S.Albert & Co. Pvt. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 435/CHNY/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2642 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2015
• Court: TRIBUNAL
• Department Lawyers: M M BHUSARI
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NO. 435/MDS/2015 / ASSESSMENT YEAR : 2010-11 M/S. S. ALBERT & CO. P. LTD., NO.13/1, WHANNELS ROAD, EGMORE, CHENNAI 600 008. PAN AADCS9670C ( /APPELLANT) V. THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-VI(1), CHENNAI.. RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI M.M.BHUSARI, CIT ! / DATE OF HEARING : 19.11.2015 '# ! / DATE OF PRONOUNCEMENT : 14.01.2016 & / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 30 .12.2014 FOR THE ASSESSMENT YEAR 2010-11. - - ITA 435/15 2 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO DISALLOWANCES U/S.40(A)(IA) OF THE ACT I N RESPECT OF LABOUR CHARGES OF ` 1,25,43,747 AND ` 25,14,375/- TOWARDS CRANES, FEL & MOVERS AND ANOTHER ` 3,00,000/- RELATING TO LEGAL FEES AND ` 7,50,000/- TOWARDS CHARTER FEE. 3. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THA T THESE PAYMENTS ARE NOT OUTSTANDING AT THE END OF THE CLOS E OF THE ASSESSMENT YEAR. BEING SO, THE SPECIAL BENCH DECIS ION OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSP ORTS V. ACIT (136 ITD 23)[VISAKHAPATNAM] IS APPLICABLE. 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. SIMILAR ISSUE WAS CONSIDERED BY THIS TR IBUNAL IN THE CASE OF SHRI N. PALANIVELU V. ITO IN ITA NO.618/MDS /2015 DATED 29.4.2015, WHEREIN IT WAS HELD AS UNDER: 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ACIT (2012) 136 ITD 23 (VISAKHAPATNAM) AND JUDGMENT OF GUJARAT HIGH COURT - - ITA 435/15 3 IN THE CASE OF CIT VS. M/S. VECTOR SHIPPING SERVICE S (P) LTD IN ITA NO.122 OF 2013 DATED 09.7.2013 HELD THAT SEC 40(A)(IA) IS NOT APPLICABLE WHEN THERE IS NO OUTSTANDING BALANCE AT THE END OF THE CLOSE OF THE YEAR RELEVANT TO THE ASSESSMENT YEAR IN RESPECT OF THESE PAYMENT. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD, THE DETAILS OF OUTSTANDING EXPENSES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WHETHER THE IMPUGNED AMOUNT IS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSME NT YEAR EITHER IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENCE, IN THE INTEREST OF JUSTICE, WE ARE REMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSI NG OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE AND THE ASSESSEE SHALL PLACE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM. 4. FURTHER, WE MAKE IT CLEAR THAT IF THE IMPUGNED M OUNT IS NOT OUTSTANDING AT THE END OF THE CLOSE OF THE ASSESSMENT YEAR IN RESPECT OF THE EXPENSES EITHER A S OUTSTANDING EXPENSES OR AS SUNDRY CREDITORS, THIS AMOUNT CANNOT BE DISALLOWED. THIS GROUND IS REMITTE D BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATI ON. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, WE ARE INCLINED TO REMIT THIS ISSUE BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION WITH SIMILAR DIRECTION. 6. THE NEXT GROUND IN THIS APPEAL IS WITH REGARD TO CONFIRMING THE DISALLOWANCE OF ` 1,70,516/- U/S.40A(3) OF THE ACT. 7. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAS MADE PAYMENTS IN EXCESS OF STATUTORY LIMIT OTHERWISE THA N BY CHEQUE - - ITA 435/15 4 OR DEMAND DRAFT. AS SUCH, THE ASSESSING OFFICER IN VOKED THE PROVISIONS OF SEC.40A(3) OF THE ACT AND THE SAME WA S CONFIRMED BY THE CIT(APPEALS). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THERE IS NO DISPUTE THAT THESE PAYMENTS ARE MADE IN EXCESS OF ` 20,000/- OTHERWISE THAN BY CROSS CHEQUE OR DEMAND DRAFT AND THE ASSESSEE WAS NOT ABLE TO SHOW ANY EXC EPTIONS IN NOT APPLYING THE PROVISIONS OF SEC.40A(3) OF THE AC T. BEING SO, WE HAVE NO HESITATION IN CONFIRMING THE ORDER OF TH E C.I.T.(APPEALS) ON THIS ISSUE. ACCORDINGLY, THIS G ROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 14 TH OF JAN., 2016 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 14 TH JAN., 2016. MPO* - - ITA 435/15 5 ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.