DCIT 8(2), MUMBAI V. LE-SHARK EXPORTS P.LTD, MUMBAI

ITA 4930/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88692 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A L SHARMA ITA NO MUM
• Assessee Lawyers: R N DSOUZA
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . , , BEFORE SHRI D. MANMOHAN, VICE PRESIDENT, AND SHRI SANJAY ARORA , A CCOUNTANT MEMBER . / ITA NO . 4930/MUM/2013 / ASSESSMENT YEAR: 2009 - 10 DCIT - 8(2) ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400 020. VS. M/S. LESHARK EXPORTS PVT. LTD. 307, PREMSONS INDL. ESTATE 3 RD FLOOR, TAHIRA COM POUND CAVES ROAD, JOGESHWARI (E) MUMBAI - 400 0 60 MUMBAI. ( / ASSESSEE) ( / RESPONDENT ) P.A. NUMBER : AAACL 2749 Q / ASSESSEE BY SHRI R.N. D SOUZA /REVENUE BY : SHRI A.L. SHARMA 2 ITA NO. 4930/MUM/2013 / DATE OF HEARING : 23/3/2015 / DATE OF PRONOUNCEMENT : 23/03/2015 / O R D E R PER SANJAY ARORA ( A M) : THIS IS AN APPEAL FILED BY THE REVENUE IMPU GNING THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS) - 17 MUMBAI, DATED 15.04.2013 F OR THE AY - 2009 - 10. THE GROUND S OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ER RED IN DELETING THE PROPORTIONATE DISALLOWANCE U/S. 40(A)(IA) OF RS.10,25,278/ - OBSERVING THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE TO THE SHORT DEDUCTION OF TDS IGNORING THE LEGISLATIVE INTENT OF INTRODUCING THE PROVISIONS OF SECTION 40( A)(IA). 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3 ITA NO. 4930/MUM/2013 2. GROU ND NO.1 AND 2 RELATES TO THE DELETION OF ADDITION OF RS.10,25,278/ - U/S. 40(A)(IA) OF THE ACT. THE BRIEF FACTS LEADING TO THE PRESENT APPEAL ARE AS FOLLOWS. THE RESPONDENT - ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORTING OF READY - MADE GARMENTS. FOR THE AY THE APPELLANT HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,91,31,260/ - . AS AGAINST THE SAID RETURN OF INCOME , ASSESSMENT WAS FINALLY COMPLETED UNDER PROVISIONS OF SECTION 143(3) VIDE ORDER DATED 8.12.2011 AT TOTAL INCOME OF RS.2,89,57,870/ - AFTER MAKING SEVERAL DISALLOWANCES. ONE OF THE DISALLOWANCES , WITH WHICH WE ARE CONCERNED , PERTAIN S TO THE ADDITION MADE U/S. 40(A)(IA) , BEING THE AMOUNT PAID FOR LAB TESTING TO M/S. B UREAU VERITAS CONSUMER PRODUCTS SERVICES (I) PVT. LTD. , ON THE GROUND THAT THE ASSESSEE - COMPANY SHOULD HAVE DEDUCTED TDS AT 10.3% U/S. 194J AND NOT AT 2.06% , I.E., AS PER THE PROVISION OF SECTION 194C. 3. AGGRIEVED BY THE ABOVE ORDER OF ASSESSMENT, THE ASSESSEE - COMPANY FILED APPEAL BEFORE T HE LD. CIT(A) . I T WAS U RGED THAT THE PROVISIONS OF SECTION 40(A)(IA) SHOULD NOT BE APPLIED IN THE CASES WHERE THERE WAS SHORT DEDUCTION OF TAX AT SOURCE FOR THE REASON / S OF BONAFIDE DIFFERENCES OF OPINION 4 ITA NO. 4930/MUM/2013 ON THE APPLICABILITY OF THE EXACT PROVISIONS OF THE ACT , I . E., UNDER WHICH TAX AT SOURCE WAS DEDUCTIBLE. IN SUPPORT OF THIS PRO POSITION OF LAW , THE ASSESSEE RELIED UPON THE FOLLOWING DECISION S OF THE CO - ORDINATE BENCHES : I) SUNBELL ALLOYS COMPANY OF INDIA LTD. (ITA NO.89 66/MUM/2010 AND 6178/MUM/2011) AND II) S.K. TEKRIWAL VS. DCIT (ITA NO.1135/KOL/2010 DAT ED 21.10.2011) . 3.1 THE LD. COMMISSIONER OF INCOME TAX(APPEALS) FOLLOWING THE RATIO LAID DOWN IN THE ABOVE DECISIONS OF THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE COMPANY. HENCE, THE PRESENT APPEAL BY THE REVENUE. 4. BEFORE US, THE LD. DR VEHEMENTLY ARGUED THAT THE ORDER OF THE LD. CIT(A) CANNOT BE SUSTAINED ON ACCOUNT OF THE FACT THAT THERE WERE CASES WHERE NO TDS WAS MADE AT ALL. HENCE, THE DECISIONS RELIED UPON BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS) CANNOT BE MADE APPLICABLE TO THE PRESENT CASE . HOWEVER, HE HAD NO SERIOUS OBJECTION TO THE PROPOSITION OF LAW CANVASSED BY THE LD. AR THAT NO DISALLOWANCE CAN BE MADE FOR SHORT DEDUCTION OF TDS. THE LD. AR HAD VEHEMENTLY ARGUED AND SUPPORTED THE ORDER OF LD. COMMISSIONER OF 5 ITA NO. 4930/MUM/2013 INCOME TAX(APPEALS) AND PL ACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS. 1. CIT VS. S.K. TEKRIWAL, (2013) 260 CTR (CAL.)73; 2. DCIT VS. M/S. BLR INDIA P. LTD., ITA NO.5793/MUM/2010 DATED 16.11.11 ; 3. PUNIT SECURITIES PVT. LTD. VS. ACIT, ITA NO.1212/MUM/2013 DATED 21.11.2014; 4. D CIT VS. CHANDABHOY & JASSOBHOY, (2012) 49 SOT 448 (MUM.); 5. HIGHLIGHT PICTURES (INDIA) PVT. LTD. VS. ACIT, (2014) 65 SOT 192 (MUM.); 6. U.E. TRADE CORPORATION (INDIA) LTD., (2012) 54 SOT 596 (DEL.); 7. APOLLO TIRES LTD. VS. DCIT, (2013) 155 TTJ (COC.) 470; 8. S UNBELLS ALLOYS CO. OF INDIA PVT. LTD. VS. ACIT, ITA NO.8966/MUM/2010 AND 6178/MUM/2011 DATED 22.8.2012 AND 9. EGS SURVEY P. LTD. VS. ACIT, ITA NO.6281/MUM/2011 DATED 10.08.2012 . 6 ITA NO. 4930/MUM/2013 5. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE MATERIAL ON RECOR D. AFTER GOING THROUGH THE ASSESSMENT ORDER , WE NOTICE THAT THE IMPUGNED DISALLOWANCE WAS MADE ON THE SOLE GROUND THAT THERE WAS SHORT DEDUCTION OF TAX AT SOURCE AND THE ARGUMENT OF THE LD. DR CANNOT BE ACCEPTED. IT IS BROUGHT TO OUR NOTICE THAT THE CALCUTTA TR IBUNAL DECISION IN THE CASE OF S.K. TEKRIWAL VS. DCIT WAS AFFIRMED BY HONBLE CALCUTTA HIGH COURT VIDE 361 ITR 432 . IN THE LIGHT OF SEVERAL DECISIONS OF THE CO - ORDINATE BENCHES CITED SUPRA, WE HAVE NO HESITATION TO AFFIRM THE ORDER OF LD. CIT(A) AND DISMI SS THE GROUNDS OF APPEAL BY THE REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT 23 / 03/ 2015. SD/ - SD/ - ( D. MANMOHAN ) ( SANJAY ARORA ) VICE PRESISDENT ACCOUNTANT MEMBER MUMBAI, DATED 23/3/2015 JV, SR. PS / . . 7 ITA NO. 4930/MUM/2013 / COPY OF THE ORDER FORW ARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI