GOENKA VASANT KUMAR VINAY KUMAR, Akola V. I.T.O. WARD -1, Akola

ITA 497/NAG/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4504 (ITAT-NAGPUR)
• Duration Of Justice: 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 12-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS

Judgement Text

1 ITA NO. 497/NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 497 /NAG/2016 ASSESSMENT YEAR : 2007 - 08. GOENKA VASANT KUMAR VINAY KUMAR, THE INCOME - TAX OFFICER, AKOLA. VS. WARD - 1, AKOLA. PAN ACFPG8530J. APPELLANT. RESPONDENT. APPELLANT BY : SHRI K.P. DEWANI. RESPONDENT BY : SMT. AGNES P. THOMAS. DATE OF HEARING : 0 6 - 10 - 2016 DATE OF PRONOUNCEMENT : 7 TH OCT., 2016 O R D E R. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 02 - 06 - 2016 AND PERTAINS TO ASSESSMENT YEAR 2007 - 08. THE GROUNDS OF APPEAL READ AS UNDER : 1. THE ORDER PASSED IS ILLEGAL, INVALID AND BAD IN LAW. 2. THE LEARNED A.O. ERRED IN MAKING ADDITION AT RS.2,75,000/ - UNDER SECTION 40(A)(IA) OF I.T. ACT, 1961 ON ACCOUNT OF NON - DEDUCTION OF TDS ON LEASE RENT PAID DURING THE YEAR. 3. THE HONBLE CIT(A) ERRED IN UPHOLDING THE ADDITION MADE BY A.O. AT RS.2,75,000/ - U/S 40(A)(IA) OF I.T . ACT, 1961. 4. THE ASSESSEE DENIES LIABILITY TO PAY INTEREST UNDER SECTION 234A, 234B, 234C AND 234D OF I.T. ACT, 1961. WITHOUT PREJUDICE, LEVY OF INTEREST UNDER SECTION 234A, 234B, 234C AND 234D OF I.T. ACT, 1961 IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 2 . IN THIS CASE THE AO MADE THE ADDITION OF RS.2,75,000/ - U/S 40(A)(IA) ON ACCOUNT OF NON DEDUCTION OF TDS ON PAYMENT MADE FOR LEASE RENT. THE ASSESSEE 2 ITA NO. 497/NAG/2016. SUBMITTED BEFORE THE LEARNED CIT(APPEALS) THAT THE LEASE RENT WAS ACTUALLY PAID DURING THE YEAR AND THE A MOUNT WAS NOT PAYABLE OR OUTSTANDING. LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED BEFORE THE LEARNED CIT(APPEALS) THAT THERE ARE CONFLICTING DECISIONS ON THIS ISSUE , THAT THERE IS NO JURISDICTIONAL HIGH COURT DECISION. THE ASSESSEES PLEA TO FOLLOW HIGH COURT DECISION IN FAVOUR OF THE ASSESSEE PARTICULARLY THE ALLAHABAD HIGH COURT DECISION SLP AGAINST WHICH HAD BEEN DISMISSED BY THE HONBLE APEX COURT WAS NOT ACCEPTED BY THE LEARNED CIT(APPEALS). THE LEARNED CIT(APPEALS) IN HIS WISDOM CHOSE TO FOLLOW TH E DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT AND HELD THAT T HE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE E VEN WHEN THE SAID AMOUNT HAS BEEN PAID AND IS NOT OUTSTANDING AT THE CLOSE OF THE YEAR. 3. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE THE ITAT. 4. LEARNED COUNSEL OF THE ASSESSEE IN THIS REGARD PLACED RELIANCE UPON THE DECISION OF THIS ITAT IN ITA NO. 333/NAG/2014 IN THE CASE OF M/S CHADDA TRANSPORT VIDE ORDER DATED 25 - 02 - 2016 WHEREIN IDENTICAL ISSUE HAD BEEN DISCUSSED. HENCE HE PLEADED THAT THE SAME VIEW MAY ALSO BE ADOPTED IN THIS CASE . 5. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF LEARNED CIT(APPEALS) AND ALSO SUBMITTED THAT THE LEARNED CIT(APPEALS) HAS CONSIDERED THE LATEST HONBLE PUNJAB & HARYANA HIGH COURT DECISION. HENCE S HE PLEADED THAT THE ORDERS OF THE LEARNED CIT(APPEALS) SHOULD BE UPHELD. 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. I FIND THAT THIS ITAT IN IDENTICAL SITUATION IN THE CASE OF CHADDA TRANSPORT (SUPRA) CONSIDE RED THE SIMILAR ISSUE AS UNDER : 12. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. FIRST WE DEAL WITH THE ISSUE ON THE GROUND THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED INASMUCH AS THE ENTIRE FREIGHT EXPENDITURE IS PAID AND NOTHING IS PAYABLE AS ON 31 - 03 - 2007. THE FACTS IN 3 ITA NO. 497/NAG/2016. THIS REGARD ARE UNDISPUTED. THE ASSESSEES PLEA IS THAT THE ENTIRE FREIGHT AMOUNT WAS PAID AND NOTHING IS PAYABLE AS ON 31 - 03 - 2007, AND THAT THIS IS DULY REFLECTED BY A PERUSAL OF THE BALANCE SHE ET/PROFIT & LOSS ACCOUNT WHERE NO AMOUNT IS PAYABLE AS ON 31 - 03 - 2007. IN THIS REGARD LEARNED COUNSEL OF THE ASSESSEE HAS PLACED RELIANCE UPON CIT VS. VECTOR SHIPPING SERVICES (P) LTD. 357 ITR 642 (ALL.). IN THE SAID CASE HONBLE ALLAHABAD HIGH COURT HAS UP HELD THE FINDING THAT WHEN THE EXPENSES INCURRED BY THE ASSESSEE IS TOTALLY PAID AND NOT REMAINED PAYABLE AS AT THE END OF THE RELEVANT ACCOUNTING PERIOD, PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE. THE HIONBLE HIGH COURT IN PARA 10 OF THE ORDER H AS CONCLUDED AS UNDER : IT IS TO BE NOTED THAT FOR DISALLOWING EXPENSES FROM BUSINESS AND PROVISION ON THE GROUND THAT TDS HAS NOT BEEN DEDUCTED, THE AMOUNT SHOULD BE PAYABLE AND NOT WHICH HAS BEEN PAID BY THE END OF THE YEAR. 13. REVENUES APPEAL AGAIN ST THE ABOVE SAID DECISION OF THE HONBLE ALLAHABAD HIGH COURT WAS DISMISSED BY THE HONBLE APEX COURT IN CC NO. 8068/2014 VIDE ORDER DATED 02 - 07 - 2014. THE HONBLE APEX COURT HAS HELD AS UNDER : HEARD MR. MUKUL ROHATGI, LEARNED ATTORNEY GENERAL, FOR THE PETITIONER. DELAY IN FILING AND REFILLING SPECIAL LEAVE PETITION IS CONDONED. SPECIAL LEAVE PETITION IS DISMISSED. WE ARE ALSO AWARE THAT THERE ARE CERTAIN OTHER HONBLE HIGH COURT DECISIONS WHEREIN THIS PROPOSITION HAS NOT BEEN UPHELD THAT PROVISIONS OF SECTION 40(A)(IA) ARE ATTRACTED ONLY WHEN THE AMOUNT IS PAYABLE. HOWEVER, WE NOTE THAT THERE IS NO JURISDICTIONAL HIGH COURT DECISION ON THIS ISSUE. IN SUCH A SITUATION WE NOW HAVE A HONBLE ALLAHABAD HIGH COURT DECISION WHICH IS IN FAVOUR OF THE ASSES SEE. REVENUE DEPARTMENTS PETITION FOR SPECIAL LEAVE TO APPEAL HAS BEEN DISMISSED BY THE HONBLE APEX COURT BY CONDONING THE DELAY IN FILING THE LEAVE PETITION. IN SUCH A SITUATION, IN OUR CONSIDERED OPINION, THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. 188 ITR 192 HAS TO BE FOLLOWED. IN THE SAID DECISION THE HONBLE APEX COURT HAS EXPOUNDED THAT IN CASE THERE ARE TWO VIEWS POSSIBLE, THE VIEW IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED. ACCORDINGLY IN ABSENCE OF ANY JURISDICTIONAL HIGH COURT DECISION, WE RESPECTFULLY FOLLOW THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VECTOR SHIPPING SERVICES (P) LTD. AS ABOVE. ACCORDINGLY SINCE NO AMOUNT OF THE FREIGHT WAS UNPAID OR WAS PAYABLE AS ON 31 - 03 - 2007 WE HOLD THAT THE PROVISIONS OF SECTION 40(A)(IA) 4 ITA NO. 497/NAG/2016. ARE NOT ATTRACTED AND IN THIS VIEW OF THE MATTER WE ARE OF THE OPINION THAT REVENUES APPEAL IS LIABLE TO BE DISMISSED. 7. I FIND THAT THE ABOVE ADJUDICATION IS FULLY APPLICABLE ON THE FACTS OF T HIS CASE. IT IS SETTLED LAW THAT WHEN THERE IS NO JURISDICTIONAL HIGH COURT DECISION AND THERE ARE CONFLICTING DECISIONS OF OTHER HIGH COURTS, THE DECISION IN FAVOUR OF THE ASSESSEE SHOULD BE ADOPTED. THIS PROPOSITION IS DULY SUPPORTED BY HONBLE APEX COURT DECISION IN TH E CASE OF VEGETABLE PRODUCTS 88 ITR 192. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, I FIND THAT THE ORDER OF THE LEARNED CIT(APPEALS) IS NOT AT ALL SUSTAINABLE. HENCE I SET ASIDE THE SAME AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF OCT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 7 TH OCT. , 2016. COPY FORWARDED TO : 1. GOENKA VASANT KUMAR VINAY KUMAR, PROP. GOENKA COTTON TRADERS, NISHANT TOWERS, M.G. ROAD, AKOLA - 444001. 2. I.T.O., WARD - 1, AKOLA. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I , NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR.