The ACIT, Bhopal V. Shri Hunaid Hussain , Bhopal

ITA 362/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2752 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-05-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 13-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: RAJU SONPAR; SHABBIR BAKSHI
• Keywords: Retrospective amendment
• Section: 133A; 6; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.362/IND/09 A.YS. 2006-07 ASSTT. COMMISSIONER OF INCOME TAX 1(1), BHOPAL APPELLANT VS HUNAID HUSSAIN PROP. OF M/S HAKIM SALES CORPORATION BHOPAL PAN AAFPH-2563-J RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI SHABBIR BAKSHI AND SHRI RAJU SONPAR O R D E R PER JOGINDER SINGH, JM THE REVENUE HAS CHALLENGED THE ORDER OF THE LEARNED CIT(A) DATED 24.4.2009 ON THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. DELETING THE ADDITION OF RS.1,02,000/- MADE BY THE AO ON ACCOUNT OF LOW WITHDRAWALS FOR HOUSEHOLD EXPENSES. 2. DELETING THE ADDITION OF RS. 7,60,313/- MADE BY THE AO U/S 40(IA) OF THE INCOME TAX ACT. 2 2. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO LOW HOUSEHOLD WITHDRAWALS. THE CRUX OF ARGUMENTS ADVANCED BY THE LEARNED SENIOR DR IS IN SUPPORT OF THE ASSESSMENT ORDER BY SUBMITT ING THAT THERE ARE EIGHT MEMBERS INCLUDING THREE SCHOOL GOING CHILDREN IN THE FAMILY, THEREFORE, THE WITHDRAWALS ARE TOWARDS LOWER SIDE. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT FIR STLY IT IS A JOINT FAMILY AND SECONDLY THE BROTHER OF THE ASSESSEE ALSO CONTR IBUTED TOWARDS HOUSEHOLD EXPENSES. ON A QUERY FROM THE BENCH REGA RDING DETAILS OF WITHDRAWALS, IT WAS EXPLAINED THAT RS.98,000/- WAS WITHDRAWN BY THE ASSESSEE, SHRI HUNAID HUSSAIN AND RS. 1,01,000/- BY THE BROTHER OF THE ASSESSEE. IT WAS FURTHER EXPLAINED THAT THE LIFE ST YLE OF THE ASSESSEE FAMILY IS ALSO VERY NORMAL AND ALL MAJOR FAMILY MEM BERS ARE INCOME TAX ASSESSEES. THIS ASSERTION OF THE ASSESSEE WAS NOT C ONTROVERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S HAKIM SALE S CORPORATION DEALING IN IRON AND STEEL. A SURVEY U/S 133A WAS CARRIED O UT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 19.4.2005. THE GRUDGE O F THE DEPARTMENT IS THAT THE AMOUNT OF RS.1,02,000/- WITHDRAWN ON AC COUNT OF HOUSEHOLD EXPENSES IS VERY LOW. THE SUBMISSION VIDE LETTER DA TED 6.9.2008 BEFORE 3 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), P REFERRED BY THE ASSESSEE, IS AS UNDER :- AS REGARDS TO THE HOUSEHOLD WITHDRAWALS IT IS SUBM ITTED THAT THE APPELLANT IS STAYING IN A JOINT FAMILY WIT H HIS MOTHER AND BROTHER MR. MOIZ. ALL THE FAMILY EXPENSES ARE MET OUT FROM THE COMMON ACCOUNT TO WHICH EVERYBODY CONTRIBU TES. IN THE APPELLANTS FAMILY ALL THE MAJOR MEMBERS SUCH AS ASSESSES MOTHER, HIS WIFE, HIS BROTHER, AND HIS WIF E ARE THE INCOME TAX PAYERS AND ALL OF THEM ARE CONTRIBUTING TO RUN THE FAMILY EXPENSES TOGETHER. DURING THE RELEVANT ASSE SSMENT YEAR THE APPELLANT HAS SHOWN WITHDRAWAL OF RS. 98,0 00 TO RUN THE HOUSEHOLD EXPENSES. IF THE ASSERTION MADE BEFORE BY THE LEARNED RESPECT IVE COUNSELS AND THE AFORESAID SUBMISSIONS PREFERRED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE ANALYSED, ONE CLEAR FACT I S OOZING OUT THAT ALL THE MEMBERS ARE RESIDING IN A JOINT FAMILY SYSTEM W HEREIN ALL THE MAJOR MEMBERS ARE INCOME TAX ASSESSEES WHO ARE CONTRIBUTI NG THEIR RESPECTIVE SHARES TO RUN THE JOINT FAMILY SYSTEM. THE IMPUGNED ADDITION HAS BEEN MADE BY THE AO ON ESTIMATE BASIS ON THE PR ESUMPTION THAT THE ASSESSEE MUST HAVE SPENT RS.2 LACS ON HOUSEHOLD EXP ENSES. THE CONTRIBUTION MADE BY THE OTHER FAMILY MEMBERS WAS N OT TAKEN INTO ACCOUNT. THE CAPITAL ACCOUNT OF THE BROTHER OF THE ASSESSEE WHO IS ALSO PROPRIETOR OF M/S NAAZ AGENCIES WHEREIN THE AMOUNT OF RS.1,01,000/- WAS ALSO WITHDRAWN TOWARDS HOUSEHOLD EXPENSES WAS N OT CONSIDERED BY THE LEARNED AO. IF BOTH THESE FIGURES ARE CONSIDER ED, NOTHING REMAINS FOR ADDITION, CONSEQUENTLY, THERE IS NO INFIRMITY I N THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN DEL ETING THE 4 IMPUGNED ADDITION, THEREFORE, THERE IS NO MERIT IN THIS GROUND OF THE REVENUE. THE SAME IS, THEREFORE, DISMISSED. 4. THE NEXT GROUND PERTAINS TO ADDITION MADE U/S 40 (IA) OF THE ACT. THE SUBMISSIONS MADE ON BEHALF OF THE REVENUE ARE I N SUPPORT OF THE ASSESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE AS SESSEE DEFENDED THE IMPUGNED ORDER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF TRANSPORTATION EXPENSES TO W HICH THE EXPENDITURE ACCOUNT (LEDGER COPY) WAS SUBMITTED EXPLAINING THE TRANSPORTATION EXPENSES DEBITED UNDER THE TRANSPORTATION HEAD AND AT THE TIME OF PAYMENT, NO CREDIT ENTRY WAS PASSED SINCE THE CONSI GNMENT WAS RECEIVED BY THE ASSESSEE ONLY AFTER PAYMENT OF TRAN SPORTATION CHARGES. IN RESPONSE TO LETTER DATED 28.11.2008, ISSUED BY T HE LEARNED AO, THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT IN THE CASE O F THE ASSESSEE FOR THE FIRST THREE QUARTERS, TAX WAS DEDUCTED AND DEPO SITED IN THE RELEVANT ASSESSMENT YEAR WHEREAS FOR THE FOURTH QUARTER I.E. 1.1.2006 TO 31.3.2006 IT WAS DEDUCTED ON 31.4.2006 AND WAS DEPO SITED ON 7.5.2006 WITHIN THE ALLOWABLE PERIOD, THEREFORE, IN VIEW OF RETROSPECTIVE AMENDMENT TO THE PROVISIONS OF SECTION 40(IA) WITH EFFECT FROM 1.4.2005, WE ARE OF THE CONSIDERED VIEW THAT NO ADDITION CAN BE MADE. IT IS FURTHER 5 NOTED THAT THE QUERY RAISED BY THE LEARNED AO AND T HE EXPLANATION OF THE ASSESSEE HAS BEEN DULY CONSIDERED IN PARA 5 TO 5.3 OF THE IMPUGNED ORDER. THE RELEVANT PROVISIONS OF THE ACT ARE REPR ODUCED HEREUNDER :- AMOUNTS NOT DEDUCTIBLE. 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTIONS 30 TO 67 [ 38 ], THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, 68 (A) IN THE CASE OF ANY ASSESSEE 69 [(I) ANY INTEREST (NOT BEING INTEREST ON A LOAN ISS UED FOR PUBLIC SUBSCRIPTION BEFORE THE 1ST DAY OF APRIL, 1938), ROYALTY, FEES FOR TECHNICAL SERVICES OR OTHER SUM CHARGEAB LE UNDER THIS ACT, WHICH IS PAYABLE, (A) OUTSIDE INDIA; OR (B) IN INDIA TO A NON-RESIDENT, NOT BEING A COMPAN Y OR TO A FOREIGN COMPANY, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCT ION, HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE SUBSE QUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB- SECTION (1) OF SECTION 200 : PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEE N DEDUCTED IN ANY SUBSEQUENT YEAR OR, HAS BEEN DEDUCT ED IN THE PREVIOUS YEAR BUT PAID IN ANY SUBSEQUENT YEAR AFTER THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SEC TION 200, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTI NG THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS B EEN PAID. EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, (A) ROYALTY SHALL HAVE THE SAME MEANING AS IN EX PLANATION 2 TO CLAUSE (VI) OF SUB-SECTION (1) OF SECTION 9 ; (B) FEES FOR TECHNICAL SERVICES SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9 ; 6 (IA)ANY INTEREST, COMMISSION OR BROKERAGE, 70 [RENT, ROYALTY,] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICA L SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONT RACTOR OR SUB-CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT AN Y WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVI I-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, 71 [HAS NOT BEEN PAID, (A) IN A CASE WHERE THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR , ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 ; OR (B) IN ANY OTHER CASE, ON OR BEFORE THE LAST DAY O F THE PREVIOUS YEAR:] 72 [PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TA X HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCTED (A)DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE SAID DUE DATE; OR (B)DURING ANY OTHER MONTH OF THE PREVIOUS YEAR BUT PAID AFTER THE END OF THE SAID PREVIOUS YEAR, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. IF THE AFORESAID PROVISION READ WITH SECTION 139(1) IS ANALYSED, WE FIND THAT THE TAX WAS DEDUCTED WITHIN THE STIPULATED TIM E AND WAS PAID/DEPOSITED WITHIN DUE DATE, THEREFORE, THERE WA S NO JUSTIFICATION ON THE PART OF THE AO TO MAKE THE IMPUGNED ADDITION, C ONSEQUENTLY, IT WAS RIGHTLY DELETED BY THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS). THEREFORE, ON THIS GROUND ALSO, THE REVENUE HAS NO MERIT, THEREFORE, THIS GROUND OF THE REVENUE IS ALSO DISMISSED. 7 FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENC E OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 6 TH JULY, 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER JULY 6, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DBN/