Income Tax Officer, Ward-2 Dewas, Dewas V. Shri Narayan Das Goyal, Kannod District Dewas

ITA 486/Ind/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9876 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Keywords: Retrospective amendment; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148

Judgement Text

NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.486/IND/2017 ASSESSMENT YEAR:2011-12 I NCOME TAX OFFICER, WARD-2, DEWAS / VS. SHRI NARAYAN D AS GOYAL, 316, M.G ROAD, KANNOD, DEWAS (REVENUE) (RESPONDENT ) P.A. NO. ABXPG9786D REVENUE BY SHRI P.K.MI T RA , SR. DR RESPONDENT BY SHRI S ANJAY AGRAWAL , CA DATE OF HEARING: 1 9 .09 .201 8 DATE OF PRONOUNCEMENT: 25 .09 .201 8 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL FILED AT THE INSTANCE OF REVENUE PERTAI NING TO A.Y. 2011- 12 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONE R OF INCOME TAX(APPEALS), UJJAIN (IN SHORT CIT(A)), VIDE APPE AL NO. U-544/2016- 17 ORDER DATED 20.04.2017 WHICH IS ARISING OUT OF T HE ORDER U/S 147 R.W.S 143(3) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 20.12.2016 BY ITO-2, DEWAS. NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.10,43, 000/- MADE U/S 40(A)(IA) OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. INCOME OF RS.5,24,640/- AND AGRICULTURE INCOME OF RS.2,84,246/- DECLARED IN THE INCOME TAX RETURN FILED ON 27.09.2011. CASE PICKED UP FOR SCRUTINY. NOTICES ISSUED U/S 143(3) OF THE ACT AND COMPLETED ON 12.02.2014 ACCEP TING THE AGRICULTURE INCOME OF RS.2,84,246/- AND ASSESSING R EMAINING INCOME AT RS.5,84,640/-. SUBSEQUENTLY LD.A.O HAD O BSERVED THAT THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE ON INTE REST PAID TO VARIOUS PARTIES U/S 194A OF THE ACT AND TOOK APPROV AL FROM JCIT FOR REOPENING AND ISSUED NOTICE U/S 148 OF THE ACT DATE D 29.02.2016 DULY SERVED UPON THE ASSESSEE ON 01.03.2016. AFTER RECORDING REASONS NOTICE U/S 143(2) AND 142(1) OF THE ACT WER E ISSUED. DURING THE REASSESSMENT PROCEEDINGS THE LD.AO CAME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT DEDUCTED TAX A T SOURCE ON NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 3 INTEREST OF RS.10,43,000/- PAID TO VARIOUS PARTIES HE DISALLOWED THE SAME U/S 40(A)(IA) AND ASSESSED INCOME AT RS.5,85,6 40/-. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD.CIT(A)AND SUCCEEDED AS THE LD.CIT(A) FOLLOWING THE JUDGMENT O F HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ANSAL LAND MA RK TOWNSHIP (2015) 61 TAXMANN.COM 45 (DELHI) CONCLUDED THE ADJU DICATION BY OBSERVING THAT THE ALLEGED FOUR PERSONS WHO RECEIVE D THE INTEREST OF RS.10,43,000/- FROM THE ASSESSEE, HAVE INCLUDED THE ALLEGED INTEREST IN THEIR RESPECTIVE RETURN OF INCOME AND P AID TAXES THEREON. 5. NOW THE REVENUE IS NOW IN APPEAL BEFORE THE TR IBUNAL. 6. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY A RGUED SUPPORTING THE FINDINGS OF LD. ASSESSING OFFICER. 7. PER CONTRA THE LD. COUNSEL FOR THE ASSESSEE RELI ED ON THE FINDINGS OF LD. CIT(A). NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 4 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD BEFORE US. REVENUES SOLE GRIEVANCE IS AGAINST THE FINDIN GS OF LD.CIT(A) DELETING THE ADDITION OF RS.10,43,000/- MADE BY THE LD. ASSESSING OFFICER ON THE INTEREST OF RS.10,43,000/- PAID TO FOUR PERSONS. THE LD. CIT(A) DELETED THE IMPUGNED DISALLOWANCE OBSERV ED AS FOLLOWS; 4.1 GROUND NO.1:-THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.10,43,0001- ON ACCOUN T OF DISALLOWANCE U/S. 40(A)(IA). THE APPELLANT HAS PAID THE INTEREST OF R S.LO,43,0001- TO THE FOLLOWING PERSONS:- RAM GOPAL SITARAM GOYAL PROP GOBIND GOYAL RS.4,50, 000/- SMT KAMLA BAI RS.2,40,000/- RAVISHANKAR NARAYAN DAS GOYAL HUF RS. L,55,000/- SMT VINITA DEVI GOYAL RS.1,98,000/- THE ABOVE PERSONS HAS ALREADY INCLUDED THE ABOVE RE CEIPT IN THEIR RETURN OF INCOME AND PAID THE TAX THEREON. 4.1.1 AS PER AMENDMENT IN SECTION 40(A)(IA) W.E.F. 1 ST JULY, 2013. IF THE ASSESSEE IS LIABLE TO, DEDUCT TAX AT SOURCE AND IF HE HAS NOT DEDUCTED THE TAX AT SOURCE BUT PAYEE HAS ALREADY DECLARED THE IN COME AND PAID THE TAX ON SUCH SUM AND FURNISHED THE RETURN, THE ASSESSEE CANNOT BE HAS RETROSPECTIVE EFFECT FROM 01.04.2005 AS HELD BY HON 'BLE DELHI HIGH COURT NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 5 IS THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (20 15) 61 TAXMANN.COM 45 (DELHI). WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT- SECTION 40(A)(IA), READ WITH SECTION 194J, OF THE I NCOME-TAX ACT, 1961- BUSINESS DISALLOWANCE-INTEREST ETC. PAID TO A RESID ENT WITHOUT DEDUCTION OF TAX AT SOURCE (SECOND PROVISO )-ASSESSMENT YEAR 200 8-09 AND 2009-10 - WHETHER SECOND PROVISO TO SECTION 40(A)(IA) IS DECL ARATORY AND CURATIVE AND IT HAS RETROSPECTIVE EFFECT FROM 01.04.2005- HELD, YES- WHETHER, THEREFORE, WHERE ASSESSEE MADE PAYMENTS WITHOUT DEDUCTING TAX AT SOURCE UNDER SECTION 194J, SINCE PAYEE HAD FILED RETURN OFFERED SUM RECEIVED FROM ASSESSEE TO TAX, IMPUGNED DISALLOWANCE MADE UNDER S ECTION 40(A) (IA) DESERVED TO BE DELETED ELD, YES [PARAS 13 AND 14] [ IN FAVOUR OF ASSESS] SAME VIEW WAS FOLLOWED BY HON'BLE ITAT INDORE IN TH E CASE OF SHRI DILIP SURYANVANSHI P/O M/S DILIP BUILDERS BHOPAL VS. ACIT 2(1) BHOPAL ITA NO. 84IIND/2015 AY 2015-16. IN THE CASE OF RAJEEV KUMAR AGRAWAL [2014] 45 TAXMA NN. COM 555 (AGRA TRIB) IN THE IT AT AGRA BENCH WAS HELD THAT _ SECTION 40(A)(IA), OF THE INCOME-TAX ACT, 1961 -BUS INESS DISALLOWANCE - INTEREST ETC. PAID TO A RESIDENT WITHOUT DEDUCTION OF TAX AT SOURCE (SECOND PROVISO) - ASSESSMENT YEAR 2006-07 -WHETHER INSERTI ON SECTION PROVISO TO SECTION 40(A)(IA) WITH EFFECT FROM 01.04.2013 IS DE CLARTORY AND CURATIVE IN SECTION 40(A) (IA) WITH EFFECT FROM 01.04.2013 IS D ECLARTORY AND CURATIVE IN NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 6 NATURE AND HAS RETROSPECTIVE FROM 01.04.2005, BEING DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY FINANC E (NO.2) ACTM 2004-HELA YEAS [PARA9] [IN FAVOUR OF ASSESSEE] THE RATIO OF DECISION OF HON'BLE SUPREME COURT IN T HE CASE OF HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. VS. CIT, 211 CTR 545 (S.C.) HELD THAT WHEN THE ASSESS IS IN DEFAULT FOR TDS, THE TAX ALREADY P AID BY RECIPIENT OF INCOME TAX PAYEE HAD ALREADY PAID THE TAXES DUE ON PAYMENT RECEIVED FROM IT FROM THE ASSESSEE. THEREFORE, THE TAX COULD NOT BE RECOVERED ONCE AGAIN FROM THE DEDUCTOR ASSESSEE. THIS ISSUE ALREAD Y STANDS CLARIFIED BY CIRCULAR NO.272/201L95-IT (B) DATED 29.01.1997. KEEPING IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENT S, THE ADDITION MADE BY THE AO AMOUNTING TO RS.LO,43,000/- IS DELETED. T HEREFORE, THE APPEAL ON THIS GROUND IS ALLOWED. 5. IN THE RESULT APPEAL FILED BY THE APPELLANT IS A LLOWED. 9. THE ABOVE FINDINGS OF LD.CIT(A) COULD NOT CONT ROVERTED BY THE DEPARTMENTAL REPRESENTATIVE AND THERE IS NO DISPUTE TO THE FACT THAT THE ALLEGED INTEREST PAID AT RS.10,43,000/- HA S BEEN OFFERED TO TAX BY RESPECTIVE PARTIES IN THEIR REGULAR RETURN O F INCOME AND TAXES HAVE BEEN PAID THEREON. WE FIND THAT THE I.T.A.T. AGRA BENCH IN THE CASE OF RAJEEV KUMAR AGRAWAL (2014) 45 TAXMANN.COM 555 HAS HELD THAT THE PROVISO INSERTED TO SECTION 40(A)(IA) OF THE ACT WITH NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 7 EFFECT FROM 01.04.2013 IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPECTIVE EFFECT FROM 01.04.2005. THIS JUD GMENT OF THE TRIBUNAL WAS DISCUSSED BY HON'BLE HIGH COURT OF DEL HI IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (2015) 61 TAXM ANN.COM 45 (SUPRA ) AND THE VIEW TAKEN BY THE TRIBUNAL WAS CONFIRM ED BY THE HON'BLE HIGH COURT. 10. WE THEREFORE RESPECTFULLY FOLLOWING THE JUDGMEN TS REFERRED ABOVE ARE OF THE VIEW THAT SINCE THE PAYEES WHO REC EIVED THE INTEREST OF RS.10,43,000/- SHOWN THE INTEREST INCOME IN THEI R INCOME TAX RETURN FILED AND OFFERED IT TO TAX, NO DISALLOWANCE WAS CALLED FOR U/S 40(A)(IA) OF THE ACT. WE UPHOLD THE FINDINGS OF LD. CIT(A) AND DISMISS THE REVENUES APPEAL. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25.09.201 8. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIALMEMBER ACCOUNTANTMEMBER INDORE; DATED :25/09/2018 /DEV NARAYAN DAS GOYAL I.T.A. NO. 486/IND/17 8 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE