Shri Sunderlal Raichand Shah, Vapi V. The ACIT.,Vapi Circle, Vapi

ITA 510/AHD/2011

• Counselvise Citation: 51020514 RSA 2011
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 21-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAY RAJ KUMAR
• Keywords: TDS
• Section: 40(a)(ia)

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' [BEFORE SHRI T K SHARMA JUDICIAL MEMBER] [AND SHRI A K GARODIA, ACCOUNTANT MEMBER] ITA NO.510/AHD/2011 (ASSESSMENT YEAR:-2007-08) SHRI SUNDERLAL RAICHAND SHAH, T-5, 4 TH FLOOR, SHOPPERS STOP, NEAR JAY TOWER, VAPI-SILVASSA ROAD, VAPI [E]-396195 V/S THE ASST. COMMISSIONER OF INCOME-TAX, VAPI CIRCLE, VAPI PAN: AHPPS 5933 R [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI RAJESH UPADHYAY, AR RESPONDENT BY:- SHRI JAYRAJ KUMAR, SR. DR DATE OF HEARING:- 07-10-2011 DATE OF PRONOUNCEMENT:- 14-10-2011 O R D E R PER T K SHARMA [JM] : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 15-11-2010 PASSED BY THE LEARNED CO MMISSIONER OF INCOME-TAX (APPEALS), VALSAD [THE CIT(A)] FOR ASSESSMENT YEAR (AY) 2007-08. THE GROUNDS RAISED BY THE ASSESS EE ARE AS UNDER:- [1] THE ACIT, VAPI HAS ERRED IN LAW AND ON FACTS TO DISALLOW 20% OUT OF TRAVELING EXPENSES OF RS.51,287/- ON AD HOC AND ESTIMATED BASIS. LR. CIT(A), VALSAD HAS ALSO ERRED IN SUSTAINING SUCH ADDITION UP TO RS.25,634/- ON AD HOC AND PRESU MPTIVE BASIS. [2] LR. CIT(A), VALSAD HAS ERRED IN DIRECTING THE A O TO DISALLOW RS.92,100/- U/S 40A(IA) OF THE ACT OUT OF TOTAL DIS ALLOWANCE 2 IT A NO.510/AHD/2011 MADE BY THE AO FOR RS.2,49,986/-, IGNORING THE AMEN DMENT MADE IN SECTION 40(A)(IA) BY FINANCE BILL, 2010 WHI CH IS OF CURATIVE VALUE. AS TDS PAYMENT ON RS.92,100/- WAS M ADE PRIOR TO DATE OF FILING ROI U/S 139(1), SUCH EXPENSES CAN NOT BE DISALLOWED AS PROVISION OF SEC. 40A(IA) BEING NOT A PPLICABLE. 2 GROUND NO.1 IS AGAINST CONFIRMING DISALLOWANCE OU T OF EXPENSES OF RS.25,634/- OUT OF TRAVELING EXPENSES. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL, E NGAGED IN THE BUSINESS OF MANUFACTURING OF MEDICINES, TABLET, CAP SULES AND SYRUP IN HIS PROPRIETARY CONCERN, VIZ., NIRMAN PHAR MA. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER [AO] DISA LLOWED RS.51,267/- OUT OF TRAVELING EXPENSES. THIS DISALLO WANCE WAS MADE AS THE ASSESSEE HAS NOT MAINTAINED PROPER INTE RNAL VOUCHERS I.E. SELF MADE VOUCHERS ONLY. ON APPEAL, IN THE IMP UGNED ORDER, THE LEARNED CIT(A) RESTRICTED THE DISALLOWANCE TO R S.25,634/- BEING 10% OF TOTAL EXPENSES. AGGRIEVED, THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL. 3 AT THE TIME OF HEARING BEFORE US ON BEHALF OF THE ASSESSEE SHRI RAJESH UPADHYAY APPEARED AND POINTED OUT THAT THERE IS NO JUSTIFICATION WHATSOEVER FOR MAKING AD HOC DISALLOW ANCE. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CI T(A) OUGHT TO HAVE DELETED THE ENTIRE DISALLOWANCE OF RS.51,267/- AS AGAINST RESTRICTING THE SAME TO 10% OF THE TOTAL TRAVELING EXPENSES. AS AGAINST THIS, THE LEARNED DR POINTED OUT THAT THE E NTIRE TRAVELING EXPENSES ARE NOT VERIFIABLE AS THESE ARE NOT SUPPOR TED BY BILLS / VOUCHERS. 4 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY, THE ASSESSEE HAS NOT 3 IT A NO.510/AHD/2011 PRODUCED ALL SUPPORTING BILLS / VOUCHERS BEFORE THE AO AS WELL AS BEFORE THE LEARNED CIT(A). IN THESE CIRCUMSTANCES, DISALLOWANCE TO THE EXTENT OF 10% OF THE TOTAL TRAVELING EXPENSE S SUSTAINED BY THE LEARNED CIT(A), IN OUR OPINION, IS FAIR AND REA SONABLE. WE, THEREFORE, DECLINE TO INTERFERE. THIS GROUND IS REJ ECTED. 5 THE ONLY OTHER GROUND OF APPEAL IS AGAINST CONFIR MING THE DISALLOWANCE OF RS.92,100/- U/S 40A(IA) OF THE ACT. THE COUNSEL OF THE ASSESSEE POINTED OUT THAT IN THE SUBSEQUENT ASSESSMENT YEAR I.E. AY 2007-08 THE ASSESSEE HAS PAID TDS DUE ON RS.92,100/-. HE FURTHER POINTED OUT THAT AS PER PROVISO TO SECTI ON 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER [AO] BE DIRECTED T O ALLOW THE SUM OF IN THE NEXT ASSESSMENT YEAR BECAUSE IN THAT YEAR THE ASSESSEE HAS PAID THE AMOUNT OF TDS DUE. 6 SHRI JAYRAJ KUMAR, LEARNED SENIOR DR APPEARED FOR THE REVENUE AND FAIRLY ADMITTED THAT HE HAS NO OBJECTIO N BECAUSE THIS HAS BEEN PROVIDED IN PROVISO TO SECTION 40(A)(IA) O F THE ACT. 7 AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. PROVIS O TO SECTION 40A(IA) READS AS UNDER:- [PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, T AX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN D EDUCTED DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DAT E SPECIFIED IN SUB-SECTION (1) OF SECTION 139, SUCH S UM SHALL 4 IT A NO.510/AHD/2011 BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME O F THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID.] WHETHER, THE ASSESSEE HAS PAID THE TDS DUE ON RS.92 ,100/- IN THE ASSESSMENT YEAR 2006-07 NEEDS VERIFICATION AT THE E ND OF AO. WE ACCORDINGLY DIRECT THE ASSESSEE TO FURNISH NECESSAR Y EVIDENCE OF PAYMENT OF TDS IN THE AY 2006-07 IN RESPECT OF TDS OF RS.92,100/- [WHICH IS DISALLOWED IN THE ASSESSMENT YEAR UNDER APPEAL U/S 40(A)(IA) OF THE ACT] TO THE AO. THE AO WILL VERIFY THE SAME AND ALLOW THE SAME KEEPING IN VIEW THE AFORESA ID PROVISO TO SECTION 40(A)(IA) OF THE ACT. 8 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREA TED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT TODAY ON 14-10-2011 SD/- SD/- (A K GARODIA) ACCOUNTANT MEMBER (T K SHARMA) JUDICIAL MEMBER DATE : 14-10-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI SUNDERLAL RAICHAND SHAH, T-5, 4 TH FLOOR, SHOPPERS STOP, NEAR JAY TOWER, VAPI-SILVASSA ROAD, VAPI [E]- 396195 2. THE ASST. COMMISSIONER OF INCOME-TAX, VAPI CIRCL E, VAPI 3. CIT CONCERNED 5 IT A NO.510/AHD/2011 4. CIT(A), VALSAD 5. DR, ITAT, AHMEDABAD BENCH-D, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD