Appeal Details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 6624 (ITAT-AMRITSAR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 1 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-07-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
23-07-2019
Assessment Year
2012-2013
Appeal Filed On
05-06-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO. 359/ASR/2017 ASSESSMENT YEAR: 2011-12 M/S HAMILTON LAND DEVELOPERS (P) LTD., 434 NEW JAWAHAR NAGAR, JALANDHAR [PAN: AABCH5559H] VS. JT. CIT RANGE-III JALANDHAR (APPELLANT) (RESPONDENT) ITA NO. 360/ ASR/2017 ASSESSMENT YEAR:2 012-13 M/S HAMILTON LAND DEVELOPERS (P) LTD., 434 NEW JAWAHAR NAGAR, JALANDHAR [PAN: AABCH5559H] VS. ITO RANGE-III (1) JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J. S. B HASIN (ADV.) RESPONDENT BY: SH. DHIRAJ GARG (DR) DATE OF HEARING: 23.07.2019 DATE OF PRONOUNCEMENT: 25.07.2019 ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF LD. CIT(A)-2, JALANDHAR DATED 08. 12.2016 & 14.12.2016 FOR AY 2011-12 AND AY 2012-13 RESPECTIVELY. ITA NO. 359 & 360 /ASR/2017 HAMILTON LAND DEVELOPERS (P) LTD. , JALANDHAR VS. JT. CIT, JALANDHAR 2 2. IN ITA NO. 359/ASR/2017, THE ASSESSEE HAS TAKEN THE F OLLOWING GROUNDS OF APPEAL: 1. THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING TH E DISALLOWANCE MADE BY LD. AO, OF RS. 10,000,00/- PAID AS CONSULTANCY CHARGES TO S NANDI & CO. AND RS. 2,17,163/- PAID AS INTEREST ON LOA NS TO TATA CAPITAL LTD., BY INVOKING SECTION 40(A)(IA) FOR THE A LLEGED NON DEDUCTION OF TDS THEREON. 2. THAT THE LD. CIT(A) MISDIRECTED HIMSELF TO UPHOLD THE ABOVE DISALLOWANCE ON A PREMISE DIFFERENT FROM THE ONE ARGUE D BEFORE HIM THAT THE RECIPIENTS OF THE AMOUNT HAVING DISCHARGED TH E LIABILITY AT THEIR END, NO DISALLOWANCE WAS CALLED FOR IN THIS CASE, AS HELD BY HONBLE APEX COURT IN CIT VS. HINDUSTAN COCA COLA BEVER AGE P. LTD. (2007) 293 ITR 0226 (SC). 3. THAT THE ORDERS OF THE AUTHORITIES BELOW, TO THE E XTENT DISPUTED HEREIN, ARE CONTRARY TO LAW AND FACTS OF THE CASE. 3. IN ITA NO. 360/ASR/2017, THE ASSESSEE HAS TAKEN THE F OLLOWING GROUNDS OF APPEAL: 1. THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING TH E DISALLOWANCE MADE BY LD. AO, OF RS. 67,600/- PAID AS INTEREST ON LO ANS TO TATA CAPITAL LTD., BY INVOKING SECTION 40(A)(IA) FOR THE A LLEGED NON DEDUCTION OF TDS THEREON. 2. THAT THE LD. CIT(A) MISDIRECTED HIMSELF TO UPHOLD THE ABOVE DISALLOWANCE ON A PREMISE DIFFERENT FROM THE ONE ARGUE D BEFORE HIM THAT THE RECIPIENTS OF THE AMOUNT HAVING DISCHARGED TH E LIABILITY AT THEIR END, NO DISALLOWANCE WAS CALLED FOR IN THIS CASE, AS HELD BY HONBLE APEX COURT IN CIT VS. HINDUSTAN COCA COLA BEVER AGE P. LTD. (2007) 293 ITR 0226 (SC). 3. THAT THE ORDERS OF THE AUTHORITIES BELOW, TO THE E XTENT DISPUTED HEREIN, ARE CONTRARY TO LAW AND FACTS OF THE CASE. ITA NO. 359 & 360 /ASR/2017 HAMILTON LAND DEVELOPERS (P) LTD. , JALANDHAR VS. JT. CIT, JALANDHAR 3 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED A SUM OF RS. 1,00,000/- PAID AS CON SULTANCY CHARGES TO M/S S NANDI & CO. BY INVOKING SECTION 40(A)(IA) FO R NON DEDUCTION OF TDS. IN THIS REGARD, IT WAS SUBMITTED THAT THE ASSESSEE HAS RECE IVED THE BILL FROM M/S NANDI & ASSOCIATES DURING THE YEAR UNDER CONSIDERATI ON THOUGH THE PAYMENT WAS ALREADY MADE IN THE EARLIER YEARS. ACCORDI NGLY, AN ENTRY HAS BEEN MADE IN THE BOOKS OF ACCOUNTS BY WAY OF JOURNAL EN TRY BY WAY OF ADJUSTMENT OF ADVANCE AND THE EXPENSES HAVE BEEN CLAIME D IN THE PROFIT & LOSS ACCOUNT. IT WAS SUBMITTED THAT THE ASSESSEE HAS ALREADY PAID THE AMOUNT IN THE EARLIER FINANCIAL YEARS AND HAS ALSO DEDU CTED TDS ON THE SAME. IT WAS SUBMITTED THAT THE SAID INFORMATION WAS SU BMITTED BEFORE THE LD. CIT(A). HOWEVER, THE LD CIT(A) HAS FAILED TO CONSI DER THE SAME AND HAS CONFIRMED THE DISALLOWANCE SO MADE BY THE ASSESSING OFFICER . 5. IN THIS REGARD, OUR REFERENCE WAS DRAWN TO LEDGER A CCOUNT OF M/S S. NANDI & ASSOCIATES FOR THE PERIOD 1 ST APRIL, 2004 TO 31 ST MARCH, 2011 WHEREIN THE ASSESSEE HAS MADE PAYMENT BY WAY OF CHEQUE ON 15.03.2 007 AND 15.11.2007. FURTHER, THE LEDGER ACCOUNT ALSO REFLECTS TD S ON SUCH PAYMENT SO MADE BY THE ASSESSEE. 6. WE FIND MERITS IN THE CONTENTION SO ADVANCED BY THE LD. AR. WHERE THE PAYMENT AS WELL AS CORRESPONDING TDS HAS ALREADY BEEN MA DE IN THE EARLIER FINANCIAL YEARS, THERE IS NO BASIS FOR DISALLOWANCE OF EXPENSE CLAIM DURING THE FINANCIAL YEAR. IN THE RESULT, THE DISALLOWANCE OF RS 1,00,000 IS HEREBY DIRECTED TO BE DELETED. 7. REGARDING DISALLOWANCE OF INTEREST PAID TO TATA CA PITAL LTD. WHEREIN THE ASSESSING OFFICER HAS DISALLOWED A SUM OF RS. 2,17,163/ - IN AY 2011-12 AND RS 67,600 IN AY 2012-13 BY INVOKING SECTION 40(A)( IA) OF THE ACT, THE LD. AR SUBMITTED THAT TATA CAPITAL IS A LARGE NBFC AND HAVE BEEN REGULARL Y FILING ITS ITA NO. 359 & 360 /ASR/2017 HAMILTON LAND DEVELOPERS (P) LTD. , JALANDHAR VS. JT. CIT, JALANDHAR 4 RETURN OF INCOME WHEREIN IT HAS PAID TAXES ON THE IN TEREST INCOME SO RECEIVED BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE ASS ESSEE HAS OBTAINED A CERTIFICATE FROM THE ACCOUNTANT OF TATA CAPITAL FOR THE FINANCIAL YEAR 2010-11 RELEVANT TO ASSESSMENT YEAR 2011-12 WHEREIN IT HAS BEEN CERTIFIED THAT TATA CAPITAL HAS TAKEN INTO ACCOUNT FINANCE CHARGES RECE IVED FROM THE ASSESSEE COMPANY WHILE FILING ITS RETURN OF INCOME. IT WAS FU RTHER SUBMITTED THAT SIMILAR CERTIFICATE IS AVAILABLE FOR AY 2012-13, HOWEVER, TH E SAME IS NOT CURRENTLY AVAILABLE WITH HIM BUT THE SAME CAN BE SUBMITTED OR THE AO MAY BE DIRECTED TO VERIFY THE SAME. IT WAS ACCORDINGLY SUBMITTED THAT THE DISALLOWANCE SO MADE MAY BE DIRECTED TO BE DELETED. 8. WE HAVE HEARD BOTH THE PARTIES AND PURSUED THE MATE RIAL AVAILABLE ON RECORD. THE SECOND PROVISO TO SECTION 40(A)(IA) PR OVIDES THAT IF THE RECIPIENT OF INTEREST IN QUESTION HAVE ALREADY CONSIDERED THE SA ME FOR COMPUTING THEIR INCOME OFFERED TO TAX THEN THE DISALLOWANCE U/S. 40( A)(IA) IS NOT ATTRACTED. IT IS A SETTLED PROPOSITION THAT SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WOULD HAVE RETROSPECTIVE EFFECT FROM 1.4.2005 I.E, THE DATE WHE N THE MAIN PROVISIONS OF SECTION 40(A)(IA) WAS INSERTED AND BROUGHT ON THE ST ATUE BOOKS AND THE LEADING JUDGMENT OF THE HONBLE DELHI HIGH COURT IN CASE CI T VS ANSAL LANDMARK TOWNSHIP P LTD (2015) 377 ITR 635 (DELHI) CAN BE REF ERRED IN SUPPORT THEREOF. HAVING SAID THAT, IN THIS CASE, THOUGH THE ASSESSEE DID NOT FILE THE RELEVANT CERTIFICATE BEFORE THE AO IN THIS REGARD HOWEVER, IT IS A FACT WHICH EXISTED RIGHT FROM THE BEGINNING AND THE RELEVANT DETAILS ARE AVA ILABLE WITH THE REVENUE REGARDING THE INCOME OFFERED BY TATA CAPITAL. THERE FORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IF THE CERTIFICATES FILED IN SUPPORT OF THE CLAIM THAT THE TATA CAPITAL HAS INCLUDED THIS AMOUNT OF INTEREST I N COMPUTATION OF THEIR INCOME OFFERED TO TAX FOR THE RESPECTIVE YEARS ARE FOUND T O BE CORRECT THEN THE COMPLIANCE U/S. 40(A)(IA) IS DEEMED TO HAVE BEEN MA DE AND NO DISALLOWANCE IS ITA NO. 359 & 360 /ASR/2017 HAMILTON LAND DEVELOPERS (P) LTD. , JALANDHAR VS. JT. CIT, JALANDHAR 5 CALLED FOR. THEREFORE THIS ISSUE IS SET ASIDE TO TH E FILE OF THE AO FOR VERIFICATION OF THE CERTIFICATES TO THE EFFECT THAT THE TATA CAPITA L HAS ALREADY TAKEN INTO ACCOUNT THE AMOUNT OF INTEREST RECEIVED BY THEM FOR COMPUTI NG THE INCOME IN THEIR RETURN OF INCOME FOR BOTH THE YEARS. IN CASE THE AO IS SAT ISFIED THAT TATA CAPITAL HAS CONSIDERED THIS AMOUNT FOR COMPUTATION OF INCOME IN THEIR RETURN OF INCOME, THEN NO DISALLOWANCE IS CALLED FOR U/S. 40(A)(IA) OF THE ACT. IN THE RESULT, THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE DISPOSED O FF IN LIGHT OF ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 25.07.2019. SD/- SD/- (N.K.CHOUDHRY) ( VIKRAM SINGH YADAV ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25.07.2019 GANESH KR. PS COPY OF THE ORDER FORWARDED TO: (1) M/S HAMILTON LAND DEVELOPERS (P) LTD., JALANDHA R (2) THE JT. CIT, RANGE-III, JALANDHAR (3) THE CIT(APPEALS)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER ITA NO. 359 & 360 /ASR/2017 HAMILTON LAND DEVELOPERS (P) LTD. , JALANDHAR VS. JT. CIT, JALANDHAR 6 DATE INITIAL 1 . DRAFT DICTATED ON PS/SR. PS 2. DRAFT PLACED BEFORE AUTHOR PS/SR. PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS PS/SR. PS 6. KEPT FOR PRONOUNCEMENT ON PS/SR. PS 7. FILE SENT TO THE BENCH CLERK PS/SR. PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER
