PALASH CORPORATION, MUMBAI V. DCIT CEN CIR 5(3), MUMBAI

ITA 4920/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9854 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH F, MU MBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4920/MUM/2016 (ASSESSMENT YEAR- 2011-12) M/S PALASH CORPORATION 205, COMMERCE HOUSE, 140, N.M. ROAD, FORT, MUMBAI-400023 PAN:AAAFP8597K VS. DCIT, CENTRAL CIRCLE-5(3 ) 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-21. (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. DINKLE HARIYA (AR) REVENUE BY : SHRI RAM TIWARI (DR) DATE OF HEARING : 19.03.2018 DATE OF PRONOUNCEMENT : 19.03.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME-TAX (APPEALS)- 53, MUMBAI, [FOR SHORT THE LD. CIT(A)] DATED 23.06. 2016 FOR ASSESSMENT YEAR 2011-2012 WHICH IN TURN ARISES FROM THE ASSESS MENT ORDER PASSED BY ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT D ATED 14.03.2014. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A)-53, MUMBAI GROSSLY ERRED IN CONFIRMING THE D ISALLOWANCE MADE BY THE DY. CIT, CENTRAL CIRCLE-5(3) (BEFORE REORGANIZATION FORMERLY IT WAS BY. CIT C.C. 36), MUMBAI OF INTEREST EXPENDITURE INCURRED OF RS. 2,71,257/- ON THE CAPITAL BORROWED FOR PURCHASE OF MOTOR CAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A)-53, MUMBAI GROSSLY ERRED IN CONFIRMING THE D ISALLOWANCE MADE BY THE DY. CIT, CENTRAL CIRCLE-5(3) (BEFORE REORGANIZATION FORMERLY IT WAS DY. CIT C.C. 36), MUMBAI OF RS.2,71,257/- UNDER THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT AS THE APPELLANT HAS FAILED TO DEDUCT TDS O N THE SAME. ITA NO. 4920/MUM/2016 - M/S PALASH CORPORATION 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT, FILED ITS RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 30.09.2011. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT BESIDES THE OTHER DISALLOWANCES DISALLOWED RS. 2,71,257/- O N ACCOUNT OF NON- DEDUCTION OF TAX AT SOURCE ON PAYMENT OF INTEREST M ADE TO M/S TATA CAPITAL LTD. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFICER WAS CONFIRMED. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE THE LD. AUTHORIZED REPRESENTATIVE (AR) OF T HE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE ORDER OF AUTHORITIES BELOW. THE LD. AR OF THE ASSESSEE SUBMI TS THAT THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE WHILE MAKING THE PAY MENT OF INTEREST TO M/S TATA CAPITAL LTD. IT WAS SUBMITTED THAT THE SECOND PROVISO IN SECTION 40(A)(IA) IS BROUGHT BY FINANCE ACT 2012 AND IS APP LICABLE W.E.F. 01.04.2013. THE SAID PROVISO IS HELD TO BE RETROSPE CTIVE IN NATURE BY VARIOUS DECISION OF TRIBUNAL AND BY HONBLE DELHI HIGH COUR T IN CIT VS ANSAL LANDMARK TOWNSHIPS (P.) LTD. [2015] (377 ITR 635). THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT TATA CAPITAL LTD. H AS PAID THE TAX ON THE INTEREST INCOME ON PAYMENT OF INTEREST BY ASSESSEE. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT NO DISALLOWANCES WARR ANTED AT THE HAND OF ASSESSEE AND THE MATTER MAY BE RESTORED TO THE FILE OF ASSESSING OFFICER FOR LIMITED PURPOSE FOR VERIFICATION OF PAYMENT ON TAX ON SUCH INTEREST PAYMENT ITA NO. 4920/MUM/2016 - M/S PALASH CORPORATION 3 BY TATA CAPITAL LTD. AND TO GRANT THE RELIEF TO THE ASSESSEE. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE FAIRLY CONCEDED TH AT HE HAS NO OBJECTION, IF THE MATTER IS RESTORED TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION, IF THE RECIPIENT OF THE INTEREST HAS INCLUDED THE INTEREST INCOME IN THEIR RETURN OF INCOME. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND FIND MERIT IN THE SUBMISSION OF LD. AR OF THE ASSESSEE. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED IN THE PRESENT APPEAL IS RESTORED TO THE FIL E OF ASSESSING OFFICER TO VERIFY THE FACT WHETHER THE RECIPIENT OF INTEREST H AVE INCLUDED THE INTEREST INCOME WHILE FILING RETURN OF INCOME. WITH THESE LI MITED DIRECTION THAT IF THE RECIPIENT HAS INCLUDED THE INTEREST INCOME AND HAD PAID THE TAX, THE DISALLOWANCE BE DELETED, HENCE, THE MATTER IS RESTO RE TO THE FILE OF ASSESSING OFFICER TO EXAMINE THE ISSUE AFRESH AND CONSIDER TH E APPLICATION OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT AND PASS TH E ORDER IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHA LL GRANT NECESSARY OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DAY OF MARCH 2018. SD/- SD/- ( RAJESH KUMAR ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 19/03/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. ITA NO. 4920/MUM/2016 - M/S PALASH CORPORATION 4 BY ORDER (ASSTT.REGISTRAR) ITAT, MUMBAI 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE C