Western Coalfields Limited Coal Estate, Nagpur V. The Additonal Commissioner of Income Tax Range-2, Nagpur

ITA 361/NAG/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3221 (ITAT-NAGPUR)
• Duration Of Justice: 6 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 04-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2012
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Business expenditure; Commercial expediency; Revenue expenditure; TDS; Set aside
• Section: 40(a)(ia); 37; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.361/NAG/2012 (ASSESSMENT YEAR : 200809 ) WESTERN COALFIELDS LIMITED COAL ESTATE, CIVIL LINES NAGPUR 440 001 PAN AAACW1578L . APPELLANT V/S ADDL. COMMISSIONER OF INCOME TAX RANGE2, AAYAKAR BHAWAN CIVIL LINE, NAGPUR 400 001 . RESPONDENT ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI A.R. NINAWE DATE OF HEARING 20.03.2017 DATE OF ORDER 27.03 .2017 O R D E R PER RAM LAL NEGI, J.M. THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIR ECTED AGAINST THE IMPUGNED ORDER DATED 27 TH APRIL 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, NAGPUR, FOR THE ASSESSMEN T YEAR 200809. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED B ELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED ASSESSING OFFICER HAS LEGALLY ERRED IN DISALLOWING BUSINESS EXPENDITURE OF ` 207.24 LAKH INCURRED BY THE APPELLANT ON COMMUNITY DEVELOPMENT AND TRIBAL WELFARE UNDER A N OBLIGATION IMPOSED BY THE GOVERNMENT OF INDIA. 2 WESTERN COALFIELDS LIMITED 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) LEGALLY ERRED IN DISALLOWING AS REVENUE EXPENDITURE, THE ASCERTAINED LIABILITY, FOR INCREME NTAL SALARIES OF ` 3076.17 LAKH FOR EXECUTIVES, ARISING UNDER EXECUTIV E PAY REVISION. 3. WITHOUT PREJUDICE TO GROUND NO.2 ABOVE AND STRIC TLY IN THE ALTERNATIVE, THE LEARNED ASSESSING OFFICER BE DIREC TED TO ALLOW THE PROVISION OF ` 3076.17 LAKH AS A DEDUCTION IN THE YEAR IN WHICH REVISION OF EXECUTIVE SALARY HAS BEEN SIGNED AND TH E DIRECTIONS FOR EXECUTIVE PAY REVISION HAS BEEN ISSUED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED ASSESSING OFFICER HAS LEGALLY ERRED IN DISALLOWING THE EXPENDITURE OF ` 1022.25 LAKH UNDER SECTION 40(A)(IA) OF THE ACT FOR NONDEDUCTION OF TAX AT SOURCE UNDER SECTION 19 4J ON THE SAME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE ONE O F THE SUBSIDIARIES OF COAL INDIA LTD., A GOVERNMENT OF IN DIA ENTERPRISE, FILED ITS RETURN OF INCOME AND RETURN OF FRINGE BENEFITS DECLARING TOTAL INCOME OF ` 1118,13,68,410 AND VALUE OF FRINGE BENEFIT OF ` 135,09,26,680. 4. INSOFAR AS GROUND NO.1 IS CONCERNED, IT RELATES TO COMMUNITY DEVELOPMENT AND TRIBAL WELFARE EXPENSES OF ` 207.24 LAKH. 5. THE ASSESSEE COMPANY, DURING THE YEAR UNDER CONSIDE RATION, DEBITED EXPENDITURE OF ` 207.24 LAKH ON ACCOUNT OF COMMUNITY DEVELOPMENT AND TRIBAL WELFARE EXPENSES UNDER THE H EAD OTHER WELFARE EXPENSES . THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO JUSTIFY THE CLAIM OF DEDUCTION SOUGHT ON THIS ACCOU NT. THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT THE EXP ENDITURE IN QUESTION HAS BEEN INCURRED FOR VARIOUS SOCIAL WELFA RE MEASURES UNDERTAKEN IN AREA OF OPERATION. THAT THE EXPENDITU RE WOULD LARGELY BENEFIT THE EMPLOYEES SINCE THE RESIDENTS OF THE RE SPECTIVE AREAS ARE 3 WESTERN COALFIELDS LIMITED MAINLY EMPLOYED BY THE ASSESSEE AND THE EXPENDITURE INCURRED WAS IN TERMS OF 20 POINT PROGRAM FORMULATED BY THE GOVERNM ENT OF INDIA AND COAL INDIA LTD. THE ASSESSEE THUS, SUBMITTED THAT T HE EXPENDITURE IS OBLIGATORY ON THE PART OF THE ASSESSEE AND, HENCE, IT SHOULD BE ALLOWED AS EXPENDITURE FOR THE PURPOSE OF BUSINESS. THE ASS ESSING OFFICER, HOWEVER, REJECTED THE SUBMISSIONS OF THE ASSESSEE INTER ALIA HOLDING THAT THE PRINCIPLE OF COMMERCIAL EXPEDIENCY IS NOT SATISFIED AND SINCE THE MATTER IS STILL PENDING WITH THE JUDICIAL AUTHO RITIES FOR THE EARLIER YEARS, CLAIM OF THE ASSESSEE CANNOT BE ALLOWED AS E XPENDITURE FOR THE PURPOSE OF BUSINESS. FEELING AGGRIEVED, THE ASSESSE E PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 6. THE LEARNED COMMISSIONER (APPEALS) FOLLOWING HIS OW N ORDER FOR THE ASSESSMENT YEAR 200708 PASSED IN ASSESSEES OW N CASE, DISALLOWED THE EXPENDITURE. THE RELEVANT FINDINGS O F THE LEARNED COMMISSIONER (APPEALS) FOR THE ASSESSMENT YEAR 2007 08, ON THE BASIS OF WHICH DISALLOWANCE WAS MADE, ARE REPRODUCE D BELOW: I HAVE CONSIDERED THE FACTS IN ENTIRETY. IT HAS BEE N POINTED OUT BY THE A.O. THAT THE EXPENDITURE HAS INCURRED FOR I MPLEMENTATION 20 POINT PROGRAMME UNDER THE DIRECTIVES OF GOVERNME NT OF INDIA COVERING SPECIAL COMPONENT PLAN, TRIBAL SUB PLAN, C OMMUNITY DEVELOPMENT PLAN AND ENVIRONMENTAL PROTECTION PLAN, ETC. WHICH INCLUDES INTER ALIA, BORING OF TUBE WELLS, LAYING P IPE LINES FOR DRINKING WATER, WIDENING OF DRAINAGE SYSTEM, WBM RO AD WIDENING, PROVIDING STREET LIGHTING, REPAIRING AND GENERAL MAINTENANCE OF PRIMARY SCHOOLS IN SURROUNDING VILLA GES. THE ISSUE IN DISPUTE IS WHETHER EXPENDITURE IS WHOLLY AND EXC LUSIVELY FOR THE BUSINESS OF THE COMPANY AND WHETHER THE CONDITIONS LAID DOWN AS PER THE PROVISIONS OF SECTION 37 OF THE I.T. ACT HA VE BEEN FULFILLED. A.O. HAS HELD THAT EXPENDITURE HAS NOT BEEN INCURRE D FOR THE PURPOSE OF THE COMPANY. IT IS POINTED OUT BY THE AP PELLANT THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLA NT IN THE EARLIER YEARS BY THE ORDER OF THE LD. CIT(A). IN MY CONSIDE RED OPINION 4 WESTERN COALFIELDS LIMITED THAT EVEN THOUGH IT MAY HAVE BEEN NECESSARY FOR THE ASSESSEE TO MAKE SUCH CONTRIBUTIONS IT CANNOT BE SAID TO BE WHO LLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. AN ACT OF CHARITY CANNOT BE GIVEN THE GUISE AND GARB OF BUSINESS EXPEDIENCY. IN THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF VOLTAS LTD. V/S CIT, 207 ITR 47 (BOMBAY) THE ISSUE AROSE FOR CO NSIDERATION THAT WHEN THE ASSESSEE CONTRIBUTED AMOUNTS TOWARDS THE BIHAR REFUGEE FLOOD RELIEF, TATA REFUGEE RELIEF PROJECT I N BIHAR WHERE IT HAD BUSINESS OPERATIONS WHETHER THE EXPENDITURE WAS ALLOWABLE U/S 37(1). THE HONBLE HIGH COURT HELD THAT EVEN TH OUGH THE CONTRIBUTIONS WERE MADE FOR A LAUDABLE OBJECT IT DI D NOT SATISFY THE CONDITIONS OF SECTION 37(1). IT HAS BEEN HELD B Y THE HONBLE HIGH COURT THAT THIS WAS CLEARLY AN APPLICATION OF INCOME. THIS DECISION OF THE JURISDICTIONAL HIGH COURT HAS NOT B EEN DULY CONSIDERED BY MY LD. PREDECESSOR. IN THE LIGHT OF T HE FACTS OF THE CASE AND THE JUDICIAL PRONOUNCEMENT DISCUSSED ABOVE , I HOLD THAT CONTRIBUTION OF ` 222.39 LAKH CANNOT BE HELD TO BE EXPENDITURE FOR THE PURPOSE OF BUSINESS. 7. AGAINST THE IMPUGNED ORDER PASSED BY THE COMMISSION ER (APPEALS), THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL. 8. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE RAISED IN GROUND NO.1, IS COVERED BY THE DECISION OF THE NAGPUR BENCH OF THE TRIBUNAL RENDER ED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200910, WHEREIN T HE TRIBUNAL RELYING UPON OTHER DECISIONS, DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION RENDERED BY THE NAGPUR BENCH OF THE TRIBUNA L IN SOUTH EASTERN COALFIELDS LTD. V/S JCIT, 85 ITD 608 (NAG.) . 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE FINDINGS OF THE AUTHORITIES BELOW. 5 WESTERN COALFIELDS LIMITED 10. HAVING HEARD THE RIVAL CONTENTIONS AND AFTER PERUSA L OF THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ISSU E OF COMMUNITY DEVELOPMENT AND TRIBAL WELFARE EXPENSES HAS BEEN DE CIDED BY THE NAGPUR BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200910, IN ITA NO.241/NAG./2013, D ATED 21 ST AUGUST 2015, RELYING UPON THE DECISION RENDERED IN ASSESSEES SUBSIDIARY COMPANY SOUTHEASTERN COALFIELDS LTD. (SU PRA), WHEREIN THIS ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY TREATING THE SAME AS EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS . IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE ISSUE OF COMMUNITY D EVELOPMENT AND TRIBAL WELFARE EXPENSES DECIDED BY THE TRIBUNAL ABO VE REFERRED HAS BEEN ACCEPTED BY THE REVENUE, AS THE REVENUE HAS NO T CHALLENGED THE SAID DECISION OF THE TRIBUNAL BEFORE THE JURISDICTI ONAL HIGH COURT. SO, RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE I MPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND AL LOW THE GROUND NO 1 RAISED BY THE ASSESSEE. 11. THE ISSUE ARISING OUT OF GROUNDS NO.2 AND 3, RELATE S TO PROVISION FOR INCREMENTAL SALARY FOR EXECUTIVE EMPLOYEES. 12. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE COM PANY, DURING THE YEAR UNDER CONSIDERATION, HAS MADE PROVISION OF ` 27715.77 LAKH TOWARDS PAYMENT OF ARREARS SALARY OF THE CURRENT YE AR AS WELL AS EARLIER YEAR W.E.F. 1 ST JULY 2006, FOR NONEXECUTIVE STAFF AND W.E.F. JANUARY 2007 FOR EXECUTIVE STAFF. THIS LIABILITY PE RTAINS TO WAGE REVISION FOR EXECUTIVE FOR THE PERIOD FROM 1 ST JANUARY 2007 TO 31 ST MARCH 2008 AND FOR NON-EXECUTIVE FROM 1 ST JULY 2006 TO 31 ST MARCH 2008. THE ASSESSING OFFICER OBSERVED THAT THE AGREE MENT FOR THE REVISION OF SALARY WAS EXECUTED IN THE YEAR JANUARY 2009, THEREFORE, 6 WESTERN COALFIELDS LIMITED PROVISION WAS MADE WITHOUT ANY STATUTORY APPROVAL O R ANY LEGAL SANCTION AND NO LIABILITY WAS IN EXISTENCE DURING T HE RELEVANT YEAR. THE ASSESSING OFFICER RELYING ON VARIOUS JUDICIAL PRONO UNCEMENTS HELD THAT IN THE ABSENCE OF ANY STATUTORY OBLIGATION THE SAME CANNOT BE ALLOWED AS EXPENDITURE. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED AND MADE ADDITION OF ` 27715.77. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 13. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSES SEE SUBMITTED THAT THE LIABILITY TO PAY REVISED WAGES, AS PER THE NEW FORMULA STARTS FROM THE DATE OF EXPIRY OF THE PREVI OUS NCWA. NCWA VII EXPIRED ON 30 TH JUNE 2006. IT WAS ONLY THE QUANTIFICATION AND SUBSEQUENT DISBURSEMENT WHICH WAS CARRIED OUT LATER AFTER THE SIGNING OF AGREEMENT. THE ASSESSEE FURTHER SUBMITTED THAT T HE COAL INDIA LTD. ESTIMATED THE EXPECTED INCREMENTAL OUTGO ON ACCOUNT OF EMPLOYEE REMUNERATION AND BENEFITS PURSUANT TO THE FRESH NCW A AND IT WAS INTIMATED TO ALL THE SUBSIDIARIES WHO THEN MADE PRO VISIONS IN THEIR ACCOUNTS ON RECEIPT OF DIRECTIONS FROM THE COAL IND IA LTD. THE ASSESSEE RELIED ON THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 200203, 200304 AND THE ORDER OF T HE CIT(A) FOR ASSESSMENT YEAR 200506. THE ASSESSEE ALSO RELIED U PON VARIOUS JUDICIAL PRONOUNCEMENTS. THE LEARNED COMMISSIONER ( APPEALS) HOLDING THAT IN THE LETTER FROM THE COAL INDIA LTD., DATED 21 ST APRIL 2008, THERE IS NO DIRECTION REGARDING THE CREATION OF PROVISION FOR EXECUTIVE EMPLOYEES OF 3076 AND ACCORDINGLY SUSTAINED THE D ISALLOWED TO THIS EXTENT. HOWEVER, GAVE PARTIAL RELIEF TO THE ASSESSE E BY DIRECTING THE ASSESSING OFFICER TO ALLOW THE AMOUNT OF ` 24639.60 LAKH AS PROVISION FOR INTERIM RELIEF IN RESPECT OF NON-EXECUTIVE EMPL OYEES. STILL AGGRIEVED 7 WESTERN COALFIELDS LIMITED BY THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISS IONER (APPEALS), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 14. BEFORE US, THE LEARNED COUNSEL FOR ASSESSEE REITERAT ING THE STAND TAKEN BEFORE THE AUTHORITIES BELOW AND SUBMITTED TH AT SIMILAR ISSUE HAS BEEN DECIDED BY THE NAGPUR BENCH OF THE TRIBUNAL, I N ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200910, ITA NO.241/NA G./2013, DATED 21 ST AUGUST 2015, WHEREIN THE TRIBUNAL RELYING UPON THE DECISION OF NAGPUR TRIBUNAL PASSED IN ASSESSEES SUBSIDIARY COM PANY SOUTHEASTERN COALFIELDS LTD. (SUPRA), WHEREIN THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE SAID DECISIO N OF THE TRIBUNAL (SUPRA) HAS BEEN UPHELD BY THE HONBLE BOMBAY HIGH C OURT, NAGPUR BENCH, IN ITA NO. 6 OF 2016, VIDE JUDGMENT DATED 29 TH JANUARY 2016. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSE SSING OFFICER HAS POINTED OUT THAT THE ENTIRE AMOUNT OF PROVISION WAS PAID IN THE F.Y. 200809 BUT HAS NOT ALLOWED THE EXPENDITURE EVEN ON PAYMENT IN THE ASSESSMENT YEAR 200910. THE LEARNED COUNSEL FOR AS SESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT V/S UNITED MOTORS (I) LTD., [1990] 181 ITR 347 (BOM.); II) BHARAT EARTH MOVERS V/S CIT, [2000] 245 ITR 428 (SC ); III) WESTERN COALFIELDS LTD. V/S ACIT, [2009] 27 DTR 226 ; AND IV) TATA COMMUNICATION LTD. V/S JCIT, ITA NO.3062/MUM./ 2003, DATED 5.12.2012. 15. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 8 WESTERN COALFIELDS LIMITED 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE DECISIONS R ELIED UPON BY THE PARTIES. WE FIND THAT THE ISSUE RAISED BY THE ASSES SEE IS IDENTICAL TO THE ISSUE DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 200910, IN ITA NO.241/NAG./2013, O RDER DATED 21 ST AUGUST 20015, WHEREIN THE TRIBUNAL, VIDE PARA3, OB SERVED AS UNDER: 3. WE HAVE PERUSED THE ABOVE. LEARNED D.R. HAS FAIR LY ACCEPTED THE ISSUES AS ABOVE ARE COVERED IN FAVOUR OF THE AS SESSEE BY ITATS DECISIONS IN ASSESSEES OWN CASE IN EARLIER YEARS AS MENTIONED ABOVE. NO CASE HAS BEEN MADE BEFORE US TH AT THE FACTS IN THE PRESENT CASE RE DIFFERENT OR THAT THE EARLIE R DECISIONS OF THE TRIBUNAL HAVE BEEN SET ASIDE BY THE HONBLE JURISDI CTIONAL HIGH COURT. IN SUCH CIRCUMSTANCES AS AGREED BY BOTH THE COUNSEL, WE HOLD THAT SINCE THE ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNALS ORDERS IN ASSESSEES OWN CASE, THERE IS NO NEED OF INTERFERENCE IN THE ORDER OF THE LEARNED CIT (APPEA LS). HENCE, THE ORDER OF THE LEARNED CIT (APPEALS) IS CONFIRMED. 17. IN VIEW OF THE ABOVE, CONSISTENT WITH THE VIEW TAKE N AS AFORESAID, WE HOLD THAT THE LEARNED COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER. HENCE, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE AND ALLOW GROUNDS NO.2 RAIS ED BY THE ASSESSEE. 18. GROUND NO 3 IS AN ALTERNATIVE GROUND RAISED WITHOUT PREJUDICE TO GROUND NO 2. SINCE WE HAVE ALLOWED GROUND NO 2 OF T HE APPEAL WE DO NOT CONSIDER IT NECESSARY TO DECIDE THIS GROUND SEP ARETLY. 19. GROUND NO.4, RELATES TO DISALLOWANCE OF EXPENDITURE UNDER SECTION 40(A)(IA) OF THE ACT. 9 WESTERN COALFIELDS LIMITED 20. THE ASSESSING OFFICER HOLDING THAT ASSESSEE WAS LI ABLE TO DEDUCT TDS IN RESPECT OF MEDICAL EXPENSES OF 1022-25 LAKH REIMBURSEMENT TO EMPLOYEES AND SINCE THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE, MADE DISALLOWANCE OF THE SAID AMOUNT UNDER SECTION 40(A)(IA) OF THE ACT. 21. THE ASSESSEE CONTENDED BEFORE THE LEARNED COMMISSIO NER (APPEALS) THAT THE TAX DUE HAS BEEN PAID BY THE DED UCTEE HIMSELF AND THEREFORE, THERE REMAINS NO LIABILITY WITH THE ASSE SSEE COMPANY TOWARDS TDS. THE ASSESSEE COMPANY HAS CARRIED OUT M INING OPERATIONS IN VARIOUS REMOTE LOCATIONS AND TO FACIL ITATE MEDICAL TREATMENT OF ITS EMPLOYEES, HAD MAINTAINED A PANEL OF DOCTORS TO WHOM THE COMPANY HAD DIRECTLY MADE PAYMENTS FOR THE SERVICES RENDERED BY THE DOCTORS TO THE EMPLOYEES. IT WAS SU BMITTED BY THE ASSESSEE THAT THE PAYMENTS WERE MADE ON BEHALF OF T HE EMPLOYEES AND, THEREFORE, THE PROVISIONS OF SECTION 194J DO N OT APPLY IN THE PRESENT CASE. THE LEARNED COMMISSIONER (APPEALS) FO LLOWING HIS OWN ORDER PASSED FOR ASSESSMENT YEAR 200708 UPHELD THE ACTION OF THE ASSESSING OFFICER. BEING AGGRIEVED, ASSESSEE HAS CAR RIED THE MATTER BEFORE THE TRIBUNAL. 22. BEFORE US, THE LEARNED COUNSEL FOR ASSESSEE SUBMITTE D THAT THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE IS LIA BLE TO DEDUCT TDS IN RESPECT OF MEDICAL EXPENSES REIMBURSED TO THE EMPLO YEES AS PAYMENTS ARE MADE TO DOCTORS / HOSPITALS AND NONDE DUCTION OF TDS WAS HELD TO BE LIABLE FOR DISALLOWANCE UNDER SECTIO N 40(A)(IA) OF THE ACT. FOR SIMILAR REASONS, ORDER UNDER SECTION 201(1 (1A) OF THE ACT WAS ALSO PASSED HOLDING ASSESSEE LIABLE FOR TDS. THE LE ARNED FURTHER SUBMITTED THAT THE ISSUE OF DISALLOWANCE OF EXPENDI TURE UNDER SECTION 10 WESTERN COALFIELDS LIMITED 40(A)(IA) OF THE ACT IS COVERED BY THE DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASES FOR EARLIER ASSESSMENT YEARS. 23. HAVING HEARD THE RIVAL CONTENTIONS AND ON A PERUSAL OF THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE DE CISIONS RELIED UPON, WE FIND THAT THE ISSUE OF DISALLOWANCE OF EXPENDITU RE UNDER SECTION 40(A)(IA) OF THE ACT IS SIMILAR TO THE ISSUE DECIDE D BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 200708 IN WESTERN COALFIELDS LTD. V/S ACIT, ITA NO.171/NAG./2012, FOR ASSESSMENT YEAR 200708, ORDER DATED 5 TH FEBRUARY 2016, WHEREIN THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 7. AT THE OUTSET WE HAVE BEEN INFORMED THAT NOW THI S ISSUE STOOD COVERED IN ASSESSEES OWN CASE BY ITAT, NAGPUR BENC H IN THE FOLLOWING ORDERS: 1. ITA NOS.35/NAG./2010 AND OTHERS, ORDER DATED 24 TH SEPT. 2015. 2. ITA NO.215/NAG/2013 ORDER DATED 4 TH DEC. 2015. IN BOTH THE ABOVE ORDERS, THE RESPECTED COORDINATE BENCHES HAVE HELD THAT THERE WAS NO OBLIGATION ON THE PART OF TH E ASSESSEE TO DEDUCT THE TDS ON THE PAYMENTS MADE TO THE DOCTORS IN THE LIGHT OF THE CBDT CIRCULAR DATED 24112009, HENCE THE PR OVISIONS OF SECTION 40(A)(IA) HAVE BEEN WRONGLY INVOKED. RESPEC TFULLY FOLLOWING THE ABOVE DECISIONS, WE HEREBY ALLOW THE GROUND OF THE ASSESSEE. 24. IT IS ALSO OBSERVED THAT THE TRIBUNAL, NAGPUR BENCH , IN ASSESSEES OWN CASE VIZ. WESTERN COALFIELDS LTD. V/S ACIT, ITA NO.35 AND 36/NAG./2010 AND ITA NO.72 TO 78/NAG./2012, VIDE OR DER DATED 24 TH SEPTEMBER 2015, HAS HELD THAT ASSESSEE HAS NO OBLIG ATION FOR TDS ON SUCH PAYMENTS AND DISALLOWANCE UNDER SECTION 40(A)( IA) IS HELD TO BE UNJUSTIFIED IN THE ABSENCE OF ANY OBLIGATION TO DED UCT TAX AT SOURCE. IN 11 WESTERN COALFIELDS LIMITED VIEW OF THE ABOVE, CONSISTENT WITH THE VIEW TAKEN A S AFORESAID, WE HOLD THAT THE LEARNED COMMISSIONER (APPEALS) WAS NO T JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSE D BY THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE AND ALLOW GROU ND NO.4, RAISED BY THE ASSESSEE. 25. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.03.2017 SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER SD/ - RAM LAL NEGI JUDICIAL MEMBER NAGPUR, DATED: 27.03.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI