Shri E.S. Rajeshkharan Nair, Anand V. The Income tax Officer,Ward-2, Anand

ITA 3980/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62910 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR
• Assessee Lawyers: A L THAKKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NO.3980/AHD/2008 A. Y.2005-06 SHRI E.S. RAJSHEKHARAN NAIR, PROP: PARSHVA ENGG., 705-A,GIDC, V.U. NAGAR, ANAND PAN-ABAPN4040N APPELLANT VS THE INCOME TAX OFFICER, WARD-2, ANAND RESPONDENT DEPARTMENT BY : SHRI T. SHANKAR, SR. D.R. ASSESSEE BY : SHRI A.L. THAKKAR, A.R. DATE OF HEARING : 06.08.2012 DATE OF PRONOUNCEMENT : 09.08.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF L D. CIT(A)-IV, BARODA DATED 17.09.2008. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION TO THE EXTENT OF RS.8,68,517/- U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961. 2. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FAC T THAT THE APPELLANT HAS DEPOSITED THE TDS IN GOVT. ACCOUNT BE FORE THE DUE DATE OF FILING OF RETURN OF INCOME HENCE THE DISALL OWANCE OF THE EXPENDITURE MADE BY THE A.O. SHOULD BE CANCELLED. I.T.A. NO.3980/AHD/2008 A. Y.2005-06 2 3. IN THE ALTERNATIVE, WITHOUT PREJUDICE TO THE ABO VE, THE LD. CIT(A) OUGHT TO HAVE GIVEN DIRECTION TO THE A.O. FO R GIVING CREDIT IN THE SUBSEQUENT YEAR, IN RESPECT OF TDS AM OUNT DEPOSITED BY THE APPELLANT ON THE EXPENSES DISALLOW ED. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSE SSMENT PROCEEDINGS THE A.O. OBSERVED THAT ASSESSEE PAID THE FOLLOWING AMOUNTS T O THE CONTRACTORS WITHIN THE MEANING OF SECTION 194C:- NAME OF THE CONTRACTOR DATE OF DEPOSIT OF TDS IN GOVT. ACCOUNT EXPENDITURE REQUIRED TO BE DISALLOWED U/S 40(A)(IA)(IN RS.) SHAKTI TRANSPORT 2,96,667/- 27.05.2005 JIGNA ENGG. WORKS, AHMEDABAD 72,301/- 27.05.2005 JOY FABRICATOR 1,07,700/- 27.05.2005 KRISHNA ENGG. 82,350/- 27.05.2005 SHAHI ENGG. CO. 61,672/- 27.05.2005 SHAKTI ENGG. CO. 25,339/- 27.05.2005 STEEL FAB. ENGG. CO. 1,10,230/- 27.05.2005 TECHNOBORE IND. 21,000/- 27.05.2005 TECHNO WORKS 51,495/- 27.05.2005 VIJAY ENGG. 53,550/- 27.05.2005 MAJOR INDUSTRIES 22,840/- 27.05.2005 AMRITA ENGG. 11,88,500 27.05.2005 TOTAL 20,93,644/- AFTER ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE THE A.O. DISALLOWED A SUM OF RS.20,93,644/- BY INVOKING THE PROVISIONS OF SECTIO N 40(A)(IA) AS THE ASSESSEE DEDUCTED TAX AT SOURCE BUT DID NOT DEPOSIT IT IN TI ME I.E. BY 7 TH APRIL, 2005. IN APPEAL LD. CIT(A) GAVE RELIEF TO THE ASSESSEE TO TH E TUNE OF RS.12,25,127/- HOLDING THAT TDS MADE ON THESE PAYMENTS MADE IN THE MONTH O F MARCH WAS DEPOSITED WITH THE GOVERNMENT ACCOUNT BEFORE THE SUBMISSION O F RETURN OF INCOME, THEREFORE, THE PROVISIONS OF SECTION 40(A)(IA) WERE NOT ATTRACTED ON THIS AMOUNT. I.T.A. NO.3980/AHD/2008 A. Y.2005-06 3 THUS, LD. CIT(A) CONFIRMED THE DISALLOWANCE OF BALA NCE AMOUNT OF RS.8,68,517/-. FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BE FORE US. 4. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESS EE, PLACING RELIANCE ON THE DECISION OF HONBLE ITAT, AHMEDABAD BENCH DATED 23. 03.2012 IN THE CASE OF M/S ALPHA PROJECTS SOCIETY P. LTD. VS. DCIT IN ITA NO.2 869/AHD/2011, WHICH IN TURN PLACING RELIANCE ON THE DECISION OF HONBLE CALCUTT A HIGH COURT IN THE CASE OF VIRGIN CREATORS HAS HELD THAT PROVISIONS OF SECTION 40(A)( IA) AS AMENDED BY FINANCE ACT, 2010 WITH EFFECT FROM 01.04.2010 ARE TO BE TREATED AS HAVING RETROSPECTIVE ANS APPLICATION WITH EFFECT FROM 1 ST APRIL, 2005 AND THEREFORE, EVEN IF THE TDS DEDUCTE D FROM THE AMOUNTS PAID OR CREDITED IN THE MONTHS EAR LIER THAN MARCH AND PAID BEFORE FILING OF THE RETURN BY THE ASSESSEE, THE PR OVISIONS OF SECTION 40(A)(IA) WOULD NOT BE ATTRACTED. SINCE THERE IS NO DISPUTE IN THE INSTANT CASE THAT TDS MADE ON THE AMOUNTS CREDITED OR PAID TO THE PARTIES IN THE MONTHS EARLIER THAN MARCH WERE DEPOSITED WITH THE CREDIT OF GOVERNMENT IN MAY, 2005, I.E. BEFORE THE FILING OF RETURN, THE PROVISIONS OF SECTION 40(A)(I A) ARE NOT ATTRACTED TO THE FACTS OF THIS CASE AND, THEREFORE, THE ADDITION OF RS.8,68,5 17/- IS ALSO HEREBY DELETED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09.08.2012 SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT I.T.A. NO.3980/AHD/2008 A. Y.2005-06 4 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD