M/s Bharat Exporters, Hyderabad V. Asst.CIT,Circle 6(1), Hyderabad

ITA 391/HYD/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8950 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P MURALI MOHAN RAO
• Section: 143(3); 10B; 10

Judgement Text

ITA NO.391 OF 2014 BHARAT EXPORTERS HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER & SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.391/HYD/2014 (ASSESSMENT YEAR: 2009-10) M/S. BHARAT EXPORTERS HYDERABAD PAN- AADFB 2948 R VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 6(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, CA FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 10.03.2015 DATE OF PRONOUNCEMENT : 11 .03.2015 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) IV HYDERABAD DATED 28.01.2014 PASSED FOR A.Y 2009- 10 U/S 143(3) OF THE I.T. ACT, 1961. 2. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF EXPORT OF RICE AND SPICES. IT FILED ITS RETURN OF INCOME ON 2 9.09.2009 DECLARING TOTAL INCOME OF RS.79,06,700 AFTER CLAIMI NG DEDUCTION U/S 10B OF RS.6,46,02,362. AO DISALLOWED A SUM OF RS.23,26,438 U/S 40(A)(IA) AND ASSESSED THE TOTAL I NCOME AT RS.1,02,33,139. 3. ASSESSEE IN THE COURSE OF THE APPELLATE PROCEEDI NGS, SUBMITTED THAT THE ASSESSEE HAD INCURRED THESE EXPE NSES BY WAY ITA NO.391 OF 2014 BHARAT EXPORTERS HYDERABAD PAGE 2 OF 4 OF REIMBURSEMENT AND THEREFORE THE TDS PROVISIONS W ERE NOT APPLICABLE TO THESE PAYMENTS. THE LD AR RELIED ON T HE DECISION IN THE CASE OF ACIT VS. GRAND PRIX FAB (D) LTD (2010) 128 TTJ (DEL) 60 AND CIT VS. BHAGWATI STEELS (2010) 326 ITR 108 ( P&H). 4. THE LD AR ALSO SUBMITTED THAT SINCE THE PAYMENTS HAD ALREADY BEEN MADE DURING THE YEAR ITSELF AND THEREF ORE SECTION 40(A)(IA) WAS NOT APPLICABLE FOR IT. HE ALSO RELIED ON THE DECISIONS IN THE CASE OF TEJA CONSTRUCTIONS VS. ACIT (2010) 3 9 SOT 13 (HYD) (URO) AND JAIPUR VIDYUT VITARAM NIGAM LTD VS. DCIT (2009) 123 TTJ 888. 5. THE LD CIT (A) DISMISSED THE APPEAL OF THE ASSES SEE. WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF THE C OORDINATE BENCH BY ITS ORDER IN ITA NO.478/HYD/2013 DATED 28.01.201 5 IN THE CASE OF M/S. S.S. NETWORKS VS. INCOME TAX OFFICER. THE RELEVANT PORTIONS OF THE ORDER IS EXTRACTED BELOW: 6. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND OTHER MATERIA LS ON RECORD. ON A PERUSAL OF THE ASSESSMENT ORDER, IT IS SEEN THAT IN PARA 3 OF THE ASSESSMENT ORDER, THE AO HAS NOTED THAT THE ASSESSEE HAS PAID AN AMOUNT OF RS.36.15 LAKHS TO VARIOUS TV CHANNELS. IF THAT IS T HE CASE, THEN NOTHING REMAINS PAYABLE BY THE ASSESSEE BY THE END OF THE RELEVANT FINANCIAL YEAR. ACCORDIN GLY THE RATIO LAID DOWN BY THE ITAT VISAKHAPATNAM SPECIAL BENCH IN THE CASE OF MERILLYN SHIPPING & TRANSPORT VS. ADD CIT (SUPRA) SQUARELY APPLIES TO T HE FACTS OF ASSESSEES CASE. FURTHER, IT IS TO BE NOTE D THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF USHODAYA ENTERPRISES VS. DCIT (SUPRA) FOLLOWING THE JUDGEMENT OF THE HON'BLE A.P. HIGH COURT DATED 24.06.2014 IN CASE OF CIT VS. JANAPRIYA ENGINEERS SYNDICATE IN ITA NO.352/14 HAS HELD AS UNDER: ITA NO.391 OF 2014 BHARAT EXPORTERS HYDERABAD PAGE 3 OF 4 8. WE HAVE HEARD BOTH THE PARTIES. WE DIRECT THAT T HE AO MAY FOLLOW THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORTS V. ACIT IN ITA NO.477/VIZ/2008 DATED 29.03.2012 AND THE DISALLOWAN CE U/S 40(A)(IA) MAY NOT BE MADE BY THE AO FOR THE AMOUNTS/PAYMENTS WHICH HAVE ALREADY BEEN PAID BEFOR E THE END OF THE RELEVANT ACCOUNTING YEAR, OUT OF THE AMO UNTS DISALLOWED WHICH HAVE BEEN UPHELD BY THE CIT (A). T HIS GROUND IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN VIEW OF THE AFORESAID DECISION, WE DIRECT THE AO TO FOLLOW THE DECISION OF ITAT, SPECIAL BENCH IN CASE OF MERILLYIN SHIPPING & TRANSPORT VS. ACIT (SUPRA) AND ALLOW THE EXPENDITURE OF RS.35,69,715/- , IF IT IS FOUND TO HAVE BEEN PAID WITHIN THE RELEVAN T FINANCIAL YEAR. THIS GROUND IS CONSIDERED TO BE ALL OWED FOR STATISTICAL PURPOSES. 6. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE PAYMENT HAD ALREADY BEEN MADE DURING THE YEAR I TSELF AND THEREFORE, SECTION 40(A)(IA) WAS NOT APPLICABLE IN THIS CASE. WE DIRECT THE AO TO VERIFY WHETHER THE AMOUNTS HAVE BE EN PAID DURING THE YEAR ITSELF AND AFTER APPLYING THE DECIS ION OF THE COORDINATE BENCH IN THE CASE OF SS NETWORKS DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 7. FURTHER ASSESSEE HAS RAISED GROUND NO.5 AS FOLLO WS: 5. THE CIT (A)-IV HYDERABAD OUGHT TO HAVE APPRECIATED THE FACT THAT ANY DISALLOWANCE MADE WIL L INCREASE THE EXEMPTION U/S 10B AND WILL HAVE NO IMPACT ON THE INCOME OF THE APPELLANT AS STATED BY THE DECISION OF HON'BLE ITAT HYDERABAD IN THE CASE OF PLANET ONLINE PVT. LTD VIDE ITA NO.1016/H/2007. 8. SINCE WE HAVE DECIDED THE ISSUE U/S 40(A)(IA) BY FOLLOWING THE ORDER OF THE COORDINATE BENCH AND FAVOURABLE TO THE ITA NO.391 OF 2014 BHARAT EXPORTERS HYDERABAD PAGE 4 OF 4 ASSESSEE, GROUND NO.5 RAISED BY THE ASSESSEE BECOME INFRUCTUOUS. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2015. S D/ - S D/ - (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 11 TH MARCH, 2015. VNODAN/SPS COPY TO: 1. P. MURALI & CO. CAS, 6-3-655/2/3 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500082 2. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 6(1) HYDER ABAD 3. THE CIT(A)-IV HYDERABAD 4. THE CIT III HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER