The ACIT, Circle-3, JAMNAGAR V. Shri Nitin Ramshi Bhatia, Jam-Khambhalia

ITA 412/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0168 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-09-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: PRASHANT MAHARSHI

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SR IVASTAVA, AM ITA NO.412/RJT/2012 / ASSESSMENT YEAR 2009-10 ASSTT.COMMISSIONER OF INCOME-TAX V. SHRI NI TIN RAMSHI BHATIA, JAMNAGAR NAGAR GATE, KAILASH CHAMBER, JAM - KHAMBALIA PAN: AELPB7 611P DATE OF HEARING : 13.9.2012 DATE OF PRONOUNCEMENT : 21.9.2012 REVENUE BY : SHRI AVINASH KUMAR ASSESSEE BY : SHRI PRASHANT MAHAR SHI / // / ORDER . .. . . . . . /D. K. SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 27.4.2012, ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.20,31,441/- MADE BY THE AO, RESORTING TO THE PR OVISIONS OF SECTION U/S 40(A)(IA) OF THE ACT. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN IN TERPRETING THE WORD PAYABLE IN A NARROW SENSE AND THEREBY NOT APPRECI ATING THE FACT THAT SUCH A NARROW INTERPRETATION COULD NEVER HAVE BEEN INTENDED BY THE LEGISLATURE AND IT FRUSTRATES THE VERY INTENTION OF THE LEGISLATURE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 2 ITA NO.412/RJT/2011 4. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CI T(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED 5. THAT THE REVENUE CRAVES LEAVE TO ADD, AMEND, ALT ER OR WITHDRAW ANY GROUNDS OF APPEAL 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS AS WORKS CONTRACTOR AND SUB-CONTRACTOR. HE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER APPEAL ON 25.9.2009 RETUNING TOTAL INCOME AT RS.18, 98,130/-. AFTER PROCESSING, THE RETURN WAS SELECTED FOR SCRUTINY DURING WHICH T HE AO NOTICED THAT THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE OUT OF INTEREST PAYMENTS. HE THEREFORE INVOKED THE PROVISIONS OF SECTION 40(A)(I A) AND CONSEQUENTLY DISALLOWED THE SAME. ON APPEAL, THE LD. CIT(A) HAS HELD THAT SECTION 40(A)(IA) WAS NOT APPLICABLE TO THE CASE OF THE ASSESSEE FOR THE DETAILED REASONS GIVEN BY HIM IN THIS BEHALF IN HIS APPELLATE ORDER. THE APPE LLATE ORDER SHOWS THAT THE LD. CIT(A) HAS GONE THROUGH THE DETAILS OF PAYMENT OF I NTEREST AND NOTICED THAT ALL THE PAYMENTS WERE MADE DURING THE YEAR ITSELF AND T HEREFORE WAS OUTSIDE THE SCOPE OF SECTION 40(A)(IA) IN VIEW OF THE DECISION OF A SPECIAL BENCH OF THIS TRIBUNAL IN MERILYN SHIPPING & TRANSPORT V. ACIT [2 012] 20 TAXMANN.COM 244 (VISAKHAPATNAM - TRIB.) (SB). 3. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTI ES SUBMITTED THAT THE ISSUE UNDER APPEAL WAS COVERED BY THE DECISION OF THE SPE CIAL BENCH OF THIS TRIBUNAL IN MERILYN SHIPPING & TRANSPORT (SUPRA) IN FAVOUR O F THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. IN MERILYN SHIPPING & TRANSPORT V. ACI T (SUPRA), A SPECIAL BENCH OF THIS TRIBUNAL HAS TAKEN THE VIEW THAT SECTION 40 (A)(IA) WOULD APPLY ONLY TO THAT EXPENDITURE WHICH IS PAYABLE AS ON 31ST MARCH AND N OT TO EXPENDITURE WHICH HAS 3 ITA NO.412/RJT/2011 ALREADY BEEN PAID DURING THE YEAR ITSELF. IN THE CA SE BEFORE US THE LD. CIT(A) HAS ALREADY HELD THAT ALL THE PAYMENTS HAVE BEEN MADE D URING THE YEAR ITSELF AND THEREFORE WERE NOT HIT BY SECTION 40(A)(IA). THE LD . DR HAS NOT BEEN ABLE TO CONTROVERT THE AFORESAID FINDING RECORDED BY THE LD . CIT(A). THE LD. CIT(A) HAS RELIED UPON THE DECISION OF A SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORT (SUPRA) IN DECIDING TH E ISSUE IN FAVOUR OF THE ASSESSEE. WE ARE EQUALLY BOUND BY THE SAID DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL. IN THIS VIEW OF THE MATTER, WE HAVE NO A LTERNATIVE EXCEPT TO CONFIRM THE ORDER OF THE LD. CIT(A). APPEAL FILED BY THE DEPART MENT IS DISMISSED. ) + 21-09-2012 ) ORDER PRONOUNCED ON 21 .9. 2012 ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER +/ DATE 21.9.2012. /RAJKOT SRL/- ) )) ) ./ ./ ./ ./ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. 3 / APPELLANT-. 2. .53 / RESPONDENT-. 3. 9 / CONCERNED CIT 4. 9- / CIT (A). 5. / ., , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNA L, RAJKOT