Sh. Jagdish Prasad Sharma, New Delhi V. ACIT, New Delhi

ITA 50/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6428 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 27-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: R K MEHRA
• Section: 234B; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-2 : NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO.50/DEL/2015 ASSESSMENT YEAR : 2009-10 JAGDISH PRASAD SHARMA, PROPRIETOR M/S INDIA OFFSET PRINTERS, X-36, OKHLA INDUSTRIAL AREA, PHASE II, NEW DELHI. PAN: ABBPS4640Q VS. ACIT, CIRCLE-22(1), CIVIC CENTRE, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.K. MEHRA, CA DEPARTMENT BY : SHRI S.K. JAIN, SR.DR DATE OF HEARING : 27.12.2016 DATE OF PRONOUNCEMENT : 28.12.2016 ORDER PER RAJPAL YADAV, JM: THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 21 ST OCTOBER, 2014 PASSED FOR ASSESSMENT YEAR 2009-10. ITA NO.50/DEL/2015 2 2. GROUND NOS.1 AND 2 ARE INTERCONNECTED WITH EACH OTHER. IN THESE GROUNDS OF APPEAL, THE ASSESSEE HAS PLEADED THAT TH E LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,90,387/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 27 TH SEPTEMBER, 2009 DECLARING TOTAL INCOME OF RS.44,18,805/-. AT THE RELEVANT TIME, HE WAS RUNNI NG A PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S INDIA OFFSET P RINTERS. ON SCRUTINY OF THE ACCOUNTS BY THE AO, IT WAS REVEALED THAT THE ASSESSEE HAS PAID INTEREST AMOUNTING TO RS.1,90,387/- TO M/S CHOLAMAN DLAM DBC FINANCE LTD. THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOUR CE WHILE MAKING THIS PAYMENT. ACCORDING TO THE AO, ONLY BANKS ARE EXEMP TED FROM DEDUCTION OF TAX AT SOURCE ON INTEREST PAID TO THEM . M/S CHOLAMANDLAM DBC FINANCE LTD., IS A NON-BANKING FINANCE COMPANY, THEREFORE, THE ASSESSEE WAS REQUIRED TO DEDUCT TDS ON THE INTEREST PAYMENT MADE BY HIM. ACCORDINGLY, HE DISALLOWED THE CLAIM OF THE A SSESSEE AT RS.1,90,387/- WITH THE AID OF SECTION 40(A)(I) OF T HE INCOME-TAX ACT, ITA NO.50/DEL/2015 3 1961 (FOR SHORT THE ACT). APPEAL TO THE CIT(A) D ID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT THE LOAN WAS TAKEN IN PERSONAL CAPACITY. HE DREW MY ATTENTI ON TOWARDS PAGE 18 OF THE PAPER BOOK WHEREIN A COPY OF THE PERSONAL LO AN AGREEMENT BETWEEN THE ASSESSEE AND M/S CHOLAMANDLAM DBC FINAN CE LTD., HAS BEEN PLACED ON RECORD. THE LD. COUNSEL FOR THE ASS ESSEE POINTED OUT THAT THE LOAN WAS TAKEN IN THE PERSONAL CAPACITY AND IT IS DULY DISCERNIBLE FROM THIS PAPER. THIS LOAN WAS TAKEN ON 5 TH AUGUST, 2007. IT WAS FOR 24 MONTHS. THE ASSESSEE HAS USED THIS LOAN AS A CAPIT AL IN THE PROPRIETORSHIP CONCERN AND THE PROPRIETORSHIP CONCE RN HAS PAID ALLEGED INTEREST IN THE SHAPE OF COMPENSATION TO THE ASSESS EE. BEING AN INDIVIDUAL, THE ASSESSEE WAS NOT SUPPOSED TO DEDUCT TDS ON THE PAYMENT OF INTEREST MADE TO M/S CHOLAMANDLAM DBC FINANCE LT D. ALTERNATIVELY, HE CONTENDED THAT NO AMOUNT WAS OUTS TANDING AT THE END OF THE YEAR. SECTION 40(A)(IA) AUTHORIZE THE AO TO DISALLOW THE EXPENSES ON WHICH TDS WAS NOT DEDUCTED AND THEY ARE SHOWN AS PAYABLE. FOR ITA NO.50/DEL/2015 4 BUTTRESSING HIS CONTENTION, HE RELIED UPON THE ORDE R OF THE ITAT PASSED IN THE ASSESSEES OWN CASE FOR AY 2006-07. COPY OF THIS ORDER PASSED IN ITA NO.209/DEL/2012 HAS BEEN PLACED ON PAGE 20 OF T HE PAPER BOOK. ON THE STRENGTH OF THIS ORDER, HE SUBMITTED THAT TH E CLAIM OF THE ASSESSEE DESERVES TO BE ALLOWED. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE FINDIN G OF CIT(A) RECORDED IN PARA 9 OF THE IMPUGNED ORDER. HE TOOK ME THROUGH PAGE 17 OF THE CIT(A)S ORDER. ACCORDING TO THE LD. DR, TH E ASSESSEE OUGHT TO HAVE DEDUCTED TDS ON THE INTEREST PAYMENT. SINCE H E HAS FAILED TO DO SO, THE AO HAS RIGHTLY DISALLOWED THE CLAIM. 6. BEFORE ADJUDICATING THIS ISSUE ON MERITS, I DEEM IT APPROPRIATE TO TAKE GROUND NOS.3 AND 4 ALSO IN WHICH THE LD. COUNS EL FOR THEASSESSEE HAS RAISED IDENTICAL SUBMISSIONS ON THE ALTERNATIVE CONTENTION. IN GROUND NOS.3 AND 4, THE GRIEVANCE OF THE ASSESSEE I S THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,47 ,814/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 40(A)(IA) OF THE ACT. ITA NO.50/DEL/2015 5 7. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE HAD MADE PAYMENT OF RS.1,47,814/- TO TWO CONCERNS, NAMELY, M/S CLASS IC PRINTING INK. CO. PVT. LTD. (RS.51,172/-) AND M/S R.K. GUMMINGS PVT. LTD. (RS.96,642/-). ACCORDING TO THE AO, THE ASSESSEE HAS GOT DONE JOB WORK FROM THESE TWO CONCERNS AND FAILED TO DEDUCT TAX AT SOURCE. THE C ONTENTION OF THE ASSESSEE WAS THAT THESE PARTIES HAVE SUPPLIED THE M ATERIAL ALSO. 80% OF THE PAYMENT CONTAINS MATERIAL COST AND 20% JOB WORK BILL. THE JOB WORK BILL IS OF RS.17,373/- AND, THEREFORE, NO TDS WAS R EQUIRED TO BE DEDUCTED. THIS PLEA OF THE ASSESSEE HAS BEEN REJEC TED BY THE AO AND APPEAL TO THE CIT(A) DID NOT BRING IN RELIEF. 8. BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE PLAC ED RELIANCE UPON THE ORDER OF ITAT IN THE ASSESSEES OWN CASE FOR AY2006 -07 AND CONTENDED THAT THE ASSESSEE HAS ALREADY MADE THE PAYMENT AND, THEREFORE, SECTION 40(A)(IA) COULD NOT BE INVOKED. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 9. I HAVE DULY CONSIDERED BOTH THE ISSUES. AS FAR AS THE DISALLOWANCE OF INTEREST EXPENDITURE IS CONCERNED (AGITATED IN G ROUND NOS.1 AND 2), I ITA NO.50/DEL/2015 6 AM OF THE VIEW THAT THE ALTERNATIVE CONTENTION OF T HE ASSESSEE IS AN ACCEPTABLE CONTENTION. BECAUSE, THE ITAT FOR AY 20 06-07 HAS SET ASIDE THE ISSUE TO THE FILE OF AO DIRECTING HIM TO EXAMIN E THE ASPECT WHETHER ANY AMOUNT WAS OUTSTANDING BEFORE 31 ST MARCH, 2006 WHICH HAS BEEN CLAIMED AS A DEDUCTION WITHOUT DEDUCTING THE TDS. ACCORDING TO THE ITAT, SECTION 40(A)(IA) CANNOT BE ATTRACTED ON THE AMOUNTS WHICH HAVE ALREADY BEEN PAID BECAUSE IT SPEAKS OF THE AMOUNT P AYABLE ONLY. IN THE PRESENT YEAR ALSO, THE ASSESSEE HAS ALREADY MADE TH E PAYMENT AND THE AMOUNTS WERE NOT OUTSTANDING AS PAYABLE. 10. AS FAR AS THE AMOUNTS AGITATED IN GROUND NOS.3 AND 4 ARE CONCERNED, THESE AMOUNTS HAVE ALSO BEEN PAID BY THE ASSESSEE. THEY WERE NOT SHOWN AS PAYABLE ON THE CLOSE OF THE ACCOU NTING YEAR. THUS, THEY CANNOT BE DISALLOWED TO THE ASSESSEE. IN ORDE R TO BUTTRESS MYSELF, I WOULD LIKE TO MAKE REFERENCE TO THE FINDING OF THE DIVISION BENCH OF THE ITAT IN AY 2006-07 ON SIMILAR ISSUES. THE ORDER OF THE ITAT READ AS UNDER:- 2.(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ITA NO.50/DEL/2015 7 DISALLOWANCE OF RS. 56,75,983/- U/S 40A(IA) R.W.S 1 94C OF THE ACT WITHOUT APPRECIATING THE INFORMATION AND FACTS PLACED ON RECORD. (B) THE LD. CIT(A) FURTHER ERRED IN LAW IN NOT DEAL ING WITH THE LEGAL ISSUE RAISED BY THE PETITIONER ABOUT THE TWO DIFFERENT INTERPRETATIONS ARISING ON APPLYING THE PROVISIONS CONTAINED IN SECTION 40A(IA) OF THE ACT AS DEALT WITH BY THE HON BLE TRIBUNAL IN THE CASE OF TEJA CONSTRUCTIONS VS. ACIT REPORTED IN [2010] 39 SOT 13 [HYD.] [URO] WHICH WAS THEN FOLLOW ED IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD VS. DCIT [20 09] 123 TTJ [JP] 888. 4. APROPOS THESE GROUNDS, THE LD. A.R HAS ALSO PLAC ED RELIANCE ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VICTOR SHIPPING SERVICES [P] LTD REPORTED AT 262 CTR 545 [ ALL] AND SUBMITTED THAT SPECIAL LEAVE PETITION [SLP] OF THE REVENUE CC NO. [S] 8068/2014 HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT ON 02.03.2014. THE LD. A.R HAS ALSO PLACED RELIANCE ON THE ORDER OF TH E ITAT MUMBAI J BENCH DATED 4.3.2015 IN ITA NO. 2293 & 2294/MUM/201 3 IN THE CASE OF SHRI JITENDRA MANSUKHLAL SAHA VS. DCIT AND SUBMITTE D THAT FOR DISALLOWING EXPENSES FROM THE INCOME FROM BUSINESS AND PROFESSION ON THE GROUND THAT TDS HAS NOT BEEN DEDUCTED, THE ITA NO. 209/DEL/2012 4 AMOUNT SHOULD BE PAYABLE AND NOT WHICH HAS NOT BE EN PAID BY THE END OF THE YEAR. 5. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS AT THE VERY OUTSET, WE NOTE THAT IN THE CASE OF SHRI JITENDRA MANSUKHLAL S AHA VS DCIT [SUPRA] AFTER FOLLOWING THE RATIO OF THE JUDGMENT OF HONBL E ALLAHABAD HIGH COURT, WHICH HAS BEEN UPHELD BY THE HONBLE APEX CO URT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES [P] LTD [SUPRA] HA S HELD AS FOLLOWS: WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIO NS HAVE CAREFULLY BEEN CONSIDERED. RECENTLY, MUMBAI TRIBUNA L HAS DECIDED SUCH ISSUE IN FAVOUR OF THE ASSESSEE BY CON SIDERING THE EARLIER DECISIONS. JUDICIAL MEMBER IS ONE OF THE PA RTY TO THE SAID DECISION THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER: ' ITA NO.50/DEL/2015 8 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CAREFUL CONSIDERAT ION, RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF M/S. VIVIL EXPORTS P. LTD. VS. ITO (SUPRA), WE DELETE THE DISALLOWANCE. FOR THE SAKE OF COMPLETENESS RELEVANT OBSERVATION OF THE TRIBUNAL FROM THE SAID DECISION ARE REPRODUC ED BELOW: 4. THOUGH NUMBER OF GROUNDS WERE URGED BEFORE US IN THE GROUNDS OF APPEAL ANNEXED TO FORM NO. 36, AT THE TI ME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE HAVING MADE THE PAYMENT, SECTION 40(A)(IA) CANNOT BE ATTRACTED BECAUSE IT SPEAKS OF THE AMOUNT 'PAYABLE' AND IT DOES NOT COVER THE AMOUNT ALREADY PAID. IN THIS REGARD H E RELIED UPON ITA NO. 209/DEL/2012 5 THE FOLLOWING DECISIONS OF T HE ITAT CHENNAI BENCHES WHEREIN THE BENCH HAD TAKEN INTO CONSIDERATION THE DECISION OF THE ITAT SPECIAL BENC H IN THE CASE OF MERILYN SHIPPING & TRANSPORT, THE ORDER OF WHICH WAS SUSPENDED BY THE HIGH COURT BUT AT THE SAME TIME TH ERE WAS A SUBSEQUENT JUDGEMENT OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF M/S. VECTOR SHIPPING SERVICES 5 ITA NO.2293/MUM/2013(A.Y. 2005-06) ITA NO.2294/MUM/2013(A.Y. 2006-07) (P) LTD. WHEREIN IT WAS HELD THAT SECTION 40(A)(IA) APPLIES ONLY TO THOSE AMOUNT WHICH REMAINS PAYABLE BY THE END OF THE PREVIOUS YEAR. IN OTHER WORDS, IN RESPECT OF PAYMENTS ALREADY MADE SECTION 40(A) (IA) IS NOT ATTRACTED: - I. ACIT VS. M/S. ESK AY DESIGNS - ITA NO. 1951/MDS/2012 DATED 09.12.2013. II. ITO VS. THE EKATHIR PRESS - ITA NO. 2076/MDS/2012 & CO NO. 155/MDS/2013 DATED 18.09.2013. THE LEARNED COUNSEL FOR THE ASSESSEE AL SO SUBMITTED THAT THOUGH THERE ARE CONTRARY DECISIONS OF THE OTH ER HON'BLE HIGH COURTS, I.E. HON'BLE CALCUTTA HIGH COURT AND H ON'BLE GUJARAT HIGH COURT, IN THE LIGHT OF THE DECISION OF THE HON'BLE ALLABAHAD HIGH COURT IT CAN BE SAID THE THERE CAN B E TWO VIEWS POSSIBLE IN THIS MATTER IN WHICH EVENT THE ONE WHIC H IS IN FAVOUR OF THE ASSESSEE HAS TO BE FOLLOWED IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCTS LTD. 88 ITR 192. ACCORDINGLY THE CHENNAI BENCH HELD THAT SECTION ITA NO.50/DEL/2015 9 40(A)(IA)IS NOT ATTRACTED IN RESPECT OF THE AMOUNT ALREADY PAID BY THE ASSESSEE. 5. THE LEARNED D.R., ON THE OTHER HAND, COULD NOT PLACE BEFORE US ANY CONTRARY JUDGEMENT ON THIS ISSUE. THOUGH THE LEARNED D.R. PROMISED TO FILE WRITTEN SU BMISSIONS WITHIN ONE DAY, IT WAS NOT FILED. IN OTHER WORDS, T HERE IS NO ITA NO. 209/DEL/2012 6 CONTRARY DECISION ON THIS ISSUE. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WITHOUT GO ING INTO THE OTHER ASPECTS, WHICH WERE IN FACT NOT ARGUED EITHER BY THE ASSESSEE OR BY THE REVENUE, WE HOLD THAT SECTION 40 (A)(IA) IS NOT ATTRACTED IN RESPECT OF PAYMENT ALREADY MADE BY THE END OF THE PREVIOUS YEAR. THE AO IS DIRECTED TO VERIFY THE CLA IM OF THE ASSESSEE AND IF IT IS IN LINE WITH THE VIEW TAKEN H EREIN THE SAME MAY BE CONSIDERED ACCORDINGLY. AS REGARDS LEVY OF I NTEREST UNDER SECTION 234B AND 234C OF THE ACT, THE SAME IS CONSE QUENTIAL IN NATURE AND NEED NOT TO BE CONSIDERED INDEPENDENTLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES 5.1 MOREOVER, HON'BLE ALLAHABA D HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES (P) LTD.(SUPRA) HAS HELD THAT FOR DISALLOWING EXPENSES FROM BUSINESS AN D PROFESSION ON THE GROUND THAT TDS HAS NOT BEEN DEDUCTED, AMOUN T SHOULD BE PAYABLE AND NOT WHICH HAS BEEN PAID BY END OF TH E YEAR. THE SAID DECISION OF HON'BLE ALLAHABAD HIGH COURT WAS M ADE SUBJECT TO SPECIAL LEAVE PETITION FILED BEFORE HON'BLE SUPR EME COURT AND THEIR LORDSHIPS VIDE THEIR ORDER 6 ITA NO.2293/MUM/2013(A.Y. 2005-06) ITA NO.2294/MUM/2013(A.Y. 2006-07) DATED 02/07/2014 IN CC NO.8068/2014 HAVE DISMISSED THE SLP AND COPY OF THI S ORDER IS FILED BY THE ASSESSEE AT PAGE 31 OF THE PAPER BOOK AND THE SAID ORDER READ AS UNDER: 'SUPREME COURT OF INDIA RECORD OF PROCEEDINGS PETITION(S) FOR SPECIAL LEAVE TO APPEAL (C)..... CC NO.(S) 8068/2014 (ARISING OUT OF IMPUGNED FINAL JUDTMENT AND ORDER DATED 09/07/2013 IN ITA 122/2013 PASSED B Y THE HIGH COURT OF JUDICATURE AT ALLAHABAD) COMMISSIONER OF I NCOME ITA NO. 209/DEL/2012 7 TAX-MUZAFFAR NGR.PETITIONER( S) VERSUS M/S. VECTOR SHIPPING SERVICES (P) LTD. ITA NO.50/DEL/2015 10 RESPONDENTS(S) WITH APPLN.(S) FOR C/DELAY IN FILING SLP AND OFFICE REPORT) DATE:02/07/2014 THIS PETITION WAS CALLED ON FOR HEARING TODAY. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MADAN B LOKUR HON'BLE MR. KURIAN JOSEPH FOR PETITIONER(S) MR. MUKUL ROHATGI, ATTORNEY GENERAL MR. RUPESH KUMAR, ADV. MR. SAHIL TAGOTRA, A DV. MRS. ANIL KATIYA, ADV. FOR RESPONDENT(S) UPON HEARING THE COUNSEL THE COUR T MADE THE FOLLOWING ORDER HEARD MR.MUKUL ROHATGI, LEARNED ATTORNEY GENERAL, OR THE PETITION. DELAY IN FILING AND REFIL LING SPECIAL LEAVE PETITION IS CONDONED. SPECIAL LEAVE PETITION IS DIS MISSED. DIGITALLY SIGNED BY RAJESH DHAM DATE: 2014.07.02' 5.2 IN VIEW OF ABOVE DISCUSSION, THE DECISION RELIE D UPON BY LD. DR WOULD HAVE NO APPLICATION AND WE HAVE TO ACCEPT THE CLAIM OF THE ASSESSEE TO THE EXTENT OF LABOUR PAYMENTS AR E MADE DURING THE YEAR UNDER CONSIDERATION AND TO THAT EXT ENT NO DISALLOWANCE SHOULD BE MADE. FURTHER THE FIGURE GIV EN BY THE ASSESSEE IN THE 7 ITA NO.2293/MUM/2013(A.Y. 2005-06 ) ITA NO.2294/MUM/2013(A.Y. 2006-07) AFOREMENTIONED CHART MAY BE VERIFIED BY THE AO AND TO THE EXTENT PAYMENTS AR E MADE DURING THE RESPECTIVE YEARS UNDER CONSIDERATION NO DISALLOWANCE SHOULD BE MADE AND ONLY REST OF THE AMOUNT SHOULD B E DISALLOWED. WITH ITA NO. 209/DEL/2012 8 THESE DIREC TIONS WE PARTLY ALLOW THE APPEALS FILED BY THE ASSESSEE. IN VIEW OF THE ABOVE, IT IS SETTLED PREPOSITION THA T FOR DISALLOWING EXPENSES ON THE GROUND THAT TDS HAS NOT BEEN DEDUCT ED, THE AMOUNT SHOULD BE PAYABLE AT THE END OF THE YEAR AND NO DIS ALLOWANCE CAN BE MADE ON THIS ALLEGATION ON THE AMOUNT WHICH HAS BEE N PAID AT THE END OF THE YEAR. IN THE PRESENT CASE THE LD. D.R FAIRLY SUBMITTED THAT THE DEPARTMENT HAS NO SERIOUS OBJECTION IF THE FACT SUB MITTED BY THE LD. A.R THAT ALL THE IMPUGNED GROUNDS HAVE BEEN MADE ON OR BEFORE 31.3.2006 IS RESTORED TO THE FILE OF THE AO FOR PROPER EXAMIN ATION AND VERIFICATION ITA NO.50/DEL/2015 11 FOR THIS LIMITED PURPOSE. UNDER THE ABOVE NOTED FAC TS AND SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE OPINION THAT RESPE CTFULLY FOLLOWING THE DICTUM OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. VECTOR SHIPPING P. LTD [SUPRA], THE AO IS DIRECTED TO EXAMINE AND V ERIFY THAT WHICH AMOUNTS HAVE BEEN PAID BY THE ASSESSEE ON OR BEFORE 31.3.2006 AND WHICH AMOUNTS HAVE NOT BEEN PAID BY THE END OF THE FINANCIAL PERIOD AS ON 31.3.2006. THE AO IS DIRECTED TO FOLLOW THE RATI O DECIDENDI LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF CIT VS. VE CTOR SHIPPING SERVICES P. LTD [SUPRA] AND TO ALLOW THE CLAIM OF E XPENSES OF THE ASSESSEE WITHOUT BEING PREJUDICED FROM THE EARLIER ASSESSMENT ORDER AND IMPUGNED ORDER. THE LD. D.R, ON THE OTHER HAND, COULD NOT PLACE BEF ORE US ANY CONTRARY JUDGMENT ON THIS ISSUE AND THUS WE NOTE THAT THERE IS NO CONTRARY DECISION ON THIS ISSUE. 7. THE LD. A.R RELYING ON THE SUBMISSIONS MADE IN T HE GROUNDS OF APPEAL, SUBMITTED THAT THE AMOUNT WAS PAID BEFORE 31.3.2006 TO THE EXCHEQUER, HENCE THE SAME SHOULD NOT BE DISALLOWED. 8. PER CONTRA, THE LD. D.R SUBMITTED THAT THE DEPAR TMENT HAS NO SERIOUS OBJECTION IF THE MATTER IS SET ASIDE TO THE FILE OF THE AO FOR VERIFICATION AND EXAMINATION OF THE CLAIM OF THE ASSESSEE AFRESH IN THE LIGHT OF THE RATIO OF THE DECISION AS RELIED UPON BY THE ASSESSE E IN THE CASE OF TEJA CONSTRUCTION [SUPRA] WHICH WAS FOLLOWING IN THE CAS E OF JAIPUR VIDYUT VITRAN NIGAM LTD [SUPRA]. 9. ON A CAREFUL CONSIDERATION OF THE ABOVE SUBMISSI ONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED VIEW THAT IN THE LI GHT OF THE ABOVE TWO RECENT JUDGMENTS REFERRED TO ABOVE [SUPRA], THE ASS ESSEES CLAIM DESERVE TO BE CONSIDERED AFRESH AT THE LEVEL OF THE AO AND ESPECIALLY WHEN THE LD. D.R. HAS SUBMITTED THAT THE DEPARTMENT HAS NO SERIOUS OBJECTION IF THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO FOR A FRESH ADJUDICATION, WE ARE OF THE CONSIDERED OPINION THAT THE ENDS OF JUSTICE WOULD MEET IF THE ISSUE OF IMPUGNED DISALLOWANCE MA DE BY THE AO U/S 40A(IA) R.W.S 194C OF THE ACT IS ITA NO. 209/DEL/20 12 10 RESTORED TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION AFTER AFFOR DING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. NEEDLESS TO SAY, THE AO SHALL ADJUDICATE THE ISSUE AS PER THE RELEVANT PROVISIONS OF THE ACT AND THE RATIO OF THE ITA NO.50/DEL/2015 12 JUDGMENTS OF THE HONBLE HIGH COURT AND CO-ORDINATE BENCH OF THE TRIBUNAL AND WITHOUT BEING PREJUDICED FROM THE EARL IER ASSESSMENT AND APPELLATE ORDER. ACCORDINGLY, GROUND NOS. 2(A) AND 2(B) OF THE ACT ARE RESTORED BACK TO THE FILE OF THE AO FOR A FRESH ADJ UDICATION AND HENCE THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS DEEM ED TO BE ALLOWED FOR STATISTICAL PURPOSES. 11. RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN EARLIER YEAR AND WITHOUT GOING INTO THE MERITS OF THE OTHER CONTENTI ONS, I ALLOW THESE FOUR GROUNDS AND DELETE THE DISALLOWANCES. THE REASON F OR DELETING THE DISALLOWANCES IN BRIEF ARE THAT THE ASSESSEE HAS AL READY MADE THE PAYMENTS AND THESE AMOUNTS ARE NOT SHOWN AS PAYABLE . 12. IN THE NEXT GROUND, THE GRIEVANCE OF THE ASSESS EE IS THAT THE LD.CIT(A) HAS ERRED IN UPHOLDING THE AD HOC DISALLOWANCE AMOUNTING TO RS.1,31,179/-. THE LD. COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET, SUBMITTED THAT AD HOC DISALLOWANCE OUT OF VEHICLE MAINTENANCE, BUSINESS PROMOTION EXPENSES AND THE DIWALI EXPENSES HAVE B EEN MADE. AS FAR AS THE DIWALI EXPENSES ARE CONCERNED, HE CONTENDE D THAT IN THE REMAND REPORT, THE LD. ASSESSING OFFICER DID NOT DISPUTE A BOUT THE GENUINENESS OF THE CLAIM. HE PRAYED THAT THESE AD HOC DISALLOWANCES BE DELETED. ITA NO.50/DEL/2015 13 13. ON THE OTHER HAND, THE LD. DR CONTENDED THAT TH E ASSESSING OFFICER HAS DISALLOWED 10% OF THE EXPENDITURE OUT OF BUSINE SS PROMOTION AND VEHICLE EXPENSES ON ACCOUNT OF PERSONAL USER OF THE SE FACILITIES. 14. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE WAS NOT MAINTAI NING ANY LOG BOOK FOR USING OF THE VEHICLES. THE POSSIBILITY OF USING AL L THESE FACILITIES FOR PERSONAL PURPOSE CANNOT BE RULED OUT. THEREFORE, T HE LD. REVENUE AUTHORITIES HAVE MADE AD HOC DISALLOWANCE. AS FAR AS DIWALI EXPENDITURE ARE CONCERNED, THE LD.CIT(A) HAS CONSID ERED ALL THESE ASPECTS INCLUDING THE REMAND REPORT AND, THEREAFTER CONFIRMED THE DISALLOWANCE. THE ASSESSING OFFICER HAS NOT MADE A N ADVERSE COMMENT IN THE REMAND REPORT DOES NOT MEAN THAT THE FINDING RECORDED IN THE ASSESSMENT ORDER CANNOT BE CONSIDERED BY THE LD. FI RST APPELLATE AUTHORITY. THEREFORE, I DO NOT FIND ANY ERROR IN TH E ORDER OF THE LD.CIT(A) ON THIS ASPECT ALSO. AFTER GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW, I DO NOT FIND ANY MERIT IN THIS GROUND OF AP PEAL. IT IS REJECTED. ITA NO.50/DEL/2015 14 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.12.201 6. SD/- [RAJPAL YADAV] JUDICIAL MEMBER DATED, 28 TH DECEMBER, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.