Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 5128 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-07-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2009-2010
Appeal Filed On
09-07-2014
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.501/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SIYARAM EXPORT INDIA PVT. LTD., 18 SIYARAM STREET, DURGAPURA, RONK ROAD, JAIPUR CUKE VS. ADDL. CIT, RANGE-6, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAKCS 1420 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SONAI (C.A.) & SHRI ROHAN SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A.VARMA (ADDL.JCIT) OKBZ DH RKJH[K@ DATE OF HEARING : 01.07.2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 26/07/2016. VKNS'K @ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)- II, JAIPUR DATED 02.05.2014 WHEREIN THE ASSESSEE HAS TA KEN FOLLOWING GROUND OF APPEAL: IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN DIS ALLOWING A SUM OF RS.14,14,534/- U/S 40(A)(IA) OF THE IT ACT, 1961. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE APPE LLANT IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF TEXTILE & HOME FURNISHING. THE APPELLANT COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSME NT YEAR 2009-10 DECLARING ITA NO. 501/JP/14 SIYARAM EXPORT INDIA (P) LTD. VS. ADDL. CIT, RANGE- 6, JAIPUR 2 TOTAL INCOME OF RS.51,03,870/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 23.12.2011 WHEREIN THE AO DISALLOWED A SUM OF RS. 14,14,534/- U/S 40(A)(IA) OF THE IT ACT, 1961 ON ACCOUNT OF NO N-DEDUCTION OF TDS. BEING AGGRIEVED, THE APPELLANT CARRIED THE MATTER IN APPE AL. THE APPELLANT SUBMITTED THAT THE WHOLE OF THE AMOUNT OF RS 14,14,534 HAS BE EN PAID DURING THE RELEVANT PREVIOUS YEAR. FURTHER, THE APPELLANT REL IED UPON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF MERILYN SH IPPING 16 ITR(TRIB.) 1 AND THE ALLAHABAD HIGH COURT DECISION IN CASE OF VECTOR SHI PPING 262 CTR 545 AND SUBMITTED THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE ONLY TO THE EXPENDITURE WHICH IS PAYABLE AS ON THE BALANCE SHEE T DATE AND CANNOT BE APPLIED ON THE EXPENDITURE ALREADY DURING THE YEAR. THE LD. CIT(A) DIDNT AGREE WITH THE CONTENTION OF THE APPELLANT STATING THAT T HE DECISION OF THE SPECIAL BENCH IN CASE OF MERILYN SHIPPING (SUPRA) HAS BEEN STAYED BY HONBLE ANDHRA PRADESH HIGH COURT. THE LD CIT(A) ALSO RELIED UPON THE DECISION OF CALCUTTA HIGH COURT IN CASE OF CRESCENT EXPORTS SYNDICATE 33 TAXMANN.COM 250 AND GUJARAT HIGH COURT IN CASE OF SIKANDARKHAN N TANVAR 33 TAXMANN.COM 133. 2.2 DURING THE COURSE OF HEARING, THE LD. AR REITER ATED ITS SUBMISSIONS MADE BEFORE THE LD CIT(A) AND SUBMITTED THAT THE SPECIAL BENCH JUDGEMENT IN THE CASE OF MERILYN SHIPPING & TRANSPORT HAS BEEN APPRO VINGLY REFERRED TO BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VECTOR SHIPPING SERVICES (P) LTD. (2013) 262 CTR 545 (ALL) AND THE DEPARTMENTS SLP AGAINST THE SAID DECISION HAS BEEN REJECTED BY THE HONBLE SUPREME COURT VIDE ITS ORDER DATED 2.07.2014. 2.3 THE LD. AR OF THE APPELLANT FURTHER SUBMITTED T HAT THE PRINCIPLES LAID DOWN BY THE SPECIAL BENCH AND BY THE HONBLE ALLAHA BAD HIGH COURT HAVE BEEN FOLLOWED BY THE HONBLE TRIBUNAL IN CASES OF ITO VS . VANAJA RAO QUICK MARRIAGE ITA NO. 501/JP/14 SIYARAM EXPORT INDIA (P) LTD. VS. ADDL. CIT, RANGE- 6, JAIPUR 3 (P) LTD.(2015) 38 ITR(T) 547(HYDRBD.)(TRI.) AND SHR I JITENDRA MANSUKHLAL SHAH VS. DCIT ITA NO. 2293/MUM/2013 (MUM TRIB.) AND ALSO BY THE JAIPUR BENCH IN CASES OF GIRDHARILAL BARGOTI IN ITA NO. 757/JP/2012 DATED 10.04.2015 AND K.Y. CONTINENTAL INTERIORS (P) LTD. IN ITA NO. 595/JP/2 013 DATED 14.12.2015. 2.4 THE LD AR FURTHER SUBMITTED THAT THE HONBLE AN DHRA PRADESH HIGH COURT IN CASE OF JANAPRIYA ENGINEERS SYNDICATE VIDE ITS O RDER DATED 24.06.2014 HAS CLARIFIED THE ISSUE OF INTERIM STAY GRANTED BY IT I N CASE OF MERILYN SHIPPING AND TRANSPORT (SUPRA) AND SUBMITTED THAT THE ORDER OF T HE SPECIAL BENCH IS STILL BINDING ON THE COORDINATE BENCHES OF THE TRIBUNAL. IT WAS ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE COORDINATE BENCH IN CASE OF SHRI AMIT NARESH SHAH IN ITA NO. 4154/MUM/2013 DATED 10.09.2014 WHEREIN THE COORDINATE BENCH AFTER TAKING COGNISANCE OF THE CLARIFICATION ISSUED IN CASE OF JANAPRIYA ENGINEERS SYNDICATE, FOLLOWED THE ORDER OF THE SPECIAL BENCH IN CASE OF MERILYN SHIPPING AND TRANSPORT (SUPRA). 2.5 IN THE CONTEXT OF FACTUAL MATRIX AND ABOVE LEGA L DEVELOPMENTS, FIRSTLY, IT WOULD BE RELEVANT TO REFER TO THE DECISION OF THE H ONBLE ANDHRA PRADESH HIGH COURT IN CASE OF JANAPRIYA ENGINEERS SYNDICATE (I.T .T.A NO 352 OF 2014 VIDE ITS ORDER DATED 24.06.2014) WHEREIN THE APPEAL FOR STAT ISTICAL PURPOSE WAS ADMITTED ON THE FOLLOWING SUBSTANTIAL QUESTION OF L AW: WHETHER THE LD. TRIBUNAL WAS JUSTIFIED IN LAW ON THE FACTS AND CIRCUMSTANCES OF THIS CASE IN PASSING ORDER OF REMA ND FOR REDECISION IGNORING THE SPECIAL BENCH DECISION OF THE TRIBUNAL ON THE I SSUE THOUGH THE APPEAL AGAINST THE SAME IS PENDING ADJUDICATION BEFORE THE HONBLE COURT? THE FINDINGS OF THE HONBLE HIGH COURT ARE AS UNDER : 3. WE FIND THAT THE LEARNED TRIBUNAL TAKING NOTE O F THE PENDENCY OF THE APPEAL IN THIS COURT, PREFERRED BY THE REVENUE AGAI NST THE DECISION OF THE ITA NO. 501/JP/14 SIYARAM EXPORT INDIA (P) LTD. VS. ADDL. CIT, RANGE- 6, JAIPUR 4 SPECIAL BENCH OF THE TRIBUNAL IN M/S MERILYN SHIPP ING & TRANSPORT IN ITA NO.477/VIZ/2008 DATED 29.03.2012, DIRECTED THE ASSE SSING OFFICER TO RE-DECIDE THE ISSUE AFTER THE DISPOSAL OF THE APPEAL BY THIS COURT. 4. WE ARE OF THE VIEW THAT UNTIL AND UNLESS THE DEC ISION OF THE SPECIAL BENCH IS UPSET BY THIS COURT, IT BINDS SMALLER BENCH AND CO-ORDINATE BENCH OF THE TRIBUNAL. UNDER THE CIRCUMSTANCES, IT IS NOT OPEN TO THE TRIBUNAL, AS RIGHTLY CONTENDED BY MR. NARASIMHA SARMA, LEARNED COUNSEL, TO REMAND ON THE GROUND OF PENDENCY ON THE SAME ISSUE BEFORE THIS COURT, OV ERLOOKING AND OVERRULING, BY NECESSARY IMPLICATION, THE DECISION OF THE SPECIAL BENCH. WE SIMPLY SAY THAT IT IS NOT PERMISSIBLE UNDER QUASI JUDICIAL DISCIPLINE. UNDER THE CIRCUMSTANCES, WE SET-ASIDE THE IMPUGNED JUDGEMENT AND ORDER, AND R ESTORE THE MATTER TO THE FILE OF THE TRIBUNAL WHICH WILL DECIDE THE ISSUE IN ACCORDANCE WITH LAW AND IT WOULD BE OPEN TO THE TRIBUNAL EITHER TO FOLLOW THE SPECIAL BENCH DECISION OR NOT TO FOLLOW. IF THE SPECIAL BENCH DECISION IS NOT FO LLOWED, OBVIOUSLY REMEDY LIES ELSEWHERE. 2.6 SUBSEQUENTLY, THE COORDINATE BENCH IN CASE OF S HRI AMIT NARESH SHAH IN ITA NO. 4154/MUM/2013 DATED 10.09.2014 TAKING INTO COGNISANCE THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN CASE OF JAN APRIYA ENGINEERS SYNDICATE (SUPRA) HAS HELD AS UNDER: FROM THE CLARIFICATION ISSUED BY THE HONBLE HIGH COURT, IT IS CLEAR THAT UNTIL AND UNLESS THE DECISION OF MARILYN SHIPPING A ND TRANSPORT (SUPRA) IS REVERSED BY THE COURT, IT IS BINDING ON ALL THE BE NCHES OF THE TRIBUNAL. WE FIND THAT HONBLE COURT HAS HELD THAT JUDICIAL DISCIPLIN E MANDATES THAT THE DECISION OF THE SPECIAL BENCH HAS TO BE FOLLOWED BY OTHER BE NCHES. AS ON TODAY, THE STAY ORDER GRANTED BY THE HONBLE COURT HAS BEEN VACATE D AND THE ORDER OF THE SPECIAL BENCH IS BINDING ON OTHER BENCHES OF THE TR IBUNAL. THEREFORE, ITA NO. 501/JP/14 SIYARAM EXPORT INDIA (P) LTD. VS. ADDL. CIT, RANGE- 6, JAIPUR 5 RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE F AA WAS JUSTIFIED IN FOLLOWING THE ORDER OF MARILYN SHIPPING & TRANSPORT (SUPRA). CONSIDERING THE FACTS OF THE CASE AND THE CLARIFICATION ISSUED BY THE HONBLE A NDHRA PRADESH HIGH COURT ON 24.06. 2014 IN THE CASE OF JANAPRIYA ENGINEERS SYND ICATE, WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSE E AND CONFIRMED THE ORDER OF THE FAA. 2.7 IN LIGHT OF DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN CASE OF JANAPRIYA ENGINEERS SYNDICATE (SUPRA), IT IS THUS C LEAR THAT THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF M/S MERILY N SHIPPING & TRANSPORT (SUPRA) CONTINUES TO BIND THE COORDINATE BENCHES TI LL THE TIME THE SAME IS NOT OVERRULED BY THE HONBLE HIGH COURT. 2.8 FURTHER, IT IS NOTED THAT THE SPECIAL BENCH DEC ISION IN CASE OF M/S MERILYN SHIPPING & TRANSPORT (SUPRA) HAS BEEN APPROVED AND REFERRED BY THE ALLAHABAD HIGH COURT IN CASE OF VECTOR SHIPPING SERVICES (P) LTD. AT THE SAME TIME, THERE ARE DECISIONS OF CALCUTTA HIGH COURT IN CASE OF CRE SCENT EXPORTS SYNDICATE AND GUJARAT HIGH COURT IN CASE OF SIKANDARKHAN N TANVAR WHERE THE HIGH COURTS HAVE DISAGREED WITH THE VIEW OF THE SPECIAL BENCH I N CASE OF M/S MERILYN SHIPPING & TRANSPORT (SUPRA). IT IS THUS EVIDENT T HAT THE VIEW OF THE ALLAHABAD HIGH COURT AND OTHER TWO HIGH COURTS ARE IN DIRECT CONFLICT WITH EACH OTHER. THE QUESTION THAT ARISES FOR CONSIDERATION IS WHERE THERE IS NO DECISION OF A JURISDICTIONAL HIGH COURT AND THERE ARE CONFLICTING VIEWS OF THE DIFFERENT HIGH COURT, WHICH VIEW SHOULD BE FOLLOWED. IN THIS REGA RD, WE DRAW SUPPORT FROM THE JUDGEMENT OF HONBLE SUPREME COURT IN THE MAT TER OF CIT VS. VEGETABLE PRODUCTS LTD. (1972) 88 ITR 192 (SC) WHEREIN THE HO NBLE SUPREME COURT HAS LAID DOWN THE PRINCIPLE THAT F TWO REASONABLE CON STRUCTIONS OF A TAXING PROVISIONS ARE POSSIBLE, THAT CONSTRUCTION WHICH FA VOURS THE ASSESSEE MUST BE ADOPTED. ITA NO. 501/JP/14 SIYARAM EXPORT INDIA (P) LTD. VS. ADDL. CIT, RANGE- 6, JAIPUR 6 IN VIEW OF THE ABOVE DISCUSSIONS AND THE ENTIRETY O F FACTS AND CIRCUMSTANCES OF THE CASE, THE DISALLOWANCE OF SUM OF RS.14,14,534/- U/S 40(A)(IA) OF THE IT ACT, IS HEREBY DELETED. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/ 07/2016. SD/- SD/- ( R.P. TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 26/ 07/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SIYARAM EXPORT INDIA (P) LTD. JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ADD.CIT, RANGE-6, JAIPUR 3. VK;DJ VK;QDR@ CITI, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)II, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 501/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR
