ITO, New Delhi V. M/s. Shiv Shakti Transport Co., New Delhi

ITA 4293/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3423 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-07-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 17-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L DIHANA
• Assessee Lawyers: ABHISHEK VERMA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE THE HONBLE VICEPRESIDENT, SHRI G.E. VEERABHA DRAPPA, AND SHRI I. P. BANSAL, JUDICIAL MEM BER. I. T. APPEAL NO. 4293 (DEL) OF 2010 ASSESSMENT YEAR : 2007-08. THE INCOME-TAX OFFICER, M/S. SH IV SHAKTI TRANSPORT CO., W A R D : 32 (2), VS. 203, VARDHMA N MARKET, 2 ND FLOOR, N E W D E L H I. PLOT NO. 1, WEST ENCLA VE, GURU HARKISHAN RAI ROAD, PITAM PURA, ND P A N / G I R NO. AAZ FS 6180 Q. ( APPELLANT ) ( RE SPONDENT ) ASSESSEE BY : SHRI RAJIV SAXENA, ADV.; & SHRI ABHISHEK VERMA, ADV.; DEPARTMENT BY : SHRI H. L. DIHANA [CIT] D . R. O R D E R. PER I. P. BANSAL, JM : THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER PASSED BY THE LD. CIT (APPEALS) DATED 12 TH JULY, 2010 FOR ASSESSMENT YEAR 2007-08. 2. GROUNDS OF APPEAL READ AS UNDER :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT (APPEALS) WAS NOT RIGHT IN ALLOWING THE DISALLOWANCE OF RS.3,12,75,922/- MA DE BY AO UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 AND RULE 30(1 ) OF THE INCOME TAX RULES, 2 I. T. APPEAL NO. 4293 (DEL) OF 2010 1962 BY DISREGARDING THE FACTS THAT THE ASSESSEE HA D NOT DEPOSITED TDS ON THE ABOVE AMOUNT ON OR BEFORE THE LAST DAY OF THE PREVI OUS YEAR, AS REQUIRED BY THE STATUTE; 2. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD. CIT (APPEALS) WAS NOT RIGHT IN LAW IN ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46-A OF THE INCOME TAX RULES, 1962 WHICH WAS NOT FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO IN RESPECT OF PAYMENTS MA DE IN THE FORM OF ADVANCES PAYABLE TO SUB-CONTRACTORS AMOUNTING TO RS.10,73,82 2/-. 3. THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN R UNNING OF COMMERCIAL VEHICLES ON HIRE / CONTRACT BASIS. APROPOS GROUND NO. 1, DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE ASSESSING OFFICER THAT ASSESSEE DID NO T DEPOSIT THE TAX AFTER DEDUCTING IT FROM THE PAYMENTS MADE TO THE SUB-CONTRACTORS WITHIN THE STA TUTORY PERIOD PRESCRIBED FOR THE PAYMENT OF THE SAME. THE ASSESSING OFFICER HAS TABULIZED THE DETAILS OF THESE PAYMENTS WHICH PERTAINS TO MONTHS OCTOBER TO FEBRUARY AND THE DETAIL OF WHICH IS AS UNDER :- MONTH T D S PAYABLE DUE DATE FOR PAYMENT T D S UNDER SECTION OCTOBER 14,592/- (SHORT 09-11-2006 194-C. PAYMENT). NOVEMBER 83,691/- 07-12-2006 194-C. DECEMBER 64,558/- 07-01-2007 194-C. JANUARY 71,922/- 07-02-2007 194-C. FEBRUARY 87,379/- 07-03-2007 194-C. 4.1 ACCORDING TO ASSESSING OFFICER THE ASSESSEE WAS REQUIRED TO DEPOSIT THE TDS FOR THESE MONTHS BEFORE 31 ST MARCH, 2007 AND THE FAILURE OF THE ASSESSEE TO DO SO HAS ENTAILED IT FOR DISALLOWANCE TO BE MADE UNDER SECTION 40(A)(IA) OF THE INCOME-TAX ACT, 1961 [ACT]. LOOKING INTO THE RATE OF DEDUCTION OF TAX WHICH IS 1.03 PER CENT, ON THE AMOUNT OF DEFAULT OF TDS OF RS.3,22,142/- THE ASSESSING OFFICER HAS CALCULAT ED THE DISALLOWANCE AT RS.3,12,75,922/- AND ACCORDINGLY THE DISALLOWANCE WAS MADE. IT HAS ALSO BEEN MENTIONED IN THE ASSESSMENT ORDER THAT AS PER FORM 3-CD THE ASSESSEE WAS REQUIRED TO PAY TDS OF RS.4,62,966/- AS ON 31 ST MARCH, 3 I. T. APPEAL NO. 4293 (DEL) OF 2010 2007 AND THE DEFAULT OF THE ASSESSEE HAS ALREADY BE EN MENTIONED IN RESPECT OF AFORE-MENTIONED ITEMS TO THE EXTENT OF RS.3,22,142/- AND THE BALANC E AMOUNT OF TDS OF RS.1,40,824/- RELATES TO MONTH OF MARCH WHICH WAS REQUIRED BY THE ASSESSEE T O BE DEPOSITED BEFORE THE DUE DATE OF FILING OF THE RETURN. THE RETURN HAS BEEN FILED BY THE AS SESSEE ON 1 ST NOVEMBER, 2007. VIDE LETTER DATED 10 TH NOVEMBER, 2009 THE ASSESSEE HAD SUBMITTED COPIES O F TDS CHALLANS, THE DETAILS OF WHICH WAS AS UNDER :- (I) RS.4,58,500 DATED 31 ST OCTOBER, 2007; (II) RS.29,945/- DATED 02 ND NOVEMBER, 2007, WHICH INCLUDED THE INTEREST ALSO. 4.2 IN THESE CIRCUMSTANCES THE ASSESSING OFFICER, I NTER ALIA, HAD MADE THE AFORE-MENTIONED DISALLOWANCE OF RS.3,12,75,922/-, THE DELETION OF W HICH HAS BEEN CHALLENGED BY THE REVENUE IN GROUND NO. 1. THE LD. CIT (APPEALS) HAS DELETED SU CH DISALLOWANCE ON THE GROUND THAT ONLY AMOUNTS PAYABLE ARE TO BE TAKEN INTO CONSIDERATION IN MAKING THE DISALLOWANCE OF AN EXPENDITURE ON WHICH TDS IS NOT DEDUCTED OR DEDUCTED, BUT NOT P AID ON THOSE AMOUNTS WHICH ARE ALREADY PAID EVEN IF TAXES NOT DEDUCTED OR DEDUCTED, BUT NOT PAI D ARE NOT COVERED FOR MAKING DISALLOWANCE UNDER SECTION 40(A)(IA) AND THESE FINDINGS OF THE L D. CIT (APPEALS) ARE MENTIONED IN PARA 7.7 OF THE IMPUGNED ORDER IN WHICH HE HAS FOLLOWED THE DEC ISION OF ITAT IN THE CASE OF RAJASTHAN VIDYUT VITRAN NIGAM VS. DCIT 123 TTJ 888. 5. APROPOS SECOND GROUND, IT WAS NOTICED BY THE ASS ESSING OFFICER THAT THE FOLLOWING ADVANCES WERE SHOWN BY THE ASSESSEE TO HAVE BEEN MA DE TO SUB-CONTRACTORS UNDER THE HEAD CURRENT ASSETS IN THE BALANCE SHEET :- A) CHETAN CHANDANA RS. 4,64,303/- B) DIPESH CHANDANA RS. 3,16,538/- C) RESHAMA CHANANA RS. 2,91,801/- D) BULK TRANS PVT. LTD. RS. 1,180/- TOTAL : RS.10,73,822/- ============ 4 I. T. APPEAL NO. 4293 (DEL) OF 2010 6. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE ON THESE ADVANCE PAYMENTS ALSO AND AS, ACCORDING TO THE ASSE SSING OFFICER, THE ASSESSEE HAD FAILED TO DEDUCT TDS ON SUCH AMOUNT HE HAD MADE THE DISALLOWA NCE. FOR THE REASONS MENTIONED ABOVE, THE LD. CIT (APPEALS) HAS DELETED THIS DISALLOWANCE ALSO. A REMAND REPORT WAS OBTAINED FROM THE ASSESSING OFFICER ON THE FACTS SUBMITTED BY THE ASS ESSEE ACCORDING TO WHICH IT WAS SUBMITTED THAT OUT OF TOTAL ADVANCES OF RS.10,73,822/- ONLY RS.14, 110/- PERTAINING TO MR. DIPESH CHANDANA AND RS.47,804/- TO SHRI CHETAN CHANDANA, TDS WAS NOT DE DUCTED AND SUCH FACT IS RECORDED IN PARA 7.3 OF THE ORDER OF THE LD. CIT (APPEALS). HOWEVER , THE LD. CIT (APPEALS) HAS DELETED THE DISALLOWANCE BY COMBINING THIS ISSUE ALSO ALONG WIT H THE FIRST ISSUE BY FOLLOWING HIS ORDER ON THE FIRST ISSUE. THE DEPARTMENT IS AGGRIEVED WITH SUCH FINDINGS OF THE LD. CIT (APPEALS) AND HAS FILED THE AFORE-MENTIONED GROUND OF APPEAL. 7. AFTER NARRATING THE FACTS THE LD. SR. DR RELYING UPON THE ASSESSMENT ORDER PLEADED THAT THE ASSESSEE HAS FAILED TO DEPOSIT TDS WITHIN THE PERIO D PRESCRIBED TO MAKE THE PAYMENT OF SUCH TDS, HENCE THE ASSESSING OFFICER WAS RIGHT IN MAKIN G THE DISALLOWANCE AND IT HAS WRONGLY BEEN DELETED BY THE LD. CIT (APPEALS). FOR SECOND GROUN D IT IS THE CASE OF THE LD. SR. DR THAT WITHOUT FOLLOWING THE PROCEDURE LAID DOWN IN RULE 46-A OF I NCOME TAX RULES, 1962 THE LD. CIT (APPEALS) HAS WRONGLY ADMITTED THE ADDITIONAL EVIDE NCES ON THE BASIS OF WHICH DELETION HAS BEEN MADE BY HIM. ACCORDING TO THE LD. SR. DR, UNLESS A SSESSEE SUBMITTED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, THE ASSESSEE WAS NOT ENTITLED TO FILE ADDITIONAL EVIDENCE AND IN THE ABSENCE OF SUCH APPLICATION THE ADDITIONAL EVID ENCE HAS WRONGLY BEEN ADMITTED BY THE LD. CIT (APPEALS). THE LD. SR. DR DID NOT CONTROVERT FACTU AL ASPECT OF THE MATTER ACCORDING TO WHICH THE ASSESSEE HAS BEEN STATED TO HAVE DEPOSITED THE ENTI RE AMOUNT OF TDS BEFORE THE DUE DATE OF FILING THE RETURN, WHICH IN THE PRESENT CASE, HAS BEEN MEN TIONED BY THE LD. CIT (APPEALS) AS 15 TH NOVEMBER, 2007 AND WHICH HAD BEEN ADMITTED BY THE A SSESSING OFFICER ON ACCOUNT OF REMAND REPORT FILED BY HIM. 8. ON THE OTHER HAND, RELYING UPON THE ORDER OF THE LD. CIT (APPEALS) IT IS A CASE OF THE LD. AR THAT RELIEF HAS RIGHTLY BEEN GIVEN TO THE AS SESSEE. IT WAS SUBMITTED BY THE LD. AR THAT APART 5 I. T. APPEAL NO. 4293 (DEL) OF 2010 FROM THE AFORE-MENTIONED DECISION OF THE TRIBUNAL R ELYING UPON WHICH THE RELIEF HAS BEEN GIVEN BY THE LD. CIT (APPEALS) THE CASE OF THE ASSESSEE I S ALSO TO BE DECIDED IN FAVOUR OF THE ASSESSEE, ACCORDING TO THE DECISION OF THE TRIBUNAL IN THE CA SE OF SHRI KANUBHAI RAMJIBHAI MAKWANA VS. INCOME TAX OFFICER REPORTED AS 2010 TIOL 765 ITAT AHM [ORDER DATED 03 RD DECEMBER, 2010] A COPY OF WHICH WAS PLACED ON OUR R ECORD. ACCORDING TO THE SAID DECISION THE AMENDMENT IN THE PROVISIONS OF SECTION 40(A)(IA) AS AMENDED BY THE BY FINANCE ACT, 2010 WITH EFFECT FROM 1/04/2010, WHICH HAS NEWLY BEEN INSERTE D BY FINANCE (NO.2) ACT, 2004, WITH EFFECT FROM 1 ST APRIL, 2005 TO SECTION 40 OF THE ACT IS REMEDIAL I N NATURE, DESIGNED TO ELIMINATE UN- INTENDED CONSEQUENCES WHICH MAY CAUSE UNDUE HARDSHI P TO THE TAXPAYERS AND WHICH MADE THE PROVISION UN-WORKABLE OR UN-JUST IN A SPECIFIC SITU ATION, AND IS OF CLARIFICATORY NATURE AND, THEREFORE, HAS TO BE TREATED AS RETROSPECTIVE WITH EFFECT FROM 1 ST APRIL, 2005, THE DATE ON WHICH SECTION 40(A)(IA) HAS BEEN INSERTED BY THE FINANCE (NO.2) ACT, 2004. THEREFORE, HE PLEADED THAT THE AMENDMENT MADE BY FINANCE ACT, 2010 IS CLARIFIC ATORY IN NATURE AND HENCE IF THE TDS IS DEPOSITED BY THE ASSESSEE WITHIN THE TIME PRESCRIBE D UNDER SECTION 139(1) THEN NO DISALLOWANCE COULD BE MADE IN THE CASE OF THE ASSESSEE AS ENTIRE TDS WAS PAID BEFORE THAT DATE. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE FACTS MENTIONED ABOVE ARE UNDISPUTE D. THE ASSESSEE HAS PAID ENTIRE TAX DEDUCTED AT SOURCE ON OR BEFORE 2 ND NOVEMBER, 2007. THE DUE DATE OF FILING OF RETURN AS ADMITTED BY THE ASSESSING OFFICER IN THE REMAND REPORT IS 15 TH NOVEMBER, 2007 [REFERENCE IS MADE TO PARA 7.3 OF THE ORDER OF THE LD. CIT (APPEALS)]. THEREFORE, APPLYING THE AFORE-MENTIONED RATIO OF AHMEDABAD BENCH OF THE ITAT IN THE CASE OF SHRI KAN UBHAI RAMJIBHAI MAKWANA VS. INCOME TAX OFFICER (SUPRA), WE FIND NO INFIRMITY IN THE OR DER OF THE LD. CIT (APPEALS) VIDE WHICH THE IMPUGNED ADDITIONS HAVE BEEN DELETED, THOUGH FOR DI FFERENT REASONS VIDE WHICH HE HAS FOLLOWED THE DECISION OF ITAT IN THE CASE OF RAJASTHAN VIDYU T VITRAN NIGAM VS. DCIT (SUPRA). ACCORDING TO THE FACTS STATED BY THE ASSESSEE, THE TDS WAS ALSO DEDUCTED ON THE ADVANCES OF RS.10,73,822/- EXCEPT PALTRY SUMS OF RS.14,110/- PE RTAINING TO MR. DIPESH CHANDANA AND RS.47,804/- PAYABLE TO MR. CHETAN CHANDANA, BUT THE FACT REMAINS THAT NO DEFAULT OF PAYMENT OF TDS HAVE BEEN FOUND BY THE ASSESSING OFFICER REGARD ING THE QUANTUM OF TDS. SO AS TO RELATES TO ARGUMENT OF THE REVENUE THAT THERE IS A VIOLATION O F RULE 46-A IT MAY BE MENTIONED THAT AS EVEN 6 I. T. APPEAL NO. 4293 (DEL) OF 2010 IF THE ADDITIONAL EVIDENCE HAD BEEN FILED BY THE AS SESSEE, THE SAME WAS SENT TO THE ASSESSING OFFICER AND A REMAND REPORT HAD BEEN OBTAINED AND O N THE BASIS OF THAT REMAND REPORT, THE LD. CIT (APPEALS) HAD RENDERED HIS DECISION. THEREFORE, IT CANNOT BE SAID THAT THERE IS VIOLATION OF RULE 46-A. THERE IS NO FORCE IN SUCH GROUND OF THE REVE NUE. 10. IN VIEW OF ABOVE DISCUSSION, THE APPEAL FILED B Y THE REVENUE, BEING DE VOID OF MERIT, IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 22 ND JULY, 2011. SD/- SD/- [ G. E. VEERABHADRAPPA ] [ I. P. BANSAL ] VICE PRESIDENT. JUDICIAL MEM BER DATED : 22 ND JULY, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT. 7 I. T. APPEAL NO. 4293 (DEL) OF 2010