ITO, UDAIPUR V. Smt. Snehlata Sarupriya, UDAIPUR

ITA 365/JODH/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78282 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 03-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Section: 11

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 447 / MUM /201 1 ASSTT. YEAR - 20 06 - 07 SMT. SNEHLATA SARUPARIA VS. ITO, WARD - 22(3)4 C/O. JAIN & C O., MUMBAI. 228, CITY CENTRE, S.C. ROAD, JAIPUR. PAN NO. ADGPS3291L I.T.A. NO. 365/JODH/2012 ASSTT. YEAR 2006 - 07 ITO, WARD - 1(4), VS. SMT. SNEHLATA SARUPRIYA, UDAIPUR. W/O. SHRI RAJ KUMAR SARUPARIA, 15, SHOPPING CENTRE, SECTOR - 11 , UDAIPUR. PAN ADGPS3291L (APPELLANT) (RESPONDENT) ASSESSEE S BY : - SHRI S.L. JAIN, A.R. DEPARTMENT BY : - SHRI N.A. JOSHI , D.R. DATE OF HEARING : 17 /0 7 /201 4 DATE OF PRONOUNCEMENT : 28/ 0 7 /2014 2 O R D E R P E R : HARI OM MARATHA, J.M. . BOTH THE ABOVE CAPTIONED APPEALS ARE CROSS APPEALS BY THE ASSESSEE AND REVENUE RESPECTIVELY AND PERTAIN TO A.Y. 2006 - 07 - ONE BEING QUANTUM APPEAL AND THE OTHER BEING PENALTY APPEAL BASED ON QUANTUM ADDITIONS. THE APPEAL S BEING CO NCOMIT A NTLY CONNECTED WERE HEARD SIMULTANEOUSLY AND ARE BEING DECIDED BY A COMMON ORDER FOR THE SAKE OF CONGRUENCE, BREVITY AND CONVENIENCE AS WELL. ITA NO. 447/MUM/2011 (QUANTUM APPEAL) 2. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), MUMBAI , DATED 25.10.2010 AND PERTAINS TO A.Y. 2006 - 07. 3. BRIEFLY STATED, THE FACTS OF THE CASE LEADING TO THESE APPEALS (INCLUDING THE PENALTY APPEAL) ARE THAT THE ASSESSEE, AS INDIVIDUAL, CARRIED ON THE BUSINESS OF TRANSPORT COMMISSION CONTRACTOR . FOR A.Y. 2006 - 07, SHE FILLED HER RETURN OF INCOME (ROI) ON 26.10.2008, DECLARING TOTAL INCOME OF RS. 1,70,241/ - ACCOMP AN IED WITH THE TAX AUDIT REPORT OBTAINED U/S 44 AB, OF THE I.T. ACT, 1961, (THE ACT FOR SHORT), P&L 3 ACCOUNT, BALANCE SHEET AND PROPRIETORS CAPIT AL ACCOUNT. THE A.O. HAS MENTION ED IN THE ORDER DATED 26.12.2008 THAT THE ASSESSEE IS THE PROPRIETOR OF THESE FIRMS, VIZ., (I) M/S. SNEHRAJ DISTRIBUTORS, (II) M/S. SNEHRAJ CARGO MOVERS AND (III) M/S. SNEHRAJ DISTRIBUTORS (IOCL COCO UNIT), WHICH ARE ENGAGED IN THE BUSINESS OF TRANSPORT COMMISSION CONTRACTOR. DURING THE YEAR, SHE HAS SHOWN A NET PROFIT OF RS. 1,73,969/ - AS AGAINST OF RS. 1,24,086/ - SHOWN IN THE LAST YEAR. THE COMMISSION AMOUNT HAS BEEN SHOWN AT RS. 2,01,533/ - AS AGAINST LAST YEARS RS. 3 , 05 , 3 49/ - . ON VERIFICATION OF DETAILS FILED , IT WAS NOTICED THAT THE ASSESSEES FIRM HAS DEBITED HIRE CHARES PAID OF RS. 54,22,971/ - AND RS. 5,04,079/ - ON ACCOUNT OF HIRE RE CEI PTS REPAID TO ATTACHED TANKERS LORRIES. ON THE PAYMENTS MADE TO CONCERNED PARTIES OUT OF TOTAL HIRE CHARGES PAID BY HER , NO TDS WAS DEDUCTED. AS PER THE ASSESSEE NO SUCH LIABILITY IS CAST ON HER BY THIS ACT. BUT THE A.O. HAD A DIFFERENT OPINION AND RESULTANTLY BY HOLDING THI S ASSESSEE RESPONSIBLE INVOKED S ECTION 40(A) (IA) OF THE ACT AND HA S DISALLOWED A SUM OF RS. 59,27,050/ - . THIS DISALLOWANCE HAS BEEN APPROVED BY THE LD. CIT(A) VIDE THE IMPUGNED ORDER. 4 4. BEFORE US BOTH THE PARTIES HAVE REITERATED THEIR EARLIER ARGUMENTS. IT WAS SUBMITTED BY LD. A.R. THAT THE ISSUE RAISED IN THIS APPEA L NOW SQUARELY STANDS COVERED IN THE FAVOUR OF THE ASSESSEE. THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VECTOR SHIPPING AND TRANSPORTS ORDER DATED 09.07.2013 IN ITA NO 122/2013 WHICH HAS APPROVED BY THE HONBLE SUPREME COURT WHO HAS DISMIS S ED THE SPECIAL LEAVE PE T IT I ON FILED BY THE REVENUE VIDE THEIR ORDER DATED 02.07.2014 IN CC NO(S) 8065/2014 REPORTED IN 357 ITR 642 [SC]. THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT [SUPRA] HAS BEEN APPROVED AS THEIR LORDSHIPS HAVE DISMISSED THE SLP OF THE REVENUE IN THIS CASE. THE HON'BLE ALLAHABAD HIGH COURT HAS HELD AS UNDER: I T IS TO BE NOTED THAT FOR DISALLOWING EXPENSES FROM BUSINESS AND PROFESSION ON THE GROUND THAT TDS HAS NOT BEEN DEDUCTED, THE AMOUNT SHOULD BE PAYAB L E AND NOT WHICH HAS BE EN PAID BY THE END OF THE YEAR. S ECTION 40(A)(IA) APPLIES ONLY TO AMOUNTS REMAINING PAYABLE AT THE END OF THE PREVIOUS YEAR AND DOES NOT APPLY TO AMOUNTS ALREADY PAID BEFORE THE CLOSE OF THE RELEVANT PREVIOUS YEAR. HOWEVER, THE CALCUTTA HIGH COURT I N CRESCENT EXPORT SYNDICATES & MD. JAKIR JUSSAIN MONDAL AND THE 5 GUJARAT HIGH COURT IN SIKANDARKHAN N.TUNVAR HAVE TAKEN A CONTRARY VIEW THAT EVEN AMOUNTS ALREADY PAID HAVE TO BE DISALLOWED U/S 40(A)(IA). IN SUCH CIRCUMSTANCES, THE RULE OF JUDICIAL PRECED ENCE DEMANDS THAT THE VIEW FAVOURABLE TO THE ASSESSEE MUST BE ADOPTED AS HELD BY THE HON'BLE HON'BLE SUPREME COURT IN CT VS. VEGETABLE PRODUCTS LTD 88 ITR 192. FOLLOWING THE SAID FUNDAMENTAL RULE DECLARED BY THE HON'BLE SUPREME COURT THE JUDGMENT OF THE A LLAHABAD HIGH COURT IN VECTOR SHIPPING WHICH IS IN FAVOU R OF HT ASSESSEE HAS TO BE FOLLOWED AND IT HAS TO BE HELD THAT DISALLOWANCE U/S 40A(IA) APPLIES ONLY TO AMOUNT PAYABLE AND NOT TO AMOUN T S PAID. 5. THEREFORE, BY RESPECTFULLY FOLLOWING THE ABOVE JUDGMENTS WE ALLOW THE AP PEAL OF THE ASSESSEE AND ORDER D ELETION OF THIS ENTIRE ADDITION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ITA NO. 365/JODH/2012 7. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 31.07.2012. ON THE BASIS OF ABOVE ADDITION AN PENALTY OF RS. 19,56,662/ - WAS IMPOSED. SINCE WE HAVE ALREADY DELETED THE ENTIRE ADDITION MADE BY 6 THE A.O. US/ 40(A) ( IA) . ACCORDINGLY, NO PENALTY WILL SURVIVE NOW. THIS APPEAL OF THE REVENUE STANDS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED WHEREAS THE APPEAL OF THE REVENUE STANDS DISMISSED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JULY, 2014.) SD/ - SD/ - ( N.K. SAINI ) ( HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH JULY, 2014. VL/ - COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR SENIOR PERSONAL SECRETARY ITAT, JODHPUR