The Dy. Commr. of Income Tax, Circle-1(2), RAJKOT-GUJARAT V. Shri Chhaganbhai Amarsinh Parmar, RAJKOT-GUJARAT

ITA 443/RJT/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4277 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHETAN L AGARWAL
• Keywords: Non-deduction of tax; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 443/RJT/2015 ( ASSESSMENT YEAR : 2011-12) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(2), RAJKOT, ROOM NO.521, AAYAKAR BHAVAN, RACE COURSE RING ROAD, RAJKOT 360 001 / VS. SHRI CHHAGANBHAI AMARSINH PARMAR, ATLAS EXPORTS, PLOT NO.62, BHAKTINAGAR INDL. ESTATE, GIDC, RAJKOT ./ ./ PAN/GIR NO. : AHHPP9112C ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRAVEEN VERMA, SR. D.R. / RESPONDENT BY : SHRI CHETAN L. AGARWAL, A.R. DATE OF HEARING 19/07/2018 !'# / DATE OF PRONOUNCEMENT 02/08/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE CIT(A), JAMNAGAR ( CIT(A) IN SHORT), DATED 24.07.2015 ARISING IN THE ASSESSMENT ORDER DATED ITA NO. 443/RJT/15 [DCIT VS. SHRI CHHAGANBHAI A. PA RMAR] A.Y. 2011-12 - 2 - 29.03.2014 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2011-12. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA DS AS UNDER:- A. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) IS CORRECT IN ALLOWING RELIEF TO THE ASSESSEE ON TH E DISALLOWANCE MADE U/S. 40(A)(IA) OF RS 16,55,865/- IN RESPECT OF COMMISSIO N PAID OUTSIDE INDIA, ON WHICH NO TDS WAS MADE? B. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) IS CORRECT IN ALLOWING THE ABOVE RELIEF BY RELYING UPON CIRCULAR NO. 3/2015 DATED 12.2.2015, WHICH CLARIFIES THAT, FOR THE PURP OSE OF MAKING DISALLOWANCE OF 'OTHER SUM CHARGEABLE' UNDER SECTIO N 40(A)(IA) OF THE I T ACT, THE APPROPRIATE PORTION OF THE SUM WHICH IS CH ARGEABLE TO TAX UNDER THIS ACT SHALL FORM THE BASIS OF SUCH DISALLOWANCE AND SHALL BE THE SAME AS DETERMINED BY THE AO HAVING JURISDICTION FOR THE PU RPOSE OF SECTION 195(1) OF THE ACT, IN ACCORDANCE WITH CBDT INST. NO. 2/201 4 DATED 26.2.2014, WHEREAS, IT IS NOWHERE ESTABLISHED BY THE ID. CIT(A ) THAT THE RECIPIENT IS NOT LIABLE TO TAX IN INDIA? C. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) IS CORRECT IN NOT ADJUDICATING THE ISSUE OF GENUINE NESS OF THE ABOVE COMMISSION EXPENSES OF RS 16,55,865/-? D. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) IS CORRECT IN ALLOWING RELIEF TO THE ASSESSEE ON TH E DISALLOWANCE MADE U/S. 40(A)(IA) OF RS.15,85,498/- IN RESPECT OF PAYMENTS MADE TO CLEARING & FORWARDING AGENT, ON WHICH NO TDS WAS MADE? E. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) IS CORRECT IN ALLOWING THE ABOVE RELIEF BY HOLDING THAT THE SAID PAYMENT IS IN THE FORM OF REIMBURSEMENT MADE TO SHIPPING COMPANY WHICH IS GOVERNED ITA NO. 443/RJT/15 [DCIT VS. SHRI CHHAGANBHAI A. PA RMAR] A.Y. 2011-12 - 3 - BY THE PROVISIONS OF SECTION 172 OF THE I T ACT, WH EREAS, NO BREAK UP OF THIS EXPENDITURE WAS THERE BEFORE THE LD. CIT(A) AND IT IS NOT CLEAR AS TO HOW THE PROVISIONS OF SECTION 172 IS APPLICABLE? F. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) IS CORRECT IN ALLOWING RELIEF TO THE ASSESSEE ON TH E DISALLOWANCE MADE U/S. 40(A)(IA) OF RS. 3,91,246/- AND RS. 66,400/- BEING CLEARING FORWARDING EXPENSES, ON WHICH NO TDS WAS MADE? G. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) IS CORRECT IN ALLOWING THE ABOVE RELIEF OF RS. 3,91 ,246/- AND RS. 66,400/- ON THE GROUND THAT THE RECIPIENT HAS FILED ITS RETURN OF INCOME, WHEREAS, THE PROVISIONS NOWHERE GRANTS EXEMPTION OR EXCEPTION TO SUCH PROCEDURAL FAILURE TO DEDUCT TAX AT SOURCE? 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD.AR FOR THE ASSESSEE THAT THE APPEAL FILED BY THE REVENUE I S HIT BY RECENTLY ISSUED CBDT CIRCULAR NO.3 OF 2018 DATED 11/07/2018 REVISING THE PREVIOUS THRESHOLDS PERTAINING TO TAX EFFECTS. AS PER AFORESAID CIRCULAR, ALL PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE DISMISSED AS A MEASURE FOR REDUCING LITIGATION WHER E THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW REVISED AT RS.20 LAKHS. IN THE INSTANT CASE, THE T AX EFFECT ON THE DISPUTED ISSUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.20 LAKHS AND THEREFORE APPEAL OF THE R EVENUE IS REQUIRED TO BE DISMISSED IN LIMINE . ITA NO. 443/RJT/15 [DCIT VS. SHRI CHHAGANBHAI A. PA RMAR] A.Y. 2011-12 - 4 - 4. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED T HE APPLICABILITY OF THE CBDT CIRCULAR NO. 3 OF 2018. A CCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINA BLE. HOWEVER, IT WILL BE OPEN TO THE REVENUE TO SEEK RESTORATION OF ITS APPEAL ON SHOWING INAPPLICABILITY OF THE AFORESAID CBDT CIRCU LAR IN ANY MANNER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 02/08/2018 TRUE COPY S. K. SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITA T, RAJKOT THIS ORDER PRONOUNCED IN OPEN COURT ON 02/08/20 18