Laxmi Samhitha Textiles, Guntur, V. ACIT, Circle-2(1), Guntur

ITA 390/VIZ/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5238 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 29-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Additional evidence; Condonation of delay
• Section: 142(1); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 390 / VIZ /201 7 (ASST. YEAR : 20 1 1 - 1 2 ) M/S. LAXMI SAMHITHA TEXTILES, C/O VUPPUTURI SRINIVASA RAO, D.NO. 9 - 53, PULLADIGUNTA, VATTICHERUKURU MANDAL, GUNTUR. V S . ACIT, CIRCLE - 2(1), GUNTUR. PAN NO. AADFL 5073 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 17 / 0 1 /201 9 . DATE OF PRONOUNCEMENT : 06 / 0 2 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 30 / 11 /201 6 FOR THE ASSESSMENT YEAR 20 11 - 12 . 2. THERE IS A DELAY OF 135 DAYS IN FILING THE APPEAL . THE A SSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY WHERE IN HE STATED THAT THE MANAGING P ARTNER SRI VUPPUTURI SRINIVASA RAO HAD BEEN SICK WITH HIGH FEVER AND WEAKNESS DURING THE FIRST WEEK OF 2 ITA NO. 390 /VIZ/2017 ( M/S. LAXMI SAMHITHA TEXTILES ) JANUARY 2017 WAS FOUND TO BE AFFECTED WITH HEPATITIS AND J AUNDICE . HE WAS GIVEN TREATMENT IMMEDIATELY AND WAS ADVISED TO TAKE COMPLETE BED REST FOR TWO MONTHS . HOWEVER, EVEN AFTER TWO MONTHS SRI SRINIVASA RAO COULD NOT RECOVER FROM FEVER AND WEAKNESS . THEREFORE, THE MEDICATION WAS CONTINUED AND HE WAS ADVISED COMPLETE BED REST FOR ANOTHER T W O MONTHS. T HE MANAGING P ARTNER THUS COULD NOT ATTEND TO HIS NORMAL AFFAIRS DURING THE PERIOD OF 0 8 . 0 1 2017 TO 2 0.0 6 . 2017 . THE ASSESSEE ALSO FILED MEDICAL CERTIFICATE ALONG WITH THE PETITION. WE HAVE GONE THROUGH THE PETITION AND ALSO MEDICAL CERTIFICATE FILED BY THE ASSESSEE AND FIND TH A T THERE IS A SUFFICIENT CAUSE TO CONDONE THE DELAY . ACCORDINGLY , WE CONDONE THE DELAY. 3 . SO FAR AS MERITS OF THE CASE IS CONCERNED, THE ASSESSING OFFICER NOTICED THAT O N VERIFICATION OF THE RETURN OF INCOME , IT IS SEEN THAT THE ASSESSEE HAS CLAIMED EXPENSES TOWARDS FOLLOWING HEADS OF EXPENSES: - RENTS : RS. 72,72,592/ - COMMISSION : RS. 60,38,266/ - AUDIT FEE : RS. 80,000/ - S INCE THE ASSESSEE C OULD NOT PRODUCE ANY BOOKS OF ACCOUNT AND BILLS/VOUCHE RS FOR VERIFICATION , THE GENUINENESS OF THE ABOVE 3 ITA NO. 390 /VIZ/2017 ( M/S. LAXMI SAMHITHA TEXTILES ) EXPENSES COULD NOT BE VERIFIED . E VEN IF IT IS ASSUME D THAT THE EXPENSES ARE GENUINE , THE ASSESSEE WAS REQUIRED TO BE DEDUCT ED TAX AT SOURCE AT THE TIME OF PAYMENT OF THE ABOVE EXPENSES UNDER THE VARIOUS PR OVISIONS OF I . T . ACT. P AYMENT OF RENT ATTRACTS THE PROV ISIONS OF TDS UNDER SECTION 194 - I OF THE ACT. SIMILARLY, PAYMENT OF COMMISSION AND AUDIT FEE ATTRACT THE PROVISION S OF TDS UNDER SECTION 194 - H AND 194 - J OF THE ACT RESPECTIVELY. VIDE NOTICE UNDER SECTION 142(1) THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF TAX DEDUCTED FROM VARIOUS EXPENSES AND PAID TO THE GOVERNMENT ACCOUNT. HOWEVER, THE ASSESSEE HAS BEEN UNABLE TO FURNISH ANY DETAILS TO SHOW THAT THE TAX HAS BEEN DEDUCTED UN DER THE RESPECTIVE PROVISIONS OF I.T. ACT. FURTHER, THE ASSESSEE HAS FAILED TO FURNISH A COPY OF THE TAX AUDIT REPORT AND THEREFORE, THE COMMENTS OF THE AUDITOR REGARDING COMPLIANCE BY THE ASSESSEE TO THE TDS PROVISIONS COULD NOT BE ASCERTAINED. IN THAT VIEW OF THE MATTER, ALL THE ABOVE EXPENSES ARE LIABLE TO BE DISALLOWED AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. ACCORDINGLY, THE ABOVE EXPENSES HAVE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4 . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4 ITA NO. 390 /VIZ/2017 ( M/S. LAXMI SAMHITHA TEXTILES ) 5. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TR IBUNAL. 6 . LD. COUNSEL FOR THE ASSESSEE HAS FILED A PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE AND SUBMITTED THAT THE DETAILS WERE NOT FILED BEFORE THE LOWER AUTHORITIES ON THE GROUND THAT THE FACTORY WAS CLOSED DO W N AND THEY ARE NOT IN A POSITION TO PRODUCE THE BOOKS OF ACCOUNT , AND SUBMITTED THAT NOW THEY ARE IN A POSITION TO FILE ALL THE DETAILS BEFORE THE ASSESSING OFFICER AND PRAYED THAT ISSUE MAY BE REMITTED BACK TO THE ASSESSING OFFICER. 7 . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 9. THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE IN RESPECT OF PAYMENT OF RENT, COMMISSION AND AUDIT FEE, NO TDS WAS DEDUCTED ON ACCOUNT OF THE ABOVE PAYMENTS UNDER SECTION 40(A)(IA) OF THE ACT . O N APPEAL , ON THE SAME GROUND, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSE SSING OFFICER. O N APPEAL BEFORE US, THE ASSESSEE FILED A PAPER BOOK CONSISTING OF 72 PAGES WHEREIN HE HAS FILED ALL THE DETAILS IN RESPECT OF COPY OF MOU WITH M/S. SREE MEENAKSHI SUNDARAM TEXTILES LTD. FOR LEASING OF SPINNING MILL , CO P Y OF ANNUAL REPORT FILED 5 ITA NO. 390 /VIZ/2017 ( M/S. LAXMI SAMHITHA TEXTILES ) BY SREE MEENAKSHI SUNDARAM TEXTILES LTD. BEFORE THE ROC , COPIES OF CHALLANS FOR TDS MADE ON COMMISSION PAYMENTS AND COPIES OF DETAILS OF GRATUITY PAID AND RECEIPTS THEREOF . THE REASONS GIVEN BY THE ASSESSEE FOR ADMISSION OF ADDITI ONAL EVIDENCE FOR NON - FILING OF THE DETAILS BEFORE THE LOWER AUTHORITIES THAT THE ASSESSEE WAS FACING FINANCIAL CRISIS AND COMPANY WAS CLOSED DOWN, HE HAS SHIFTED TO KARNATAKA FROM ANDHRA PRADESH . UNDER THESE CIRCUMSTANCES , THE ASSESSEE WAS NOT IN A POSIT ION TO COLLECT THE RELEVANT MATERIAL TO SUBMIT BEFORE THE AUTHORITIES BELOW. 10 . WE HAVE CONSIDERED THE PETITION FILED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE AND FIND THAT THE REA S ONS MENTIONED FOR NON - FILING OF THE DETAILS BEFORE THE AUTHORITIES BELOW ARE GENUINE, THEREFORE, IN THE INTEREST OF JUSTICE, ADDITIONAL EVIDENCE FILED BY THE ASSESSEE HAS TO BE ADMITTED TO DO SUBSTANTIAL JUSTICE TO THE ASSESSEE. ACCORDINGLY, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IS ADMITTED . THESE DE TAILS FILED BY THE ASSESSEE IN THE FORM OF ADDITIONAL EVIDENCE ARE NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD. CIT(A) , FOR THE FIRST TIME, HE HAS FILED THESE DETAILS BEFORE THE ITAT . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , IN OUR OPINI ON, THE DETAILS FILED BY THE ASSESSEE HA VE TO BE EXAMINED BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND 6 ITA NO. 390 /VIZ/2017 ( M/S. LAXMI SAMHITHA TEXTILES ) REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO CONSIDER THE ADDITIONAL EVIDENCE FILED BY THE A SSESSEE AND PASS ORDERS IN DENOVO IN ACCORDANCE WITH LAW . THUS, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 1 1 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 6 T H DAY OF FEB . , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 6 T H FEB . , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE M/S. LAXMI SAMHITA TEXTILES, C/O VUPPUTURI SRINIVASA RAO, D.NO. 9 - 53, PULLADIGUNTA, VATTICHERUKURU MANDAL, GUNTUR . 2. THE REVENUE ACIT, CIRCLE - 2(1), GUNTUR. 3. THE PR. CIT , GUNTUR. 4. THE CIT(A) - 1, GUNTUR. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.