AKP Infrastructure, Ahmedabad V. The ACIT, Circle-9, Ahmedabad

ITA 413/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63113 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 09-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMITABH SHUKLA
• Assessee Lawyers: M K PATEL
• Section: 194C

Judgement Text

ITA NO. 413/AHD/2009 . ASSESSMENT Y EAR 2005- 06 . 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, AHME DABAD ( BEFORE SHRI G.C. GUPTA,V. P.& SHRI ANIL CHATURVEDI, A.M.) I.T. A. NO.413/AHD/2009 (ASSESSMENT YEA R: 2005-06) M/S.AKP INFRASTRUCTURE 303,SARTHAK-II, SWASTIK CHAR RASTA, NAVRANGPURA, AHMEDABNAD. (APPELLANT) VS. JOINT COMMISSISONER OF INCOME TAX, CIRCLE-9, PRATYAKSHA KAR BHAVAN, NR.PANJARA POLE, AMBAWADI, AHMEDABAD (RESPONDENT) PAN: AAEFA 7501Q APPELLANT BY : SHRI M.K. PATEL RESPONDENT BY : SHRI AMITABH SHUKLA ( )/ ORDER DATE OF HEARING : 17- 09- 2012 DATE OF PRONOUNCEMENT : 30 -11-2012 PER: SHRI ANIL CHATURVEDI, A.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT (A)- XV, AHMEDABAD DATED 10-12-2008 FOR THE ASSESSMENT Y EAR 2005-06. 2. THE ONLY EFFECTIVE GROUND OF THE ASSESSEE READS AS UNDER:- ITA NO. 413/AHD/2009 . ASSESSMENT Y EAR 2005- 06 . 2 THAT THE LD. CIT (A)-XV, AHMEDABAD HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.6 ,16,73,819/- MADE U/S.40(A) (IA) OF THE ACT, INSTEAD OF DELETING THE ENTIRE ADDITION IN TOTO, AS PRAYED FOR. 3. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS O F ROAD CONTRACTOR FOR GOVERNMENT, SEMI GOVERNMENT & PRIVATE PARTIES. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING INCOME OF RS.45,83,5 45/- ON 31-3-2005. THE CASE WAS SELECTED FOR SCRUTINY. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. OBSERVED THAT THE ASSESSEE HAD MADE PAYMENTS OF RS.7,95,90,1 56/- TO CONTRACTOR AND SUB-CONTRACTORS WHICH ARE COVERED UNDER SECTION 194C, RS.1,97,880/- WAS PAID ON ACCOUNT OF INTEREST WHICH WERE COVERED U/S. 194A AND RS.52,207/- WAS PAID AS PROFESSIONAL FEES THAT WERE COVERED U/S. 194J OF THE ACT. A.O. FURTHER OBSERVED THAT THE ENTIRE AMO UNT OF TDS DEDUCTED ON THE AFORESAID PAYMENTS WAS NOT DEPOSITED TO THE GOV ERNMENT ACCOUNT WITHIN THE PRESCRIBED TIME. HE OBSERVED THAT THE TD S U/S. 194C WAS DEPOSITED ON 31-10-2005. DEPOSIT OF TDS DEDUCTED U/ S. 194J WAS MADE ON 18-10-2005 & DEPOSIT OF TDS DEDUCTED U/S.194A WAS M ADE IN JULY, AUGUST & OCTOBER,2005.. THUS ACCORDING TO THE A.O. SINCE T HE ENTIRE AMOUNT OF TDS WAS NOT DEPOSITED INTO THE GOVERNMENT ACCOUNT W ITHIN THE PRESCRIBED TIME U/S.200 (1) OF THE ACT HE HELD THAT THE PAYMEN T OF RS.7,98,40,243/- WAS NOT ALLOWABLE AS DEDUCTION WHILE COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION. HE ACCORDINGLY DISALLOWED THE ENTIRE PAYMENT U/S. 40(A )(IA) AND ADDED TO THE ITA NO. 413/AHD/2009 . ASSESSMENT Y EAR 2005- 06 . 3 INCOME. AGGRIEVED BY THE ACTION OF THE A.O. THE ASS ESSEE CARRIED THE MATTER BEFORE CIT (A). 5. CIT (A) WAS OF THE VIEW THAT AS PER THE AMENDMEN T BROUGHT IN SECTION 40A (IA) BY FINANCE ACT, 2008 ASSESSEE WAS ENTITLED TO DEDUCTION ONLY IN THOSE CASES WHERE THE ASSESSEE HAS PAID/CREDITED TH E AMOUNTS IN MARCH AND TDS WAS ALSO DEDUCTED IN MARCH AND DEPOSITED IN GOVERNMENT ACCOUNT BEFORE THE DUE DATE OF FILING OF RETURN. IN CASES WHERE THE AMOUNTS WERE PAID/CREDITED PRIOR TO MARCH AND THE ASSESSEE HAD NOT DEPOSITED TDS BY 31 ST MARCH, NO DEDUCTION WAS ALLOWABLE. THUS OUT OF THE TOTAL DISALLOWANCE OF RS.7,98,40,243/- MADE BY A.O., HE G RANTED RELIEF WITH RESPECT TO RS.1,81,66,424/-. SINCE IN THOSE CASES T HE AMOUNTS WERE PAID/CREDITED IN MARCH AND TDS WAS ALSO DEPOSITED B Y 31 ST MARCH. IN OTHER CASES WHERE THE AGGREGATE AMOUNT WAS RS.6,16,73,819 /- WHERE THE PAYMENTS WERE MADE/CREDITED PRIOR TO MARCH AND TDS WAS NOT DEPOSITED WITHIN THE PRESCRIBED TIME, HE UPHELD THE ACTION OF A.O. 6. AGGRIEVED WITH THE ORDER OF THE CIT (A) THE ASSE SSEE IS NOW IN APPEAL BEFORE US. 7. BEFORE US THE LD. A.R. POINTED OUT THAT THE ENTI RE PAYMENT OF TDS HAS BEEN MADE IN ALMOST ALL THE CASES ON 31-10-2005. HE ALSO POINTED OUT TO THE ENTRY TO THE ANNEXURE WHEREIN IN FOUR CASES THE TDS WAS DEPOSITED ON VARIOUS DATES BUT BEFORE FILING OF THE RETURN. THE LD. A. R. THEREFORE, SUBMITTED THAT SINCE THE TDS HAS BEEN MADE BEFORE T HE FILING OF THE RETURN, NO DISALLOWANCE U/S. 40(A)(IA) IS CALLED FOR AND TH E ADDITION MADE BY THE ITA NO. 413/AHD/2009 . ASSESSMENT Y EAR 2005- 06 . 4 A.O. BE DELETED. HE FURTHER RELIED ON THE DECISION IN THE CASE OF SHREEDHAN CONSTRUCTION CO. IN ITA NO.3465/AHD/2008 DATED 13-7 -2012 WHERE THE CO-ORDINATE BENCH OF THE TRIBUNAL AFTER RELYING ON THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATORS I N GA NO.3200/2011 DATED 23-11-2011 AND FOLLOWING THE DECISION OF ITAT C BENCH, AHMEDABAD IN ITA NO.2869/AHD/2011 ORDER DATED 23-3-2012 HAS H ELD THAT SINCE THE TDS WAS DEPOSITED BEFORE THE FILING OF THE RETURN N O ADDITION IS CALLED FOR. HE PLACED ON RECORD COPY OF THE AFORESAID DECISION. ON THE OTHER HAND LD. D.R. SUBMITTED THAT THE A.O. WAS JUSTIFIED IN DISAL LOWING THE PAYMENT MADE U/S. 40(A)(IA) IN VIEW OF THE LAW PREVAILING AT THA T TIME. HE FURTHER RELIED ON THE DECISION OF BOMBAY SPECIAL BENCH IN THE CASE OF BHARATI SHIPYARD LTD. VS. DCIT IN ITA NO.2404/MUM/2009. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE DETAILS OF PAYMENTS FORMING PART O F TAX AUDIT REPORT IT IS SEEN THAT ALL THE PAYMENTS OF TDS HAVE BEEN MADE BE FORE THE FILING OF THE RETURN. 9. IN THE CASE OF ALPHA PROJECTS SOCIETY, (SUPRA) T HE CO-ORDINATE BENCH OF TRIBUNAL HAS HELD AS UNDER:- WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND ORDERS PASSED BY THE AUTHORITIES BELO W. THE ISSUE INVOLVED IN THE PRESENT APPEAL HAS BEEN DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN C REATORS IN G.A. NO.3200/2011 DATED 23-11-2011 AGAINST THE REVENUE. HOWEVER, IT IS NOTEWORTHY THAT THE SPECIAL; BENCH OF ITAT MUMBAI I N THE CASE OF BHARTI SHIPYARD LTD. VS. DCIT IN ITA NO.2404/MUM/20 09 IN ORDER DATED 12-9-2011 HAS TAKEN A VIEW THAT THE AMENDMENT IS PROSPECTIVE ITA NO. 413/AHD/2009 . ASSESSMENT Y EAR 2005- 06 . 5 IN NATURE AND WOULD APPLY ACCORDINGLY. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF VIRGIN CREATORS (SUPRA) THE ORDER OF LD. CIT (A) IS NOT SUSTAINABLE . HENCE, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. THE ASSESSING OFF ICER IS DIRECTED TO DELETE THE DISALLOWANCE OF RS.3,69,568/- AS MADE U/ S. 40(A)(IA) OF THE ACT. 10. IN THE PRESENT CASE IT IS AN UNDISPUTED FACT T HAT TDS HAS BEEN DEPOSITED BEFORE THE FILING OF THE RETURN. WE THER EFORE RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF AL PHA PROJECTS SOCIETY LTD., HOLD THAT IN THE FACTS OF THE PRESENT CASE NO DISALLOWANCE IS CALLED FOR AND THEREFORE, DELETE THE ADDITION MADE BY THE A. O . 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON 30- 11- 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD.S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) XV, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDAB ITA NO. 413/AHD/2009 . ASSESSMENT Y EAR 2005- 06 . 6 1.DATE OF DICTATION 17 - 9 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 6,9 / 11/ 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER