VIVIL EXPORTS P.LTD, MUMBAI V. ITO 2(3)(4), MUMBAI

ITA 509/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75814 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 20-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Assessee Lawyers: JITENDRA SINGH
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.509/MUM/2011 (ASSESSMENT YEAR: 2007-08) M/S. VIVIL EXPORTS P. LTD. INCOME TAX OFFICER - 2( 3)(4) 3-A, DHANNUR BLDG., 3RD FLOOR MUMBAI P.M. ROAD, FORT, MUMBAI 400002 VS. PAN - AAACV1752B APPELLANT RESPONDENT APPELLANT BY: SHRI K. GOPAL & SHRI JITENDRA SINGH RESPONDENT BY: SHRI B.P.K. PANDA DATE OF HEARING: 20.02.2014 DATE OF PRONOUNCEMENT: 26.02.2014 O R D E R PER D. MANMOHAN, V.P. THIS IS AN APPEAL FILED AT THE INSTANCE OF THE ASSE SSEE COMPANY AND IT PERTAINS TO A.Y. 2007-08. 2. THE FOLLOWING DISALLOWANCES WERE MADE BY THE AO BY INVOKING PROVISIONS OF SECTION 40(A)(IA) OF THE ACT: - 1 DISALLOWANCE ON ACCOUNT OF TRANSPORTATION CHARGES PAID TO M/S. LALJI MULJI ` 1,59,386/- 2 DISALLOWANCE ON ACCOUNT OF EXPORT FREIGHT CHARGES PAID ` 6,17,830/- 3 DISALLOWANCE ON ACCOUNT OF EXPORT FREIGHT PAID TO INDIAN AGENTS OF FOREIGN SHIPPING COMPANIES `3,70,062/- 3. IN THE OPINION OF THE AO AS WELL AS THE CIT(A), NON -DEDUCTION OF TAX AT SOURCE ATTRACTS PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND ACCORDINGLY ADDED THE AMOUNT PAID BY THE ASSESSEE AS INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 4. THOUGH NUMBER OF GROUNDS WERE URGED BEFORE US IN TH E GROUNDS OF APPEAL ANNEXED TO FORM NO. 36, AT THE TIME OF HEARI NG THE LEARNED COUNSEL ITA NO.509/MUM/2011 M/S. VIVIL EXPORTS P. LTD. 2 FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAVING MADE THE PAYMENT, SECTION 40(A)(IA) CANNOT BE ATTRACTED BECAUSE IT SP EAKS OF THE AMOUNT PAYABLE AND IT DOES NOT COVER THE AMOUNT ALREADY PAID. IN THIS REGARD HE RELIED UPON THE FOLLOWING DECISIONS OF THE ITAT CHE NNAI BENCHES WHEREIN THE BENCH HAD TAKEN INTO CONSIDERATION THE DECISION OF THE ITAT SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT, THE OR DER 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 TH E CASE OF M/S. VECTOR SHIPPING SERVICES (P) LTD. WHEREIN IT WAS HELD THAT SECTION 40(A)(IA) APPLIES ONLY TO THOSE AMOUNT WHICH REMAINS PAYABLE BY THE E ND OF THE PREVIOUS YEAR. IN OTHER WORDS, IN RESPECT OF PAYMENTS ALREAD Y MADE SECTION 40(A) (IA) IS NOT ATTRACTED: - I. ACIT VS. M/S. ESKAY DESIGNS - ITA NO. 1951/MDS/2012 DATED 09.12.2013. II. ITO VS. THEEKATHIR PRESS ITA NO. 2076/MDS/2012 & CO NO. 155/MDS/2013 DATED 18.09.2013. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THOUGH THERE ARE CONTRARY DECISIONS OF THE OTHER HON'BLE HIGH COURTS , I.E. HON'BLE CALCUTTA HIGH COURT AND HON'BLE GUJARAT HIGH COURT, IN THE L IGHT OF THE DECISION OF THE HON'BLE ALLABAHAD HIGH COURT IT CAN BE SAID THE THERE CAN BE 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 DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCTS LTD . 88 ITR 192. ACCORDINGLY THE CHENNAI BENCH HELD THAT SECTION 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 PLAC E BEFORE US ANY CONTRARY JUDGEMENT ON THIS ISSUE. THOUGH THE LEARNE D D.R. PROMISED TO FILE WRITTEN SUBMISSIONS WITHIN ONE DAY, IT WAS NOT FILE D. IN OTHER WORDS, THERE IS NO CONTRARY DECISION ON THIS ISSUE. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WIT HOUT GOING 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 ATTR ACTED IN RESPECT OF PAYMENT ALREADY MADE BY THE END OF THE PREVIOUS YEAR. THE A O IS DIRECTED TO VERIFY ITA NO.509/MUM/2011 M/S. VIVIL EXPORTS P. LTD. 3 THE CLAIM OF THE ASSESSEE AND IF IT IS IN LINE WITH THE VIEW TAKEN HEREIN THE SAME MAY BE CONSIDERED ACCORDINGLY. AS REGARDS LEVY OF INTEREST 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. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2014. SD/- SD/- (N.K. BILLAIYA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 26 TH FEBRUARY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 6, MUMBAI 4. THE CIT 2, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.