THE ACIT, Guntur V. Sri Gude Venkata Krishna Rao, Guntur

ITA 370/VIZ/2015

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9689 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 15-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

ITA NO.369 & 370/VIZAG/2015 SRI GUDE VENKATA KRISHNA RAO, GUNTUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.369 & 370/VIZAG/2015 ( / ASSESSMENT YEARS: 2011-12 & 2012-13) ACIT, CIRCLE - 2(1), GUNTUR VS. SRI GUDE VENKATA KRISHNA RAO, GUNTUR [PAN: AHEPG4373K ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK, DR / RESPONDENT BY : SHR I D.L. NARASIMHA RA O , AR / DATE OF HEARING : 24.10.2016 / DATE OF PRONOUNCEMENT : 22.11.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS FILED BY REVENUE ARE DIRECTED AGAINS T THE ORDER OF CIT(A)-I, GUNTUR DATED 31.7.2015 FOR THE ASSESSMENT YEARS 2011-12 & 2012-13. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS IN THE B USINESS OF TRANSPORT CONTRACT WORKS UNDER THE NAME AND STYLE OF M/S. GVK TRANSPORT AND ITA NO.369 & 370/VIZAG/2015 SRI GUDE VENKATA KRISHNA RAO, GUNTUR 2 ALSO RUNNING PETROL PUMP. THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 44,14,327/- TO THE PROFIT & LOSS ACCOUNT TOWARDS FI NANCE CHARGES. THE A.O. HAS CALLED THE ASSESSEE AND ASKED THE EXPLANAT ION IN RESPECT OF AMOUNT DEBITED TO PROFIT & LOSS ACCOUNT. IT WAS SU BMITTED BEFORE THE A.O. THAT THE AMOUNTS ARE NOTHING BUT INTEREST PAID AGAINST THE VEHICLE FINANCE OBTAINED FROM DIFFERENT FINANCE COMPANIES. THE A.O. BY CONSIDERING THE EXPLANATION OF THE ASSESSEE, HE HAS OBSERVED THAT EXCEPT ICICI BANK, ALL OTHER COMPANIES FALL UNDER T HE CATEGORY OF NON- BANKING FINANCE COMPANIES AND THEREFORE, THE ASSESS EE OUGHT TO HAVE DEDUCTED TDS AND ACCORDINGLY, HE INVOKED SECTION 40 (A)(IA) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE AC T') AND EXCEPT AMOUNT PAID TO THE ICICI BANK I.E. ` 7,64,259/-, THE REMAINING BALANCE OF ` 36,50,068/- IS ADDED BACK TO THE INCOME OF THE ASS ESSEE. ON APPEAL, CIT(A) BY FOLLOWING THE DECISION OF THE SPE CIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ACIT (136 ITD 23) DIRECTED THE A.O. TO ALLOW THE PAYMENTS ALREADY MADE ON OR BEFOR E 31 ST MARCH OF THE FINANCIAL YEAR. 3. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE COORDINATE BENCH OF ITA NO.369 & 370/VIZAG/2015 SRI GUDE VENKATA KRISHNA RAO, GUNTUR 3 THIS TRIBUNAL IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (SUPRA). 5. ON THE OTHER HAND, THE LD. D.R. HAS SUPPORTED TH E ORDER PASSED BY THE A.O. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE VERY SAME ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS VS. ACIT IN ITA NO.657/VIZAG/2014, WHICH IS EXTRACTED A S UNDER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT SPECIAL BENCH VISAKHAPATNAM AND ALSO IN THE LIGHT OF THE VIEW EXP RESSED BY THE HONBLE A.P. HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERIN G SYNDICATE, WE ARE OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT CANNOT BE MADE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY P AID BEFORE 31 ST MARCH. IN OTHER WORDS, THE A.O. IS DIRECTED TO RESTRICT THE DISALLOWANCE TO THE AMOUNTS PAYABLE AFTER 31 ST MARCH. WITH THESE OBSERVATIONS, GROUND NO.3 OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. 7. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN TH E ORDER PASSED BY THE LD. CIT(A) AND THESE APPEALS FILED BY THE REVEN UE ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND NOV16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER # /VISAKHAPATNAM: ' /DATED : 22.11.2016 VG/SPS ITA NO.369 & 370/VIZAG/2015 SRI GUDE VENKATA KRISHNA RAO, GUNTUR 4 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-2(1), GUNTUR 2. / THE RESPONDENT SRI GUDE VENKATA KRISHNA RAO, D .NO.4-2-17/8, 18 TH LANE, CHANDRAMOULI NAGAR, GUNTUR 3. + / THE CIT, GUNTUR 4. + ( ) / THE CIT (A)-I, GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM