ORDER PASSED BY THE CIT(A) IN THIS BEHALF. 8. WE HAVE HEARD BOTH THE PARTIES. THE LD. AUTHORIZ ED REPRESENTATIVE FOR THE ASSESSEE SUBMITS THAT NONE OF THE AFORESAID EXPENSE S WAS PAYABLE AS ON 31 ST MARCH AND THEREFORE NO DISALLOWANCE WAS CALLED FOR U/S 40(A)(IA) IN TERMS OF THE DECISION OF A SPECIAL BENCH OF THIS TRIBUNAL IN M/S . MERILYN SHIPPING & TRANSPORTS V. A.C.I.T. (SUPRA) IN WHICH IT HAS BEEN HELD THAT SEC . 40(A)(IA) WOULD APPLY ONLY TO THE EXPENDITURE WHICH IS PAYABLE AS ON 31 ST MARCH AND NOT TO THE EXPENSES WHICH HAVE ALREADY BEEN PAID DURING THE YEAR ITSELF. HE CLAIME D THAT THE ASSESSEE HAS NOT SHOWN ANY OF THE AFORESAID EXPENSES AS PAYABLE AS O N 31 ST MARCH OF THE RELEVANT PREVIOUS YEAR AND THEREFORE NO DISALLOWANCE WAS CAL LED FOR. ACCORDING TO HIM, ENTIRE EXPENDITURE WAS PAID WITHIN THE YEAR ITSELF. HOWEVE R, THE SUBMISSION OF THE ASSESSEE THAT ENTIRE EXPENDITURE WAS ACTUALLY PAID BY THE ASSESSEE DURING THE PREVIOUS YEAR ITSELF NEEDS VERIFICATION. IN THIS VI EW OF THE MATTER, THE ORDER PASSED BY THE C.I.T.(A) IS SET ASIDE AND THE MATTER IS RESTOR ED TO HIS FILE FOR A FRESH DECISION IN CONFORMITY WITH LAW AFTER BRINGING RELEVANT FACTS O N RECORD. REASONABLE OPPORTUNITY OF HEARING SHALL BE GIVEN TO BOTH THE PARTIES. APPE AL FILED BY THE DEPARTMENT AND THE MEMORANDUM OF CROSS-OBJECTIONS FILED BY THE ASSESSE E ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ) + 30/04/2012 . ) THIS ORDER PRONOUNCED IN OPEN COURT ON 30-04-2012. SD/- SD/- ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER +/ DATE 30/04/2012. /RAJKOT ITA 354/2011. 4 ) )) ) 12 12 12 12 32 32 32 32 / COPY OF ORDER FORWARDED TO:- 1. 6 / APPELLANT-THE I.T.O., WARD 1(4), RAJKOT.. 2. 186 / RESPONDENT-M/S. BHOOMI CONSTRUCTION, RAJKOT.. 3. ; / CONCERNED CIT-I, RAJKOT. 4. ;- / CIT (A)-I, RAJKOT. 5. 2 1, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.