Deora Wires N Machines Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(4), Ahmedabad

ITA 36/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6239 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Assessee Lawyers: S N SHAH
• Keywords: Retrospective amendment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 36/AHD/2014 (ASSESSMENT YEAR: 2009- 10) DEORA WIRES N MACHINE PRIVATE LIMITED, DEORA AVENUE, NAVRANGPURA, NEAR MITHAKHALI SIX ROAD, AHMEDABAD - 380009 APPELLANT VS. HON.CIT APPEALS-VI, AHMEDABAD / INCOME TAX OFFICER, WARD 1(4) RESPONDENT PAN: AAACD6608E /BY ASSESSEE : SHRI S. N. SHAH, A.R. /BY REVENUE : SHRI ANTONY PARIATH, SR. D.R. /DATE OF HEARING : 15.01.2018 /DATE OF PRONOUNCEMENT : 19.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 ARISES AGAINST THE CIT(A)-VI, AHMEDABADS ORDER DATED 08.11.2013, IN C ASE NO. CIT(A)- VI/ITO.WD.1(4)/290/11-12, AFFIRMING ASSESSING OFFIC ERS ACTION INTER ALIA DISALLOWING FRINGE BENEFIT TAX OF RS.29,932/- (NOT PRESSED IN COURSE OF HEARING BEFORE US), U/S.40(A)(IA) DISALLOWANCE QUA INTEREST PAYMENTS MADE ON DEPOSITS TAKEN FROM M/S. INDIA BULLS FINANCIAL SERVICES LTD. AMOUN TING TO RS.5,25,145/- AND SECTION 36(1)(III) INTEREST DISALLOWANCE IN RESPECT OF INTEREST CHARGEABLE TO M/S. ITA NO. 36/AHD/14 [DEORA WIRES N MACHINE PVT. LTD. VS. CIT(A)/ITO] A.Y. 2009-10 - 2 - VIKAS METAL AMOUNTING TO RS.5,24,300/-; RESPECTIVEL Y, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. LEARNED COUNSEL REPRESENTING ASSESSEE IS FAIR EN OUGH IN NOT PRESSING FOR ITS FIRST SUBSTANTIVE GROUND OF DISALLOWANCE OF FRINGE BENEFIT TAX AMOUNTING TO RS.29,932/- MADE U/S. 40(IC) OF THE ACT. THE SAME IS ACCORDINGLY REJECTED. 3. THE ASSESSEES SECOND SUBSTANTIVE GROUND CHALLEN GES BOTH THE LOWER AUTHORITIES ACTION INVOKING SECTION 40(A)(IA) DISA LLOWANCE ON ACCOUNT OF INTEREST PAID ON DEPOSITS TAKEN FROM M/S. INDIA BULLS FINANC IAL SERVICES LTD. AMOUNTING TO RS.5,25,145/-. THERE IS NO DISPUTE ABOUT THE ASSES SEE NOT HAVING DEDUCTED THE PRESCRIBED TDS QUA THE IMPUGNED INTEREST PAYMENT. WE HOWEVER FIND MERIT IN ASSESSEES SOLE PLEA THAT SECTION 40(A)(IA) 2 ND PROVISO INSERTED IN THE ACT VIDE FINANCE ACT, 2012 W.E.F. 01.04.2013 STIPULATES THAT THE IMPUGNED STATUTORY PROVISION WOULD NOT APPLY IN A DEDUCTOR ASSESSEES CASE IF IT IS NOT AN ASSESSEE IN DEFAULT U/S.201(1) OF THE ACT. A CO-ORDINATE BENCH IN CASE OF RAJEEV KUMAR AGARWAL VS. ADDL.CIT, ITA NO. 337/AGRA/2013; AS UPH ELD IN EXTEMPORE IN HONBLE DELHI HIGH COURTS DECISION IN CIT V. ANSAL LANDMAR K TOWNSHIPS PVT. LTD. [2015] 377 ITR 635 (DEL), HAS ALREADY CONCLUDED THAT THE ABOVE SECOND PROVISO CARRIES RETROSPECTIVE EFFECT SINCE CURATIVE IN NATURE. LEA RNED DEPARTMENTAL REPRESENTATIVE FAILS TO REBUT ALL THESE LEGAL DEVELOPMENTS. WE TH EREFORE ACCEPT ASSESSEES INSTANT SUBSTANTIVE GROUND FOR STATISTICAL PURPOSES AND LEA VE IT OPEN FOR THE ASSESSING OFFICER TO CARRY OUT NECESSARY FACTUAL VERIFICATION THAT THE ASSESSEES PAYEE M/S. INDIA BULLS FINANCIAL SERVICES LTD. HAS ALREADY INC LUDED THE IMPUGNED INTEREST PAYMENTS IN ITS INCOME. ORDERED ACCORDINGLY. 4. THE ASSESSEES NEXT GRIEVANCE IS THAT SECTION 36 (1)(III) INTEREST DISALLOWANCE OF RS.5,24,300/- IN CASE OF M/S. VIKAS METAL @ 14.2 2% HAS BEEN WRONGLY MADE IN ITS HANDS. THE ASSESSEES CASE THROUGHOUT HAS BEEN THAT IT HAD MADE ADVANCE PAYMENT FOR PROCURING SUPPLIES FROM THE ABOVE ENTIT Y. WE FIND FROM CIT(A)S OPERATIVE PART PARA 7.4 PAGE 17 THAT HE HAS IN FACT DIRECTED THE ASSESSING OFFICER TO ITA NO. 36/AHD/14 [DEORA WIRES N MACHINE PVT. LTD. VS. CIT(A)/ITO] A.Y. 2009-10 - 3 - VERIFY ASSESSEES ABOVE CONTENTION OF RAW MATERIAL SUPPLIES WITH A FURTHER STIPULATION THAT IN CASE THE SAME IS FOUND TO BE TR UE, THE IMPUGNED DISALLOWANCE WOULD STAND DELETED. WE CONCLUDE IN THIS BACKDROP THAT NOTHING FURTHER SURVIVES FOR OUR ADJUDICATION AT THIS STAGE. WE THEREFORE REJEC T ASSESSEES INSTANT LAST SUBSTANTIVE GROUND. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF JANUARY, 2018.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 19/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0